Supply Chain

The Incredible Power of Trade Compliance - an Invisible Resource

Ned Blinick

October 28, 2016

The graphic below is courtesy of Mike Laden from Trade innovations. As many of you know, Mike is deeply passionate about Trade Compliance. His resume is the quintessential resume for a trade compliance specialist. He has extensive and deep experience in the area of Trade Compliance as an LCB, Senior Trade Compliance executive with Target, and advisor to CBP and Industry.

the-breadth-of-trade-compliance-in-the-organization

The visual is a powerful and graphically shows the far-reaching and pivotal role that trade compliance can play within an organization. The graphic applies to both companies large and small. From an internal perspective the organizational structure will vary greatly depending on the size of the organization. But, from the external perspective the world is the same. As I have written about in many other blogs, the external parties provide equal opportunity and pitfalls for both large and small organizations without regard to size. This is particularly so with CBP and PGAs. From my experience few organizations take advantage of the knowledge and understanding that resides in their trade compliance group. This knowledge and understanding and how to apply it is becoming more important as the trading environment becomes more complex and uncertain. The precarious trade environment requires organizations to be nimble and able to respond quickly and appropriately when governments impose new or altered trade rulings.As Mike’s graphic represents the information that resides in trade compliance impacts the organization’s operations directly across a very broad spectrum. This is true whether the organization understands its implications or not. If the powers that be in the organization fail to understand the potential of trade compliance the organization misses opportunities to directly and positively impact their bottom line. Right from the time a product is in its inception the trade compliance team can affect its outcome. How a product is designed, where it is sourced, who produces it all affect its total landed cost. Understanding the tariff implications and the risk factors associated with getting a product from source to market affect the cost and the competitive position of the product and therefore the bottom line of the organization.If viewed holistically, and I am a big advocate of the holistic view, trade compliance is a major resource and active participant in an organization’s supply chain and risk assessment teams. However, sadly, too many executives fail to understand the value that the cross-functional knowledge and skills that trade compliance brings to the table and therefore they miss a real opportunity to maximize their global supply chains and minimize their risk exposure.There are many competing agendas that senior executives deal with on a daily basis. It is natural for them to gravitate to their comfort zone and deal with those issues where they have understanding and can move with confidence. Unfortunately, trade compliance is an area where few executives really have any exposure and therefore don’t understand its broad and significant capabilities.This is a challenge for all trade compliance specialists. However, the journey is worthy and the results are personally and professionally rewarding if you can succeed in improving the understanding of trade compliance within the organization.