We often hear about the trade
compliance issues with small and medium enterprises (SMEs) more frequently as compared to the larger
organizations. Small companies are impounded
with many challenges attributed to their
limited trade management staff and tight budgets. In spite of their small size,
there is no exemption from compliance requirement for these SMEs. The cost of
non-compliance for these enterprises is very high since it may result in loss of privilege to export or import,
financial loss, and disruption in the supply
chain.
Challenges
Some basic challenges that these
enterprises face are of the following
nature:
·
Lack
of know-how in trade compliance due to lack of experience
·
Failure
to ramp up for the export compliance requirements of highly regulated products when
they expand their product lines from products of low regulatory controls
·
Absence
of senior trade compliance leadership
·
Not
being aware of export / import procedures
·
Lack
of trade compliance charter and in-house training program
·
Untimely
fulfillment of trade documentation
·
Dependence
on third-party vendors such as freight forwarders and customs brokers for trade
compliance-related activities
Mitigation
To mitigate these
teething or persistent trade compliance issues, these enterprises need a simple but comprehensive
in-house program that ensures the following:
Hiring an experienced trade
professional to design, plan, and implement a trade compliance program from a domestic
or international trade perspective
1)
Concisely
written trade compliance policies and periodic reviews that enable the staff to
understand about the day-to-day compliance activities and take the best decision
when faced with difficult situations
2)
Product
classification and the applicable regulations knowledge, including duty deferment / subsidies and trade agreement
benefits
3)
Government
authorizations / permits requirement for
export / import of products and their maintenance to reap the short / long term benefits
4)
Periodic
audits and refresher training programs
5)
Informed
pricing and investment decisions for sourcing the product considering
regulatory requirement and free trade agreement benefits or duty reduction
program evaluation
6)
Appropriate
monitoring and enforcing of compliance program
7)
Preparation of systematic trade compliance
mechanism to overcome trade challenges by implementing a global trade
management system as per the available and allocated budget
How Oracle GTM can help SMEs to become trade compliant?
In the newer world of cloud-based compliance, systems may offer a
solution that fits these SMEs needs, but the foremost and important thing is to
get senior management to understand the importance of a trade compliance management
program. The manageable fee structure of cloud software allows small and medium
companies to make smaller upfront investments (such as license fee, annual
maintenance fees, hardware procurement, etc.) and avail all the benefits of the
software. These cloud implementations are usually faster than the on-premise ones.
Oracle Global Trade Management (GTM) cloud-based
software addresses almost all trade compliance related needs of an SME at an
affordable cost.
Using Oracle GTM's cloud-based application will lead to a trade-compliant atmosphere within the company for less
than a few hundred dollars a month. Cloud-deployed
Oracle GTM is a multi-tenant version of the on-premise Oracle Transportation
Management (OTM) where Oracle hosts the software and handles all the routine
maintenance and upgrades of the system giving ample return on investment (ROI)
against total cost of ownership (TCO) without any security concerns.
To know more on GTM Solutions, please meet us at the Infosys Booth during the OTM SIG APAC 2016 Conference (Singapore) and our experts shall be delighted to explain the details.
Written by: Ravikiran Narayan Khobragade and Mohammad Haider Talat