PWAC Victoria: Pam Blackstone, Writing Sample

The Reading Room

Thrifty Foods Tackles Monumental Y2K Project

by Pam Blackstone © 1999

How Thrifty Foods tackled the Millennium Bug. The work they are doing now will ensure that all fifteen stores in their Island-wide operation continue to operate smoothly when the New Year ticks over. Published in Victoria Times Colonist, Mar. 29, 1999.

When Bruce Thompson took on Thrifty Foods' Y2K project, he had no idea what he was getting himself into. As the company's Risk Manager and "new guy on the block," Thompson was the natural choice to head up Thrifty's fledgling Y2K committee in early 1997. Questioned today, Thompson frankly admits that he didn't understand the magnitude of the issue at the time. "Like many people," he concedes, "my initial reaction was that this was just a computer problem. I didn't understand how far-reaching it was."

Now, almost two years later, an older and wiser Bruce Thompson lives and breathes Y2K and is much in demand as a speaker. His bookshelves overflow with fat binders containing procedural details and test results. He is one of the few people I know who has read the U.S. Senate Committee report cover to cover. He admits that he spends "100% of his time on Y2K, and the other 100% on everything else."

I have learned more about this issue from my association with Bruce than from all the research I have done on this topic. To prepare for this column, I met with him one sunny March morning a week ago, and emerged from his office two hours later, reeling from information overload.

Organizing a Y2K project for an organization the size of Thrifty's is a massive undertaking. With fifteen stores throughout the Island and a 30-40% market share, they average one million customer visits a month. This huge grocery chain also has a distribution centre that operates around the clock, a kitchen that services its deli departments, and a wholesale operation that supplies dry groceries and produce to forty to fifty independents.

Thrifty's fledgling Y2K project was helped along as much by fortuitous timing as good planning. The company was in the middle of opening four new stores, and had just commenced the process of upgrading its point-of-sale system, when the project kicked off. In hindsight, Thompson realizes that this decision averted trouble. "Installing a POS system that came compliant from the vendor," he admits, "saved a ton of work and remediation costs." Thrifty's also recognized early on that Y2K was too complex to tackle by themselves, and had the good sense to bring in outside help.

Today's typical supermarket operates on a just-in-time inventory basis. As a result, it has about 20 days' worth of non-perishable food in stock, and only 3-4 days' of fresh products such as meat and produce. Thrifty's knew they were dependent upon supplier Y2K fitness, so one of the first things they did was attempt to survey key suppliers to determine where they were in their Y2K remediation process. In the summer of 1997, they sent out approximately 600 letters. Only 77 straggled back. Of these, half indicated that they were compliant. "The best one," laughs Thompson, "was from a health food supplier in California who said they were operating on the Julian calendar, so Y2K didn't apply to them." Seriously, though, Thompson admits that this non-response was a wake-up call.

They subsequently assembled a team and, with the help of their auditor and an outside consultant, put together an ambitious plan. Like any Y2K remediation project, Thrifty's plan essentially had four overlapping phases:

Phase 1. The first phase involved an enterprise-wide inventory. Thrifty's relies on an extensive wide area network to move data between stores. This meant they had to inventory servers, network interface cards, modems and routers, as well as every computer, operating system and software program throughout their operation. The inventory included embedded systems like telephones, fax machines, photocopiers, postage meters, scales, and handheld scanners, and encompassed physical plant systems like security alarms, fire alarms, sprinkler systems, and heating, ventilation and air-conditioning systems for each of their fifteen stores. This massive phase was completed in April 1998.

Phase 2. This was followed by risk analysis, which involves identifying "mission-critical" applications and priorizing their degree of criticality. There may be many things to fix, and not enough time to fix them all. For example, the store could continue to function without someone's Winzip software working properly, but the failure of the POS system, or the computer that handles accounting and inventory, would be disastrous.

Phase 3. Next came the remediation phase, a labour-intensive and time-consuming process requiring every non-compliant product to either be repaired, retired or replaced with a compliant one. This meant contacting vendors and obtaining compliance statements or the necessary hardware and software upgrades.

Phase 4. The final phase, testing and rollout, was a massive undertaking that took the last six months of 1998. In Thrifty's case, an outside consultant was hired to write test scripts (detailed sets of instructions to guide an operator through a test sequence) for over fifty mission-critical functions. Five dates were tested for each application: September 9, 1999; December 31, 1999; January 1, 2000; February 29, 2000; and an arbitrary fifth date later in the year 2000.

"Every piece of hardware, software, or embedded system," Thompson explains, "either underwent a test script or has a vendor compliance statement." He's quick to warn, however, against accepting vendor compliance statements at face value, citing the stores' 60 hand scanners as an example. These handheld devices are used for ordering products and maintaining inventory. As such, they're an absolutely essential part of Thrifty's operation.

These devices appeared to have no date functionality at all and Thompson had a vendor compliance statement on file. As an added precaution, he decided to test one of them. Much to his surprise, the BIOS failed. No one realized that these devices had internal clocks. Had they missed this, these innocuous little appliances could have seriously impaired Thrifty's ability to function smoothly on January 1, 2000.

The fifth phase--contingency planning--is the activity that's absorbing most of the team's attention these days. Thompson is confident that Thrifty's is in good shape internally to survive the year change. "We were not able to identify any major problems that we couldn't fix," he concludes. External factors such as suppliers, power, financial services, telecommunications, fuel, and waste disposal are another matter, however. Thompson realizes that these factors are entirely beyond his control, and he is now addressing contingency measures to cope with disruptions in any of these critical services.

Thompson considers the Y2K project a positive learning experience that will ultimately strengthen Thrifty Foods. "It's an incredibly worthwhile and productive process to go through," he maintains. "A company of this size should have a disaster recovery plan, not just for Y2K but for fire and earthquakes as well. We didn't have one. Now we do."--an observation that's lent credence by the weight of Thompson's 25 years in the insurance industry.

Thompson believes it's prudent to begin preparing now, and urges Victorians to avoid last-minute panic. "The point here," he argues, "is that if people prepare for an emergency over the next few months and don't rush in and clean the shelves in December, we will be able to supply a constant allocation of grocery items for weeks, even in the event of a disruption." To help people take the necessary steps, Thrifty's is collaborating with Pacific Coast Savings Credit Union on a Y2K preparedness brochure, which will be available as a bag-stuffer in late April or early May.

If your business is one of the estimated 40% of Canadian small businesses that are still ignoring Y2K, I hope you will find Thrifty's experience an inspiration. Please start today to address this problem. Unlike other emergencies, Y2K is predictable. We know exactly when it is going to happen, and we can take steps to reduce its impact. Start now to assess the Y2K readiness of your operation. Talk to your landlord, telecommunications supplier and financial institution. Consider your relationship with key customers and suppliers. Help staff prepare. Informative workbooks (printed and electronic) are available from Industry Canada and B.C.'s Action 2000 Office, and there are links to further Y2K information and resources at my site. The clock is ticking.

Pam Blackstone
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Last updated: April 13, 1999 http://www.islandnet.com/pwacvic/blackp02.html