Driving Risk and Spend Out of the Global Supply Chain: 1st Edition (Hardback) book cover

Driving Risk and Spend Out of the Global Supply Chain

1st Edition

By Thomas A. Cook

CRC Press

366 pages | 98 B/W Illus.

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pub: 2014-09-18
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Description

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.

Table of Contents

Overview of Risk and Spend Issues in the Global Supply Chain

Overview of Supply Chain Risk

Economic

Political

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

Logistics

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

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

Consignment

Risks

Political Risks

Currency Inconvertibility

Devaluation

Incorrect Utilization of Currency and Exchange Rates

Risk versus Insurance

Characteristics of Export Credit Insurance

Overview of Spend

Managing Landed Costs

Summary

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

Pharmaceuticals

Chain of Custody

FDA Compliance

Communications and Broadcast

Carnets Can Reduce Risk and Cost

Carnet Utilization

Relief Agencies

Food Products

Case Study

Chemicals

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

Property

Marine Cargo

Geographic Areas Covered

Named Insured

Modes of Transit Covered

Limits of Liability

Valuation

Underwriting Terms

Special Terms

War, SRCC Coverage

Terrorism

Effective Dates

Storage/Warehousing

Consolidation and Deconsolidation

Domestic Transit

Interruptions in Transit

Exclusions

Loss of Market

Delay

Business Interruption or Consequential Damages

War, SRCC

Inadequate Packing

Cancellation

Liability

Workers’ Compensation

Fiduciary

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

Overview

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

Summary

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

SOPs

Technology

Training

Engagement

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

Marking

Valuation

Importer Security Filing

Drawback

Record Keeping

Driving Risk and Spend Out of the Global Supply Chain—Export Perspective

Incoterms

Export Compliance

Due Diligence

Export Licensing and License Exceptions

Embargoes

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

Glossary

Resources

Appendix

Index

About the Author

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.

About the Series

The Global Warrior Series

Learn more…

Subject Categories

BISAC Subject Codes/Headings:
BUS042000
BUSINESS & ECONOMICS / Management Science
BUS076000
BUSINESS & ECONOMICS / Purchasing & Buying