|
By John Goodrich email
| bio
Following is a bit of light fiction blended with, I’m
afraid, a heavy dose of truth.
“Even a trained squirrel could do classification, John!”
a product engineer at a manufacturing firm told me the other day
when we were discussing the HTS classification process at his company.
“What’s that you’re saying?” I had to restrain
myself from reaching across the table and throttling him.
“Yes,” he sniffed arrogantly, “this classification
nonsense really isn’t that difficult. Someone with my background
and education shouldn’t be wasted on such a tactical exercise
as assigning commodity codes to our products. Any clerical with
a little training could be assigned this process.” He sniffed
again, extending his hand to examine his manicure.
“Wow,” I thought to myself, “How does this guy
get his head through the door every morning?”
“Trained squirrel? Huh, you don’t say!” was all
I could verbalize as I seethed internally.
Those of you who know me personally know that it takes a Herculean
effort for me to hold my tongue in the face of ignorance such as
this. And amazingly I did, until now. In hindsight the following
is what I really wanted to say to this buffoon:
“Well, buddy, if I’m a squirrel then call me Rocket
J. Squirrel! Of course, if that is the case then you must be Bullwinkle
Moose! And we both know who the smarter one of that pair is.
“I sense you hold yourself and your profession in high regard.
I am sincere when I say you should indeed be proud of what you have
accomplished in attaining your professional credentials. It is curious
that you feel the need to diminish the level of expertise required
for the profession of Trade Compliance. Calling classification a
tactical skill is like calling your finely drafted engineered drawings
‘pictures.’ Any trained monkey could draw pictures of
your products!
“Now that we have exchanged unpleasantries, let me share
with you what has me cooking under the collar. I understand companies
must make decisions regarding the level of expertise they will hire
in their various business disciplines. Given an unlimited budget
companies would hire only the best, most qualified professionals
in management, finance, accounting, legal, regulatory compliance,
purchasing, sales, marketing, logistics and, yes, even engineering.
Your company has actually recognized that they do not have the budget
to hire a full-time trade compliance professional. They did recognize
the need and have made the choice to delegate the classification
process to a senior qualified employee. That person is you!
“I understand how you would first perceive HTS classification
as a tactical exercise. There are, indeed, times it can be tedious
and appear mechanical. That is the case with many professional disciplines
including your own. The strategy and the skill within classification
come in some of the following areas:
- “The Gray Areas: While classification,
in theory, should be a straightforward process, it involves a
certain amount of interpretation and subjectivity. Strategic thinkers
will explore the gray areas of classification and use the process
to their company’s advantage. This involves a considerable
amount of research into extrinsic classification aids and classification
rulings.
- “Trade Agreement Eligibility: Without
properly identifying classifications you will be unable to examine
sourcing options and to explore opportunities for participation
in free trade agreements and duty preference programs. Staying
abreast of preferential trade agreements is not something to be
left to a ‘trained squirrel.’
- “Product Design & Specification:
Sometimes minor changes in product design or component specifications
can assist in reducing duties. By way of example, tool sets are
subject to the rate of duty applicable to that tool in the set
subject to the highest rate of duty. Strategically thinking importers,
those who employ bright folks such as you in classification, quickly
learn to separate out the higher duty rate items, such as wrenches
from the sets and import them as individual components.
- “Regulatory Compliance Imperative: You
wouldn’t consider having an unqualified clerk completing
corporate tax returns would you? The HTS classifications you identify
are used in the completion of federal tax forms such as customs
entries and NAFTA country of origin forms. Customs regulations
require importers to exercise a type of due diligence known as
reasonable care in this area. Last I checked hiring ‘trained
squirrels’ did not demonstrate reasonable care.
- “Sarbanes-Oxley Obligations: As a publicly
traded company SOX requires you to be in compliance with all regulations.
Since your company has already acknowledged weaknesses in your
classification process, SOX rules compel you to take corrective
action.
