Not long ago we asked if you, or Ecovadis, could solve the compliance challenge before it cost your organizations tens or hundreds of millions of dollars. The biggest reasons for lack of compliance are still lack of knowledge, policy, visibility, analysis, and procurement technology and the fixes are still knowledge, policy, and appropriate technology.
One of those technologies is a Procurement Marketplace that can steer (or force) buyers to buy the right products from the right (and approved) suppliers (which can be an integrated catalog management solution that takes advantage of your supplier master, community intelligence provided by the vendor, and integrated risk information from third parties).
Another of these technologies is still supply chain visibility technology that lets a company monitor what is going on in the supply chain and evaluate a potential supply base before making a decision.
A third technology, and one we should not forget about, is import/export/trade management software that helps the organization identify the regulations it must comply with, collect the necessary information, produce the required documents, make sure the documents get to the proper authorities complete and on-time, and track all of the associated certifications and insurance certificates that go with the products and the supply base.
A good trade solution will address, at a minimum, import/export requirements, ECCN (Export Control Classification Number), custom security programs, FTA/FTZ/SEZ (Free Trade Agreements/Free Trade Zones/Special Economic Zones), country of origin, DPS (denied party screening), entry visibility, and HS (Harmonized System) codes / HTS (Harmonized Tariff Schedule) codes — and keep up with the never ending onslaught of tariff changes and temporary product bans that are result of the trade war. Essentially it will help a company determine all of the export requirements, all of the import requirements, produce the necessary documentation, and track its product from country of origin to the destination country.
In order for this solution to work, it needs a lot of content. Namely:
- import/export regulations for all of the countries being sourced from, sourced through, and shipped to
- US ECCN database
- requirements for programs such as C-TPAT, PIP, and AEO
- Free Trade Agreements between all of the relevant countries
- database of all FTZs / SEZs in the relevant countries
- HS schedules for all of the relevant countries and mappings
and/or mappings to from country specific schedules
- Denied parties lists for the relevant countries
- Direct feeds to updated denied product lists for real-time updates
- Direct feeds to updated tariffs for real-time updates
- Early warning of products under consideration for bans/tariffs and real time flagging
Don’t overlook these last three. They are new and many of the traditional solutions on the market won’t have the capability. When a single ban or tariff spike can lay ruin to your best laid plans, be prepared.