Category Archives: Global Trade

An Updated Checklist for Major International Procurements

Twenty years ago we presented a slightly modified version of a great checklist by Mr Paul Emanuelli who presented key concepts for major procurements in the age of globalization and a movement by the mid-market to take advantage of the global sourcing opportunities big enterprise had been taking advantage of since the 80s. It wasn’t complete, but it was complete enough for an average organization and a great start.

But that was the age of globalization. Opening borders. Minimal conflicts. Reasonable levels of natural disasters. Efforts to ensure major maritime routes were not blocked by any disagreements or conflicts were made. Piracy was an issue, but alternate routes and good (military) security minimized impacts.

Now we’re in the age of isolationism. Borders are closing. Sanctions are restricting others. Conflicts and wars are breaking out with regional impacts. Major maritime routes are being blocked as a result of conflict, including the Red Sea and the Strait of Hormuz, putting trillions of dollars of trade at risk. Natural disasters, including droughts, are also limiting trade routes, including restricted passage through the Panama Canal due to water shortages. The rules have changed, and your Procurement (knowledge) needs to keep up.

This means two things:

1. Your Team Needs to Expand

When once upon a time you may have been able to get away with:

  • procurement lead
  • finance lead
  • legal counsel lead

Now you also need, at a minimum:

  • logistics lead
  • domain lead
  • (geopolitical) risk lead
  • compliance lead

These stakeholders will need to provide the following insight between them:

  • procurement: handles the details of the buy — cost vs expected return
  • logistics: handles the global supply chain – carriers, modes, import/export requirements, etc.
  • finance: handles the international economics — currency exchange, projections, international banking arrangements, tariff management and (VAT) reclamation
  • legal counsel: appropriate international legal frameworks, supplier home country law, local laws
  • domain lead: realistic supplier and product assessment vs. supplier claims
  • compliance lead: handles international compliance regulations — source country, intermediate transportation hubs, and local companies with respect to finished goods, raw materials, transport, and entities
  • (geopolitical) risk lead: keeps a handle on the international geopolitical conditions relative to the source country, destination country, and any intermediate countries the goods would have to pass through — and if they are likely to lead to sanctions, border closings, conflicts, wars or other situations that could prevent or significantly hinder trade

In other words, the analysis of a potential buy has become significantly more involved than it was 20 years ago, because it’s not just the buy, it’s the likelihood of supply assurance and affordability when exchange rates can fluctuate significantly almost over night or fuel, and thus carrier costs, can double or triple with almost no warning.

Once you’ve selected the team, you need to determine the extent of the project. Is it a sourcing project or a mega project. If you’re simply replacing a source of supply, and using a supplier in a region you’re already doing business in, it’s a project. If you’re looking for a source of supply for a new product or material, trying to enter a new country, and/or looking somewhere you don’t have a logistics network, it’s a mega-project. Just like a major technological project / system replacement, underestimating the effort involved is a recipe for disaster. Especially if the effort is not put in up front before a contract is signed and an issue crops up later.

This means that before the contract is signed, the following sub-projects need to be completed:

  • detailed product requirements assessment
  • detailed proposed supplier and product assessment
  • detailed proposed logistics / supply chain network
  • detailed legal frameworks review
  • detailed compliance and risk review
  • detailed business plan

Only then, can you move forward to:

  • contract framework
  • negotiations
  • final contract

International procurements are not as easy, or predictable, as they were 20 years ago. Now they’re mega-projects which require mega-effort to get right.

We Know You Should Have A Lot Of Global Trade Data …

As per our last post, if you want to design and run a relatively smooth running supply chain, you need a lot of data. As per our post, at a minimum:

  • product compositions
  • supplier locations
  • route details
  • alternate products, suppliers, and routes
  • sanctions
  • denied parties
  • tariffs, export and import
  • taxes and recoverables
  • carbon/GHG
  • commodity market and product cost data
  • currency conversions and trends
  • natural disaster risks
  • man-made disaster data
  • consumer and market sentiment data

Which leaves you with two major problems.

  1. where do you get it?
  2. how do you manage it?

There are two choices on where to get it:

  1. data consolidators and brokers
  2. government / public sector sources

As much as possible, you want to rely on option b), because, in this AI-HYPE filled world, data is now the most valuable commodity, the data brokers know it, and even when they are getting it from a government / public source (for free) and then processing it for your consumption, they are charging a premium for it. A subscription to even a fraction of the above data could cost you more than the annual SaaS subscriptions you are feeding it into (not counting your AI token costs which are going to continue to increase without bound if you are unnecessarily relying on AI for tasks you do not, and should not, be using Gen-AI LLMs for).

