When you're the largest apparel company in the world with billions of dollars in sales, plants throughout the Americas and a worldwide sourcing operation that takes you to Asia and Africa, the amount of documentation required to both run the business and pass federal security and compliance requirements for importing and exporting is staggering.

But that's what faces Ellen Martin every day as Vice President of Supply Chain Systems at VF Corp. of Greensboro, N.C., known best for its Vanity Fair label among others. It was hard enough to manage just-in-time shipping and manufacturing schedules before 9/11. Now, Martin notes, the melding of homeland security regulations into import/export compliance regulations has added another stack of documentation to an operation that's already overloaded. And, she knows this task would be nigh impossible without the deployment and integration of many types of software.

The same dilemma faces Bob Scribner, Senior Manager for Global Logistics at Fairchild Semiconductor International. From his South Portland, Maine office, Scribner helps direct a global operation with 10,000 employees and factories in Asia and North America. Although the company is fully networked and implanted a PeopleSoft suite to manage supply chain flow since the late 1990s, he's found that since 9/11, export and import documentation has soared with the add-on of federal homeland security.

"When you look at importing goods it used to be all about duties and tariffs," explains Eric Peters, Executive Vice President of Strategy and Business Development for Manhattan Associates, an Atlanta, Ga.-based supplier of supply chain execution solutions. "Now, it's all about security and that's a huge shift. With NAFTA and other trade zones documentation should have gotten easier, but since 9/11 it's more complex. Companies have to prove they have security processes in place."

Although it's easier on the export side if goods originate in the United States, Peters notes that all global traders (particularly importers) need to provide a "clear documentation trail" that doesn't send any red flags to Customs. What might trigger a red flag?

A change in pattern of receipts or insurance costs-something out of the norm that could suggest money laundering or other illicit activities that might be a warning sign of terrorists. But when documentation, depending on country of origin, can top 50 pages, assembling the requisite information can pose a challenge.

Darren Maynard, Chief Operating Officer of NextLinx Corporation. in Rockville, Md., developer of trade compliance solutions, says that "problems arise when people change who they do business with and change countries, but don't have a process to document the changes and don't have system in place to assess the risk. If you're inadvertently doing business with someone harmful, there will be problems. The more you've documented and captured, the more you're in control and the more Customs is comfortable that you're in control."

No one tool will do it

Although there are supply chain management tools available to streamline operations within the enterprise and security/compliance tools to bolt onto the supply chain system, these experts all agree that there is no one software suite that will do it all.

"It's just not there. You have to take tools and integrate them," Martin says of handling VF's needs to provide a networked system, track and trace goods worldwide and be able to satisfy import/export compliance and homeland security regulations. VF's approach was to start with SAP's Enterprise Resource Planning (ERP) suite as its base, and then "bolt on best-of-breed technology" rather than work around the fact that SAP lacked certain functionalities crucial to running their business. That decision put more of a burden on the information systems division to either purchase middleware or write interfaces for ERP and other software products so "all modules talk to each other," but Martin believes that choice has given VF a competitive edge.

Among the add-ons to the basic management system were New Generation Computing's tracking and tracing solutions designed especially for the apparel industry, which allows VF to know where every garment is in the manufacturing and shipping process anywhere in the world. Capturing such data from diverse sources can be, in Martin's terms, "like going into a black hole." The hole needs to be closed. To cover the myriad of import and export regulations entailed by their extensive supply chain, and to help reduce dependence on customs brokers, VF integrated several products from NextLinx, including their Trade Collaborator solution to manage the trade fulfillment process. Other applications include the Trade Export solution, which Martin says is expected to "integrate with VF's existing applications to screen for restricted parties, determine licenses, create documentation and submit Shippers Export Declarations (SEDs) to U.S. Customs."

Fairchild Semiconductor has been a fully networked company utilizing a full suite of PeopleSoft's supply chain management products since the late 1990s to better manage a far-flung global operation. But rather than allow the myriad of new regulations and requirements to slow down its supply chain, Fairchild also chose to integrate security/compliance products from NextLinx.

NextLink's Maynard says that typically, trade management systems for security and compliance don't hold enough data to satisfy homeland security regulations. In order to capture that information, security and compliance solutions need to be integrated with the order management system portion of the ERP where customer data is stored traditionally.

"You need to know who you're doing business with. Our solutions can screen customer data with any government list in the United States or globally to ensure that someone in your supply chain isn't a denied or restricted party. Terrorists should appear automatically on a denied party list," Maynard says.

Product process information is also critical. Maynard says most ERP store product information, but not information pertinent to passing security regulations that are heavy on process documentation or compliance. "Our solutions allow you to link the tariff schedules worldwide with a product record from your supply chain system, so you can map product classifications worldwide and have the information you need on exporting and importing countries to meet Customs' 24-hour rule" (the post 9/11 regulation requiring shippers to transmit shipment documentation to Customs at least 24 hours before a delivery's arrival in the U.S.).

Making integration work

The challenge to world traders is substantial: how do you make that integration of ERP work seamlessly with security/compliance so your supply chain keeps chugging just-in-time?

Martin says VF quickly learned that the answer was to write its own interfaces between SAP and the various software solutions bolted on to provide security/compliance functions. The enormous volume of daily shipments involved, plus the fact that most solutions aren't geared to sizing, which is crucial in the apparel industry, made this particularly challenging.

"We wrote the interface with SAP to NGC for the tracking and tracing module and then an interface to NextLinx compliance/security products. We still had to add-in necessary information to generate documents to the broker," who Martins hopes one day will become "a rubber stamp" able to guarantee compliance. Their next goal is to handle electronic clearance, but they are not there yet.

Her advice to other companies tackling integration of a supply chain system with security/compliance add-ons is that "there's no soup to nuts answer. You're going to have to write interfaces to whatever ERP system you have and whatever you buy for security applications. Go in with your eyes open to the fact that you're only going to get part of a solution."

She also suggests understanding the databases of the package you're buying-what fields are necessary and required. "Do I have the required data in my ERP system, and if not, how am I going to get it? Most people find out later they don't have half the data necessary to run a security/compliance solution because it's not in the base ERP system. Then you want to cut your throat for spending all this money on software and finding out that you'll have to spend just as much to make it work."

And remember middleware, she adds. The various systems have "to talk seamlessly, which means having a good communication methodology. There are many messaging buses that get stuff from point A to B, but don't talk to each other because they're on different operating platforms."

At Fairchild, Scribner says they are now involved in major product upgrades on both the supply chain and security fronts, and there are the usual array of problems making things work. As he notes, "You can't test this stuff enough. But we work with the problems up-front and just don't turn it on until we've solved the problem."