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Home I Introduction I Poetry I Literature Review I Methodology I Findings & Results I Implications I Conclusions
Literature Review The following is a review of the changing IS/IT standards for Canadian Customs Brokers. The review is based on articles found at the websites listed below: www.computerworld.com/softwaretopics
Customs Brokerage in the 21st Century An Original Article by Shaun A. Miller With the need for timely, accurate and efficient information in the fast paced competitive business environment of today and tomorrow, there is an increasing trend in which intra company logistics are being outsourced to third party firms. The outsourcing of supply chain and logistical activities to Customs Brokers has the ultimate effect of increasing operational efficiency, freeing intra firm resources, and bottom line cost savings. These efficiencies are coupled with a strong reliance on technology, and committed relationships with all parties involved. The requirement for customs brokers to provide timely answers to questions that are relevant both now and in the future, has led to a need for Customs Brokers to provide technologically advanced solutions parallel to consumer requirements. What does this mean? It means that clients are becoming increasingly reliant on custom brokerages and as such, the relationship that is built between the two must be a strong one built on support and industry awareness. Brokers must be committed to providing accurate and flexible solutions, competitive pricing and quality service. A system that focuses on any of the above but ignores another (ex. focuses on flexibility but ignores quality service), leaves the customer vulnerable to loss of market share. As a result of improving industry awareness, logistic suppliers must be committed to monitoring and adapting to technological needs and industry expectations. If a custom broker is unable to be an industry leader or keep pace with technological change and innovation, they will most likely fall behind industry expectations and profitability will be affected accordingly. This trend towards constant technological innovation is in direct correlation with increasing customer expectations and industry standards. While the benefits of a global supply chain can be substantial, the logistical headaches it can produce can be plentiful. Due to these complications, many firms have called upon customs brokerages to remedy these headaches. Companies such as Ford Motor Co. have turned over crucial supply chain process to a third party, Vastera Inc., and trusted them to manage and exceed job expectations. These expectations are challenging and require companies to often comply with various international shipping regulations and how critical it is to keep parts moving without delay. Specific rules and regulations for every country, and product are destination specific and are ever changing thus requiring constant software updates. If these rules and regulations are not constantly monitored, a violation can amount to tremendous amounts of money in penalties. Third party logistics offer a solution that allows brokerages to separate themselves from competing firms. Using new technologies, companies such as Federal Express (FedEx) are deploying new software to get that closer with consumers that quicker. FedEx Corp. is launching a multi-million dollar Customer Resource Manager (CRM) initiative, deploying software from Clarify Inc., in an effort to cut costs and use existing customer data to cross-sell and up sell services. FedEx hopes that this new system will allow them to tailor its data in ways that are not currently possible in the industry, ultimately contributing to the firm’s competitive advantage. The use of these brokerage systems will further help FedEx to realize market “Sweet Spots” and calculate how profitable those segments will be to the company. This relationship between FedEx and Clarify can be expected to give FedEx a leading edge in their industry. This competitive advantage will not last long, as other third party logistic suppliers in the highly competitive package-delivery market are likely to keep pace in technological advancement. Information Technology developments have given customs broker’s the ability to provide information, and business solutions with effectiveness and efficiency that could have never been achieved using previous systems. These efficiencies have provided great change stimulating opportunities within the industry that have benefited brokers, customers, and end users. These IT systems enable companies to literally be a “double click” away from customers, suppliers, and retailers. As is the case with United Parcel Services (UPS) in using “smart tag” technology allowing users to retrieve immediate job information with minimal effort. These on the spot capabilities have given UPS the opportunity to build strong relationships with their customers, increase task efficiency, and lower fixed processing costs. The use of customs brokers has given business the ability to conduct electronic business transactions with trading partners. Through a single point of connection to Sterling Information Broker, Maytag can exchange EDI-based documents with essential trading partners, including customers, suppliers, freight carriers, and financial institutions around the world. The use of this system has allowed Maytag to reduce costs associated with handling paper documents manually, improves the accuracy of company data, and speed business communications. As well, the electronic trading network developed for Maytag has led to increased operational efficiency and reduced transaction costs. It is clear that many companies today are outsourcing supply chain and logistical tasks to third party customs brokers. Customs Brokers have an obligation to be up to date with technological innovation and to implement it within their respective organizations thus ensuring that they are meeting the expectations of the services that they are providing. These services must not only meet industry expectations, but must exceed them to ensure competitive advantage. Companies must rely on brokers to develop systems that increase efficiency, decrease lead-time, lower costs, and increase the precision of the overall production process. Any brokerage firm that fails to acknowledge consumer needs and adapt to the external environment will fail to provide what their competitors surely will, as demonstrated in FedEx’s case.
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