So you want to use the cheap/free government and public sources as much as possible. While this sounds easy enough, every single source will be in a different format, with different access requirements, different update frequencies, and different levels of completeness. We’re talking about everything from Excel files to real-time json requests, with multiple types of authorizations, access protocols, and transport protocols.

This bring us to the second issue — how do you manage it?

You basically need a DIY data orchestration platform. And the reality is, the majority of today’s orchestration providers, despite their grand claims, don’t really do that! Out-of-the-box, you can only integrate solutions they have already integrated with, and only import any data they have previously mapped. Plus, they are limited in intake to what they have designed for. Most of them aren’t even as powerful as last generation data mapping frameworks that allowed a data analyst to integrate all of the data from various sources into one common, central, database. (Now, it typically involved creating yet another data warehouse / lake / lakehouse.)

What you need is a next-gen supply chain orchestration platform that was built from the ground up to allow you to plug, play, and orchestrate data sources as well as workflows and applications using pre-defined mappings, Web 3.0 Markup, standard terminology, and statistical AI (with known confidence) that will auto-map as much as possible, minimize what can’t be auto-mapped, and generate additional data objects and tables for storage where your systems aren’t already handling that type of data.

A next generation system that also incorporates auto-mapping, auto-schema-extension, and auto-data-orchestration alongside workflow construction and third party system integration using APIs, MCP, and other integration technologies along with all of the common authorization protocols. A fully dynamic data platform that can serve as the core of a next generation SCP platform. One that is a level beyond the majority of platforms calling them orchestration platforms today,

And, finally, one that understands how to organize, federate, and classify data for true analysis.

But that’s another post!

How Much Global Trade Data Should You Have?

As per our recent series on supply chain stability, and the need for visibility and audits, you need a lot of supply chain data. On your products, suppliers, and routes. As well as their products, suppliers, and routes. Down to the source.

But is that all you need — just suppliers, products, and routes down to the source?

Well, as per our previous series, you also need detailed data on alternate locations and other product offerings from your suppliers, alternate suppliers and their alternate product offerings, alternate routes, and alternate carriers that service them.

But that’s not enough.

Product existence is not availability, and availability is not obtainability. You also need to know if the countries, parties, or connected parties (owners) are sanctioned and if they use restricted or banned substances in their products or operations. If so, you can’t do business with them … and spending hours, days, weeks or months evaluating them just to figure that out when you try to order the first shipment.

But even if there are no sanctions or official roadblocks, it still might not be possible to acquire the goods you want from certain suppliers due to export and import tariffs. That means you need to know any export tariffs and import tariffs that will be applied, in the export country, import country, and any intermediate countries (that may not have [usable] FTZs).

Also, since some goods and services will be acquired, change hands, or used in the source countries, you also have to be aware of all the country, state, and municipal taxes that you will need to pay, as well as any taxes you can potentially reclaim.

This means we’re up to:

  • product compositions
  • supplier locations
  • route details
  • alternate products, suppliers, and routes
  • sanctions
  • denied parties
  • tariffs, export and import
  • taxes and recoverables

Is that all?

Well, in some countries you have to be cognizant of carbon/GHG production, so you need to be able to track how much carbon is produced in the production of each unit and be able to report that when needed, as well as control that if the country the good is being produced in, or sold in, has a carbon quota or carbon tax.

And it sounds like we’re nearing completion, but not really.

We left out cost data. If you have to find alternate products or suppliers, you really want to understand your costs. And not just market costs, should costs. Which means you should be tracking, when possible, raw commodity costs, component and part costs that allow you to estimate production costs on top of input costs, and currency exchanges, that allow you to build reasonable should cost models.

And while this might be enough to make perfect sourcing plans, we all know plans rarely turn into reality. So having the data to build the perfect hypothetical supply chain is a great start, but only in theory. In practicality, you need to know how realistic the supply chain is.

This means you need relevant supply line related data as well. Transport times, and risk of spoilage and theft are critical. As is natural disaster risk data related to storms (hurricanes, tsunamis, [fire] tornados), the possibility of floods, wildfires, blizzards; and earthquakes (or volcanic eruptions) in areas where they are common. You need to track this data to judge the potential reliability of supply chains.

