Leveraging these capabilities,
international product movements can
be designed to minimize tax and tariff
implications and take advantage of
trade preferential agreements with
foreign countries. Global logistics
decisions are then made based on
greater consideration of the financial
supply chain impact. Ultimately,
transportation planning and execution
functions are tightly linked with
automated financial approval and
settlement tasks.
A more advanced area of Financial
Supply Chain Management relates to
development of a “tax efficient supply
chain.” While beyond the scope of this
report, total tax liability can be
significantly impacted by the country
from which a product is sourced,
where and when value is added to the
product, the physical flow of the
goods, and who takes ownership
when. As the total impact can be
substantial, supply chain leaders will
consider tax implications in the design
and execution of their global supply
chain strategies.
Global logistics leaders will closely link
the movement of cash and excellence
in the Financial Supply Chain to
expand trading partner relationships,
maximize profitability, and ensure the
flow of goods is not disrupted.
The Lack of Global Logistics
Technology Enablement
While not every one of these 10
capabilities may be appropriate for
every company’s situation, we believe
that together they provide a solid
framework for developing a strategic
plan for building out process
capabilities and technology support
across global logistics planning and
execution. By evaluating your current
capabilities and improvement plans
against this framework, it will help to
identify areas for improvement and to
prioritize investment in people,
process and technology.
There is simply no question that for
most companies, technology
enablement of global supply chain and
logistics processes is well behind other
areas of the enterprise and supply
chain operations themselves.
As analyst Dwight Klappich at Gartner
recently wrote, “Even sophisticated
companies that have more global
supply chain experience and were
early adopters have only automated a
small fraction of their global trade
operations.”3
There are a variety of reasons for this.
The growth of offshoring happened so
quickly, relative to most business
trends, that many companies were
knee-deep in the strategy and
execution before they could really
assess technology needs.
Similarly, the seeming potential of
substantial cost reductions from
moving to low cost country sourcing
alone seemed attractive enough that
many companies simply assumed the
benefit