Sustainability is one core component of an effective supply chain. Fortunately, modern tools, devices, and software, such as the Internet of Things (IoT) and blockchain, are streamlining how we balance these systems. With highly transparent and secure networks, we stand to improve the overall sustainability of supply chains for cleaner and more lucrative results.

The IoT and blockchain support sustainable supply chains in a variety of ways. By exploring these sustainable functions and how you might integrate them into your business processes, you can build the supply chain stability you’re looking for in an uncertain economy.

IoT provides data transparency that supports decision-making

The Internet of Things is the term given to devices that collect data and then communicate that data over the internet. IoT devices range from industrial sensors to wearable devices, all with various implications when it comes to the functionality of a supply chain. These implications are far-reaching across transportation and supply chains and would not be possible without the world of big data that the IoT taps into and makes useful.

IoT is instrumental, for instance, in developing eco-friendly, efficient fulfillment center strategies. That’s because these processes rely on the kind of big data transparency that only the IoT can offer on a scale that reverberates through the entire supply chain. The IoT enables accurate tracking methods, consistent protocols, and data analysis that all stand to change supply chain decision-making for the better.

Many companies have already experienced the sustainable benefits that come through industrial IoT. Shipping line giant Maersk, for example, built an infrastructure of sensors and mobile and satellite communication technology with the help of Ericsson to monitor its fleet of 300,000 refrigerated produce containers. The increase in transparency of container conditions led to a decrease in necessary inspections. This, Maersk says, means reduced resource use and even CO2 emissions.

As we have seen, the IoT supports supply chain flexibility in the following ways:

• By improving supply chain transparency
• By improving system efficiency
• By reducing resource consumption

As you explore the use of connected devices in your supply chain, consider these benefits. But also understand that with more connected devices, you present your company with more digital security risks.

Want to learn more about managing your company’s supply chain? Take the FITTskills Global Value Chain course here.

Blockchain protects data from interference

Connectivity offers us much in terms of actionable insight and effective communication. And yet, digital threats are a huge concern for supply chain companies. In one infamous example, Target became the subject of a data breach through its vendor and had to inform 110 million customers of their potentially stolen credit card data.

It is precisely attacks like these that make it necessary for supply chain companies to protect themselves against all the threats of the digital world. Malware opens up the gates to your data. From there, you stand to suffer incalculable losses from the damage to your reputation alone. Blockchain systems, however, are changing the playing field with enhanced security measures for protecting data.

Blockchains are decentralized data systems designed for cryptocurrencies like Bitcoin. They store data in nodes linked by cryptographic hashes. Now, blockchains are being integrated by companies like FedEx to improve the traceability of their packages because blockchain can store a (mostly) tamper-proof record of inventory locations and conditions.

With greater accuracy in a record, any data breach can be caught and prevented more efficiently. Simultaneously, these improvements offer much greater sustainability potential through their ability to pinpoint spoiled products or remove recalls with greater precision. Supply chain companies that can track inventory can more effectively reduce waste.

In this sense, blockchain and the IoT fulfill similar functions and offer similar benefits across a supply chain. In fact, utilizing these technologies in tandem can be a great way to maximize supply chain potential.

IoT and Blockchain streamline security and sustainability

The IoT offers unprecedented insight into business functions and supply chain conditions. But traditional networks for hosting this data present all kinds of digital threats. That’s where blockchain can come in to help improve the security of an IoT network and provide new business potential.

Blockchain is unique in its use of servers in various locations to host, protect, and backup data. To infiltrate such a system typically requires absurd amounts of computing power. By leveraging the power of the IoT to assemble supply chain insights, then protecting those insights on a blockchain, you can build greater accountability and security for your supply chain. From here, sustainability becomes easy.

That’s because sustainability means longevity without damage. Getting there requires insight only accurate data records can provide. Apply the IoT and blockchain as you assemble the information architecture needed to streamline a supply chain, and watch cost and resource-saving opportunities open up across your ventures.

The post How the IoT and blockchain are supporting sustainable supply chains appeared first on Trade Ready.

There are many important details that need to be covered when dealing with cargo insurance—defined as the transfer of risk to a third party, the insurance company, who takes on the risk for a fee called an insurance premium—and every stakeholder involved in the international trade transaction has insurance.

Want to learn more about how to manage your company’s supply chain and logistics? Check out the FITTskills Global Value Chain online course!

For those who are aiming to obtain insurance, they must be aware of the process, which requires the following agreements by the insured and the insurer:

Setting the insurable value

The shipper can insure the cargo for the invoice value of the goods, plus freight and other charges. Most insurers offer insurance at 110 percent of the CIF value. The additional 10 percent is included as compensation for loss of profit. Generally, the beneficiary of the insurance policy determines which risks should be covered by insurance and negotiates to include that degree of coverage in the sales contract. It is rare to obtain insurance for more than 110 percent of the CIF value of the goods. The purpose of insurance is to compensate the insured for loss or damage, not to generate profit to the insured for the accident or event that led to the loss or damage.

Determining who takes out the policy

Usually, the terms of the sales agreement indicate which of the parties must obtain insurance. The Incoterms® 2020 rules for CIF or CIP require the seller to obtain cargo insurance to protect the buyer against the risk of loss. The rules require a policy that will allow the buyer to claim directly from the insurer, and requires the seller to provide the buyer with a copy of the insurance policy or other evidence of insurance coverage.

