Stanford University Professors Warren Hausman and Hau Lee recently decided that an end-to-end model was required for global trade management and decided to research the requirements. Analyzing imported goods from Asia to the US in the apparel sector, Hausman and Lee identified 106 discrete steps in the global trade management process. One Hundred and Six. Wow!
They also found ample opportunities for ROI for investment and improvement of global trade processes. Specifically, they estimated that importers actively using Asian sourcing had an opportunity through automation to reduce their supply chain costs by a range of 0.6-2.2% of annual sales. This is a substantial level versus average corporate net profit margins in the apparel sector. For instance, at an average profit margin of about 6%, such a decrease in costs would boost the corporate bottom line by 10% – 37%.
So, if you have IT-enabled global trade management, you:
- have enhanced efficiency
as you don’t have to manually execute 106 steps
- are significantly safer
the visibility lets you corrupt hiccups before they become costly seven or eight figure disruptions
- have profits a-plenty
as you’ve just increased the bottom line by 10% to 40%
So if you don’t have one, go get yourself a GTM solution today! Need a provider listing, start with the resource site.