Now we’ve added:

  • carbon/GHG
  • commodity market and product cost data
  • currency conversions and trends
  • natural disaster risks

While you think this may be everything, we’re sad to say that while it’s close, it’s not.

It’s not just natural disasters that matter, it’s man-made disasters. Mines collapsing, factories burning down, and unexpected supplier and carrier bankruptcies can also bring down your supply chains. So you need real-time event data.

Furthermore, while it won’t bring down supply chains, it can greatly vary demand and being aware of consumer sentiment, including mass displeasure and (potential) boycotts. If you’re selling consumables or creating high-priced electronics with a limited shelf-life, you don’t want to overproduce. And if there are indications of a demand surge, you want to be prepared so you don’t have costly stock-outs that could result in unhappy customers.

That’s quite a lot of data. And that’s a minimum.

Supply Management in the Decade Ahead: Same Old, Same Old — Only the Pendulum Swings Part I

Almost 20 years ago, back in 2007, I wrote a 2-part series on Supply Management in the Decade Ahead: The Eight Major forces (Part 1 and Part 2) where I discussed the various external forces that will impact a company’s supply chain in the years ahead, as verified by CAPS, AT Kearney, and their clients.

And just like you don’t need to read another state of procurement report for five years! because, except for the tech-du-jour, nothing has really changed in the past five, ten, and even twenty years; you don’t really need to do an extensive study or survey to realize that the core supply chain issues are more or less the same, it’s just where the pendulum happens to be in it’s swing on each major issue.

Today we discuss the first four.

Global Competition Contraction

Twenty years ago, we were dealing with the rise of China hitting full swing as a result of the outsourcing craze that started to pickup in the eighties (as a result of pushes by McKinsey and counterparts), as well as other secondary markets becoming more accessible — and a host of global options for just about everything you could buy.

While this hasn’t changed, since the world’s dependence on China is still at an all time high (from about 5% of Global GDP in 2005 to almost 20% in 2025), and there are more and more companies popping up every year to satisfy your needs, their relative availability to you has changed. With canals and straits being shut down on a regular basis, sanctions coming fast and furious, tariffs costing out supply, and so on, the competition you can access in some countries (especially the United States and Europe) is shrinking by the day. The pendulum is swinging back from Globalization to Deglobalization/Contraction, and, as usual, you have to keep track of where the pendulum is and what direction it is (still) swinging in.

Merger, Acquisition, & Supply Market Consolidation

To meet the onslaught of new competition, companies headquartered in developed economies are still attempting to increase in size, scale and market power to ensure they survive stagflation and recessions. Others, in financial (di)stress, need to do whatever they can to survive. This will thus force many companies to continue the merger and consolidation trend that has been ongoing in fits and spurts for the past few decades.

Similarly, in the supply chain software space, paralleling the procurement software space, due to the impacts of the Age of AI Hype, we will see a lot of M&A as the bigger companies, with their legacy SaaS, acquire smaller “AI” players to add the “AI” propaganda to their own marketing, and the smaller legacy companies, struggling to sell their SaaS, put themselves up for (fire)sale to “AI” and I2O (Intake to Orchestrate) providers who need real capabilities and larger companies trying to complete their suites.

Increased Government Regulation

Governments continue to do what they do best — create red tape for the private sector, sometimes with the best of intent, sometimes to fatten their pockets, and sometimes just to keep busy. Sometimes the regulations help competition, sometimes they protect consumers, and other times they just add cost and process for absolutely nothing. Either way, they won’t stop.

This continues to lengthen your supplier / partner research and contract negotiation cycles, which must discuss relevant government regulations, privacy legislation, DEI (must [not] have), AI, and who’s on the hook when (import/export) tariffs get introduced out-of-the-orange. In addition, government actions to support or restrict economic development, such as tax incentives and trade restrictions, will continue to have a large impact on supply strategies.

Technology Advances

(Proclaimed) technology breakthroughs continue to cause major changes in how products and services are provided, especially in the software and control systems spaces. Properly applied technology improvements (i.e. real AI vs. Gen-AI LLMs) will revolutionize design, planning, and production systems and continue to lower total cost of production and the consumer’s total cost of ownership. Aggressive early adopters who overpay for the hammer when they don’t have any nails (just screws) will drive up costs while driving down efficiency and organizational capability (as they lay off workers they actually need and freeze hiring) are increasing their costs significantly and reducing their consumer base. If they can’t rapidly correct, they’ll end up being part of the new M&A frenzy (if not the next bankruptcy), while those who can successfully adapt modern, proven, tech with a plan will win big.

