FOOTWEAR SOURCING INTEL SUMMIT (FOOTWEAR FACTORY COMPLIANCE, SUPPLY CHAINS, AND SOURCING) Managing the Landed Cost of Imported

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1 FOOTWEAR SOURCING INTEL SUMMIT (FOOTWEAR FACTORY COMPLIANCE, SUPPLY CHAINS, AND SOURCING) Managing the Landed Cost of Imported Shoes and Related Products Apex Global Logistics Thomas A. Cook Global Supply Chain Management 1

2 THE NEED TO MANAGE COMPETITIVE SUPPLY CHAINS THE CRITICAL NATURE OF LANDED COSTS - BEST OPTIONS TO REDUCE LANDED COSTS - IMPACT FREIGHT COSTS - NEGOTIATION SKILL SETS - KNOWING BUSINESS PROCESS OPTIONS - BETTER DEMAND PLANNING - TECHNOLOGY PO MANAGEMENT - DOCUMENTATION AND TRADE COMPLIANCE - PEAK SEASON DEMANDS - ALTERNATIVE SOURCING OPTIONS (FTA S) - BONDED WAREHOUSES - FOREIGN TRADE ZONES SUMMARY AND QUESTIONS 2

3 Understanding Landed Costs The accumulation of costs and expenses, including the potential of risk exposures that add up to the final cost to bring imported goods into the United States from foreign sourced locations to point of sale, value or utilization. Every Industry has this exposure who imports goods, but it is of particular concern to Consumer Product Sales where COGP, Cost of Goods Purchased Impact Consumer Sales Price in a highly competitive marketplace in what we all know to be a Very Competitive Global Economy. This also enhances the position we all serve in Supply Chain Management which heightens our importance in impacting the competitiveness of the companies we serve as importers, distributors, manufacturers, carriers and service providers. 3

4 Sample Landed Cost Analysis: - Purchase Price (FOB) $ - Export Charges $ - Consolidation, Packing, etc. $ - Inland Freight $ - International Freight $ - Insurance $ - ISF Filing $ - Duties, Taxes, etc. $ - Import Clearance Fees $ - Warehousing, De-consolidation, Distribution $ - Inland Freight to Distribution $ - Inland Freight to Point-of-Sale or Use $ 4

5 Potential Additional Costs and Risks: - Single Country or Supplier Sourcing (Or Dominant) - Political, Economic and Geo-Physical Exposures - Security C-TPAT - Trade Compliance The complexities associated with shoes, leather and Consumer Products and dealing with CBP and other government agencies - Internal communications and controls in PO Management, Demand Planning and Inventory and Distribution Systems 5

6 With all this Knowledge about Costs and Risks The Key Focus is that we are all:! In a position to make decisions that reduce Risk and Cost to our Supply Chain! To recognize that we cannot eliminate all risk and cost. But we can manage it successfully to a point! Where profits and margins meet company expectations and goals Some Examples: 6

7 Examples and Options: - Impact Freight Costs - Negotiation Skill Sets - Knowing Business Process Options - Better Demand Planning - Technology PO Management - Documentation and Trade Compliance - Peak Season Demands - Alternative Sourcing Options - Bonded Warehouses - Foreign Trade Zones 7

8 8 Apex Global Logistics

9 Additionally You must spend time on training, education and market intelligence/ opportunities/options " FDRA Does a Great Job, along with other Options " You can contact me at: tomc@apexglobe.com or tomcook@bluetigerintl.com and I can point you in a number of training directions 9

10 SUMMARY You have Options to Impact Landed Costs and Risks - I discussed some 10 + Options - If I were going to focus on a few to earn some immediate results! Technology in PO Management! Alternative Sourcing Options! Foreign Trade Zones! Managing Peak Season 10

11 THANK YOU! Open for Comments and Questions: