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B2B Customer Behavior is Changing. What Should Marketers Do?

B2B
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B2B Customer Behavior is Changing. What Should Marketers Do?

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If there’s anything the last decade has taught us—and that the COVID-19 pandemic punctuated in grand fashion—it’s that businesses must get digital, or they may become invisible. Branding—once an exercise that involved plastic signs, billboards, and newspaper print ads—has now firmly taken up residence in the world of bits, bites, smartphones, wearables, and, occasionally, a desktop computer.

The digital transformation—already fully ensconced when we dropped the ball in 2020—picked up considerable steam in the last year or so. Today, forward momentum in the digital strata is not just required—but mandatory—to assure business growth, especially in the B2B arena.

Customer behavior is changing

About 15 years ago, the one-two punch of social media and email campaigns entered the picture – and established a new method of showcasing your expertise as a means of getting people to look in your direction. Post Covid-19, a McKinsey study on B2B buyer preference showed how much of each phase of the buyer’s journey is being done online in a self-service way. The punch line: there has been a dramatic change in consumer behavior over the past 3 years.

In the research/education phase, there has been an 85% increase in the preference for B2B buyers to conduct their research online. In the evaluation stage, the results are even more dramatic: a whopping 238% increase in buyer preference for self-serve looking for information on the companies’ website.

The implications for a B2B marketer are huge. Now they must literally compete online, providing the information for which buyers are looking, and they need a comprehensive content strategy to win.

Learn how customers want to interact online

What the past decade taught us—and what COVID reiterated in the past couple years—is that the conversation around digital goes far beyond just plain awareness. In fact, the businesses that are the best at digital branding have constructed a lead generation machine around these capabilities. They’ve taken the knowledge of clients’ needs and wants and translated it into an incubation device that effectively appeals to this group.

So, what are some of the ways that you can change the thinking within your business to improve the success of your digital branding efforts? Here are four critical elements every marketer should master:

#1 Know The Decision Makers

In B2B in particular, you’ll often find multiple decision-makers involved in the buying process. That’s OK. This simply means  we have to appeal to each of their “decision journeys.” We have to understand their challenges and obstacles, whether they are a CFO or an engineer, etc. Invariably, they will have different selection criteria, success metrics, and the like.

#2 The “Amazon” Effect

With so much buying activity across the digital space during COVID, a remarkable thing has happened. Now, even B2B buyers want the same type of information and transparency in their professional lives as they get when they make personal purchases from Amazon. These buyers give a thumbs-up to live chat and clear, concise information; and a thumbs-down to having to dig for information, deal with technical issues, and to overly complex websites.

#3 Big M, Little m

It’s time to draw a solid, unbroken, line in the sand. Marketing today—with a capital M—relates to what we’ve mentioned here: real insights and strategies that will drive new business and grow your company. No longer is it satisfactory to lean on “little m” tactics, like pretty pictures that look gorgeous but say nothing.

#4 Marketers: The Business Development Rep’s Best Friend

No longer should marketers consider themselves an ancillary resource to more sales-oriented folk; they should take hands-on responsibility to ensure that their activities drive as many qualified leads to business development as possible. As important is to be in close coordination with business development so the leads that come in get the attention they deserve! Research shows that up to half of sales go to the partner or vendor that responds first. In the past, we’ve done a great job, as marketers, of saying we are experts, but then throwing the ball over the fence to business development. That’s an old way of doing things; now, we should be aligned and attached at the hip as we jointly journey further and further into the funnel. This includes being aligned on the funnel metrics that are used to measure efficacy and success.

Bottom Line

Time is of the absolute essence in today’s marketplace, and you must find that extra gear to operate your digital branding machine.  When you decide to turn on your digital machine, you need to know exactly what you’re looking for and to be ready to respond.

So, how is your company’s digital brand presence? Are you relevant or invisible? If you want to know, a digital audit—to see how your company stacks versus the competition—is a great place to start, and we are ready to help you.

___________________________________________________________________

Adriana Lynch is a Partner and CMO with Chief Outsiders, the nation’s fastest-growing executive-as-a-service company.

manufacturing companies
Archives, Commentary, Global Trade Daily, Special Reports

Three Surprising Ways Marketing Can Solve Manufacturers’ 2022 Challenges

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Manufacturing businesses small and large have had their hands full with the fall-out of the pandemic, and while it seems the worst of the crisis is now behind us, companies will continue to grapple with how to keep both customers and employees on board despite supply chain issues, intense competition, and labor shortages.

What’s sometimes overlooked is that the marketing function can help solve three of manufacturers’ biggest challenges in 2022—if the C-suite doesn’t limit marketing’s role to lead generation.

Here are three ways marketers can help manufacturing businesses navigate the many disruptions they will continue to face next year, in ways that extend far beyond product promotion.

Supply Chain Related Communications

Up until this year, the markets were very rarely rocked by supply chain disruptions. The Wall Street Journal did not even have a logistics beat in the last few decades. In 2021, everything changed when COVID-19 caused labor shortages, disrupting the supply chain of a vast amount of finished products and base materials—just when demand for manufactured goods surged.

