Global Trade Management is the practice of streamlining the entire lifecycle of a global trade across order, logistics, and settlement activities to significantly improve operating efficiencies and cash flows. The comprehensive nature of GTM is a boon for organizations that fully embrace the cross-functional, system-wide view of global trade. At the same time, because GTM crosses traditional functional silos within organizations, many businesses endure poor performance in their global operations for years before they realize the gains of applying GTM solutions.
Insufficient planning, execution and synchronization of financial, logistics and regulatory procedures can lead to very costly business challenges, including:
- Shipment delays
- High inventory
- High AR & DSOs
- Increased logistics spending
- Penalties and fines
- Lost sales
- Claim write-offs and invoice deductions
SUCCESSFUL GTM STRATEGIES
Global Trade Management requires the integration of the financial supply chain with the physical supply chain, enabling corporations to accomplish the following goals on a continuous basis:
- Grow top line revenue and reduce supply chain costs
- Provide full visibility into shipments
- Minimize working capital in inventory and accounts receivable
- Comply with required governmental reporting and security mandates
- Measure the efficiency and performance of global trade policies, procedures and trading partners
The international trade journey starts where goods leave a country. Over the years, exports have increased significantly as organizations are tapping more into foreign markets. More markets in more countries across the globe represent an increase in export compliance challenges and a corresponding increase in potential regulatory violations. That often stops exporters in their tracks as they are challenged to screen potential customers against restricted party lists, determine license requirements, perform export compliance checks, and generate international trade documents. The right approach to GTM will automate the end-to-end export process to reduce export compliance risks and improve export efficiencies while addressing:
- Product classification
- Restricted party screening
- License determination and management
- End-use management
- Freight forwarder collaboration
- Export compliance
Global Trade Investments segments the GTM market into two high-level solution categories: Trade Compliance, and International Trade Visibility and Execution. These are briefly described in the following table, and then in more detail later in this section.
Trade Compliance includes functionality that supports the required item classification, trade documentation, and communications with international government authorities regarding:
- Non-financial trade regulations issues, such as restricted parties, government licensing of export rights for controlled items, and other regulations
- Duties, tariffs, and trade taxes placed by governments on international trade and commerce
Examples of specific functionality often listed by GTM suppliers include product classification, restricted party screening, import security filing, free trade agreement management, foreign trade zones, export control, international customs compliance, and the document and data management functionality that supports these information and process domains.
Trade content revenues are also included within the Trade Compliance category. However, suppliers’ trade content revenues are only included in the study if they also provide GTM software.
International Trade Visibility and Execution
International Trade Visibility and Execution includes functionality that facilitates the execution of cross-border shipping and transportation and provides visibility into international trade partner processes and events. These processes must be international and involve transactions and agreements between commercial trade partners.