Bob Scribner knew three years ago that Fairchild Semiconductor's export management software was sorely in need of an upgrade. Since 1998, the South Portland, Maine-based manufacturer had been using a solution that couldn't quite keep up with its global growth.

But Scribner's hands were tied by a force that was much larger than the company itself: a recession in the semiconductor market, spurred by a downturn in Fairchild's target markets. "There was a huge reason why we couldn't do the upgrade, and it's called economics," says Scribner, senior manager of global logistics. "In 2002 we had a four-year-old product on our desk, but right when we began to think about upgrading it, a recession hit our industry and lasted for the next two years."

It was a far cry from the boom times of 2000, when worldwide semiconductor sales exceeded $200 billion for the first time since the first such device was shipped commercially in 1949. In 2001 and 2002, by contrast, the industry experienced 37-percent and 27-percent declines, respectively, leaving companies like Fairchild more concerned with survival than with internal technology improvements.

The tide changed in late 2003, when signs of an industry recovery prompted the company to again consider upgrading its technology. Early the following year, Scribner and his colleagues embarked on a 10-month journey to switch from its existing global trade management software to Trade Collaborator v.12.2 from NextLinx. Fairchild currently uses that program's Trade Export Solution module, an Oracle-based product that automates compliance with the export requirements of major trading countries.

With 18 worldwide locations, Fairchild has about 9,500 employees and posted $1.6 billion in sales for the last fiscal year. The company, which was spun off from National Semiconductor in 1997, builds semiconductors, starting with the base wafer and continuing on through the assembled chip. The wafer manufacturing process begins in Fairchild's U.S. plant. Work-in-progress is shipped for final assembly and testing to Asia, where the company has five distribution centers. Each year, Fairchild ships some 17 billion units of finished product from six countries to customers in 45 countries, primarily via express carrier DHL.

Scribner, who has been with Fairchild for 21 years, says that shipping between foreign countries presents unique regulatory-compliance challenges. The shipper must not only comply with the requirements of the origin and destination countries but it must also must comply with U.S. export/import regulations, regardless of where its shipments originate.

The fact that Fairchild has acquired 11 companies since 1998 also has complicated the compliance picture. Each of those companies had its own operating methods, so developing standard processes that would be easily repeatable and scalable across geographically dispersed locations was a must, says Scribner. Fairchild also needed the ability to quickly identify country-specific requirements as well as to conduct order consolidation, landed-cost analyses, and denied-party screening.

Although the benefits of upgrading were clear, it wasn't easy to get approval for the new system. "Because there aren't 10 million customers out there using this kind of software, the upgrades and implementations can feel rather expensive," says Scribner, who campaigned hard for the investment. "We knew we had to do it," he says. "We were too far behind." Continued...

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