WCO Capacity Building Committee – 26th February 2013

1

“How Can Business Awareness

Contribute to

the WCO’s

Orientation Package ?”

Bill Taylor

De La Rue International

Credibility- What Gives Me The Right To Be Here?

1813 Company

founded by

Thomas

de la Rue

1855 First printed

British Postal

Stamps

1860 First banknotes

printed for

Mauritius £1, £5

& 10 Shillings

1947 First listed on

the London

Stock Exchange

1965 De La Rue Giori

formed; leading

banknote press

manufacturer

1967 De La Rue jointly

develops world’s 1st

ATM

1995 Acquisition of

Portals

(banknote

papermaker

founded 1712)

2003 De La Rue wins

contract to print Bank

of England currency

2009 De La Rue

wins 10 year

contract for

UK Passport

2

2009 De La Rue

accepted into

WCO PSCG

•26 Years – Private Sector - Marketing, Sales & Product Management

•15 Years with Current Company - De La Rue International

•WCO PSCG - Members Since 2009

2013 200 Yrs of

De La Rue

WCO PSCG Members – Household Names!

3 V1.0 • Strictly Confidential • © De La Rue plc 2009

So let’s start at the very beginning….

4

Orientation - [mass noun] , [count noun]

• the action of orienting someone or something relative to the points of a

compass or other specified positions

• the relative position or direction of something

• a person’s basic attitude, beliefs, or feelings in relation to a particular subject

or issue

• familiarization with something: many judges give instructions to assist jury orientation

Employee Orientation

Employee orientation is the process of introducing a new employee to the

job. New employees are introduced to the organisation profile, its goals

and policies and the roles and duties they are required to perform to

enable the smooth running of the organisation. It also provides skills-

based training for the employee to familiarise him/herself with the

organisation’s culture and expectations.

Orientation enables the employee to feel

welcome and at ease in the organisation or

institution.

http://smallbusiness.chron.com/business-orientation-24274.html

PSCG Initial Commentary on Orientation Package

5

• Very grateful to be invited to comment.

• Honoured to share ideas and proposals at Policy Commission in Kyoto, December

2012.

• Orientation Package could become one of, if not the key programme for defining

Customs’ role.

• The medium of Regional Seminars promoting economic competitiveness is

supported – trade should, and PSCG members will be happy to contribute.

• PSCG members have accumulated extensive experience in doing business in

most of the world.

• PSCG participation in the meetings of Capacity Building Committee is a great

example of such work.

6

During Orientation, what would a new Senior Government Agency

Director want, and need, to know about business?

Easy answer – just ask an economist!

Fundamentals:

•Trade is a patchwork of a huge diversity of sectors – which sectors impact Customs,

and how, is key.

•Business is not just about products – but products, and their movement, in the form

of cross-border trade in products, is what’s critical to a Customs Director.

•Cross-border trade increase – 1990 through 2010 has TREBLED in volume!

•Legitimate trade is critical to the economic success of a nation.

•Illicit trade can present a huge threat to national & international security.

•Increased multi-agency interaction at frontier – Customs, Health, Phyto-Sanitary.

What insight can trade offer Customs?

Here’s some PSCG food-for-thought.

7

Makers

•Manufacturers

•OEMs

•Services

Shakers

•Brokers

•Agents

•Associations

•Councils

Movers

•Logistics

•Supply Chain

•Forwarders

•Shippers

•Carriers

Business Complexity Snapshot

8

Extended Supply Chains

Company Policies & Corporate Governance

Trade Compliance

ERP System Complexity

Cross-Border Trade

Transfer-Pricing

Tax & Duty Liabilities

Data, Data, Data, Data!!!

And if you think that’s complex…………..

Feedback on

Exceptions

Objective : Maximise margin

Tactical horizon: 3 – 24 months ,Fortnightly cycle ,Monthly bucket: Material; Ship

To

Objective: Maximise material contribution margin

Tactical horizon: 3– 24 months, Fortnightly cycle, Monthly buckets; Material ; Price

Group/Demand Group

Logistics

Plans/

schedules

20

22 21

25

19

Liquid Product

Transfers

Milk Req.

P&I req.

