January 20, 2015 | Robert Waldrop, a managing director in KPMG LLP's (KPMG) Global Trade Technology Services group, explains global trade management systems (GTMS), including their benefits and implementation challenges, as well as what KPMG can do to help companies deploy a successful GTMS.
KPMG’s Trade & Customs professionals include former U.S. Customs Border Protection import specialists and field auditors; former Bureau of Industry and Security personnel; customs brokers and certified customs specialists; professionals with advanced degrees in business, economics, and law; and experienced tecnology, transporation, and logistics professionals. For more insights on Trade & Customs, click here.
KPMG has focused its resources on building out its knowledge in trade technology. In November 2014, KPMG LLP, the U.S. audit, tax and advisory firm, acquired the Global Trade Management (GTM) Practice of EntryPoint Consulting LLC, an industry leader in providing SAP Global Trade Services (SAP GTS) technology and business consulting services to multinationals across industries. The EntryPoint team joined KPMG’s Trade & Customs practice enabling KPMG to provide both regulatory and technology consulting under one umbrella. Click here to read the full press release.
Global Trade Management System
A global trade management system (GTMS) is an application that provides automation and control for shipments across borders -- so, imports and exports.
The three general areas for doing this is compliance, ensuring that you can legally export or import a product, that you have certifications and licenses in place. The second area is customs. This is communicating either with paper forms or electronically with customs organizations or customers or third-party entities the information about that shipment, again, to smooth the border crossing.
And then the third area is duty management. So this allows you to reduce the cost of your supply chain, of international shipping, things such as free trade agreement management, foreign trade zones, duty drawback. Things like this allow you to reduce your costs.
The benefits of having a GTMS
The benefits of a global trade management system is something we run into and help clients with quite frequently. We've identified over 100 tangible and distinct benefits from deploying a global trade management system.
You can take something very simple, like denied party screening, and you can categorize those benefits. By categorizing them, you simplify these 100 benefits into a fewer group of benefits, and then you can make a more compelling argument to your executives. So, for example, denied party screening could save costs. It could potentially reduce fines. It could eliminate manual processes. It could speed up your supply chain, and many other things.
At a general level, the three benefits of a GTMS is speeding up your supply chain, allowing your shipments to around the world much quicker than they are today; reducing costs, generating cost savings either from fees or taxes or duties; and efficiency, creating automation, reducing manual processes, becoming a smarter organization.
Challenges that comapanies face implementing GTMS
When you're implementing a GTMS, the challenges start even before the implementation. Understanding first that you need a GTMS, selecting the right one, is probably a major challenge.
Once you have the solution, you're still not ready to implement, because you have to prepare the business, you have to prepare your data, and you have to make sure that you're ready for the implementation―you have another challenge there.
Then once you implement, and as you're implementing, I think the challenge is always focusing on the business benefit, and not getting enamored by the technology.
And then finally, once you've deployed the solution, a tendency is to just forget about it and go on to other things. So once you deploy the solution, it's in place, you're using it to constantly monitor it, make sure you're getting the benefits that you wanted out of it.
KPMG helping companies enhance the use of GTMS
KPMG helps companies enhance the use of GTMS by leveraging their trade and customs practice. The Trade and Customs practice has professionals all over the world. Some are trade specialists and others are trade technology specialists. So with that group, we're able to help a company go through the six major steps in deploying a GTMS.
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