MASTER THESIS
Title:
August 31, 2013
student name: Georgia Kanellopoulou student number: s2353024
E-mail: g.kanellopoulou@student.rug.nl Address: Antillenstraat 1-95, 9714JT, Groningen
MSc Supply Chain Management 2012-2013 University of Groningen,
Faculty of Economics and Business Nettelbosje 2, 9747 AE Groningen,
The Netherlands
Faculty Supervisors: Company Supervisor:
Prof.dr. Jack AA van der Veen
Professor of Supply Chain Management Nyenrode Business Universiteit
Email: j.a.a.van.der.veen@rug.nl
&
Drs. Ing. Justin Drupsteen
Mr. Erik van Dort Vice President at Capgemini Consulting Email: erik.van.dort@capgemini.com
Lecturer at University of Groningen Email: j.drupsteen@rug.nl
Acknowledgements
I would like to thank my supervisors, Prof. Jack van der Veen and drs. Justin Drupsteen for providing me guidance on how to perform this thesis. I would like also to thank my company supervisor, drs. Erik van Dort for his guidance on writing my research, and the supply chain managers of companies all members of EVO association who kindly participated in the interviews and questionnaires of my research project.
CONTENTS
ABSTRACT ... 3
1. INTRODUCTION ... 4
1.1RESEARCH OBJECTIVE AND RESEARCH QUESTION(S) ... 6
2. THEORETICAL BACKGROUND ... 7
2.1TRADE FACILITATION AND TRADE LIBERALIZATION ... 7
2.2TRADE ENVIRONMENT ... 7
2.3TRADE FACILITATION PROJECTS & RELEVANT ORGANIZATIONS ... 8
2.3.1 Supply Chain Innovation (SCI) initiatives in the Netherlands ... 9
2.4CATEGORIES OF SCI INITIATIVES ... 9
2.4.1 Information Technology ... 9
2.4.2 Collaboration ... 10
2.4.3 Corporate Social Responsibility... 10
2.4.4 Safety and Security ... 11
2.4.5 Process Innovation ... 11
2.4.6 One EU ... 11
2.4.7 Economical Effects ... 12
2.5SUPPLY CHAIN BARRIERS TO TRADE ... 12
2.5.1 Enabling Trade Index (ETI) ... 13
2.5.2 Logistics Performance Index (LPI) ... 14
2.6CONCEPTUAL MODEL ... 15
3. RESEARCH DESIGN ... 16
3.1METHODOLOGY ... 17
3.2UNIT OF ANALYSIS... 17
3.2.1 Linde Gas Benelux Nederland ... 18
3.2.2 FloraHolland ... 18
3.2.3 DSM Nederland ... 18
3.2.4 Tata Steel Nederland... 18
3.2.5 Lekkerland ... 18
3.3DATA COLLECTION ... 19
3.3.1 Questionnaires ... 19
3.3.2 Interviews ... 19
3.3.3 Study of relevant business reports... 19
3.3.4 Study of reports for SCI initiatives ... 19
4. ANALYSIS AND DISCUSSION ... 22
4.1A FRAMEWORK FOR THE SCI INITIATIVES AND THEIR CATEGORIES ... 22
4.2SCI INITIATIVES ... 25
4.3TRADE FACILITATION ISSUES ... 26
4.4OVERVIEW OF SHIPPERS’ VIEW FOR INTERNATIONAL TRADE FACILITATION ISSUES ... 27
4.4.1 Linde Gas Benelux Nederland ... 27
4.4.2 FloraHolland ... 28
4.4.3 DSM Nederland ... 28
4.4.4 Tata Steel Nederland... 29
4.4.5 Lekkerland ... 30
4.5SUPPLY CHAIN BARRIERS FOR INTERNATIONAL TRADE FROM VARIOUS SHIPPERS’ PERSPECTIVE IN THE NETHERLANDS ... 30
4.6MATCHING SHIPPERS’ VIEW WITH THE CATEGORIES OF SCI INITIATIVES ... 35
5. CONCLUSIONS AND FURTHER RESEARCH ... 36
5.1SUPPLY CHAIN BARRIERS ... 36
5.2IMPROVEMENTS ... 36
5.3MATCHING OF CATEGORIES OF SCIINITIATIVES AND TRADE FACILITATION ISSUES ... 37
5.4RESEARCH LIMITATIONS ... 38
5.5RECOMMENDATIONS ... 38
APPENDIXES ... 39
APPENDIX A:QUESTIONNAIRE (SENT VIA EMAIL) ... 39
APPENDIX B:QUESTIONNAIRE (USED FOR THE INTERVIEWS) ... 40
APPENDIX C:DESCRIPTION OF SCI INITIATIVES OF THIS STUDY ... 45
ABSTRACT
1. INTRODUCTION
Trade facilitation is implemented primarily on the regional level, with regional institutions and trade organisations (UNECE, 2003). In the Netherlands, there are various supply chain innovation initiatives (SCI) lead by Dutch government and institutes such as Dinalog and Topsector Logistiek. Some of these initiatives (also) aim to improve the competitiveness of the Netherlands with respect to imports and exports. On the one hand, there are a lot of reports delivered by various agencies and Dutch government regarding initiatives for facilitating international trade. There are different themes of these SCI initiatives, such as e-freight, synchromodality, security, horizontal collaboration, and common IT platforms. For shippers, the level of information, ideas, knowledge, technology, models and frameworks in terms of international trade could be upgraded and extended through these supply chain innovation paths. However on the other hand, it is observed that these reports often appear to be unknown to the concerned companies or sometimes these reports do not match the companies’ interests. Hence, there appears to be insufficient understanding of the ways that the concepts of supply chain innovation initiatives can be adopted and implemented by organizations, and specifically by shippers in the Netherlands.
Existing studies demonstrate a great range of data and information regarding trade volumes and trends such as those of World Economic Forum (WEF), The World Bank, World Trade Organization (WTO), Organisation for Economic Co-operation and Development (OECD). At academic level, previous research studies point out the impact and benefits of trade facilitation on countries (Wilson, Mann and Otsuki, 2005; Walkenhorst and Yasui, 2009; Wilson, 2007; Engman, 2009). However, there is limited academic research on how business sector, particularly shippers, can benefit from on-going supply chain innovation initiatives on national, European or global scale, i.e., how such innovation initiatives can be viewed not by academics and government’s but by company’s perspective.
Trade facilitation is considered as an important enabler of the global competitiveness of those involved in international trade, the development of a more reliable trading environment, as well as the global economic growth and poverty reduction (WTO, 2012; UNECE, 2003). The four interdependent elements that define trade facilitation are:
[1] the simplification and harmonization of applicable rules and procedures;
[2] the modernization of trade compliance systems, in particular the sharing of information and lodgement of declarations between business and government stakeholders;
[4] the institutional mechanisms to preserve the effective implementation of trade facilitation principles and the on-going commitment to reform (Grainger, 2011).