The remaining Incoterms®2020 rules leave the purchase of marine cargo insurance to the discretion of the buyer. Most insurance brokers are familiar with the requirements applicable to each trade term. The insurance ramifications of the Incoterms® rules being considered should be investigated before entering into a sales contract. Insurance can be quite costly, and in some cases it is unavailable.

Do you need a better understanding of Incoterms^® 2020 definitions/rules and obligations? The Incoterms^® 2020 online course, presented by FITT and the Canadian Chamber of Commerce (CCC), is designed to help international trade professionals gain an understanding of the latest edition of the Incoterms^® rules (which came into effect on January 1, 2020).

Finalizing the policy

Once all details of the policy are determined and the insurance premium paid, an insurance policy is issued to the insured. The insurance policy is the contract between the insurer (i.e. the insurance company) and the insured (the shipper on the B/L or waybill) in which the insurer promises to pay the beneficiary (the person named in the insurance policy) for damage to, or loss of, the insured goods due to particular risks.

Legal Considerations

In terms of risk, it is also important to understand the protections that may be provided to international trading organizations based on the conventions, treaties and agreements to which countries are signatories. It is important to understand the geopolitical aspects of international trade in order to determine how international conventions, treaties and agreement may be beneficial.

The answers to the following questions will assist in this assessment:

• What is being shipped?
• What is the shipment’s final destination?
• Who owns the land, air and sea en-route to the final destination?
• Where is it stopping along the way to the final destination?
• Are there passage rights, bans, boycotts, wars or trade restrictions on specific goods that could hinder the transportation of the goods being shipped?
• What is the process if an accident or natural disaster destroys some or all of the goods?
• What is the percentage of coverage, and where do the obligations of different stakeholders begin and end?
• What is the notice period to file a claim or initiate liability litigation? How should the notice be given?

The post Necessary agreements and legal considerations for cargo insurance in international trade appeared first on Trade Ready.

Up until now, one obstacle standing in the way of more efficient transportation has been the state of traffic management. But, with recent technological advances in traffic data collection and management, information system specialists have managed to bring a new way of thinking about traffic management and global trade to the table.

The Innovations in Traffic Management

Although there are several solutions out there that combat the problems inherent in today’s traffic management systems, here are a few of the top, most promising innovations:

Making Use of Sensors

Before any traffic management innovation can take place, the precursor is generally installing sensors to monitor road conditions and traffic patterns. Traffic surveillance and monitoring are key to obtaining data unobtrusively, which experts can then use to expand upon existing traffic management systems.

These days, sensors come in a variety of shapes and sizes, from Bluetooth to loop detectors to even third-party data, like local weather forecasts and public holiday calendars. Sensors are also used to detect accidents on the road and record immediate conditions. Optical fibres are an example of new sensor technologies currently being tested before full-blown deployment.

Updated Traffic Lights

Since the 1920s, traffic lights have undergone relatively few upgrades. Many have recently begun to finally make the switch to LED bulbs, which are not only more environmentally friendly but also last longer. Because they fade rather than immediately burning out, they’re also simpler to replace before they start causing traffic issues.

LED lights can also be outfitted to square traffic lights, which are generally more visible and therefore present additional precautions when it comes to roadway safety.

Municipalities around the world are experimenting with countdown traffic lights, allowing drivers to better adjust their speeds and pedestrians theirs. Reducing driver doubt in the transition from green to red is essential to optimizing roadway safety. Some newer vehicles, like those manufactured by Audi, are even beginning to install in-car systems that communicate with infrastructure.

Smart Traffic Control

Once sensors are installed, smart traffic control becomes that much simpler. Roads detecting few cars can keep lights green, saving drivers fuel and time. Traffic lights and speed limits can therefore be adjusted accordingly (perhaps in partnership with smart vehicles) to maximize roadway efficiency and safety.

Although aided by cameras, sensors, and other technologies, for now, traffic management centers will play an important role in the implementation and wide-scale rollout of smart traffic control methodologies.

How These Innovations Could Improve Global Trade

The implications of these innovations create obvious time, fuel, and cost-saving advantages for those managing ground transportation supply chains. They also have far-reaching environmental benefits, potentially lowering carbon emissions through decreased driving and traffic times.

They also have implications for ground transportation risk mitigation strategies.

We’ve already seen the importance of risk mitigation within the shipping industry—especially with current COVID-19-related port congestion issues and delays and the past year’s Suez Canal Crisis—so, many businesses are also taking care to avoid costly lawsuits and PR disasters by mitigating product liability for ground transportation as well.

Safety concerns are becoming more palpable but also more measurable. Purchasing global insurance policies and investing in appropriate infrastructure is one way of handling liability concerns. Another is to invest time and energy in smarter vehicles and traffic management, reducing the risks involved with the respective parts of the supply chain.

Learn more about how to manage your company’s supply chain and reduce risks with the FITTskills Global Value Chain course.

The Intersection of Global Trade & Traffic Management

The more well-educated professionals who join the ranks of traffic management innovation, the faster the technologies will be able to progress and expand beyond their current reach. Information systems professionals entering top industries, ranging from air travel to manufacturing, are working to increase the efficiency of global trade alongside global traffic.

As a result, great strides have been made in the areas of real-time traffic feedback, Vehicle to Infrastructure (V2I) technology, and pedestrian tracking systems. Wyoming’s pilot V2I program communicates inclement weather conditions and road disruptions to drivers statewide, for instance. The positive impact of installing these systems in every freight vehicle is massive, not only potentially preventing devastating accidents and crises, but general delivery delays and traffic too.

The effects of these innovations in traffic management extend far beyond their initial scope. With wide-reaching economic to environmental impacts, traffic management is being used to address a myriad of issues, from lowering vehicular carbon emissions to increasing pedestrian safety to expediting the shipping processes of global trade. In addition to new practices that allow you to take control of your own supply chain and empower the planet, your import-export business and clientele are sure to benefit greatly from enhanced traffic management practices.

Did you know that the The International Chamber of Commerce Incoterms^® rules are used in contracts to clearly communicate the obligations, costs, and risks associated with the transportation and delivery of goods, providing clarity for sellers and buyers to help facilitate trade? Learn more with  The Incoterms^® 2020 online course, presented by FITT and the Canadian Chamber of Commerce (CCC) to fully understand how they work.

The post How Ground Traffic Management Innovations Could Improve Global Trade appeared first on Trade Ready.

In a recent press release, The WTO (World Trade Organization) predicted that world trade was set for a strong but “uneven recovery” in the aftermath of COVID-19, with the volume of global merchandise trade expected to increase by 8.0% in 2021 after having dropped 5.3% in 2020.

They were also cautious to note: “The relatively positive short-term outlook for global trade is marred by regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries.”

Considering the simultaneous feeling of optimism and uncertainty in the current economic climate, FITT recently hosted an online panel discussion as part of our Challenge and Change series of events to discuss the next phase of business as vaccinations begin to roll out across the world.

For some, there is a light at the end of the tunnel, while others feel they are still very much in the woods, so we turned to a panel of international business experts to draw up useful insights and strategies that businesses could use to move forward in the current climate.

The event, From Reactivity to Adaptability—Advice and Resources for Businesses on the Rebound, explored

• How various industries were faring
• Shipping and supply chain trends
• Risk mitigation strategy for the coming months
• Available businesses support resources, networks, and organizations
• And much, much more.

See what some of the speakers had to say below:

Watch the full event including a LIVE Q&A with the panel below

SME and industry insights, the new normal and innovation in tech

Bernadette Fernandes – Founder & CEO, The Varanda Network

Bernadette’s global business career began in 1986 and has spanned several sectors. She has spent the last 10 years consulting her Varanda Network clients all over the world. She is passionate about helping SMEs develop their export readiness and connect them to business opportunities in markets worldwide.

As circumstances are changing, and many are looking forward to getting back to normal, what type of approach do you think a business can take for preparing for a more normalized market?

Bernadette:

With the exception of travel…we now see a lot of things that we want to do differently or less of, like not having to go into a workplace and, instead, having a more balanced life.

I know some technology companies that are actually now more successful because they are able to offer alternatives to travel. I look at Kognitive Spark, a software company based in New Brunswick where I live, and they’ve seen an increase in clients, applications, target market and revenue because they offer an augmented reality solution with the Microsoft hololens that provides things like maintenance support remotely to onsite staff instead of sending a technician from wherever that expertise happens to be.

Having said that, I do believe that there are many businesses that want to establish some semblance of normal, even if it’s not the normal we were used to. So there are things that businesses are doing or can do to prepare themselves for this new normal—most of which seems to be around digital transformation. To establish or grow an online presence, pivoting and transformation seem to be the things within our control these days, so instead of sending salespeople to tradeshows or to client premises, we’re now relying on e-commerce or social media sales.

Risk mitigation strategy and how to best prepare your business for market changes

Enrique Sobalvarro: CITP, Director-at-Large, The GoldMind Project

Enrique is an international trade professional, connector, entrepreneur, strategist, and expert advisor with over 20 years of experience. He is now working as the Director-at-Large for The GoldMind Project. He is also a member of the Advisory Board of the Small Business Initiative at Calgary Catholic Immigration Society and, recently, contributed to Calgary’s post-pandemic recovery as a Business Mentor the Bounceback YYC (a Mount Royal University and the City of Calgary initiative) helping hundreds of entrepreneurs to launch their businesses.

Rahim Mohtaram – Ph.D., Professor at Saskatchewan Polytechnic

Rahim has been working in global supply chains for 15 years and has negotiated and executed more than 155 international contracts in sales, purchasing, agencies and distributors in 25 countries. He is also a CIFFA certified instructor and provides consultation on cost reduction strategies.

The last time we were together on a panel, we talked about smart cost-saving logistics strategies that businesses were employing during the pandemic. Have you seen these strategies change at all in 2021?

Smart finance options to carry your business through all conditions, plus the importance of having a documented business plan.

Amesika Baeta, CITP – Senior Account Manager, Export Development Canada (EDC)

As a senior account manager at Export Development Canada, Amesika works with companies of all sizes, of all industries, helping them take their business abroad providing them with trade finance, knowledge and risk mitigation strategies. She has worked in international trade for over 10 years.

Amesika Baeta:

Finances are always top of mind for a lot of SMEs. Though many are looking forward to a normal economy, the truth is that we’re not out of the woods yet. What are some insights you can share with those looking to tread this uneven scenario?

