Get the opportunity to grow your influence by giving your products or services prime exposure with Performance Magazine.

If you are interested in advertising with Performance Magazine, leave your address below or contact us at: marketing@smartkpis.com.

Advertise with us
logo1 KPI Certified

A maturity model for Global Trade Management

FacebooktwitterlinkedinFacebooktwitterlinkedin

Global Trade Management maturity model for

A recent report analyzing the global trade companies’ performance released by the Aberdeen Group reveals that global importers and exporters need to reassess their Global Trade Management (GTM) practices in order to stay updated.

  • with the latest supply and demand fluctuations;
  • status of their growing global operations;
  • increasing operational complexities and risk, and
  • trade lane changes (Heaney, 2010)

A ranking of the most important pressure points that drives the Global Trade Management framework reassessment, as outlined by the study survey respondents can be visualized below.

Assessment criteria

The study is based on a survey of 136 global exporters and importers, performed during August and September 2010 and assesses their performance against a maturity model that has at its core 5 Key Performance Indicators (KPIs) or criteria.

The maturity model or ‘Maturity Class Framework’, as it is named in the report, is structured on three maturity levels:

  • Best-in-Class – Top 20% of aggregate performance scores
  • Industry Average – Middle 50% of aggregate performance scores
  • Laggard – Bottom 30% of aggregate performance scores

The five Key Performance Indicators (KPIs) or assessment criteria and the results for the Best-in-Class companies are outlined below:

  • % Average trade compliance cost to value ratio8,2%
  • % Perfect order rate received95%
  • % Perfect order rate delivered96%
  • % Improvement in average trade compliance cost to value ratio1,4%
  • $ Total land cost per unit handled versus prior year0,6% (Heaney, 2010)

Assessment results

The results of the study show that companies enjoying Best-in-Class performance are sharing several common capability gaps when compared with their peers classified on the lower maturity levels, such as:

  • They are 1,4 times as likely to have proactive and automated monitoring and resolution of General Trade Management exceptions and service disruptions;
  • They were 1,3 times as likely to have the ability to meet all electronic external trade compliance requirements;
  • They were 1,7 times as likely to automate total landed cost calculation. (Heaney, 2010)

Required actions for performance improvement

For reaching the highest capability maturity level in terms of Global Trade Management processes performance, the report outlines several directions, that the companies classified as Industry Average or Laggards need to pursue:

  • Improve core processes and leverage automation in Global Trade Management;
  • Establish or renew the corporate focus or strategic direction and ensure alignment with all applicable trade regulations;
  • Use Global Trade Compliance (GTC) knowledge in terms of companywide sourcing, purchasing and supply network design decisions. (Heaney, 2010)

References

Image Source:

  • Heaney, 2010
Performance Measurement Maturity Model - assessing organizational performance measurement capabilities
Desired State of Evolution - the newest instrument in the managerial toolkit
free

Tags: ,

THE KPI INSTITUTE

The KPI Institute’s 2019 Agenda is now available! |  The latest updates from The KPI Institute |  Thriving testimonials from our clients |