Supply Chain Management

What is supply chain management?

Supply chain management is the handling of the entire production flow of goods or services—starting from the raw components to delivering the final product to consumers. A company creates a network of suppliers that move the product from raw materials suppliers to organizations that deal directly with users.

Why is supply chain management important?

Effective supply chain management systems minimize cost, waste and time in the production cycle. The industry standard has become a just-in-time supply chain where retail sales automatically signal replenishment orders to manufacturers. Retailers can then restock shelves almost as quickly as they sell products. One way to further improve on this process is to analyze the data from supply chain partners to see where to improve further.

1. Identifying potential problems

When a customer orders more products than the manufacturer can deliver, the buyer can complain of poor service. Through data analysis, manufacturers might be able to anticipate the shortage before the buyer is disappointed.

2. Optimizing price dynamically

Seasonal products have a limited shelf life. At the end of the season, retailers typically scrap these products or sell them at deep discounts. Airlines, hotels and others with perishable “products” typically adjust prices dynamically to meet demand. By using analytic software, similar forecasting techniques can improve margins, even for hard goods.

3. Improving the allocation of “available to promise” inventory

Analytical software tools help to dynamically allocate resources and schedule work based on the sales forecast, actual orders and promised delivery of raw materials. Manufacturers can confirm a product delivery date when buyers place orders—significantly reducing incorrectly-filled orders.

What we offer

Letter of Credit

Why use a documentary credit: Risk mitigation and benefits

Risk Mitigation

International trade transactions often involve buyers and sellers residing in countries with different legal systems, currencies, market practices, customs, trade, and exchange control regulations.

Buyers can face challenges in evaluating the credibility of foreign suppliers and have to bear the risks associated with the seller failing to fulfil its contractual obligations. This can include non-delivery or delayed delivery of the goods or goods that do not meet the quality standards agreed upon in the contract.

Given the challenge of remedying these issues in a foreign and unfamiliar legal system, buyers naturally prefer to commit to making payment only after receiving the goods to their satisfaction.

Likewise, sellers must bear the risk of non-payment and, if that occurs, would need to take legal action against the buyer in the buyer’s country. This means that sellers naturally prefer to receive payment before making a shipment.

This dynamic, where buyers only want to pay after delivery, but sellers want to receive payment before shipping, creates an imbalance in the system. Documentary credits provide a mechanism to address and help resolve these conflicting interests.

UCP 600 and International Standard Banking Practice (ISBP) publication 821 govern documentary credits and provide the rules and practice for the examination of documents. As such, when traders deal under the terms of a documentary credit, there is a reduced likelihood of misunderstanding or misinterpretation, which helps to minimise the risk of unforeseen disputes.

To avail upon the benefit of the documentary credit mechanism, it is vital for the beneficiary to clearly state the terms and conditions of the documentary credit, including which documents are needed and which party should issue them. Likewise, the beneficiary must submit the documents stipulated in the documentary credit’s terms and conditions.

Benefits

The benefits of documentary credits differ depending on which side of the transaction a party finds themselves on.

For the buyer in an international transaction (i.e., the applicant), the primary benefits are assurance that:

1. In most cases, they will only need to make payment after the shipment has been made.
2. The seller will submit the documents required by the credit which should allow for customs clearance needs.
3. The issuing bank will examine the submitted documents for compliance with the terms and conditions of the credit before payment is made.

For the seller in an international transaction (i.e., the beneficiary), the primary benefits of a documentary credit are that:

1. The risk of payment under the sales contract shifts from the buyer to the issuing bank (which may have a credit rating which exceeds the applicant’s). The credit is independent of the sales contract and in instances where a presentation complies with the credit, the issuing bank is obligated to pay. In the event they do not pay, for whatever reason, the seller can still rely on the sales contract from its buyer.
2. A documentary credit cannot be cancelled or amended without beneficiary agreement since a documentary credit is, by definition, irrevocable.
3. The issuing, confirming or nominated bank which agreed to act upon its nomination, if there is one, will make payment upon presentation to them of complying documents.
4. There is the possibility of further recourse to a confirming bank. (This is useful if the seller has concerns regarding the political, or legal landscape for the buyer’s country or the credit rating of the issuing bank).

Process Management

Planning
Plan and manage all resources required to meet customer demand for a company’s product or service. When the supply chain is established, determine metrics to measure whether the supply chain is efficient, effective, delivers value to customers and meets company goals.

Sourcing
Choose suppliers to provide the goods and services needed to create the product. Then, establish processes to monitor and manage supplier relationships. Key processes include: ordering, receiving, managing inventory and authorizing supplier payments.

Manufacturing
Organize the activities required to accept raw materials, manufacture the product, test for quality, package for shipping and schedule for delivery.

Delivery and logistics
Coordinate customer orders, schedule deliveries, dispatch loads, invoice customers and receive payments.