For many, we’re still trying to find ways to access working capital to support their needs. Over the last year, the support for SMEs has quickly changed to adapt to the needs that we see that they need. The reality is that this current economic climate has come, and EDC is one of those agencies where we had to really pivot to figure out how we serve our exporters. Now, in March of last year, the Government of Canada expanded EDC’s mandate to specifically help Canadian companies take on the risk of doing international business. But in times like this, the Canadian government said, no, we need to stretch beyond your mandate to help non-exporting Canadian companies face the financial challenges that they’re experiencing due to the pandemic. As a result, we had to make the necessary changes to adapt and extend some of our focus and our solutions to support needs like this, literally overnight.

We went into problem-solving mode to figure out how does EDC fit into this and what can we do? What are the mechanisms that we have to change to really grow and meet the demands of Canadian companies? So, our goal was to minimize the impact of this pandemic on all businesses—all Canadian businesses. One of the things that we did is create a business credit accessibility program, or what’s most know as the BCAP guarantee program, which is a stepping stone off of another financial guarantee program that we have at EDC that is traditionally for commercial bank clients. So this guarantee program was created in partnership between EDC and Canadian financial institutions to help businesses of all sizes and sectors and all across Canada to address the financial impacts that COVID-19 was having on companies. So, qualified applicants could be quickly approved to help meet their cash flow needs through their bank or credit unions to help manage their day-to-day expenses.

This guarantee is being served through your financial institutions and it is specifically done in new operating lines or term loans, if that’s what your bank has determined in order to really help sustain your operations. So, to pay rent, to pay employees salaries, to, you know, keep the lights on, and to keep operations moving. That program is there to try and help bring the cash into the economy to help companies survive and really, it’s been a program that has been very successful for companies of all sizes and shapes. It’s still available today, so, if you’re not speaking to your bank about it, I would highly recommend going and speaking to them to see whether you qualify.

I must preface that EDC’s program has set parameters and how each bank or credit union applies those parameters differs. So, again, I highly recommend that you and speak to your financial institution and see whether the BCAP guarantee program is a good fit for your cash flow needs. Now, there’s been other things EDC has done. We’ve taken on more credit appetites when it comes to insurance. We’ve made special accommodations to consider if companies had to pivot their business models to sell PPE or start manufacturing PPE and other types of things during the pandemic. So, we’ve made a lot of adjustments to our own regular programs that we provide in order to try to help companies through this pandemic. I welcome people to come to EDC either through the website or online or contact me directly, and I can put you in touch with the appropriate colleagues in the organization to talk through any of those programs to see whether they’re the right fit for your needs right now.

There’s a number of other programs that have been created through our sister crown corporation. Business Development Bank of Canada, there’s provincial programs, federal programs, some municipal programs have all been done to try and help companies survive this pandemic. We’re not out of it yet, so don’t be too proud to go out and ask for what help is out there because that’s the only way that we’re going survive. I also really recommend that you don’t make assumptions as to what you think you are eligible for. Just go and ask an expert to see whether your business could be eligible for these programs. The skilled team at EDC can also answer any kind of trade-related questions that you might have.

If you’re interested in specific COVID-related programs, there are a number of different resources that you can leverage. Virtual tradeshows that you can attend or industry reports or the Canada Export program—that’s run through the Trade Commissioner Service.

In terms of things that I’ve been seeing in my role as an account manager specifically in the GTA region, I’ve seen how important it is for companies to really have a good sense of where they are financially. So, as Enrique mentioned, the importance of having a business plan that addresses what the current needs are—not from when you wrote it, five, 10, or 20 years ago. You may have revamped it for today, and there has never been a time where it has been so needed for companies to make sure they take the time to stop and re-evaluate and readjust themselves as well. And, when it comes to working capital, that is extremely important because your bank is going to be asking for that organization. Any financial institution is asking to see a business plan. One, they want to understand how did you survive the pandemic, what do you do when you had a bad year and because you lost a few clients, that’s ok, but what did you do to pivot? What did you do to counteract that dip in sales? Are things starting to turn around in 2021? Have you had to start selling a different product? Did you move your product online?

We want to know that story as to what your business had to go through, so it’s important that you are building comprehensive financial statements, that you’re keeping interim statements up-to-date and your sales projections. The more organized, the more prepared you are to answer these questions, we’ll only ever be more in your favour and allow you to have more productive conversations with your financial institution.

The post Event Recap: From Reactivity to Adaptability: Advice and Resources for Businesses on the Rebound appeared first on Trade Ready.

Ahmad Malek’s journey in international trade began in 2012 when he joined the Schlumberger Dubai office in the finance team of the logistics and distribution department. The oil and gas company primarily conducted business across borders, which opened doors to Ahmad’s newer opportunities. He soon made the move to the supply chain industry by joining Dubai media Inc. as Procurement Specialist. In this role, he was responsible for dealing with all kinds of purchasing and supplies within the UAE and outside, which offered him a broader picture from the buyer’s point of view.

A job that was always fun and happening

For Ahmad, his job at Dubai Inc. has given him some of his most memorable and favourite career stories. Working with TV channels and radio stations meant getting access to special events like horse and camel races or celebrating the new year at the Burj Khalifa. For him, there was never a dull moment and always something new to look forward to.

