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Building The Case for Global The next few years should carry the global into the next wave of , critically underpinned by sophisticated and pervasive digital that reduces barriers, improves between cultures, levels the playing field for entrepreneurs and startups, and forms the foundation for an always-on global economy. Our projections show that world trade is expected to quadruple in to reach $68.5 trillion of traded each year by 2050.16 Are you ready? 00. Contents

Introduction GTM is defined GTM has its challenges GTM gets a new business case Key takeaways and closing

3 The role of GTM has evolved That means your business case should too.

The scales have shifted GTM has a new business case Historically, trade compliance was a back-office With the total volume of world merchandise trade We know that GTM technology function focused on risk mitigation. The was continuing to grow, more companies are looking avoiding penalties, side-stepping jail time, and across international borders to find and connect with can help your company protecting the company’s . Nothing trading partners, suppliers, and . That move forward. That’s why we more, nothing less. calls for a stronger, faster supply chain and a better created this e-book to help you approach to GTM. While those are important – which help understand the business value you remain in good standing with and Companies are now exploring how an effective GTM of GTM technology and how it your trading privileges – they don’t strategy can: supports your overall supply chain. support an overall supply chain strategy. You • Impact sourcing decisions and lower total aren’t making advancements because you’re landed cost always on the defensive. • Decrease delays, demurrage fees, and That’s where global trade management enters as operational costs a competitive edge. • Increase supply chain speed and streamline border crossings

4 The old GTM meets the new GTM

Old GTM New GTM In the past, GTM began when the shipment was The new GTM, on the other hand, recognizes the increasing complexity involved in global trade ready. It meant moving the shipment from origin to and the need to span design, , and sourcing decisions as part of its end-to-end scope. destination at a low cost and in a timely manner. This new approach to GTM includes everything that’s needed to source, qualify, produce, and / the with minimal risk.4

Design Production Sourcing Compliance

5 01. GTM is Defined

6 First things first Before we dive into the business case, let’s review a few terms.

Global Trade Management Global Trade Compliance n. the practice of streamlining the entire lifecycle of n. the practice of addressing the rules, regulations, and trade- global trade across order, , and settlement specific costs of conducting cross-border trade.11 activities to significantly improve operational efficiencies and cash flows.20

Used in a sentence: Used in a sentence: The comprehensive nature of GTM is a boon for If GTM is the cross-functional, -wide view of global that fully embrace the cross-functional, trade, then global trade compliance is a key piece of that system-wide view of global trade. puzzle. Compliance allows you to move your goods across borders. Without it, trading privileges are lost, and the supply chain comes to a halt.

7 Compliance across the supply chain You may not realize, but compliance has all throughout your supply chain. Here are some common ways that compliance can overlap with other strategic departments.

If you’re making decisions in a Product development /Distribution vacuum, then you’re may make changes If procurement/sourcing Manufacturing may not know Sales needs to be in probably losing to a finished good, altering changes the sourcing location what product information communication with the and putting the classification or country or supplier without involving to report to the compliance compliance department to of origin. If the compliance the compliance department, department, which impacts make sure that customers are your company at risk. department isn’t notified, they they might accidentally lose dutiable value and the total properly screened to identify might incorrectly classify the preferential treatment from duties paid. sanctions or restrictions. product and, as a result, pay an an applicable Selling and distributing to incorrect rate. agreement and increase the restricted parties puts the total landed cost. “Cheaper” company at risk for non- sourced products can have compliance, penalties, and significant hidden costs. bad publicity.

8 GTM across the supply chain Like compliance, GTM opportunities span the entire supply chain. The four main areas of opportunity are:

Strategic sourcing Duty optimization Global trade visibility You should analyze global sourcing In addition to strategic product With a GTM solution, you can Gaining visibility across regions is one options in the early stages of design and sourcing, you can use facilitate the flow of information of the most fundamental challenges product design and development. up-to-date trade data to optimize throughout your supply chain for global companies whose data By leveraging up-to-date trade your cross-border movements. and direct file with government is kept in disparate . GTM data, you can capture by An automated solution with agencies. That leads to lower technology can collect data from designing products to achieve integrated trade data can help transaction costs between multiple countries and sources to the lowest possible duty through you analyze factors such as duties, business and government, as well provide a single consolidated view of available free trade agreements. sanctions, and controls to help you as smoother border crossings. your global trade compliance activity. Through strategic duty , you determine the most -efficient With that clarity and data insight, you can lower your total landed cost and trade lane for your goods. can identify strategic opportunities for the cost of goods sold. your overall supply chain.

