Global companies are not deploying technology or the right processes to effectively manage their trade and supply chains, according to a survey of 1,700 trade professionals. The report, by Thomson Reuters and KPMG, pointed to a continued reliance on manual processes, low use of automated trade management systems, challenges in dealing with transfer pricing and low levels of preparation for free trade agreements (FTAs).
It found that more than half of the trade professionals said that technology would improve their trade compliance programme. Fifty-three per cent of the respondents said their trade and supply chain departments don't have the systems and processes needed to maximise the use of incentives, reduce complexity in classification, and automate tasks in the global marketplace.
"Serious disconnect" between supply chain needs and tools
Thomson Reuters' Taneli Ruda called this “a serious disconnect between what trade professionals have and what they need to do their jobs effectively” and referred to “inefficiencies in operational practices across the global trade and supply chain functions”.
The main points highlighted in the survey are as follow:
- manual processes are time-consuming and increase risks, among them audits, lost savings and opportunity costs;
- 34 per cent of respondents use a global trade management system for any aspect of import/export activities, despite awareness of the need of automation;
- 53 per cent of respondents said technology is a key element that would enhance their activity;
- the transfer pricing process was regarded as a challenge by 93 per cent of respondents, with 59 per cent saying their companies lack a formal process to align transfer pricing and customs valuation;
- use of FTAs continues to be low, with just 23 per cent of respondents saying their companies are fully using all FTAs available to them, citing difficulty in record-keeping and tracking supplier information;
- one-third of respondents said they are thinking about how to use the Trans-Pacific Partnership (TPP), leaving the remaining two-thirds not yet preparing to take advantage of an FTA expected to reshape supply chains globally;
- the respondents expect more regulatory complexity, with 62 per cent of respondents assuming this will happen within the next three to five years.
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