Manufacturers of high tech products often face restrictions and
controls if and when they ship goods across regions and countries.
In this QAD Precision Report, we look at the three most pressing
compliance issues for high tech enterprises.
Innovation, at its core, is spreading new ideas to new people. For
high tech manufacturers, this means spreading product across
audiences, regions and even countries. Unfortunately, the global trade
landscape isn’t especially open to the constant movement of goods and
ideas, and many customs regulations make it difficult for
manufacturers to transfer goods across borders.
Adhering to customs and trade compliance regulations is crucial for
high tech manufacturers, as there are some very real consequences
attached to these seemingly innocuous laws. Monetary fines, penalties
and shipping issues (read: delays) are a very real possibility, and
these outcomes all put the customer experience at severe risk. High
tech manufacturers can address many of these issues with better record
keeping and documentation, which is one of the biggest pitfalls of the
current global trade compliance landscape. Maintaining trade
compliance is a great way to take proactive steps towards optimizing
Below, we’ll explore three of the top trade compliance issues for
high tech manufacturers and tips on how to overcome them.
Restricted Party Screening
For many high-security shipments, only specific entities or
individuals are able to receive. If this person isn’t available or is
off-site, it’s common to just get sign-off from any warehouse employee
who happens to be present. Unfortunately, this practice violates trade
compliance laws and can lead to serious fines. Particularly with
certain types of technology, licensing restrictions may limit who can
handle specific shipments and who cannot.
To make sure denied parties screening doesn’t come between an
organization and streamlined shipping, it’s crucial to maintain clear
and auditable documentation of all restricted or licensed parties, as
well as deliver customs data in a easy-to-manage format. Often, denied
parties screening issues arise when one person is out of the office
and nobody else knows how to manage the workflow. With a documented
process in place, denied parties screenings can run smoothly and efficiently.
For high tech manufactures looking to spread their innovations
overseas, it’s important to be aware of certain licensing controls and
regulations. It’s common that manufacturers that create technology in
one country cannot simply ship goods without restriction to another
country. For example an item is shipped from a non-US country but
contains a substantial amount of US technology or IP. Even though this
item is not shipped directly from the US, it is still subject to US
export controls. Manufacturers must manage these licensing agreements
extremely carefully, as well as monitor and record every interaction
and checkpoint in case of audit.
Leveraging a cloud-based global trade compliance solution can help
take the guesswork out of licensing. With licensing requirements and
regulations stored for individual manufacturers by critical metrics
such as country, item, date or value, these platforms make it easy for
logistics managers to ensure no licensing issues slip through the
cracks, thus protecting a manufacturing organization from potentially
With today’s ever-changing global economy, it’s important for high
tech manufacturers to keep a steady pulse on changing government
export controls and sanctions. These sanctions include shipping bans
on countries like Iraq and Cuba alongside detailed caveats on
transferring high-security technology across borders. The consequences
of doing so are monumental. Just ask the companies that ended up on
the United States’ “Don’t Let This Happen To You” publication of
actual investigations of export control and anti-boycott violations.
For high tech manufacturers to stay completely up-to-date on
sanctions, it’s important to have technology in place that is
constantly updated and refreshed so that all new regulatory agency
data?including the lists of sanctioned countries?are readily available
to key stakeholders. This data can be associated to individual
shipments to create more accurate records and facilitate more complete
So how can a high tech manufacturing organization successfully
overcome these compliance issues? Implementing a cloud-based solution,
such as a global trade compliance management solution, can help
streamline the compliance documentation process while opening the door
for a more hands-on, custom service approach.
For high tech manufacturers looking to grow across international
borders, global trade and export management solutions deliver
best-in-class analytics and visibility to international logistics
managers as they seek ways to overcome compliance issues. Used in
tandem, trade compliance management and global trade and export
management solutions deliver a suite of tools designed specifically
for addressing global trade issues, overcoming compliance roadblocks
and streamlining manual efforts?all with the end goal of providing an
amazing customer experience.
As high tech manufacturing organizations look to expand global
operations and streamline trade compliance efforts, they must consider
how to handle the roadblocks in front of them.
About QAD Precision – Trusted Global Trade and Transportation Execution
QAD Precision (Precision Software), a division of QAD Inc., provides
industry-leading global trade management, transportation execution and
multi carrier shipping software solutions from a single, integrated
platform. Preeminent industry leaders in every region of the world
rely on QAD Precision’s global support centers to leverage thousands
of carriers and manage millions of shipping transactions every day.
Our open architecture easily integrates with Enterprise Resource
Planning, Warehouse Management Systems and legacy solutions. An
ISO-certified company, QAD Precision assists companies to minimize
shipping costs, optimize first mile and last mile deliveries, automate
free trade agreement compliance, avoid customs delays and mitigate the
risks associated with dynamic trading environments to maximize their
competitive advantage. QAD Precision’s customers span multiple
industries including banking and finance, life sciences, high
technology, retail, industrial, automotive, higher education and
public sector as well as logistics providers. For more information
about QAD Precision, visit www.qadprecision.com.
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