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Rolling With The Changes

A closer look at ways to improve your odds as Y2K looms before us.

Dr. Arthur H. Bell

Weve all heard the dire prophecies for those days and weeks after the calendar flips to 2000. One of the most extreme scenarios goes like this: major power, water, communication and transportation systems will suddenly fail, along with the food industry they support. Nuclear reactors and weapons worldwide may perform unpredictably. Public riots will quickly follow, necessitating a military response by governments.Those prepared to protect themselves and their foodstores will survive; the unprepared may not. As an early sign of such concerns, home-based bombshelters have experienced a resurgence in popularity not known since the 1960s. Back To Reality

In early April, 1999, more than 2000 managers from several dozen major U.S. and Canadian electric power companies conducted a one-day test of communication systems in preparation for the transition to the new millennium. With minor exceptions (noted later in this article), all systems and equipment operated as planned. A larger simulation, both in complexity and number of participants, is planned for late summer of 1999.By rejecting the most extreme scenarios, however, we should not make the mistake of assuming that Y2K bug is burrowing in someone elses backyard. The textile industry and its complex web of support business is as vulnerable as any other sector of economy to Y2K disruptions. Where To Look
Where should managers in the textile industry look for the Y2K bug Start first with electric control devices (thermostats, communications and intercom equipment and computerized monitoring systems for office lights, heat and air conditioning.) If a device contains a calendar chip in any form for keeping track of time, date or days of the week, it should be considered guilty until proven innocent of Y2K problems.In many cases, the safe-keeping function of a particular office or plant electronic device is not obvious at first glance. An office fire sprinkler system for example, may rely on a chip that keeps track of time in the form of its service record. If the chip cannot successfully make the switch to 2000, it may fail entirely or perhaps worse, turn watering systems on in unpredictable ways. Thermostats for heating and air conditioning systems may similarly be prone to malfunction due to a calendar chip buried in the works.Will elevators plummet No, says Peter Kowalchuk of the Otis Elevator Company of Farmington, Conn.The safeties are electromechanical and their operation is decided by speed, he said. If the elevator speeds up or slows down, it trips the lever and the elevator stops.But the computerized monitoring systems used by many textile firms in commercial and industrial buildings for controlling elevators may experience Y2K problems. If the central computer fails, the elevators are likely to settle themselves on the ground floor awaiting further instructions.If your company is dependent on a network of suppliers and of the vendors for your business viability, you can assure yourself and your customers of product reliability at the turn of the century by contacting these manufacturers and distributors now and requesting certification of Y2K compliance in writing. Be prepared to wait as long as several weeks for a response. Manufacturers of virtually all chip-based devices have been deluged by such inquiries.If your schedule makes this wait impractical, negotiate a Y2K return and replacement agreement with your vendor or supplier. Credit Cards And Loans
Looking beyond office energy systems, all textile professionals are well advised to gather hard copies of important financial records prior to the new millennium.Most credit card companies began to deal with the Y2K problem several years ago after the expirations date on their cards reached 2000 and caused major systems to crash. According to Elaine Kolish of the Federal Trade Commission, most Y2K bugs at major financial institutions will be discovered or fixed in before they cause problems.She recommends, nevertheless, that you: protect yourself so that you can show that youve been making payments, what your loans are, and how much you have paid.Specifically, assemble paper copies of important transactions during the last six months of 1999. For mortgages and partnership financial dealing, obtain a letter showing your payments schedule and the amount paid to date. Your ability to produce pertinent records may be invaluable if you receive an inaccurate overdue notice, with implications for your credit record and business continuity. Will The Lights Go Out
Checking out the micro-environment of the textile company, manufacturing or distribution facility for Y2K problems will mean little, or course, if the macro-environment of electric, gas, oil and water systems experience millennium bug difficulties. Consider the dimensions of the potential problems:The United State now has about 3,200 independent electric utilities that generate nearly 80 percent of the nations power, with the remaining 20 percent coming from combustion of government power (Tennessee Valley Authority, Bonneville Power Authority, etc.) and privately-owned entities that generate power for their own use.The electric power industry is a complex web of communication and control connections, networking nuclear, fossil fuel, gas and hydro-electric generation plants by transmission lines known as the grid. These lines of supply power to every company and household in North America.The largest of these transmission grids is the Eastern Interconnection, supplying power to all states and provinces east of Colorado. The Western Interconnection provides transmission links to western states and Canadian provinces, and the ERCOT Interconnection serves Texas and parts of Mexico.Each of these grids is constantly in the process of making adjustments to balance supply and demand for power throughout the system. Because electric power cannot be stored, these minute-by-minute adjustments are critical to the grid itself. If too much power builds up within the system, transmission lines can melt in an instant. If too little power is available brown-outs or black-outs occur.Needless to say, such complex monitoring and adjustment is controlled by an equally complex computer system and therein lies the Y2K vulnerability of the three major grids.According to the Senate Special Committee on the Year 2000 