Earning the supply chain designation—a feather in his cap

Soon after completing his Master’s degree in Logistics and Supply Chain Management from Heriot-Watt University, Ahmad was awarded the MCIPS, the Chartered member designation of the Chartered Institute Procurement. Ahmad considers this as one of his proudest professional accomplishments in his career so far.

Find yourself a mentor in your field

According to Ahmad, it’s impossible to overemphasize the importance of seeking the guidance of a mentor at every stage of your professional journey.

“A mentor is not only someone who teaches you what you don’t know but is someone who will help you broaden your horizons and achieve more than you expected to.”

Ahmad’s advice to all his counterparts in the industry would be to benefit from the experience and advice of a mentor. They can help you navigate the complexities and challenges that the ever-changing global business environment can throw your way.

International trade training that builds critical thinking abilities

The next step for Ahmad was to upgrade his international business skills and know-how by enrolling in FITTskills accredited training. He found the courses to be excellent resources with the latest and most relevant knowledge spanning the various aspects of international trade, from market entry and finance to supply chain and product development.

The case studies proved particularly insightful to him:

“The case studies are amazing extracts from real examples that happened, and by going through them you become familiar with potential problems that might be similar to what you have faced, and you will have a sense of the solution that others have used.”

With his keen inclination towards finance and supply chain, it comes as no surprise that International Trade Finance and Global Value Chain are Ahmad’s favourite FITTskills courses:

“Studying my favourite topics in detail gives me more confidence and keeps me up to date with the newest terms and trends in the industry.”

The next career goal that Ahmad envisions for himself is to join the Trade Commissioner services. To help him  move closer to this goal he sought to complete the FITT Diploma in International Trade and subsequently the prestigious, industry-backed CITP®|FIBP® designation.

Ahmad was awarded the designation in February 2021, and it marked the successful completion of a milestone aim that he had set for himself. Earning the elite credential adds to Ahmad’s optimism for the future as he prepares to connect with the other members of the CITP community and broaden his network.

Spurred on by a love for his profession and a keen ambition to expand his horizons, we have no doubt that Ahmad will easily exceed the goals he has set for himself.

The post CITP Spotlight: Ahmad Malek, Procurement Officer appeared first on Trade Ready.

What are the drivers for a circular economy? Discover the main reasons below.

On April 22, millions of people around the world took part in Earth Day, a global mission to “diversify, educate, and activate the environmental movement worldwide,” according to the official website.

This year’s theme, Restore Our Earth, “generated thousands of policy commitments and billions of dollars in financial commitments around reforestation, regenerative agriculture and investment in green carbon removal and decarbonization technology,” according to an official press release, highlighting the quick movement of governments and policymakers toward concrete sustainability initiatives for countries around the world.

For international businesses, these international policy and financial commitments are significant, because they put greater emphasis on newer business and production models—like circular economies—that take an active part in reducing carbon emissions and environmental impact globally.

With more than 1 billion people participating in Earth Day activities each year (making it the largest civic observance in the world), it bodes well for businesses to understand the drivers for circular economies and their potential and impact for future business growth down the line.

What are the drivers for a circular economy?

Proponents for circular economies, given today’s technology, believe that the linear model of consumption is wasteful, and businesses are realizing that their current business models are not sustainable. A number of factors are contributing to the disruption of the current model, including those in the list below:

Economic loss and structural waste

The current economic model of value creation is wasteful. Material recycling and waste-based energy recovery captures very little of the original raw materials and energy investment. Similarly, societal lifestyles are also wasteful; for instance, cars spend the majority of their time parked and buildings outside of working hours are empty.

Want to learn more about managing your company’s supply chain, logistics and how to mitigate risks? Check out the FITTskills Global Value Chain online course.

Price risks

Currently, there is an increase in exposure to risks, most notably volatile resource prices and supply disruptions. Higher resource price volatility can dampen economic growth by increasing uncertainty, discouraging businesses from investing and increasing the cost of hedging against resource-related risks.

Supply risks

Many nations are importers of non-renewable resources. World demand puts the supply of raw materials themselves at risk, in addition, the increasingly elaborate optimized global supply chains needed to meet global demand presents supply security and safety risks.

Degradation of natural systems

Negative environmental consequences related to the linear model, such as climate change, loss of biodiversity and natural capital, land degradation, and ocean pollution, are affecting the productivity of economies.

Regulatory trends

There has been an increased effort on the part of regulators to curtail and price negative business externalities. Governments are creating new laws to address climate change. Such as different forms of carbon pricing taxation schemes to address emissions, and fees for waste dumped at landfills. This pushes businesses and the general public to rethink how goods are produced and consumed. In this context,

the circular model of growth, decoupled from the consumption of finite resources and capable of delivering resilient economic systems, is increasingly looked upon as the next wave of development. An unprecedented favourable alignment of technological and societal factors is now making the transition to a circular economy possible at scale.

Advances in technology

Information and industrial technologies now online are being deployed at scale. This allows the creation of circular economy business approaches that were previously not possible. These advances allow more efficient collaboration and knowledge sharing. As well as better tracking of materials, improved forward and reverse logistics setups, and increased use of renewable energy.