So how should companies communicate about delayed or canceled deliveries to their customers? One way is for marketers to segment the client database and then decide how the different tiers need to be serviced. When demand outweighs supply, choices need to be made on who will receive what, when. One useful approach is to distinguish between client segments based on profitability and potential. For each segment, decide how various customers and customer types will be prioritized. Include a comprehensive plan on how client communication will look across all channels.

Another way marketers can help companies navigate through supply chain issues is by deciding to not manage supply, but rather to manage demand. This can be done through turning down the promotional activities for a series of products that are running short or use targeted price increases to affect demand.

Customers can and will understand more than some managers may expect, but they need sensible and consistent information. For information to make sense, it needs to be based on a coherent and methodical approach to client service in a disrupted market. Customers time and again have expressed appreciation for timely communication even with “bad news” as it helps them with plans and projections.

Value Proposition

Manufacturing companies pride themselves on their legacy and track record. Claims regarding longevity and past success have a place in marketing communications. But having served your customers for many decades with products that work, is table stakes, and not something companies can use as meaningful differentiators or the basis for building customer preference.

Many businesses can still make a lot of progress in differentiating themselves successfully through a better understanding of what it is that their customers value. Insights gained through a customer survey or set of interviews (AKA Voice of Customer or VoC), as well as through consultations with sales and customer service about how purchase decisions are made, who makes and who influences those decisions and what features are important, are vital inputs for messaging that will resonate with the prospect. These insights are invaluable to company messaging and differentiation. Marketers are trained to facilitate these conversations, collect and analyze the data, and then develop and communicate a value proposition that credibly differentiates a company from its competitors.

Another category of differentiators pertains to purpose where marketers can help tell the unique origin story of the company and convey a message on purpose that extends far beyond specific product features.

Purposeful Employee Engagement

Branding is not just an external exercise. A company’s internal brand is at least as important. Defining the value proposition for employees is often overlooked and undervalued. This leads to turnover and poor retention, and hinders employee recruiting. Studies consistently show the high costs associated with onboarding and training new employees.

In many manufacturing companies, the HR function may not be well equipped to manage the complexities of employee engagement that businesses currently face. There is a part of the workforce (the white-collar one) that will work remotely, so that needs to be managed in terms of making sure people stay productive but also engaged with the brand. Marketing can especially help with the latter. With remote working more prevalent than ever, it is important for employees to understand the company’s brand promise and each employee’s role in helping to fulfill that promise.

With a labor shortage in the manufacturing sector, employees can demand more from their employers than they have in the last few decades. For some, the pecuniary aspect will be important, others will prioritize flexibility. Accommodating this is either costly (the first) or impossible to achieve for blue-collar workers (the latter). There is, however, something else to which many employees attach great value, and that can be achieved at no cost—a sense of purpose. Just as with a VoC program, a Voice of Employee (VoE) program can help employers better understand what will motivate and incentivize their associates.

Employees want to know and feel they are contributing in a meaningful way to producing a product or service that helps customers solve important problems. Marketing can help develop and implement purposeful employee communication which will help not only retain employees, but also attract new talent.

Bottom Line

Manufacturing companies will continue to have their hands full managing the fall-out of an unprecedented health crisis. They will have to successfully manage supply chain disruptions and seize opportunities to differentiate themselves. They can use their efficient approach to the current crisis, and their purpose to communicate a credible and purposeful brand that will bolster their hiring and retention of talent. Marketing can play a critical role in each of these areas when allowed to go beyond lead gen and product promotions.

_____________________________________________________________________

Bob Sherlock and Dennis Bailen are Partners and CMOs with Chief Outsiders, the nation’s fastest growing executive-as-a-service company.

EDI
Archives, Global Trade Daily, Software

EDI’s Role and Evolution through Technological Advances

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Designed to automate the processing of information in a “zero paper” perspective, electronic data interchange (EDI) has not stopped moving forward since its inception. Thanks to the numerous advantages it offers in terms of business collaboration, it has become a seemingly indispensable tool within companies. But on a concrete level, what is EDI? How has the technology evolved over the years? Let’s look together at the uses of EDI over time. 

 

How EDI works: definition and regulatory context

 

What is EDI? 

In principle, electronic data interchange (EDI) can be likened to a dialogue between two computers and pursues a very simple goal: to exchange electronic documents between trading partners. By replacing paper document exchanges, electronic transactions have made it possible to significantly reduce human intervention. From this point of view, EDI, therefore, offers companies numerous advantages:

-Greater speed and reliability in processing information

-Reduction of operational costs

-Reduced errors and improved relationships between trading partners

For the exchange of data to be structured, it is essential to adopt a common standard recognized by the parties.

The format matters

Inevitably, along with electronic data processing comes the need to use a standard format that enables the system to read and understand the documents received. This format defines the type and form of the expected information, for example: integer, decimal, dd/mm/yy, etc. In this way, it is possible to share a common language used by the sender’s computer system and that of its recipient.