X Functional Planning

Demand Management Optimisation Tactical Planning Sales

Customer segmentation by

profitability and loyalty

Loyalty

% of business with Fonterra &

quality of relationship

Profitability

potential gross margin based

on product mix & price

achievement

Less loyal,

profitable

B

DEVELOP

RELATIONSHIP

Less loyal, less

profitable

D

TRANSACT

CLEANLY

Loyal, less

profitable

C

MANAGE

EFFICIENTLY

Loyal, profitable

A

MAINTAIN

RELATIONSHIP

Pro

fita

bili

ty

Objective Function: Unconstrained Demand

Horizon: 3 – 24 months; Monthly cycle / monthly buckets;

Material ; Ship-to & Demand Node Hi/Low risk

Tod

ay

Order

History

Trend

Season

ality

Today

2

3

Unconstrained Demand

Converted to ETD

6

Customer aggregated

By buying behaviour

8

9

13 11

Optimised Demand

Optimisation

Model

NZ Milk Supply

Sales Orders, Contracts, gDT,

f/cast

7

12

23

Demand

Consensus

(Monthly)

5

Optimisation

Release

(Fortnightly)

10 Supply

Review

(fortnightly)

14

Gap

Review

(Monthly)

15

Pack Plants

Logistics Planning

260

Factory Store

100

Pack Plant

100

40

Cust 1

Cust 2

Cust 3

Cust 6

PP2

PP1

Cust 5

FS1

FS3

Cust 4FS2 3PS

Storage

Packing

Storage

Packing

Supply &

Demand balance

reviewed/

confirmed

Logistics plan pull from

demand,

push from capacity

Operational Planning & Scheduling

• Objective : Plan Attainment, Cost

• Operation horizon: 3 – 13 weeks ,weekly cycle, weekly buckets

• Scheduling : 1 -3 weeks weekly cycle, daily buckets

Inventory

Contract

Creation

Demand

Communication to

Account Managers

AD checked at

contract creation

Order

Placement

Customer Orders

received

Available to promise selects pack plant; Kotahi

confirms vessel ; order scheduled

Exec XFP

Inventory pulled to pack plant

based on demand and

pushed to 3rd party stores

when store capacity

constrained

Export Documents

Potential Material

Shortage :Surplus

milk; Resource

Capacity

Factory Store

Delivery created,

containers ordered,

deliveries scheduled,

customer updated

Deliveries/ Shipments

Material picked

and containers

packed Containers sent to port and

loaded onto ship

Order Invoiced

Customer updated

Delivery &

Shipment

Execution

Invoicing

Pallet to Factory

Store

Order Fulfilment

Sales Allocation Plan

including Committed for

Contract

GMX

(weekly)

17

Sales Allocation Plan

16

31

24

26 27

28

30

Volume

Time

Optimised

Price

Pack Plant

Schedule

Order Management/ Customer Interaction

commodity price

DemandGroup B / PriceGroup 1234

DemandGroup A /PriceGroup 1234

forecast

Work Centre

Production Planning

820620

Edendale

190100

Whareroa

MVT

MVT

480

200

Capacity

Capacity

Cust 1

Cust 2

Cust 3

NZ Invent

ory

Cust 4

D4

D3

D5

ED4

ED3

Wh5

Wh3D3

Rule based ATP

Alternate

Configuration

Alternate

Location

Location1 Location2 Location3

Product2

Product1

Ordered product and location

BOMs

forecasted

demand

customer

orders

current

inventory

supply plan

line

constraints

forecasted

sku prices

forecasted

commodity prices

target forward

sold position

Maximise Profit

block

orders

transportation

product age

requirements

What to make

when and for whom?

What prices

To Forecast

customer / product /

transaction

segmentation

price

elasticity

Process Outputs

Optimised Demand – Ship to

Optimised NZ Supply – Material by

Resource

Optimised Inventory - Material

Optimised Price - $ FAS

Logistics Reports– material movements

by store in weekly/monthly buckets

Sales Allocation

Plan

(To Demand

Management)

Inventory

Plans

Material by

store

Sales Orders consuming

Contracted Demand

Inventory

Management

GMX

(weekly)

GMX

(weekly)

GMX

(weekly)

Customer

Promise

29

Hodco Ltd (02-03-12)

Operational Production

Planning

Operational Logistics

Planning

Production Scheduling

Demand

Collaboration

Logistics

Operations

4

Contract Tenure sets

Allocated Demand

horizon

Optimised Demand review with

Sales to confirm Allocated

Demand

Planned Orders

Weekly Buckets

Process

Orders

Daily

Buckets

Store Transfer

Requests

Weekly Buckets

Weekly Exception

Management

Feedback on

Exceptions

CRA GDT

Auction

gDT auction outcome

Customer

Portal

Allocated Demand converted into

Quotes and Contracts

gDT customer

self service

Inventory

Management

Statistical

Forecasting

Objective: Maximise

Sales contribution

margin

Optimisation:

Maximise material

contribution margin

Sales Maximise Sales

contribution margin

Material picked, containers

packed

Warehouse

scheduling

Corrections/R

eturns

Contribution

Scheduled

Agreements

Product Mix

Optimisation

Tactical

Production

Planning

Tactical

Logistics

Planning

Material

Ship To

Month/

Week

ETA

Material

DG

Month

ETD

Material

Ship to

Month

ETD

Material

Resourc

e

Month Mat

ReqDate

Material

Ship to

Month/W

eek ETA

Plan Group

Plant

Week

Mat

ReqDate

Optimised NZ Supply

Material

Resourc

e

Week

MRD

Planned Production Orders

Material

Ship To

Month/

Week

ETA

Base Price

Material

Ship To

Month/

Week

ETA

Committed for

Contract

1

18

Manufacturing

Operations

Logistics

Scheduling

Warehouse

Execution

Stock Transfer Orders

Deliveries

Daily Buckets

10

Customs Expectations

•Honesty.

