Once upon a time I became a buyer with the heavy engineering division of a legendary multiglobal Company, I was really proud to be joining an experienced group of well seasoned professionals, they sent me on a 3 day basics residential course and when I returned I was given a desk, a chair and a telephone and was expected to get on with it. I did get on with it but looking back I can see how old fashioned it all was. Jimmy, Ken, Mike and co were very technical and talked about EN8 grade steel and 'Reaming' to their hearts content, they knew about 'tin bashing' and lots of stuff about machining specs and tolerances. Supplier partnerships, Supplier Rating and Supplier selection were rarely, if ever, mentioned, and although a lot of parts came in from outside the UK there was no procedure for controlling the importations. Not only was there no procedure but the system of dealing with paperwork and any additional charges over and above the agreed unit price on the Purchase Order was primitive. Additional costs such as freight, Customs duties, VAT were put under a cost collection code and in due course were paid without query.
"Of course" I can hear you say " that was probably a long time ago and things have changed since then" and it may be true in some cases but when we in our current role of giving training in International trade procedures talk to import staffs in the supply chain we ask them what causes them most problems in their daily work they almost unanimously reply "Buyers !!". They find that their Purchasing people are not comfortable with Incoterms, with Duty Relief options, selection of service providers such as Freight and Forwarding companies aand how to determine the landed value of goods as opposed to the Purchase Order value. If this is true and we believe it to be so then it begs the question "WHY?". The answer would seem to be that Purchasing from overseas is not included in the core training of Purchasing staffs, this in a global market economy seems a glaring omission and is also an indictment of Managements who in turn may have a poor understanding of supply chain issues.
Let's hear from you out there.
Strong & Herd LLP Blog - Import / Export Services
Shipping office services, helpline, consultancy and supply chain security
I've always been on the sales side but occasionally, for manufacturing purposes - and more so now - we have had to buy goods from overseas. As far as I am aware the price of the goods has been the main concern, which caused us a major problem a few years ago with some steel tubing. Cheapest unit price CHINA ... order placed ... included additional duty of 85%, we also got a supply chain delay (wrong paperwork with the goods) and ended up with a LD (for the unitiated that's a Late Delivery penaly) of £2k. When challenged the purchasing said duties weren't something they had to check. Is my company unusual - I think not
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