Turning Global Trade Compliance Into a Competitive Advantage

When you operate in more then 140 countries around the world, global trade compliance is bound to get complicated. But Tyco Fire & Security is turning that complexity into a competitive edge.


The software runs the order information against about 35 different lists to which Tyco subscribes, including lists from various countries other than the United States, screening against all the denied or restricted parties and embargoed countries, checking to whom they're shipping and selling, as well as the freight forwarder, and also looking at the product for the particular "ship-to" country to see if there are any licensing issues. If the order passes muster, the system keeps a record of it. If there is an issue, the software system sends an e-mail back to the order-entry person and automatically puts the order on hold so that no one can process that order until someone physically goes into the system, reviews the order to understand the issue and makes a decision as to whether it's a real problem or not. "It's fuzzy logic," Philbrook says of the screening process. "At times it's coming up with an issue and you can review it very quickly and say whether it's a real hit."

When the shipment is ready to go out the door, the system again screens the order to determine whether anything has changed and whether an issue has arisen, for example, if the government has imposed new sanctions on a country. Again, if any issues pop up, the system will put the order back on hold, send the appropriate alert and wait for a resolution. Once a shipment receives final approval, depending on the country to which it's going, the software has a checklist of all the documents required for that country, and the operator only needs to click and print and the system prepares all the necessary documentation, ensuring consistency across the segment.

Additionally, the company's facilities staff can manually log into the system when visitors are due to come into a facility. The facilities staff runs the visitors through the system, along with the product that they're coming to see, allowing the staff to immediately check for any restrictions on sharing information or technology with that visitor regarding that product. Boca Raton-based technical support staff perform the same checks before training or offering service support.

Gaining a Competitive Edge

Philbrook acknowledges that it can be difficult to hang a concrete return on investment on a trade compliance software solution, but she says that, in this day and age, with compliance an absolute requirement and the rules of the game changing so quickly, such a solution has become increasingly valuable. With the compliance solution running in the background on an exception basis, according to Philbrook, the efficiencies that the system has introduced into the company's processes have allowed certain organizations in the enterprise, especially in the distribution functions, to take on more business without added headcount that would otherwise be required to conduct required checks for restricted parties.

In spite of her brief tenure in her new position, Philbrook says that her team has been successful in building awareness of global trade compliance throughout the company and its supply chain. "We've made excellent progress in getting the word further out through the organization and to our suppliers throughout the supply chain," she says. "It does take time, but I will say that we're more in a proactive mode now than in a fire-fighting mode."

Much of the proactive work has come since Tyco Fire & Security integrated compliance with its formal product release process, Philbrook says. "We work very early on with the strategic business units that develop the products to help them understand whether there will be licensing requirements, the landed cost model from a supply chain standpoint and the best scenario for our customers and for the company." For example, just by sourcing some components in a different way, the company may be able to qualify a product for favorable treatment under NAFTA, making it less expensive for both Tyco and the customer.

And allowing the company to provide that level of service to its customers may prove to be the greatest return on investment in building a trade compliance organization with Tyco Fire & Security, according to Philbrook. "It's a service for our customers to be able to tell them that the Tyco products might qualify for a trade program that would allow them to buy the products at a reduced duty," she says. "Being able to make those decisions up front when you are structuring the supply chain for a new product is critical."

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