| As per the e-Sourcing Wiki* paper, that gives us an introduction to global trade, global trade management can be defined as the practice of streamlining the entire life-cycle of global trade across order, logistics, and settlement activities to significantly improve operating efficiencies and cash flow. It encompasses global sourcing, e-Procurement, import and export management, document creation, global trade agreements, supply chain finance, regulatory compliance, trade document creation, global taxation, risk management, and global logistics and can be a very involved activity for some multi-national enterprises.
Global trade management is important for a number of reasons. Poor global trade management can cost a company dearly, as it can end up paying more duty, fees, taxes, and even fines than it would if the process was well managed, which it isn’t at many companies. A recent Global Data Mining# study found that error rates in global trade processes approach 10% to 20% in many companies and that the effective control of global trade processes is often 100 times to 200 times worse when compared to accounts payable processes. Global trade management is an involved process, which, as per the wiki-paper, can take fourteen or more steps for imports and exports and require 35 documents between 25 parties that need to comply with over 600 regulations and more than 500 trade agreements, as per this article in Supply Chain Digest that noted that the complexities of global trade require a new generation of transportation management. For more insights into the aspects of Global Trade, refer to the other glossary entries on the component functions, and the following blog posts.
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Sourcing Innovation
Next Generation Supply Management Defined
