Considering that
- the average global trade management process has 106 discrete steps,
- we’re days away from the implementation of the penalty phase with respect to the ISF “10+2” regulations which could hit you hard this year and cost you millions,
- “reasonable care” is now a must and just one of the many reasons why you need a global classification platform,
- their support for FTZs can help you save millions during these tough economic times,
- your trade visibility success depends on it, and
- spreadsheets are NOT a global trade management solution
you have to be either extremely organized and knowledgeable about your global operations or a complete idiot not to.
And now Hausman and Lee from Stanford University and Napier and Thompson from TradeBeam have released the full study on How Enterprises and Trading Partners Gain from Global Trade Management (A New Process Model for the China-to-US Trade Lane) which found
- $ savings of 1.7% to 2.4% in Annual Sales for Exporters
- $ savings of 0.6% to 2.2% in Annual Sales for Importers
- a 28% to 40% increase in Annual Profit for Exporters
- a 10% to 37% increase in Annual Profit for Importers
- Manufacture-to-Invoice Cycle Reduction of 9% for Exporters
- Days Sales Outstanding Reduction of 28% to 29% for Exporters
- Order to Receipt Cycle Reduction of 35% for Importers
Extrapolating these benefits to total worldwide trade Exports and Imports based on World Merchandise Exports of 13.6 Trillion in 2007 and World Merchandise Imports of 14.0 Trillion, this suggests that the annual benefit to global supply chains would be:
- $194 Billion to $263 Billion to Exporters and
- $54 Billion to $109 Billion to Importers.
That’s free savings there for the taking! All you have to do is some business process re-engineering, which consists of:
- modelling “as-is” processes,
- designing “to-be” processes,
- benchmarking the current state,
- defining the target state,
- identifying the skills, partners, processes, tools, and technologies to get to the target state from the current state, and
- implementing, measuring, and continually improving in a methodical, step-by-step fashion, until you get there.
There are a number of Global Trade companies out there with SaaS solutions ready and willing to help you. And if you don’t know where to start, [shameless plug] you could always contact the doctor and I could help you with a needs assessment and RFP to find the right solution and partner(s) for you.
So go out and get yourself a Global Trade solution. You’ll be glad you did … especially when you come out looking like a Global Trade Hero.