Optimising and streamlining business processes related to international trade is inevitable; global trade solutions (GTM) enable organisations to centralise their global trade operations. Read to know the difference they can bring to global trade.
International trade involves a network of several suppliers across the borders with every process being a combination of a digital and manual process.
With humongous trade data at stake, centralising it gives unparalleled visibility with control over orders and shipments, ensuring seamless global trade. The advantage of streamlining the processes to scrutinise data saves time and cost for companies which can be utilised to channel priorities according to the factors that need immediate attention.
A smart way to handle the data flows and increase efficiency is to adopt global trade management (GTM).
Utilising Global Trade Management (GTM) Solutions
Adopting a Global Trade Management (GTM) solution creates a reliable foundation to drive businesses while also offering tangible and intangible benefits for users.
Organisations all over the world deal with Global Trade Management (GTM) solutions to improve their performance and keep a check on costs. One of the main advantages of its implementation is optimising the inventory and reduction of logistics. A very pertinent need for a Global Trade Management (GTM) solution is the automation of documentation which is associated with everything related to the import and export process. By doing so, the efficiency of the internal operations is increased simultaneously, lowering the costs of errors in documentation.
Tackling The Transportation Time
A critical factor that decides the logicality of global trading is the highly inconsistent transportation time, which shoots up the logistics costs and the complexity of inventory management. The application of Global Trade Management (GTM) solution facilitates in accurately calculating total landed costs, taking into consideration the aggregate of the product cost, shipping, handling fees, insurance, and government fees charged by the exporting and importing countries.
In short, Global Trade Management (GTM) solutions can significantly reduce the impact of complexities and the labour-intensive nature of managing global trade in terms of finance.
The implementation of global trade solutions is likely to yield the following benefits to companies:
- Faster order processing
- Lesser delays of the goods in transportation
- Enhanced visibility of the goods in transportation
Increasing The Visibility
With improved visibility, identifying potential sources of delay becomes easier for companies and hence mitigating them to shorten total transportation time, and consequently lowering the company’s annual cost of capital. Furthermore, communicating with business partners located in different countries or continents, and monitoring their actions may be challenging and expensive. The use of manual processes to communicate with them requires many working hours, which are prone to misunderstandings and inaccuracies. All of these can be controlled with a Global Trade Management (GTM) solution in place.
An extended advantage of a GTM solution would be to simplify the verification of the accuracy of trading partner bills and avoid being overcharged.
CFOs and GTM Solutions
CFOs primarily must drive businesses effectively by using the funds judiciously.
The backing of new technologies based on open standards, the integration of legacy systems, and new web-based services will enable Global Trade Management (GTM) to facilitate information flows and foster diverse business strategies. CFOs must back the investment for creating, developing, and maintaining the software and services associated with a GTM solution.
However, the cost of using such solutions may be high. Hence, an organisation in the process of implementing such solutions need to consider all the costs associated with purchasing, customisation, integration, and employee training.
Across these flows, CFO needs to be able to balance these immediate and periodical costs with the return on investment (ROI) of a GTM solution.
The Cost Factor
While costs are relatively easy to assess, it may be challenging for the finance team to come up with an exact evaluation of the expected value to be effectively brought down by a GTM solution.
Trading internationally involves more extensive, complex, and costly processes which are laborious to manage when compared to domestic trade. It also requires a higher number of intermediaries in the supply chain.
The Integration of GTM Solutions
GTM has become a significant hurdle for many organisations. A result of this demand is a market for GTM software applications which has been developing at a rapid pace over the past few years. GTM solutions work in tandem with companies’ ERP systems and existing management applications, including suppliers/vendors, customers, transportation providers, customs brokers, banks, etc. They also include updates from regulatory agencies. In simple terms, a complete GTM solution should assimilate all of the processes, management strategies, and disciplines needed to run and manage a global supply chain.
By accomplishing the communication with trading partner’s systems, these applications should enable better visibility along the supply chain, faster correction of malfunctioning, and enhance trade relationships.
The idea of bringing in automation to the existing ecosystem is to channel the attention towards freeing personnel to focus only on those processes that need intervention and corrective action instead of having to deal with an overwhelming amount of information. In the long run, GTM solutions may be proficient enough to help detect inefficiencies in the supply chain and improve tactical operations. All these improvements are likely to bring down the total duration and variability of order-to-delivery cycle time, in turn, allowing the company to reduce its required levels of on-hand inventory and safety stocks.