26 Sep Managing Cross-Border Supply Chain Logistics with SAP GTS
Are you managing your cross-border supply chain logistics as efficiently as possible?
If you have high volumes of international trade and are not currently employing an ERP system like SAP and itsGlobal Trade Services (GTS) module, the answer is no. If you’ve already implemented SAP GTS, the answer might still be no. SAP GTS can help you manage logistics, mitigate risks, and cut costs—if it’s being optimally utilized. This happens when your company leverages every relevant capability of GTS to meet your specific needs, and when your employees are trained to fully understand and use these capabilities.
Cross-Border Supply Chain Logistics Are Growing Increasingly Complex
The number and complexity of rules and regulations governing international trade (such as ITAR and EAR, or others enforced by CBP and FDA) compel global organizations to adopt an automated and auditable approach to managing the process. Minimizing—ideally eliminating—fines imposed by failure to comply with regulations is the primary reason for adopting SAP GTS to manage cross-border supply chain logistics. The consistency introduced by the automation provided by GTS also lowers transaction costs. It’s not an understatement to say that without GTS, you can’t effectively manage cross-border supply chain logistics.
SAP Global Trade Services Mitigate Risk and Reduce Costs
The SAP Global Trade Services module complements the operational foundation you’ve established with your existing SAP system. SAP GTS capabilities enhance your ability to more efficiently manage cross-border supply chain logistics by eliminating error-prone manual tasks and processes, ensuring you comply with relevant regulations, and capturing and managing required documentation.
Eliminate Error-Prone Manual Tasks
Tasks that involve re-keying data, manually looking up information like codes, classifications, SPL, or licenses (that could easily be accessed via integrated systems), referencing email notifications, or in the worst case, relying on paper, are inherently error-prone.
GTS replaces these manual tasks with consistently executed automated processes. Supplier, shipper, order, and customer information already residing in ERP master data is immediately accessed and utilized. Formal automated processes, tailored to your specific supply chain practices, prompt users for the required information and determine the proper workflow. Documentation is captured, managed, and retained digitally.
With GTS, tasks that took minutes (or hours, in some instances) are now accomplished in seconds. Every step of the process is monitored to provide an auditable record. With automation, you gain efficiency and consistency to reduce risk in your trade processes.
Comply with Relevant Trade Regulations
The daunting number of continually changing rules and regulations that govern international trade make it difficult for any organization to monitor, interpret, and act upon them. Here too, GTS greatly simplifies the challenges.
GTS is designed to handle export and import regulations and localization for more than 25 countries. GTS processes automatically step you through compliance checks regarding sales and purchase orders, product classifications like Harmonized Tariff Schedule and BIS Export Control Classification Number (ECCN), license requirements, customers, embargos, and financial institutions.
Integration with government services such as the Bureau of Industry and Security’s Denied Parties List enables you to automatically screen buyers and vendors to avoid business with restricted or denied entities, or calculate applicable tariff rates for merchandise imported into the United States. GTS also helps track preferential and free trade agreements, allowing you to automatically calculate the required duties and tax payments to lower your costs.
GTS gives you the ability to automatically apply rules and regulations that pertain to your cross-border supply chain transactions to ensure compliance per regulation and country.
Ensure Proper Documentation
Every cross-border shipment generates a significant volume of paperwork or documentation. Failure to provide accurate and complete documentation can delay shipments, detain shipments in customs, and in the worst case, result in fines or even in liquidation of shipments. For example, inaccurate, incomplete, or untimely filing of documentation per the CPB Importer Security Filing and Additional Carrier Requirement (the “10+2” rule) can result in a $5,000 fine per violation.
GTS ensures you’ve captured, created, and provided accurate and correct documentation in preparation for shipment. Once all of the required documentation has been compiled, it can then be electronically filed using U.S. Customs and Border Patrol, Automated Commercial Environment (ACE). If electronic filing is not an option, GTS still provides a single source for all the shipment documentation and can easily print the documents required to accompany the shipment. All documents are automatically retained as electronic records for easy accessibility in the event of an audit.
Each of these GTS capabilities helps mitigate risk and improve efficiency, as well as directly contributes to operational cost reductions. For organizations managing high volumes of foreign trade, GTS becomes an indispensable tool.
It Takes More Than the SAP GTS Module to Manage Logistics
SAP GTS, when properly implemented, is powerful. Risk mitigation, significantly greater efficiency in managing cross-border supply chain logistics, and reduced operational costs are the key benefits. However, to obtain the greatest value from GTS, whether it’s a brand new project or a system that you know is not optimized, you’ll need the guidance of an experienced implementation partner. You’ll need a partner who understands GTS capabilities and nuances, has a deep familiarity with global trade regulations, and knows how to translate them into actual compliance requirements.
An experienced SAP partner who specializes in GTS will guide your implementation process in the following manner:
- Invest time to listen, study your organization, and learn the details of your cross-border business needs.
- Employ a proven, systematic, and analytic approach in designing an implementation plan tailored to your needs.
- Have a Licensed Customs Broker (LCB) advise you throughout the entire project.
- Identify the lines of business and their specific responsibilities in supporting a compliant cross-border supply chain logistics process.
- Recommend the latest strategies and best practices to help understand liabilities and strengthen policies.
- Identify special trade programs that can be financially beneficial to your operations.
- Encourage system testing, exploring and verifying every facet, before signing off on the project.
- Conduct a full knowledge transfer and user training to make your team competent and self-sufficient in managing cross-border supply chain logistics going forward.
Whether you are contemplating a new GTS implementation or want to obtain greater value from your current system, seek the guidance of an experienced SAP partner who specializes in GTS.