EDI standards 

There are numerous EDI standards, including ANSI X12, UN-EDIFACT (and its many variants EANCOM, GALIA…), VDA, TRADACOM, etc., and each of them has defined its own syntax and data dictionary. New standards based on the XML metalanguage have since been added to these historically popular standards, just as has been the case with HL7 industry standards used in healthcare or generic frameworks such as UBL, eb-XML, and UN-CEFACT. In addition, each standard includes numerous variants such as ODETTE or EANCOM for EDIFACT, resulting in ANSI version 5010 or EDIFACT version D12, Release A.

Before companies can exchange their electronic documents, they must therefore choose a common standard and version. Most of the time, they then use an EDI translator to automatically convert data from internal software or an application service provider.

Internet and XML metalanguage put EDI to the test

In the last decade, the overwhelming spread of the Internet and XML metalanguage have had a considerable impact on EDI. EDI/B2B software houses have taken advantage of these technological advances by aiming to facilitate the use of this tool within companies. In addition, all recent developments in EDI interoperability standards are based on XML syntax and use API-type exchange protocols.

EDI emerges as an online service 

The first commercial offerings of outsourced EDI type became popular in the early 2000s. These platforms had the advantage of outsourcing all EDI exchanges to external companies, regardless of the partners, systems and file formats involved. SaaS (Software as a Service) therefore made it possible to eliminate the many obstacles that held back EDI implementation.

EDI in Saas greatly simplifies the uses of this new technology. It can be used without major investment, to the great benefit of cost optimization. You can send or receive messages directly in the format of your ERP without the need for resources or an in-house EDI expert.

B2B integration: what’s the future for EDI? 

By automating the inter-company core business, B2B integration allows different stakeholders (customers, suppliers, business partners) to work more streamlined and efficiently.

Also known as B2B gateways, these integration solutions differ from the first generations of EDI platforms in that they bring a general, rather than a technical, view of the core business. By ensuring that different formats are taken care of, and multi-protocol transmission is possible, these B2B gateways allow you to model your core business processes and provide tailored monitoring. All of a company’s complex processes are thus integrated into a single platform. In addition, these B2B integration solutions can be offered on-premise for on-premises use, or in the cloud and thus be accessible from anywhere, such as Generix EDI Services.

Although process management or data processing engines are generally open to all use cases and formats, some EDI service providers have chosen to verticalize their solution for certain core businesses – this is what is happening in banking, healthcare, and supply chain. This allows them to speak the same language as the users and focus on each industry’s practices regarding data format, process type or security challenges.

Undeniably, the uses of EDI have evolved greatly since its inception, particularly due to the technological advances made since 2000. Thanks to APIs and blockchain, there is no shortage of prospects for further evolution, making EDI more than ever a solution of the future that can improve the efficiency of multi-company collaboration.

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. From Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) to Manufacturing Execution Systems (MES) and more, software platforms can deliver a wide range of benefits that ultimately flow to the warehouse operator’s bottom line. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

This article originally appeared here. Republished with permission.

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Archives, Global Trade Daily, Special Reports

Did Your Customers Disappear? How To Get Them Back In 2022.

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Perhaps orders are down, in-store traffic has hardly rebounded, revenues are frustratingly slow to return and employee spirits are in the tank as well.

When customers go away and don’t come back, business owners and CEOs are left to scratch their heads as they try to figure out why. A probable culprit is that the business failed to maintain authentic customer and employee connections while implementing the latest communication technologies that have pushed relational interactions outside of the reality of their consumer’s experience, says Phil Kelley Jr. (www.philkelleyjr.com), author of Presence and Profitability: Understanding the Value of Authentic Communications in the Age of Hyper-Connectivity.

“Technology is rapidly changing the way people exchange information and ideas leading to tremendous efficiency opportunities, but no matter how much technology changes things, people have the same psychological need for positive human interactions,” says Kelley, who is president and CEO of Salem One, a company that specializes in direct marketing, packaging, printing and logistics.

If customers feel that they are not getting that interaction, he says, they are going to move to another business in search of it.

As businesses move into 2022, Kelley has advice for how they can bring back customers they have lost because of both external and internal communication misfires:

Customers want to talk with people, not machines. Kelley is wary of technology that cuts costs but fails to take the customer experience into account. ​​”Anyone at my company will tell you that I have a passion for answering phones as quickly as possible,” he says. “I absolutely refuse to use an automated call-response application. I know that if a client is calling us, they need something and want to talk to a person, not a machine.”

Relationships are built on true relational moments. Racking up “likes” on Facebook or Twitter, or sending and receiving canned sales pitches on LinkedIn, are not examples of really connecting with others, Kelley says. “Relationships don’t get built automatically, and leadership does not get conveyed by the number of keystrokes you make,” he says. “Success is based on the value you bring to the table, and comes only after investments of time and effort. A connection in and of itself is not a relationship, and for most people connections are missed opportunities.”

