Global trade master data management: Not sexy – but essential in the digital age
Jun 06, 2018 Comments (0)
Ambitious IT managers can raise their profile by implementing an ERP system, introducing digital processes, or overseeing the global rollout of logistics software.
Setting up a system of sophisticated master data management rarely leads to fame and glory, unfortunately. But it really should!
Master data management isn’t just a highly complex undertaking, it also brings critical added value to the company. Consistent master data is the underpinning of the entire digital transformation, including next-gen industry and logistics, the internet of things, and other digital business models.
What is the best way to achieve your data management objectives? It starts with awareness. Without an understanding of the legal consequences and economic disadvantages that result from poor master data management, it’s impossible to implement the appropriate processes.
Awareness of this message as it relates to global trade has really taken hold in recent years, mainly driven by developments around export controls and digital transformation. The legal consequences of unclassified or misclassified goods can be significant.
Moreover, the trend towards electronic management of customs and global trade processes requires that data to be universally and centrally accessible. The same is true of the integration of internal systems, such as global trade and logistics solutions, and the integration with service providers’ and partners’ external systems.
But which data is important for global trade? Typical master data may include address data of customers, suppliers, service providers, etc., product classification data (commodity codes, etc.), legal conditions (authorisations, bans, restrictions, etc.), or EORI/customs numbers.
Due to the scope and complexity of master data management it’s important to have an appropriate process in place for entering and approving master data.
Here are three tangible tips for managing master data successfully:
1. Document changes: It sounds obvious, but this is all too often neglected in practice. If you are classifying your products and discover that a similar material was misclassified in the past, you should first document which user entered the incorrect data and when. IT systems generally capture this information automatically in log files. Next, document any actual use of the obsolete or incorrect classification.
2. Use tools to help with year-end changes: A lot of reclassifications are introduced at the start of a new year, especially when the comprehensive HS reforms come along every five years. At such times the various content providers offer “correlation tables” that let you automatically update all products for which the old commodity code is simply replaced with a new commodity code (1:1 relationship). Of course these changes should also be documented.
3. Establish collaborative master data management: As companies become more digitally connected, there is an increased need to share certain master data with external partners. This is usually done for reasons of efficiency, but it can also be required for liability. Suppose, for example, that a company hires a service provider to clear its imports through customs. Above a certain volume of declarations, it might make sense for the importer to share its master data (product classification data, etc.) with the service provider so that the provider can use this data to clear the imports. Obviously, the digital transformation won’t work without smart master data management.
With the right software, master data management can largely be automated. Modern algorithms can help by providing good suggestions based on previous product classifications: machine learning, in other words. This makes it possible to automate simple classifications, so your employees can focus on the tougher cases.
Hannah Beckett is a Business Solutions Consultant at AEB (International) Ltd and has been working with the company since 2006, when she joined as a Sales Assistant. Her key focus and experience is within the Aerospace and Defence sector, advising companies on possible solutions for export controls and global trade compliance. Hannah has dealt with companies ranging from SME’s to multi-national companies.…