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SAP MANUFACTURING INDUSTRIES FORUM 2015 RUN SIMPLE: INTELLIGENTLY CONNECT EVERYWHERE SAP Manufacturing Industries Forum The Westin Lombard Lombard, IL | June 23-25, 2015

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  • SAP MANUFACTURING INDUSTRIES FORUM 2015 RUN SIMPLE: INTELLIGENTLY CONNECT EVERYWHERE

    SAP Manufacturing Industries Forum The Westin Lombard

    Lombard, IL | June 23-25, 2015

  • When Your Goods Leave The Country Kevin Riddell, Tremco

    SAP Manufacturing Industry Forum The Westin Lombard

    Lombard, IL | June 23-25, 2015

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 3 Confidential

    Agenda

    Introduction

    Overview of Tremco and international trade challenges faced

    Specific Challenges Faced (And SAP GTS Solution):

    Preferential Trade

    Import / Export Controls # 1: Embargo

    Import / Export Controls # 2: SPL

    Import / Export Controls # 3: Licenses

    SAP GTS V 11.0

  • The Tremco Group Overview of Tremco and international trade challenges faced

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 5 Confidential

    About The Tremco Group

    Founded 1928

    Manufacturer of roofing and construction materials

    Products sold globally

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 6 Confidential

    Tremco SAP Environment

    Implemented in USA/Canada*

    Running ECC 6.0, Enh5(patch 7)

    Implemented ECC 1998 (16 years)

    Implemented SAP Global Trade Services (GTS) 10.0 in 2012

    Running other SAP modules (CRM, WMS, APO)

    * And Brazil (sort of)

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 7 Confidential

    Global activity on the rise:

    Sourcing overseas

    Selling overseas

    As company grows, increased risk (on the radar)

    Increased regulations and regulatory attention post 9/11

    Global sanctions programs changing

    Changing Priorities for Customs Enforcement (next slide)

    International Trade Challenges

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 8 Confidential

    Current Priority Trade Issues includes Trade Agreements*:

    Focus post 9/11

    has been security,

    but indications that

    is broadening

    US Customs Priorities

    *From: http://www.cbp.gov/trade/priority-issues

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 9 Confidential

    Free Trade Agreements

    Other Trade Agreements and Preferential Status Programs

    Country Embargos/Sanctions

    Sanctioned/Denied Parties

    Restricted Parties

    Import/Export Licences

    Classification of Products (For Multiple Programs)

    Multiple Country Requirements For Foreign Subsidiaries

    And more

    Some Specific Challenges

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 10 Confidential

    SAP GTS Solutions to Challenges

    -Free Trade Agreements

    -Other Trade Agreements and

    Preferential Status Programs

    -Country Embargos/Sanctions

    -Sanctioned/Denied Parties

    -Restricted Parties

    -Import/Export Licences

    -Classification of Products (For

    Multiple Programs)

    -Multiple Country Requirements

    For Foreign Subsidiaries

    -And more

  • Challenge # 1 Preferential Trade

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 12 Confidential

    $4,000,000+ annual avoidance of duty through NAFTA

    We have 5 separate legal entities

    Dozens of manufacturing locations

    10,000+ inventory SKUs

    Auditing BOMs manually requires unavailable resources

    Ever growing pool of other programs (Buy American, other FTA)

    Preferential Trade Tremco Priorities

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 13 Confidential

    Preferential Trade The Risk

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 14 Confidential

    Preferential Trade The Risk

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 15 Confidential

    Preferential Trade The Risk

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 16 Confidential

    Live SAP GTS Preference Processing March, 2012

    Allows for auditing of BOMs and determinations of NAFTA eligibility

    Generates Certificates of Origin for customers and brokers

    Active in 2013 BOMs audited

    Exclusive source of NAFTA certificates for 2014

    Why did it take 2 years?

    Preferential Trade SAP GTS at Tremco

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 17 Confidential

    Lessons learned in Preference Processing: Data cleansing was underestimated

    Tariff codes

    Procurement Type (see next slide)

    Alt BOMs

    Plant changes

    Solicitation of vendor certificates should precede GTS

    Have a separate team address data cleansing prior to or along side actual

    implementation of GTS

    Mass populate data at time of go live as much as possible (example additional

    conditions)

    Preferential Trade SAP GTS at Tremco

    Hint: Audit the results before issuing

    any certificates! Blaming the system will

    not protect you if there were errors!

