Turbulent times need flexible supply chains

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Supply chains blog

From Trump’s tariffs to Brexit befuddlement, firms that trade internationally face unprecedented global changes – but getting a grip of tech strategy can help secure their supply chains, writes Geoff Taylor, MD of AEB (International)

Geoff Taylor AEBSupply chain management (SCM) is a crucial yet underappreciated area of any business that often goes unnoticed until something goes wrong.

It gets everyone’s attention when, for example, volcanic eruptions or election results suddenly affect the availability or price of everyday products.

In a globalised and increasingly digital world, each supply chain is an ecosystem of its own.

Manufacturers, suppliers, distributors, carriers, logistics providers, customs brokers, government bodies, traders, resellers, retailers, and end-customers are all part of it. They collaborate on interlinked processes to make it all work.

While the logistics challenges are similar overall, each sector and individual business model brings its own characteristics and requirements.

An abundance of operational and administrative tasks must be mastered within and beyond companies’ borders.

All workflows for every item and service must be perfectly aligned to manufacture and trade its products across the globe.

Moving goods… and data

In this environment, e-commerce and technology advances drive change at a dizzying pace, while economic and political environments become more and more complicated.

The fast and safe movement of goods and services across country borders also means navigating the administrative complexity of a whole new ecosystem: global trade – with all its applicable national and international laws, and all the trade agreements and restrictions between countries.

In modern supply chains, goods and services always need to cross borders twice: once the goods themselves, and once their data sets.

The data required in global trade is elaborate and often more difficult to manage then the goods movements themselves.

Immeasurable amounts of information are exchanged from system to system, from one supply chain partner to the other, and through the many virtual borders of customs offices and export control organisations along the way.

Nothing moves without the right data being created, submitted, transferred, reviewed, approved and processed at the right time.

Supply chains have become fragile bubbles that are easy to burst – at many points, at any time, and at the click of a mouse.

Luckily, with its many rules and repeated data sets in international supply chains, global trade lends itself perfectly to optimisation through automation.

But it’s not just about having a software tool to efficiently automate a customs workflow.

It’s about developing the right IT strategy to build integrated and flexible global trade IT landscapes that are fit for the future and can support businesses in driving continued growth and supply chain performance in times of change.

Brexit, Trump and supply chains

Brexit and the ongoing trade war brought on by the Trump administration have trained the spotlight on SCM again, demonstrating the impact of trade and border obstacles on both businesses and consumers quite clearly.

Seasoned exporters and importers are well aware of the complexity of customs procedures and the expertise it requires, for example how import tariffs are structured and which IT system each country’s customs office is working with.

And business leaders in automotive, as direct sufferers of the Trump effect, can attest how it all affects a product’s price and availability in international markets.

But companies who have so far only traded goods within the EU are facing customs procedures under Brexit developments for the first time.

They now also need to build up customs knowledge and systems, renegotiate supplier contracts, revise pricing structures, and implement and adapt supply chain strategies to ensure their products continue to reach their markets quickly and efficiently – without any border delays.

For both – experienced exporters and those just starting – this year’s dynamic developments present significant supply chain challenges.

But they also present a great opportunity for optimisation through automation. Establishing more flexible supply chains through integrated global trade and customs management minimises the impacts on operations and profits. Now and in the future – whichever way things go.

Automation helps businesses to react to any change in the trade environment at any time.

Depending on individual businesses requirements, customs declaration volumes and global trade networks, there are different strategies that may be right for a business.

– Implementing an integrated customs platform for holistic global trade management may be the right approach for some.

– Adding software solutions for self-filing or customs broker integration to their existing global trade IT landscape could be right for others.

– And those just starting out with import or export may want to kick off with slim cloud solutions that can be added to at a later point when their international trade expands.

Whichever strategy they adopt way, companies derive significant value from the overall flexibility that customs digitisation delivers.

They benefit from the ability to change their flow of goods when markets and dynamic changes require it, without disrupting the supply chain – for example by changing suppliers and/or applying new trade agreement provisions, adopting new customs procedures, or calculating the impact of new import duties on product pricing.

And one thing is certain: businesses need to start now – there is no time to wait.

AEB will host a conference for traders at the IoD in London on 4 December. Click here for more details on the Brexit Tool Kit Conference: Practical Solutions for Businesses

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