Trade procedures include the “activities, practices and formalities involved in collecting,
presenting, communicating and processing data required for the movement of goods in international trade” (WTO definition, 1998).
In theoretical terms, trade facilitation definition “addresses the logistics of moving goods through
ports or moving customs documentation associated with cross-border trade” (Wilson, Mann,
Otsuki, 2005). Trade facilitation definition has been extended to include “the environment in
which trade transactions take place, including the transparency and professionalism of customs and regulatory environments, as well as the harmonization of standards and compliance to international or regional regulations” (Wilson et al., 2005). In practical terms, trade facilitation
emphazises efficiency and costs reduction across the whole trade transaction process including various activities such as agreements of sale between the buyer and the seller, processing of the agreed commercial documentation, compliance with health, and safety and other regulations and standards (UNECE, 2003). In this research, the extended definition of trade facilitation is used, since different factors are encountered regarding issues of the current complex trade environment.
Grainger (2011) states that trade facilitation includes the simplification and harmonization of applicable rules, the modernization of trade compliance systems, administration and institutional tools and mechanisms. On supply chain level, “innovations are new processes, products and
services which produce a substantive change resulting in improvements in operational efficiency better value to the customer or a positive impact on the environment” (Mena and Braithwaite,
2010). Therefore, trade facilitation can be considered as a type of supply chain innovation.
For the needs of the present study, specific twenty-four SCI initiatives are selected that contribute to trade facilitation in the widest sense, such as synchromodality, cross chain control centers, transparency of logistics information, e-freight, horizontal collaboration, border control and supervision, environmental aspects.
There are two categories indicating supply chain innovation; technological and administrative (Mena and Braithwaite, 2010). Technological innovations involve technologies which improve the ways that supply chain processes are operationalized, such as data planning, manufacturing, procurement warehousing and transport. Administrative innovations refer to changes in structures, business processes, customer and supplier relationships, and use of knowledge that result in different ways of managing the supply chain.
competitive advantage (Farley, 1997), and the coordination of the manufacturing, logistics, and materials management functions within an organization (Lee and Billington, 1992).
Additionally, according to Mann (2012), trade facilitation research can be viewed by a macroeconomic or microeconomic view. The first refers on how policymakers should alter the environment facing business to support global sourcing and international trade, while the latter means how a business should organize its operations given the environment. However, macroeconomic and microeconomic views should be connected and compared in order to make explicit to different stakeholders the various burdens and needs of the concerned partners participating in a dynamic and complex trade environment. In this research study, there is interest to explore these factors by microeconomic view, which is shippers’ perspective.
1.1 Research objective and research question(s)
This research is focusing on Dutch shippers and how they can gain advantages by the various supply chain innovation initiatives in The Netherlands. This research project has been supported by the EVO, by providing access to their members for the research. EVO is an association representing 20,000 companies in The Netherlands that transport goods within Europe and overseas. EVO members account for 70% of all goods shipped in The Netherlands. The core idea of this research is expressed through the main research question, as it is stated below.
“To what extent are current Supply Chain Innovation projects contributing to the resolution of Trade Facilitation issues considered most important by Dutch companies?”
The scientific contribution of this study is that this, to the best of my knowledge, is the first study which seeks to explore the advantages generated by specific SCI initiatives from shippers’ perspective in the Netherlands.
2. THEORETICAL BACKGROUND
In this section, literature review is further elaborated and relevant theories are introduced in order to conceptualise and re-articulate the research question. The concepts of trade facilitation, trade environment, supply chain barriers for international trade and supply chain innovation initiatives are respectively analysed. This section concludes with the conceptual model.
2.1 Trade facilitation and trade liberalization
Trade facilitation is related to trade liberalisation, but trade facilitation concept is a broader term (UNECE, 2003). Considering trade liberalization, it has great effect on a country level, on an organizational level, and on a global level. It varies extensively across countries, sectors and characteristics of traders (Walkenhorst and Yasui, 2009). The reason is that each country’s specific factors have a great influence on shaping the economy’s response to alterations in trading opportunities or incentives. The benefits of merchandise trade liberalization have been measured mainly through the use of the Global Trade Analysis Project (GTAP) model, the World Bank’s LINKAGE model and teams of computable general equilibrium (CGE) researchers (Lloyd, 2011; Bouët, 2008). On a country level, free or unhindered trade enables countries to specialise in those goods where they have a comparative advantage. Comparative advantage is an economic law introduced by David Ricardo (1817) which shows that each partner (i.e., country, organization) should focus on what they are relatively best at, so that no resources are used for an activity by the partners that are not good at. If each partner focuses on its comparative advantage and if the partners trade the products they produce best, as a result, they will achieve better trade-offs, and win-win partnerships. Hence, on a supply chain level, countries allocate their resources better and purchase cheaper resources from other countries. On an organisational level, companies increase their production and efficiency. Also, free trade reveals several opportunities for product improvements and innovations due to competition that companies create or cope with in markets. On a global level, free trade generates welfare both to developed and developing countries through a global market and as countries cooperate together efficiently, mutual respect for the countries’ customs and cultures increases which, in turn, lessens the fears of conflicts among countries’ relations.
2.2 Trade environment
perceived to be at the level of the firm (Bichou, 2007). Grainger (2011) also distinguishes actors and stakeholders in trade environment in three categories: [1] Traders, [2] Intermediaries and [3] Government. Shippers, as an elementary entity of the present research study, play an important role as traders in the international trade environment. The transportation of goods include different activities such as cargo tracking, equipment booking, cargo loading and unloading, issuance of bill-of-lading, carriage of goods (Lai et al., 2011). Transportation is achieved by shippers (insourced logistics) or by LSPs (outsourced logistics). Table 2.2 shows the categories of actors and stakeholders of the trade environment.
1. TRADERS 2. INTERMEDIARIES 3. GOVERNMENT
Small or large, Importers or exports, Agents, Experience or inexperienced, Direct or indirect representatives
(a)TRANSPORT & RELATED SERVICES:
Shipping Lines, Non Vessel Owning Common Carrier (NVOCC), Airlines, Charter Operators, Trucking and Haulage Companies, Railway
Companies, Logistics Service Providers, Freight Forwarders, Customs Brokers, Banks and Finance Companies, Insurance Companies
Revenue and Customs, Transport Ministry, Port Health Authorities, Ministry for Food and Agriculture, Marketing Boards, Trading Standards Bodies, Ministry for Trade and Industry, Civil Aviation Authority, Health and Safety Executive, Immigration Services, Finance Ministry, Ministry for Internal Affairs, Quarantine Inspection Service, Phytosanitary Inspection Services, Police, Highway Agency,
3rd Country Representatives, Contracted inspection and testing firms
(b) FACILITIES & INFRASTRUCTURE:
Seaports, Airports, Rail-terminals, Inland Container Ports, Port Operators and Stevedores, Cargo Handlers and Handling Agents, Warehouse
Operators, Transit-shed Operators, IT Service Providers
Table 2.2: Actors and stakeholders of the trade environment (adapted from Grainger, 2011)
2.3 Trade facilitation projects & relevant organizations
commercial practices and the use of international standards, and legal aspects of trade facilitation. Certain organizations play a key role in trade facilitation research such as World Trade Organization (WTO), United Nations Economic Commission for Europe (UNECE), World Commerce Organization (WCO), the World Bank , International Maritime Organisation (IMO), the International Chamber of Commerce (ICC), the International Civil Aviation Organisation (ICAO), the International Organization for Standardization (ISO), United Nations Conference on Trade and Development (UNCTAD), Organization for Economic Cooperation and Development (OECD) and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).
