GTM Best Practices

A recent article in Supply Chain Digest (June 23, 2011) discussed results from a Gartner study that are interesting from the perspective of global trade management. According to Dan Gilmore, SC Digest editor, of the 300 respondents “34% say they consider supply chain the leading source of their company’s competitive advantage, 40% identify SCM as one of several sources, and 26% see it as largely a commodity function.”

Further, according to the survey results, improving supply chain productivity and efficiency topped “cost reduction” as the number 1 supply chain priority, while cost reduction was number 2. As shown in the table, improving efficiency is expected to dominate in 2012 as well.

One sure way to improve productivity and increase efficiency is to think beyond the domestic sphere and optimize your supply chain for cross-border transactions. Any company that depends on parts or goods sourced from outside their home country should consider a global trade management solution that does the following:

• Leverages free trade agreements across your supply base to reduce cost of goods sold (COGS) by 2 – 3%
• Provides supply chain visibility that can improve cash-cash cycles by 4 – 5 days
• Automates import compliance to reduce entry costs by 30% or more and better manages risk
• Manages global logistics to reduce landed costs by 5% or more

A global view of your supply chain is key to achieving the kind of productivity gains and cost reductions that will keep your company competitive.

Read more about international trade management in this informative white paper, or read more about how fashion giant, Perry Ellis, reduced freight overage costs using Management Dynamics’ International Trade Management solution.

According to the 14th Annual Third-Party Logistics Study, which was conducted by Capgemini Consulting, both shippers and 3PLs are reporting that their current IT provider is not giving them the tools they need to measure performance:

Nearly nine in ten shippers (88 percent) said that IT-based logistics services are important, but only 42 percent said they are satisfied with the capabilities of their provider. As a result of this IT capability gap, the study authors said, shipper respondents reported a lack of the key performance indicators, alerts and visibility required for an adaptive supply chain, and 3PLs reported similar difficulties in getting the data and commitment they need from shippers.

Global supply chains are complex, inter-connected systems that must be managed by establishing key performance indicators, measuring the process, analyzing results and developing strategies to continuously improve performance. Unfortunately many supply chain teams struggle to access data in multiple sources and formats and do not have access to the latest business intelligence tools.

A Performance Management solution for Global Trade Management can unlock a wealth of operational data that is available in supply chain visibility and across key export, import and trade agreement processes which span from order to final delivery. Users across various functions can access Performance Management to run Web-reports or manage key metrics through scorecards.

Each department can then access their performance monitoring reports to manage service providers such as suppliers, forwarders, and brokers as well as manage critical process cycle times. By sharing operational data and inter-linking metrics across compliance, logistics and procurement domains, supply chain managers can make better data-driven decisions and manage cash-cash cycles.

Best-in-class companies have been able to realize the following benefits after implementing Performance Management:

• Shift from tactical decision making to continuous improvement programs based on Lean principles
• Restructure supply chain and proactively manage business partner SLAs
• Access one aggregated source of cleansed data with all key dimensions