With steadily increasing international competition, businesses face daily pressure to keep pace. A company’s growth often depends on expanding into new markets, where managing a supply chain becomes even more difficult.
New products from unfamiliar markets add complexity to import/export operations, making consistent, on-time delivery a real challenge. For most businesses, their supply chain operations struggle to keep products moving steadily and maintain positive cash flow.
A complex array of sourcing options and evolving trade regulations together with balancing compliance and business needs make decisions daunting for even the most experienced supply chain teams. If you’re like most companies, the worldwide marketplace presents challenges you’re not prepared for.
Below are four of the most common global supply chain issues. Are any of these impacting your company today?
1. Higher International Shipping Volumes Increases Exposure to Trade Regulation Violations
Global trade regulations change frequently, and balancing compliance with business needs presents challenges to even the most experienced supply chain teams. In many cases, companies find they are ill-prepared to operate in the global marketplace.
With the threat of severe penalties for non-compliance, your compliance department plays a crucial role in your supply chain strategy. The real question is whether they can keep pace as your business grows and shipments increase.
The weakest link rule applies here: having a strong compliance team at one location means nothing if there are gaps in your company’s customs skills at other locations. Unless your company adopts automated solutions and enlists the assistance of supply chain solution experts, your business will face unnecessary exposure to significant risk.
2. Breakdowns in Cross-Border Shipments
The global nature of today’s business world means businesses must offer a diverse product line to meet the demands of customers in different countries. With goods going to and from multiple countries, it is imperative that companies stay on top of a dizzying array of trade regulations.
A single compliance mistake, such as missing the current regionally applicable classification and licensing requirements, can put a stop on your shipments and prevent them from crossing the border. The resulting delay compromises your entire supply chain and negatively impacts your bottom line.
3. Inconsistent Trade Practices Lead to Compliance Issues
International expansion often involves entering new markets or acquiring other operations. Each additional business arm can require a unique set of operating procedures.
Without strict adherence to standard operating procedures, companies quickly fall prey to decentralized trade practices, and inconsistencies begin to compromise supply chain operations.
Failure to adhere to SOP’s leads to inability to produce repeatable, measurable results. It’s only a matter of time before your supply chain becomes riddled with compliance breakdowns.
4. Inability to Keep Pace With Modern Customs Technology
The last decade has seen steady progress in the application of technology to customs requirements. Electronic systems are replacing older customs processes as automization becomes a priority for trade authorities around the world.
Modern initiatives implement different methods for fulfilling requirements, such as advance e-manifest filings and new licensing and documentation requirements. Companies are forced to change their procedures and even migrate to entirely new software platforms in order to comply.
Is there a solution?
One way companies are solving these issues is by turning to the expertise of 3PL’s to help develop a business strategy to manage the varied challenges of international trade and mitigate risk. Partnering with a 3PL and using C-TPAT certified customs brokers allow companies to address the areas where they lack international trade expertise.