Global Trade Management (GTM) solutions are used by enterprises to streamline the trade practice life cycle—including order, logistics, and payment settlement activities—in order to increase operating efficiencies and cash flows. GTM includes everything from placing an order to the logistics of getting it from its warehouse of origin to its ultimate destination. GTM also helps resolve the issues faced in the collection of international payments.
Globalization, industrialization, outsourcing, and the use of advanced technology in transportation have had major impacts on global trade. Globalization gives domestic consumers access to products and services in new markets. With GTM, global suppliers can swiftly deal with the complexities of multiple languages, time zones, currencies, and modes of transport that have arisen due to globalization. The legal practices involved in global trade are numerous, highly complex, and ever-changing—something that GTM helps streamline.
The challenges faced in the use of GTM include insufficient planning, execution, or adjustment of financial, logistical, and regulatory procedures. Other potentially costly business challenges faced by GTM users include shipment delays, excess inventory, high accounts receivable & days sales outstanding (DSO), increased spending on logistics, penalties & fines, and claim write-offs and invoice deductions. Early and correct implementation of GTM can help overcome these challenges.
The need for GTM can be attributed to every global trade participant’s distinctive position within the field—no two participants have identical needs. GTM helps overcome inconsistencies that may arise due to different players using different Enterprise software for global trade functional requirements across the same trading network.
GTM solutions are versatile and adapt to changing rules and business necessities without the need for any sudden changes in daily operations. By integrating the financial supply chain of an enterprise with its physical supply chain, GTM helps increase top-line revenue, cut supply chain costs, reduce working capital in inventory & accounts receivable, follow governmental reporting & security mandates strictly, and obtain full visibility into shipment statuses. Global Trade Management also helps companies increase their cash cycles, cut down working capital, avoid payment delays in global transactions, and abide by international trade regulations.
Two-Level GTM Solution
GTM can be divided into a two-level solution that includes Trade Compliance and International Trade Visibility & Execution. Trade Compliance supports the required item classifications, trade documentation, and communications with international government authorities. International Trade Visibility & Execution ease cross-border shipping and transportation activities and allows complete visibility of international trade partner processes and events. It also involves transaction and finance agreements such as letters of credit between commercial trade partners and financial intermediaries.
Automating the entire global trade life cycle ensures smooth functioning of order, logistics, and settlement activities as well as of global sourcing and distribution. GTM helps reduce the challenges and costs associated with the regulatory and documentary requirements of doing business on a global scale. The adoption of GTM can lead to significant improvements in the operations and profits of an organization.