Yamaha zips past millennium problems

Yamaha Motor Australia's distribution system faced significant Y2K related business problems even before the dire date but early compliance initiatives kept it on track.

Warranty and inventory-related date issues on January 1 this year and a potential showstopper on January 1, 1999 were averted when Yamaha became one of the nation's earliest companies to become 2000-compliant. Its business includes distribution and service of motorcycles, outboard motors and other small engine products.

Andrew Carruthers, Yamaha's national administration manager, said: "This is an unusual position for distribution companies, which tend to be well behind other industries in implementing their Y2K programs."

Technology encompassing long-range dates is a crucial part of its business: for example, two- and three-year warranty expiry dates, and long-range inventory forecasts. Yamaha outsourced the Y2K project to Aspect Computing and it was completed by November 1997.

While organisations are generally aware that some computer systems could create problems in 2000, many -- whose systems deal with dates beyond the January 1, 2000 deadline -- experience a shock. Unforeseen date-related issues, such as use-by dates, warranty expiry dates, future bookings, delivery dates, credit card expiry dates, payment terms and the like, are some of the pitfalls.

But not at Yamaha. Responding to the Y2K issue early has enabled the company to maintain its competitive position, and potentially enhance it.

Yamaha's management team took a business function approach to the problem to prioritise the areas where Y2K problems could do the most damage. This analysis pinpointed computer functions associated with servicing the company's products as the highest priority.

Colin Iskov, Yamaha's national spares manager, said: "The IDS distribution software running on the IBM AS/400 is crucial in maintaining superior levels of customer service to both end users of the products and the reseller network. Also, the service division is a highly profitable business segment."

Although all dates would need to become 2000-compliant by January 1, 2000, two specific date issues had far greater urgency:

* Warranty expiry dates -- a number of products have two- and three-year warranty periods which take them past 2000, creating "unpredictable" results in the system; * Forecasting for the parts inventory -- efficient inventory management is based on sophisticated, long-range forecasting and it would have become an issue this year.

Carruthers said that at Yamaha, Y2K was seen as having significant strategic importance to the operation.

"However, at the same time, it was a distraction as opposed to a core business task.

"We'd rather not worry about Y2K. Management doesn't get paid to maintain the status quo. Our job is to enhance the competitive position of the business.

"The logical solution was outsourcing, but we had to be confident that the organisation contracted was able to successfully complete the job in the timeframe. Reference sites were critical in the decision-making process."

After extensive reference checks, Yamaha contracted Aspect Computing, a systems integration and information technology services company. Aspect started the impact analysis in December 1996 and delivered a structured project plan early in 1997. The process was completed by November 1997, one month earlier than the initial project deadline.

Peter Draney, managing director of Aspect Computing, said: "Year 2000 conversions should not be approached as a massive manual task, but rather as a project in which skilled professionals are used to augment a largely automated conversion project. In this project we automated the analysis, development, query and reporting facilities using a number of tools."

Carruthers said: "We were particularly pleased with Aspect's approach to problems. When some unforeseen problem arose, Aspect personnel came up with alternative solutions, which we negotiated and resolved. This saved me a lot of time, which was of course the whole point of outsourcing."

Yamaha's prime focus was meeting the January 1, 1998 deadline. A pragmatic approach was taken to ensure that this target was achieved. Carruthers said: "We did what needed to be done from a business perspective. We changed the internal workings so that the system would work, but we didn't need to change every screen to hold four digits. Our operators know that "00" means 2000, just as 97 means 1997."

"The Y2K-compliant system is now fully operational, and has passed the critical January 1, 1998 test. We know the users are satisfied, because we have had no complaints. And we certainly would have if things had not been running smoothly.

"Our users were heavily involved in the project testing and used this time to make sure the application ran exactly as they expected," Carruthers said.

"Although the project was completed before time and under budget, at the time of contracting Aspect we were prepared to pay a premium to eliminate the risk. The value of the investment was really the cost of the failure of the business," Carruthers added.

Stephen Suen, Yamaha's IS Manager, said: "With the Y2K project behind us, we are now developing a new application which will improve administration processes between our resellers and ourselves. This is a strategic initiative aimed at enhancing our competitiveness -- the sort of technology project we really should be focusing on."

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