Third Party Tech Support, Part 2

Erika R. Waeckel, a director of Vandegrift is talking about third party support services available to companies to support not just logistics and entries, but also compliance. We’ll pick things up where we left off:

You were mentioning the “Endless Excel” nightmare. But sometimes an excel sheet or email is all a small business can really afford.

That’s sometimes true, but on the other hand, they often spend a lot of time in the “hunt” for the right information, or they simply give up in doing certain things because they can’t handle the work load—then it’s not always the work, but the system that is the problem. And certainly Excel can be a good way to start—but as you grow, it will become a less efficient form of data management.

Ultimately what we recommend is to have your network interconnected, but most importantly, your information should be transparent and accessible. Vandegrift (and I’m sure other service providers like us) can offer clients an affordable way to capture pertinent data and documentation and retain in a single repository that is organized, defined, available, and reportable. Hundreds of thousands of dollars do not have to be spent to automate your data.

Can you walk me through a simple example of a system you could set up for a small importer?

Just as with selecting a trusted broker that is willing to collaborate, companies should also look for the same in a software provider. Select a provider that will work together with you and discuss scope first to determine what makes the most sense for your supply chain needs. For example, a smaller importer may only require a software solution that captures pertinent documentation for review and approval. This will provide a central repository for documents that can be reviewed and approved by the designated individual before being released to ship.

And when you are considering outsourcing, look for a company already familiar with your issues. You don’t want to find an otherwise great service provider who doesn’t know what Lacey means or what CARB records you might want to keep. Smaller brokers, as for example, often have trouble with a Lacey entry and the many Latin names you might need to enter.

And how about one for a larger company?

Larger companies may require more systems integrations between themselves, their vendors, and their transportation or forwarding companies. For example, a purchase order and documentation may be uploaded by the vendor/trading partner for your review and approval. Once approved, this particular purchase order will then be flagged to ship, and the system will automatically notify the vendor, or it might notify the carrier to proceed with arranging a booking. On the other hand, if it is missing relevant information, or the species is incorrect, or the piece count is off, the designated user will be notified of this as well. The system itself becomes a hub coordinating the flow of information to and from sources.

For a larger importer, not only managing the purchase order, or shipment, may be of importance, but assigning the level of risk for each product and vendor may be as well. Managing raw material inventory, having a global classification database, and conducting vendor surveys can also be additional automated tools that a larger importer depending on their product and where they are importing from, or exporting to, may find useful.

What do you see as the biggest compliance issues in the wood industry?  And hopefully, places where you see improvement in the industry’s activities?

I probably should state things more broadly regarding issues. I think compliance enforcement is increasing overall and I think there are some areas, like the Forced Labor Act that the wood industry has never really been focused on.

Further, compliance and enforcement issues are more than just data—the questions are frequently regarding actions. While of course the genus and species given on a PPQ should be true and validated, it is vital that you take steps to ensure that your entire supply chain is secure. Having the ability to illustrate the steps you have taken to do so is critical. You need to be able to provide evidence that you have verified the information from your trading partners is correct and accurate that your vendors are socially and environmentally compliant (referring to Forced Labor) and that you have defined processes in place that are accepted and adhered to.

The awareness of the need to be more compliant is an improvement across the industry. Most companies are realizing that they need to formulate a compliance oriented culture within their organization to not only protect themselves and their brand but their consumers as well.

And what do you see coming down the road at us—both in terms of new regulations and also new technologies to deal with them?

Aside from Lacey and TSCA Title VI, the U.S. Department of Commerce established anti-dumping duties on the Canadian softwood lumber industry. Furthermore, plywood out of China is also currently subject to dumping duties. The message from Customs over the last year, in particular, has been their aggressive pursuit of highly regulated products and the enforcement of both new and established regulations. For years, the textile and the seafood and shellfish industries have been heavily targeted by CBP. The new kid on the block is now lumber/hardwood/flooring.

Also, the more automated CBP and other government agencies become, the more access to your information they will have. It is better to stay ahead of them than behind. Thus, in regards to new technologies, I feel that most supply chain providers will begin to understand the need for more automated solutions for the lumber industry, and therefore there should be more options for the market to choose from as time progresses. There are technological solutions out there for other highly regulated industries. It will just be a matter of them adapting to lumber/hardwood.

Can you give a couple of tricks on managing your data efficiently? 

Bandwidth and storage space is cheaper and more plentiful every day. Paper, hopefully, will continue to become less important. But make sure you back everything up—ideally including something off-site, just in case.

Set down timetables to review and update. Set clear policies regarding who can change something or delete something. When you do make changes, you will often want to save the information in a new file or as a change, so you have a record of the old information as well.

And join associations that will keep you informed of changes and issues.

Any final thoughts?

Steve Jobs once stated that “Technology is nothing. What’s important is that you have faith in people that they’re basically good and smart, and if you give them tools, they’ll do wonderful things with them.”

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