2.3.1 Supply Chain Innovation (SCI) initiatives in the Netherlands
This research examines various supply chain innovation initiatives that contribute to improving the competitiveness of the Netherlands and include aspects of trade facilitation. These initiatives are anticipated to make it easier for organizations to manage their end-to-end supply chain. These programs and projects have different themes and frame such as synchromodality, cross chain control centers, transparency of logistics information, e-freight, horizontal collaboration, border control and supervision. These SCI initiatives are lead by Dutch government, organizations, institutes and universities in the Netherlands. For this study, the selection of twenty-four specific SCI initiatives is based on experts’ know-how including that of my two supervisors. These specific SCI initiatives have already started and are planned to be completed in the coming one or two years. Thorough description of each of these initiatives is presented in Appendix C.
2.4 Categories of SCI initiatives
A previous study, “JOint DOuane/CUStoms Challenge(Jodocus)” made by Capgemini, TU Delft and TNO in 2011, introduced certain categories for the SCI initiatives analysed in that study. In that study, ten supply chain innovation initiatives in the Netherlands and EU were examined and were rated by field experts in seven categories. Categorization creates a clear overview of the contribution of the SCI initiatives for the concerning partners. Therefore, the major areas to which those SCI initiatives could contribute to organizations were clustered to certain categories. These categories are described below from literature review.
2.4.1 Information Technology
time data. IT plays a key role in organizations as supply chain teams need timely and accurate information about existing and planned manufacturing capacities and costs, products inventories, transportation costs, and customer demands (Tan et al., 1998b). In this study, the extended definition of IT is used, suggesting that IT helps to improve the availability of communication between public and private sector via a common IT platform by sharing data while maintaining control (integrity and privacy).
2.4.2 Collaboration
Collaboration can be considered a kind of inter-organizational relationship in which the participating parties reach agreements to invest resources, achieve goals, share information, (Stank et al., 1999; Ring and Van de Ven, 1994; Gray and Hay, 1986; Barrat and Oliveira, 2001) resources, rewards (Phillips et al., 2000) and responsibilities and take decisions and solve problems (Spekman et al., 1998), increase operational flexibility to cope with high demand uncertainties (Fisher, 1997). Collaboration suggests that competencies are developed if there is leverage from the skills and know-how of each partner (Vlachopoulou et al., 2002). And in terms of supply chain innovation, collaboration plays significant role since partners recognize plenty of benefits of innovation such as high quality, reduction of costs, more timely delivery, efficient operations and operational coordination of activities (Soosay, Hyland, and Ferrer, 2008; Bowersox, 1990). There are various types of collaboration including strategic alliances, joint ventures, cooperative arrangements, and virtual collaboration, vertical, horizontal and lateral integration. In this study, SCI initiatives suggest collaborative models between organizations and government which aim to enhance information and knowledge sharing and development of new knowledge and capabilities.
2.4.3 Corporate Social Responsibility
2.4.4 Safety and Security
The main themes in safety and security in relation to trade facilitation are trying to increase efficiency and effectiveness of government security checks on international trade flows. It includes use of risk management techniques, development of partnership programmes, preferential treatment of authorized firms and individuals, standardization of data requirements, cooperation and mutual recognition of controls between agencies and governments, replacement of paper documents with the use of electronic reporting systems (Grainger, 2007). Besides, there are more concepts by practitioners’ observations mainly containing suggestions for better regulation (i.e., simple rules and procedures, avoidance of duplication, trade consultation, transparent and operable rules and procedures) and information and communication technology (i.e., automation, Single Window, standardisation of documents and electronic data requirements, international electronic exchange of trade data). Government organizations control and administer the international movement of goods. Modernized Customs administrations and the SAFE framework addresses significant issues such as the harmonization of the advance electronic cargo information requirements on inbound, outbound and transit shipments. In this study, SCI initiatives suggest solutions for improving supply chain effectiveness and efficiency by controlling international trade, it includes for example initiatives to share visibility information between government and companies,.
2.4.5 Process Innovation
This category aims to improve processes of organizations in terms of trade facilitation and to create standardisation in these processes which guarantees their quality. Process innovation allows firms to produce at lower marginal production costs. Product innovation is understood as a means of reducing the substitutability between goods (Braun, 2008). Therefore, the focus lies on innovation within a given product life-cycle (rather than on the invention of new products (Kobayashi et al., 2003). The various SCI initiatives are related with process innovations regarding trade facilitation concepts such as cross chain control centers, service logistics, and transport hubs in control, supply chain finance, synchromodality, and human capital. These innovations can have impact on various logistics activities such as new product development, process improvements, service delivery, inventory management, technology transfer and capacity planning.
2.4.6 One EU
2.4.7 Economical Effects
This category refers to the financial aspect of the supply chain innovation initiatives. This category indicates the importance of economical results through the suggested supply chain innovation initiatives. Empirical literature states that a reduction in international trade costs can have a substantial impact on individual firms’ decisions to exit, export, and invest in research and development both to improve the cost or quality of existing products and to create new products (Bernard et al., 2007). In this study, SCI initiatives’ are judged by the contribution to positive effects on the economy for example by lowering the costs of supply chains.
2.5 Supply chain barriers to trade
From practitioners’ perspective, according to Grainger (2008a), the obstacles to any trade facilitation initiative can be many, including one or several of the following three issues: conflicting interests among stakeholders, lack of knowledge, and institutional limitations.
The Dutch organisations Dinalog and VLM (2012) identified three major challenges to overcome in administrative hindrances of international trade. Firstly, the established European Law is leading which means that there is little space for development of national initiatives to facilitate trade. Secondly, the rising level of internationalization and the different level of trust and understanding of cultural aspects between government agencies and logistical parties. Thirdly, most parties which participate in transactions (sell-buy) are not or barely involved in the physical movement process such as the compliance rules and law regulations. In the same paper, further explanation of the supply chain barriers for international trade is given as follows.