- “Contribution to Supply Chain Efficiencies:
A quality classification programs assists an importer in reducing
its time-in-transit by reducing delays at the border. Good classifiers
don’t just assign numbers; they work cross-functionally
within the organization to contribute to a smoothly functioning
supply chain.
“Lest you think my profession suffers from an inferiority
complex I would have you think again. People with trade compliance
experience are in high demand today. Best-in-class companies within
industry have recognized that trade compliance is not just some
unfunded regulatory burden. They now recognize the strategic and
competitive advantage of robust, professional trade compliance.
That includes classification. Otherwise said, your competitors get
it. To quote my teenage son, ‘You are sooo last millennium,
dude!’
“What has me most irked about your ‘trained squirrel’
statement is that I know your company is struggling to remain competitive.
I know and you know that your company over-paid $400K in duties
because your previous ‘trained squirrel’ incorrectly
classified just one of your products. In addition, I am here to
help you succeed. Despite these facts, you fail to envision the
strategic nature of this process and the significant positive contribution
you could make to your company. You even fail to see how knowledge
in this area will enhance your resume. This is extraordinarily frustrating
and is behavior unbecoming of someone of your credentials.
“And yes, I have a meeting scheduled with your boss.
“If after all of this discussion you still believe any trained
squirrel can do classification I gladly accept the mantel. Call
me ‘Rocket J. Squirrel.’ Watch me fly!”
Sycophantic Disclaimer to My Clients: The person
described above does not depict any of you. You are all wonderful,
attentive and compliant people without whom I would be destitute.
I very much appreciate your business and respect you and the challenges
you face within your companies.
Empathy for a Colleague: I extend my condolences
to a business colleague to whom the above really happened. I hope
you find my embellished version of your story therapeutic. I also
hope this helps you find the words to respond to your boss the next
time he uses the term ‘trained monkey’ with you. For
sake of your career, I would recommend being more diplomatic than
I have been here.
Top of Page
By Prema Nakra, Ph.D. email
| bio
In February 2006 Apple computers made an announcement that
it will now provide global service coverage for all Apple
desktop computers, servers and displays that are under warranty.
Prior to this announcement, this service support was only
available for iPods and portable computers. The announcement
pleased its customers worldwide because they could envision
purchasing an Apple system or display in the U.S. and having
that product serviced for warranty repairs in Europe or Asia
if they happen to be traveling in that part of the world.
This article addresses the issue of after-sale service and
warranty management in an increasingly complex global market
environment.
Product warranty, despite its somewhat pedestrian mantel
in the eyes of far too many marketers, plays an increasingly
significant role in both consumer and commercial transactions.
It is just as important for the customers in your home country
as it is for all those in the countries where you market your
products directly or indirectly. Strategically designing product
warranty services is important even if you know your product
is reliable and seldom fails. Global warranty management is
important for both the technologically sophisticated products
as well as non-technical products. Warranties are a signal
of quality and they serve as elements of marketing strategies.
According to one study American manufacturers spent more
than $25 billion honoring warranty claims in 2004 alone, and
the amount spent seems to be growing. Buyers and users of
durable products such as washing machines, automobiles, tractors,
personal computers, as well as hiking boots and hairdryers
need an assurance from their retailers and manufacturers that
the product will perform as promised.
In an international and domestic context, whether a product
is sold in your neighborhood or across the globe, if it breaks
down within the warranty period, during the life of the product
or soon after purchase, it may require repairs, parts or service.
Defining Warranty and After-Sale Service
In simple terms a product’s warranty is an agreement
(implicit or explicit) offered by a producer to a consumer
to replace or repair a faulty item or to partially or fully
reimburse the consumer in the event of a product failure.
Warranties are not only instructions to customers about what
to do if product fails within a specified time period but
also an effective promotion tool. Customer service or after-market
support includes all the activities that are needed to attract
and retain customers including the repair of a product during
and after the warranty period, a recall of defective products
for repair or disposition, the warehousing of recalled products
until they are disposed or rerouted, and the handling of customers
complaints and returns for returned or recalled merchandize.
