Mining supply chain gold
As supply chains become more complex, the amount of data generated per shipment has increased exponentially. Much of this data is put to good use, allowing parties involved in the transactions an unprecedented level of visibility into the supply chain.
However, when the transaction is complete and the goods have been delivered, what happens to all that data?
Relatively few companies seem to have a good answer for that question. Very useful data is often left behind and never revisited.
Meet Global Data Mining, a data management company. 'GDM helps multinational companies optimize business processes and turn unorganized data into corporate assets,' said Matt Gersper, founder and president of the company.
'We specialize in helping businesses manage and use their enterprise data,' he said. 'GDM comes from an accounts payable auditing/financial background. We have a strong background in audit, data management and data mining.'
GDM provides a blend of on-demand systems and managed services that fall into several general categories. They include:
' Parts master database ' Classification content used from global trade management functions.
' Customs audit ' Reviews data from a number of sources, including government, enterprise estate planning, parts master list, and brokerage, to ensure reporting to government is accurate.
' Trade data analytics ' a project-based service that allows companies to look for future savings or opportunities.
'We're not consultants and do not try to be. Rather we supply data to consultants that makes them more effective,' Gersper said.
NEC Corp. of America, a provider of IT network and communications products, developed its own trade database in an effort to reduce the time it takes for shipments to clear customs. NEC estimated this demurrage time to be on average six days per shipment.
'By engaging GDM we were able to compress the processing time from approximately three years to three months through data consolidation and ease of data analysis,' said Joseph de la Luz, NEC's general manager of corporate trade compliance. 'While the process does require concurrence and final acceptance by an NEC subject matter expert in tariff classification analysis and determinations, GDM greatly accelerated the process.'
GDM estimates NEC could be saving as much as $5.6 million per year by moving product through customs in roughly one-and-a-half days.
There are many opportunities for savings available through GDM's services.
|'We're not consultants and do not try to be. Rather we supply data to consultants that makes them more effective.'|
founder and president,
Global Data Mining
'Trade data analytics brings together disparate databases with information outside the firewall, including shipping information, tariffs, and our proprietary information, to provide insight into financial opportunities or supply chain risks,' Gersper explained. 'Trade data analytics audits for opportunities, customs auditing solutions audit for compliance.'
GDM's trade data analytics measures the effectiveness of a company's current strategy and provides actionable intelligence that it can use to improve its use of free trade agreements, foreign trade zones, sourcing and supply chain finance.
'Web-based, 100-percent electronic audit allows companies to correct systemic problems in a highly effective manner,' Gersper said. In fact, using metrics provided by Aberdeen Group, he calculates that U.S.-based companies can save as much as $232 billion per year in unnecessary customs and regulatory fees. Certainly this is a best-case scenario, but the point remains that there is a large opportunity for basic business process improvement. 'Every CFO should conduct this exercise, Gersper said.'
Therein lies the challenge that GDM and its competitors face. Customs and trade issues lack attention within the senior executive level, but they remain a necessary endorsement for making strategic investments in better performance through technology and services.
Gersper offers some guidance for those who are struggling to build momentum around these initiatives. 'Trade professionals should audit their import and export data for financial opportunities,' he said. 'Data analysis will help them prioritize efforts to get the biggest bang for the buck. They should help their leadership make the informed decision to stop losing money everywhere the return on investment meets their company's standard.'
Supply chain managers may also be handicapped by their own supply chain outsourcing strategies. 'We believe that customs management is the last corporate function to be optimized,' Gersper said. 'Companies have outsourced customs management to their broker so the data resides outside their firewall.'
Clearly GDM and its customers must have access to the data related to their supply chain to be effective.
Looking forward, Gersper sees more opportunities for GDM to expand its list of data management related products and services. 'We are working on a total landed cost calculator application,' he said. The company plans to release this new application in the fourth quarter.
'We don't see many commercially available systems that do the job,' Gersper said. 'We have provided content to many businesses that have built their own application.'
Total landed cost calculations can vary widely from company to company due to the complexity and disparity of rules that govern import or export in different states.
'Some taxes are not a mathematical formula; they do not lend themselves to automatic calculations.' he said. 'There are a significant number of incalculable duties and taxes. We identify those and allow users to make customized business rules regarding how to calculate them.'
Just as GDM opens potential savings for customers, there continues to arise opportunities for companies like GDM as the supply chain market increases in scale and complexity. They will just need to mine a little deeper to meet each challenge.