Technology Problems: Of greatest concern to the electric power industry are embedded computers small electric devices. These chips are used extensively in all parts of the electric power industry including generating plants, transmission lines, distribution systems and power control systems. Even though only a small number of these embedded devices will have a Y2K problem, it is impossible to tell which ones until each chip has been checked and tested.Making matters worse for those attempting the check such chips is the very nature of the chip itself, including those installed in all types of textile equipment and the factories that produce that equipment. Electronic chips are mass-produced without knowledge of their eventual end-use. These serve-all chips can have dozens of functions a board, a susceptible to Y2K corruption, that are not used by a particular power company application. In addition, a single circuit board can have as many as 100 or more of these chips form carious manufacturers around the world (some of which who have gone out of business.).Vendors of circuit boards commonly use a wide mix of such chips even within devices able with the same name, model number and year. Asking a vendor to certify Y2K compliance for a particular device thus becomes impossible, given the diversity of chips involved. Five Critical Areas
The following scenario describes circumstances that are largely out of the hands of textile professionals, but nevertheless be understood to estimate the likelihood that your business will be disrupted by Y2K problems.First, the nations electric generating units must respond on command to start up and deliver electricity as required. The danger is that, due to Y2K problems, the knock at the door of these generating units wont be answered, or will be answered in unpredictable ways.In the language of the Senate report, the threat is most severe in power plants with Digital Control Systems (DCSs) ... Numerous control and protection systems within the DCS use time-dependent algorithms, which may result in generating units trips when encountering a Y2K anomaly.Second on the list of critical areas are the 200 or so bulk electric centers in North America, from which system operators monitor and control the supply and demands of electric power. At any given moment, somewhere between 10 to 20 percent of generating units (power plants) are on automatic control. The software for such automatic control contains built-in time clock. Similar automation functions are used are the hundreds of other subtransmission control centers throughout the United States. In some cases, the energy management systems used by all these control centers depend on time signal transmissions from Global Positioning Satellites.Third, the viability of the power grid depends directly on the dependability of the microwave, telephone, VHF radio and satellite communications. In the April 1999, simulation test of power grids, it was precisely this communication component that malfunctioned. When company communication channels failed, a systems operator in New York was able to stop electrical power production at a distant nuclear plant only by resorting to his cellular telephone. If the cellular system too had been done in, the results could have been disastrous.A fourth area of vulnerability involves substation control systems. These contain a dizzying array of circuit breakers, disconnect switches and transformers that function as control devices for the flow of electrical power.Remote terminal units (RTUs) in these substations are the communication links by which major control centers are able to isolate faulty lines, transformers or other pieces of equipment. Substation control systems depend on time-based software and chips for the majority of their monitoring functions.Finally, Y2K vulnerability can be located in the equipment associated with distribution systems. Beyond the substation, distribution systems may have time-sensitive electronic controls such as capacitors, voltage regulators, monitoring devised and reclosers (relays that open and close a distribution feeder in rapid succession to allow a fault to clear.) The Current Situation
Aware of these five areas of Y2K vulnerability, the Senate Committee staff surveyed five large electric companies at the end of 1998 to determine the levels of readiness for Y2K-related problems.The staff concluded that the utilities were proceeding in the right direction, but the pace of remedial efforts was too slow and there was so much remaining to be done that there was significant cause for concern.Only two of the firms reported completion of assessment, making assertions of Y2K compliance by December 1999 highly suspect. Committee concern was heightened because the most difficult tasks renovation and testing were yet to come.The utilities lack of information regarding Y2K compliance of their suppliers, vendors and service providers created additional concerns about the utilities assertions of readiness. The survey results raise significant levels of concern given that the firms surveyed were among the largest utilities and were dedicated many resources to Y2K (collectively over $400 million).Smaller firms with fewer resources are presumably further behind in their Y2K remediation efforts. The Bottom LineWhat is the ultimate message for those involved in textiles manufacturing, distribution and sales The most likely and most problematic impact upon you and your employees from the Y2K bug will not be from local and minor electric controls within the office or factory. Instead, the real crunch may come when the lights, heat, air conditioning and communication links go out for a prolonged period due to major power grid failures.According to the U.S. Senate, there is every likelihood that such failures will occur, although the place and time surely cannot be predicted.A bombshelter may be overkill for such eventualities. But some conscientious crisis planning as soon as possible with your staff may be just what the doctor ordered for temporary relief from the Y2K bug.Editors Note: Arthur H. Bell holds his Ph.D. from Harvard University and is Professor of Management Communication at the McLaren School of Business, University of San Francisco, where he teaches and researches the impact of electronic communication technologies on business.His many books for managers are listed at www.usfca.edu/fac-staff/bell/home.html. October 1999



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