Fixing the fixesgreenspun.com : LUSENET : Sonoma County : One Thread
Some recent news stories cast doubt on the assertion that computer problems will be neatly handled over the New Years weekend.
By now I am sure everyone has heard about Hersheys computer problem, which resulted in a 16 percent drop in 3rd qtr. earnings and a potential $100 million loss of sales in the 4th qtr. A recent column from Westergaard discusses some of these issues. http://www.wbn.com/y2ktimebomb/Techcorner/DE/de9945.htm
And The following AP story is about Royal Doultons experience.
Thursday November 11, 12:33 am Eastern Time Computer Glitch Costs Royal Doulton By BRUCE STANLEY AP Business Writer LONDON (AP) -- With more than 200 years of experience behind it, fine china manufacturer Royal Doulton thought it was being prudent when it installed a new computer system to guard against the Y2K bug.
But the cure for the potential illness took a painful toll of its own.
The company said Wednesday that it will lose an estimated $19 million in sales because the new equipment caused delays of up to 10 weeks in deliveries of its goods to distributors.
The problem comes as Royal Doulton, which has been manufacturing fine china since 1748, approaches its most important period for sales: the weeks before Christmas.
Investors reacted to the announcement by dumping the stock, which plunged 23 percent to finish trading at 79.5 pence ($1.27) per share.
The new system was installed to avoid potential problems when the Year 2000 arrives. Many older computers and software programs recognize only the last two digits of the year and could mistakenly interpret ``00'' as 1900.
The glitch apparently arose because of problems integrating the new equipment with the company's existing computers. As a result, the china maker was unable to supply distributors when they ran out of inventory.
Spokeswoman Valerie Baynton said Royal Doulton has now solved the problem, but it has already cost the company. The expected loss is equal to 5 percent of Royal Doulton's sales for all of 1998.
``It's very frustrating,'' Baynton said from the company's headquarters in Stoke-on-Trent, 200 miles north of London.
The company's profit warning is its latest setback in recent months. Interim sales so far this year, $144.5 million as of the end of June, are already well below their 1998 level of $173.6 million.
Chairman Hamish Grossart said operating losses for the year would exceed analysts' forecasts of $16 million.
Sales of Royal Doulton's traditional tableware have suffered from a decline in formal dining and the rise of convenience foods and TV dinners.
Tougher competition from Waterford Wedgwood PLC [NasdaqNM:WATFZ - news] and other china makers have hampered business, as has the company's decision to discontinue shipments to discount retailers.
In response to depressed sales, Royal Doulton announced last December that it was laying off 1,200 workers, almost a fifth of its work force.
-- Roger Dealno (email@example.com), November 11, 1999