The 12 Days of X-emplification: Day 10 – Trade Data Management

Trade Data Management is a broad topic, and means different things to different people. As far as I’m concerned, Trade Data Management is the process of tracking all of the data that you need to manage the global trade cycle, as defined in the Global Trade Primer on the e-Sourcing Wiki.

Global Trade is quite involved. It encompasses supplier selection and management, e-Procurement, transportation, import & export, government organizations, third parties, and a host of regulations depending on where you’re shipping from, where you’re shipping to, and where you’re passing through in between. However, since most shops already have e-Sourcing, e-Procurement, Supplier Management (SRM/SPM/SIM), and logistics solutions, when they look for a global trade management solution, they are specifically looking for a solution that can capture all of the data they need to produce the documentation needed by each organization that they interact with (government, carriers, and other third parties), produce those documents for them, and automatically submit electronic versions of the documents to those systems capable of receiving the documents automatically. Secondarily, they want a system that can help them with export classification, tax calculations, and regulatory requirement identification. Thus, we will specifically focus on those requirements in the questions that follow.

1. Does the vendor they have a software based solution, a blended software and services solution, or is it entirely services?

Although the first two choices can be equally adequate, be wary of a services only solution. Not only do you need to produce a lot of documents when trading internationally, but you need to have those documents submitted in a timely fashion, especially to government agencies that can stop, confiscate, and even destroy your goods if you don’t follow the rules. How fast can a purely services company turn these documents around, especially given the sometimes dynamic and unpredictable nature of global trade?

2. Does it address import and export classification (ETS) and corresponding tax rates (HTS)?

Let’s face it – import and export codes can be bewildering. Without the right expertise, you might find that your product apparently fits the requirements of three or four different codes, especially if there have been recent changes in the country you’re importing into or exporting from. However, given that each code might require different documentation requirements, and, more importantly, that each code might be associated with a different tax rate, it’s critical that you select the right one. Unless you have an expert on staff, you want a service provider that can provide you with that expertise.

3. Can it produce the documentation required by government agencies? Can it submit those documents directly into existing systems?

It’s one thing to track all of the data, it’s another thing to create the forms – automatically. You want a partner that not only tracks the data you need for every form you might need in the global trade cycle, but that automatically creates those forms for you and, when possible, electronically submits those forms to the appropriate government agencies. For example, those companies operating in the US need to submit their manifests to ACE before the truck reaches the border.

4. Does the solution support appropriate performance metrics?

It’s not just the services offered, but how effective those services are. You want a company that tracks its performance by customer and globally and makes a continual effort to improve its performance over time. Completeness, on-time delivery, cycle time reductions, and other meaningful metrics need to be tracked and available to you at all times.

5. Does it support all available transportation methods adequately?

If you’re global, chances are you’re shipping by land, sea, and air and using multiple carriers and methods for each transportation method. For example, you might have your own trucks for local shipments between a warehouse and your retail location, a 3PL for shipment from a supplier to your warehouses, and an agreement with Fedex for customers who shop on-line for home-delivery. You want a partner who is adept at managing all transportation methods that are available to you.

6. Does it support regulatory data requirements such as RoHS, REACH, WEE?

Let’s face it – it’s not just customs and associated regulations you have to comply with when trading globally, it’s also a slew of regulations that govern the safety and material content of your products. You want a service provider that can track all of the data required to produce the necessary documentation to show that you are in compliance with each regulatory code that can be applied to your products.

7. Does it support your vendors and partners?

If you use a 3PL, you want them to be able to access the system to print off the documents you need, and if you use contract manufacturers, you want them to be able to input the data required to demonstrate that you are in compliance with the appropriate regulations. Thus, it needs to be a web-based system that is accessible to those who need access.

8. Does it integrate with your visibility solution?

Hopefully you’ve realized that if you’re not tracking what’s going on in your supply chain, then you’re just asking for a major disruption, given that the average company is now experiencing at least one major disruption a year. (Furthermore, the frequency of disruptions to those companies not actively engage in supply chain monitoring and risk management is expected to increase significantly over the next decade.) If you have, then you’re in the process of implementing a visibility solution that lets you track the status of each order and alerts you when something does not ship or arrive at the expected time. For this type of system to be useful, it needs to track all of your supply chain data – and this includes the document submissions and information requests managed through your trade data management system. So make sure it can implement with the visibility solution you have, or the one you plan to implement (if you haven’t started yet).