Procurement, Compliance and Logistics Professionals all play Important Roles in ordering Products
Global importers simply don’t have the option of depending on a single supplier for a variety of items. Both the demands of supply chain resiliency and the reality of maintaining stock levels make it necessary to obtain the same item from multiple suppliers. Particularly if you are a global retailer or manufacturer with distributed outlets or plants, it’s neither practical nor possible to source all units from a single vendor.
This is where the concept of multiple sourcing comes in — literally buying items from more than one source. While multiple sourcing is straightforward in theory, as a practice it is more complex from a global trade management perspective, including implications for landed cost, compliance and logistics.
Consider the example of a large global retailer that is purchasing a basic white t-shirt for thousands of retail outlets located in ten countries. The retailer has four different suppliers, each in a different country, capable of fulfilling t-shirt orders. What are the implications of placing an order with each of these suppliers to ensure adequate global stock levels of the white t-shirt?
• Landed cost — Each shipment of shirts will have a different landed cost associated with it since it will be coming from and to a different country. Freight, insurance, duties and taxes all play a role in determining landed cost, and there may also be preferential trade programs, countervailing or anti-dumping duties in place between some of these countries.
• Compliance — Each country has different regulations in place for importation of the white t-shirt. This can include rules around fiber content, bleaches or chemicals used in the manufacturing process, labeling requirements and subtleties in product classification. Agencies other than Customs may be involved, and each government has its own set of import filing forms and rules.
• Logistics — Getting the shirts from manufacturer to retail outlet is no small task. Each shipment must be rated and booked, and multiple land and sea carriers will need to be managed and tracked.
A global trade management system should inherently and intuitively approach the complexities of multiple sourcing of goods at the product level. This means that it needs to store information about the multiple sources and account for all the permutations in a single product record. It also needs to perform import cost calculations and check compliance for all the relevant country of import/country of export combinations.
Procurement, compliance and logistics professionals all play important roles in ordering products. Access to a centralized repository of sourcing information via a GTM system makes it possible for these professionals to place orders in an efficient and compliant manner.
Source: Nathan Pieri, Senior VP, Marketing & Product Management, Amber Road