Customs Clearance

What is it?
Customs clearance is the process of declaring goods to Customs authorities when entering or leaving a country. Individuals or businesses can do this. Goods subject to customs clearance include items that are being imported or exported, as well as personal effects and commercial shipments.

The purpose of customs clearance is to ensure that all applicable import duties and taxes are paid and that goods comply with all relevant regulations. To clear customs, businesses or individuals must provide detailed information about the shipment, including its value, origin, destination, and contents.

Businesses or individuals may also be required to submit supporting documentation, such as invoices or bills of lading. Once customs officers have cleared the shipment, they can release it for delivery.

Processes

İnspection of Documents
When shipments arrive at a port of entry in the United States, they are subject to inspection by U.S. Customs and Border Protection (CBP). During this process, officers from the government agency, CBP, inspect the documents associated with the shipment to ensure that all required information is present and accurate.

The most common documents required for clearance are:

• Proof of insurance
• Invoice
• Port spending
• A packing list
• Certificate of origin
• Air waybill, inland bill of lading, through bill of lading, and ocean bill of lading
• Pre-shipment inspection certificate
• Transportation invoice
• Once CBP has verified all the necessary documentation, they will clear the shipment for entry into the United States.

Tax and Duty Payments
After your shipment has been inspected and all required import documentation has been filed, you’ll need to pay any taxes or duties owed on the goods before Customs will release them for delivery. The amount of tax and duty owed depends on several factors, including the type of goods you’re importing, their declared value, and the applicable customs laws.

Shipment Release
After Customs inspects and assesses the goods, they are released from the warehouse where they have been held. The release process can vary depending on the type of imported goods but typically involves paying any customs duties or taxes owed. Once the release paperwork has been completed, the importer can take possession of the goods and move them to their final destination.

In some cases, goods may be released on a conditional basis, meaning that they must meet specific requirements before they can be moved off-site. For example, toxic chemicals may need to be appropriately labeled and packaged before they are released from customs. Ultimately, the customs clearance process aims to ensure that all imported goods meet all applicable regulations before they enter the domestic market.

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KPI Management

The main purpose of KPI management is to identify whether the measures implemented are benefiting your company and helping it to grow, or if they are not delivering the results you might expect.

KPI management generates hard data about a company's performance at various levels. They are not based on assumptions and are predictable, thus contributing to the healthy growth of any company.

By having access to the KPI values, employees in the company's various departments can establish more effective ways to achieve the goals related to their KPIs.

Through KPI management, the company can optimize the achievement of its strategies. Using this type of diagnosis, companies can evolve, grow, and improve their market positioning.

Business Partnership

A strategic business partnership should be a mutually beneficial alliance where both professionals share business ideas, knowledge, resources, risks and rewards. When done well, a business partnership may help you offer new products or services, increase your profits, expand your clientele, take over a new area of the market or even minimize client- or shareholder-perceived weaknesses.

It's important to understand that a partnership may not be the best solution for every business, as it could present increased risks and liabilities. Here is a list of some important advantages and disadvantages to consider when deciding whether a partnership is right for our business.

Advantages of a business partnership
The advantages of business partnerships may help your business better reach its goals, such as improving performance or increasing market share.

Shared expertise and knowledge
Gaining a business partner usually means gaining access to their expertise, experience and distinctive competencies. A strategic business partnership should help your company by filling in gaps in your own knowledge or skills. For instance, if you're excellent at moving products and inventory but struggle with maintaining accurate books or developing a successful financial strategy, partnering with another professional who is highly experienced in business accounting and financial management should strengthen your financial record-keeping and decision-making.

More resources available
Operating a business by yourself typically means you're responsible for all the financing, connections and resources your business needs. Creating a partnership may alleviate some of that stress by offering access to important resources. If your prospective business partner has strong financial standing, they may also be able to secure additional financing and cash for your business to support your goals. Experienced business partners often also have key industry and community connections that may further aid your business endeavors.

Decision-making support
When making decisions for your business, two minds are often better than one. Entering into a partnership should mean decisions fall on all partners' shoulders, not just yours. Having someone to help you flesh out ideas, brainstorm solutions, identify potential problems and see situations from different perspectives can strengthen business decisions.

Additional business opportunities
Beyond weighing in on decisions, your business partner should also share the workload. Efficiency and productivity are likely to increase due to the added support of your business partner. Being able to divide tasks and responsibilities with them may also give you the freedom and flexibility to explore other business opportunities, such as:

1. Researching the competition or ideas for business innovation.
2. Marketing your business to more investors.
3. Implementing creative rebranding.
4. Expanding your location or product line.

Expand your network and audience
Strong prospective business partners often have a network of valuable industry and community contacts. These contacts may help connect you with potential clients, offer preferred rates for their commercial services, collaborate with you on community and publicity events or otherwise support your business. Experienced and/or highly regarded business partners may also help you grow your client base by expanding your brand reach and recognition through their own business experiences and audiences.