SAP GRC GTS for Reducing Global Supply Chain
Risks and Costs

By Sam Sliman
President, Optimal Solutions Integration

In today’s world of increasingly complex global supply chains, two business objectives reign supreme: reduce risks and reduce costs. Built atop the SAP NetWeaver business process platform, the SAP GRC Global Trade Services (GTS) composite application helps businesses kill these two birds with a single stone.

First introduced in 2002 and currently used by more than 250 global companies -- including Applied Biosystems, Bayer and Halliburton, SAP GTS helps businesses with international supply chains standardize and streamline import and export processes.

SAP GTS was initially adopted as a risk-mitigating solution driven by compliance mandates such as Sarbanes-Oxley in the U.S., the Turnbull Report in the U.K, and Japan’s JSOX regulations, among others.

Today, risk management (writ large) continues to be a major driver for SAP GTS as global sourcing strategies gain traction, contract manufacturing relationships become increasingly complex, and natural and political events that can disrupt the supply chain abound. Risk is of such great concern today that 46 percent of companies with global supply chains plan to implement or evaluate technology for risk management in the next 12 to 24 months, according AMR Research.

But, in addition to mitigating risk, SAP GRC GTS also delivers value as a powerful global supply chain cost-cutting tool. As risk levels rise, demarcating risk reduction from cost reduction becomes an increasingly difficult and frequently moot endeavor. SAP developed the GRC GTS xApp with a keen understanding of risk/cost conflation.

According to ARC Advisory Group analyst Adrian Gonzalez, "At the highest level, achieving compliance with the Sarbanes-Oxley Act is dependent on having access to timely, accurate and complete information, as well as establishing process controls -- the same success factors required to create more secure and efficient global trade operations. Leading companies today are looking for a comprehensive and integrated trade management solution to gain competitive advantage. SAP, with its GRC focus, growing customer base and continued innovation, is the new leader in the global trade management market."

Since the products’ introduction in 2002, SAP has leveraged its vast experience with global supply chain operations and deep vertical-market expertise to add new features and functionality to its GRC GTS software.

The most recent version of SAP GRC GTS, version 7.0, released from SAP GRC in June 2006, includes functionality that helps companies reduce global supply chain costs by automating the creation of letters of credit, which are commonly used in Europe and Asia, and by automating custom warehousing processes, which allow companies to defer or eliminate duties payments.

In addition to being fraught with risk, navigating complex and dynamic local laws, tariffs, embargoes, and documentation requirements; staying in compliance with waves of new legislation; and satisfying mandates from customers and suppliers is extremely costly.

According to a 2001 United Nations study, seven percent of the cost of international trade, equaling $420 billion annually, can be traced to the inefficient administration of customs regulations and documents.

With SAP GRC GTS, huge cost savings are realized by establishing a single, corporate-wide standard for trade processes across SAP and non-SAP systems, eliminating redundancies and automating high-maintenance manual processes.