Daily Archives: November 13, 2008

The Sourcing Maniacs 2008 Vendor Tour Part XI: Integration Point

When we left off in our tale of the Sourcing Maniacs 2008 Vendor Tour, they had just finished meeting with the CEO of Iasta who told them all about bringing e-Sourcing to the mid-market masses and, in particular, the benefits of applying decision optimization and supplier relationship management to your sourcing process. We catch up with the maniacs in Indianapolis, Indiana.

The post is a little lengthy, so I’ve again broken it up into parts; Interlude and Integration (which contains the content).

Interlude

Wakko Faster, faster!
Dot Go! Go! Go!
Yakko Floor it!
For the sake of clarity, I should point out that the maniacs are currently at the Indianapolis Motor Speedway watching the cars take practice laps in preparation for their next race.
Wakko Do you think I can take one for a lap?
Dot Given your penchant for mischief, I’d be surprised if they’d even take you for a lap in the 2-seater experience.
Wakko Why not?
Yakko What happens every time you drive fast?
Wakko I tend to crash on occasion.
Yakko I didn’t hear you!
Wakko I usually wreck the car.
Yakko So do you think they’re going to let you take a mulit-million dollar piece of precision equipment for a spin?
Wakko solemnly
No.
Yakko Now that that’s settled, ready to move on?
Dot Where next?
Wakko I thought you said it was eSourcing Place now?
Dot glares at Wakko.
Yakko Well, we’re on the I’s and the doctor strongly suggested that we check out this place called Integration Point.
Dot Where are they?
Yakko North Carolina.
Wakko Sweet Home Carolina
Where the skies are so blue
Sweet Home Carloina
I’m coming home to you
Dot Don’t you mean Sweet Home Alabama?
Wakko Yakko said Carolina!
Dot But …
Wakko Works, don’t it?
Dot Yes …
Wakko Okay, then!

Sweet Home Carolina
Where the skies are so blue

Yakko & Wakko Sweet Home Carloina
I’m coming home to you
Dot, reluctantly, joins in
Yakko, Wakko, & Dot Here I come, Carolina!
  We catch up with the maniacs a few days later.
Dot Are we here?
Wakko reaching for his mini-mallet
I’ll check!
but before Wakko can tap-tap-tap, the door opens … a woman, who appears to be dressed like a marketing-type executive, answers
Marketing Executive Oh. Sorry. Can I help you?
Dot Is this Integration Point?
Marketing Executive Yes it is.
Dot What do you integrate?
Marketing Executive Now that’s a strange question. Who are you?
Dot I’m Dot.
Yakko And I’m Yakko. And that fella over there …
pointing to Wakko who has decided to bonk himself on the head with the mini-mallet, presumably in disappointment in not getting to use it on the door
is Wakko.
Marketing Executive I can see that. Is he okay? Do I need to get help?
Dot Oh, he’s fine. Don’t worry about him.
Marketing Executive Dot. Yakko. Wakko. Why do those names sound familiar?
Yakko & Dot We’re the sourcing maniacs!
Marketing Executive guarded
Oh. Well …
pause
we don’t have any open positions right now. Sorry. Have a nice day.
she starts to close the door … obviously, she’s heard of the maniacs and their antics
Dot Wait. We’re not hear for jobs, unless you have them.
Marketing Executive Then what are you hear for?
Wakko who has grown bored of his mini-mallet
Knowledge!
Marketing Executive I can see that you could certainly use some!
Yakko We want to know what you do and why it’s important.
Marketing Executive Why us?
Yakko the doctor said you’d broaden our horizons!
Marketing Executive Well
glancing at Wakko
I don’t think that will be too hard!
Dot So will you tell us what you integrate?
Marketing Executive If you’re sure you want to broaden your horizons. They say ignorance is bliss, and
glancing back at Wakko
it seems to me that he likes his blissful state of ignorance.
Yakko & Dot We want to broaden our horizons!
Yakko And you can ignore Wakko.
Dot Everyone else does.
Marketing Executive OK.
Looking sternly at Wakko. But the construction tools stay in your backpack. Got it?

Integration

Dot So what do you integrate?
Marketing Executive I think you misunderstand what we do. We’re not your run of the mill software development or consulting shop … we don’t “integrate” anything, except data.

Let me ask you this, how much do you know about global trade?

Dot You call up your supplier in China, tell him you’d like 20,000 DVD players, and then call up your 3PL to handle the delivery to your warehouse. Easy-peasy!
Marketing Executive Are you sure?
Dot What do you mean?
Marketing Executive What about government regulations? Import and export classifications? Duties and Tariffs? Consignment? Free and Secure Trade Zones?
Dot Aren’t regulations the supplier’s problem?
Yakko And don’t the suppliers know the classifications?
Dot And doesn’t the supplier just add the tax?
Yakko And doesn’t the 3PL take care of consignment …
Dot and the free and secure trade zones?
Marketing Executive No, not necessarily, maybe sales tax and VAT, not always, and definitely not.

