Chapter 8
It’s a Small World: Effectively
Managing Global Trade
In This Chapter
Grasping why global trade is so complex
Figuring out the difficulties of exporting and importing
Using the SAP approach to managing global trade
T
he world is growing smaller every day. Sure, it’s a cliché, but when it comes
to trade it’s never been truer. More and more, we are buying goods from
other countries, and we are sending our exports abroad. (Figure 8.1 illustrates
the sharp growth in exports.) We live in an age of unprecedented globalization.Today, a doctor in India might analyze X-rays from a patient in London, or a
Japanese auto company might build cars with Brazilian parts in a factory in
the United States. The pace of exchange is only speeding up as new free trade
treaties are inked from Central America to East Asia. Companies are increas-
ingly sourcing, manufacturing, and distributing goods on a global basis.The open doors mean business opportunities, but they also mean new
headaches. Managing global trade adds an extra layer of complexity to any
business. It’s one thing to source a widget from Walla Walla, but an entirely
different experience to get it from a factory in Guangzhou, Bangalore, or
Minsk. How do you ensure the widget arrives at the same time every month?
What global trade treaties need to be complied with? How can you track all
the documentation?When it comes to exporting goods, how do you ensure that the thousands of
orders you ship every day don’t end up in an embargoed country or, worse
yet, in the hands of terrorists? You’re probably thinking “Wait... terrorists?!?”
Before you reach for the antacid, read on.By creating an organized system for dealing with global imports and exports,
these challenges and others can be effectively managed. This chapter gives
you an understanding of how global trade works and the best practices to
put in place to ensure you meet the requirements of global trade regulations.