Many companies operating in the United States have achieved an inclusive look into their transportation spend, but unfortunately many companies that do business on a global level have struggled to achieve full freight process management. There are many reasons for this including a multitude of additional service providers, currency and language conversions, import and export compliance restrictions, a lack of supply chain data, and the confusing nature of working with and managing disparate technology systems across various global locations. Tracking global commerce activity across the entire transportation lifecycle – beginning with planning, including execution, and through settlement—is key for businesses to thrive on a global level. State-of-the-art transportation management systems (TMS) certainly help with planning and execution, but advanced freight audit and payment processes are also vital toward obtaining complete process management results.
Global freight management success will be contingent on businesses understanding the people, processes, and system integrations needed to compete in the global marketplace. When tasked with improving global freight process management, keeping the following tips in mind will be key.
Understand the true size and scope of global transportation networks.
With disparate operational and cultural systems, it is difficult for organizations to truly know what is happening across their network. Two issues make this more challenging. First, companies moving freight globally often are large enough to acquire other companies with other systems. These larger conglomerates are challenged to fully integrate platforms in order to communicate internally. Some will work off a uniform enterprise resource planning (ERP) system, but few use a single platform. Second, consider all the data normalization that needs to take place. It is a challenge to access and understand the various languages, city naming conventions, and currencies used by various vendors.
In order to gain visibility across an entire global transportation network, businesses must decide between two options. The first is to integrate all of the disparate systems used by the company and its vendors/partners, which usually comes along with a large price tag and a long timeline for completion. The second, and often preferred, option is to invest in a solution that delivers widespread supply chain visibility, such as a trading partner management (TPM) platform. Select a system that takes orders and data in any format from any number of systems and readily translates and communicates between technologies with ease.
Dig deeper into information with data refinement.
In order to achieve the best possible visibility into global freight processes, businesses will want to develop and gather high-quality data. Useful data is generated any time products are shipped or received. Data refinement should occur by receiving raw data from all different sources across the supply chain and converting it into uniform data, making it easier to understand and act upon. Enhancing the quality of data before it is utilized within any of your communication processes will improve efficiency and minimize the chances for misunderstandings throughout all supply chain processes. While internal IT resources can be used for data refinement, an outside vendor can also be utilized due to the costly and time-consuming nature of the process.
Recognize and act on compliance and regulatory rules which vary by country.
Each country has its own unique set of rules for importing and exporting products, and unfortunately those regulatory parameters change on a regular basis. As tax authorities are under more pressure to bring revenue to their countries, revised requirements are constantly being put in place. For example, some countries require specific documentation to show that certain export regulations have been followed. So not only do companies need to follow all of the rules, they must have the proper documentation proving they have done so and keep that documentation for a required period of time.
Some companies attempt to learn the regulations as they work with different countries, but that takes a substantial amount of time and leaves ample room for error. For many businesses, outsourcing global trade management will make the most sense, minimizing compliance risk as well as the commitment of internal resource time and training.
Possess the ability to communicate electronically and via paper-based documents.
There is no standard when it comes to the format for sending and saving information. Electronic communication is commonplace in the U.S., but it is not standard practice in many countries or with smaller vendors. Many in the industry are still working toward a paperless global supply chain, but it will be some time before that is achieved.
Communicating with businesses in multiple countries should be done with the agility to quickly adapt to formats. Software that enables the rapid transfer of both electronic and paper-based documents enables these business goals. The best software will be able to refine and normalize data from disparate systems to gain efficiencies within global supply chain audit and payment. It should also allow for multiple document formats, not just PDFs.
If companies utilize these pieces of advice, their global freight process management will improve and both import and export will become simpler and more profitable as a result.
Doug Kahl is the Vice President for enVista’s Transportation Solutions and Freight Management practices. Dominic McGough is the Managing Partner at enVista’s Europe, the Middle East and Asia (EMEA) office.