There is no internationally accepted standard set of global trade rules, and as a result, a variety of issues exist in international trade procedures. An example emphasizes the complexity of trade regulations; the shipment of a container comes with more than thirty documents and datasets, which are required for various government agencies, like Customs, Tax administration, food and agricultural inspection agencies and the National Bureau of Statistics. In the case of perishable or dangerous goods, there are stricter rules with additional requirements.
Eventhe electronic data and information exchange between companies and the government is sub-optimal. The information systems of government agencies require companies to provide the information in different data formats to different systems, interfaces or portals. Also between trade partners there are a lot of commercial documents or certifications with data in different formats and standards exchanged to support the physical movement of cargo. This inefficiency between companies should also be addressed to lower the administrative burden.
physical or electronic) for the submission and handling of all data, and documents related to the release and clearance of an international transaction” (UNECE, 2003).
2.5.1 Enabling Trade Index (ETI)
From researchers’ perspective, the term supply chain barrier is interpreted as “lack of
infrastructure, institutions, policies, and services facilitating the free flow of goods over borders” (WEF, 2013). Supply chain barriers to trade are divided into four categories through
the Enabling Trade Index (ETI), introduced by Wold Economic Forum (WEF, 2013). These four categories include
[1] market access,
[2] border administration,
[3] telecom and transport infrastructure, and [4] business environment.
The categories ‘border administration’ and ‘transport and communications infrastructure’ are most closely related to trade facilitation (Enabling Trade Valuing Growth Opportunities-Online Appendix, World Economic Forum, 2013). For the present study, the four categories of the ETI have been used for ranking the Dutch shippers’ supply chain hindrances they deal with for international trade. Table 2.4.1 shows the categories and sub-categories of ETI.
As presented in Table 2.5.1, the first category [1] market access includes tariffs and non-tariff measures. Market access barriers contain safety and sanitary requirements, technical standards, local content requirements as well as other regulations.
1. MARKET ACCESS (domestic and foreign)
2. BORDER ADMINISTRATION
3. TELECOM & TRANSPORT INFRASTRUCTURE
4. BUSINESS ENVIRONMENT
Quotas, Import fees – not tariffs (e.g. tax schemes), Local content requirements, Rules of origin, Technical, sanitary & phytosanitary measures or other requirements, Import/ export licenses (a)Efficiency of customs administration
(a)Availability and quality of transport infrastructure
(a)Regulatory environment:
Investment policy, Hiring foreign workers, Other regulatory, environment issues (including trade finance)
(b)Efficiency of import-export procedures
(b)Availability and quality of transport services
(b)Physical security
(c)Transparency of border
administration
(c)Availability and use of information and
communication technologies
In the second category [2] border administration, [2.a] the efficiency of customs administration is related with the speed and ease with which imports and exports can clear customs and the quality and range of services national customs authorities offer. Inefficiency of customs administration commonly means there is an insufficient allocation of resources to customs agencies or a failure to implement best practices in customs procedures. [2.b] The efficiency of import-export procedures refers to border delays, burdensome requirements and/or a lack of coordination between border agencies and compliance with import-export standards. [2.c] The transparency of border administration is related with corruption which may involve the direct costs of making, also referred to as ‘facilitation payments’ (bribes), or the added delays, the outcome of refused or not forthcoming bribes.
In the third category, [3] telecom and transport infrastructure, the first pillar [3.a], the availability and quality of transport infrastructure refers to the number of airports, the quality of roads and the amount of congestion at ports and other transport facilities. The second pillar [3.b], the availability and quality of transport services refers to transport services, such as the availability of companies picking up or delivering goods to a country and the capabilities of local logistics industries. In the third pillar [3.c] the availability and use of information and communication technologies address barriers related with untrustworthy communications and technology infrastructure.
In the fourth category, [4] business environment, [4.a] the regulatory environment may enclose barriers that increase costs and risks which sequentially create unstable or poorly functioning government, difficulties in hiring foreign workers and a lack of available trade finance. [4.b] The physical security barriers are related with high crime rates or thefts along the supply chain which increase operational costs.
2.5.2 Logistics Performance Index (LPI)
The Logistics Performance Index measures the logistics performance of a country. This tool, introduced by the World Bank, logistics service providers and academics, “captures a broad set
of elements that affect perceptions of the efficiency of trade logistics in practice” (The World
Bank, 2012). Logistics performance is related with the reliability of supply chains and the predictability of service delivery from and to producers and exporters (The World Bank, 2012). Moreover, better logistics performance and trade facilitation indicate better rates of trade expansion, export diversification, attractiveness to foreign investments as well as economic growth of a country. Therefore, LPI is relevant to this study, since it addresses six factors indicating the logistics performance of a country and in turn, has an effect on trade procedures which are related with shippers’ international trade performance.
addresses supply chain performance outcomes in which (3) international shipments, (5) tracking and tracing, and (6) timeliness are considered as outputs to the supply chain.
Table 2.5.2: Categories of Logistics Performance Index (adapted from The World Bank, 2012)
2.6 Conceptual model
The research question of this study is about the extent to which current supply chain innovation initiatives can contribute to the resolution of trade facilitation issues considered most important by Dutch companies. Firstly, it is important to determine the list of relevant SCI initiatives, because there are many SCI initiatives which serve diverse objectives. For the purpose of this study, the relevance of these initiatives with the aspect of trade facilitation is examined. The supervisors have selected those SCI initiatives from their domain knowledge they judge to have the most relevance for trade facilitation. Secondly, the list of the relevant SCI initiatives is linked with certain categories of supply chain innovation initiatives. From a previous study, it seems that SCI initiatives are related with collaboration, IT, process innovation, safety and security, corporate social responsibility, One EU, and economical effects. All categories mentioned can potentially contribute to trade facilitation and help to improve import/export. Thirdly, a framework is introduced that helps to classify the list of projects and their impact on the categories of SCI initiatives. This framework is linked with the trade facilitation issues. Trade facilitation issues are analyzed through ETI in literature review. This relation between the framework and trade facilitation issues helps to grow the insight of Dutch companies and to identify more easily which project could be of interest for the shippers interested in trade facilitation.
Figure 2.6: Conceptual model
1.Efficiency of the clearance process
(Speed, Simplicity, Predictability of formalities by border control agencies)
2.Quality of trade and transport infrastructure
(Ports, Railroads, Roads, Information Technology)
3.Ease of arranging competitively priced shipments 4.Competence and quality of logistics services
(Transport operators, Customs brokers)
5.Ability to track and trace consignments
6.Frequency with which shipments reach the consignee within the scheduled or expected delivery time
SCI Initiatives Categories of SCI
Initiatives
3. RESEARCH DESIGN
This section explains how data are gathered and how and why the data are analyzed. This includes the operationalization of the concepts being used in the conceptual model. Issues of reliability and internal and external validity are also addressed in this section, as well as the adopted research method and its limitations.
