Realizing Global Trade Management Potential
Source: ARC Advisory Group - Steve Banker, director of supply chain solutions at ARC Advisory Group, predicts an average growth rate of 9.4 percent annually for GTM software through 2014.
February 24, 2011
GTM in action
With GTM gaining traction and the global economy in growth mode, companies like Cadence Design Systems of San Jose, Calif., picked up on the need for a GTM early and for the last 10 years has relied on the system to ensure compliance and create a streamlined, global supply chain.
Specializing in Electronic Design Automation (EDA), or software tools that engineers use to design electronic systems such as printed circuit boards and integrated circuits, Cadence installed its Kewill Export Compliance System (ECS) and Reverse Denied Party Screening (RDPS) products.
Larry Disenhof, group director of export compliance and government relations for Cadence, says most of the firm’s sales and software transfers are handled electronically through sales, research, and development offices in India, China, Japan, Europe and Israel. Disenhof says that the firm’s GTM fulfills several functions, the most important of which is ensuring that no products are shipped to terrorist countries, or to companies or individuals that are listed as denied parties.
Using the RDPS, for example, Disenhof stays on top of both new and existing customers that must be checked against a list of about 28,000 denied parties. The system syncs weekly with that government list, and notifies Disenhof of any possible conflicts.
On several occasions, for example, the RDPS has identified denied parties, thus allowing Disenhof to work with Cadence’s order administrators to “shut them off, and warn the rest of the company that we can’t do business with these customers.”
Other times, the system alerts Disenhof to the need for a special export license, based on the customer’s location. And once in a while, the GTM solution gets overzealous and generates false positives that need further investigation before any orders are canceled. “There’s a company on the denied party list called Technology Options India Private Ltd.,” Disenhof explains, “so we get false positives whenever the system checks against commercial enterprises in India.”
Disenhof, who remembers a time when such compliance was handled manually, says Cadence’s GTM system adds a layer of protection that would be impossible to achieve without technology. “Export compliance is way too much of a burden to handle manually,” says Disenhof. “Using a GTM makes the process quick, and requires just a simple entering of a customer name and destination to get an immediate response. We can then clear the ‘no’ response by getting more information about the customer, or by stopping the order and moving onto the next task. It’s as easy as that.”
For more information on the latest news and insight revolving around global trade visit our Critical Topics Global Trade Section.
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