Today's supply chains include more trading partners, touch more systems, and see goods changing hands more rapidly than ever before. In this environment, the only certainty is that uncertainty will occur. Add to this mix shifting trade policy, natural disasters, currency fluctuations, and global economic tensions, and most companies are likely to face a supply chain disruption at some point.
Businesses, however, do not need to be a “deer in the headlights” when a supply chain disruption occurs. Import and export trade data is one critical element that can be added to the decision-making process to mitigate risk and provide a competitive advantage.
Join us for a practical web seminar on Thursday, October 25 at 2 pm ET that covers how to turn import and export trade data into actionable intelligence.
Let’s look at a few real-world examples of supply chain disruptions and how import and export data can minimize their impact:
- A tariff is issued that affects a business line: Trade data can highlight alternative countries that also regularly export the same commodity
- A natural disaster or trade dispute interrupts a port’s operations: A review of trade data can identify other ports that have historically handled the product
- A supplier becomes insolvent: Import and export information can help pinpoint alternate suppliers that also manufacturer a similar commodity
These are simple scenarios, but the financial impact can be substantial. Too often, businesses turn to anecdotal solutions instead of empirical insight when a disruption occurs; however, not all data-driven solutions are the same. Data must be accurate, current, and delivered in a format that mirrors business requirements. The information needs to cover a broad range of trade activity, be searchable, and intuitive.
Supply Chain Risk and Knowledge
Leading companies know that they must protect their supply chains from costly interruptions. While it’s critical to reduce risk following a disturbance, incorporating a continuous trade data review before a disruption occurs is a best practice. Some of the fundamental components of proactive supply chain risk management include the ability to:
Know your network: Many businesses do not have a full understanding or knowledge of their supply chain partners. The ability to trace supplier networks, view contact information, assess creditworthiness, and track the performance of other imports and exports that a supplier handles can reveal potentially unknown risks.
Incorporate supply chain risk into product development: Supply chain risk and research and development (R&D) often operate in independent silos. While product development may consider the cost of a given material, factors such as the import and export history of a supplier may not be considered early enough in R&D. The ability to fully vet suppliers’ shipment volumes, trade patterns and more is critical to reducing risk before it occurs.
Establish a fall-back plan: Trade policy is often top of mind when speaking of supply chain disruptions; however, should weather and/or cultural related change begin to impact a marketplace, how should a supplier start to create a fall-back plan? The answer can be found in trade data.
Let’s examine the case of vanilla prices that incorporates all three of the above factors in one easy-to-understand scenario. Consumer preferences called for natural ingredients, such as natural vanilla. Poor weather conditions impacted crops in Madagascar. Prices went up, and some companies adjusted product composition as a result.
By using a solution such as Descartes Datamyne™, an alert can be generated monthly, quarterly, or when a new record is created for HS9505 (vanilla). A business can rapidly track trends such as alternate sources for a product, component, or ingredient. For example, the below data from Descartes Datamyne shows that Indonesia may be one emerging source for natural vanilla. A simple drill down will reveal those suppliers shipping the product to the U.S., in what quantities, what value shipments, and who is receiving them.
Descartes Datamyne could also help guide businesses toward exporters of artificial vanilla extract as the R&D product development process simultaneously begins. It all starts with accurate, current, and insightful trade data.
How Descartes Can Help
Descartes can help businesses reduce supply chain disruptions by tracking import and export patterns, keeping pace with changing trade policy changes, and more. 95% of trade is covered in our Global Trade Content solution suite.
Manufacturers, shippers, wholesalers, retailers, logistics service providers, management consultants, legal practitioners, industry analysts, and more use our exceptionally accurate and granular data to initiate growth strategies, explore new markets, benchmark performance, monitor commodity volumes and values, simplify trade data research, discover buyer-seller relationships, refine sourcing strategies, better classify goods, reduce duty spend, and minimize the risk of transacting business with denied parties.
Supply chain disruptions will occur but, with Descartes’ solutions in place, business will be better prepared to minimize the impact of change with information.
Join us for a practical web seminar on Thursday, October 25 at 2 pm ET that covers how to turn import and export trade data into actionable intelligence, or register for a one-on-one demo.