1 / 17

The Cost of Paper in the Supply Chain

The Cost of Paper in the Supply Chain. Malcolm McKinnon CEO, SITPRO Ltd Presentation to UN/CEFACT Plenary September 2008. Presentation Objectives. To present SITPRO’s “Hermes” report To demonstrate potential benefits from implementing straight-through data processing = “ STP”

susanna
Download Presentation

The Cost of Paper in the Supply Chain

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Cost of Paper in the Supply Chain Malcolm McKinnon CEO, SITPRO Ltd Presentation to UN/CEFACT Plenary September 2008 SITPRO Simplifying International Trade

  2. Presentation Objectives • To present SITPRO’s “Hermes” report • To demonstrate potential benefits from implementing straight-through data processing = “ STP” • To explain how we are going forward in the UK • To reinforce case for international trade data standards SITPRO Simplifying International Trade

  3. About SITPRO • Who we are: UK’s trade facilitation organisation – world leader in our field • Mission: To make international trade easier • History: Established 1970: • simplified trade documents • better border regulation • international standards • capacity building SITPRO Simplifying International Trade

  4. Objectives of research • Confirm scale of perishable food import and export markets • Identify and value documentary issues arising in this market • Assess potential benefits from replacing current documentary systems with integrated paperless trading (straight-through processing = “ STP”) SITPRO Simplifying International Trade

  5. UK Perishable Food Imports Meat 14% Fish 7% Other Dairy 46% 6% (of which bulk foodstuffs = 30%) Flowers 3% Vegetables 10% Fruit Coffee/Tea 12% 2% Estimated Market Size: £26 billion 2005 SITPRO Simplifying International Trade

  6. Perishable Food Supply Chain 2005 UK perishable food imports/exports = £37 billion SITPRO Simplifying International Trade

  7. Supply Chain Costs • As a percentage of the wholesale product price a key supplier has assessed the costs of his supply chain as: • 64% of berries from Chile • 70% of tomatoes/bell peppers • 80% of apples • Spoilage rates vary from 5% to 30% and can reach 50% for soft fruit SITPRO Simplifying International Trade

  8. Market and Documentation • Substantial UK market with significant supply chain costs • No single company sees or manages the whole movement • some activities, transactions and costs invisible or hidden to participants • Little realisation of true costs of documentation • many companies focus on just-in-time deliveries • Paper documentation is a major administrative burden on business and government SITPRO Simplifying International Trade

  9. Scale of Documentation SITPRO Simplifying International Trade

  10. Incidence of Missing/Delayed Documentation 1.4 million incidences annually SITPRO Simplifying International Trade Source: Consultants’ research of over 500 consignments

  11. Impact of Missing/Delayed Documents • Impacts on both government and businesses • Personnel and time spent in: • obtaining and verifying priority documents • processing deferment claims to recover overpaid duty • recovering missing documentation • physically tying together overall documentation and storing final document sets • Environmental impact of paper documents SITPRO Simplifying International Trade

  12. Impact of Missing/Delayed Documents SITPRO Simplifying International Trade

  13. Impact upon Country of Origin • 7-10 days typically required to assemble documents • 4 government agencies and 5 logistics providers(fruit from analysed African countries) • Impacts upon product shelf life and reduces revenue including to exporting countries – many developing countries SITPRO Simplifying International Trade

  14. STP savings evidence • European Electronic Invoicing report (2007) states € 243 Billion savings by adopting E-invoicing alone across Europe • Gateway Sweden, Finland, Korea all introduced various STP systems with substantial savings • Australia – cane sugar now STP based saving 4.4% of total value SITPRO Simplifying International Trade

  15. Conclusions • Current documentary systems cost perishables supply chain more than £1 billion annually • Consumers pay more than necessary • Development of perishables trade from developing countries inhibited • Potential savings of over £700 million from straight-through processing SITPRO Simplifying International Trade

  16. International requirements for STP • Business process mapping (by trading partners) • Identification of data to be exchanged (Export data import data) • Common data definitions (UN/CEFACT data standards) • Interoperability of data communication (UN/CEFACT message standards) SITPRO Simplifying International Trade

  17. Hermes Research Report SITPRO Ltd www.sitpro.org.uk / reports / hermes.pdf SITPRO Simplifying International Trade

More Related