These days, that kind of accelerated logistics on a global scale is the norm rather than the exception. A strong U.S. market coupled with the economic recovery in Asia has triggered a boom in world trade. Global merchandise trade imports in recent years have climbed at an annual rate of 6%, reaching nearly $5.5 trillion in 1998, according to the World Trade Organization. The United States imported goods valued at $1 trillion last year, a 12% jump from 1998, the Commerce Department reports.

Companies are using integrated systems--often Internet-based--to give them a better view of their global supply chain and help speed delivery of products from the farthest reaches of the planet--areas that offer a ready workforce but may be technologically deprived. For instance, Home Depot Inc. is developing a Web alternative for low-volume suppliers that don't use electronic data interchange. DHL Airways Inc. is piloting a Web system to let shippers determine duties and tariffs before their products cross international borders. "Our ability to communicate has shrunk the globe," says Tom Brunell, VP of supply-chain strategies at Avnet Inc.'s integrated material services business in Phoenix. "It doesn't make a difference if a product comes from Southeast Asia or South America."

Larger companies still rely heavily on EDI to transmit and receive order requests along the supply chain. Eight of every 10 purchase orders Home Depot issues are transmitted via EDI, usually over a value-added network, says Gary Cochran, VP of IS at the $38.4 billion Atlanta home-improvement retailer, which partners with 300 overseas manufacturers. "For large-scale players who got into EDI early on, it will continue to be a major artery for the flow of information," Cochran says.

But Internet technologies such as Java and the Extensible Markup Language are playing a larger role in developing systems to exchange information among companies along supply chains, especially those pipelines that incorporate less technologically sophisticated partners. Web-based systems are crucial because many small and midsize manufacturers in the far reaches of Asia, Latin America, and the Caribbean are relatively low-tech companies--they don't have the financial wherewithal or technological sophistication to handle EDI.

These companies usually phone, fax, or mail orders to their overseas manufacturers. This process is slow and error-prone. And errors introduced at the beginning of the process can grow exponentially as wares move along the supply trail. "People make mistakes when they take stuff off the phone," says Arnold Maltz, an assistant professor of supply-chain management at Arizona State University. "They'll write down the wrong unit of measurement, then hand that off to someone else. That's a problem with nonintegrated systems."

Home Depot's online payment system caters to smaller suppliers that don't have EDI. Vendors shipping merchandise based on an already-submitted purchase order can easily bill Home Depot by entering the total cost of the goods. Information from the purchase order is automatically conveyed to the invoice. The system lets vendors modify the invoice online if, for instance, Home Depot receives only part of the shipment detailed in the original purchase order.

Vendors of logistics systems are developing products to target the market for global, midmarket, integrated supply-chain systems. Maersk Logistics, a subsidiary of the $6.7 billion Danish conglomerate A.P. Moller Group, markets a Web-based supply-chain system in 55 countries. M-Power is a browser-enabled application that lets customers see the entire supply chain from the time a product leaves the assembly line to when it's placed on retailers' shelves. It also provides reports for in-depth analysis. The system, developed in Java and Allaire Corp.'s Cold Fusion application server, runs on Microsoft's Windows NT and SQL Server.

Maersk customers access M-Power through an extranet, where they input the purchase-order information and retrieve information about specific shipments. One Maersk customer moves 13,000 40-foot-long containers to the United States from Asia yearly and grants access to the system to more than 100 employees representing not only logistics personnel but sales representatives and other workers as well, says Tony Chiarello, who heads Maersk Logistics' North American operations in Madison, N.J. Eventually, customers and business partners will be able to integrate their own systems with M-Power over the Web. "Customers don't want to have 15 different EDI solutions because they have 15 different suppliers," he says.

Getting a clear picture of the supply pipeline is especially important to companies such as Stride Rite, in Lexington, Mass. Having shuttered plants in the United States and the Caribbean in recent years, Stride Rite buys nearly all its products from overseas producers--more than 80% of Stride Rite's shoes are manufactured by independently owned footwear makers in China.

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Illustration by Kitty Meeks
Photo of Brunell by Reed Rahn