1st Edition

Driving Risk and Spend Out of the Global Supply Chain

By Thomas A. Cook Copyright 2015
    366 Pages 98 B/W Illustrations
    by CRC Press

    Driving Risk and Spend Out of the Global Supply Chain provides a complete picture of the various risks multinational firms face when they operate overseas and engage in foreign purchasing and sales, import and export trade, and global logistics. Thomas A. Cook, a subject matter expert on global trade management, supplies readers with step-by-step guidance on how to develop an airtight global risk strategy.

    This second book in The Global Warrior Series presents a blueprint and operational strategy for executives to consider when charged with the responsibility of reducing risks and costs in their global supply chains. The book reviews a number of key factors, including:

    • The key issues that impact risk and spend in all supply chains
    • How to develop effective risk management strategies, tactics, and action plans
    • Managing requests for proposal (RFPs) to achieve desired results with minimal compromise
    • Risk versus insurance and cargo loss control
    • Business model development for a cost reduction program
    • Maintaining best practices while reducing risks and costs
    • Sarbanes–Oxley issues for public companies
    • How to achieve world-class status in international trade

    The book examines all the areas where spend can be reduced and details a specific strategy to help readers reduce spend without compromising values. Providing the most comprehensive and up-to-date compilation of material and tactics currently available for international business professionals, the text supplies a clear understanding of the steps readers must take before taking any action to reduce risk and spend in their import, export, and domestic supply chain operations.

    Overview of Risk and Spend Issues in the Global Supply Chain
    Overview of Supply Chain Risk
    Contractual and Legal
         Relationship, Relationship, Relationship
         Local Legal Counsel
         Case Study
         Hiring Legal Support: Some Helpful Hints
         International Contracts: Helpful Hints and Best Practices
    Physical (Demographics)
         Physical Challenges of Global Trade
    Customer, Supplier, and Vendor
    Foreign Distributors
         You Lose Control over Distribution and Sales Price and Margins
         You Cannot Control How They Represent You in the Countries They Are Distributing To or In
         Repairs, Service Agreements, and Warranty Handling May Not Be Adequate
         Potential Issues with Intellectual Property Rights (IPR)
         Reexport Is a Potential Exposure
         Resell into the Gray Market Back in the United States or Abroad
         Leveraging Logistics Options
              Reduce Cost with Bonded Warehouses and Foreign Trade Zones
              Freight Forwarders and Custom House Brokers Managing Transportation Service Providers
    Trade Compliance
         Trade Compliance Facilities Reviews
         Financial Risks in Foreign Exchange
              How to Export in Foreign Currencies
              Best Practices to Reduce Risk
              Characteristics of a Foreign Currency–Denominated Export Sale
              FX Risk Management Options
    Methods of Payment in International Trade
         Letters of Credit
         Documentary Collections
         Open Account
         Political Risks
         Currency Inconvertibility
         Incorrect Utilization of Currency and Exchange Rates
         Risk versus Insurance
         Characteristics of Export Credit Insurance
    Overview of Spend
         Managing Landed Costs

    Special Need Supply Chains

    Industries with Special Needs
    Defense and Export Controlled Products
         Failure to Manage the Regulatory Process Proactively
         Failure to Train All Personnel in the Global Supply Chain from Sales to Purchasing, Operations and Logistics, Supply Chain, Legal, and Finance
         Failure to Create a Compliant and Secure Logistics Supply Chain
         Chain of Custody
         FDA Compliance
    Communications and Broadcast
         Carnets Can Reduce Risk and Cost
         Carnet Utilization
    Relief Agencies
    Food Products
         Case Study
    Project Business
    Clothing and Retail

    Developing a Risk Management Strategy

    Creating the Necessary Leadership for Risk Management
    Assigning Ownership
    Building Internal Teams to Tackle Risk Management as a Corporate Responsibility for Everyone
    Assessment and Benchmarking
    Creating Action Plans
    Strategies in Risk Management
    Tactics in Risk Management

    Summary of Insurance Purchasing for Global Supply Chains

    Outline of the Risks in Managing Global Supply Chains
    Marine Cargo
         Geographic Areas Covered
         Named Insured
         Modes of Transit Covered
         Limits of Liability
         Underwriting Terms
         Special Terms
         War, SRCC Coverage
         Effective Dates
         Consolidation and Deconsolidation
         Domestic Transit
         Interruptions in Transit
              Loss of Market
              Business Interruption or Consequential Damages
              War, SRCC
              Inadequate Packing
    Workers’ Compensation
         Key Risk Management Initiatives in Global Trade
              Players in Global Supply Chain Risk Management, Brokerage, and Underwriting
         Key Initiatives
    Disaster Management
         Types of Disasters
         Disaster Prevention
         Disaster Preparedness
         Disaster Relief
         Disaster Recovery
         Global Supply Chain Disaster Management

    Mastering Cargo Loss Control

    How Do Loss and Damage Occur in International Shipping?
    Best Practices: A Company’s Strategy to Combat Loss and Damage in Global Trade
    Other Areas That Could Have an Impact on Cargo Outturns

    Developing a Cost Reduction Business Model: Creative Leveraging and Aggressive Management Strategies
    Change Leadership
    Lead by Example
    Case Study and Example
         The Wrong Way
         The Right Way
    Utilization of Consultants
    Areas in Which Spend and Risk Can Be Dealt with Aggressively
    Dealing with Change Management Issues
    Moving Theory into Results

