Mastering Purchasing Management for Inbound Supply Chains

Transcription

1 Mastering Purchasing Management for Inbound Supply Chains Thomas A. Cook CRC Press Taylor & Francis Croup Boca Raton London New York CRC Press is an imprint of the Taylor St Francis Croup, an informa business

2 Contents Prologue Acronyms xiii xv 1 Purchasing Management What Is Purchasing Management? 1 How Does Purchasing Management Work? 2 Purchasing Management and Corporate Governance 2 What Makes Purchasing Managers Effective? 3 Know What the Needs Are of the Corporation Now and into the Future 3 Know What the Options Are in Fulfilling These Needs 3 Know How to Obtain the Best Deal to Fulfill These Needs 4 Know How to Maintain These Deals for the Long Term 4 Additional Best Practices in Purchasing Management Master Negotiation Skills 5 2 Foreign Purchasing Management Why Is Foreign Purchasing Different from Domestic Purchasing? 9 Distances Involved 10 Demographics and Infrastructure 10 Language 11 Culture 11 Politics 11 In-Country Risks 11 Receivable Exposure 12 Currency Risk 12 Insurance Risks 12 Political Risks 13 Legal Differences 13 Logistics and Supply Chain 13 Dependence on Providers 14 VII

3 viii Contents Customs (Domestic and International) 14 Regulatory Affairs 14 Access to Qualified Personnel 15 Travel Costs 15 Sarbanes-Oxley 15 Develop Resources 15 Magazines 15 Key International and Supply Chain Web Sites 16 Risk Management in the Global Supply Chain and Foreign Purchasing...22 Summary 23 Import Logistics and Landed Cost Modeling 25 Logistics Management 25 Hire the Very Best Inbound Logistics Provider 25 Know Your True Landed Costs 26 Import Landed Cost Formula 26 Control Lead Times 27 Control the Most Favorable INCOTERMS of Purchase 27 Exercise Due Diligence, Reasonable Care, and Supervision and Control over the Inbound Process 31 Case Study in the Landed Costs in the Import Supply Chain 31 Options in Reducing Landed Costs 33 Import Compliance Management 35 Import Management Overview 35 Inbound Supply Chains Have Logistics Costs Escalate 40 Detail to Documentation Was Much More Critical 41 Purchasing Managers Had to Learn New Skill Sets and Establish SOPs in Areas Not Previously Prioritized 42 The Air Carriers Suffered Greatly 42 Financial Consequences to Importers and Global Supply Chain Participants 43 Supply Chain Security and Compliance Management Becomes a New Corporate Concern 43 Reasonable Care 45 Supervision and Control 46 Ultimate Consignee 46 Powers of Attorney 47 Due Diligence 47 Record Keeping 48 Documentation (Invoice) Requirements 48 Methods of Storage of Records 49

4 Contents ix Assists 50 Drawback 51 Necessary Drawback Documentary Requirements 52 HTS Classification 52 Imported Product/Origin Markings 53 Valuation 53 Duties and Taxes 53 ISF (10+2) Importer Security Filing 54 5 Customs Bonded Warehouses 57 What Is a Customs Bonded Warehouse? 57 Types of Customs Bonded Warehouses 58 Advantages of Using a Bonded Warehouse 59 Merchandise: Entry, Storage, Treatment 59 How to Establish a Customs Bonded Warehouse 60 Application 60 Other Requirements 60 Bonds Required 60 Where Are Customs Offices Located? 61 6 Foreign Trade Zones 63 What Is a Foreign Trade Zone? 63 Why Were Foreign Trade Zones Established? 63 Advantages of Using Foreign Trade Zones 64 Role of the Foreign Trade Zones Board Staff 65 Role of the U.S. Customs Service 65 Role of the Port Director 66 Frequently Asked Questions to CBP 66 What Are the Types of Foreign Trade Zones? 66 What May Be Placed in an FTZ? 66 What May Be Done in an FTZ? 67 What May Not Be Done in an FTZ? 67 How Is Merchandise Admitted into a Zone? 68 Customs Form 214 Application 68 Direct Delivery 69 What Documents Are Needed for Admission? 69 How Is Merchandise Removed from a Zone for U.S. Consumption? 70 What Are the Four Types of Zone Status? 70 Articles of Mixed Status 71 Where Is Additional Information Available? 71 FTZs: Big-Time Competitive Advantage: An Overview 71

5 Contents 7 Choosing Providers Best Practices 73 Choosing Correctly 73 Determine Your Needs 74 Know Your Options 74 Develop an RFQ/RFP 75 Obtain Referrals 75 Agree to Service Parameters First, Then Price 75 Set a Review Period, before Long-Term Agreements 75 Agree to Stewardship Reporting 76 Periodically Test Your Options 76 Focus on Technology Capabilities 76 View Added-Value Benefits 76 Partnership Mentality 76 Stewardship Reports from Freight Forwarders: An Excellent Management Tool 77 Organizing the Stewardship Report 78 The Process of Selecting Freight Forwarders, Customhouse Brokers, and Other Service Providers 78 Identify Your Expectations, Parameters, Needs, and Service Requirements 79 Interview Potential Candidates 79 Issue the Proposal Outline (RFP/RFQ) 79 Set Deadlines for Responsiveness 79 Eliminate the Peripheral Candidates and Bring the Selection Group from Eight to Ten Persons to Two or Three 79 Meet Again 80 Ask for Pricing and Final Revised Proposals 80 Make the Selection: Set a Time for Testing the Relationship, before Making a Longer-Term Agreement 80 Structure a Review Process 80 Summary 80 8 China and India 81 What Is the HTCG? 82 Successful Best Practices for Purchasing from China, India, and Other Emerging Countries 83 9 What Purchasing Managers Need to Know about Exporting 85 Department of Commerce (DOC)/Bureau of Industry and Security (BIS) 88 U.S. Principal Party in Interest (USPPI) 88 Export Licensing 88 Denied Parties Screening 90

6 Contents xi Deemed Exports 91 Antiboycott Compliance 92 Department of Treasury/Office of Foreign Asset Controls (OFAC) 92 Department of State (DOS) 93 Managing TSA Regulations within a Logistics Organization 95 Why Pay Attention? 95 Audits 96 Concluding Remarks 97 Glossary. 99 Appendix A 107 Appendix B 159 Appendix C 303 Appendix D 363 Index 389 About the Author 401