What is Aggregate Planning? – Importance and its Strategies
Introduction An organization can finalize its business plans on the recommendation of demand forecast. Once business plans are ready, an organization can do backward working from the final sales unit to raw materials required. Thus annual and quarterly plans are broken down into labor, raw material, working capital, etc. requirements over a medium-range period (6 […]
Criticisms of Globalization: Growing Income Inequality
More Losers than Winners The previous articles in this module covered the topic of globalization in depth. Some of the points of discussion were about how globalization has succeeded in lifting millions of people out of poverty. While accepting this fact, it is also the case that globalization has created income inequality which when coupled […]
BPI Project Tools – Different Types of Flow Charts
Business Process Improvement programs are an effective way of overhauling the business operations, of improving the efficiency, of bringing in change in the operations and lastly in enhancing the benchmark of the Business offering of the product or service to the Customer. In the fast changing business environment marked by technological advances, shortening lifecycle of […]
History of International Trade
Any time you walk into a super market and pick up any stuff like a knife or a toy and chances are that the item has been manufactured in China or assembled in Mexico. Pick up coffee pods and you will see that they have been imported from Africa. When you shop for clothes, it […]
Working through Business Process Improvement Project
Introduction Organizations are very similar to living Organisms. They too go through a definite life cycle and different stages of development. As in life, change is the only constant factor especially in the operations of each and every organization. Organizations are constantly engaged in the process of changing and fine tuning their internal processes in […]
Supply chain operations and network extend beyond domestic boundaries and global boundaries of all countries. A logistical exercise originates at the buyers end and involves multiple agencies including buyer, seller, 3PL freight forwarder, transporters at various juncture, shipping lines, airlines, various governmental agencies, customs departments at various locations and financial institutions like banks to complete the entire supply chain cycle.
Smooth flowing of materials in a journey originating at one point and going through the entire cycle of exports and imports to reach a point of consumption would mean engagement and interaction with all of the above agencies who have a stake in the said transaction.
Need for decision-making concerning financial, commercial, technical, operational matters about shipments arise at various times in the cycle, which demands that the 3PL, the logistics carrier, the buyer, the supplier are actively engaged and have visibility to information and documentation for the smooth flow across various transit points. In fact, in faultless logistics operations, the documentation and information flow should precede physical movement of goods.
Documentation becomes important not only for the physical logistics operations involving multiple agencies engaged in the entire chain, the financial, trading and accounting processes of the both buyer and seller organizations and partner banks also involved depend upon the entire set of documentation pertaining to each transaction to be able to recognize the sale, recognize value of consignment and effect necessary payment.
Accounting practices of the organizations require detailed documentation as per bookkeeping practices and norms. Finally, goods and services are recognized and identified at every stage only with the set of authenticated documentation showing ownership based on which the customs allow them to be exported or imported into or out of the country. There are many more aspects like terms of carriage by the carrier coupled with insurance liabilities and coverage that call for set of documentation covering specific aspects of each transaction.
Therefore the entire supply chain transaction involves set of standardized documentation from buyer and seller, from 3PL carriers and documentation as required by customs at exporting country and importing country coupled with trading or bank requirements documents. The entire set of documents and the terms of trade have been developed and standardized across all countries to facilitate international trade.
INCO terms and EDI approved/enabled standardized documentation has made Export and Imports smoother and hassle free, thus cutting down on bottlenecks and delays arising out of documentation requirements.
Today software applications have built in standardized documentation templates and modules in their offerings that reduce the amount of time and effort involved in preparing documentation.
ERP modules contain the documentation formats as an integral part of its internal processes. 3PL logistics providers work with various software applications that have shipping documentation built into its operational processes and offer track and trace with documentation visibility to customers on the web.
Filing documents with customs has been EDI enabled. Electronic documentation has become a part of operations amongst all agencies. However at customs and banking counters, original documents are required to be produced as negotiating and valid legal documents for shipments to be cleared through.
A supply chain manager needs to be aware of the complete set of documentation requirement along with the various aspects to be able to design processes and documentation control mechanisms. Errors in documentation will lead to financial damage, delays in delivery and performance that is what every manager aims to avoid.
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