Repost: Firms Stockpile to Beat Y2K Bug

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The Sunday Times

June 13 1999

Firms stockpile to beat Y2K bug

David Parsley

A SIGN of the impending economic dislocation likely to be caused by the millennium bug is given today in a report from the Cranfield School of Management. It reveals that companies are building up stocks of raw materials and finished goods out of fear that normal levels of supply will be interrupted because of year 2000 (Y2K) computer problems.

Of 500 organisations questioned, 70% expressed a fear of disruption and 60% admitted they were already stockpiling.

The distortion in company purchases could have damaging effects on the economy. The report says: "Since organisations are simply increasing levels of raw materials and finished goods to offset perceived uncertainty in the supply of goods and materials, there may be a boom in the second half of 1999 followed by a bust in early 2000."

A severe economic slowdown could result from organisations having surplus stocks, significantly reducing manufacturing and purchasing activity during early 2000. This could even drive the economy into recession.

Dr Richard Wilding, a lecturer at Cranfield, said: "Some organisations are also investing to increase capacity. However, the increase in customer demand may just be a mirage. Demand might well rapidly disappear, leaving organisations with excess capacity which they need to fund."

A second report out this week concerns Action 2000, the government body charged with ensuring the bug does not cause problems. The study by Rooftop Communications, an information technology consultancy, reveals the extent of the confusion among workers about the Y2K bug.

The report, which targeted 1,000 small to medium-sized enterprises (SMEs), focuses on the importance of Y2K communications. It reveals that 75% of respondents did not know what their company's compliance status was and said this was causing them concern. Of the 25% who thought their companies might be compliant, 60% did not know what specific action had been taken to tackle the bug and 80% had still not received any offical statement from management.

Richard Coppel, chairman of Rooftop, said: "If staff are unsure of their company's compliance status, how can they possibly convince their customers, suppliers and other trading organisations that appropriate steps have been taken to tackle the bug?

"Over the past 12 months there have been no positive changes in the attitudes of the SME market. This lack of activity and communication is having a detrimental effect on staff morale. As we are all aware, stress is one of the major contributors to sick leave in the work environment and will be one of the hidden costs of the millennium bug."

To educate Britain's workers, the government today launches Facts Not Fiction, a report on the bug.

-- mabel (mabel_louise@yahoo.com), August 12, 1999

Answers

http://www.sunday-times.co.uk/news/pages/resources/library1.n. html?999

-- mabel (mabel_louise@yahoo.com), August 12, 1999.

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