Brand communication should meet customers on their terms. Businesses often fail to get the most out of their advertising because the connection to the customer is off in some way, Kelley says. He gives as an example how online advertisements often work. If someone searches for a product, they soon see advertisements for that product on nearly every website they visit, even if the website isn’t appropriate for the brand. That can become annoying. “You need to know where your brand is showing up, and what kind of customers and potential customers your brand is in front of at all times,” Kelley says. “You also need to know who those customers are, what their tastes and preferences are, and how they do and don’t like to experience things.”

Connect in a way that turns customers into repeat customers. Long-term success depends on repeat customers, but too many businesses treat their relationship with customers as simply transactional, Kelley says. That doesn’t make for a satisfying relationship. “The highest-value communications are person-to-person, but that certainly doesn’t mean that your company can’t make a connection without those face-to-face communications,” he says. “Amazon is masterful at forging relationships with its customers just via their website. They do it by making it easy to find, order, and have delivered things that people really need or want. They make it easy to find more information on the products and make it easy to return something the customer isn’t satisfied with.”

Know that a great corporate culture results in satisfied customers. It’s well-established that an organizational culture where people feel engaged, connected and purposeful helps achieve financial success, Kelley says. “This is because the attitudes of the people in an organization ultimately reach and affect customers,” he says. “To put it simply, satisfied employees tend to foster satisfied customers. So, the time and energy you devote to creating a positive corporate culture is not an add-on to getting the job done. It’s an essential part of getting the job done – or at least, getting it done well.”

“Relationships are so important to people,” Kelley says, “that any company that makes a real connection with a customer can win that customer’s loyalty for life.”

_____________________________________________________________________

Phil Kelley Jr. (www.philkelleyjr.com) is the author of Presence and Profitability: Understanding the Value of Authentic Communications in the Age of Hyper-Connectivity. He also is president and CEO of Salem One, which specializes in direct marketing, packaging, printing and logistics. Kelley holds bachelor’s and master’s degrees in industrial and systems engineering from Georgia Tech as well as an MBA from Clemson University. He has served on the boards of directors of multiple nonprofit and for-profit organizations. Kelley has been an active voice in the print industry, refocusing industry success definitions within the rapidly developing world of corporate communications. 

enterprise marketplaces
Archives, Global Logistics, Global Trade Daily

10 Reasons to Embrace Enterprise Marketplaces

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Sellers must think strategically to unlock the power of these powerful new ecommerce technologies.

The pandemic sparked a surge in online selling — and not just by DTC brands serving customers while they were hunkered down at home. The B2B digital commerce space has also seen massive growth over the past two years, a trend that has only been accelerated by the rise of enterprise marketplaces.

What is an enterprise marketplace? Well, we’re all familiar with online marketplaces such as Amazon, Etsy, or eBay that focus solely on connecting buyers and sellers. An enterprise marketplace does much the same, but it’s typically run by an organization that wants to sell its own products and services to customers, and creates a marketplace to offer complimentary products, strengthen its partner networks, or create a better experience for its customers.

The world of enterprise marketplaces is remarkably diverse, including multi-vendor marketplaces, procurement-focused marketplaces, and branded marketplaces. In all cases, though, the enterprise marketplace approach is a powerful paradigm that’s changing the way that organizations sell online. Let’s take a closer look at some of the key benefits that well-run enterprise marketplaces deliver for their operators, vendors, and customers:

1. New revenue streams. Subscriptions, transaction fees, and value-add services or support charges enable marketplace operators to collect revenues without managing their own inventory or building out warehouses. Frankfurt Airport, for instance, invested in an online marketplace, and now collects membership fees from airport retailers who list products and offer promotions to passengers.

2. Customer experiences. Marketplaces are a great way to expand from B2B into B2B2C, or D2C models while still delivering engaging experiences. Andikem, the chemical fulfillment marketplace, achieves this by providing supply-chain transparency and fulfillment efficiency, keeping prices low for buyers.

3. Elimination of pain points. Marketplaces can offer solutions to customer headaches in areas such as supply chain and fulfillment. DOZR set up its WebStores marketplace to address an unmet need by helping construction contractors to rent equipment more easily, and now connects 15,000 suppliers with hundreds of thousands of customers.

4. Smarter procurement. Marketplaces are a perfect solution for complex procurement scenarios, helping buyers such as large companies or government agencies to coordinate across multiple divisions, subsidiaries, or business units while maintaining strict ordering processes. SupplyCore, the logistics solutions company, achieves this with a digital platform that manages complex orders without manual input, enabling customers to track order status from quote to delivery.

5. Streamlined purchasing. Marketplaces can support complex B2B purchasing arrangements, improving efficiency and lowering costs for everyone. Tundra Restaurant Supply, for instance, has built a flexible marketplace that allows it to offer customized experiences, discounts, and free shipping even for big buyers such as Chipotle.

6. Better franchise relationships. Franchise businesses can use an enterprise marketplace model to create a collaborative environment, maintain visibility into franchisor-franchisee relationships, and improve outcomes for customers. French retail franchise V and B does this well: their cloud-first marketplace centralizes inventory and streamlines operations for HQ, franchises, and suppliers.