•Correct , legitimate

business procedures.

•Good quality data.

•Reliability.

•Compliance.

•Making risk analysis easier.

•Assisting security.

•Affecting change via full engagement

with current issues - AEO /

Harmonised System/Time Limits /

Core Data requirements.

Trade Expectations

•Transparency.

•Predictability and speed of clearance

•Raising of standards and the control of

corruption.

•Efficiencies and speed at the frontier in

Customs processes.

•Joined –up frontier interdiction ( Single

Window).

•Reciprocal arrangement with other

jurisdictions (eg MOU).

•Availability of special procedures with

economic impact (Inward /outward

processing, Customs warehousing etc.)

•Desire to be involved in the decision

making processes

And if we can foster all of that .......we just might get this

11

Mutual trust and respect.

Agile, flexible and reliable supply chains

to reduce capital costs for business.

Acknowledgement of the new dynamics

of trade such as globalization,

multi-step manufacturing and the

increase in the number of suppliers to

accommodate regional and global needs.

(‘Business has and is changing’.)

Increased corporate and then national

prosperity (employment etc.).

Increased capital investment.

Seamless frontiers.

Fast response to aid

economic recovery.

Ditto in post crisis situations.

Ability to respond quickly to

market demands and changes.

Control in the growth of

black and grey markets.

Limit to the availability of

counterfeit goods.

Control of smuggled goods.

A level playing field for legitimate

trade.

12

Turn the question on its head – what does business want from Customs?

EASY – process our legal and compliant goods in a fast, efficient and cost-

effective manner please!

HOW – by working together to build mutually beneficial & sustainable

relationships between Customs & trade.

RESULTING IN – great conditions for businesses to make positive decisions on

investment and sustainable growth.

13

Wish List

Where?

Hotspots

Pinchpoints

Quick Wins

Shining Examples

When?

Meeting Frequency

Interventions

What?

Roadblocks

Wish List

Mutual Risks

Common Goals

Do we measure

Who?

Size of Companies

Biggest Importers

Largest Exporters

Size of SME Sector

Biggest Employer

Investors

Innovators

Violators!

How?

Can I Help You?

Can You Help Me?

Can we fix things?

Can We Help

Society?

Can We Work Better

Together?

Why?

Are you late payers?

Can you not file

Correctly?

Is this your 5th penalty?

My Country?

“I Keep 6 Honest Serving Men, They Guide Me

In All I Do, Their Names Are:

What & Why & When & Where & How & Who.”

Rudyard Kipling

“If you always do what you’ve always done,

then you’ll always get what you’ve always got.”

Bill Taylor (with thanks to Matt Groening)

14

The Future – What’s The Utopia?

• The absolute highest standards of compliance and integrity from private

and public sector.

• Further developments in trade facilitation – can Customs and trade do

more for each other?

• Multiple-agency engagement in the supply chain – truly embracing the

recent WCO themes of Connectivity, Customs-Business Partnership and

Innovation to secure and facilitate legitimate global trade.

15 V1.0 • Strictly Confidential • © De La Rue plc 2009

Why we invest in Customs/Business Partnership

• Puts our members’ brands onto a different, yet still global, forum

• Gives us early visibility of new Customs initiatives and legislation

• Helps our network and networking

• Provides the opportunity for partnership with Customs Leaders

• Gives us credibility with other global-reach institutions

16

Revisiting Your Key Themes

• PSCG appreciates the insight of the WCO for recognising “the importance

of the voice of trade” when creating the Orientation Package.

• PSCG warmly welcomes the outreach and enhanced opportunities for

engagement:

– we’re still the new kids on the block (2006!)

– a lot has changed and continues to change

• Please remember - we are YOUR PSCG – we may not be representative

of ALL global trade, but we are:

– A vehicle created by the WCO,

– Focused on matters that impact Customs & trade

– Directly accountable to and reporting to:

– WCO Secretary General

– Policy Commission

– SAFE

Few, if ANY, global-reach organisations have such a trade voice vehicle!

17 V1.0 • Strictly Confidential • © De La Rue plc 2009

Comms:

e: bill.taylor@uk.delarue.com

http://uk.linkedin.com/pub/bill-taylor/21/a68/26

+44-7710-739136

www.delarue.com

www.wcopscg.org

Diolch yn Fawr!