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1997-10-23 14:52:29


How Noncompliant Suppliers Will Topple Others



A story from SOFTWARE MAGAZINE (Oct., 1997) describes the problem in detail. Here are excerpts.

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The supply chain encompasses every source and process involved in creating and delivering a product, from raw materials through design, production, warehousing, distribution, application, and customer acceptance or rejection. Compounding the scope of the supply chain is the intertwining of multiple companies and their respective departments, including purchasing, sales, marketing, and IT. Myriad applications are piled on top of those complexities, resulting in a very intricate entity that requires much planning and attention. . . .

Despite the help that's out there, things are moving slowly. "I don't think anybody has fully tested or fully certified their systems from front to back," says PeopleSoft's Roon. He says the only companies that would be able to claim full Year 2000 compliance are those with a completely homogeneous set of systems, who work in isolation from external systems. "And that's just not realistic," he concludes.

Given the scarcity of organizations that have completed remediation, the likelihood of many missing the mark appears greater and greater. What can a company do when a supplier announces in February 1999 that it won't be compliant? What happens if the domino effect kicks in, where, as Turi says, "one little non-compliant supplier might affect myriad other unsuspecting companies?"

One vendor suggests the threat of litigation is enough to spur suppliers into action, and to protect against non-compliance. Although litigation may be a solution for some companies, most would prefer to avoid a legal battle. Besides, asks Turi, "What good is having a strong case against a supplier if you go out of business? Or if they have gone out of business? What are you going to collect? Who are you going to collect from?"


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