7. Expanded product offerings. With competition growing, mass-market retailers are increasingly creating marketplaces to grow their product offerings. Walmart Marketplace, Amazon’s biggest US challenger, now uses its 5,000 brick-and-mortar stores as a value-add: vendors get a chance to sell in-store, and shoppers get access to a far wider array of products.

8. Better use of existing assets. Organizations with a large distribution footprint can maximize their assets with a marketplace. Target, for instance, leverages its distribution and store network to power its invite-only Target Plus marketplace, and promotes hand-picked brands across its Target.com and mobile ecosystem.

9. Better product information. Enterprise marketplaces can elevate product presentation — a valuable proposition for B2Bs with large SKUs and complex offerings. PartsBase, the world’s largest aircraft parts marketplace, delivers value by maintaining detailed product information for 15 billion parts spanning 100,000,000 inventory lines.

10.  A stronger ecosystem. Businesses with large partner networks can use marketplaces to centralize and enable collaboration. Toyota Material Handling achieved this by gathering over 200 certified dealers on its platform, delivering a more engaging partner experience and ensuring a better product selection for end-users.

Think strategically

Unlocking these benefits doesn’t happen all by itself. Organizations need to think strategically about their enterprise marketplaces in order to get the most bang for their buck.

That starts with building out the operational infrastructure you need to succeed, including clear purchasing processes, fulfillment workflows, and payment systems. You’ll also need to communicate clearly with all stakeholders, including your outside partners and your own employees, in order to make sure that everyone understands the strategic goal of the marketplace and is committed to pulling in the same direction.

Operators also need to go into the process of building a marketplace with clear eyes, and an understanding that creating a successful marketplace requires committing serious resources. From building out digital infrastructure to retraining employees and engaging with partners, you’ll need to invest if you’re going to build a successful marketplace — and the amounts needed can be a dealbreaker for brands that aren’t sufficiently mature or ambitious.

Finally, you’ll need to develop the right toolkit. Fortunately, that doesn’t mean building everything yourself: these days, there are a wide range of marketplace management platforms to choose from. Many marketplace tools are designed to support conventional marketplace operators, though, and don’t include the features needed for enterprise operations. Be sure you do your due diligence, and select a marketplace solution that’s designed to support the specific needs of B2B and enterprise operators.

Plan for success

The bottom line is that enterprise marketplaces are changing the way that businesses of all kinds buy and sell online. That’s potentially a lucrative opportunity for operators — including manufacturers, distributors, retailers, franchisors, and even government actors.

The more crowded the enterprise marketplace grows, though, the more competitive the space will become. That means new and existing operators will need a careful and measured strategic approach in order to gain a foothold and build a successful marketplace.

When you’re thinking about the potential benefits of running an enterprise marketplace, then, it’s important to plan ahead. Focus in on exactly what you’re hoping to achieve — and develop the strategy, partnerships, and toolkit you need to achieve your own specific goals.

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Yoav Kutner is the CEO and co-founder of Oro, Inc, which has created OroCommerce, the No.1 open-source eCommerce platform built for distributors, wholesalers, brands, and manufacturers. Yoav previously co-founded and served as the CTO of Magento.

B2B
Archives, Global Trade Daily, Special Reports

What B2B Marketing Trends Can We Expect to See in 2022?

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Major shifts in the global market are impacting how B2B companies approach marketing. After 18 chaotic months, innovation is accelerating at a rapid pace. The digital transformation of the economy and the rise of e-commerce are likely to spark significant change in 2022.

Current data suggests these trends are likely to define B2B marketing in the coming year, so businesses would be wise to embrace them.

1. Spending Shifts to Mobile-First Strategy

In 2022, mobile and digital advertising will continue to become central to B2B marketing efforts. At the same time, marketers are also adjusting to a work-from-home reality. Around 70% of B2B buyers and decision-makers prefer remote or digital interactions with vendors.

Gartner predicts this number will tick up by an additional 10 percentage points by 2025. These buyers will likely respond better to more digital marketing strategies, as well.

Many marketers will likely shift to a digital-first marketing approach that prioritizes mobile advertising and content over offline and more traditional strategies. This will probably come with growing ad spend — though growth is on track to be slower next year than it has been in the past, partly due to the lingering effects of COVID-19.

As the amount of millennials in decision-making roles has grown, so has the number of buyers who want a seller-free experience. Less personal and direct approaches to marketing may become more popular among B2B marketers as a result.

2. Changing Lead Generation Channels

Generating quality leads remains a top goal of B2B marketers. How they are developed is likely to change significantly in 2022 and through the rest of the decade.

COVID-19 impacted how events are hosted. While some businesses pivoted to online events and others chose to delay or cancel, all marketers had to adapt quickly to the reality that in-person events were no longer always available to generate leads.

Jurgen Desmedt, head of marketing at Europe-based CDP vendor NGDATA, told CMSWire that social media is emerging as a major lead-generation channel.