Acceptance of alternative business models

A new model of transaction is emerging. Individuals are embracing business models that enable them to access services rather than owning the products that deliver them. Thus becoming users. This has been demonstrated in some markets, for example, in rental, performance-based, and sharing models. Enabled by new technologies, they are already finding ready customers and experiencing exponential growth.

Urbanization

For the first time in history, over half of the world’s population resides in urban areas. And there are no signs of this trend stopping. With this steady increase in urbanization, the associated costs of many of the asset-sharing services and the costs for reverse cycles, collecting and treating end-of-use materials will benefit from much higher drop-off and pickup density, simpler logistics, and greater appeal and scale for service providers.

The post Drivers for a circular economy: Why businesses are shifting from linear models to circular economies appeared first on Trade Ready.

Maysa Balout’s curiosity about international business first started when, after earning her diploma in business administration and management, she built a successful career as a manager for several retail chains. Dealing with regular shipments at the stores she managed, she realized she wanted to learn more about how the larger shipping and operations for her stores functioned.

“It always came to mind that the back-end operation of how and where the boxes came from and the process involved must be extensive and very precise. This is when I looked into supply chain, specifically international trade.”

As her interest and knowledge began to grow, she decided to reorient her career to focus on supply chain management and pursued further training in order to achieve this goal.

This training included the FITT-accredited post-graduate international business management diploma at Fanshawe College, which she found instrumental in developing the specific knowledge and skills she would need to build a successful supply chain career.

“It was great, and I would recommend it to anyone in a similar situation. My experience learning about international trade with the FITTskills program was very targeted and helped me reference back to anything I might have needed in negotiations and in understanding trade facilitation.”

“Feasibility of International Trade was my favorite course because of the intense research skills and knowledge I gained learning how to dissect a company and country of interest for the FITT project. This helped me become an expert in market research and allowed me to explore my research capacity.”

Thanks to her excellent academic performance and other work in her community, most notably helping Syrian refugees with the transition to Canada and settling into their new homes, she was also the winner of the 2016 FITT Achievement Award.

“The accomplishment I’m most proud of was receiving my 2016 FITT Award. It was a struggle juggling many things from professional career to schooling and family but was well worth it!”

Helping acquire the materials needed to build the community around her

Since 2014, Maysa has worked as the Buyer and Administrative Manager for The Construction Guys, a contracting company based in London, ON. For over five years, she has used her skills to build a sourcing and procurement strategy, acquiring the materials needed for the company to complete its construction projects at an affordable rate.

Her work has necessitated building contacts all over the world, negotiating contracts and ensuring delivery among many other tasks.

One of her favourite success stories involves convincing her company to switch flooring suppliers in China.

“ After many days of negotiating and scoping out suppliers, I came across this amazing company that would reduce overall costs for the customer and the contractor significantly. After negotiating and receiving confirmation on the offer, I calculated out the overall reduction in company expenses to be roughly 30% annually. This contract not only allowed for more options to be provided to our customers, it also reduced overall annual costs at the company. We eventually secured the contract. Once the annual report came in, costs had gone down 26% within nine months . It was one of the proudest moments of my career.”

As she’s developed relationships with businesses around the world, she’s realized that having the intercultural knowledge and competence is crucial. She that recommends those new to international business make that a focus early on.

“Learning more about other cultures is a mandatory factor in effective and efficient building of trade relationships. It took time for me to learn how vastly important it is to know other countries’ business practices and routines.”

Proving knowledge and experience with international trade certification

With her FITT Diploma and her years of experience, Maysa wanted to acquire the CITP (Certified International Trade Professional) designation as proof of her career accomplishments, and successfully applied to earn it in 2019.

“This designation highlights the hard work and knowledge that went into learning and demonstrating international trade management, as well as the expertise and success I have accomplished. I feel very honoured and very appreciative I am a part of a global organization that can share and support international trade learners.”

She is now excited to see how the designation will open doors and provide further opportunities for growth and experience in her career.

“I feel this will jump start my career in international trade in various roles and capacities, as the designation represents the level of hard work attained thus far in my career.”

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Lawsuits are expensive, complex and time consuming, so liability is something business owners should consider for every aspect of their supply chain.

Planning and preparation are important steps in mitigating product liability. Organizations should assess the product liability risks tied to individual products and in different markets and consider potential loss scenarios. Strategies for product design, manufacturing, marketing and product recall planning can then be developed—to minimize or mitigate liability risk.

Organizations should be proactive and research the quality control measures and risk management plans of all suppliers to have a complete understanding of the supply chain; this includes procedures and plans of second- and third-tier suppliers. Businesses should also consider including language on compliance, indemnification and financial penalties into their supplier contracts.

Another important planning step is the preparation of a crisis plan detailing how organizations will act in the event of a product failure or contamination event. A crisis plan should clearly define roles and processes governing all aspects of a recall. This should include communications—via multiple channels—with customers, regulators, employees, suppliers and news media.

Businesses should be prepared to trace products and components throughout their supply chain, be ready to execute a recall as necessary, and be able to account for all related costs for claims purposes.

Having the right infrastructure in place ahead of time—for example, the ability to launch web sites and staff call centers in multiple languages, and a plan to collect unsafe products and redistribute safe products—can help organizations to quickly initiate a recall and recover from it.

Want to dive deeper into the regulations and requirements for selling in international markets? Check out the FITTskills Products & Services for a Global Market online course.

What should your next steps be to reduce your product liability?