For the rest of the decade, and possibly part of the next decade, the winners will continue to be those that adopt the right SaaS solutions (because, while we may be in the SaaSpocalypse, it’s only going to weed out those overcharging for commodity software and capability, and the companies that survive the next few years will be those that offer true value. The reality is that even agentic (and AI) is still SaaS, it’s just SaaS that requires less (to no) human intervention [beyond maintenance by the provider] for the tasks it is assigned.

Supply Chain 2026 or Supply Chain 2008? Part III

Still continuing our “the more things change, the more things stay the same” theme, back in 2008, the Supply Chain Digest published an article on Key Trends Impacting Supply Chain Management and Logistics for 2008 where it asked a number of leading academics and practitioners what they saw coming. (Their responses are summarized in this SI post.)

Nine (9) experts weighed in and provided 24 thoughts on what they saw coming in 2008. Those thoughts more-or-less fell into seven themes, and for the most part, those themes are the same themes today. Moreover, the specific concepts addressed are more-or-less the concepts being addressed today. Let’s continue to take them theme by theme and conclude our initial series.

Globalization

Three (3) of the nine (9) experts included globalization as a core theme and stated that they believed:

  • Globalization will continue to take up a lot of organizational focus as companies try to efficiently and cost-effectively manage their global operations.
  • Supply chain globalization is about to enter a new phase, driven by the recognition by many organizations that their initial off shoring decisions were made with a myopic focus on product cost, and not a thorough evaluation of total delivered cost.
  • Freight volumes will continue to fall in the first half of 2008, but will stabilize by the second half of the year.

With the tariffs, global instability, and continually increasing natural disasters, globalization will continue to command organizational focus and attention.

As the pendulum swings back from full globalization to isolationism, we’re returning to an earlier time where trading partners are limited, friend-and-near-shoring is finally gaining traction, and pushes are being made for home-sourcing. (Which won’t happen until proper investments are made because, even with tariffs, it’s still cheaper to use someone else’s multi-million/billion dollar facilities than build your own.)

Freight volumes by country and route will continue to rise and fall as tariffs, oil price surges, recessions, sanctions, border closings and other contributing factors play a factor in actual consumer demand, available supply, and permissible routes.

Multi-Stage Manufacturing

Two (2) of the nine (9) experts included multi-stage manufacturing as a core theme and stated that they believed:

  • More companies will resume manufacturing in-house.
  • Multi-stage manufacturing that allows for decision postponement and re-purposing of parts in-line with fluctuations in demand across product lines will start to become common.

That didn’t really happen much as a result of the financial crisis or the carrier failures because it was still cheaper to outsource, but when tariffs, border closings, oil price surges, and other detrimental factors combine, companies take an analysis of in-house manufacturing seriously and as soon as it looks like it will be cheaper long-term to bring manufacturing back in house (which will happen if the government that pushes an isolationist strategy starts to actively invest in the industries it wants to nationalize / build / resurrect).

This has become common in electronics and control systems where components have been standardized across product variations, and even product lines, to the extent possible to allow for production plan updates and postponement as long as possible to reduce stock-outs in the product versions and lines in greatest demand and minimize overstocks in product versions and lines not selling as well as possible. However, with parts shortages bing common, you can see more and more products are going to be designed with the ability to use multiple components from multiple manufacturers with specs that are “similar enough”.

Green

Two (2) of the nine (9) experts included green supply chain as a core theme and stated that they believed:

  • Activity & Hype around “Green” Supply Chain will continue.
  • “Green” Logistics will continue to attract mind-share, but until profitability is proven, market-share will lag.

While the USA might be rolling back environmental legislation to (at least the) 1970s to please the tech bros so they can build their energy and water intensive data centers for Gen-AI (that can blackout and dry entire towns, while nearby energy plants pollute on a scale not seen in decades), as the same mega corps try to build similar massive data centers in the EU and other environmentally conscious countries, we will see a renewed effort to introduce new environmental legislation, that will renew a push for “green” supply chains in those countries.

Nothing has changed in the past two decades. When the economy is good and consumers have extra disposable income, they become interested in corporate responsibility and green, and the green hype sells. But the reality is that, like corporations, consumers like to virtue signal and when the rubber meets the road, or, more importantly, the plastic hits the terminal, they still won’t spend more than they need to for a product or service they want to fulfill a need.

This concludes our coverage of the market predictions from the thought leaders in 2008 and how nothing has really changed over the past two decades.