Improving global trade management is front and center for shippers, says new Aberdeen report

Jeff Berman, Senior Editor -- Logistics Management, 6/20/2007

BOSTON—Improving trade compliance and global supply chain visibility are the top two drivers for shippers in terms of their global trade management initiatives, according to a survey of 200 shippers conducted by the Aberdeen Group, a Boston-based supply chain and logistics research firm.

Aberdeen’s report, Global Trade Management Strategies: Surviving Growing Complexities in 2007, states that best-in-class shippers are nearly three times as likely than their peers to be currently using a global trade management technology platform that can result in reduced total landed costs, shorter lead times and lead time variability, and increases customs clearance speed.

According to Viktoriya Sadlovska, Aberdeen research analyst and author of the report, these platforms also provide shippers with speed and process improvements that are now crucial in building efficiency into global supply chain operations. “One thing that makes a difference is how good and how granular data feeds are,” says Sadlovska. “If [shippers] can include this granular level of data—such as advance shipment notices created, customs clearance events, and order acknowledgement—it will give them more order and control of [global] supply chain operations and enable them to be more agile.”

A key benefit to the GTM platform, says Sadlovska, is the ability to upgrade visibility data quality by adding service level agreements in contracts with shippers and logistics partners that focus on accurate and timely delivery of documents and deadlines. Another shipper benefit of using visibility technology on a global basis, notes Sadlovska, is that it enables them to make core corrections to their international shipments and schedule changes that may reduce lead times and lead-time variability.

Greg Hines, senior manager trade compliance with Symbol Technologies (Motorola), agrees with Sadlovska in that global supply chain visibility platforms can directly impact how successful a shipper is—or not—when it comes to centralizing trade compliance processes.

“Companies that take a centralized approach with only a few platforms, or just one, are better able to manage imports and exports with a quicker turnaround in customs,” says Hines. “And this gives them the ability to make sure they’re taking advantage of a special trade program. If you get a customs audit, and can show customs that you have a system[s] in place, that helps mitigate risk.”

Aberdeen data—based on shipper feedback—further validates how important trade compliance has become, with 58 percent of report respondents saying improving processes in this area is a high priority in 2007. The top trade compliance initiatives mentioned by shippers in the report include: improving total landed cost calculations (58 percent); strengthening C-TPAT compliance (55 percent); and actively using global trade management knowledge to engineer lower total landed costs on products (41 percent).

For Donnie Barnes, customs compliance manager for BMW Manufacturing Co. LLC, global trade management software has enabled her to eliminate the cumbersome, paper-based process that was formerly used to handle import and export processes.

Now, for things like C-TPAT compliance, she says BMW utilizes an electronic system that contacts suppliers via e-mail with a log-on ID and password; in turn, suppliers can complete a questionnaire and attach required documents.

“This allows us to review their responses, slice and dice the information and compare it with what other suppliers are doing in order to determine risk,” says Barnes. “The [former] process took hours of labor to accomplish a review that is not as thorough as what we can do now in a matter of minutes…and leaves us with more time to assist the suppliers in making improvements if necessary.”

While global supply chain visibility and trade compliance are front and center for shippers, the familiar mantra of cost reduction is not to be ignored, according to the report.

“Because cost is so highly prioritized in global trade, best-in-class shippers need to show more improvement in cost reduction[s] while also maintaining a high customer service level,” says Sadlovska.

Talkback

We would love your feedback!

Making Visibility a Supply Chain Priority

11/02/2009

Logistics technology: Oracle targets compliance, multi-fleet management with new releases

03/12/2010