    World Class, Best Practices, and SOX: While Reducing Risk and Spend
    Typical Global Supply Chain Scenario
         Move Freight in a Timely Manner
         Move Freight Safely
         Move Freight Cost Effectively
         Move Freight Securely and Compliantly
    Senior Management Leadership
    Experienced Management with Global Trade Experience
    Utilization of Technology
    SWOT Analysis Mindset
    Alignment with Quality Service Providers, Advisors, Channel Partners, and Professional Service Organizations
    Partner Mentality with Channel Partners
    Assessment and Benchmarking
    Industry and Trade Organization Participation
    International Travel and Relationship Building
    Connectivity in the Organization with a Global Supply Chain
    Investing in Skill Set Training
    Bringing International Culture into the Organization
    Leveraging Supply Chain Options—FTZ
    Keeping International Travel and Entertainment Costs in Line

    Managing RFPs and RFQs: Maximizing Results
    What Are RFPs and RFQs?
    Step 1: Define Stakeholders
    Step 2: Mine
    Step 3: Assess Needs
    Step 4: Define Deliverables (Parameters May Be Required)
    Step 5: Assign a Committee Approach (Buy-In)
    Step 6: Create Basic RFP Outline
    Step 7: Identify Potential Partners Who Will Be Invited In to Bid on the RFP
    Step 8: Conduct Preliminary Meetings with RFP Participants
    Step 9: Establish Metrics or Measurement System for the RFP
    Step 10: Send Out Basic RFP Outline—No Pricing Involved
    Step 11: Set Dates for Second Meetings with RFP Participants
    Step 12: Move Participants List to a Manageable Amount
    Step 13: Bring Price into the Equation
    Step 14: Move Participants List to One to Three Options
    Step 15: Set Full-Blown "Dog and Pony" Show
    Step 16: Make Selection, Implementation Strategy, and Follow-Up Evaluation
         Implementation Strategy
         Review Meetings
              The RFP Committee

    Spend Issues: Global Operations, Trade Compliance, and Regulatory Management
    Trade Compliance Manager
    Senior Management Support
    Point Person and Committee
    Assessment and Benchmarking

    Import and Export Trade Compliance: Risk and Spend Concerns
    Driving Risk and Spend Out of the Global Supply
    Chain—Import Perspective
         Understanding Incoterms® Rules
         Ultimate Consignee
         Managing the Import Process
         Purchase Order Management
         Import Invoices
         Import Compliance
         Reasonable Care
              General Questions for All Transactions
              Questions for Merchandise Description and Tariff Classification
    Centers of Excellence
         Managing the Customs Broker Relationship
         Harmonized Tariff Classification
         Country of Origin
         Importer Security Filing
         Record Keeping
    Driving Risk and Spend Out of the Global Supply Chain—Export Perspective
         Export Compliance
         Due Diligence
         Export Licensing and License Exceptions
              Best Practices against Diversion
         Foreign Trade Regulations
         Restrictive Trade Practices
              Examples of Boycott Requests
         Export Record Keeping
         Managing Freight Forwarders
         International Traffic in Arms (ITAR) Regulations
         Export Control Reform 
         Free Trade Agreements
              U.S.–Australia Free Trade Agreement
              U.S.–Bahrain Free Trade Agreement
              CAFTA–DR–U.S.–Peru Free Trade Agreement
              U.S.–Chile Free Trade Agreement
              U.S.–Colombia Trade Promotion Agreement
              U.S.–Israel Free Trade Agreement
              U.S.–Jordan Free Trade Agreement
              U.S.–Korea Free Trade Agreement (KORUS)
              U.S.–Morocco Free Trade Agreement
              U.S.–Oman Free Trade Agreement
              NAFTA (North American Free Trade Agreement)
              U.S.–Panama Trade Promotion Agreement
              U.S.–Peru Trade Promotion Agreement
              U.S.–Singapore Free Trade Agreement
    Export Red Flags
         Export Documentation
    Effective Compliance Management






    Thomas A. Cook has been involved in international business and global supply chain management for more than 30 years. He is a graduate of the NYS Merchant Marine Academy with a BS and MS in transportation and business management. He has spent more than six years in the U. S. Naval Reserve and the U. S. Merchant Marines. He founded American River International, a premiere logistics and supply chain management consulting company, in 1982. Last year he stepped down from his position as CEO and managing director and sold his company to existing shareholders.

    Cook is a subject matter expert on global trade management, and has published more than 12 books and 300 articles about international business, supply chain management, RFP, negotiation, and world business development. He has sat or currently sits on numerous boards and advisory groups that assist corporations, associations, and industry trade groups in the best practices of running their businesses. He sits or has sat on the board of, or is involved in corporate training with, the following companies: American Management Association (AMA), American Pet Products Association (APPA), Council of Supply Chain Management Professionals (CSCMP), Institute for Supply Management (ISM), and National Association of Purchasing Managers (NAPM), to name a few.

    Cook has experience in a number of subjects concerned with general management, including sales, negotiations, customer service, operations, supply chain, logistics, RFP management, business development, and training. He is cofounder of the World Academy, which equips international business executives and operational personnel in supply chain with the skills necessary to operate successfully in global trade.

    Currently, Cook is managing director of Blue Tiger International (www.bluetigerintl.com), a management consulting organization focused on international purchasing and RFP enhancements. He is also working on an eight book series entitled The Global Warrior (Taylor & Francis/ CRC Press). Each book gives strategies on the skill sets necessary for the corporate executive of the future to compete in global trade.