Even within more mature global supply chain
management approaches, shippers vary
significantly in their capabilities. Most comply
with the minimum to get by, ensuring that they
are covering tariff/duty and transportation
costs. Some understand the need for complexity,
and build in-house solutions to address their
immediate needs. Top performers have
grasped the concepts of GTM and are creating
competitive advantages by exploiting it. They
are specifically applying GTM capabilities in
areas where demand is growing in developing
markets. These leaders have found the value in
managing the complexity of GTM.
GTM continues to evolve alongside the need,
but open questions remain regarding best
practices for GTM application. For example,
is there more benefit for certain industries
over others? Is there a minimum scale that a
company must reach to achieve the benefits of
adopting a complex GTM approach?
GTM as a Preferential Sourcing
Requirement
Often those with less mature approaches to GTM
do not see the potential profitability in a welldeveloped preferential sourcing methodology.
As indicated in Figure 14, shippers are more
likely to regard efficiency, compliance and risk
management as key drivers for their investment
in GTM than profitability. Many shippers view
GTM as a tactical tool required to buy and sell
products in global markets.
In addition, as illustrated in Figure 15, these
entry- and mid-level shippers do not implement
GTM solutions globally. Instead, they are
frequently applied in individual regions to
support compliance.
Further evidence of the tactical use of GTM
tools by entry- and mid-level shippers is seen in
Figure 16. Almost half of shippers place
responsibility for global trade management in
departments which would employ GTM for
more tactical applications, namely logistics
(23%), compliance (13%) and procurement (12%),
while the remainder locate it in departments
where it would play a more strategic role, or
consider it a cross-functional application —
consistent with a mature approach.
When shippers use GTM for isolated regions
or exclusively for tactical decisions, they are
unable to fully leverage its power for enabling
sound preferential sourcing decisions that take
PTAs into account.
As one Shanghai participant noted, “You
can build beautiful systems, but you need to
understand how to use them” to make key
decisions at both the tactical and strategic levels.