What could possibly cause such poor performance? Each stakeholder is acting with incomplete information and in self-interest rather than in the best interest of the supply chain itself, acting independently rather than collaboratively. Other factors that contribute to mismanaged supply chain hand-offs include language differences between the stakeholders, cultural differences, differences in industry jargon, breakdowns in communication and failure of the importer to set, and control expectations for each activity within the supply chain. Inefficient supply chains cost corporations millions of dollars in unexpected "hidden costs" severely impacting company profits.
Financial opportunity also abounds on the plus-side of managing an international supply chain by effectively managing the proliferation of Free Trade Agreements, improving sourcing options and implementing new supply chain finance programs for international suppliers. Leading executives are beginning to use data mining and metrics to identify significant financial and operational opportunities within their global supply chain. One leading Industry analyst, Beth Enslow of the AberdeenGroup, and GDM recently collaborated on an extensive data mining project for the International Compliance Professionals Association (ICPA). The project included five Fortune 500 companies and identified more than $500 million in potential savings.
In a separate Aberdeen study (the CFO's Agenda for Global Trade Benchmark Report), Beth Enslow concluded, "A $1 billion company can free $10 million to $40 million in cash by better controlling its basic global trade processes." How large is the opportunity for your company?