Case Studies The Multi-National Retailer

The Multi-National Retailer

Our client, is a multi-national retailer whose business model is based on opportunistic procurement. This translates into extremely short delivery lead times on a wide variety of ever-changing, mostly imported products.

Prior to the adoption of 3CE, our client identified four major operational challenges. First, there were problems with the on-time collection and filing of customs documents. Vendors provided only hard copy documents, and critical commodity information was often missing. This resulted in constant shipping delays.

Second, inaccurate customs data received from the vendors often misrepresented crucial data such as first cost and country of origin. This missing information also led to shipping delays, and increased errors associated with manual data entry by brokers. What’s more, since there was no proactive validation of purchase order data, duties were often overpaid .

The third major issue related to HS codes, which vendors were not mandated to provide. Brokers classified products only when shipments arrived at the border, which resulted in further duty overpayments and shipping delays.

The final major issue related to vendor compliance and training. In the past, our client’s logistics systems were not able to automatically monitor vendor compliance. Vendor compliance management was reactive based on post audit activities, creating an inverse relationship between performance and profit.

In order to overcome these challenges, 3CE was integrated into the client’s procurement and fulfillment ERP system. Our client has effectively transferred the cost and responsibility for HS classification to its vendors, who now use 3CE to classify their products before they are submitted electronically to the customs broker (who in turn, is responsible for making the formal submission to customs). In some cases vendors may choose to submit documents that already include an HS code. These documents automatically undergo a validation check by the 3CE. If any discrepancies are detected, the transaction is quarantined until the problem has been corrected by the vendor.

With 3CE, our client has eliminated manual handling of vendor commodity information, ensured the highest degree of customs compliance, and enable true and accurate landed cost calculation. As a result of the 3CE adoption, our client has (and continues to achieve) significantly reduced logistics and brokerage costs, streamlined border clearance ensuring quicker time to market, and error-free customs reporting.