Despite efforts to ensure best in brand quality standards are adhered to, and conscientious compliance with safety and production regulations, product liability disputes can still develop. It is recommended that organizations:

• Routinely buy liability insurance as a safeguard against litigation and factor the cost of liability insurance into their business plans
• Conduct due diligence when engaging in foreign markets
• Engage legal services not only for contract reviews, but also to provide a product liability environmental analysis from the legal perspective
• Ensure production design, testing and quality controls are rigourous, enforced and documented
• Implement proactive strategies to ensure product compliance with regulations in all markets product is distributed, such as by employing compliance specialists
• Put contingency plans in place to manage product recalls and potential liability

Consider creating a global insurance policy inventory

A detailed insurance policy inventory can also help businesses identify coverage gaps that may need to be addressed. A standard commercial general liability policy may offer protection against bodily injury tied to the failure or contamination of a product. But businesses may also consider other forms of coverage that are available in most countries. For example:

• Product liability insurance, which protects manufacturers and sellers from liability for losses or injuries to consumers or others as a result of a product defect or failure. Coverage could also include design defects or “failure to warn” claims.
• Product recall insurance, which can be customized to provide coverage for business interruption and extra expense, brand rehabilitation, third-party risk, and expenses associated with the execution of a recall.
• Industry-specific solutions—for example, clinical trials insurance coverage for life sciences companies.

Handle issues in the future by preparing to do so in the present

In the broadest sense, product liability risks must now be anticipated and managed by businesses participating at every level of the supply chain. The interplay of regulatory regimes and liability regimes cannot be ignored in a world where authorities are increasingly adopting an interventionist approach to product risks, and consumers are connected through Internet-based communications.

With authorities in regular communication across national borders and consumers ever more alert to product safety issues in other countries as well as their own, businesses operating in the global arena need to ensure they are properly advised and coordinated in managing and responding to these issues.

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Manufacturing is a key part of many national economies. However, certain nations, such as China, are known for having significantly stronger manufacturing sectors than most countries. In recent years, however, China’s manufacturing sector has been declining due to rising labor costs, the ongoing trade war with America, and a trend towards high-tech manufacturing jobs. This means that many companies are searching for new countries to which they can move their low-skill and low-cost manufacturing.

Here is a list of the top four countries that are picking up China’s manufacturing slack and will be major manufacturing hubs in the near future.

1. India

India is a country that is largely known for its software creation and its call centers. However, manufacturing has been steadily increasing there recently, largely due to Prime Minister Narendra Modi’s recently launched “Make in India” program that is helping to attract a large amount of foreign interest. The goals of this program are to facilitate investment, foster innovation, enhance skill development, protect intellectual property, and build best-in-class manufacturing infrastructure.

This program is part of a larger strategy to make it easy to do business in the country. This strategy has advanced manufacturing so much in India that the country is projected to by one of the top five manufacturing hubs for the world by the end of 2020. India’s manufacturing sector is currently growing by about 8% per year. It is attracting luxury brands, smartphone makers, automobile companies, and many more to conduct manufacturing in the nation. India could very well be the next China.

2. Vietnam

Vietnam has one of the fastest merchandise exports growth rates of any Asian country. In fact, between 2005 and 2013, merchandise exports increased by 20%. Considering that many companies that once used China for manufacturing are seeking out cheaper and more reliable alternatives in Asia, Vietnam could benefit substantially.

Vietnam is close to China and also borders the South China Sea, which connects to the Pacific Ocean. This means that shipping from Vietnamese countries is extremely feasible. This is desirable for companies that want to manufacture products in Vietnam and then have the products shipped to places like the United States and Canada.

In addition to its good location, Vietnam’s government has also been working hard to make business conditions favorable in the nation. It has been doing this by providing universal healthcare and job skills training, improving education, and developing infrastructure. Vietnam also has a stable political climate, which is favorable for business. All of these factors mean that there is a very good chance that more and more companies will outsource manufacturing to Vietnamese companies in the coming years.

3. Indonesia

Indonesia’s manufacturing has been growing by five percent for the last few years. Manufacturing now makes up about 25 percent of the country’s GDP. Additionally, Indonesia’s population has been growing steadily in recent years as well. The country now has about 240 million people.

Indonesia currently has some major infrastructure issues and needs to its power stations and grid, water sanitation systems, roads, seaports, airports, and urban transportation. This is especially true now that Indonesia is seeing larger percentages of its citizens migrating to urban areas.

The government has started to invest hundreds of billions of dollars into infrastructure development. So, this is encouraging. But there is a lot of room for improvement. However, if Indonesia can fix its infrastructure issues, then even more companies could outsource manufacturing to this nation. The low cost of labor, proximity to the Pacific Ocean, and relatively stable political climate are all very attractive to companies who need manufacturing. All of these things mean that Indonesia could soon become another Asian powerhouse of manufacturing.

Competition with India and Vietnam will be strong, so the country has its work cut out for it. But considering vast quantities of companies, including Apple, Nintendo, and HP, are all looking to move at least part of their manufacturing out of China, Indonesia could be one of the key beneficiaries of this mass exodus. The protracted U.S./China trade war, tariffs, and China’s rising labor costs are forcing companies to seek manufacturing outside of China. Indonesia could be where many companies including large tech companies end up setting up new manufacturing operations.

