Is Globalization a Zero Sum Game or a Win-Win Situation?
When we discuss globalization, we often take into account the fact that both countries that are partners in trade benefit from the exchange. What this means is that a country A that specializes in a particular good or service can trade with country B that specializes in another good or service. In this way, both […]
Is the Indian Economy at Risk of Turning into another Greece or Thailand?
What History teaches us and why Forgetting History would condemn us to repeat it? The Indian Elections are over and it is now time to take stock of what the new government has in store for the Indian Economy. With PM Modi winning a record second term with foolproof majority, he and his administration have […]
Value Analysis: An Applied Concept for Manufacturing and Service Industry
Introduction All organizations strive to create value for their customers. This value creates mind space for product and services. Value analysis, therefore, is a scientific method to increase this value. Value is a perception hence every customer will have their own perceptions on how they define value. However, overall at the highest level, value is […]
Trust is the Key to Building Successful Companies and Great Nations
The Importance of Trust in Building Successful Companies and Great Nations Recently the former Prime Minister of India, Dr. Manmohan Singh, made an impassioned plea for building trust among the economic agents and between the citizenry as that would have a salutary effect on the country’s economy. In a hard hitting article, Dr. Singh, decried […]
Contract Logistics – Key block in Supply Chain Management
Supply Chain Activities constitute multi-modal transportation, customs clearance, and warehousing activities in one or more locations in the entire network. Supply chain activities may be local referring to within the country or regional meaning within a continent or region and global which is essentially intercontinental. Global operations are the order of the day as businesses […]
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.
Your email address will not be published. Required fields are marked *