B2B marketers are more often taking to social advertisements to generate leads that previously came from events. Uncertainty in B2B marketing may also be driving the pivot to social media. Marketers unwilling to commit fully to in-person interactions may instead look toward other methods requiring less commitment.

The most popular style of social media marketing is also changing. Many marketers are now more interested in highly targeted and personalized strategies. Many platforms offer targeting tools with extremely fine levels of detail so they can deliver niche content to specific audiences.

Scheduling apps may help smaller businesses and solo entrepreneurs manage an increasingly complex strategy that delivers niche content to various audiences.

3. Growing Focus on Customer Psychology

The “neuromarketing” strategy allows B2B marketers to spend more time than ever focused on the individual psychology of key buyers and decision-makers. In practice, this may look like a shift from topic-driven to persona-driven marketing in B2B. Marketers will focus on honing in on their target audience’s particular needs, desires, and interests to generate more effective ads, content, and events.

Client personas will become a more important marketing consideration as a result. There’s also likely to be a greater focus on matching searcher intent and developing deeper content calendars.

4. Innovation to Engage B2B Customers

Cutting-edge technology will help marketers create campaigns that more effectively engage potential buyers in 2022. Optimizing for new types of search — like image and audio — may be essential to capture traffic. AI and marketing chatbots could help marketers reach more customers and reduce the amount of time potential buyers spend waiting.

In some cases, new technology and the focus on psychology may also mean the growing use of high-tech advertisements that generate interest and secure potential buyers’ attention.

Interactivity in emails can increase conversions and improve ROI — helping businesses get more out of their email campaigns. AMP emails, which enable marketers to provide app-like functionality inside a message, are one common method for delivering this interactivity.

Similar uses of personalization and interactivity in other forms of marketing may also provide results like these.

5. Original Research and Top-Quality Content

Online resource centers, blogs, content hubs and more have become a valuable tool for B2B marketers. In 2022, original research is likely to become even more important for marketing efforts.

According to data from the 2020 Demand Gen Report, B2B buyers increasingly look to a business’s original content when making purchasing decisions. This has become a significant trust marker, signaling to buyers that the company puts stock in its organizational knowledge and experience. Research also provides some early value to a potential buyer,

Because content has become a trust marker, simply writing posts to generate traffic and leads will no longer be enough. Information needs to be top-quality to encourage buyers to investigate the brand further or get in touch with the business’s sales team.

Various content strategies will likely be necessary to deliver high-quality information relevant to B2B buyers’ interests.

Customer psychology will likely be important to content teams. Effective use and reuse of posts will allow marketers to take full advantage of what they develop. Breaking things up to enable the tracking of micro-conversions could provide marketers with additional insights into reader behavior and interests.

Certain content types will also probably be more valuable than others. A business’s niche, original research, white papers and other forms of highly valuable and in-depth content may provide the most value to readers — building trust and generating interest.

Video content remains one of the top content types, overtaking blog posts and infographics in popularity. However, the high cost of producing video content may be a barrier to its use by some businesses.

How B2B Marketing Is Likely to Change in 2022

Uncertainty and digital transformation will likely have a significant impact on B2B marketing next year. Marketers are beginning to leverage mobile-first approaches, invest more in social media and adopt cutting-edge technology, like chatbots and interactive emails. This will be vital to effectively reach people and boost sales moving forward.

These new strategies and tools may help companies adapt to a market where buyers are more interested in digital channels and personalized content. Marketers must be prepared to embrace the upcoming changes to effectively reach their target audiences in 2022.

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Why Enterprise Resource Planning Systems Fall Short with Rebate Management

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Enterprise resource planning (ERP) systems allow companies to integrate many disparate elements of their business on a single centralized platform – from human resources to supply chain logistics to financial data. While this level of centralization can create operational efficiencies, the breadth of functionality offered by ERP systems also make them less effective when it comes to handling more specialized aspects of your business.

For example, when companies need to design, track, and execute rebate agreements, ERP systems come up short. This is because rebates can be highly complex and dynamic – to manage them productively, companies need purpose-built software that will help them maintain transparency internally and with trading partners, identify where rebate programs can be improved, and react to changes in markets and distribution dynamics. ERP systems allow companies to record the rebates they’re owed, but not much else.

Although many companies get by with the rudimentary rebate management tools offered by ERP systems, supported in parallel by spreadsheets and other off-system tracking, the usefulness of these tools breaks down with complex incentive-based rebate programs and an ever-increasing drive for rebates to stimulate the business growth they were implemented for in the first place. Dedicated rebate management systems, on the other hand, are designed around the needs of complex and dynamic rebate programs, helping companies build more sustainable relationships with one another by giving them a wider range of options and the resources they need to communicate and collaborate in real-time.

