No matter how well-oiled an importer's logistics operation may be, nearly every one of them has seen shipments hit the customs "wall" and languish there for a frustrating (and expensive) length of time.

To prevent that from happening, importers must conquer the twin challenges of maintaining international supply chain visibility and presenting complete and accurate customs documentation at the point of entry. The way to do that, say importers who have fought that battle, is to find and implement the right information technology (IT) system.

That was the case for IBM, the global information services giant, and Liberty Richter, a specialty foods marketer. Although their businesses are markedly different, both found the answer to the importer's prayer in customized information systems—one developed in-house and the other acquired from a provider of import-export software.

IBM's Global Logistics business unit is charged with managing the movement of Big Blue's products to and from 160 countries and is responsible for some $8 billion in imports into the United States each year. Despite having so much experience, however, the group continued to have problems with regulatory compliance.

About 10 percent of IBM's U.S. import transactions, mostly for high-end and mid-range servers and low-end workstations, experienced exceptions that required the importer to retrieve and present documentation to customs authorities, thereby stalling customs clearance. Ten percent may not sound like much, but with IBM filing more than 100,000 entries per year, the cost of those holdups was substantial.

The problem was that the backup material customs officials required consisted of faxed, scanned, and e-mailed documentation—a mélange of paperwork that in some cases had been lost or damaged early on.

That wasn't surprising, as Global Logistics works with a network of freight forwarders, customs brokers, and air and ocean carriers, all of them creating and exchanging documents in a variety of media.

"Customs today is all about advanced information," says Alan Kohlscheen, the Boulder, Colo.-based business unit's manager of international trade compliance. "[Yet] paper still drives a lot of the government process, and the multiple handling of printed-out paperwork upstream leads to too many opportunities for errors."

Kohlscheen and his colleagues recognized that resolving documentation problems was the key to eliminating customs-clearance delays—and for preventing future problems. "The handling of information, its timeliness and data integrity, is the most critical problem for importers," he explains. "The last thing you need in a customs audit is to be marked discrepant because of inadequate documentation."

As a provider of IT development and consulting services, IBM had the resources to solve the problem itself. Global Logistics thus turned for help to the company's Almaden Research Center in San Jose, Calif. Continued...

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