Meeting trade globalization challenges using SAP GTS
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By: Krypt Team - November 29th, 2019

Authored by: Vijendra Kargudri


Companies today are increasingly trading (buy/sell/outsource) around the world. Though the opportunities are immense for them, devoid of proper workflow and effective IT, leveraging these opportunities gets challenging for them. This is because the increased level of complexity associated with moving goods across borders has made global trade business difficult and risky. Added to this are the new trade agreements, embargos, tariffs being put in place in one part of the world, to safeguard its national interest, while protectionism increases in another.

Such a volatile & complex trading eco-system forces companies to comply with ever-expanding and increasingly automated regulatory filings, including security and customs. As a company into global trade, if you fail to manage & sustainably be a part of this complex eco-system, you already will have a depleting bottom line and greater risks operating in the complex supply chain.

Global Trade Challenges

If your company is into global trade, you ought to be aware of compliance, legal regulations, and must adapt to custom changes, while electronically communicating with customers, suppliers, logistics partners, and customs authorities. Furthermore, you must be aware of the current customs procedures in order to avoid hefty penalties & restrictions and rather benefit from custom concessions.

Addressing the global trade compliance appropriately is not only mandatory but will also help minimize your company’s risk from getting sanctioned. It will increase your competitiveness and help take advantage of the existing benefits.

The following are the critical global trading areas that require proper assessment and adequate IT structure to help your company attain a competitive advantage over others in the market.

Customs Management – proper handling & monitoring of global trade processes is an essential & critical component of daily business. Inefficiency and errors in that area generate unknown and unmonitored costs in many companies which can be timely addressed.

Profitability Management – your company can take advantage of the commercial benefits provided by customs – under the preferential trade agreement import tax reduction. This will help you benefit from a decrease or suspension in import taxes and the lower market prices of the products.

Timely processing under customs control – your company can avoid paying hefty import duties on goods that are imported from another customs’ territory for a given time by taking advantage of tax suspension using inward or outward processing or placing the goods in a bonded warehouse.

Compliance – an important area that helps ensure your company from violating any law or getting entangled into sanctions, embargos, high tariffs.
Most companies outsource the import or export declarations to the brokers and pay brokerage fees that are usually high.

Integrating a tool that will automatically transform your logistics documents into the appropriate form, add missing data, verify across SPL and communicate automatically with customs will help you – be compliant, enable efficient communication & monitoring thereby drastically reduce mounting costs.

How can SAP GTS help mitigate global trade challenges?

If you aim to profit from these customs advantage – and be able to comply with fast-changing legal and compliance requirements – your company must have real-time visibility to review & make informed decisions from your trade data as per the prevalent customs guidelines. In other words, your company must ensure its system is in complete sync with today’s foreign trade requirements, and future-ready to constantly adapt to any sweeping change in regulations.

SAP Global Trade Services (SAP GTS) not only automates your company’s trade processes but also enables you to manage a large number of business partners & high volume of complex documents. It also ensures your compliance with changing legal regulations. It further facilitates global trade by providing the required tools for timely response to the government’s trade initiatives through electronic communication.

In short, SAP GTS helps you to avoid costly delays in your import & export processes, quickly respond to global business opportunities, and mitigate financial and compliance risks.

Benefits of SAP GTS implementation for global trade requirements

As a global trade solution, SAP GTS enables your company to efficiently handle the growing demands and challenges in trans-border trading through –

Custom Management – through seamless electronic exchange of customs documents with the customs authorities for import/export and transit processes. It also provides advanced bonded warehouse and inward/outward processing management.

Preference Handling – by supporting the monitoring & optimization of the value flows in international trade. It helps you monitors & manages requests for long term vendor declarations, computes the eligibility for preference for each sales transaction, and appropriately marks it. It also enables you to consider preferential origin issues in your purchasing strategies.

Restitution Claim – helps handle complex & large number of products eligible for restitution in the export process, assigns it to correct license in order to provide the necessary data, and facilitates appropriate reporting to the relevant authorities. Furthermore, it helps you to apply for new licenses at the correct time to avoid any loss of claim.

Letter of Credit (LOC) – it provides support for you to calculate & handle financial commitments such as letters of credit and bank guarantees, thus enabling you to handle multiple letters of credit processes in inbound/outbound flows.

Compliance Management – by facilitating compliance checks against SPL, applicable regulations and statutory requirements. Various goods import/export processes are monitored, with import/export control functionalities coupled with boycott & embargo lists.

Given the new laws and dynamic business requirements, most customs systems are regularly growing & evolving solutions. SAP GTS is the only one that offers steady integration point to existing ERP along with upgrades for the GTS solutions without any changes to the ERP system or its interface with GTS.

Global trade solutions are essential for every company seeking to combine trade law compliance along with the seamless enactment of international trade transactions. If your company is already using SAP as an enterprise platform, you can benefit from implementing SAP GTS as the integration is done through an SAP standard plugin that ensures the co-existence of the systems with minimal setup and maintenance effort.

SAP GTS is a one-stop solution that will enable your company to single-handedly address all global trade-related issues and efficiency of all processes centrally.

KRYPT is a preferred SAP Partner that has assisted in the success of global businesses through the implementation of SAP GTS, TM, IBP & EWM.

If you wish to know more about our products/services, please request a DEMO or do contact us.

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