Reynold Martens, Executive VP, GHY International and author of the series of white papers on Integrated Trade Compliance Strategy development describes another “best practice” employed by leading traders – that of constantly benchmarking performance against optimal objectives. Best Practice #4 is that systems are in place to track performance that are built around the Key [...]
Reynold Martens, Executive VP, GHY International and author of the series of white papers on Integrated Trade Compliance Strategy development describes another “best practice” employed by leading traders – that of constantly benchmarking performance against optimal objectives.
Best Practice #4 is that systems are in place to track performance that are built around the Key Performance Indicators (KPIs) that I mentioned in Best Practice #3.
It’s one thing to know what you want to track, its another to actually track it. The firms that we surveyed had automated tools, databases, tracking software, and they were measuring variation diagnostics. As an objective for this they wanted to have a visible audit trail; green, yellow and red status bars, if you will, to know when they were within parameters or outside parameters, or on the verge of becoming either. Often they teamed up with third-parties to have the technology and systems in place. In other cases they had custom-designed ERP systems that worked specifically for their companies. And probably in the majority of cases I think some of the surveys we looked at to corroborate our findings showed that joint solutions – between the broker, carrier and forwarder –were more the norm than anything else.
An example of some of the things tracked would be the clearance cost, duty savings, free trade agreement analysis, delivery on time performance, and similar types of commercial measurements. On major multinational that we looked at and has become part of our white paper actually scrubbed all of their purchase orders in advance of sending them out to ensure that controlled goods and denied parties weren’t part of any of the transactions they were considering.
Our question to you: are systems in place and are the right people seeing the right information at the right time in your company?
Related:
• 7 Best Practices of Leading Traders
Reynold Martens, Executive VP, GHY International and author of the series of white papers on Integrated Trade Compliance Strategy development describes another “best practice” employed by leading traders – that of constantly benchmarking performance against optimal objectives. “Best practice #3 has to do with KPIs or Key Performance Indicators. The premise for KPIs in business [...]
Reynold Martens, Executive VP, GHY International and author of the series of white papers on Integrated Trade Compliance Strategy development describes another “best practice” employed by leading traders – that of constantly benchmarking performance against optimal objectives.
“Best practice #3 has to do with KPIs or Key Performance Indicators. The premise for KPIs in business is that what can be measured can be managed. The companies that we surveyed had aligned their KPIs to desired outcomes and that makes perfect sense, doesn’t it?”
“The obvious outcomes they were working towards are the ones you might expect. They want to avoid penalties; they want to ensure that they know they’re paying the right amount of duty and not too much and not too little; they want to know how much duty they’re saving; and they want to know how much liability they’re avoiding.
“But there are also some less obvious and more commercial reasons why KPIs have been put in place. For example, one of the companies that we reference in our white paper is a large retailer with global operations. They actually link compliance to client satisfaction in terms of delivery times. They’re responsible to get their products into the hands of large retailers, especially in the U.S. within certain parameters. If they miss those particular timeframes there are penalties in place. The customs piece is a big part of that process and so if there are delays it will result in penalties from those clients that they won’t get paid for the full value of the contract.
“So KPIs become an important part of eliminating supply chain uncertainty, reduce surprises and they eliminate supply chain drama which is something I don’t think any of us want in a complex world where there are lots of variables to manage.”
My question is, has your company identified KPIs for trade-related activities that impact (or could impact) your financial performance?
Related: Successful Trade Compliance Depends on Benchmarking
Reynold Martens, Executive VP of GHY International and author of a white paper series on Integrated Trade Compliance Strategies discusses the changes at Customs and Border Protection (CBP) in the United States and the Canada Border Services Agency (CBSA) that international traders need to be aware of and highlight the need for an Integrated Trade [...]
Reynold Martens, Executive VP of GHY International and author of a white paper series on Integrated Trade Compliance Strategies discusses the changes at Customs and Border Protection (CBP) in the United States and the Canada Border Services Agency (CBSA) that international traders need to be aware of and highlight the need for an Integrated Trade Compliance Strategy.
“It’s always been about collecting revenue, but in recent years and especially after 9/11, national security and regulatory interests have been morphed together to create a new approach to managing imports and exports. Not that this wasn’t in place to some extent before 9/11, but that event really pushed this concept forward and accelerated the growth of all the various programs U.S. and Canadian Customs now have in place to detect non-compliance.
There are two major tracks our cross-border customs agencies take to look at compliance verification: one is a transactional review and that takes places as the shipments are entering or exiting the country; the second one is the audit stream where they’re coming in and doing regular audits looking for tariff, value, origin, other government department compliance and business systems linkages.
What it’s really done is shifted the onus for compliance onto the importer and the trader to be diligent and take measures to ensure that all the practices that they have in place for their imports and exports are compliant with all the global regulations which are now much more intensive and have fairly severe consequences attached to them in terms of fines and penalties. Additionally, there are all kinds of other commercial repercussions involved such as lost profitability of a particular shipment or even loss of reputation because this is a legal requirement as well, so companies tend to look at compliance as something that can be a benefit to their brand.”
I.E.Canada’s 2nd Annual Ontario Regional Conference aims to provide participants with the knowledge and skills needed to succeed in today’s rapidly changing global trade environment. On Day 2 of the conference (May 15), GHY’s Executive Vice President Reynold Martens will present a session entitled “Integrated Trade Compliance Strategies: 7 Best Practices of Leading Traders.” In [...]
I.E.Canada’s 2nd Annual Ontario Regional Conference aims to provide participants with the knowledge and skills needed to succeed in today’s rapidly changing global trade environment.
On Day 2 of the conference (May 15), GHY’s Executive Vice President Reynold Martens will present a session entitled “Integrated Trade Compliance Strategies: 7 Best Practices of Leading Traders.”
In a world of increasingly complex international supply chains, trade compliance expectations placed on Canadian importers and exporters have never been higher. Companies that integrate effective compliance remediation mechanisms into their processes of governance, business operations, sourcing and sales, will benefit from reduced regulatory risk and enjoy competitive advantage. This presentation unpacks the essential elements required to make it happen.
Reynold Martens, Executive Vice President, GHY International shares his insight of the evolving importance of international trade to organizations and why visibility must exist at the board and C-suite level. “Trade risks are getting significantly higher. Fines are moving into the six-figure range… a loss of market share, profit erosion, and director liability is a [...]
Reynold Martens, Executive Vice President, GHY International shares his insight of the evolving importance of international trade to organizations and why visibility must exist at the board and C-suite level.
“Trade risks are getting significantly higher. Fines are moving into the six-figure range… a loss of market share, profit erosion, and director liability is a big issue for those who are involved at a corporate level and have to take responsibility for that piece of their job.”
“It’s not a micromanagement approach – it’s more directional and has to do with strategy and risk management, which is of course what the C-suite is all about.”
Richard (Rick) Riess, President of GHY International, and Reynold Martens, Executive VP, share their insights on the relationship between the Canadian Dollar and International Trade as part of the Trade Compliance Strategies video series. For more videos subscribe to our Vimeo or YouTube channels.
Reynold Martens & Manitoba Premier Greg Selinger at Canadian Manufactures Exporters (CME) National Board of Directors October 2010 Meeting
Reynold Martens & Manitoba Premier Greg Selinger at CME’s National Board of Directors October 2010 Meeting
