December 1999 | Case Studies | I.T. Toolkit

Anyone Can Sell on the Web, But Can You Deliver Worldwide?

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Through its GLS software, Syntra addresses the three significant areas of constraint that inevitably impede international trade—regulatory compliance, financials, and logistics management.

"The worldwide web is really just a domestic web."—Perry Ziff, vice president, product marketing, Syntra Technologies.

Anyone who doubts the validity of Ziff's statement need look only at the B2C (business to consumer) .com retailers such as etoys.com and toysrus.com, which have extended shipping capabilities to the United Kingdom but don't attempt to deliver worldwide.

And these are the savvy web players. The ones that are truly remiss are those B2B (business to business) web sites that sell to customers worldwide only to learn that they can neither deliver the order nor collect payment.

Thanks to web-based global commerce management solutions provided by Syntra Technologies, New York, the global 1000 (that elite collection of companies successfully practicing global e-commerce) have tools to reduce costs and manage transactions more efficiently. And, companies that aspire to sell worldwide, but lack the resources to accomplish this feat, now have affordable and effective options.

Building on its Global Logistics System (GLS), which was released in 1996 to automate order fulfillment with suppliers and customers worldwide, Syntra introduced a web-based solution this past summer. Companies realize huge savings and increased efficiencies because the software is installed in a single location. Satellite facilities and trading partners log on to a web site and gain real-time access to updated information.

By using the GLS software, Motorola has lowered its shipping costs, reduced on-hand inventory from 45 days to five days, and cut supply chain cycle time by 50 percent from order to delivery.

"Global commerce becomes an issue of growing revenue, not just reducing cost," explains Ziff. "When we talk about reducing costs, we get the attention of the vice president of logistics. But when we talk about the huge revenue potential associated with GLS, it becomes a powerful tool that every CEO and CFO wants to know more about."

By providing solutions to the inevitable and monumental challenges associated with global distribution and logistics, Syntra has effectively leveled the playing field for companies of all sizes to source, sell, and expand market share globally. Through its GLS software suite, consulting group, and GLS.com offerings, Syntra addresses the three significant areas of constraint that inevitably impede international trade:

1. Regulatory compliance and documentation. In the best of times, government regulations are cumbersome and confusing. Complexities with multiple languages, currencies, and customs requirements contribute to the problem. To avoid exceptions, GLS performs compliance screening before a product leaves its point of origin. The software automatically sends messages to key personnel if an exception is detected and explains why the shipment doesn't comply.

Origin and destination, as well as intermediary countries crossed in-transit, have to be considered prior to fulfilling international orders. GLS addresses issues not only concerning what you are shipping, but also the country or person to whom you are shipping, and the transportation path the order must follow.

For instance, high-tech encryption software shipping to Germany may be detained in customs because the seller did not meet stringent regulations for the product. An Internet order for Mien Kampf may not be delivered to certain countries because the product itself is banned. An item as simple as toilet paper may not be shipped to Iraq because of restrictions on shipping to that country.

When exceptions occur, the problems can escalate into cost-prohibitive disasters. Customs may retain all or part of a shipment, making it impossible to deliver on customer service expectations and leaving the company responsible for holding costs, as well as any penalties or fines that may accrue. The goods may never be returned, and a company may permanently lose the right to ship products into a country.

"Companies spend 80 percent of their time dealing with and rectifying five to 10 percent of order exceptions," says Ziff. "Our software streamlines the velocity of information through the supply chain, significantly improving accuracy to prevent loss and duplication of data, yield labor savings, and minimize undelivered orders."

2. Financial pricing and collections. One of the biggest challenges is quoting the full-landed costs for order fulfillment to international customers. Syntra claims to be first to market with an innovative Landed Cost Engine that allows organizations to provide global customers with the total product cost per transaction, including transportation, taxes, import and export duties, port charges, and insurance.

"The miscellaneous costs inherent to international shipments can be more than 100 percent of the cost of the product shipping. A $20 book might cost $160 by the time it is delivered to Brazil," says Ziff. "If a business can't quote the full landed cost, the customer won't buy. Understanding the true net landed cost of doing business positions a company to compete more effectively against local suppliers in global markets."

Through its Triangular Trade Management functionality, GLS has the ability to route intra-company shipments moving between countries to minimize tax payments.

"The most cost-effective physical movement of an order doesn't necessarily follow a logical geographic path because of the duties and taxes that various countries might impose," explains Ziff. "When a manufacturer needs to ship parts from a U.S. location to one of its plants in Europe, GLS can build a customized country profile to determine the best physical route. The system will automatically transfer ownership, create an audit trail, and generate the appropriate invoices between subsidiaries."

3. Logistics management. Serving as a virtual warehouse, Syntra software empowers customers to manage orders to the lowest component level, even manipulating parts of an order in process to route pieces with a common origin to different destinations.

"Visibility, control, and the agility to react quickly and appropriately are key issues for logistics management," says Ziff. "We can manipulate inventory in motion, throughout the supply chain, to get the right parts to the right place at the right time."

Unlike domestic shipments, international deliveries can transfer through multiple modes. Companies entering global markets need to be able to review various combinations of modes to decide the most efficient transportation options. By sending coordinated messages, GLS can reserve space on multiple modes to choreograph the ideal flow of products. Advanced shipping notices update carriers throughout the supply chain as the order progresses, facilitating proactive responses to any problems or delays that might arise.

Syntra's mission is to enable more than $300 billion in global commerce over the next five years, creating $30 billion in value for its customers. Partnered with Oracle Business OnLine as its Internet application hosting service, Syntra leverages the power of the Internet to provide a total Global Trading Architecture.

A new product due for release early in 2000 will produce documentation electronically, through a PDF file, or e-mail. Companies will be charged a transaction fee based on complexity of the compliance screening and value of the order. The prerequisite compliance screening will be completed in sub-seconds, similar to consumer credit card approvals at a retail point of sale.

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