Complete the Fonterra: Managing The Worlds Milk Trade case study on pages 186-187. Write 500 word response
INTERA FONTERRA: MANAGING THE WORLD'S MILK TRADE While global trade has expanded at over 9 percent a in the last 20 years, many international compa- (actually import/export process a cooperative) that is impleme control system. terra is the world's leading export year nies still rely on outdated manual processes and products. Owned by 11,000 New Zealan nducting their international trade business. In 2010, global trade of goods and services will amount to a staggering $15 trillion. That's a lit- tle bigger than the entire United States econom ($14 trillion). There are many complex challenges that managers face when conducting business on a international scale. Chief among these challenges is managing the import and export business process. Managing an import/export business involves man- aging three processes: compliance with foreign and elies on the contributions of 4.3 milli far mers, Fonterra is a cooperative that e percent of its products to 140 countries dairy goods it manufactures, only 5 per consumed within its domestic market. primarily an exporting firm. Fonterra h n in assets, annual revenues of $12.1 bill produces 3.6 billion gallons of milk ea t's possible, the answe wonder how tha domestic laws, customs clearance procedures, andZealand cows, and over 15,000 employ accounts for over 25 percent of New Z risk management. Each country you export to has different laws governing imported products and dif-trade, and about 30 percent of all glob and milk products. ferent customs procedures. Trading across bound aries raises financial and contractual risks. What if you export to a foreign company and it doesn't pay Fonterra's operations generate amount of transactional data. The vo through this platform is quite significa dollar and transactional terms," says Documentation Center Manager at F ou? What kinds of credit assessments can you perform in various countries? What if your goods are stalled at a foreign port for lack of proper documents? What are the proper documents? The potential pitfalls are numerous. don't just rely on New Zealand. products from multiple countries to t risk. We also export out of Australia, States, Latin America, Europe, and A In the past, time-consuming and error-prone man- ual methods were incapable of handling the complex challenges of global trade. To conduct business in other countries, your company must comply with local laws, satisfy trade security measures, meet doc- umentation requirements, understand complicated tariffs and duties, and coordinate the involvement of all parties. Handling these responsibilities manually increases the risk of errors. According to a United Nations study, the inefficient administration of cus- toms regulations and documents accounts for 7 per- cent of the cost of international trade. That's $1 tril- lion lost annually on a global basis to inefficient handling of customs documents. Poor managemen of compliance and risk accounts for even more losses needs to be captured in an enterprisa moved into a data warehouse so mar tions. To han monitor the firms opera complex import/export processes, i the SAP BusinessObjec solution SAP Global Trade Services (SAP G import/export processes, while ensu transactions comply with all custom tril-regulations. SAP GTS helps compan and streamline trade processes acro enterprise and business units. And shared data and shared collaboratio replacing high-maintenance With SAP GTS, Fonterra has beer cost, and reduce the risk, of doing SAP GTS has help trade proce Increasingly, international firms are turning to enterprise software and business intelligence applications to manage their import/export business processes on a global scale. One world, one business, dardize and streamline t one set of software tools with pre-defined business processes that are the same the world over. Tha the dream. Fonterra provides an example of a firm tionally. To date, entire enterprise and business unit tered the sharing of data, greater c sharing of knowledge throughout t manages the complexities of globa INTERA FONTERRA: MANAGING THE WORLD'S MILK TRADE While global trade has expanded at over 9 percent a in the last 20 years, many international compa- (actually import/export process a cooperative) that is impleme control system. terra is the world's leading export year nies still rely on outdated manual processes and products. Owned by 11,000 New Zealan nducting their international trade business. In 2010, global trade of goods and services will amount to a staggering $15 trillion. That's a lit- tle bigger than the entire United States econom ($14 trillion). There are many complex challenges that managers face when conducting business on a international scale. Chief among these challenges is managing the import and export business process. Managing an import/export business involves man- aging three processes: compliance with foreign and elies on the contributions of 4.3 milli far mers, Fonterra is a cooperative that e percent of its products to 140 countries dairy goods it manufactures, only 5 per consumed within its domestic market. primarily an exporting firm. Fonterra h n in assets, annual revenues of $12.1 bill produces 3.6 billion gallons of milk ea t's possible, the answe wonder how tha domestic laws, customs clearance procedures, andZealand cows, and over 15,000 employ accounts for over 25 percent of New Z risk management. Each country you export to has different laws governing imported products and dif-trade, and about 30 percent of all glob and milk products. ferent customs procedures. Trading across bound aries raises financial and contractual risks. What if you export to a foreign company and it doesn't pay Fonterra's operations generate amount of transactional data. The vo through this platform is quite significa dollar and transactional terms," says Documentation Center Manager at F ou? What kinds of credit assessments can you perform in various countries? What if your goods are stalled at a foreign port for lack of proper documents? What are the proper documents? The potential pitfalls are numerous. don't just rely on New Zealand. products from multiple countries to t risk. We also export out of Australia, States, Latin America, Europe, and A In the past, time-consuming and error-prone man- ual methods were incapable of handling the complex challenges of global trade. To conduct business in other countries, your company must comply with local laws, satisfy trade security measures, meet doc- umentation requirements, understand complicated tariffs and duties, and coordinate the involvement of all parties. Handling these responsibilities manually increases the risk of errors. According to a United Nations study, the inefficient administration of cus- toms regulations and documents accounts for 7 per- cent of the cost of international trade. That's $1 tril- lion lost annually on a global basis to inefficient handling of customs documents. Poor managemen of compliance and risk accounts for even more losses needs to be captured in an enterprisa moved into a data warehouse so mar tions. To han monitor the firms opera complex import/export processes, i the SAP BusinessObjec solution SAP Global Trade Services (SAP G import/export processes, while ensu transactions comply with all custom tril-regulations. SAP GTS helps compan and streamline trade processes acro enterprise and business units. And shared data and shared collaboratio replacing high-maintenance With SAP GTS, Fonterra has beer cost, and reduce the risk, of doing SAP GTS has help trade proce Increasingly, international firms are turning to enterprise software and business intelligence applications to manage their import/export business processes on a global scale. One world, one business, dardize and streamline t one set of software tools with pre-defined business processes that are the same the world over. Tha the dream. Fonterra provides an example of a firm tionally. To date, entire enterprise and business unit tered the sharing of data, greater c sharing of knowledge throughout t manages the complexities of globa
