Standards speed global trade (page 2)
-- Logistics Management, 10/1/2005
Page 2 of 3
For help, Scribner turned to NextLinx Corporation of Rockville, Md., the successor to the vendor of Fairchild's existing export management solution. The shipper and software developer worked together to design, configure, and implement a solution that propelled the manufacturer "many versions ahead" of the system it had been using, according to Scribner.
Today, Fairchild uses the Trade Export module to manage its compliance activities. One of the module's most important functions is to screen customers to ensure that they're not on the frequently updated "denied parties" lists—government-issued lists of entities that pose a security risk to the United States. Trade Export also provides a way to authorize shipments to new customers.
"It's more than just the typical Dun & Bradstreet type of check," explains Scribner. "We also check their legitimacy in the eyes of the U.S. government by keeping our database updated with the names that the government keeps on a list that has grown significantly since 9/11."
Fairchild also uses the software to maintain Harmonized System (HS) classifications for each part number and to check import and export licensing requirements. In addition, Trade Export pulls information from various databases to generate documents such as commercial invoices and Shipper's Export Declarations (SEDs).
Much of that paperwork is transmitted electronically using a combination of PDF files, extranets, and automated e-mail notifications. That newfound efficiency has markedly reduced the time it takes to clear shipments through customs. In fact, 90 percent of Fairchild's shipments are now pre-cleared before arrival at their destinations, Scribner says. "When [customs authorities] get the documentation before the plane even lands," he explains, "it really smoothes the way for customs clearance."
Of course, updating regulatory information and maintaining compliance with trade requirements for 45 countries isn't easy, even with a state-of-the-art trade management system. When Fairchild makes a shipment from Malaysia, for example, it needs to provide a Malaysian HS code for each part number, as well as the U.S. and European Union versions of the codes.
To prevent information overload and eliminate the potential for conflicting data, the shipper relies on one customs broker and one customs attorney to handle all classifications and to enter that data into the system. An export-compliance team monitors other areas, such as export licensing. Says Scribner: "We knew we couldn't have everyone in the world trying to update and manage the data, so we centralized it."
Fairchild spent most of 2004 installing, testing, and implementing its new export system. It then assembled an internal, NextLinx-trained team of employees to train the rest of the users. The manufacturer also used that period to integrate the solution with its PeopleSoft enterprise resource planning (ERP) system as well as with the automated shipping application used by its primary carrier.
All of Fairchild's factories now use Trade Export for both direct shipments to customers and indirect shipments of materials. The software is now being implemented in Fairchild's German sales office, which sometimes ships parts to other locations in Europe. Continued...
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