We just finished doing an implementation for a reasonably large Wine & Spirits Importer. The goal was to automate and streamline their import process - from PO shipment planning through delivery to the warehouse or direct to customer.When we started the project they didn't have good visibility into the execution of POs which meant they really couldn't control their imports the way they felt they should. They did cost budgeting but they felt they should be able to get a better handle on the total landed cost of their product. And, they wanted to be able to process more shipments without adding headcount.As we came to the end of the implementation and started on training, we had to remind the users that they "should never be doing manual entry. Things are automated. Data is flowing between systems. There is no need to do manual entry."Automation - the elimination of manual entry - is such a foreign concept for our new clients.For most of you involved in the import of wines and spirits, there is a high likelihood that what you are doing today involves a reasonably large amount of manual processes and entry. You might be responsible for logistics, or perhaps you are responsible for trade compliance. In either case, we rarely speak to someone (and we speak to hundreds of companies a year) that does not have multiple systems and/or spreadsheets that don't synchronize with each other to manage the work. Here are a few examples of situations that we come across frequently:
- A PO is generated in an ERP system. That PO is then sent to a freight forwarder, and the management of the execution is now done on their system. The problem is that the company uses multiple freight forwarders, and so the management of the POs is spread across multiple freight forwarder systems. Therefore, the logistics team now uses a spreadsheet to aggregate the various activities that are happening so that they have one view of the status of the various shipments they have. Because all the entry is manual, it is often not up-to-date and is fraught with errors. Accurate reporting is near impossible and visibility is really quite poor.
- A container arrives at the port and needs to clear customs. The Trade Compliance professional needs to get all the appropriate documentation to the customs broker so that the entry summary can be created and filed. Smart...better a broker than you. Let them do all the manual entry. But understand, the company is paying for this manual entry...and paying big time. It isn't unusual for companies to be paying upwards of $150 to process an ISF, customs and PGA entry. The Compliance professional should audit the broker's entry summary and invoice to make sure it was done correctly - which often involves one or more spreadsheets, and data needing to be entered and verified. It is too much work and therefore it is done on a limited and often ad hoc basis.
- Shipment planning is a challenge that is often done on spreadsheets. A container needs to be consolidated from a number of POs from a number of suppliers. Most companies do not have a system robust enough to manage this, and so Excel is typically used to build the containers. It requires the manual input of lots of data to make sure that the container is optimized. Most often, the complexity of planning the container is too difficult and that task is delegated to the freight forwarders. Smart...better a broker than you.
What is life like after automation? Here is a typical example of the automated import process.A PO is entered into the enterprise or finance system and automatically downloaded to 3rdwave - our clients GTM tool. When 3rdwave takes in the PO it automatically does a bunch of validations:
- The Supplier/Producer: Does it exist and is it set up properly, with the correct address? Does it have an MID number associated with it? Does it have a FDA profile with a current registration?
- The Products: Do they exist? Do they have an HTS code against it? Is the pack configuration set up correctly? Do they have the required TTB COLA associated against it? Do they have an associated country of origin? Do the products have producers set up against them? Do they have the correct FDA classification? Etc. etc.
- The Ports: Do they exist? Are they legitimate for the purposes of both logistics imports and customs?
Now the Logistics team knows that a PO has been issued and is correct. At some point, the consolidator/freight forward (let's say someone like JF Hillebrand) would forward a Shipping Advice, which is also automatically taken in by 3rdwave. A bunch of validations are done again:
- Parties: Do all the parties (Supplier, Freight Forwarder, Consolidator, Producer, etc.) exist in 3rdwave with required addresses?
- POs: Are all the POs on the shipment in 3rdwave (and therefore in the ERP)? Do all the products being shipped match in the expected quantity to the PO?
At this point, 3rdwave checks to ensure that all the information is correct. If there are discrepancies the system notifies the user what needs to be corrected and allows them to immediately take remedial action. Once the user has verified that there are no warning flags that still needs to be cleared, they are able to either file the ISF on their own (by clicking a button), or send their customs broker the ISF detail (by clicking a button).Now, vendor invoices need to be created. That is easily done by pulling the information forward from the PO. At this point they are able to validate the actual supplier invoice for products, quantities and dollar values. (If they are creating a pro forma invoice, this step wouldn't require that check). This is all done with a couple clicks of the mouse. Any discrepancies are flagged and can be addressed immediately to insure correctness.Once all the vendor invoices are created, the user is able to automatically generate and review the 3rdave Customs Entry. 3rdwave makes all the required conversions to Wine Liters and/or Proof Liters and any other data transformations that are required. The only thing the user is required to do is a visual check that all the information is accurate. If there is a FTA that is applicable to a line item, 3rdwave automatically adjusts the entry to insure the FTA duty rate is applied. At this point 3rdwave can either generate the detailed Broker Advice or submit the Customs Entry directly to CBP through 3rdwave's ABI partner.So, what's life like after manual entry? It is more meaningful and less tedious and menial. It allows users time to do more valuable work, like figuring out how to optimize logistics, systematically reduce freight costs, or implementing an FTZ. There are a myriad of benefits things that can be realized when processes are automated and manual effort is removed.The question is, are you up for the challenge?Are you working towards this end? Let us know how you are doing! If you need help, give us a shout…we help W&S Spirits Importers with this problem on a daily basis. Want to learn more? Drop us a line at firstname.lastname@example.org.