In this study, a certain row of seven steps is followed, as figure 3 shows. In particular, the process of research design starts with the literature review primarily examined (step #0), as presented in the theoretical background section of this paper. A basic component of the research design is an inventory of various SCI initiatives. This starts with a list (step #1) of SCI initiatives which is to be made based on various selection criteria. A first list of SCI initiatives and their categories (step #2) is provided by company experts and the company supervisor who recognized the most closely related projects and programs for this study. In the meantime, Dutch shippers, members of EVO association, are asked through a survey about their themes they find most important regarding international trade (step #4). Following that, based on these initiatives and their categories, a framework with categorized inventory of SCI initiatives and their categories is developed and presented through a table-matrix visualization (step #3). Then the framework is discussed in an expert forum, the Council for Logistics Knowledge of EVO association (step #6). A final step includes five individual Dutch companies as case studies (step #5). The knowledge of all previous steps are combined and linked to explore the Dutch shippers’ needs and perspective regarding the SCI initiatives provided by various institutes (step #7).
Figure 3: Process of research design
0. Literature Review 6. Raad voor Logistieke Kennis 4. Important themes by Shippers’ view
5. Case Studies 7. Match
Central point to this research design is to examine the matching between demand (by shipping organizations) and supply (by research institutes) of knowledge regarding SCI initiatives. Overall, the framework (step #3) may serve for all members to be a reference framework to understand recent developments and see the impact for their own organization.
3.1 Methodology
In this paper a case study approach is selected, since it is an empirical inquiry that allows for an existing phenomenon to be investigated within its real life context, and the boundaries between phenomenon and context are not obviously evident (Yin, 2003). The case method is mostly chosen to assess a relationship or effect, rather than to describe an average effect, so, cases are commonly considered as representative, not as exemplary (Stuart et al., 2002; Eisenhardt, 1989). The case study follows an inductive logic, firstly collecting qualitative data from which relevant and testable theories are then developed (Eisenhardt and Graebner, 2007; Fisher, 2007; Roth, 2007; Voss et al., 2002). In addition, the results of this approach can generate valuable insights and theory, and have high validity with practitioners (Karlsson, 2009). However, the case study research is time-consuming and requires highly-skilled interviewers. The limitations set by the small number of cases used for the research should be carefully examined for the development and generalization of conclusions (Karlsson, 2009). The purpose of this research is exploration, since this paper tries to explore the extent to which current supply chain innovation initiatives can contribute to the resolution of trade facilitation issues considered most important by Dutch companies. This research aims to build an understanding of what is the contribution of the SCI initiatives for Dutch shippers. As figure 3 indicates, there are five case studies including face-to-face interviews with supply chain managers of five Dutch companies (step #5), as well as a survey including an e-mail sent to various members of EVO association (step #4).
3.2 Unit of Analysis
3.2.1 Linde Gas Benelux Nederland
It is an industrial gas supplier and a member of The Linde Group. Its specialties include industrial gases, refrigerants, gas applications, safety services, dry ice, and medical gases. The group comprises three divisions: industrial gases and healthcare, engineering and gist. The largest division, gases, has three reportable segments – EMEA (Europe, Middle East and Africa), Asia/Pacific and the Americas. These are divided into eight Regional Business Units (RBUs). The gases division also includes the two Global Business Units (GBUs) Healthcare (medical gases and related maintenance and advisory services) and Tonnage (on-site supply of gases to major customers), as well as the two Business Areas (BAs) Merchant and Packaged Gases (liquefied and cylinder gases) and Electronics (electronic gases).
3.2.2 FloraHolland
It is a co-operative organization of and for growers of horticultural products. It has a number of market places with an auction clock sales system and a large logistics network. The focus in Aalsmeer, Naaldwijk and Rijnsburg is primarily on exporting customers. In Bleiswijk and Eelde, the focus is on the domestic market. FloraHolland also supports the outlets by providing an intermediary organization and customized services such as concept development, personal sales, product promotion and market information.
3.2.3 DSM Nederland
It operates as a holding company for the Dutch DSM subsidiaries active in the Netherlands as a nutritional and pharmaceutical ingredients group. The company, with a group of companies, engages in nutrition, pharma, performance materials, and industrial chemical businesses. The company's other activities focus on aspects of corporate policy on labor relations, socioeconomic policy and safety, and health and welfare policy.
3.2.4 Tata Steel Nederland
It operates as a subsidiary of Tata Steel Europe Limited. It is a holding company that produces and distributes steel, semi-finished steel, and aluminum products. It produces and delivers steel and coated products in the form of rolls. The company also offers design, technology, and consulting services. Its products are used in automotive, construction, and packaging industries, as well as in batteries, tubes, industrial vehicles, and fridges and cookers.
3.2.5 Lekkerland
3.3 Data collection
The collected data contain primary and secondary data sources. These include answers from questionnaires sent via e-mail, written and taped records of five interviews. The interviews and surveys are the main primary data sources. Interviews are recorded, since recording the data makes it easier to understand and structure all the obtained information. Secondary data include relevant business documents that the companies were willing to provide, and reports of the SCI initiatives used for this study. In addition, information by a previous study, Jodocus, has been taken into consideration for creating the categories of the specific SCI initiatives selected for this study (step #2, figure 3). Five weeks were required for collecting data through multiple sources, including archives, interviews, and questionnaires. In this study, five sources of data are used, as presented below and in Appendixes.
3.3.1 Questionnaires
A questionnaire is sent via e-mail to various members of EVO association in the first part of data collection phase. It demonstrates three basic questions regarding international trade. It aims to provide insights from companies’ perspective about burdens to international trade for imports and exports, their suggestions about logistics improvements which may help their supply chain and trade, as well as the leaders of these improvements’ implementation.
3.3.2 Interviews
A series of five individual interviews with five professionals are conducted in the second part of data collection phase. These face-to-face interview sessions include discussions with supply chain managers about key areas concerning international trade. Interview questions focused on shippers’ perspective identifying supply chain barriers to international trade, logistics improvements the firms want to see in the future, benefits from supply chain innovation initiatives, et cetera. Each session lasted from 40 to 50 minutes.
3.3.3 Study of relevant business reports
Information and data regarding the various departments, functions and trade activities of each of the companies of the sample of this research are obtained from the companies’ websites or documents provided during the interview sessions. This information can contribute to the analysis of shippers view regarding their needs for the various SCI projects.
3.3.4 Study of reports for SCI initiatives
Factsheets and website info of SCI initiatives are used to collect data and develop the panel for analysis of twenty-four SCI initiatives selected for this study. The SCI initiatives selected for this study are the following: DaVinc3i, GreenRail, HubWays, CASSANDRA, Extended Single Window, NLIP, Seamless Connections, Cargo Driven International Transportation, Ultimate: Efficient Multimodal, Value creation by choosing the loop, SIEEG, Demanes, iCargo, eFreight, Cargo Hitching, 4C4More, SALOMO, CO3 Project, WINN, HST Cargo/ Euro Carex, Schiphol
LOG2020. For each of these programs and projects, extensive understanding of its context is
required, i.e. objectives, related participants, relevant sectors, products and transport modes. The information for these SCI initiatives is obtained from the websites of institutes such as Dinalog, Topsector Logistiek and Artemis association industry.
