The world of international trade is awash with data. Information from suppliers, paperwork that must be submitted to customs authorities and new free trade agreements all require attention from importers and exporters, and this can quickly become overwhelming.
However, getting to grips with this data isn't just about maintaining compliance and ensuring you're paying the correct amount of duties on goods. With the right tools, you can also tap into information to derive critical insights into your operations and the wider market that can help optimize your activities.
Whether it's finding the most profitable customs environments, building a better understanding of customers and suppliers, or ensuring you don't fall foul of compliance requirements around the globe, effective use of analytics is critical if firms are to succeed in an increasingly data-driven world. With this in mind, here are five key reasons you should be implementing analytics into your business.
1. Spotting problem areas
A key benefit of effective analytics is its ability to give you full visibility into every stage of your supply chain. In turn, this lets you quickly hone in on any potential problems that require your attention.
For example, the data can easily flag any inventory management issues such as under or overstocking, allowing you to make adjustments to your strategy in order to resolve any issues and avoid potentially expensive warehousing costs or production delays.
Elsewhere, analytics can alert you if there are any potential problems with paperwork, such as certification, export control documents or invoices, that will need to be presented at customs. This helps to spot and correct any errors or omissions that may cause disruption during transit.
2. Increasing dynamic reporting
The reporting tools offered as part of a good data analytics platform give businesses much more accurate and up-to-date information about the latest customs issues and changes. By contrast, traditional static reporting based on historical data can only tell a business what has happened, not what is happening.
With the right tools, these can be tailored to the needs of different individuals throughout a business. This allows buyers, customs specialists, brokers, auditors, compliance professionals and more to access the right data for their roles at their fingertips, presented in an easy-to-understand format with clear visualizations, enabling users to make decisions with confidence.
3. Improving compliance
Managing compliance issues is among the most challenging aspects of international trade, with operators needing to keep up-to-date on a wide range of regulations, from export control licenses and denied party screening to complex rules of origin requirements.
Data analytics helps with this by delivering real-time insight into information throughout the business. For example, it can help spot any inconsistencies in data provided by third-parties such as suppliers and brokers, check that all parties are meeting contractual obligations and ensure that all customs classifications are accurate. This can prove vital in maintaining the smooth flow of goods and avoiding any fines or other penalties.
4. Reducing costs
Analytics can also identify opportunities to reduce expenses or find more profitable trade routes. For instance, it can help businesses find supply chains that benefit from reduced or zero duty rates on goods due to free trade agreements or other preferential arrangements, or allow companies to optimize or diversify their shipping routes to avoid any disruptions.
Other ways in which analytics can cut costs include improving the accuracy of goods valuations and identifying your most profitable suppliers or customers, enabling you to focus efforts in the right places.
5. Making better decisions
Having the right data on hand makes it easier for businesses to plan for the future and ensure they are moving in the right direction. When the consequences of critical decisions may be felt for years to come - such as when deciding where to source critical components from or which free trade zones to build new facilities in - it's important to get it right.
Analytics provides the critical context needed to make the best choice. With the right platform, you can spot the patterns, trends and correlations to help you answer key questions and even run simulations to see how operations might be affected by issues such as changes in tax regimes.
Ultimately, this can give businesses a significant competitive advantage. In a complex and fast-evolving market, the ability to make changes proactively before problems arise or circumstances change means businesses can get ahead of the curve and stay operating to their maximum efficiency.