Technology Update: Global Trade Management Systems

Transcription

1 Technology Update: Global Trade Management Systems Facilitated by Matt Wilkerson and Gene Tyndall September 1-2, 2009 Chicago, IL

2 Global Trade Management Two Principle Categories of Global Trade Management (GTM) Functionality 1. Trade Compliance 2. International Transportation/Logistics Management Copyright 2009 Supply Chain Consortium. All rights reserved. 2

3 Session Scope This Session Will Focus On: Current utilization of GTM systems GTM system performance monitoring GTM advantages beyond compliance Discussion of experiences, concerns, and opportunities Copyright 2009 Supply Chain Consortium. All rights reserved. 3

4 Global Trade Compliance Technology Introduction The ability for companies of all sizes to source and sell globally has added significant complexity to supply chains. Despite recent volume declines due to the recession, globalization will continue to be a major force in supply chain management. For many companies, globalization is an important component of future growth, yet it is fraught with opportunities for costly mistakes. This discussion will begin by identifying where global trade management technology is currently being used, then ascertain where further opportunity exists, and end with a discussion of how these principles may apply to your organization. Copyright 2009 Supply Chain Consortium. All rights reserved. 4

5 Global Trade Compliance Technology Utilizing Global Trade Compliance Software Respondents' Utilization of Global Trade Compliance Software No 48% Yes 52% Slightly more than half of the companies surveyed use global trade compliance software. The software functions most often used are classification of goods and electronic status tracking. Copyright 2009 Supply Chain Consortium. All rights reserved. 5

6 Global Trade Compliance Technology Strategy for Evaluating and Obtaining Global Trade Compliance Software Strategy Purchase best-in-class point solution Use system capability provided by ERP vendor Build what is needed Percentage of Respondents 24% 47% 29% Nearly half of the respondents prefer to utilize the system capability provided by their ERP vendors for global trade compliance. Copyright 2009 Supply Chain Consortium. All rights reserved. 6

7 Global Trade Compliance Technology Additional Global Trade Compliance Software Functions Utilized Software Functions Internal Third Party Portal Trading Partner Duty management and drawback (optional) 50% 40% Tracking import and export regulatory fees 60% 20% Tracking duty and taxes 70% 20% Valuation of goods 67% 11% 11% 11% Supplier compliance to classification and valuation 70% Intrastate reporting 50% 25% 13% 13% Free trade agreement qualification 63% 13% 13% 13% Outward processing relief 60% 40% 0% 20% Cost tracking by category 86% 0% 0% 14% A variety of different software functions are used by companies to manage global trade either internally, through a third party, via a portal, or with a trading partner. Copyright 2009 Supply Chain Consortium. All rights reserved. 7

8 Performance Monitoring Monitoring Global Trade Compliance Performance Monitoring of Trade Compliance At the corporate level (all divisions and locations) At the division level (all locations within division) At the location level Multiple answers possible. Total may exceed 100%. Yes 81% 59% 63% No 19% 41% 68% More than 80% of respondents monitor the performance of their trade compliance program at the corporate level. In total, nearly all companies indicate that they monitor performance at some organizational level. Copyright 2009 Supply Chain Consortium. All rights reserved. 8

9 Performance Monitoring Most Common Performance Measures for Trade Compliance Penalties Duties saved or avoided Holds or inspections Violations not resulting in penalties Copyright 2009 Supply Chain Consortium. All rights reserved. 9

10 Performance Monitoring Calculating Total Landed Costs When Making Sourcing Decisions Regulatory Agency Costs of Trade Import duties Import taxes Import fees paid to regulatory agencies Export taxes Export fees paid to regulatory agencies Percentage of Respondents 95% 90% 85% 65% 50% A majority of companies responding to the survey include import duties, taxes and fees in their total landed cost calculation. Copyright 2009 Supply Chain Consortium. All rights reserved. 10

11 Performance Monitoring Customs Hold Metrics Percentage of Orders that Experience a Customs Hold at Origin Less than 1% 1 to 3% Greater than 3% Percentage of Orders that Experience a Customs Hold at Destination Less than 1% 1 to 3% Greater than 3% Percentage of Respondents 81% 19% 0% Percentage of Respondents 62% 38% 0% More than 80% of respondents indicate a customs hold percentage of less than 1% at the point of origin, and 62% have a customs hold of less than 1% at the destination. Copyright 2009 Supply Chain Consortium. All rights reserved. 11

12 Global Trade Management Systems Top 8 Advantages Beyond Compliance 1. Computing Total Landed Costs (TLC)/Total Delivered Costs (TDC) 2. Shipment/Container Planning and Execution 3. Tracking and Tracing Shipments 4. Reducing Port Delays 5. Event Management 6. Securing Preferred Space 7. Reporting Actual International Freight and Inventory Costs and Time 8. Better Control of the Order-to-Cash Cycle and Minimizing Days Sales Outstanding (DSO) Copyright 2009 Supply Chain Consortium. All rights reserved. 12

13 Discussion Group Open Discussion Questions Does compliance fall under the supply chain function or somewhere else? Are changes on the horizon that may necessitate bringing functionality in-house? Are current processes doing a good job of ensuring compliance and highlighting potential areas of risk and productivity opportunities? Do you plan to consider and evaluate GTM in 2009/2010? Why or why not? Would you envision further needs beyond compliance and the top 8 advantages (listed on slide 12)? How integrated is your international supply chain management with domestic? with finance? with others in your company? How important to you is real-time information on international trade? Copyright 2009 Supply Chain Consortium. All rights reserved. 13