How to manage complexity

Global supply chains have never been more complex than they are today – they’re more interconnected, they serve larger and increasingly diverse markets, and they often require vast logistical infrastructure to function. A 2020 survey found that 91 percent of businesses say they “can’t stay ahead of their supply chain complexities.” As if this task wasn’t already difficult enough, COVID-19 threw the global economy into chaos overnight, snapping crucial links in supply chains, straining relationships between manufacturers and distributors, and forcing consumers to deal with delays and unpredictable cost fluctuations.

One of the reasons rebates exist is to account for uncertainty – from economic shocks to shifting consumer demands. They retroactively bring volume, pricing and payments into line with projections, incentivizing trading partners to continue investing in one another. The more contingencies rebates can account for, the easier it will be for companies to predict future conditions and adapt when they change. This is why there are hundreds of different types of rebate agreements – they can be based on seasonality, sales targets, marketing commitments, the performance of specific product lines, and a range of other variables.

Many rebate agreements also change annually (or more frequently) to spur growth and react to market changes as they arise. These are all reasons why these agreements can be surprisingly intricate, which makes ERP systems blunt instruments for managing them.

Increasing efficiency and agility

ERP systems are all about efficiency – by bringing a wide range of business processes (from workflow solutions to communication tools) together on a single platform, these systems are designed to consolidate information, facilitate cooperation, and streamline a company’s processes across the board. This sounds particularly attractive to company leaders in the supply chain sector, who are hyper-cognizant of any opportunity to increase efficiency. An EY survey found that 55 percent of companies expect digitization to improve operational supply chain efficiency (the second-most-cited option) over the next three years.

But can ERP systems really increase the efficiency and effectiveness of B2B rebate programs? By failing to account for a wide enough range of variables and providing little in the way of real-time flexibility, these systems aren’t the drivers of business growth that companies need. According to Gartner, 89 percent of supply chain professionals want to invest in agility. This is what specialized rebate management solutions provide by giving companies the chance to get creative with the negotiation and implementation of deals, adjust those deals as circumstances change, and track every stage of the process on a platform that was built specifically for handling rebates.

When companies rely on ERP systems that can’t accommodate their rebate needs, they’re forced to use other forms of documentation and manual logistics management, such as spreadsheets. This can lead to costly errors and wasted time – hardly the efficiency companies are after.

Building stronger relationships between supply chain partners

Rebates help companies forge stronger relationships by allowing them to negotiate deals that satisfy both parties and giving them the freedom to alter the provisions of those deals as circumstances dictate. Dedicated rebate management platforms provide mechanisms to ensure transparency and accountability, more robust contract management, and the ability to manage hundreds of different types of rebates.

According to a recent Enable survey, more than one-third of companies say they still use spreadsheets to document, share, and sign off on deals. This doesn’t just lead to mistakes, backtracking, delays, and a series of other logistical problems – it can also be detrimental to relationships, as it requires partners to dig through scattered documents and search records that haven’t been properly systematized whenever a dispute or any other issue arises. ERP systems are typically transaction-centric, while rebate management systems make the process of creating, approving, and tracking deals an ongoing collaborative process with dedicated workflow and communication tools.

ERP systems have a clear role to play in helping companies become more productive, which is why rebate management solutions can be directly integrated with them. But rebate management is a highly specialized field – it requires digital tools that are specifically designed to manage complexity, improve supply chain flexibility, and build healthy and sustainable relationships between partners.

_____________________________________________________________________

AUTHOR BIO:

Andy James is the Director of Product Strategy at Enable, a cloud-based SaaS solution for B2B rebate management. The software is used by procurement and finance professionals in distribution, wholesale and manufacturing across over 50 industries so that they can have an easy, seamless solution to execute and track their full range of trading programs.

cybersecurity
Archives, Global Logistics, Global Trade Daily, Software

E-COMMERCE VS. MANUFACTURING CYBERSECURITY: WHAT YOU SHOULD KNOW

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In the digital world, most of us are constantly immersed in protecting data while ensuring smooth operations that have become increasingly complex in recent years, particularly in the age of COVID-19 for manufacturers and e-commerce leaders. With concerns of maximizing cybersecurity compliance increasing almost as quickly as consumer demand, we decided to take a deeper look at how data protection ties into e-commerce and manufacturing and what companies can do to remain competitive, compliant and trustworthy in the eyes of their customers. 

To gain a better understanding, we looked to Bindu Sundaresan, director at AT&T Cybersecurity Consulting. With the firm for the past 12 years, Sundaresan and her organization offer planning and professional services to help customers in retail, healthcare, manufacturing, finance and more reduce cyber risks.


 

“You name the emerging technology irrespective of customer security maturity, we are there,” Sundaresan says. “We are starting to see some implications of rushed transformation efforts, putting companies at larger risk. They have to take stock of their altered risk profile as the threat surface grows and with the adoption of digital technologies in pursuit of new business models and enhanced customer experiences such as e-commerce in manufacturing.”

She adds that in the modern age, e-commerce is no longer just in sight for retailers or e-tailers. In fact, e-commerce has transformed the way major industries are conducting business from manufacturing, B2B and even shippers. 