9 Who does this matter to, and why? The answer is pretty simple: everyone.

From trade data around the world, we see that the concept of “Made in Country X” is already obsolete. Every year more countries trade in intermediates, not final products. According to recent estimates, The increase in international trade doesn’t just affect the compliance department. Your tax, audit, , and about 30% of the value of supply chain departments all have skin in the game. The truth is that your company’s level of compliance and effective duty/tax management has a big effect on the bottom line. global comes from foreign inputs.24

81% 91% Russia Rest of 95% Global trade on the rise 97% 96% Europe North America EU-28 Here you can see the percentage of importers sourcing from various regions 87% 88% 2 91% India Rest of Asia around the world. 80% 85% Rest of South America 88% Brazil

10 What are the common business benefits? As companies adopt GTM technology, they are converting manual processes to cloud-based solutions for improved visibility and compliance performance. Best-in-class companies prioritizing automation in their global trade activities experience key advantages over their competitors. Best-in-class vs. Competitors

Frequency of out-of- inventory in the past year15 0.8% decrease 0.9% increase

Total landed cost per unit year-over-year4 2.71% decrease 5.03% increase

Orders delivered to customers that are complete and on time15 96% 87%

Reduced global trade spend year-over-year4 69% 21%

Orders received from suppliers that are complete and on time15 95% 85%

Visibility into all international outbound orders shipped status within hours4 88% 54%

11 02. GTM has its challenges

12 Challenges in global trade In this section, we will lay the groundwork for the business case. Every company involved in global trade faces at least four major challenges.

1 2 3 4

Complex and Cost reduction Supply chain risk Operational inefficiency changing regulations In a global economy, Heightened national security Without common compliant Trade regulations are ever- companies need their supply has increased the demand for procedures across the changing and vary greatly by chain and cross-border successful supply chain risk , accuracy and country, making import and transactions to be as tax- management. suffers. export compliance difficult. efficient as possible.

13 Challenge #1: Complex and changing regulations Complexity is inherent — and growing—when it comes to international regulations. Compliance is increasingly complicated by growing multitudes of rules, regulations, trade agreements, and audit requirements. Not to mention that trade regulations can vary dramatically by country.

According to some reports, US When you consider those numbers What are global trade specialists most concerned about? business regulations are among on a global scale, it’s no wonder the least burdensome in the that compliance managers are 1. Interpreting and communicating requirements across sites and countries world. Even so, the concerned about their ability Disparities in requirements between countries estimates that it takes 9 hours to keep up with regulatory 2. and $275 per shipment to fill requirements. 3. Complex and changing requirements with local government agencies the documentary and border compliance requirements for In one survey of global trade 4. Manual processes and disparate systems importing into the US.26 specialists, most respondents were very concerned with 5. Lack of automated systems their ability to interpret and 6. Inefficient processes and systems communicate requirements across sites and countries.23 7. Visibility to all elements in a trade transaction (external providers, etc.) 8. Inefficient import and export key performance indicators (KPIs) and metrics 9. Detailed recordkeeping and audit trails 10. Delays and fines caused by compliance and documentation errors 11. Lack of historical transactional data

Responses taken from GTM technology users.

