Global sourcing: Throw out the spreadsheets

Scrutinizing thousands of global business connections is nearly impossible when trying to view the information on a spreadsheet.

One can only imagine the inefficiencies that would arise when using rudimentary tools to measure inventory production and output in foreign trade zones. This concern has led enterprises to outsource to managed IT services developing advanced software capable of analyzing complex information sets. 

How intricate are these relationships? 

Although FTZs are not subject to abiding by customs regulations, organizations sanctioning these territories need to satisfy incredibly diverse client needs. SupplyChainBrain outlined the challenges Deutsche Bahn AG, Schenker's North American division, faced while offering FTZ services. 

The source exemplified a situation in which Schenker may cater to the needs of a pharmaceutical manufacturer and a heavy-machinery producer simultaneously. While the latter only requires traditional pick-and-packing setups with no specialized storage, the former must contain its products in refrigerated environments.

Multiply two clients by 30 and companies have to contend with a complex situation. Assessing the operational needs of each customer requires a thorough analysis of all operations.

What assets are needed? 

For one thing, collecting data from warehouse sensors, RFID technology and other resources is necessary. How can a logistics company expect to satisfy such a wide range of shipping requirements if it doesn't understand what's being processed? 

Second, a warehouse management system can help pare down the raw information before its entered into analysis software. Enterprises working with basic analysis programs can benefit from funneling data through the WMS beforehand, because this provides structure to data that was previously more difficult to peruse. 

Aside from a visualization tool, FTZ companies should consider hiring a procurement services company to bridge connections between itself and its clients. Strategic sourcing enterprises are comprised of experts capable of assessing the following factors, as they apply to manufacturers:

  • The government taxes imposed on companies and how they affect business structure
  • Production rates and how raw or pre-finished materials need to be acquired
  • Their own customer service needs 
  • The manner in which they sanction contracts 
  • Their unique approach to the RFP process

Planning expansion 

One organization may have to consider the aforementioned factors. According to the Albuquerque Journal, Doña Ana Country recently received permission from the United States Foreign-Trade Zones Board to expand its own FTZ countywide. The county government maintained that any production companies interested in utilizing the FTZ can now look anywhere in the area's 3,804 square miles. 

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