From a purchasing standpoint, trade compliance efforts tend to focus on the buy side. In order to procure components and materials from outside the United States, manufacturers need to make sure that each order adheres to the most current federal laws and regulations.
However, the export side is also requiring more manufacturers, especially those in the high-tech sector, to pay close attention to exactly where in the world their finished products finally end up -- and how they get there. JDS Uniphase Corp., for example, has faced much closer scrutiny in recent years as its products have reached a level of sophistication that is subject to export controls enforced by numerous federal agencies.
And while export compliance is nothing new for the Milpitas, Calif.-based manufacturer of optical products used in the telecommunications industry, according to Dave Wilson, JDSU's senior manager of global trade, the company's rapid technological advances in the last few years have made global trade much more challenging than it's been in the past.
"Our products had become much more sophisticated and were crossing over that threshold where they became more controlled by federal regulations," explains Wilson. "In addition, our number of transactions were increasing, as was our business outside the United States."
|As JDSU's products have become more sophisticated, the company's export practices needed to adapt to higher levels of scrutiny being enforced by various federal regulatory agencies.|
"As the company grew, we wanted to make sure the global trade department was able to grow as well," Wilson says. "Since there are literally thousands of transactions taking place all over the globe every day, it's not possible for a single department to oversee every transaction. So we realized we needed an automated tool to facilitate that kind of close scrutiny."
During its search for just the right export compliance tool, JDSU was introduced to TradeBeam Inc., a global trade management software and solutions provider. The fee-based, Software-as-a-Service (SaaS) tool offered the scalability Wilson and his team wanted, in addition to having content updated automatically from a variety of sources to stay current with frequently changing restricted or denied-party lists.
The platform also provides purchasing departments with important tools to address the requirements of multiple regulatory bodies, including the Bureau of Industry and Security (BIS), the United Nations, the U.S. State Department, the Directorate of Defense Trade Controls and several others, according to Alex Thompson, TradeBeam's vice president of product management.
"They can use the tool to make better decisions by leveraging free trade agreement management," Thompson explains. "By leveraging compliance, those doing the purchasing can improve cycle times, avoid shipment delays and minimize inventory costs."
For JDSU, a key to a successful integration was being able to eliminate manual screening efforts, in addition to affording greater visibility into screening activities around the globe. Now, a relatively small group of people can have control over everything.
An important side benefit to automating the export process was that it required a new level of discipline in the system, Wilson says. "It forced us to make sure that every one of our products is classified for export and to have accurate maintenance of customer information," he explains. "That needed to take place in order for the new solution to do its job properly."
Because several different departments can affect trade compliance, Wilson also stresses the importance of employee training and awareness across the entire organization. Before the new system was implemented at JDSU, the company established a cross-functional team representing each department that would be impacted by the new export controls. The teams met every week for over a year.
"Having buy-in from the cross-functional teams throughout the whole process is really critical," Wilson adds. "You need to create awareness and help people understand why the solution is important and how it will impact the other departments. If you don't take those steps, I think the whole effort is doomed to failure."
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