Imagine a single part that gets machined halfway around the world. It has precise tolerances and needs to be verified and traced. It might also need government approval, further engineering changes and fall under a strict limit of volume before returning to the U.S. several years later, where it awaits new compliance demands.
Now multiply that by 10,000 and you begin to understand the task that faces a company like Lockheed-Martin, which must track and update each piece that goes into its aircraft.
With its new F-35 Lightning II stealth jet, those complexities multiply, which is why the defense contracting giant automated its international trade compliance using SAP's Global Trade Services (GTS).
The software will be used to enable Lockheed-Martin to manage its outsourcing across nine countries and dozens of suppliers, and voluminous documentation. Part of the reason for this is that exporters, importers and manufacturers all must shoulder increased legal responsibility for knowing the identities of their end customer.
Until now, says Charles Abrams, international licensing analyst for Lockheed-Martin, that system has been done manually.
"We used spread sheets, even note cards," said Abrams. "We're currently in Year 2 of our planning. But were going to make a huge leap in the next three years and we need to automate this."
Currently, two F-35 are built per month, with production split between facilities in Texas, Georgia and California, and final assembly taking place in Fort Worth, Texas. But over the next several years, that production will multiply by the thousands, with the Fort Worth facility slated to produce one F-35 every day. That will mean millions of data elements to track.
Abrams explained that contractors like Lockheed-Martin also face a complex web of licensing, which will only multiply in the coming years. Some of those licenses are temporary in nature -- limiting, for instance, the number of components that are allowed to be produced per year. Others are permanent. GTS will be used to help differentiate between temporary and permanent licenses, while also managing inbound and outbound activities.
Another issue the software is helping Lockheed-Martin is in dealing with U.S. customs. With a long list of sanctioned countries and companies, contractors are responsible for knowing where every part is going and into whose hands.
GTS will also enable the future development of a web-based portal for external logistics partners. "It will allow third-part logistics providers to input data into the system as it gets into their facility," said Abrams. "It will streamline the process and speed it up."