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Supplier digitization in supply chain

5 MIN READ
Nov 26, 2023

Digitize trade – it is important

Trade flows and supply chains are largely paper-based.

There is a simple way to get 100% digital supply chain visibility and to digitize all the trade documents involved - suppliers can deliver digitization of supply chain documents easily with the right technology.

Paper-based supply chains and trade documents lead to significant costs, risks, friction. McKinsey estimates that the cost of paper-based trade processes to the global economy is in $billions (see their analysis here).

Benefits of supplier digitization of trade documents

Suppliers have all the trade paperwork even though it may come from many sources. Suppliers can easily digitize the paperwork.

The digital supply chain and 100% visibility of trade flows deliver many benefits:

What does supplier digitization of the supply chain look like?

A digitised supply chain involves taking all of the many types of paperwork that flow from supplier and service providers (eg: logistics) to the buyer and making those documents available as both scan copies and structured data.

Typical fields that can be pulled from the different documents in a supply chain include:

In a digitised supply chain, all documents are digitised and all the data is pulled off the documents and organised in a structured way.

This supports comprehensive reporting and allows cross-matching of data across the documents to validate that everything is reasonable and makes sense.

Is it difficult for suppliers to digitize supply chain documents?

A well-designed system can achieve this result quite easily via "self-digitization" - the supplier does the digitization of all the required supply chain documents at shipment.

PrimaTrade supplier digitization journey

Drag and drop - a simple four step "wizard" to digitize all the documents

See more on how our platform works here.

The necessary capabilities are:

What trade documents are involved?

Our platform (PrimaTrade) handles all the documents involved in cross-border trade, including:

How does the buyer control the document list?

There are three levels:

Buyers say what documents that want and the platform automatically creates a list for each shipment.

At the first level (supplier), some documents are requested because of the supplier identity (eg: given this country and this supplier, we need X, Y and Z documents).

The second level is the shipment – so typically a commercial invoice, packing list and transport document – potentially with a certificate of origin.

The third level is the product. This is where compliance paperwork is typically handled, for example:

ESG compliance requirements are making this area much more complicated. For example, modern slavery legislation nowadays requires proof of source to evidence that materials are not coming from locations where forced labour is being used; advertising standards regulations also require documentary support for any ESG or sustainability product claims.

So any platform supporting trade digitisation has to be able to cope with these additional requirements – and to build the list of required documents for a given shipment taking the individual product level into account.

Product level ESG documents – seriously?

Indeed yes – as regulators tighten the rules to implement modern slavery legislation and to require advertisers to support any sustainability or ESG claims – it is essential to collect documents that support and reference individual SKUs or purchase orders (ie: collections of a particular product) - see PrimaESG, the module of our platform that addresses this requirement.

For example, a simple t-shirt might require:

Making this work is important

Digitizing trade is an important initiative supported by the ICC (see the digitial trade initiative here), by the DCSA (see here) and pretty much universally across regulators, participants, industry, carriers and so on. The digital supply chain is coming – in fact, with PrimaTrade, it is here now.

Suppliers are on our platform every day, at scale and around the world , using our carefully-designed screens, powerful OCR and rules engines to self-digitize all their trade documents as they ship.

It is quick and simple. It takes about 15 or 20 minutes to process an entire shipment across the full set of paperwork – leading to an accurate, reliable and a fully-digital picture of the shipment and its products. And this is a lot less time for suppliers than typically happens today over email via multiple communication channels with different departments on the buyer-side.

This works as a process – and saves considerable time for suppliers who otherwise are responding via multiple communication channels to multiple importer departments in order to provide the required documents.

Benefits flow immediately

The benefits emerging from this process are immediate.

Our technology can automatically compare and match fields across different digitized documents to arrive at an automated decision on invoice approval at shipment.

Automated invoice approval in PrimaTrade

Automatically cross-check each field (value 1) with other documents and data (value 2)

Is this difficult to set up?

Amazingly, this technology is very easy to set up. Our platform is implemented “over-the-top” so it can go live without an initial IT project. Simply set up the rules to ask for the documents that you want, switch on the suppliers, data flows, automation follows.

Many clients find a benefit in linking our platform up to a purchase order feed to help with specifying what documents are needed and to have the supplier also match the shipment to purchase orders as part of the process. This enables an automated and secure 3-way match to be done at shipment (POs to transport documents to invoices).

What next?

The supplier self-digitization model pioneered by PrimaTrade is being freely shared in the market.

Contact us here (info@prima.trade) or talk to your advisers about how to join the digital revolution in supply chains.

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