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Global Supply Chain
Trade Compliance

Supply Chain Visibility Starts with Product Master Data

In this blog, we’ll argue that the optimization of item-level visibility actually starts with Product Master Data (PMD).

Dan Gardner

Solutions Consultant at 3rdwave

If one were to pick a supply chain buzzword that’s been overused during the Pandemic, “visibility” would be a top contender. Whereas knowledge of the whereabouts of merchandise across an import supply chain is important, there are several perquisites that determine just how valuable cargo tracking really is. In this blog, we’ll argue that the optimization of item-level visibility actually starts with Product Master Data (PMD).

Basically, the Product Master database serves as the “Genesis File” for a vast array of import activities. Because PMD contains item-level details on things like description, country of origin, HTS number, product testing and various Partner Government Agency (PGA) requirements, it is going to have a material impact on subsequent functions like P.O management, coordination with vendors & forwarders, and ultimately, U.S. customs clearance.  

In other words, what we’re saying is that if an importer doesn’t have all of its “ducks in a row” with Product Master Data before goods start moving, the only thing that visibility is likely to do is provide a stark reminder of how overlooked item-level details can stop a supply chain in its tracks. Here’s a sequential set of examples that illustrates this point…

Because the Product Master serves as the Genesis File, when an importer places a P.O. on a supplier, fields like the description of the item being ordered and its unit of measure should be identical to what’s in the importer’s database. From there, when the vendor produces the goods and creates the commercial invoice and packing list, fields such as the importer’s item number, product description, country of origin and HTS number should also be the same.

Without question, it is also critical that the bill of lading created by the forwarder at origin is consistent with the information found on the commercial invoice and packing list. In that regard, something as simple as an inconsistent product description or a missing HS code on the bill of lading can create issues at origin when export clearance takes place, as well as at destination when U.S. Customs gets involved. Ideally, the product description used on the B/L should be born of what’s in the Product Master.

Once goods are in a container and on the move, alignment with PMD is even more important. By this time, the importer’s fate is sealed (literally with a container seal) and if the data points required by U.S. CBP and PGA’s aren’t all present on the required documentation, the real trouble will start when the importer’s broker submits an entry to customs. Again, what good is knowing that a vessel is five days out of port and ready for pre-clearance if the item-level detail on a container’s contents is incomplete, inconsistent and/or incorrect?

From a trade compliance perspective, the ultimate arbiter of data quality is U.S. CBP and its PGA’s. Through its ability to identify items via the HTS numbers in an entry, ACE knows the requirements for all products imported into the U.S. Whether it’s an FDA-mandated Drop Test for sunglasses or plant-based products covered by the Lacey Act, Uncle Sam is going to make sure that all the boxes are checked on a given import. And this is precisely why visibility is only as good as the quality of the Product Master Data that covers and describes the contents of a container.  

So, while shipment visibility is important, importers (and exporters) have to work diligently to make sure that their Product Master Database covers all facets of item-level requirements. As we saw, the vast majority of documents that are generated during the life of a transaction should be born of the details found in the Product Master. Given this “ripple effect”, it only stands to reason that a disciplined approach to PMD will pay huge dividends once goods are shipped.

From the time an ISF is filed at origin, through export clearance, AMS filing and U.S. customs clearance, there is no disputing that product-level detail found in the Product Master has a material impact on the trouble-free flow of merchandise through the global supply chain.  What is also indisputable is that most enterprise Master Data solutions fail to take into account the needs and requirements of Trade Compliance.

Product descriptions, units of measure (UoM), HS Tariff classification (for import and export), Product rulings and Notes, registration codes, Country of Origin declaration  are all critical trade compliance requirements  that should be maintained in the Product Master Data.  The inability to manage Product Master Data elements in an automated solution leads to the continued use of cumbersome and inefficient spreadsheets.

Early on in its development of Global Trade Management software solutions, the team at 3rdwave understood the far-reaching impact of Product Master Data across global supply chains. Concurrent with that understanding, 3rdwave recognized just how important it is to a shipper (and their customers) to know where merchandise is on a real-time basis. Most importantly, the company never treated PMD and shipment visibility as separate subjects.

In recognition of the combined impact of Product Master Data and supply chain visibility, 3rdwave has developed both capabilities. As experts in the compliance aspect of Global Trade Management software solutions, 3rdwave begins the process of supply chain integration at the earliest stage possible: the Product Master database. From there, visibility tools enable shippers (and their customers) to not only know where their goods are, but to have the confidence in knowing that downstream processes like customs clearance will flow smoothly.

What’s also difficult to argue is that a disciplined approach to Product Master Data ensures a “global information supply chain” that parallels the physical supply chain.   The combination of the complete and accurate information supply chain combined with end-to-end supply chain visibility, is a powerful one-two punch.

It is the integration of compliance, operational and visibility capabilities that sets 3rdwave apart in the GTM software market, thus creating optimal value for its clients. To learn more about 3rdwave’s suite of integrated Global Trade Management software solutions, visit 3rdwave.co/gtm