The acceleration of global sourcing and selling activity and the increasing need to monitor multiple tiers of the supply chain to remain agile and cost competitive is challenging companies to rethink their business models and automation strategies. Companies report that their need to more effectively manage growing global operations and distribution networks and the lack of critical supply chain process visibility are the top two factors driving them to focus on improving their global trade management (GTM) practices in 2007.
The top strategic action companies are looking to take to meet these challenges is to increase their logistics agility and they are prioritizing visibility and trade compliance technology enhancements to help them achieve this goal.
Best in Class companies in this study are:
1. About 1.5 times as likely as all lower-performing peers to report reduced lead times and lead time variability over the past 2 years
2. Twice as likely as Laggards to have increased their customs clearance speed
3. Based on the survey of over 200 organizations, Best in Class, Industry Average, and Laggard organizations have been identified by their ability to manage total landed costs while maintaining adequate customer service levels as measured by the percentage of perfect orders with international customers and suppliers.
Best in Class companies are more likely to have instituted centralized supply chain process and knowledge management, formalized risk and lead time management programs, as well as superior technology enablers that provide enhanced visibility and control over global trade transactions:
1. Best in Class are twice as likely as Average and 3.7 times as likely as Laggards to be using a global supply chain visibility platform.
2. Best in Class together with Average companies are twice as likely as Laggards to be using an export or import compliance automation module as part of their GTM technology platform, although the overall adoption of this kind of automation is still moderate.
3. Laggards are twice as likely as Average and almost 3 times as likely as Best in Class to report that global trade management (GTM) at their companies is still manual/ spreadsheet driven.
1. Adopt a global supply chain visibility technology platform. Current visibility platform users should gradually incorporate more in-process and in-transit milestones and apply scorecards, dashboards, and analytics.
2. Combine supply chain visibility with dynamic demand signals to reallocate and reroute goods in process and in motion to higher points of demand. Also start implementing data quality SLAs with your carriers, forwarders, and suppliers.
3. Improve the accuracy of supply chain costing for your international transactions. Pay special attention to inventory and transportation related costing, which are often underestimated.
4. Institute a global trade center of excellence that advises the corporation on total landed cost and risk reduction actions from the point of product design and sourcing through final delivery decisions.
5. Turn trade compliance automation and the use of preferential trade agreements, free trade zones, and other duty deferral programs into profit drivers for your company.
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