Integrated Trade Compliance Strategies: Seven Best Practices of Leading Traders
Best Practice #3
The experience of companies we interviewed suggests that organizations with the most successfully integrated trade compliance programs have established goals and objective outcomes against which they routinely measure their performance.
KPIs provide performance visibility that reduces surprises and eliminates supply chain “drama”
For example, by setting firm targets and closely monitoring the flow of information between corresponding databases, window fashion manufacturer Hunter Douglas reduced the number of tariff discrepancies occurring at the time of release by 95 per cent over the past three years.
The most common trade compliance performance measures are still focused on bottom line metrics such as penalties assessed, duties saved (usually by means of free trade administration) or liabilities avoided. Monitoring the percentage of orders experiencing a Customs hold and tracking compliance infractions not resulting in penalties are other common performance measures used.
Some companies however are also looking to other factors when determining the value of compliance. For clothing manufacturer Nygard International, compliance translates into both customer satisfaction and cost savings. Understanding that retailers have a penalty system for late delivery and short shipment of merchandise, Nygard’s aim is to avoid supply chain delays resulting from avoidable incidents of non-compliance, thereby significantly reducing the amount that was formerly budgeted to account for these avoidable losses.
Whatever key performance indicators (“KPIs”) are employed to routinely measure and report on performance, respondents frequently stressed that a lack of surprises, “certainty”, and an “absence of drama” were also considered to be valuable outcomes of the compliance team’s efforts.
Follow this link to download the new GHY White Paper “Seven Best Practices of Leading Traders”.
Also in this series:
• 7 Best Practices of Leading Traders
• Corporate Leadership is Essential to Effective Trade Compliance
• Trade Compliance Needs to be Owned by a “Champion” or Team Within the Organization
• 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
• Best Practice Compliance: Benchmarking Questions