14 Challenge #2: Cost reduction as a key business priority

How are CPOs planning to generate value? Cost reduction has always been important Consolidating spend for business, but recent studies suggest that 37% it’s even more important now. According to a Reducing total lifecycle/ costs 32% 2018 study on Chief Procurement (CPO) priorities, reducing cost outweighs increasing Increasing 31% cash flow for most CPOs.9 Specification improvement 24% A total of 78% of CPOs cited cost reduction as a key business strategy in 2019. By contrast, only Increasing level of supplier 23% 40% cited increasing cash flow as a key strategy, similar to rankings for and Business partnering 22% organic expansion. existing supplier relationships 21% When surveyed about their tactics to generate value, the majority of CPOs listed cost reduction Restructuring the supply base 19% strategies, including consolidating spend and reducing total lifecycle and ownership costs. Reducing transaction costs 16% Reducing demand 13% Managing volatility 11% of non-core sourcing and procurement activities 10%

15 Leaving money on the table

The same study called out cloud technology and advanced fully utilizing all of the FTAs available to them, despite analytics as an emerging opportunity for value and efficiency. the fact that nearly all respondents reported favorable Approximately 50% of CPOs reported using analytics for cost results. Globally, just 8% of respondents failed to report In 2017, nearly 40% of US optimization and process improvement.9 any savings in import duties through the use of FTAs.23 goods exports went to FTA partner countries.8 However, And they’re right on the money. GTM technology offers a host Not participating in FTAs, or cherry-picking just one FTA, of opportunities to increase cost competitiveness via process means that you are losing out. Plain and simple. many companies choose not to automation, supply chain digitization, and duty savings. But participate because they struggle these savings are often left on the table. That waste is even more significant when you consider a recent study that found a correlation between high with identifying opportunities to As a key opportunity for savings, free trade agreements (FTAs) FTA utilization and better performance — specifically, qualify goods under FTA-specific are underutilized across the board. In a survey by Thomson the ability to export more goods without increasing rules of origin. The good news is Reuters and KPMG International, only 23% of companies are costs.18 that GTM technology can greatly simplify that process. How FTAs are utilized globally18

71% 41% 36% report that full FTA full FTA utilization is of companies 25% utilization pays reported in the US, are utilizing just of companies for itself compared to one or two FTAs utilize no FTAs India’s 19%

16 Challenge #3: Risky business and the supply chain The next challenge is risk management.

Supply chain risk management is becoming a top priority in procurement as organizations lose millions because of supply chain disruption, non-compliance fines, and incidents that cause damage to the organizational brand and reputation. Defining risk in the trade In one study, the Business Continuity Institute found that 33% of firms responded compliance world that their executive exhibited a high level of commitment to managing supply chain risk and increasing supply chain resiliency.6 Risk is the potential for non-compliance with customs . The root of the problem is often improper or missing processes. For example, if your company lacks the proper procedures to correctly claim preferential treatment under an FTA, the penalties for false claims can be well over a quarter of a million dollars.

17 Risky business and personal liability We can illustrate the importance of risk management with two court cases.

In 2014, the US Court of Appeals agreed with a previous US Court of International Trade (CIT) case, acknowledging that individuals could be held personally liable for attempting to introduce or enter goods through fraudulent or negligent documents or other information. The original CIT case, US v. Trek Leather Inc. and Harish Shadadpuri, perfectly illustrates the top concerns for risk mitigation.25

Facing fines Causing supply chain delays Damaging the Mr. Shadadpuri had a of Naturally the case does not evaluate company reputation failing to declare assists at time how the ruling affected Trek Leather The court found Mr. Shadadpuri of importation. CBP took the Inc.’s or exports. But we know jointly and severely liable for position that this was particularly what issue suddenly became their gross negligence, along with his egregious and asked the court for top priority: how to declare assists company. You can imagine how maximum penalties of more than correctly. That requires new processes this affected his personal and $2 million. to ensure that manufacturing and other corporate reputation at large. departments provide the information that the compliance department needs. That doesn’t happen overnight — but delays do.

18 Challenge #4: Operational inefficiency and the burden of low-value tasks

We briefly covered the cost burden of customs For non-GTM users, their top interaction, but there’s another burden on companies today. Companies around the world challenge in global trade was “GTM users may still have room 18 are looking for productivity improvements that the lack of automated systems. to improve processes and further can unburden their and personnel from automate tasks, but they have administrative tasks, allowing them to dedicate more time and intellectual to higher value, Here’s the practical difference. moved past the initial hurdles strategic matters. One group is spending their time on routine that prevent trade management tasks that could be facilitated by a GTM specialists from focusing on For non-GTM users, the majority of their time is solution with integrated trade data. The 18 the underlying intellectual and spent on documentation and licensing. GTM other group is able to spend more time on users, on the other hand, spend the majority of higher-value, strategic actions that serve the strategic issues associated with their time on classification, which is a risk-prone company’s broader supply chain goals. doing their jobs. This is the real and difficult task that has wide-ranging effects on 18 your products throughout the supply chain. power of automation.”