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 18 Confidential

    Preferential Trade ECC Data

    Procurement Type

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 19 Confidential

    Preferential Trade ECC Data

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 20 Confidential

    Preferential Trade ECC Data

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 21 Confidential

    Preferential Trade GTS Data

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 22 Confidential

    Preferential Trade GTS Data

    Additional Conditions

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 23 Confidential

    Applying GTS to other agreements:

    The Good:

    Nafta work has already made other work easier (central depository for data and disciplined business process)

    Learning curve is past

    ECC data cleansed

    The Bad:

    Nafta data not relevant for other agreements (see next slide)

    SAP GTS And Multiple Agreements

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 24 Confidential

    SAP GTS And Multiple Agreements

    Not a universal statement of CA origin only for NAFTA

    (i.e.) NOT a statement that item is CA for Canada/EU

  • Challenge # 2 - Embargos

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 26 Confidential

    Embargos The Risk

    Embargoed Countries

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 27 Confidential

    GTS live in US and Canada March, 2012

    GTS live in Brazil August 2014

    Blocks any document attempting to use a sanctioned country

    List of countries is manually maintained to allow additions based on company decision re: risk

    Embargos SAP GTS At Tremco

  • Challenge # 3 - SPL

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 29 Confidential

    SPL The Risk

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 30 Confidential

    Implemented GTS Sanctioned Party List Screening March, 2012

    Live immediately

    Reviews all customers, vendors, other partners and documents for possible matches

    All matches blocked until Compliance staff review

    SPL SAP GTS At Tremco

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 31 Confidential

    Dont underestimate time needed to decide on settings. Dont let deadline drive decisions

    better late than subpar

    Add compliance expertise to review of settings go outside if necessary

    Run as many simulations as you can time invested is time well spent run against

    complete database, not partial

    Manual review of all results is compliant but impossible how many can you afford to

    review?

    SPL Lessons Learned

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 32 Confidential

    Lessons learned with SPL (cont.):

    Make decision re: expired entries and frequency of updates

    Consider multiple settings (will require multiple Legal Regulations in GTS) not all

    SPL lists are to be treated equal

    Some non-binding

    Some only apply to certain partner types

    Audit the system periodically do not blind trust!

    TREX

    SPL Lessons Learned Cont

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 33 Confidential

    SPL - Example

  • Challenge # 4 Licenses

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 35 Confidential

    Tremco is a chemical manufacturer and trader on a global level

    Chemicals are regulated in international trade for various reasons, i.e.:

    Chemical Weapons Convention

    Wassenaar Arrangement (UN agreement) EAR/ITAR

    Australia Group (UN agreement)- EAR/ITAR

    Drug precursors DEA rules

    TSCA EPA rules

    Import/Export Licenses Tremco Exposure

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 36 Confidential

    Import/Export Licenses The Risk

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 37 Confidential

    SAP GTS Legal Control Export implemented March,2012

    Live immediately

    Blocks any export of a product that will require a permit, licence or notification

    Order cannot not ship until GTS administrator releases

    Import/Export Licenses SAP GTS At Tremco

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 38 Confidential

    System is only as good as information fed to it Garbage in

    Who is classifying your goods?

    Who is configuring the logic? (Translating compliance knowledge into programming?)

    see next slide

    Minimise the # of people with authority to release orders (but 1 is too few!)

    Consider need for subscription data (How many ECCN do you need?)

    Get expert/outside help if you arent sure!!!

    Import/Export Licenses Lessons Learned

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 39 Confidential

    Are your SAP staff ready to translate this into system logic? (Config)

    Import/Export Licenses A Challenge

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 40 Confidential

    Import/Export Licenses A Challenge

  • Version 11.0

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 42 Confidential

    SAP GTS 11.0 - Improvements

    Support for more countries

    Support for new communication systems (i.e. US transition to ACE)

    Changes to interfaces/menus (i.e. Maintain Products)

    SPL enhancement exclude deleted partners

    License enhancements depreciating values and quantities

    Preference simulation logs saved

  • 2015 SAP SE or an SAP affiliate company. All rights reserved. 43 Confidential

    SAP GTS 11.0 New Features

    USA FTZ Support

    Hana*

    Fiori

    * Offers biggest change to SPL yet

  • 2015 SAP SE or an SAP affiliate company. All rights reserved.

    Thank you

    Contact information:

    Kevin Riddell

    International Logistics Mgr N.A.

    The Tremco Group 416-467 2435 or email: [email protected] or Find me on LinkedIn

    http://5100.espresso-tutorials.com/

    mailto:[email protected]://5100.espresso-tutorials.com/http://5100.espresso-tutorials.com/http://5100.espresso-tutorials.com/