1st National Conference on Safe Trade and AEO 13 May 2008 © 2008 IBM Corporation A Global &...

1st National Conference on Safe Trade and AEO

13 May 2008

© 2008 IBM Corporation

A Global & Business Overview on the SAFE Framework of Standards and the AEO Concept

Andrew JacksonChairman – Customs Working GroupUS-ASEAN Business Council

© 2008 IBM Corporation2


13 May 2008

Global Import Compliance and Supply Chain Security

Mission: Enable a globally integrated world class import process

– Attributes of a world class importer:– Compliant – Secure – Efficient

Responsibilities– Identify and interpret regulations

– Establish policies

– Assess internal compliance

– Educate import network

– Develop government relationships

IBM is a globally integrated enterprise– 60% of revenue and 65% of our employees are outside the US and

growing

Daily Scope

– 2500 Customs Declarations

– $68M in value

– 5.5M pounds shipped

© 2008 IBM Corporation3


13 May 2008

Supply Chain Security Goals

Implement a more secure supply chain that yields greater trade efficiencies

Create Industry/Government Partnerships in the development of security and trade initiatives

Achieve Global Commonality of Supply Chain Security Criteria, Customs Declarations Data and Processes

Promote voluntary industry participation that provides collateral benefits

4 © 2008 IBM Corporation

Why participate in Authorized Economic Operator programs?

Reduce threats to ‘our’ global supply chain from:

– Unauthorized materials

– Weapons of Mass Destruction (MWD)

– Weapons of Mass Effect (MWE)

– Unauthorized personnel

Enhance supply chain operations

Assure the safety of employees

Maintain or improve brand image


Security has to be applied across the entire value chain, across borders, and integrate an ongoing awareness in every single point of interaction with the goods.

DistributionCenter

Port Authority “A”

Customs

Port Authority “B”

CustomsCarrierManufacturer

Distributor FreightForwarder

A Chain is Only as Strong as its Weakest LinkStakeholder Security Linked with its Predecessor and Successor


Mobilize to Execute

Executive sponsorship

Establish end-to-end team– IBM

– International Service Providers

– International Product Suppliers

Monitor for continual improvement


Identify Key Stakeholders

Import Compliance Office

Security

Integrated Supply Chain

– Procurement

– Manufacturing

– Global Logistics

Human Resources

Legal

Internal Audit / Business Controls

Customs / Government

Service Providers / Product Suppliers


Project Milestones

Gather data– Identify gaps

– Propose resolutions

– Prioritize

– Approve and implement

Draft response

Engage and close with stakeholders

Executive sign-off

Customs Validation Meeting– IBM

– Service Provider Locations

Validation Report


Government Initiatives

Customs Relationship Management – Establish relationships with 20 Customs organizations

that are considered most critical to IBM’s asset based supply chain

– Discuss support needed for common standards

– Create partnerships

– Expedite implementation of programs

World Customs Organization (WCO) – Member of the Private Sector Consultative Group

(PSCG)

– Provide input regarding SAFE Framework or Standards to Secure and Facilitate Global Trade and Authorized Economic Operator (AEO) program

– Benefits for industry participation

– Mutual Recognition

– Participation by Small and Medium Enterprises

– Adoption of harmonized partnership programs will prevent conflicting requirements and unnecessary inefficiencies in a global supply chain

Country Meeting Date

United States On-going

Mexico 4/24/2004

EC HQ 3/07/2005

Germany 3/08/2005

UK 3/10/2005

Ireland 3/11/2005

Australia 3/17/2005

Canada 3/29/2005

Japan 5/24/2005

Taiwan 5/27/2005

Singapore 6/15/2005

Malaysia 6/16/2005

Thailand 6/17/2005

China 10/20/2005

Brazil 3/07/2006

France 3/28/2006

Hungary 9/06/2006

Korea 11/09/2006

India 2007

Russia 2007

Common global standards will drive supply chain efficiencies


Internal actions to improve supply chain security

Early Adoption of Government Anti-Terrorism Trade Programs

Partners in Protection (PIP) Canada

Business Alliance for Secure Commerce (BASC) Mexico

Free and Secure Trade (FAST) ProgramUS/Canada US/Mexico

Global supply chain readiness assessment

Electronic door sensors on trailers transporting product between U.S. and Canada

High level security seals on ‘stuffed’ trailers / containers / conveyances

Empty trailer / container / conveyance inspection

Risk Assessment database for security monitoring and analysis of IBM facilities

Updated Asset Protection corporate standards

Supply Chain Security education and training for import compliance and security personnel

Internal Security Actions

Participation in recent AEO Programs

Secure Trade PartnershipSingapore

Australian Authorised Economic Operator Program


Participation in Australia AEO Pilot - Lessons Learned

Completing partnership application and security profile requires:– internal collaboration of multiple internal stakeholders

– engaging our supply chain partners

Validation process with government is a two-way learning experience, promotes sharing of industry best-practices

Voluntary partnership:– promotes stronger relationships and open communication

– enables flexibility to adapt program quickly

Continual improvement process is key to success

– new threats require a review of existing security processes

Security

Brands

ICOGovtPgms

LegalISC

Suppliers

Customs

GovtAgencies

End-to-End FocusSense of UrgencyContinual Improvement


Participation in AEO Programs – Benefits Expectations

Increased Efficiency– Adoption of Common Requirements by other countries will prevent

conflicting requirements and unnecessary inefficiencies in a global supply chain

– Mutual Recognition will reduce administration burdens for industry and governments

– Less Intervention and Fewer Examinations will reduce cycle time

– Measurable Benefits will facilitate ongoing executive support

Enhanced Business Continuity– Business Resumption consideration following a security incident or

during increased threat levels will provide a competitive advantage

Increased Productivity– Recognition/prequalification for future Trade Facilitation programs (e.g.,

Accredited Client Program) will acknowledge company internal controls while focusing customs’ resources on less known importers

Measurable Benefits and Mutual Recognition are key


Recommended Next Steps

Pursue common standards and processes globally– Streamline processes to keep cost down

Track and promote benefits of investing in supply chain security– Return on Investment (ROI)/Collateral benefits– Efficiency and productivity

Be industry leaders– Be outspoken– Be a part of the process – Be an influencer

Industry – this is your supply chain …

Governments – this is an opportunity for valuable partnerships …

Accelerate implementation of common APEC/WCO SAFE Framework Establish Government – Industry consultation groups to drive

Authorized Economic Operator (AEO) aspects of framework Begin pilot programs with trusted industry partners and major trading

countries


[email protected]

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1st National Conference on Safe Trade and AEO 13 May 2008 © 2008 IBM Corporation A Global &...

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