What to Do When the Chips Fall

The effect of the year 2000 bug has grown more ominous than an embedded glitch in computer codes, which makes computer systems unable to distinguish between the years 1900 and 2000.

For example, on Jan. 1, 2000, a non-compliant dispatching system may tell a trash hauling company that it has fallen behind in its pick-up schedule by 100 years. The hauler will realize the error, but the computer system may attempt to create 100 years of routes and drive itself insane.

To cushion your company from Y2K problems, you first must fix your own company's hardware and software. Then you have to prepare for the probability that not everyone - including your customers and vendors - will fix their hardware and software. But then what?

In a complex economy that relies on various widespread computer networks to transfer information critical to business operations, one problem link in a chain can drag a number of businesses down.

As a result, all businesses must solve two problems. First, they must kill the Y2K bugs infecting their own systems. Second, they must figure out how to deal with problems that may affect their ability to do business because of others who have failed to fix their problems.

If you haven't started working on Y2K problems yet, consultants recommend crossing your fingers and hoping that you won't have much to do - and getting to it. Now.

First Things First For smaller trash haulers and trash processing facilities, starting now still may be early enough to avoid problems. Regardless of the time frame, Y2K issues are there.

Take Himco Waste-Away Service Inc., Elkhart, Ind. Himco uses about 60 front-end loaders to haul commercial refuse. The company also owns and operates a recycling facility.

"We've been working on this [Y2K problem] for a little more than two years," says Ken Himes, manager of information systems. "It really hasn't been a full time job, and we're pretty much on schedule."

As the point person for Y2K planning, Himes began with a step-by-step evaluation of every piece of Himco's mechanical and electronic equipment, looking for embedded microchips and software programs that might create Y2K glitches.

"First we looked at our trucks," Himes says. "We don't have on-board computer systems, so that wasn't a problem. We found no problems with engine technology. There is a microprocessor that controls our transmissions, and we were concerned about it, but the vendor has assured us that it will cause no problems."

Next, Himes looked at security systems. No problems there.

Third, he studied the heating, ventilating and air conditioning systems. Once again, he found no embedded processors or software programs with the potential for creating Y2K problems.

Then, he assessed the processing operations at the recycling plant. Because the operation relies largely on manual labor, few problems arose on the processing floor.

Himes also checked the telephone PBX system. "Our PBX failed the Y2K check and we had to replace it," he says. "We also had to replace our voice-mail system, which wasn't compliant."

Y2K problems also appeared in Himco's desktop computer hardware, network hardware, operating systems and application software.

"Our recycling plant uses a small computer network," Himes says. "We had to upgrade to Windows 98, and that process required us to upgrade our desktop computers."

Himco's old 486 desktops weren't compatible with Windows 98, so Himes replaced the 486 computers with Pentiums, spec'd with larger memories to handle the new software.

But Himes warns that you shouldn't necessarily take the Pentium brand as a stamp of approval for Y2K compliance. "I had been told that if you bought a computer before 1997, the hardware might not be compliant," Himes says. "We looked at some of our older Pentium machines and found that we had to replace several."

At Himco's main offices, the center of the hauling operation and accounting and financial matters for the recycling center, Y2K solutions followed a different course. Instead of upgrading the existing accounting system, which failed Y2K compliance testing, company executives decided to buy a new, more advanced system.

Its new Solomon Software, Penn Valley, Calif., accounting system incorporates financial management with order entry, dispatching, sales automation and other industry specific tools.

The decision to replace the old accounting package had more to do with enhancing business practices than with worries about non-compliance. "Y2K considerations led us to do this earlier than we might have," Himes says. "But business needs were driving us in that direction anyway."

The Bigger They Are ... Larger operators have been working on Y2K issues as well. The streets and sanitation department in Chicago has found that Y2K has little to do with its operations. "We won't be affected by Y2K," says department spokesperson Terry Levin. "We have no computerization in our garbage collection operations. We just send out the trucks to the same houses and make the same pick-ups."

That, of course, doesn't mean that the city isn't dealing with Y2K problems in other departments, Levin adds. Those problems, however, won't affect residential trash pick-up.

In Houston, Browning-Ferris Industries (BFI) has been working on the Y2K problem for five years. In 1998, the company completed the first phase of its effort, replacing approximately 45 percent of its existing business software systems. Final testing for all business systems was scheduled for completion by June 1, 1999, according to the company's website [www.bfi.com].

That's the software. BFI also reports working to identify and correct all embedded microprocessors that may create problems.

Likewise, Casella Waste Systems, Rutland, Vt., has been laboring for the past three years to address Y2K issues. The company reports spending approximately $1.2 million over 18 months to address hardware- and software-related Y2K snags.

Casella's approach has followed a four-phase plan. Phase one, now complete, concentrated on creating awareness among employees of the problem, developing a plan to address the problem and gaining management approval of the plan.

During phase two, now underway, Casella's technology staff is evaluating all of the company's technical systems: computer hardware and software, security systems, voice mail, and other systems and equipment that rely on microprocessors and software. Phase three, also underway, focuses on correcting problems identified in phase two. Both of these phases should be complete mid-year, according to the company's website [www.casella.com].

In phase four, scheduled for completion by Aug. 31, 1999, the company plans to test all of its systems and validate them.