19 Common manual tasks that hinder your compliance performance As we move into our next section, this is an excellent time to summarize our previous three challenges and show how they all affect operational efficiency.

When you’re performing Complex and changing Cost reduction Supply chain risk tasks manually, your ability regulations If you’re considering adding strategies Supply chain risk is a broad topic, and to maintain up-to-date If you’re using Microsoft® Access or to optimize your duty spend, then there are many avenues of managing Excel to manage your HS codes, then the manual labor makes it nearly risk. However, there’s one area that regulations, reduce cost, every time a government changes that impossible to incorporate another is particularly easy to automate – and manage risk is greatly HS , you need to not only FTA or to analyze several trade lanes performing denied party screening hindered. update your records manually but also for the best sourcing decision. The (DPS) before and at transaction. If you’re share that updated information with all amount of time it takes to maintain manually screening your shipments, your trading partners. Those updates regulations or gather new trade you’re asking for trouble. You may can add up quickly. In a single year, you data may not be feasible for a small spend hours manually screening and may see over 100 million updates to compliance of two. That’s where maintaining updates to DPS lists. trade data around the world. GTM technology, integrated with trade Automation allows you to screen more data like FTA rules of origin, can help efficiently and more often, ensuring that you do more with less. you’re not accidentally shipping goods to restricted parties.

20 03. GTM gets a new business case

21 Meet the new business case Just as we covered the four main challenges of global trade, we’ll cover the four main benefits of GTM technology. In this section, we will show you how GTM technology can help you:

1 2 3 4

Increase supply chain Reduce cost Manage supply chain risk Achieve productivity gains velocity and prevent Companies can reduce their total With the correct automation tools in Decrease the burden on your delays duty spend through strategic place, you can decrease supply chain company’s resources through sourcing and by taking advantage disruptions while safeguarding the automation and common compliant With timely, accurate trade of preferential duty programs. company reputation. procedures. data, you can make sure that you have the right data at the right time. That means fewer customs inspections and fewer delays at the border.

22 Benefit #1: Having the right data at the right time Let’s talk about the real impact of trade compliance on your bottom line.

As a whole, companies often leave their employees Consider the process of licensing with without the necessary, scalable technology tools GTM technology instead. they need to handle today’s enormous volumes GTM technology can take the and complexities. Routine trade activities, such as If you have trade data integrated into your export guesswork out of license and management solution, then your export departments maintaining up-to-date trade regulations, are still documentation requirements. being processed manually where technology is would have visibility well in advance of a license better equipped to facilitate. requirement. This integrated trade data would allow This is a great example of how them to: trade compliance — when you For example, cancellations happen in nearly 5% don’t have a complete picture of sales due to export license delays.27 And that’s • Gain visibility into the license requirement not for lack of trying. One study found that non- • Apply for the license before the order is in place of how to enter a new country GTM users are spending most of their time on or to a new — 18 • Manage the license on file in the system documentation and licensing. Most of their time, can impact the bottom line. and yet cancellations and delays still occur.

23 Regulatory risk as a strategic priority

While the everyday concerns of compliance may not reach That supply chain delay has a ripple your CEO — supply chain disruptions do. Companies are effect downstream. Now your stores often caught unaware when they make new sourcing or Even the narrow procurement decisions. It happens all the time. A decision aren’t stocked, sales aren’t coming is made on what to sell, where to buy, and how much. The in, and your CEO notices. details have a big purchase order is sent, and everything is fine until your picture impact. shipment is waiting at the dock because you don’t have the right documentation or export license.