Internal validity is established since SCI initiatives and their categories, supply chain barriers for international trade are described in the literature review and are considered as the central point for this study. Certain categories will be examined in terms of supply chain barriers to trade according to Enabling Trade Index (WEF, 2013). In addition, other categories indicating logistic performance will be examined through the Logistics Performance Index (The World Bank, 2012). These categories of indexes could provide additional insights for trade facilitation issues regarding imports and exports. External validity indicates whether the findings of a research can be generalized apart from the immediate case study (Voss, et al., 2002). The outcomes of this study are related with five case studies of Dutch companies. Therefore, the findings could be generalized to companies with similar activities or characteristics in the Netherlands. Finally, reliability of data is increased when multiple different sources of information and data are used on the same phenomenon (Voss, et al., 2002).
Obviously, the conceptual model has a key role in executing this study (figure 2.6). Some of the variables mentioned in the conceptual model are operationalized below in Table 3.3.
FRAMEWORK OF SCI INITIATIVES & CATEGORIES OF SCI INITIATIVES:
List
List of specific SCI initiatives selected for this study (Cassandra, NLIP, 4C4More, etc.)
Categories
The theme(s) of the project/program described in its factsheet. (i.e., IT, Collaboration)
Sectors
The sector(s) that the project/program refers to. (i.e., cargo, services, flowers)
Transport modes
The transportation mode(s) that the project/program refers to. (i.e., rail, water, road, air)
TRADE FACILITATION ISSUES:
Enabling Trade Index
Market access, Border administration, Telecom and transport infrastructure, Business environment
Logistics Performance Index
Efficiency of the clearance process, Quality of trade and transport infrastructure, Ease of arranging competitively priced shipments, Competence and quality of logistics services, Ability to track and trace consignments, Frequency with which shipments reach the consignee within the scheduled or expected delivery time
The above mentioned variables of the conceptual model are examined during the interview sessions. Thorough understanding of these concepts seeks to explorethe extent to which current supply chain innovation initiatives can contribute to the resolution of trade facilitation issues considered most important by Dutch companies. These data will be analysed to introduce a framework which shows these SCI initiatives linked with certain categories, sectors and transport modes.
Following that, two indexes, ETI and LPI, are examined in order to reveal issues in terms of supply chain barriers to trade. According to the company supervisor, these two indexes can be considered as two indexes that are useful to rate the international competitiveness of countries for international trade. For the operationalization of trade facilitation issues, additional interpretation of these two indexes is recommended, by the company supervisor, since an overlap exists among the four categories of ETI and the six categories of LPI. Although the meaning and the purpose of development of these indexes are different, indicated in literature review, it is recommended for the operationalization of the variables of the conceptual model. Table 3.4 shows the categories of indexes, the six categories of LPI presented in the first column of the table and the four categories of ETI on the second row of the table. When there is relevance between the concepts of the categories, it is indicated with a filled box with (x).
Enabling Trade Index (World Economic Forum)
Logistics Performance Index (World
Bank) 1. M AR K ET AC C ES S 2 . B OR DER AD M IN IS TRA TI ON 3 . T EL EC OM & TRA N SPOR T IN FR A ST RUC TUR E 4 . B U SI N ES S EN V IRON M EN T
1. EFFICIENCY OF THE CLEARANCE
PROCESS X
2. QUALITY OF TRADE AND TRANSPORT
INFRASTRUCTURE X
3. EASE OF ARRANGING COMPETITIVELY PRICED SHIPMENTS
4. COMPETENCE AND QUALITY OF
LOGISTICS SERVICES X
5. ABILITY TO TRACK AND TRACE
CONSIGNMENTS X
6. FREQUENCY WITH WHICH SHIPMENTS REACH THE CONSIGNEE WITHIN THE SCHEDULED OR EXPECTED DELIVERY TIME
(x) X X
4. ANALYSIS AND DISCUSSION
The analysis section presents a framework which is developed as indicated at the conceptual model (2.6) and the process of the research design (figure 3). It also includes the collected data from interviews, surveys, documents, and observations. Furthermore design oriented research presents the design related to the analysis and results of the data collection, and provides a clear division between findings and interpretations. According to all data and facts gathered in the previous phase of questionnaires and interviews were documented and coded.
4.1 A framework for the SCI initiatives and their categories
A new framework with a categorized inventory of SCI initiatives and their categories is developed. This framework suggests relationships between SCI initiatives and the categories, the sectors and transport modes these SCI initiatives refer to, and it is illustrated through a table-matrix visualization.
In this study, a certain row of steps is followed regarding the process of research design (figure 3). Firstly, a specific list of SCI initiatives is selected (step #1). These include DaVinc3i, GreenRail, HubWays, CASSANDRA, Extended Single Window, NLIP, Seamless Connections, Cargo Driven International Transportation, Ultimate: Efficient Multimodal, Value creation by choosing the loop, SIEEG, Demanes, iCargo, eFreight, Cargo Hitching, 4C4More, SALOMO, CO3 Project, WINN, HST Cargo/ Euro Carex, Schiphol SmartGate Cargo, Sense and Response,
Bundling at source location, Grenzeloze Logistiek, and LOG2020. Secondly, certain categories are
The category ‘Development of People’ shows the necessity of creating and spreading knowledge and skills of people involved in trade facilitation. The human factor drives quality and efficiency of logistics services. This is also how this category is reflected in the LPI (“competence and quality of logistics service”) and the ETI (“quality of transport services”). In The Netherlands the importance is widely recognised and reflected in a separate “Human Capital Agenda” for the Topsector Logistics. Within that program there is special attention for a process called “valorisation”. This is a process of exploiting (innovation) project learning and outcomes with a view to optimising their value and impact in existing and new contexts. The Development of capabilities of people working in logistics and trade facilitation is therefore a relevant category to identify as part of supply chain innovation initiatives.
The category ‘trade compliance’ refers to “the process by which companies transporting goods
internationally, comply with all laws and regulations of the countries that goods are shipped to”
(Dinalog, VLM, 2012). The emphasis of trade compliance is on complying with law and internal company policies and logistic procedures and documentation. This can be achieved through simplification and harmonization of law, from clear and effective company procedures and from following procedures of government agencies. This category is defined in correspondence with the category ‘One EU’ of a previous study, with a more widening interpretation of removing remaining barriers between EU countries and differences between their legal/customs systems including the categories of ‘market access’ and ‘border administration’ of the Enabling Trade Index as described in literature review (WEF, 2013). It aims to improve supply chain visibility, efficiency of trade compliance and effectiveness of border control.
initiatives. For example, in the first row of the table-matrix, DaVinc3i project has high relevance with collaboration and information sharing, the IT systems, the process innovation and quality control, the environment and social responsibility and safety and security. It refers to floriculture products and suggests the availability of all transport modes for the transportation of these products.