Like many large waste management companies, acquisitions complicate the company's work. The company reports that a limited number of its acquired operations have not been fully integrated into the company-wide information system, and that acquisitions made during the latter half of 1999 may not be fully integrated by Jan. 1, 2000.

"In a consolidating industry where you buy a lot of companies, you have to look at this issue constantly," says Joseph Fusco, vice president of communications for Casella. "When Y2K is an issue, we need to change systems and make sure that our acquisitions are compliant."

Now For The Contingency Plans Although compliance checks, and software and hardware upgrades may be necessary, the real Y2K problem for most companies is risk management, says Jim Kissane, vice president of operations for Telly Communications Inc., a Tampa, Fla.-based company providing computer and communications consulting to waste management companies.

"On January 1, some computers will fail and affect communications, inventories, supplies and internal business operations," Kissane says. "There is little disagreement about this. Because there is no historical precedent, however, no one knows whether these disruptions will involve a few companies for a short time or a lot of companies for a long time. In an interdependent global economy, we don't understand what the domino effect will be."

In other words, even if you've fixed your internal systems and can operate smoothly, you haven't solved all of the problems you face.

Imagine, for example, what might happen if your fuel supplier has fixed its internal operations but deals with another supplier who hasn't. If that second upstream supplier can't get fuel to the railroad terminal on time, your fuel supplier won't be providing you with fuel. Filling your tanks at the end of the year and lining up backup fuel suppliers may be a potentially important contingency plan.

"There are alarmists talking about Armageddon," Kissane says. "I'm not an alarmist. But if you think about how certain events have disrupted the economy in the recent past, you can see the possibilities for problems related to Y2K. A few years ago, the United Parcel Service (UPS) strike caused many indirect effects. Companies relying on overnight services couldn't ship and receive on schedule."

Those shipping disruptions led to business disruptions around the world, and they arose because one company in one industry stopped functioning.

What happens when one company in 20 or 30 industries functions poorly, while 10 companies in 10 other industries stop functioning altogether?

"If you plan ahead, you can mitigate the affects of these problems on your business," Kissane says, noting that planning ahead means imagining what external factors can prevent you from carrying out your normal operations.

Can you operate without fuel, hydraulic fluids, oil, vehicle parts? If not, you must talk to your current suppliers about what they are doing to ward off Y2K problems in their operations and in the businesses they rely on for support. You also must line up alternative suppliers, especially when your primary supplier fails to answer your questions in a satisfactory way.

What about your personnel? If power outages occur in your area, will your employees come to work? Or will they stay home to take care of their families? How will you get your company's work done?

Himco's Himes agrees with Kissane's evaluation and has developed contingency plans. "We've cleared our major vendors," he says. "We've held discussions with our bank, the landfill where we dispose of our trash, our fuel distributor and others along the supply chain."

Himes also has developed plans to deal with the possibility that all of his in-house Y2K problem avoidance efforts may not work.

"I don't think we'll have to, but if necessary, we'll prepare bills by hand and send them out. If our dispatching and order entry systems go down, we have manual systems that can take over," he says. "If our drivers can't get to work, our entire management team has commercial drivers licenses, so we have people who can operate the business. Again, I don't think the worst will happen, but we've thought about it and have prepared for the kinds of problems that may arise from Y2K failures that we can't control."

You can drive yourself to distraction by imagining all of the bad things that might happen. Himes has resisted going down that path.

"I have a canned response to Y2K inquiries that sums up our approach," he says. "We tell companies this: 'We have cleared our system. We know what we need to do to be compliant. We expect to fulfill our service expectations. We expect to pay and to be paid on time. We're not guaranteeing our systems against this problem, and we're not requesting that you guarantee your systems.'"

In other words, do what you can do as best you can. Expect the same of others.

Then let the chips fall where they may. But make sure you have a contingency plan if the chips do fall.

If you operate a landfill, transfer station or recycling facility, the U.S. Environmental Protection Agency (EPA), Washington, D.C., suggests that you check the following items for Y2K compliance.

* Safety shutdown systems, such as automated freeboard controls;

* Groundwater monitoring devices with data transmission capabilities;

* Microprocessor and software controlled laboratory equipment;

* Software used by automated reporting systems;

* Record keeping, reporting and tracking software applications;

* Waste treatment operating equipment;

* Electronically controlled valves;

* Emissions monitoring equipment and control devices;

* Automated scale systems;

* Communications systems;

* Utility systems, including electricity, natural gas, water, sewage, etc.; and

* Any and all hardware and software systems you can find.

Thinking about cruising through the first of the year in the hopes that nothing bad will happen? Don't.

A Y2K glitch eventually will have to be fixed and may cause more operational headaches than you're prepared to handle, according to the U.S. Environmental Protection Agency (EPA), Washington, D.C. In support of this, the EPA points to a recycling facility's experience during the 1996 leap year. A software program that regulated temperature in the facility did not recognize the 366th day of that leap year. As a result 660 process control computers stopped functioning at midnight. The entire system had to be operated manually until programmers identified and solved the problem. Equipment costs related to solving the glitch tallied more than $1 million. The EPA believes this experience provides an example of the kinds of problems that may occur if computer programs fail to recognize the year 2000.