Delta preps non-IT suppliers for Year 2000
By Elena E Murphy -- Purchasing, 2/12/1998
Preparation for the year 2000 isn't just about adjusting internal computerized systems. In fact, companies often overlook suppliers of non-IT (information technology) equipment, dismissing the potential for interrupted supply. However, at Delta Air Lines, purchasing is taking the time to assess its non-IT suppliers as carefully as it reviews its hardware and software providers. After all, IT equipment enables all suppliers to meet delivery schedules, monitor inventory levels, and manage billing."Everything is based on criticality," says Linda Henning, manager--diversified supplier program, at Delta's Atlanta, Ga., headquarters. She notes that when Delta began to shape a process for the transition, the company recognized the need to methodically address suppliers' preparation.
Jim McCullough, director of the Year 2000 (Y2K) program points out that Delta started preparing its technical suppliers first. Later, the company began reviewing non-IT suppliers, concentrating initially on sole sources, high-volume suppliers, and those suppliers considered vital to the airline's operation. For example, fuel supply is at the top of the non-IT "criticality" list, since supply can't be interrupted even for a day. Also, Delta and other airlines that rely on AlliedSignal's auxiliary power units (APUs) for powering planes on the ground, have been in communication about Y2K with that supplier.
But this doesn't mean small suppliers or those providing less "critical" products or services are off the hook. Delta is contacting all of its suppliers regarding Y2K and is assessing each supplier's level of preparedness. Delta also may suggest consultants or other sources of information for suppliers developing a Y2K plan. Examples of non-IT suppliers that Delta is reviewing include:
* Ground support equipment (for example, APUs).
* Elevators.
* Security.
* Office equipment, (for example, fax machines).
* hvac.
* Baggage handling systems.
Delta assigns a "criticality code" which determines the level of scrutiny that suppliers are subjected to, says Udo Rieder, managing director, purchasing. This applies to new suppliers as well as those in the current base. Suppliers also are expected to absorb the cost of the system changeover.
First step is to alert non-IT suppliers who may not think their products will be affected by Y2K, that production, storage, and transport can change based on the "embedded date logic" in systems that support these processes. "This process requires more than sending out surveys," Henning says. Delta has conducted one-on-one communication with major or key suppliers to guarantee that those sources know what is expected of them in the new century.
The communication continues in a more structured program that standardizes supplier preparation. The four phases of Delta's Year 2000 Program:
* Planning.
* Inventory.
* Readiness assessment.
* Treatment which may include fixing or replacing the supplier's processes, and a contingency plan if needed.
* Monitoring system until Year 2000 date passes.
To streamline the process, the airline's preparation phases "run concurrently," says McCullough. Right now, the airline is taking inventory of non-IT suppliers while Delta has more immediate criticality dates for IT equipment. For example, changes in the reservation system will be finished this year.
Unifying the approach to Y2K on an industry-wide level also makes sense where it's possible, says McCullough. He notes that the industry associations, ATA (Air Transport Association) and the iata (International Air Transport Association) are communicating with airlines to keep them posted on industry-wide changes that could affect their Y2K preparation.
Henning says that certain members of the air transport industry realized that "assessing external suppliers that are common to all of us in the industry group" would optimize resources used for Y2K preparation. "Since we all rely on airports, the FAA (Federal Aviation Administration), and a number of aircraft parts suppliers, forming a Y2K industry team through the ATA reduces interference associated with redundant inquiries and contains costs." The team consists of ATA member airlines and cargo carriers and their purchasing departments
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