4 3 1 0 2 3 3 1
Collaboration & Information Sharing
IT systems
Process Innovation and Quality Control
Economical Effects
Development of People
Environment & Social Responsibility Safety and Security
Trade Compliance 4.2 SCI initiatives
In this study, the main research question of this study addresses the extent to which current Supply Chain Innovation initiatives can contribute to the resolution of trade facilitation issues considered most important by Dutch companies in The Netherlands. During the interview sessions, five supply chain managers were asked which of the eight categories of SCI initiatives (figure 4.1) are most important for the companies. In figure 4.1, it is suggested that organizations can leverage the value of eight categories by using deeper initiatives’ knowledge to enrich their end-to-end supply chain. Specifically in the case of shippers, all categories signify valuable ways for companies to optimize their international trade procedures. Table 4.2 and Figure 4.2 show shippers’ perspective concerning which of the eight categories play a significant role within companies. The answers are indicated with a tick (√).
SHIPPERS CATEGORIES OF SCI INITIATIVES
Co llab o ra tio n & In fo rm ati o n Sh ari n g IT sy ste m s P ro ces s In n o vati o n & Qua lity C o n tr o l Eco n o m ical Effect s D ev el o p m ent o f P eo p le Enviro n m ent & So cial Respo n sib ilit y Sa fet y an d Secur ity Trad e Co m p lian ce
(a) Linde Gas Benelux √ √ √ √
(b) FloraHolland √ √ √ √
(c) DSM √ √
(d) Tata Steel √ √ √
(e) Lekkerland √ √ √ √
Table 4.2: Interview-based data regarding the shippers’ view for the categories of SCI initiatives
Linde Gas Benelux FloraHolland
Tata Steel
Linde Gas Benelux FloraHolland DSM FloraHolland Lekkerland FloraHolland DSM Tata Steel 0 1 2 3 4
market access border administration telecom and transport infrastructure
business environment 4.3 Trade Facilitation Issues
Answers by interviews signify the most important -for five Dutch organizations- categories regarding two indexes, ETI and LPI, which are useful to rate the international competitiveness of countries for international trade. It the first index, ETI, Dutch organizations indicate commonly the necessity of market access, border administration and business environment, which address tariffs and non-tariffs, efficiency in customs administration, imports and export procedures, and country’s general business conditions, respectively, as presented in figure 4.3.
Figure 4.3: Shippers’ view regarding ETI categories
In the second index, LPI, the competence and quality of logistics services seem to be the most important aspect for Dutch shippers. Besides that, the ability to track and trace consignments, the efficiency of the clearance process, and the quality of trade and transport infrastructure influence the various trade procedures of Dutch firms, as presented in figure 4.4.
FloraHolland Tata Steel
FloraHolland Lekkerland
Tata Steel
Linde Gas Benelux FloraHolland
DSM Tata Steel
Linde Gas Benelux Lekkerland Lekkerland 0 1 2 3 4 5 Efficiency of the clearance process Quality of trade and transport infrastructure Ease of arranging competitively priced shipments Competence and quality of logistics services Ability to track and trace consignments Frequency with which shipments reach the consignee within the scheduled or expected delivery time
Figure 4.4: Shippers’ view regarding LPI categories
4.4 Overview of shippers’ view for international trade facilitation issues 4.4.1 Linde Gas Benelux Nederland
good one. Safety and security and trade compliance is also stated as very important for the company. For logistics improvements in terms of international trade it would be interesting for them to see how they could easily deliver out of The Netherlands in the close border of Germany for instance. Because then they can further improve efficiency, contribute to sustainability, and so on. The reason is that there is separation on country size, so for instance, they are driving to Belgium, but they are not delivering in Germany, because they have their German company which is delivering in Germany. From the list of supply chain innovation initiatives showed at the matrix-table (figure 4.1), the company has no participation in any of the projects or programs.
4.4.2 FloraHolland
At FloraHolland company, the manager of Supply Chain Development provided various information about their national and international trade procedures regarding floriculture products. He firstly stated that, on the one hand, the company can be seen as being part of the growers and acting as a shipper, on the other hand, the organization can be seen as service provider. Its activities include three main core businesses: market place facilitation, logistics infrastructure, and bank processes, so, the firm does the turnovers of the growers with whom it cooperates. The company is linked with growers-members in countries like Ethiopia and Kenya which send their products in the Netherlands, and FloraHolland, in turn, sends the products mainly in Europe. As a less interesting fact from the firm’s perspective for its international trade activities is mentioned the large amount of exporters from Russia which desire direct contact with growers. For the current market, the supply chain manager highlights the change in the market demand. In the past the market executed into The Netherlands (production push), while at present, it is executed directly at the growers in Africa. As a result, the company focuses from physical to virtual market places with the aim to facilitate its processes effectively. Regarding the categories of SCI initiatives he states that development of people is important and is a prerequisite of process innovations in businesses. The safety and security is important aspect, but is not an issue in The Netherlands, there is trust, an important element in collaboration between organizations. Other aspects not mentioned are those of technical innovation, equipment and infrastructure innovation which should be included in the categories of categories of SCI initiatives. Vision is also really important component of supply chain innovation and success of the organization. From the list of the matrix-table (figure 4.1), the company has an indisputable role on the development and implementation of several supply chain innovation initiatives, so it participates in DaVinc3i, GreenRail, HubWays, Extended Single Window, NLIP, CORE, Seamless Connections, HST Cargo/Euro Carex. Another supply chain initiative suggested by the supply chain manager to be included in the list of the table-matrix (figure 4.1) is that of Circle Lines.
4.4.3 DSM Nederland
activities on international level, he highlights the necessity of availability of competent logistics suppliers on international level, and the lack of logistics infrastructure in Africa, where there is a real challenge for the company to develop its activities. He also suggests that labeling of goods, products such food products and chemicals, it is important aspect need to be standardized. As far as the categories of the SCI initiatives, he states that there is lack of information sharing and transparency of data between firms’ data which is a current issue. Hence, collaboration is important, while automation and connecting powerful IT systems nowadays is a key point in international trade and logistics, and to better utilize their activities. Authorized Economic Operator (AEO) is essential for Quality Control and enables border check controlling and monitoring. Hence, the biggest challenge for Quality Control is to have upfront control procedures and agreed procedures which prevent checking among regulations and rules. In general, he thinks that innovation in logistics is very low, it is a conservative industry. Economical effects and reduction of costs is important facet, and logistics for the company is a consequence of cost-component. Hence, it is important to be creative, think innovations for make things cheaper to reduce costs and remain sustainable such as use of bigger number of trucks, or longer trucks, and lower emissions. Logistics is seen as traditional static procedure, so companies should focus on this challenge, development and education of people for these innovation initiatives for international trade facilitation. Environment and social responsibility is really vital for the company functionality and existence, it is their license to operate to control what you produce and deliver. He makes the remark that the company has not any participation in the initiatives listed in the table-matrix, due to lack of time and specific knowledge regarding various initiatives. He suggests that it would be preferable for worldwide businesses, if there would be half of these initiatives and be used by a broad range of companies, rather than a huge amount of initiatives that are known by a small number of firms.
