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Supply Chain: Don’t Lose Your Company’s Future En Route

By: Simon Kaye
Posted: June 9, 2008, from the June 2008 issue of GCI Magazine.

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Increased supply chain visibility and the control of import shipments are critical FOB benefits. By taking control as cargo crosses the ship’s rail at the port of origin, importers get better shipment management from their third-party logistics provider. Moreover, since Incoterms do not cover goods ownership or title transfer or other considerations necessary for a complete contract of sale, transfer of title can be separately agreed upon between the parties in the contract of sale under applicable law.

Importers can thus specify in their contract that title to the goods does not transfer from the seller until the importer takes possession at a specified point, even when paying the cost of freight for the imports being sourced. Deferring ownership can delay accounting for costly shipments as inventory, thus lowering expenses and boosting reported income. The sales contract can provide for supplier invoicing upon confirmed arrival at the destination port. An online tracking system allows for real time cross-checking and timing of shipments, a huge advantage in making such arrangements work.

What’s the Result?

Electronic tracking protocols are the ideal way to always know the status of mission critical factors within a supply chain—with no lost information, shipments or production. Cutting-edge electronic systems ensure that supplies are delivered on time and with proper quality. This means that cosmetics suppliers and manufacturers are able to track freight as it moves across the world, reducing the pressure on a company’s traffic department and improving both efficiency and cost-effectiveness.

The end result will go right to any bottom line. Missing shipments—or even incomplete knowledge of active shipments—are unacceptable by today’s global business standards. Use of electronic tracking to integrate supplier and shipper provides a company firm control over the direction of its own future. “Lost” may be a good concept for television entertainment, but “in control” is the only formula for global business success.