Supply chain management (SCM) is a crucial but often underestimated discipline in any industry. Often, SCM is only in the spotlight when something is not going well. For example, when a volcanic eruption or referendum has a negative impact on the availability or pricing of the products we use every day.
In this globalised and digitised world, every supply chain is a self-contained ecosystem. Manufacturers, suppliers, distributors, carriers, logistics providers, customs agents, government agencies, traders, dealers, retailers and end-users are all part of that ecosystem. They work together in interconnected processes with only one goal: to generate as much value as possible for those end-users and for all companies in the ecosystem.
Although the logistics challenges are the same everywhere, each sector and each individual business model has its own characteristics and needs. The great common denominator is elimination of operational and administrative tasks, not only within individual companies but across the ecosystem. All workflows for each product or service must be perfectly aligned to produce products and sell them globally.
Dizzying pace
In this setting, e-commerce and technological advances are driving change at a dizzying pace. Meanwhile, economic and political conditions are becoming increasingly complex. Fast and reliable flows of goods across national borders require companies to find their way through the complex administrative processes of a completely new ecosystem: international trade - with local and international laws and trade agreements and restrictions applying.
In modern supply chains, flows of goods always cross the same boundary twice. First the physical goods themselves, then the related datasets. The dataset required for international trade processes is vast and often more difficult to manage than the goods flows themselves. Immeasurable amounts of information are sent from system to system, from one supply chain partner to another and across the many virtual borders of customs offices and controlling agencies that the data encounters along the way.
Vulnerable bubbles
Nothing moves until the right data is created at the right timeëered, shipped, transferred, checked, approved and processed. Supply chains have become fragile bubbles that can easily burst - at many points and at any time, with just the click of a mouse. Fortunately, international trade lends itself perfectly to optimisation through automation because of its many rules and constantly reused datasets.
But optimisation is not just about implementing the right software tool to automate customs processes. It is about developing the right IT strategy to create a geïcreate an integrated and flexible IT landscape for international tradeëren. A future-proof IT landscape that can support companies in their continuous drive to grow and improve performance in an era of change.
Experienced vs novice exporters
Both Brexit and the ongoing trade war started by Trump have put supply chain management back in the spotlight. More than ever, the impact of trade restrictions and border blockades on both businesses and consumers is clear.
Seasoned exporters and importers are familiar with the complexity of customs procedures and the expertise it requires. They know how import tariffs are structured and which IT system is used by customs in each country. And leaders in the auto industry, who are directly affected by Trump's’s policy experience, can testify how it all affects the price and availability of products in international marketsïinfluences.
But companies that until now only traded within the European Union are facing customs procedures for the first time thanks to the Brexit. They now also need to build up knowledge of customs procedures and systems. They will have to renegotiate contracts with suppliers, look at pricing structures and flexible supply chain strategyën need to implement it to ensure that their products are quickly and efficientlyënt reach their final destination - without delays at the border.
Opportunities through automation
For both groups - experienced and novice exporters - this will be a year with big challenges in the supply chain. But also with great opportunities for optimisation through automation. Achieving more flexible supply chains by integrating international trade and customs management keeps the impact on operations and profitability to a minimum. Now and in the future - whatever happens.
Automation helps companies respond quickly and appropriately to any change in international trade. Depending on companies' needs, the number of customs declarations and network set-up, companies can choose from several strategiesën.
● Implementation of a geïntegrated customs platform for complete management of trade processes may be the right choice for some companies.
● Possibly adding a software solution for integration with customs agents; sometimes the best solution for other companies.
● And for those companies starting out with imports or exports, it can be good to start with a cloud solution that can easily scale up as trade volumes increase.
The value of digitalisation
Either way, companies get extra value from the flexibility created by digitisation of customs processes. They benefit from the ability to change the direction of goods flows without supply chain disruption when markets and new developments require it. Think of changing suppliers or drafting new trade agreements, or implementing customs procedures and calculating the consequences of new import duties on pricing.
Eéone thing is certain: companies need to get started now - there is no time to lose.
