Making a Business Case for GTM

Q: What is the role of global trade management (GTM) in organizations today?

A: In today’s world, GTM is more than compliance. GTM practitioners should think of GTM as standing on three equal pillars: compliance, supply chain finance, and global logistics. A holistic approach is necessary given the growing complexity—both in regulations and geography—of international trade.

Q: How can companies sell the importance of GTM to upper management?

A: One of the greatest challenges GTM practitioners face is elevating GTM to a boardroom priority. The good news is that a strong business case can be made for adopting a holistic approach at the executive level. For example, by automating trade compliance, a typical company can expect to see a five- to eight-percent reduction in transportation costs; 10- to 15-percent reduction in cycle stock inventory; and four to seven days’ compression in order cycle times.

Start by benchmarking your operations. Knowing where you are and where you need to be is vital to improving operations and demonstrating to management how a strong GTM program benefits the company. By identifying opportunities and current deficiencies, you can then move to providing a business case on how a strong GTM program can lower costs, streamline processes, and improve customer service.

Q: What is the structure of a strong GTM program?

A: Two key pieces to a strong GTM program are integration and centralization. First, apply an integrated view of the supply chain to all aspects of GTM, including logistics, supply chain network design, and global sourcing decisions. Make sure you are connected to your carriers, 3PLs, customers, suppliers, and other important players in your supply chain. Incorporate your supply chain finance and working capital management considerations into global supplier and customer relationship management and inventory-related decisions.

Second, centralize your operations, both by geography and technology. Best-in-class retail companies are 50 percent more likely than their competitors to have a centralized global supply chain management organization, according to an Aberdeen Group global supply chain visibility study. These retailers are also twice as likely to have trade compliance management centralized at the enterprise level.

Q: What other factors should shippers consider when creating a strong GTM program?

A: Recognize that there is no one-size-fits-all solution. Look for automated, flexible solutions that adapt to meet your changing needs, and turn paper-based transactions into an electronic data flow. When choosing a provider, look for a company that has successfully deployed its solution at a company similar to your own, within your industry.

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