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Global Trade Management: What are the key trends in 2016?

by Phil Lavin, Sales Manager, AEB (International)

The purpose of global trade management (GTM) is to manage the entire supply chain, from procurement and product development to distribution, efficiently and in compliance with all relevant rules and regulations. This includes all tasks for planning and controlling as well as trade relations.

AEB’s Global Trade Management Agenda is an annual study in partnership with the DHBW University in Stuttgart, Germany, that identifies key challenges in the year ahead. The 2016 study features responses from over 300 supply chain management experts in companies of various sizes and across a range of industry sectors – mainly based in the United Kingdom, Germany, Austria, Ireland, Singapore and Switzerland. The objective of the online survey was to find out which tasks companies that engage in international business consider of particular importance for 2016.

The main challenge identified for 2016 is reducing time to delivery and overall lead times. Of those surveyed, three-quarters are currently focusing on this, and 27% consider it a “very important issue”. The trendsetters are business-to-consumer (B2C) ecommerce businesses, which dominate not only development but also media coverage by offering same day delivery, drone delivery, as well as anticipatory shipping. These developments in the B2C sector also raise business customers’ expectations.

Another challenge identified by this years’ survey was ‘complying with embargo requirements’, which 60% of participants consider either “important” or “very important”. “Ensuring legal protection” is still regarded with the same importance as in last year’s survey (66.5%), but has been overtaken by other challenges such as “recruiting and training employees” and “implementing changes to customs laws”. Dr. Ulrich Lison, a global trade expert at AEB and one of the authors of the study, explains:

“The increasing professionalisation in the business of global trade has led to a shortage of personnel. Plus, the impact of the Union Customs Code, which takes effect on 1st May 2016, can already be felt, as businesses are expecting a few changes and know they’ll have to make preparations.”

In addition to assessing the key challenges for the year ahead, the study also explores how well businesses are equipped to face them. While the majority of respondents think they are well prepared, over one-third see potential for reducing lead times and time to delivery in their businesses. Only 3.1% concede “major shortcomings” in this area.

Most respondents also have a good idea of how to manage risks in their supply chains. Changes to customs laws don’t seem to be a problem – over three-quarters of those surveyed consider themselves as efficient or very efficient on this front.

However, when it comes to personnel management, over half of businesses see a need for action, and 8.6% admit to ‘major shortcomings’ in this area. Compared with last year’s survey, this issue has gained importance and occupies fourth spot among the greatest challenges for 2016.

More findings are available in the full Global Trade Management Agenda 2016. It is available at www.aeb.com/gtm-survey.

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