According to recent studies, CEOs around the world recognize the need to manage regulatory compliance.17

19% 17% 34% considered cited effective were actively regulatory solutions regulatory response as concerned about as a company-wide a strategic priority for regulatory risk priority their organization

24 Why best-in-class companies use integrated trade data solutions By adopting GTM technology with integrated trade data, companies can:

Address new regulations Reduce over or Avoid risk of penalties Keep the supply chain in a cost-effective manner underpaid duties The majority (58%) of best-in- moving According to a 2016 study, 77% of 70% of best-in-class companies class companies automate their Complete and accurate data best-in-class automated companies share or centralize their trade denied party screening before and makes a world of difference for 4 have online access to trade-related compliance data at the enterprise at transaction. The result is fewer supply chain speed. Automated regulations.4 The reason is simple. level.4 Why? That shared and government fines. For example, companies actually decrease the It saves you time because you accurate data leads to more one study found that companies number of supply chain disruptions don’t have to manually research informed decisions about compliance automating their denied party due to trade compliance errors by regulations, and it eliminates the risk and the supply chain. Sourcing is one screening are 35% more likely to 4.29%, whereas mostly manual of using an outdated schedule example. When you have the correct maintain or decrease government companies see their disruptions 1 by accident. It’s no surprise that data on import and export controls, fines for non-compliance. increase by 1.03%.1 companies who prioritize automation country of origin rules, and available for their global trade activities see duty deferral programs, you can a 2.69% decrease in dollar value of improve the overall cost of sourcing fines due to trade compliance errors.13 from a particular location. With that with classification insight, best-in-class companies are able to save a yearly average of One Thomson Reuters client discovered a classification error that, 12.8% from sourcing decisions.14 once corrected, saved the company more than $100,000.

25 Case in point: client saves $1 million annually with the GSP program A large Thomson Reuters retail client saves more than $1 million every year by participating in the Generalized System of Preferences (GSP) program.

The client uses GTM technology to What is GSP? Using GTM technology to close the loop house their product information in GSP is the largest and oldest A combination of GTM functionality can ensure that your key stakeholders have one centralized location — a Global US trade program, the right data at the right time. Classification database. Operating eliminating duties for over 3,500 from a “single version of the truth” products from designated beneficiary With FTA Management, With Global Classification, rather than various documents or excel countries.21 Given the relatively low you can automate the you can store product versions, allows for greater accuracy supplier solicitation data in our centralized threshold for qualification (35% and also decreases the likelihood of process to confirm database that allows domestic content is required), many penalties for inaccurate data or non- eligibility status Solicit for greater accuracy and shippers assume that they’re within upfront, thereby Store easier sharing among supportable FTA claims. range. Best practice, of course, is to avoiding potential supply chain partners. delays or lost savings Furthermore, you have the ability to always prove your due diligence. downstream. electronically communicate all your classification data (including GSP eligibility) with your broker. All this Audit makes it easier for your broker to have complete and accurate eligibility information to file at the time of entry. With Entry Verification, you can automate the post- entry process to ensure that eligibility status was correctly and consistently claimed by your broker at the time of entry.

26 Benefit #2: Cost reduction and the tax-efficient supply chain As we have discussed, GTM can do more than avoid fines and penalties — it can save you money. An effective GTM strategy can help you design a tax-efficient supply chain.

What is a tax-efficient supply chain? The tax-efficient supply chain is a current priority for many companies. More than 85% of companies A tax-efficient supply chain is exactly what it says: a supply chain recognize the importance of a strategic sourcing designed with duties and in mind. The goal is to optimize the optimization process to manage trade and supply supply chain with a holistic view of duties and taxes and to perform chain costs.13 The ROI is there. Every year best-in-class what-if scenarios that determine overall cost, supplier sourcing, companies save an average of 12.8% from sourcing manufacturing strategies, and more.19 decisions compared to the 5.6% savings of their peers.14 Simply put, where you’re sourcing parts and where you’re assembling products does matter. It can be the difference of millions of dollars, and it can even cost you the competitive edge.

27 Supply chain design: The devil is in the details In order to design a tax-efficient supply chain, you need the right information at the start.

