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About the Author

Ty Bordner
Vice President, Product Management & Solutions Consulting
Amber Road


Ty Bordner, Vice President of Product Management and Solutions Consulting, has over 18 years’ experience in the GTM software market. He is responsible for product strategy and direction as well as customer and prospect focused solution creation.

Prior to joining Amber Road, Ty spent 10 years with JPMorgan Chase Vastera in various leadership roles, including oversight for Engineering, Solutions Consulting and Product Management. During his tenure he helped manage the company through multiple growth stages from startup, through IPO, to achieving annual revenues in excess of $80M. Prior to joining Vastera, Ty worked for GXS (formerly GE Information Services).

Ty holds a bachelor’s in mathematics from Longwood University and a master’s in computer science from Johns Hopkins University.

For more information, please visit www.amberroad.com
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Supply Chain Comment

By Ty Bordner, Vice President, Product Management & Solutions Consulting, Amber Road

December 19, 2013



Strategic Inbound Optimization – What Best in Class Companies Do

Steps To Take, Based on Research of Best in Class Company Practices by AberdeenGroup, to Optimize Your Inbound Transportation



According to a recent AberdeenGroup report, “Strategic Inbound Optimization: Foreign Trade Zones and Reshoring Increase,” over 85 percent of companies recognize the importance of strategically optimizing their inbound processes, yet only 21 percent of companies say they are reducing inbound total costs with reshoring and associated global trade strategies.

Below are steps you can take, based on research of best in class company practices by AberdeenGroup, to optimize your inbound transportation.

Bordner Says:

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Best in class companies use a variety of global trade automation tools to lower inbound costs and improve processes.
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1. Periodically review and alter as necessary your inbound planning process. Your inbound planning process should include a determination of costs and services required; comparisons of international shipping options based on landed cost and export and import regulations; identify preferential trade agreement opportunities; and take into account your company’s corporate strategies. Consider using a trade planning solution to gain full visibility into all associated costs and regulations with sourcing overseas. 

2. Utilize free trade agreements, free trade zones and other deferred duty programs and incorporate them into your inbound strategy planning. These programs can yield significant cost savings to companies. FTZs can also reduce delays caused by overseas shipments and delays in customs and support specialized configurations or requests that could cause delays with an overseas partner.

Successfully using these programs requires companies properly evaluate total landed costs, including duties and tariffs, as well as transportation, labor and other logistics costs, to ensure that they are accurately calculating their costs and savings. To qualify for an FTA, companies must maintain rules of origin by soliciting suppliers and maintaining valid certificates and qualifying complex bills-of-material to legally claim preferential duty. Companies with large trading volumes, SKUs or supplier base may want to use a trade agreement management solution to automate the FTA qualification process.

3. Use knowledge and analytics to optimize sourcing, purchasing and supply chain networks at the company-wide level. Many logistics and compliance teams struggle to access data stored in multiple sources, present results in a useful format and distribute reports across the organization to drive decisions. A single data repository accessible company-wide allows individuals to access the wealth of operational data available in logistics, compliance and trade processes. Users can then take this data to run reports or manage key metrics and share operational data and metrics across compliance, logistics and procurement domains; make data-driven decisions; shift from tactical decision making to continuous improvement programs; and access one aggregated source of cleansed data.

4. Understand your total landed costs and improve core processes. The logistics costs associated with operating a global supply chain can be 6 to 11 percent of revenue, roughly 3 to 5 times more than a domestic supply network. These logistics costs are not transparent, though. Companies must calculate fluctuating rates from accessorials, such as fuel adjustment factors; determine total shipment cost with multiple charge elements not traditionally available in one format or from a single source; compare all available routes under contract; and centrally manage international transportation contracts to ensure company-wide standard practices and visibility.

5. Collaboratively execute using dynamic optimization tools. While trade planning is critical, it is equally important to be able to dynamically react to events as they occur. Best in class companies are more likely to respond in real-time to supply chain events; realign their sourcing, mode or routes as needed; redirect in-transit flows and orders in response to higher demands or inventory imbalances; and support programs such as DC Bypass. Consider utilizing supply chain visibility and supplier management tools to gain order and shipment visibility; alerts and event management capabilities; lessen operational bottlenecks and reduce cycle times; eliminate excess inventory; minimize expedited shipments; improve customer service; streamline the import supply chain; better manage a global supply base; and collect and analyze key compliance metrics to improve operations.

6. Develop a formal strategic optimization program at the corporate level.  Best in class companies recognize the value of optimizing, centrally managing, and automating their inbound supply chain. A corporate, centrally managed program allows importers to adopt best practices on a global level and gain a centralized view of import compliance and key processes. With a corporate, standardized program, companies can extend import business processes to suppliers, forwarders and brokers; centrally manage their import trade and supply chain data; administer the entire lifecycle of a purchase order in a closed-loop process; factor the complete spectrum of landed cost components into sourcing decisions; and ensure compliance and admissibility throughout the inbound process.


In conclusion, best in class companies use a variety of global trade automation tools to lower inbound costs and improve processes. These tools allow companies to better understand costs and risks; utilize FTZs, FTAs and other duty deferral programs; and collaborate with their trading partners.

 

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