4. Singapore

Despite the fact that Singapore is a small nation and is only about 31 miles wide at its widest point, the nation has a strong manufacturing sector that has continued to grow in recent years. In fact, during 2018, Singapore’s manufacturing sector grew by roughly ten percent. Manufacturing is Singapore’s fastest-growing business sector.

The product categories that are leading the manufacturing charge in Singapore are electronics, biomedical, and transport engineering. Other key reasons why Singapore’s manufacturing sector is increasing include the fact that the country has excellent infrastructure and is very stable politically. These factors help to make businesses feel comfortable launching manufacturing operations in the nation. The political stability of Singapore gives the country an advantage over places like Thailand, which is experiencing major political uncertainty at the moment.

Singapore is yet another Asian nation that could benefit from the decline of China’s manufacturing dominance. Singapore is somewhat limited by its size. However, many companies will most likely seek to conduct manufacturing in Singapore because of all the advantages it provides.

The manufacturing map will continue to change rapidly in the coming years

After decades of consistent growth and a meteoric rise to become the world’s biggest manufacturing powerhouse, China is starting to face a lot of difficulties in its manufacturing sector. Companies are fleeing the nation rapidly and are quickly seeking low-cost alternatives. India, Vietnam, Indonesia, and Singapore will all likely benefit tremendously from this situation and see continued manufacturing growth as a result.

However, as these nations see their manufacturing increase, they will most likely have to deal with many of the issues that China is facing right now, such as rampant pollution, increasing salaries, and potentially even protracted trade wars with the United States. China is going to be forced to adapt to the fact that it is becoming an increasingly unpopular place to manufacture goods. Meanwhile, India, Indonesia, Vietnam, and Singapore can all enjoy the fruits of their hard work and watch foreign investment continue and their manufacturing sectors to increase year after year as long as this trend continues.

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When mitigating the impacts of increasing tariffs, organizations need to consider 4 important levers – procurement costs, supply chains, customers, and competitors.

Lever 1: Procurement Costs

For larger organizations such as Ford or GM with products integrating parts such as microchips, drives, and other critical components, tariffed materials may account for up to 10-15% of costs.

For small players, like metal stamping, material costs are unlikely to be significantly affected by increasing tariffs. In this case, suppliers will likely be domestic and they in turn are unlikely to face tariffs.

Organizations should:

• Ensure sources of expertise are accessed during the evaluation process, including engineering, manufacturing, legal, regulatory and commercial teams
• Evaluate the impact of an increase in the cost of raw materials throughout the production chain – for example, the impact of steel and aluminum tariffs from China could increase raw material costs by 2 to 5%
• Undertake risk analysis to identify the cost impact of different tariff scenarios
• Focus on total cost of ownership, not just prices to understand the actual impact of tariffs relative to costs

Lever 2: Supply Chains

With few alternatives, or with significantly limited capacity, we would expect costs to rise even more severely throughout the supply chain than would be indicated by the tariffs alone. Margins should be locked in by seeking long-term contracts with suppliers and buyers, so that uncertainty is reduced.

Supply chains that involve sourcing from providers whose goods and materials may be subject to increasing tariffs will need to evaluate which suppliers will pass on the tariff load and, if so, explore alternatives.

Organizations should:

• Deepen relationships with existing suppliers to identify joint solutions to mitigate the impact of tariffs
• Switch suppliers – identify the long-term supply chain risks, including the impact a supply shortage would have on manufacturing and operational costs
• Make engineering changes so that non-tariffed substitutes can be used
• Negotiate with suppliers to share in the tariff burdens
• Work with existing suppliers to source from factories they may operate in non-tariffed countries
• Insource – look for existing opportunities to produce items that were previously outsourced
• Seek product reclassification to place items outside the tariff bucket (e.g., specialty steel may also qualify for tariff exemptions so that in such cases, prices would not be impacted)

Lever 3: Customers

When evaluating if and how much of the cost increases can be passed along to customers, it is critical to consider how responses to price will vary. This depends on the relative value they ascribe to your products and their ability to source elsewhere.

Organizations should try to predict customer behaviour:

• If your product is key, or it cannot be easily substituted, or switching represents a significant risk, then customers will likely be less price sensitive (e.g., where switching products can be difficult or illegal)
• Conversely, if there are readily available substitutes, or customer margins are tight, or you sell large volumes that are not critical to their own activities, expect price sensitivity

Lever 4: Competitors

While competitors will also face the same tariff pressures, they may be impacted differently. Their responses may differ depending on their own cost structures, objectives, supply chain options, target markets and customers, geographic considerations, regulatory implications and strategies.

Organizations should:

• Look at previous competitor actions to determine which markets or customers are viewed as critical

Also, competitors may try to minimize price increases in critical markets while countering the impact on their bottom line by increasing prices more in other markets.

Organizations should:

• Understand key markets and develop pricing strategies based on which markets are critical and prepared to defend them given competitors’ objectives and strategies

Which lever(s) will work best for your business?

Overall, it’s important for businesses to make decisions that provide them with flexibility, given the continuing uncertainties with respect to tariff policies. Procurement organizations must ensure that mechanisms are in place to monitor changing developments, disseminate that information to key stakeholders, assess the potential impact of changing tariff policies, and use the four levers to mitigate the impact.

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