When analyzing possible trade Upstream sourcing Designing a tax-efficient supply chain lanes, you should incorporate the decisions always have a impact of import and export controls, applicable country of origin rules, ripple effect downstream. documentation requirements, and duty You may choose the cheaper sourced savings opportunities like free trade product at the risk of altering your agreements or foreign-trade zones. domestic content percentage and losing FTA eligibility status. If you lose All of these details can affect your preferential treatment, that increases ability to freely move goods in or out the cost of your goods, which could of origin and destination, as well as put you at a competitive disadvantage. the overall cost of sourcing from a That’s why it is critical to consider the particular location. details when creating the big picture for your supply chain. Here’s a simple illustration of how duties and taxes can affect supply chain design decisions. Here are three trade lane scenarios for “flexible magnets” (HS 8505191000) coming Trade Lane 1: BR - US Trade Lane 2: CN - US Trade Lane 3: MX - US into the United States. Trade lanes 1 Main duty rate 4.90% Main duty rate 4.90% Main duty rate 4.90% Preferential duty rate 0% (GSP) No preferential duty rate Preferential duty rate 0% (NAFTA) and 3 both offer opportunities for a 0% No sanctions apply Sanctions may apply No sanctions apply preferential duty rate through either No ADD/CVD rate applies Potential ADD/CVD rates No ADD/CVD rate applies GSP or NAFTA. On the other hand, No other duty Other duty 25% No other duty 5 HS specific controls may apply 5 HS specific controls may apply 5 HS specific controls may apply trade lane 2 offers no preferential duty Potential of 24 required import documents Potential of 24 required import documents Potential of 24 required import documents rate and may be affected by sanctions. Corruption Perception 35% Corruption Perception Index 39% Corruption Perception Index 28%

28 Case in point: Nearly $4 million saved with duty deferral

In a feasibility study, a large retail client found that they would save nearly $4 million in the first year by locating an FTZ in the US. Many shippers are unable to Those $3 million savings come from broker take advantage of FTZs due fees, MPF savings, and the deferment of to the manual complexity of duties, which results in improved cash flow and . regulations and reporting — which are tasks that GTM Even when considering the setup costs of technology can facilitate. the zone, as well as the software, the savings still amount to nearly $4 million in That’s good news because the first year and over $1 million in the years FTZ savings can be significant. after. In 10 years, you would see net savings More than 50% of companies of more than $13 million. report decreases in import fees after effectively using FTZs.13

29 Benefit #3: Managing risk in the supply chain

When we talk about risk, Companies were also polled about what The financial impact of supply chain incidents what are you actually they believed were significant risks in 2019. Almost half (44%) of respondents risking? cited new laws and regulations as a top Less than €50,000 52% We talked earlier about how risk in concern for their business, only below trade compliance typically refers to the cyberattacks and data breaches (55%) likelihood of non-compliance — which and unplanned IT or telecommunications €50,001-250,000 22% can, of course, result in bigger picture outages (54%). concerns such as fines, penalties, and supply chain disruptions. Think supply chain disruptions aren’t €250,001-500,000 12% a concern for your business? There’s a And when we talk about the risk of 28% chance you’re right. But 56% of supply chain disruptions, what are the those respondents reported at least one €1-10 million 8% real consequences? instance of supply chain disruption in the last year, with 16% reporting that they In one study, the Business Continuity weren’t sure. €11-50 million 4% Institute totaled the approximate financial cost of their respondents’ The bad news is that you will probably supply chain incidents within the last experience a supply chain disruption in €51-100 million 1% 12 months. Nearly 15% reported that the coming year. But there’s good news. the financial impact was more than one Your second highest risk — new laws and 6 million euros. regulations — can be easily managed €101-250 million 1% with GTM technology.

30 Assessing your level of exposure To manage supply chain risk in your company, you should develop processes to identify, prioritize, and mitigate risk. Like most processes, it begins with asking the right questions.

Risk identification Risk assessment Risk mitigation and What can go wrong? What is the likelihood that an issue management will occur? What options are available to What is the magnitude of the mitigate the risks? consequences and overall impact? What are the costs and benefits of How quickly can the issue be each option? discovered, and what is the time to recovery?

31 Case in point: Civil penalties for consumer product risk reach all-time high The focus on product safety has only increased in recent years, and data from the US Consumer Product Safety Commission (CPSC) reflects that.

