In the landscape of global trade management (GTM) systems, the benefits are multifaceted. These systems serve as a pivotal tool for organizations seeking compliance with trade regulations and tariffs while also streamlining transactions and bolstering supply chain visibility. Harnessing the insights derived from GTM systems can yield significant advantages in navigating the complexities of international trade.
Amid the escalating number and intricacies of trade regulations alongside rapid tariff fluctuations, organizations face the challenge of ensuring compliance while minimizing potential fines and penalties. As supply chains extend across the globe, the efficient management of these intricate networks becomes increasingly vital.
The reliance on manual processes and spreadsheets poses inherent risks of errors and operational complexities. Consequently, many organizations are turning to the adoption of global trade management systems (GTM) to address these challenges. Augmented by adept compliance professionals, a robust GTM system facilitates a strategic, automated, and efficient approach to global trade compliance.
For instance, Altana, an international specialty-chemicals company, effectively utilizes a global trade system (GTS) to prevent transactions with denied parties, ensuring compliance. The system also aids in monitoring shipments of specific chemicals subject to export limits, ensuring adherence to volume constraints.
Accurate trade management holds paramount importance across several dimensions:
- Cost: Inaccurate classification of items in transactions can result in unforeseen costs. For instance, BPE Global, a trade consulting firm, discovered misclassifications in 20% of transactions, incurring an extra $8,000 in tariffs. GTM systems play a pivotal role in minimizing such risks by ensuring proper classification, notes Beth Pride, president of BPE Global.
- Liability: Despite outsourcing international trade functions, the responsibility for compliance remains with the shipper or importer. GTM solutions can mitigate these liabilities, ensuring adherence to regulations, highlights Wayne Slossberg, senior vice president at QuestaWeb.
- Information: GTM systems aid in disseminating accurate information among multiple entities involved in cross-border trade, emphasizing the significance of data management for cost control and supply assurance, as observed by Gary Schneider, vice president of financial services at Infor.
The suitability of implementing a GTM system hinges on several factors:
- Risk Profile: Companies operating in regions with higher levels of corruption or with extensive distribution models beyond their control may benefit significantly from a GTM solution, notes Elizabeth Connell, vice president of product management at Thomson Reuters.
- Duty Payments: Higher duty payments indicate potential benefits from tighter controls or identifying savings through GTM solutions, advises Connell.
Selecting an optimal GTM system involves considering various aspects, such as the quality of updated content, seamless integration with existing systems, and comprehensive trade functionalities. Ann Grackin, CEO of ChainLink Research, underscores the necessity of regularly updated content and expertise in international trade to maintain system databases.
Integration capabilities with multiple systems, including enterprise resource planning and transportation management, mark an essential trait of an effective GTM system, as highlighted by Gary Schneider. Additionally, the system should encompass diverse facets of international trade, from partner screening and license management to customs documentation and tariff management.
Implementing a GTM system requires meticulous planning:
- Process Review: Before implementation, assessing current processes and systems aids in streamlining and standardizing operations, as exemplified by Altana consolidating divisions for centralized GTM maintenance.
- Data Accuracy: Accurate data, particularly harmonizing codes and recipient details, forms the backbone of GTM effectiveness, warns Ann Grackin, emphasizing the repercussions of errors in these areas.
- Collaboration and Automation: Onboarding multiple stakeholders involved in cross-border trade and planning for handling exceptions are critical aspects, ensuring smooth operations even in the face of deviations, recommends Joe Vernon, supply chain analytics practice leader at Capgemini America.
GTM systems generate copious amounts of data, often underutilized by companies. Leveraging this data is crucial for informed decision-making and can uncover insights into optimizing trade routes or ensuring compliance with evolving regulations, notes Ann Grackin.
The evolution of technology, including AI and blockchain, promises to elevate GTM capabilities. Blockchain facilitates seamless product and documentation tracking, while AI streamlines compliance checks, contributing to the efficiency of trade operations, as per Troy Duncan, managing director at KPMG.
In conclusion, GTM systems are becoming increasingly indispensable for organizations navigating the complex terrain of global trade. These systems, when thoughtfully implemented and integrated, offer a strategic edge by ensuring compliance, minimizing risks, and capitalizing on savings opportunities in the ever-evolving global trade landscape.
Stay on top of supply chain news with The Supply Chain Report. Enhance your international trade knowledge with free tools from ADAMftd.com.
#GlobalTradeManagement #GTMSystems #TradeCompliance #SupplyChainVisibility #GlobalTrade #InternationalTrade #AutomatedCompliance #TradeRegulations #ComplianceProfessionals #CostManagement #DutyPayments #RiskManagement #GTMImplementation #BlockchainInTrade #ArtificialIntelligenceInTrade #SupplyChainOptimization #CrossBorderTrade #TradeConsulting #TradeSolutions #TradeAutomation #CustomsDocumentation #TariffManagement #TradeDataManagement #HarmonizingData #TradePartnersScreening #InforFinancialServices #BPEGlobal #AltanaGTS #ThomsonReuters #QuestaWeb #ChainLinkResearch #KPMG #CapgeminiAmerica
