Integrated Trade Compliance Strategies: Seven Best Practices of Leading Traders
In a world of increasingly complex international supply chains, trade compliance expectations placed on global importers and exporters have never been higher. Our previous white paper released in 2010 entitled The Case for an Integrated Trade Compliance Strategy, isolated silo-based organizational structures as a major impediment to effectively managing the growing demands of global regulators on critical sales and sourcing activities.
As a remedy, we advocated the case for an integrated approach, premised around horizontal and vertical functional visibility of all compliance “intersections” that have upstream or downstream consequences, with shared responsibility across functional lines and levels, up to and including the board of directors.
For this white paper, GHY’s research team set out to gain greater insight into the business practices of enterprises deemed as being highly compliant and integrated in their approach to strategically managing their trade compliance obligations.
Participants in our survey included industry-leading companies spanning a cross section of diverse industries. One-on-one interviews were carried out with senior executives responsible for trade compliance to explore particular issues in more detail, and the 7 best practices of the group were abstracted and synthesized into this white paper.
What we discovered in this survey is that while leading organizations wrestle with “the compliance issue” in different ways best suited to their own strategic architecture and operational capacities, nonetheless there are common traits and best-in-class business practices shared by companies that are working towards successful implementation of an integrated trade compliance strategy.
Best Practice #1
Of the seven “best practices” that we identified, foremost is the need for corporate leadership in this area, and a team willing to actively champion trade compliance as a critical issue across the entire organization.
Best performers all recognize that key performance indicators are essential to the success of any compliance program — “What gets measured gets done” as the old maxim goes. These KPIs are most usually focused on bottom line metrics, but there is also a move amongst some toward measuring other benefits of compliance such as customer satisfaction.
Automated tools, centralized electronic recordkeeping, and a visible audit trail are generally recognized as essential elements of a best practices approach to trade compliance. Effective information sharing about trade compliance issues across horizontal and vertical lines of communication within the organization is another critically important best practice shared by leading companies.
Finally, the degree to which companies integrate trade compliance factors into their business development plans and engage with professional service providers to help them achieve their strategic objectives, are both significant determinants of success. Successful implementation of an integrated trade compliance strategy involves a constant and dynamic knowledge transfer between all the parties who provide service in the legal, financial, trade, customs, and logistics areas under the client’s direction.
In a nutshell, rapid globalization, supply chain complexity, and intensifying regulatory vigilance translates into escalating trade compliance risk for internationally active corporations and their leadership teams at both the Director and Executive levels.
Also in this series:
• 7 Best Practices of Leading Traders
• Trade Compliance Needs to be Owned by a “Champion” or Team Within the Organization
• Successful Trade Compliance Depends on Benchmarking
• Automating Your Trade Compliance Success
• Effective Communications Protocols are Vital
• Integrate Trade Compliance Into Plans For Growth & Expansion Into New Markets
• Team up with Professional Service Providers for Compliance Success
• Putting Best Trade Compliance Practices Into Action