Beyond fines: Implementing a In 2009, the average civil penalty compliance program settlement was $275,763. Seven Did you know CPSC settlements now require manufacturer- years later in 2016, the average implemented compliance programs as well. That means written standards and , settlement was a record-breaking According to the Semi-Annual Global effective compliance training, recordkeeping $6.6 million, and the year’s total Theft Intelligence Report, there are 11 incidents requirements, and more. As civil penalties and reached $33 million. Since then, of cargo theft per day. The median theft value, compliance program requirements continue depending on the region, ranges from South to rise, it’s important for manufacturers to penalties have remained just 5 preemptively make sure they have effective under $30 million per year.22 America’s $77,940 to Asia’s $14,582. Today’s strategies in place for monitoring and reporting GTM technology can help secure your supply potential hazards. chain by identifying potential risks, collecting information on your suppliers’ facilities and loading areas, and issuing corrective actions.

32 Benefit #4: Operational efficiency: How to do more with less

Across the board, studies show that companies are turning to automated solutions to lower cost and increase productivity. This two-pronged benefit — getting more efficient while becoming more accurate — is what makes Thirty-three percent of companies automation so compelling for the global trade . believe that it is a strategic GTM priority

The return on automation is everywhere. By standardizing workflows and to improve productivity in the trade centralizing data, you eliminate errors and the wasted time spent confirming compliance department by streamlining decisions and locating missing documents. processes and implementing new 3 For that very reason, companies who use a high level of automation see technology solutions. a 15.88% improvement in productivity.13 And that’s to say nothing of accuracy. In previous sections, we covered that automation leaders see a 2.69% decrease in dollar value of fines due to trade compliance errors.

33 What do best-in-class companies automate? To name a few,4

Have online access to trade-related content (e.g. tariffs or HTS classifications) 77%

Share or centralize trade compliance management data at the enterprise level 70%

Automate their communication/document exchange with brokers 58%

Automate their denied, restricted, sanctioned party screenings (before and at 58% transaction)

Use automation to comply with security regulations/programs such as PIP or AEO 46% (includes supplier )

Can qualify BOM (at multiple levels) against multiple FTA rules of origin 33%

Communicate directly with customs and exchange documents 31%

34 Case in point: Distributor cuts nearly 2,000 hours of manual with automation

One Thomson Reuters client, a large heating and plumbing distributor, processed their export 10 minutes to 10 minutes to 2,166 hours shipments using a non-integrated system. On 6,500 process and manually re-enter of manual work that average the compliance team spent 10 minutes exports generate export the information could be eliminated by processing and generating export documents, in a year documents and file in AES using an integrated, then another 10 minutes to re-enter the automated solution information in order to file in AES.

After an onsite meeting, the client realized that by electronically sending the export shipments 2 minutes to from the ERP system to the GTM platform, the 6,500 216 hours process and time spent on processing would decrease to just exports in to allow for more time generate export 2 minutes. a year spent on strategic, documents value-add tasks

35 04. Key takeaways and closing

36 Preparing your business case Now that we have covered the benefits of GTM technology, it’s time to draft your own business case.

1 2 3

Identify efficiency gaps Develop the business case Secure corporate buy-in and areas of improvement Determine the financial and Before presenting to executive Think about your current and intangible benefits, along with the management, create a focused and your company’s long-term goals.12 payback period of the investment. concise presentation. Make sure to How could technology improve your Be as specific and realistic as you include how the investment decision day-to-day activities, and how does can. Make sure to quantify when would affect other departments such that support your overall corporate possible, especially concerning lead as logistics, procurement, finance, and goals? Focus on areas like growth, times, broker fees, number of customs IT. If you can show a holistic advantage cost management, compliance, and inquiries, and changes in duty to the company at large, you will have a . . If you can, research case much better chance of succeeding. studies of companies that have faced similar challenges.

37 Key takeaways and closing GTM has come a long way — from just a back-office function to a key player in your overall supply chain strategy.

Today companies use GTM technology to make more informed sourcing decisions, to avoid supply chain delays and disruptions, and The business value of GTM to spend more time on strategic matters that provide higher value. technology only continues to grow, and we encourage you In fact, 70% of GTM users report a return on investment within 13 to research providers who will 7 months on average. partner with you and help you succeed in the global .

38 References

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