SAP Updates Trade Compliance Solution

New functionality intended to help companies operate more easily under NAFTA, EU Trade Agreements; customers include AMD, ASML

New functionality intended to help companies operate more easily under NAFTA, EU Trade Agreements; customers include AMD, ASML

Walldorf, Germany — February 7, 2005 — Enterprise software giant SAP has taken the wraps off an updated global trade solution designed to help companies more easily conduct business under the North American Free Trade Agreement (NAFTA) and European Union (EU) trade agreements with lower costs and easier regulatory compliance.

New trade preference processing capabilities have been added to the latest version of SAP's Global Trade Services (GTS), a packaged composite application intended to help businesses standardize and streamline import and export processes to speed their global supply chains.

SAP said that GTS, based on the NetWeaver technology platform, provides companies with a holistic approach to managing global trade activities across their heterogeneous technology landscapes. The new capabilities of the solution were developed to help companies leverage the benefits of trade agreements, such as the North American Free Trade Agreement (NAFTA) and the ones that the European Union (EU) has concluded with other countries and groups of countries.

New Treaties Complicate Compliance

Established to spur growth, the trade agreements provide companies with reduced rates on customs duties or exemptions based on established rules. While the benefits are numerous, the process is highly complex and time consuming due to the need for written declarations from suppliers regarding product origin, accurate calculation and determination of preference eligibility, and the fulfillment of document requirements such as movement certificates as the goods pass through customs.

SAP said that Risk Management, the latest component to be released within GTS, automates the necessary processes, including requesting vendor declarations from suppliers, calculating and publishing eligibility information in sales documents, and providing detailed reports. These new capabilities help companies comply with the regional trade agreements, eliminate risks through documentation and audit trails, and ensure competitiveness through reduced duty rates their customers can claim, SAP said.

Risk Management ties together these new capabilities along with the existing GTS components, including Customs Management, which helps customers expedite the clearance of goods through customs at import/export time, and Compliance Management, which helps companies mitigate risks while trading across borders.

"Globalization is not an emerging trend; it's a business reality," said Adrian Gonzalez, director of the Logistics Executive Council at technology consultancy ARC Advisory Group. "What's changed is the increased level of complexity and risk associated with moving goods across borders, especially after the 9/11 terrorist attacks. Technology is the key enabler of any global trade management strategy, and companies must take a broader perspective and view their entire enterprise software platform as a GTM solution. SAP shares this perspective and this latest release further strengthens its value proposition to clients."

AMD Aims to Automate Trade Processes

The 125-plus companies currently using GTS include Advanced Micro Devices, ASML and the Teekanne Group. Advanced Micro Devices (AMD), a producer of microprocessors, was looking to automate and streamline trade compliance processes across its global business units, and the company is using GTS to standardize its export processes to support a secure supply chain, ensure regulatory compliance and increase productivity across the enterprise.

AMD is using the Compliance Management component of GTS to proactively screen business partner data and documents along the order-to-cash process. This component helps AMD check up-to-date sanctioned party lists published by governments and helps mitigate the potential risks of non-compliance.

As AMD manufactures products that require proper export licenses, GTS also helps automate license determination, track value and quantity limits and exception handling process to drive new efficiencies. GTS replaced manual and legacy system export processes in existence at various AMD locations worldwide.

"We worked closely with SAP to have the GTS solution up and running in a matter of weeks and successfully met our tight deadlines," said Judy Studebaker, senior export compliance specialist at AMD. "We chose SAP GTS to create a standardized export process, with appropriate regulatory checks that will diminish compliance risks and help us best serve the needs of our customers."

Standardizing Export Management at ASML

ASML, a semiconductor manufacturer headquartered in Veldhoven, Netherlands, has manufacturing sites and research and development facilities located in the United States and the Netherlands.

"In order to deliver top-quality service, we rely on an efficient export management system of our products from our headquarters in the Netherlands and the U.S. to customer sites worldwide," said Eric Vennekens, director of international trade and customs at ASML. "We implemented SAP GTS to help us standardize our trade compliance process across the entire company and help us to meet the latest trade regulations to mitigate the risk of regulatory violations."

Finally, the Teekanne Group, a tea trading company headquartered in Dusseldorf, Germany, chose GTS, which is accredited by the German customs authorities, to support the company's participation in Europe's New Computerized Transit System (NCTS). With production facilities and branches in eight countries around the world, plus distribution partners in many different countries, Teekanne is leveraging GTS to support its participation in this new system alongside other member states of the European Union.

"We implemented SAP GTS in the beginning of 2004 to enable us to participate in Europe's New Computerized Transit System, a system that is used to monitor undeclared goods during transport," said Ronald Kloust, chief information officer at Teekanne. "It took only seven weeks to implement and easily integrates with our existing heterogeneous IT landscape. We are really satisfied with how smoothly SAP GTS is running and how it has helped us streamline our customs-related processes."

For a look at how Tyco Fire & Security is tackling trade compliance issues in its global supply chain, see "Turning Global Trade Compliance Into a Competitive Advantage," in the August/September 2004 issue of Supply & Demand Chain Executive.

For more information on the challenges and opportunities presented by increasingly global supply chains, see the special in-depth report in the August/September 2004 issue of Supply & Demand Chain Executive, which includes the following articles:

For more information on the global supply chain, with a focus on security issues, see "Building the Secure Supply Chain," the Net Best Thing article in the June/July 2003 issue of iSource Business (now Supply & Demand Chain Executive) magazine.

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