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About the Author

J. Anthony Hardenburgh
Vice President, Global Trade Content
Amber Road


J. Anthony Hardenburgh brings over 18 years of international trade experience to Amber Road, where he manages a global team of international trade professionals who monitor and maintain the company's vast amount of trade compliance content.

Prior to joining Amber Road, Anthony served as Vice President of Global Trade Content for JPMorgan Chase Vastera. During his six years with the company he managed a global team of trade professionals responsible for supporting both its software and managed services operations. Anthony also served as a director for From2, and as an International Trade Specialist for the US Department of Commerce, where he was responsible for counseling small to medium size exporters on exporting their goods and services.

Anthony has a bachelor's degree in international business from Virginia Polytechnic Institute & State University, and an MBA from Marymount University.


For more information, please visit www.amberroad.com


Supply Chain Comment

By J. Anthony Hardenburgh, Vice President, Global Trade Content, Amber Road

September 10, 2015



Moving Beyond Costs to a Strategic Import Approach

Seven Key Steps Necessary to Create a Strategic Importing Approach


Hardenburgh Says:

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When corporate culture and objectives are aligned, importing can move beyond cost reduction to maximizing costs and continuous improvement.
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The focus today of most companies for importing is cost reduction. However, strategically addressing imports can enable a company to proactively improve import operations, reduce bottlenecks, grow profits and further add to the bottom line. Below are some key pieces necessary to create a strategic importing approach.

1. Get senior executive support

The single most important factor for successful import operations is executive buy in. The best way to do so is to speak their language and link successful import operations to the overall success of the company. Reducing costs and improving a company’s market share and return on investment are big motivators for C-level and other senior executives. Other concerns include containing risk (legal department); ensuring product availability and improving information exchanges with trading partners (supply chain); sourcing quality materials and ensuring acceptable supplier performance (procurement).

2. Take the time to ensure correct product classifications and review periodically

Correct product classifications are the cornerstone for complying with country-specific regulatory controls and smooth customs clearance operations. These classifications form the basis for nearly every tax, tariff, fee and export/import control imposed by governmental authorities. Missing or incorrect product classifications can often result in delays, penalties and loss of preferential duty rates. In addition, products that fail to meet admissibility standards can be excluded from entry, seized, or even recalled.

3. Perform regular audits of import operations

These audits should include a range of factors, including potential security, social, financial and quality risks. Pre shipment audit checklists ensure that all employees involved are taking a consistent approach to import process.  Post shipment audits provide the company with an opportunity to see the full picture, identify anomalies and share that information internally so that errors are not repeated. Results from annual audits should be presented to senior management for review and can be used to update import processes. Best practices include reviewing a certain percentage of files monthly, and ensuring the auditor was not the same person who created the shipment.

4. Provide compliance training

Training for compliance personnel – as well as those in other departments involved in the compliance department – should be ongoing, promote an overall awareness of the importance of compliance as well as details, and involve all aspects of compliance. These aspects include procedures, documentation, records, personnel and other important security issues. There should be follow-up training where there are security gaps and a written manual clearly stating compliance policies. Creating a corporate culture recognizing the importance of compliance and linking compliance to an individual’s job evaluation are other parts of a successful training program.


 

5. Leverage free trade agreements and other duty avoidance strategies

Duties and tariffs can have a significant impact on cost. Similarly, taking advantage of a free trade agreement or other preferential trade program can shave millions off the bottom line. For example, according to an Aberdeen Group report, companies that utilize free trade zones (FTZ) save nearly three percent in duties. Additional FTZ benefits include reduced shipment delays, operating cost reductions, and optimized total landed costing. Utilizing free trade agreements, duty drawback and other duty avoidance strategies can further lower costs.


6. Invest in technology

Using automation can alleviate many burdens associated with importing, particularly when importing large numbers of items or dealing with multiple countries. With high volume operations it can be extremely difficult, if not impossible, to manage manually. The data needed for classifying goods, for example, is voluminous and frequently changes and must be pulled from country-specific lists. Software that has this information in a central repository with automatic updates can pull information from different systems and use that data for Customs filing and inventory management. Look for a technology system with a flexible, cloud based infrastructure, trade content integration, integration capabilities and reporting tools.

7. Create a collaborative compliance culture

Great import teams include individuals from sales, accounting, manufacturing, customer service and legal departments. All departments involved in the import transaction should be identified and included on the team to garner their support for meeting company objectives. Furthermore, having regular communications across departments regarding compliance demonstrates due diligence and reasonable care, which can mitigate penalties if they occur.


Final Thoughts


In conclusion, adopting a strategic approach to imports involves people, processes and technology. When corporate culture and objectives are aligned, importing can move beyond cost reduction to maximizing costs and continuous improvement.


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