International trade has never been easy. Importers and exporters have long confronted challenges created by differing national regulations, languages, and business cultures; long journeys by air, sea, and land; and mountains of documents needed to satisfy government requirements at both origin and destination.
To simplify matters, many companies have turned to global trade management (GTM) software. This software may be best known as a tool for automating time-consuming, error-prone tasks like document creation and denied-party screening. But that's just the tip of the trade management iceberg, so to speak. The software also can help users mitigate or avoid all sorts of supply chain risks. (For more on GTM software's capabilities, see July 2007.)
Here are just three of the risks the technology can help importers and exporters avoid:
GTM software can also help to ensure that each link in the supply chain does its part. A system that tracks whether a task has been completed, who completed it, what should happen next, and who's responsible keeps the international trade ball rolling, Heimbeck says.
One risk-related task that's often overlooked is the purchase of cargo insurance, which many people buy on a per-shipment basis. But doing that increases the chances that the shipper will get the coverage wrong or even forget to insure altogether, Heimbeck warns. Trade Tech's system addresses that problem by automatically sending shipment details to its insurance partner, Chubb Commercial Insurance, which then creates an insurance certificate. What's more, shippers that use GTM software—and can therefore document their shipments' chain of custody—may qualify for lower insurance rates.
Think globally, execute locally
In all of these examples, a single theme emerges: GTM software offers an effective means of minimizing supply chain risk because it permits centralized control of business processes that typically are decentralized.
The benefits of centralized control at an enterprise level are clear. "My mantra is 'think globally, execute locally,'" says SAP's McCollum. Operational details should not be managed globally, but managers should think about them that way, he adds. "You want a global strategy for trade compliance."
Not only does GTM software help companies maintain better control over their transactions, it also monitors the execution of those tasks and sends reports back through the supply chain for evaluation from the perspective of corporate strategy, McCollum adds. "How do you know you're executing against that strategy unless you cascade information down and get feedback at the local level? That's where the power of GTM comes in."