4.4.4 Tata Steel Nederland
optimization this barrier is essential, from a stable water perspective. Another issue addresses the great number of stops in the trucks’ routes due to load security requirements in Germany where there are many provinces. The Netherlands trade environment, especially at Amsterdam and Rotterdam regions, can be streamlined if additional proper infrastructure will be developed by government. More particular, direct route for transporting and warehousing through different rail and water flow routes can enhance customers’ trade procedures. Regarding the categories of SCI initiatives, he also highlights cooperation and sharing information and transport modalities being important for network optimization of businesses, in case of Tata Steel, it can be benefit from these categories which will enable lowering costs and increasing the company’s service. Finally, he recommends the focus in costs should be the crucial key characteristic of these SCI initiatives. From the list of various SC initiatives (figure 4.1), the company is part of Seamless Connections and CO3 projects.
4.4.5 Lekkerland
The manager of Logistic Support at Lekkerland in The Netherlands indicates firstly that the company’s trade activities take place on a national trade, not on an international trade. However, the questions were discussed and examined by this view, the perspective that the company’s trade within The Netherlands and the supply chain manager’s opinion for Dutch trade environment. As example of their trade procedures is mentioned that, they do the deliveries in HEMA in Belgium, they rent the trucks in Belgium for six months, because there are certain rules for drivers’ license use in and out of Belgium. Hence, economical aspect is important for the company. Safety and security is really important aspect even in national level, because they sell cigarettes and there is an obvious need of procedures and steps controlling. Standard way of packing is what he suggests for additional category and key characteristic of initiatives. Cargo Hitching is the initiative in which the company is involved.
4.5 Supply chain barriers for international trade from various Shippers’ perspective in the Netherlands
Additionally, other important aspects are related with several formats for certificates, reports and payment terms required between countries. Moreover, the quality of available resources in IT systems and the knowledge of professionals in logistics sector, i.e., knowledge in customs legislation and procedures. It is also mentioned the importance of internal logistics departments problems, and the lack of information exchange and cooperation between organizations. Other burdens for international trade are the custom requirements in Non-EU countries, the uncertainty regarding delivery times of imported goods and the recession in EU.
Table 4.5: Questionnaire- and Interview-based data regarding hindrances for international trade
these supply chain problems can be embodied into one or more of the eight -more extended-defined- categories of SCI initiatives, as indicated with a (x). For example, the first row of the table addresses the tax laws, the regulations, customs and imports/exports restrictions in EU and Non-EU countries which can be related with almost all of the with the eight categories of SCI initiatives in a direct or indirect way, mostly with the category of ‘safety and security’ and ‘trade compliance’. Table 4.6 provides information regarding a multiple choice of trade facilitation issues from shippers’ perspective in accordance with the categories of ETI. This is recommended by the company supervisor.
Enabling Trade Index (World Economic Forum)
Multiple choice Supply Chain Barriers
1. MARKET ACCESS 2. BORDER ADMINI- STRATION 3. TELECOM & TRANSPORT INFRASTRU- CTURE 4. BUSINESS ENVIRON-MENT TAX RULES, CUSTOMS, IMPORTS/EXPORTS
RESTRICTIONS, ETC. X
LAW DIFFERENCES IN DIFFERENT COUNTRIES
(EU, NON-EU) X
NATIONAL POLICIES ON TRADE POLICIES X INTERNAL LOGISTICS DEPARTMENTS
PROBLEMS
LACK OF COOPERATION AMONG COMPANIES
ROAD WEIGHT RESTRICTIONS, ETC. X X
BUREAUCRACY, PERMITS, DECLARATIONS,
ETC. X X
Table 4.6: Relevance of multiple choices of supply chain barriers to trade with ETI
in logistics sector, i.e., at schools as in companies. In addition, the use of big data to understand virtualization trends and their impact on the supply chain, the development of a European Goods ‘subway’ system (Goederen metro model), and information sharing about city distribution within Europe, such as restrictions for “green zones”, vehicle weight restrictions or delivery windows. It is stated that there is no uniform/ consistent format for this information and each company has to reinvent ‘the wheel’ repeatedly. Other suggestions include the use of hubs in several countries for paperwork decrease, the implementation of a customs warehouse can contribute to the improvement of trade facilitation issues that companies cope with.
9% 9% 20% 6% 3% 13% 19% 9% 6% 6% EVO association
World Trade Organization
Governments (Dutch & other)
World Customs Organization
United Nations
EU
Business community
(importers/exporters,partnerships) Supply chain directors/managers
Environmental lobby groups
Independent research
Operational, better and more reliable shipping lines (deep sea), rail connections, short sea connections, less restrictions on the use of long and heavy trucks can contribute to lessen the trade facilitation issues for shippers. The more centralization of processes could help to implement one global trade compliance system. The combination of import volume flows means that merging back over chains and possibly achieving cost improvements in the chain. The more multi-modal transport volumes can be arranged which is, in turn, good for the environment and the sustainability. In addition, an increased reliability of the agreed delivery times can reduce safety stocks.
In the third question, when supply chain managers are asked who should take the lead in realizing the logistics improvements, they replied multiple organizations. According to supply chain managers of Dutch companies (Figure 4.5), the organizations which can play a major role on that stand on a global level and on national level, including the Dutch government and other governments. Secondly, on company level, the business sector itself, including companies or partnerships, or specifically supply chain directors and managers can contribute to the implementation of the logistics improvements in terms of trade facilitation. Thirdly, on a European level, EU councils and EU Commission can take the initiative of leading these logistics improvements.
17% 16% 11% 12% 9% 9% 14%
12% Collaboration & Information
Sharing IT systems
Process Innovation and Quality Control
Economical Effects Development of People Environment & Social Responsibility Safety and Security Trade Compliance 4.6 Matching Shippers’ view with the Categories of SCI initiatives
Answers from interviews and a survey reveal useful information about the interests of Dutch shippers. Particularly, the categories ‘Collaboration and Information sharing’, ‘IT systems’, and ‘Safety and Security’ are closely related with multiple supply chain barriers for international trade from companies’ perpsective. Figure 4.6 illustrates the contribution of the eight categories of SCI initiatives on most important trade facilitation issues reflected by Dutch companies’ view, presented in Table 4.2, Table 4.5 and Table 4.7.
Figure 4.6: Percentages of categories of SCI initiatives according to Tables 4.2,4.5,&4.7
