For companies with many global locations, a hosted global trade management solution is the best approach for centralized management and process control. The document discusses how Flextronics and Sensormatic both chose a hosted GTM solution from Open Harbor to automate their trade compliance processes across multiple countries in a standardized way. A hosted solution requires fewer resources than separate point deployments, enables consistent processes, and provides better visibility into global operations. Both companies saw benefits in reducing costs, preventing penalties for non-compliance, and offering clients additional services through a centralized GTM infrastructure.

1. THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN
ARC INSIGHTS
By Adrian Gonzalez
For companies with many
locations, a hosted GTM solution
is arguably the best approach for
enabling centralized management
and process control.
INSIGHT# 2003-08E
FEBRUARY 20, 2003
A Centralized Approach to
Global Trade Management
Keywords
Trade Compliance, Trade Security, Global Trade Management (GTM)
Summary
Companies that source, manufacture, and/or distribute goods across bor-
ders cannot afford to use manual processes to manage their global trade
activities. Operational excellence can only be achieved by leveraging tech-
nology such as global trade management (GTM) software.
There are several solutions and deployment options
available in the market, but for companies like Flextronics
and Sensormatic that have many locations around the
world, a hosted solution is arguably the best approach for
enabling centralized management and process control.
Analysis
Managing global trade activities has always been a complex process, but in
light of new regulations and initiatives such as the 24-hour Manifest Rule
and Customs-Trade Partnership Against Terrorism (C-TPAT), companies
cannot afford to rely on manual processes to manage their operations.
♦Accurately completing and filing
about 35 documents;
A typical cross-border shipment involves…
♦Compliance with over 600 laws
and 500 trade agreements which
are constantly changing.
♦Interfacing with about 25 parties,
including Customs, carriers,
freight forwarders, and banks;
Global Trade Management Is a Complex Process

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Trade regulations and related content are at the heart of global trade man-
agement, but staying up to date is a major challenge because the
information changes frequently; it’s often made available only in a foreign
language; and it’s not always produced in electronic form.
Therefore, in order to truly automate GTM business processes, companies
must implement software solutions that are configurable and have access to
timely, accurate, and complete trade compliance information. For compa-
nies that have many locations around the world, a hosted solution is
arguably the best approach for enabling centralized management and proc-
ess control.
♦ Resources required at
every location
♦ Difficult to implement
standard processes
♦ Fragmented view of
operations
Point Deployments
Hosted Centralized Deployment
GTM Content &
Software
♦ Fewer resources
required
♦ Enables consitency
♦ Provides more holistic
view of operations
Point vs. Hosted Deployment of GTM Solutions
Case Studies: Flextronics and Sensormatic
ARC interviewed executives at Flextronics (a leading Electronics Manufac-
turing Services provider) and Sensormatic (a leading manufacturer of
electronic security devices) to better understand their decision to imple-
ment a hosted GTM solution. Both companies selected Open Harbor as
their solution provider. The vendor’s ability to automatically update trade
content in real-time was cited as a key decision factor, along with the solu-
tion’s adaptive workflow engine that allows clients to define and automate
processes and Open Harbor’s “shared risks” business model.
Flextronics and Sensormatic both operate manufacturing facilities in vari-
ous countries, and they source and distribute goods on a global basis. Until

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©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com
recently, both companies relied on manual processes to manage their global
trade operations. As their businesses grew in terms of production volume,
customers, and product mix, it became increasingly difficult and costly to
remain in a non-automated and decentralized GTM environment.
For example, at its facility in Hungary, Flex-
tronics was printing orders from its ERP
system and manually screening them against
paper-based restricted party lists. Similarly,
Sensormatic was screening orders by visiting
multiple Websites and manually entering the
required information. This inefficiency re-
sulted in excess overhead costs and a strong
potential for errors, which could ultimately
translate into fines and delayed shipments.
Therefore, automating the trade compliance process was a primary goal for
both companies. Today, Sensormatic’s ERP solution (Baan) is integrated
with Open Harbor, and orders are screened automatically when they’re
received and again prior to shipping. Human intervention is only required
when exceptions occur, which allows the trade specialists to focus on more
value-added activities.
Another driving force for both companies
was their desire to implement a corporate-
wide GTM infrastructure. For Flextronics,
creating such an infrastructure was a critical
component of truly becoming an end-to-end
service provider, from product design
through distribution. In other words, Flex-
tronics views GTM as another value-added
service that it can offer its clients from any-
where in the world.
After evaluating several options, both Flex-
tronics and Sensormatic realized that a hosted solution was the best option.
In addition to meeting IT requirements, the hosted model was the most ef-
ficient way to implement a standard process across the company along with
ensuring that every facility had the most up-to-date trade compliance in-
formation.
♦ Less overhead by centralizing
and streamlining GTM process
♦ Cost avoidance by preventing
penalties and delays due to
non-compliance
♦ Hosted model facilitates
centralized management
♦ Flexibility of solution
♦ Real-time update of trade
compliance information
Investment Justification
Decision Factors
♦ Operates in 29 countries
♦ Ships to over 120 countries
♦ Diversified product mix
Needed centralized but configurable GTM solution
♦ Improve productivity, reduce costs, and
minimize liability
♦ Enable direct shipments to end-customers
♦ Offer clients value-added services
Why?

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©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com
Recommendations
• Automate your global trade processes. In addition to being inefficient
and costly, manual processes prevent you from becoming C-TPAT cer-
tified and hinder your ability to meet ever-evolving trade security
regulations.
• A centralized approach to global trade management is the best option
for ensuring corporate-wide compliance and consistency. Consider im-
plementing a hosted GTM solution for enabling such an infrastructure.
• All functional groups must be involved in the selection process. Outlin-
ing a scope of work, with roles, responsibilities, and milestones clearly
defined in advance, is critical for success.
Please help us improve our deliverables to you – take our survey linked to this
transmittal e-mail or at www.arcweb.com/myarc in the Client Area. For further
information, contact your account manager or the author at adriang@arcweb.com.
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