Companies such as caterpillar, the makers of earthmoving
equipment, have built a strong international market position
based on the promise that the dealers will be delivered service
parts within 48 hours anywhere in the world. This promise
is a key motivator for buyers of heavy earthmoving equipment
who cannot afford to have non-functioning equipment for an
extended period of time.
Firms operating in international markets are faced with the
choice of standardizing their warranty policies worldwide
or adapting the same policies for various regions or country
markets based on use conditions, government regulations, price
and the costs of delivering on warranty services.
Providing Warranty Services
Once global warranty and after sale service policies are
designed, marketers must move to develop a strong network
of companies or facilitators in country markets where the
company markets its products. Building such a network requires
selecting locations (distributors and dealers) from which
warranty repair and other services will be offered, investing
in physical facilities as well as equipment and parts to provide
the service.
Staffing, training and maintaining local personnel including
service technicians are equally as important. It is also important
to maintain a logistics and information network to keep track
of service performance and customer complaints. Distributors
and dealers that make a commitment to provide after-sale service
for a global vendor must be provided with the financial and
technical support to ensure a high level of customer service.
Sony, for example, operates 24 branded U.S. service centers
aimed at broadcast, recording and technical professionals.
These service centers are located in industrial parks and
they provide parts and services for expensive cameras, monitors,
mixers and other equipment. In addition, Sony also operates
a separate network of factory controlled centers to service
its consumer products.
For goods sold through retail outlets, a preferred service
option is to identify and use local service facilities. This
option requires an upfront expense to identify and train local
service providers. Administrative, supervisory and training
costs associated with this option must be assessed and carefully
weighted against the potential loss of market share and profits
due to customer dissatisfaction and customer loss.
Warranty Management Cannot Be an After-Thought
It is important to devise a warranty management strategy
that incorporates a holistic view on service management. In
this context global warranty management must be viewed as
an integral process in product management rather than as a
series of ad hoc actions. The use of advanced analytics to
improve product quality and recover warranty costs, the automation
of warranty processing to improve accuracy, and the use of
leading edge technology solutions to identify and combat fraudulent
claims go a long way in ensuring customer satisfaction and
brand equity on a global scale. The use of third-party suppliers
of warranty and other repair services in regions or countries
where they are available and willing to provide service is
also an effective way of managing warranties on a global scale
and dealing with customer complaints and other warranty related
issues.
Final Words
Business-to-business customers as well as end-user customers
in foreign markets are well informed and world traveled and
their expectations are converging on a global scale. It is
important for international manufacturers and suppliers endorsing
global branding strategies to ensure that their service support
level is comparable or superior to that of the dominant competitors
in other country markets and regions.
Top of Page
Thousands of successful exporters are using Shipping Solutions
to complete their export documents faster, easier and less expensively
than ever before. Why aren't you?
If you're too busy trying to complete your export documents by
hand to spend some time reviewing the Shipping Solutions Professional
export documentation and compliance software yourself, let us do
it for you! Sign
up for one of our free online demos and let us give you a one-hour
overview of the software.
We'll take you step-by-step through the process of completing your
export forms, filing your SEDs electronically through AES, and checking
your exports against the various government restricted parties lists
and export regulations to make sure your shipments are in compliance,
and you—and your company—stay out of trouble.
These free online demos are available on Tuesdays at 1:00 p.m.
and Thursdays at 10:00 a.m. Central Time. All you need is an Internet
connection to watch the demo and a phone to listen in and ask questions
about the software. It's the perfect opportunity to get your first
view of Shipping Solutions or to convince your coworkers and your
boss that Shipping Solutions is the perfect solution for your company.
See why Shipping Solutions is America's #1 export software. Sign
up for the free online demo today!
Top of Page |
