The shift to growth-oriented initiatives is causing companies to reach outside the enterprise to collaborate with others in their supply ecosystem. This multi-enterprise collaboration (MEC) is the technique by which organizations are able to progress along the path toward visible business. Its components involve the availability, analysis, and application of information to generate worth. In this installment, we continue our examples of MEC.
More and more companies are choosing to do some degree of business internationally. Whether that’s all or a portion of the manufacturing process, selling to new customers, purchasing from alternate suppliers, outsourcing, etc., the reality is that organizations have to wrestle with how they efficiently interact with their foreign partners in the supply ecosystem.
Of course, this interaction frequently involves the physical movement of products, parts, raw materials, etc., across international boundaries. In such cases, at its very simplest, the shipper and/or the shipment recipient (called the consignee) must manage the following. [Figure 1]
The shipper contacts potential carriers to determine which ones are able/willing to accommodate the schedule, route, content to be shipped, shipment size, etc. Rates are negotiated and the shipment is scheduled. Of course, this interaction—in and of itself—is an opportunity for MEC. In addition, the shipper or carrier frequently will make an appointment with the consignee for the anticipated delivery time. [After all, consider a retailer’s distribution center (DC) with dozens of delivery bays and a constant parade of trucks coming and going. Often, the only way to avoid complete gridlock is to pre-arrange arrival times and delivery locations for each truck.] But, from the moment agreement is struck between the shipper, the carrier, and the receiving point, there are several key milestones that—if reported—provide valuable insight for both the shipper and the consignee. Updates about these milestones help everyone involved determine whether—and, if so, when—the shipment will arrive at the intended end destination.
The journey begins, of course, when the carrier picks up the shipment.*1 Of course, prior to leaving the country, the shipment must clear export Customs. Usually a freight forwarder is employed to facilitate more fluid passage of the goods through outbound Customs. At a minimum, there are two interactions that must take place with export Customs. A customs declaration is sent from the shipper to Customs to indicate what is being passed through customs. And, a customs release is sent from customs to the shipper to indicate that the shipment contents have been approved and may continue their journey. [Again, like the interplay between the shipper and the carrier, this interaction with Customs has the potential to benefit from MEC by integrating and automating the steps involving the Customs declaration and release to remove human intervention and speed the process. In fact, many Customs agencies are equipped for electronic interaction.] Once Customs has released the shipment, it’s typically the freight forwarder that is the first to hear from Customs that the shipment has cleared and can proceed.