There are a number of actors involved in foreign trade operations ?? buyers, importers, suppliers, exporters, carriers, shipping companies, customs brokers, freight companies, warehouses, terminals, insurers and more. Each of them represents a link in the logistics chain, and each plays an important role. Randall Castillo Ortega, expert in import and export operations, explains how companies can better use management control in their foreign trade activity.
Obviously, the longer the chain, the greater the risk. Because the merchandise goes from hand to hand, there can be various types of issues such as merchandise not arriving on time, costs higher than budgeted and more. In addition, there are controls which, according to the legislation, must be automated, such as the administration and control of stocks and the control of credit accounts and guarantees in the case of companies certified as VAT and IEPS.
Nowadays, it is difficult to think that with the volume of information that we have to handle, operational management control can be performed correctly and efficiently manually. Says Castillo, “Even the evolution in the application of technology has developed, and we might even remember how the clearance of goods has evolved. Today, it is electronic customs clearance, without papers, everything goes through interfaces, it simplifies the processes and reduces the time and the risks.
Management control within organizations prompts us to seek automation, but not in isolation, but as a supply chain. If we refer to the import process, there are ways to control the process from the moment the business need arises, through the purchase, delivery of material, transfer of material from point of origin at customs of entry, customs clearance at importation, transfer to place of destination and entry of material. All of this can be automated, with minimal human resource intervention. There are also systems that even take into account every part of the process. Likewise, we refer to export processes and, of course, inventory controls, as well as account control and guarantees.
The erosion of economic resources in automation for management control is ultimately an investment that will be recovered over time. On the other hand, we need to establish metrics (KPIs) for each participant in the chain and the systems need to be able to get the results in a simple way. What is not measured cannot be changed or improved.
Once you have the metrics, you can make decisions that even help lower costs further. When there is no proper management of supply chain flows, companies tend to increase inventory levels to avoid the risk of not complying with a delivery or stopping one of them. their production processes. On the other hand, if we are clear about the deadlines, organizations have the opportunity to reduce costs by avoiding overstocks in their warehouses.
If areas of opportunity are detected in the transfer of materials, there is a strong case for requesting improvements from carriers or freight forwarders. The same goes for the other actors in the chain, such as customs brokers, they must be prepared technically and operationally, but we must also ensure that they respect the established metrics.
Companies can determine their needs or be supported by specialized companies capable of carrying out a general diagnosis of the various processes that are implemented in the supply chain, with the aim of offering solutions that are both digital and technical and operational. It is important to note that a fundamental aspect is that it operates within the legal framework, so it is important to know the current regulations. Can our company provide these services holistically? adds Castillo.
When it comes to the human resources that are involved in the supply chain, we can consider them to be the most valuable thing in every organization. For this reason, the fact that they stop performing certain tasks due to the fact that they are automated does not imply that the development of their activities is not of the utmost importance, therefore we must consider that a another area in which it is recommended to invest is in their training and development. Automation, training, metrics, and working within the law can help organizations grow and, therefore, the country’s economy.
About Randall Castillo Ortega
Randall Castillo Ortega has been involved in the financial space virtually his entire professional career. Besides having founded the financial loan company RACO, he is also an avid outdoorsman and, along with his family, is a big supporter of the community. He regularly participates in community ceremonies and events organized to foster a better environment for children and families.
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