An article by Mary E. Shacklett, president of Transworld Data, published today on the supply chain news website EBN, outlines some of the customs compliance challenges faced in particular by electronics companies operating globally “in an era of heightened security and trade risk” and explains how “new cloud-based automation can reduce the cost and complexity of international customs management.”
One example cited by Shacklett of an organization benefiting from an effective global trade management (GTM) strategy for its supply chain is Fairchild Semiconductor. The San Jose, California based manufacturer of high-tech electrical components has acquired almost a dozen companies around the world in the last several years in locations from China to Sweden and today moves 17 billion units across 45 different country boundaries on an annual basis. According to a testimonial by the company, its GTM solution has allowed Fairchild to “achieve global logistics processes that are 100 percent standardized worldwide, establishing a process that is easily repeatable and scalable to meet any new business need.”
When compliance is not managed effectively, the risks posed by customs problems are illustrated by a quote from the logistics manager of Atlanta based Superior Essex, a leading manufacturer of advanced wire and cable products: “If a border shuts down, we immediately lose part of our production capacity, since we have manufacturing facilities in the US, Mexico and Canada. This can impact the volume of goods we are able to ship to our customers – and it makes our capital assets, such as factories from which we can’t ship goods across borders, useless. Consequently, it is very essential that we efficiently process our goods through customs and that we comply with all regulations and documentation needs.”
“To the degree that cloud-based and other technology solutions can address customs issues, companies in rapidly paced industries like electronics will find their supply chain optimization easier,” Shacklett says.
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