Global events threatening security of huge numbers of people are recognized as important triggers for introducing changes to the systems of international and national law, so that in the future similar events can become preventable. The brightest example to confirm this thesis is introduction of the UN system and development of international humanitarian and criminal law after the World War II, which was associated with lots of events, which are currently being classified as crimes against humanity, genocide and war crimes. Apart from influencing the international law, World War II had variety of implications on different spheres of life in different countries all over the world. The example of consequences of September, 11th tragedy in New York also testifies to rightness of the thesis, discussed above.
Discussing law- and business-related consequences of September, 11thfor the USA, it is important to state that this event has forever changed the way products are being imported in the USA due to introduction of variety of new security-related measures. Especially serious consequences of the tragedy got concerned with the activities of foreign merchandise procurers, who faced a strong need to re-evaluate importing policies and procedures of their companies in the light of strengthening their compliance with changes, which have been introduced into customs laws and regulations both at the federal and state levels.
Except focusing entirely on exporting- and importing-related consequences of September, 11th and examining their implications for running business in the USA, Michael Assaf, Cynthia Bonincontro, Stephen Johnsen, authors of the book “Global Sourcing and Purchasing Post 9/11”, attempt to think in more global terms, rethinking current trends in the world of export and import, trying to shape their own vision of the future of trade relations in international context.
Michael Assaf is the Head of International Trade and Compliance and Import Operations for LANXESS Corporation. Before concentrating on export-import operations and issues, Mr.Assaf was also engaged in airlines` running, freights and stewardship business. As for Cynthia Bonincontro, she serves as the Import Control Officer for the Import Operations Department of Bayer HealthCare LLC. Her professional experiences also include managing internal import supply chains for companies, operating within different sectors of business. Stephen R. Johnson is employed by Bayers Corporation as the Manager of International Compliance, being responsible for administering import and export operations for Bayer`s five operating companies. Due to the fact that all of the authors of the book have practical experience in the field of administering import and export operations, their views on changes, which have followed the events of September, 11th, can be considered to be based on real-life business activities and, therefore, quite well-grounded. Let us proceed with summarizing the content of the research under study.
”Global Sourcing and Purchasing Post 9/11” starts with describing the events of September, 11thin quite a brief manner. Thereafter an overview of basic changes is provided with a special emphasis for reasons for these measures having been introduced. After having described main changes, authors come to more practical part, which can be really useful for those, responsible for those administering supply chains. These practical notes include, first of all, guidelines for achieving more efficient export and import operations, improving tunaround time, associated with the delivery of goods, introducing changes into products classifications, so that compliance with new customs duties is ensured. In other words, the authors consider ways to optimize import- and export-related activities under new rules, which is critical for supply chains managers. It is widely known that income, which is going to be got as a result of outer economic activities, is often connected with subjects` being capable of making use of financial instruments and deals, available from different international exchanges. At the same time, dealing with futures, forwards and options requires, firstly, detailed knowledge of each alternative instrument`s peculiarities and effective managing of risks. Significant part of the book under study is dedicated to explaining the ways to reach cost savings with the help of using forward contracts and instruments of currency hedging. Forward contracts are non-standardised contracts, which are being concluded between two or several parties in order to buy or sell an asset at a specified time point in the future. The most important peculiarity of forwards lie in the fact that price for an asset is paid for the moment of the contract being concluded, not the one, when items are to be actually delivered. Operations, which use forward contracts, constitute one of the types of risk- hedging operations. Forward-based hedges can be employed with respect to both buying and selling assets. The peculiarity of the way authors of ”Global Sourcing and Purchasing Post 9/11” approach forward hedging lies in the fact that they conducted comparative analysis of hedging operations as they were before September, 11th and the changes they faced after introduction of new business law-related regulations after the tragedy. Moreover, authors provide readers with detailed costing-based information about the activities of companies, so that business entities were informed enough to effectively benchmark and manage logistics costs.
Another important topic, covered in the book, is introduction of variety of multi-level automation systems, which are represented by the ones starting with document imaging to fully automatized process of running documentation. Significant attention is paid to introduction of smart labels. (smart tags), which became widely used in transportation and logistics after September, 11thas effective means to ensure proper identification of goods, which are being transported. Variety of other coding and labeling options is also being examined.
E-sourcing, which has currently been widely spreading, is one of other emphasises, introduced by authors. E-sourcing is designed to provide for more timely and transparent ways of facilitating tenders and conducting pre-import or pre-export business negotiations. Despite important advantages of e-sourcing (time savings, convenient interface for online data sharing, transparent style of conducting negotiations etc.), the authors insist on the need to introduce E-sourcing in multi-step process, so that painless transfer is ensured. With respect to e-sourcing systems analysis, description of newest electronic procurement standardization systems is provided for. It is also worth mentioning that the book can potentially be used as a guide either to modify supply chains, which had originally been designed before the changes under study occurred, or to build new ones with respect to the need ensure compliance with new customs rules. The last, but not the least to mention, when characterizing the content of ”Global Sourcing and Purchasing Post 9/11”, is that the authors aimed not only at designing the guide for supply chain management professionals, but expressing their view on the future of export and import relations. We will refer to the scope of these views in Analysis section, designed for the purposes of this book review.
