Business (trade) Process Analysis

for Trade Facilitation

Outline

1. What is Business Process Analysis and Why it is Required?

2. Examples of output from BPA Studies in WP3

2

What is a Business (trade) Process and it’s Analysis?

A Business Process is a collection of related and structured activities or tasks that produce a specific service or product.

Example- Obtaining a fumigation certificate for rice export

- Applying and Issuing Process for a Certificate of Origin

- Customs Clearance Process at the Border Point

3

What is..

..a Business Process Analysis?

An analysis and modelling of business processes for improvement, simplification and automation

Example- Documenting existing practice in an

administration/company

- Describing a “Standard Procedure”

- Identifying quantitative indicators (time, cost, docs)

- Recommending ‘to-be’ situation or TF measures

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Supply Chain Complexity

Source : Complex Networked Supply Chain [Harwick,

1999

Trade Movement – 3 Kinds of Flow

Seller(Exporter)

Buyer(Importer)Physical Goods

Payment

Customs Other-Government-Agencies

Ship Agent Transport-Operators

Terminal-Operator Carriers

Banks

Information/Documents

Freight Forwarders

Cargo InsuranceFarmers Post-HarvestersTraders

Exporters Importers Traders

Wholesalers

Consumers

Why conduct a Business Process Analysis?

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Business Process Analysis is a practical study to understand attributes of business processes,

and their relationships

Who involved

Proceduresand Documents

required

Related Rulesand Regulations

Some quantitative

indicators

What are benefits of Business Process Analysis?

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1.1 Sales contract

2.1) Make advance payment

3.1) Obtain Export License

3.7) Deliver to port of departure for Customs examination

3.8) Examine commodity

Exporter (orrepresentative)

Importer

Exporter’sbank

Importer’sbank

ICD

SAD

Directorate of Trade, MOC

Customs broker

3) Ship

3.11) Deliver shipping documents to buyer

1) Buy

2) Pay

Use Case Diagram of Rice Export from Myanmar

Customs department

Port

3rd party inspector

Shipping line

3.10 ) Prepare required shipping documents for buyer

3.4) Declare CusDec 2

3.2) Arrange overseas shipping

3.3) Arrange pre-inspection and fumigation

3.9) Handle and loadthe goods onto the vessel

3.6) Stuff containers at warehouse

3.5) Collect empty containerfrom ICD and deliver it to warehouse

Bank

Transporter

Courrier

FDA

Customs departmentat the port

Exporter (or representative)

3.8.1Request for examination

3.8.8 Allow shipment

Found incorrect

3rd party inspector

3.8 ) Examine commodity

Found correct

3.8.3 Register case file

3.8.5 Order to the port Customs examination team

3.8.2 Receive request

3.8.4 Reviewscase file

3.8.7 Fumigate the containers after

Customs examination

3.8.1 Request for fumigation

3.8.2 Receive the request for fumigation

Port terminal

3.8.2 Receive port challen, SI, and

103 challen

3.8.1 Request for delivery

Transporter

3.8.2 Receive request to send the loaded Container

to Customs yard

3.8.3 Check the container against

103 challen

3.8.1 Submit 103 slip,shipping instructions,

& Port Challen

Shipping Agency Department (SAD)

3.8.9 Allow to load cargo

3.8.6 Check with loading list and

prepare mate receipt

3.8.6 Examine the goods

Time-procedure Chart for Importing Animal Feed to Lao PDR

1. Check demand of import for animal feed by Livestock and Fishery Division, Customs and Trade Division

2

2. Certify of farm’s animal feed demand for importing 5

3. Declare of import documents to custom office at the border point for approval

3

4. Pay import tax, fee and custom to treasury office 2

5. Inspect of import goods by custom inspector at the checked point

1

6. Inspect of import goods by Agriculture Quarantine officers at the checked point

1

7. Trucks transport all goods to destination places 1

8. Pay to the export representative 2

TOTAL 17

Documents Required for Jute Bag Exports to India from BangladeshSl. Procedures Docs

Reqd.Details Documents List

1 Receive order from the buyer, set the trade terms and finalize sales contract

6 Proforma Invoice, Commercial Invoice, Export License, Offer Letter, Sales Contract, Copy of TT

2 Contract inland transport agency 1 Transport Invoice

3 Prepare export documents 10 Proforma Invoice, Commercial Invoice, Certificate of Origin, SAPTA Certificate, Phytosanitary Certificate, Packing List, Export License, Sales Contract. Transport Invoice, Copy of TT

4 Transport to port of departure Nil None

5 Obtain customs declaration from the customs authority at the land port (mainly by the C&F agent)

14 Proforma Invoice, Commercial Invoice, Certificate of Origin, SAPTA Certificate, Phytosanitary Certificate, Packing List, Export License, Sales Contract. Transport Invoice, Copy of TT, Export Form, VAT and Source Tax Chalan, Bill of Entry

6 Customs inspection and clearance 16 Proforma Invoice, Commercial Invoice, Certificate of Origin, SAPTA Certificate, Phytosanitary Certificate, Packing List, Export License, Sales Contract, Transport Invoice, Copy of TT. “C” Form, Out Pass

7 Border checkpoints 16 Proforma Invoice, Commercial Invoice, Certificate of Origin, SAPTA Certificate, Phytosanitary Certificate, Packing List, Export License, Sales Contract. Transport Invoice, Copy of TT, “C” Form, Out Pass

Economic impact of bottlenecks in business processes of cross border trade

Each additional day of delay (e.g. because of trade logistics procedures) reduces trade by at least 1%Source: Simeon Djankov, Caroline Freund, and Cong S. Pham. (2007). Trading on Time. Washington, D.C.: World Bank.

“Direct and Indirect Cost from import/export-related procedures and required documents is about 1-15% of product cost.”Source: OECD. (2003). Quantitative Assessment of the Benefits of Trade Facilitation. Paris: OECD Publications

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