GTM: Keeping the Goods Moving

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GTM: Keeping the Goods Moving

By Anthony Coia - 01/03/2012
As apparel supply chains have grown increasingly complex and global, supporting them requires information technology that handles multiple aspects of international trade and can do so in a streamlined fashion that allows business to move from manual and siloed systems to sophisticated technology processes that are not only more automated but provide a more holistic approach to manage their trade programs. 

With apparel organizations increasingly under pressure to grow product differentiation and channel offerings while reducing product costs, global trade management (GTM) technologies, including software and comprehensive trade content, are increasingly important to automate global operations and manage complex government regulations. A GTM platform can successfully streamline the procure-to-pay to process, track and automate dynamic preferential trade agreements and boost regulatory compliance.  GTM software can optimize the procedures involved in international transactions between trading parties, logistics providers and government agencies. 
 
And, as apparel companies set about to move a greater variety of products to market faster, any challenge to that progress along the supply chain can stymie the entire operation, with the result that, says, Kevin Shoemaker, vice president of global solutions for Integration Point Inc., “Compliance departments are becoming more involved in sourcing and logistics, classifying products, and duty rates so there is no delay at the border.” Rather than regarding compliance as a cost center, he says, “consider it a strategic sourcing tool.” 
 
Shoemaker says that Integration Point Inc., whose global trade content database helps to determine the classification, duty rate, import and export controls and quotas for apparel raw materials and finished goods, is seeing a growing use of its GTM solution to manage operations outside of the United States due to the regulatory complexities abroad. 
“Companies want to [manage these functions] from a web-based platform that provides connectivity to local government agencies,” he says, adding that Integration Point’s GTM fully automates the process of importing under NAFTA and other free trade agreements such as those recently passed between the United States and Korea, Panama and Colombia, respectively, “by providing the certificate of origin, expanding the universe of suppliers, and automating the entire supplier base.” 
 
A good GTM tool can not only help smooth the sourcing process but can actually intervene to help assist with selecting sourcing solutions earlier in the process by helping to determine costs in advance, says Shoemaker. For example, Integration Point’s Tariff Analyzer Tool serves as a strategic decision-making tool because of its ability to analyze landed costs. 
Shoemaker says that Integration Point, whose web-based GTM is integrated across a common platform and serves many verticals, is continually challenged to incorporate functionality that meets the unique requirements of the textile and apparel industry. 
 
Tying into GTM
As with many technologies, the scope of GTM can vary depending on the needs of a business or the type of solution it wishes to implement. While a more narrow definition of the software tends to focus more exclusively on activities centering on compliance with regulatory issues, another view defines it more broadly to include functions of sourcing, transportation, inventory, warehousing, regulatory compliance and financial transactions that bear directly on the regulatory and compliance processes.
 
A good GTM system can improve a retailer’s operations by accelerating inventory turns and global trade decisions as well as increasing margins and cash utilization, says Tony Pechenik, vice president business development for Simparel, which offers a single-platform global ERP that is fully open, meaning that it backs any interface. Simparel’s solution includes an embedded collaboration portal that supports sample and purchase order management, inbound logistics tracking and tracing and inter-country trade regulations concerning customs, duty, taxation and testing.
 
As apparel companies strive to gain greater visibility into their entire supply chains, Simparel is assisting them with integrations such as pulling direct data feeds from ocean carriers and forwarders into their systems as part of their efforts to achieve full order-to-cash visibility. Its solution integrates with ocean, air, and land carriers, testing laboratories, customs, and Harmonized Tariff Schedule (HTS) tables and codes. 
 
Pechenik notes, interestingly, that the company is seeing, among its customers, the Asia-to-Europe and U.S.-to-Europe trade lanes experiencing the fastest growth. Traditionally, the China-to-U.S. route has been a major growth area, but as China’s domestic demand rises, the ability to deliver product to China will become increasingly important, he said. 
 
Pechenik notes that one of the major challenges Simparel faces in serving the needs of GTM comes from integrating multiple communication methods and data feeds into its ERP to allow customers to achieve a global view of their respective enterprises.
 
Southern Glove and Dayleen improve operations with GTM
Like many stops along the supply chain, GTM all comes down to accessing the right data at the right time. “Customers need to capture a level of granular data, sort it, and analyze it for customs regulations and for plant operations. The data element and information must be in one place where the appropriate people can access it,” says Michael Juliano, founder and CEO of Frogfish Solutions Inc. Frogfish’s GTM solution is designed to handle international sourcing, procurement, transportation and costing, with a goal of providing its customers the ability to achieve the lowest landed cost possible, and on-time delivery, says Juliano. 
 
Industrial glove manufacturer Southern Glove Inc. is currently integrating Frogfish’s GTM solution in order to establish one common database across its U.S. and Honduras facilities, which each currently house their own systems. 
Southern Glove’s president and CEO Brent Fidler says the solution will improve the ease and speed of its international trade operations. Currently, for example, it is handling the high volume of customs paperwork for its duty-free shipments under DR-CAFTA using Excel spreadsheets that import data from its legacy system. The new solution, whose integration the company expects to complete by the second quarter, will allow the company to determine where an order is at all times by providing “real-time, seamless information on the status of inventory and orders for us and our customers,” says Fidler. 
 
“It will be able to reach customs on time and more accurately and will reduce delays due to paperwork problems.” The web-based solution from Frogfish will handle the production order, record all costs, and then calculate the total landed cost, also providing the ability to compare landed costs and to mine the data and set up triggers to alert users when a problem occurs or input is needed.
Frogfish is also helping Dayleen Intimates Inc., which sources primarily from Vietnam, but also from China and Thailand, by providing its customers better visibility into the moving parts of the supply chain, says Michael Chernoff, president. Customers have a view into their inventory availability, fulfillment, orders, shipping, tracking and payment, and also can place orders directly into the system.
 
“We are rolling out each phase, adding customers, distributors and factories. For us, the most important aspect of GTM is production planning and factory visibility. Customers can see any delay, and can adjust their in-house date accordingly,” says Chernoff. 
 
The second benefit of GTM is the enhanced customer service, he says. Customers have a view into the dates product will be completed and also receive weekly progress reports automatically, which used to be part of a labor-intensive manual process.
 
Chernoff expects to eventually be able to issue routings (inland, ocean, port, etc.) on a larger scale, by country instead of by factory, with a subsequent phase allowing for the customer and distributor to enter projections and requirements on a unique interface that is customized so that each party automatically has access to the data that he or she needs. Currently, that access is restricted, and Chernoff must manually give permissions for each individual to see the appropriate data.  
 
Anthony Coia is a free-lance writer based in Washington, DC.

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