Regulations are your problem. You’re the one taking ownership, you’re the one trying to import the goods, and you’re the one who’s going to sell them. You’re the one who has to make sure that the goods meet material and quality regulations, or face the consequences.

The supplier might know the right export code, and the supplier might not. But it’s definitely your responsibility that the right (HTS) import code is utilized. Otherwise, you could face huge losses if the wrong code is used and the tarriff is higher, or huge fines if the wrong code is used and the tarriff paid is lower than it should be. Your 3PL might be able to help you, but proper classification is ultimately your responsibility.

Identification of the appropriate duties and tariffs, and prompt payment, is ultimately your responsibility.

And whether or not you consign goods, and when you do it, is totally up to you.

As is the determination of whether or not you use free or secured trade zones in an effort to take advantage of what they have to offer.

Are you at least familiar with the basic Global Trade Import Cycle and Export Cycles?

Dot The Global Trade What-Now?
Marketing Executive You say the doctor sent you. Didn’t you at least take the time to read his introductory wiki-papers on Global Trade, Customs & Security, Free Trade, and Regulatory Compliance?
Dot Uhm … no. Were they important?
Marketing Executive Very. And they’d help you better understand what we do.
Dot Which is?
Marketing Executive Global Trade Data Management solutions that help customers with import management, export management, free trade zones, compliance, and other aspects of global trade.

Our solutions, which are web-based and true SaaS, help suppliers with classification; advance notification (as required by 10 + 2); denied party screening; free trade zones, foreign trade zones, and special economic zones; customs warehousing; AEO, C-TPAT, and PIP; free trade agreements; and import/export safety.

If you understand the cycle, you understand that there are significant documentary requirements at each stage. These documentary requirements can only be fulfilled with good, up-to-date data. Our systems maintain that data and help you with the creation and, where possible, the electronic transmission of the forms you need to the required parties — which include your supplier, your 3PL or import/export broker, and various government agencies. And, to go bo back to your “what we integrate” question, we can also integrate with a wide range of ERP (and competitor trade platforms) to pull the data you need for form creation out of your ERP and then push the data your missing back into your ERP for archival purposes.

Dot So you generate e-paper?
Marketing Executive Sort of. In terms you can understand, we generate e-paper that keeps you compliant. How much do you know about 10 + 2?
Wakko 10 + 2 = 12?
Marketing Executive It’s the new secure freight initiative from the US Government that requires a more detailed Security Filing that is being dubbed the “10+2″ because it requires 10 data elements from the importer and 2 data elements from the carrier that must be electronically filed 24 hours prior to loading cargo onto a shipping vessel ultimately bound for the US. And it’s a doozy. Besides the fact that some estimates believe that it might cost importers 690 Million annually to implement, there’s the little caveat that if the principal fails to comply with the proposed Importer Security Filing requirements, the principal and surety (jointly and severally) would pay liquidated damages equal to the value of the merchandise involved in the default. So, if you’re importing a 1 Million dollar shipment, and you screw up, that’s a 1 Million dollar fine.
Dot That’s a lifetime of Prada bags!
Marketing Executive giving Dot a strange look
At least!
Marketing Executive And how much do you know about REACH? WEEE? RoHS? ELV?
Yakko What now?
Marketing Executive REACH: Registration, Evaluation, Authorisation and Restriction of Chemicals, WEEE: Directive on Waste Electrical and Electronic Equipment, RoHS: Restriction Of Hazardous Substances, and ELV: End of Life Vehicles. The European directives that specify what can, and more importantly, can’t be in products you want to import into the EU. Failure to comply can result in seizure and destruction of your entire shipment.
Yakko But that’s just in the EU, right?
Marketing Executive For now. But similar acts, especially with regards to RoHS, are popping up all around the globe in countries like India, China, and Korea, for starters.
Yakko But China’s the biggest user of coal. Why would they care about electronics?
Marketing Executive A few grams of certain metals and chemicals, which are restricted or banned by acts like RoHS and REACH, in old electronics equipment can contaminate over a million litres of ground water!
Yakko Wow!
Marketing Executive And even the third world countries are trying to clean up their acts these days. But back to topic. These aren’t the only compliance directives out there … different countries, and sometimes even industries, have their own. Our product can track any product-specific data you like, compare it to the regulatory requirements of major acts that we track, and even allow you to add your own industry or company specific regulatory requirements to compare the product data to. This helps you maintain compliance and, more importantly, helps you to avoid large fines and stay out of the headlines.
Wakko So your product helps companies get a complete view of their global operations from a regulatory and compliance perspective?
Marketing Executive stunned (since no one really expects Wakko to listen)
Yes.
Wakko Cool!
So, can we go get some pulled-pork now? I’m hungry!
Yakko stunned (since he usually asks for baloney)
Uhm, sure!
Dot I guess we have to go now. Thanks for the insight. I never knew global trade was so involved.
  And with that, the maniacs take their leave.

At this point, we take another short break in our story.