In short, we may claim that the book has both practical and theoretical significance. On the one hand, it covers variety of purely organizational and technical issues, which may be of significant use only for those, who are actively engaged in actual supply chains design, while, on the other hand, when introducing whatever technical or organizational innovation to the reader authors try to identify reasons of its having been launched, its advantages and disadvantages, and also the trends, which can be associated with its future development.
Secondly, it is worth paying particular attention to the fact that changes in logistical systems should be seen as a direct consequence of communications` development. Thirdly, complex of technological and communication developments, along with ever increasing wellbeing of world`s population (and consumerism trends`) provided for international trade operations becoming more wide-spread and, therefore, created the need for introducing uniform rules of both import and export. In my opinion, security reasons have played an important role only with respect of systems` modification, not the very fact of them having been introduced into practice.
The last, but not the least to mention, is that increase in number of financial instruments and different electronic means, designed to help enterprises run the business, called forth the need to create such means of regulating these processes, which will ensure compliance of relevant market practices with obligatory requirements, imposed both in terms of public law (especially with respect to public safety) and private law (civil regulations).
Nonetheless, we would like once more underline that it is not worth diminishing the importance of the events of September, the 11th for the changes which were introduced tothe legal framework of supplies-related activities regulation and, therefore, supply chain management practices. It is impossible to disagree with authors, stating that the importance of September, the 11thlied in the fact that it provided law-makers with an insight of how insecure U.S. borders are and added complexity to the issue of sourcing materials overseas (Assaf, Bonincotro and Johnsen, 2005, 251).
As for the contents of the book, it is worth emphasizing its being really practical and covering state-of-the art topics, which are of great importance for everyone, whose activities are related to supply chain design and management, starting from recent changes, which may occur in terms of supply chain design-related decision-making processes to using newest systems, aimed at simplifying import and export operations, so that timeliness and quality of supplies is ensured. It is also important to state that being fully aware of initial running business aims, authors pay particular attention to the ways, which can be employed to cut costs in the process of designing supply chain. The majority of ways, described in the book, relate to cost-cutting means, which can be used in terms of activities of international exchanges. The insight into international exchanges` activities is really important for supply chain managers due to the fact that vast majority of deals, which are concerned with import and export of goods and services are currently being concluded in terms of exchanges` activities. Crucial meaning of such an insight is also concerned with the fact that current activities at international exchanges employ variety of financial instruments, which can be both of use with respect to hedging risks or, on other hand, exert an inevitably negative influence on profits of the company. Moreover, it is crucial to understand that relationships with suppliers can be most often perceived as long-term ones, so the failure to run into beneficial contractual relationships with supplier once can result in negative consequences related to either finishing contractual relationships before the term, provided for in the contract (and experiencing sanctions) or suffering from lack of benefits till the contract ends.
Another benefit, which I cannot help mentioning, when analyzing the book under study, is its perfect structuring and explaining things not in typically scholarly manner, but in a way, which looks like guiding. For instance at page 179 of the book the authors start explaining rules, which are important to understand to be able to source a product internationally. Instead of including long descriptions of what sourcing is and mentioning a wide variety of rules, which may be considered somehow applicable to the issue of sourcing, the authors provide the reader with detailed and practical description of four most important rules, namely valuation, classification, country of origin and marking requirements (Assaf, Bonincotro and Johnsen, 2005). Furthermore, when describing each of the rules, listed above, the authors pay particular attention to difficulties, which may be associated with using each of these rules in practice. For instance, when reading about valuation rules the reader at once gets to know that valuation is most often considered to be a difficult area due to the fact that in many cases individuals, engaged in supply chain design-related negotiations, may suffer from the lack of customs-required valuation information. Thereafter the readers are already provided with the advice (best practice examples), which states that the best thing to do for every company is to elaborate on purchasing guidelines, which will include valuation checklist and arrange relevant training for staff.
When describing some rules or issue authors tend, first of all, to use lists, so that readers can understand the scope of the issue under study at once, include tables and, what is crucial, to provide as many examples as possible to show that there are remedies for almost all difficulties, which supply chain managers can experience in terms of their activities.
As far as we have already mentioned in the summary of the content of the book under study, authors aim not only at creating a comprehensive guide, which will be capable of providing supply chain managers with practical help in their activities, but also expressing their views on the way international export- and import-related legal framework and practices will be shaped in the future with respect to current trends, which can be traced in this sphere of business. Despite the fact that only short section of the book is dedicated to examining current trends of import-export relationships with the intention to create the vision of how export and import operations are going to be designed in the future, particularly this part of the research under study is of most significant interest for us due to the fact that we will face the need to deal with even more complicated legal, organizational and technical regulations and practices of import-export relationships and supply chain management as future professionals operating in this field of management and business. The authors single out three most important areas, which will continue their development in terms of the evolution of import and export relationships. They are introduction of freer trade, employing ever growing efforts to meet the challenge of ensuring cargo security and using even more automation than now. Mentioning each of these areas can be justified with the help of reconsidering current trends of international trade development. Apart from singling out three spheres of development, mentioned above, the authors also consider overall perspectives on international trade developments in the very end of the book.
Assaf,M., Bonincotro, C.,Johnsen, S. (2005).Global Sourcing and Purchasing Post 9/11.Font Lauderdale, J. Ross Publishing