“It’s a whole function, end-to-end in terms of when the ordering is placed to checking on what stocks are available, to shipping,” Sundaresan says. “This is all happening through front-end e-commerce websites. E-commerce in general is an attractive target for the malicious actor, because that’s where the money is.”

Data protection in the digital space requires a strategic and tedious process–two words some would never think to put in the same sentence when talking technology. For businesses to successfully secure consumer data, company data and overall cybersecurity, all moving parts must be considered, starting with the basics. Sundaresan emphasizes that just because digital applications have been simplified, it does not ensure a successful launch of data-secured applications.

“Follow the data, think about every connection, think about the data flow, think about every connection you are making for every asset within your organization. Web application security must be taken seriously. Application Security 101 is how you should secure your third-party and open-source code because approximately 96 percent of apps today use borrowed code. Sure, it is a great way of standing an application up, making it run fast, and saving development time and resources. But at the same time, it will introduce vulnerabilities into your infrastructure.” 

From its inception, web applications present competitive advantages—and significant vulnerabilities if not properly deployed. One must carefully consider the limitations and vulnerabilities of the selected tools over protected information to effectively secure and operate it. 

“It’s not just about fraud protection or credit card data behind these applications,” Sundaresan notes. “It is about the denial-of-service attacks that can happen, making your website unavailable. It is not somebody stealing, it is somebody getting availability. It is about using your website and your brand to craft another webpage that looks exactly like your brand, and then do SQL injection on it. E-commerce websites now have sophisticated tools with shielding applications and technologies available. These are all affordable and easily consumable, eliminating the need to go in and actually change the code.”

Whether we realize it or not, almost all of us are using some type of e-commerce platform, IoT device or another form of digital technology enabling connectivity between us and the outside world of products and goods.

“Everyone cares about privacy, and this is a common thread across industry verticals,” Sundaresan explains. “We all use internally built applications, APIs and take payment information. Anyone that takes credit card information needs to comply with the PCI standard. It covers a lot of web applications and e-commerce security controls that are a must. Compliance is not the end goal, but it’s a great starting point for your framework.”

Looking at manufacturing, we see a different story unfold. Data protection measures are approached from a different angle that does not consider coverage for sensitive consumer payment information or personal identification. After all, many manufacturers are not dealing directly with the consumer but still have a need for securing digital transformation in the sector.

“As a manufacturer, you have to think about what the attack surface looks like and what the protection surface looks like,” Sundaresan warns. “It is critical for manufacturers to think of each new connection as a potential vulnerability to their attack surface. Gone are the days where manufacturers are going to look at just safety and well-being as the only priorities–security is now top of mind, and it should be.” 

Along with basically every other industry sector across the globe, COVID-19 impacted and changed manufacturing. Sundaresan highlights the changes sparked by the pandemic and how manufacturers are now prioritizing data security. 

“COVID propelled smart manufacturing, showing us that security is more about risk and resilience rather than just providing a technological element to operations. We have enough tools out there, and it’s time to initiate the joining of forces and look at how data can be exploited because of unpatched systems in manufacturing.” 

Over the past 12 years, Sundaresan and her team at AT&T Cybersecurity Consulting have learned the adage, “you’re only as strong as your weakest link” was more than relevant during the pandemic for the supply chain, challenging the notion that just because a company is not focused on B2C operations does not eliminate risk for data breaches and threatened security.

“In the 20 years I have been working in the industry, there is not one thing that we don’t do at AT&T Cybersecurity. Some assume we might only do large projects or cater to those if they are connected to our network. That is not the case. In relation to the industry as a whole, an important takeaway is to remember that what manufacturing and healthcare are going through now, retail and finance went through this same thing about two, three years ago.” 

To learn more about AT&T Cybersecurity and its diverse solutions portfolio, visit: https://cybersecurity.att.com/

____________________________________________________________________

Bindu’s experience, which spans more than 20 years, has been shaped by the opportunity to work with some of the world’s most innovative companies. She has worked with industry frameworks, including NIST/ISO/HITRUST, regulatory requirements including PCI, NERC, and HIPAA. Bindu has led dozens of cyber-risk engagements for Fortune 500 clients from strategy to technology implementation to breach response. She was tapped to lead a complex PCI and HIPAA compliance assessment for a leading global retailer, spearheaded a $1M security assessment, and worked on securing Criminal Justice Information Sharing Networks in NYC. Before AT&T, Bindu was a Senior Manager with Verisign. Before joining Verisign, she was a Senior Consultant with KPMG and a Senior Network engineer. Her love for teaching and mentoring started with her role as an Adjunct Faculty with the State University of New York (SUNY).

manufacturing
Archives, Global Logistics, Global Trade Daily, Special Reports

Tips to Grow your Manufacturing Business with a Help of a Blog

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Nowadays, blogs are proving very useful in growing any business. And the same adage holds true for manufacturing businesses. In fact, if you own a manufacturing business, there are several tips that could prove handy to grow it with the help of a superb blog.

Why Manufacturing Businesses Need a Blog

There are a few reasons why manufacturing businesses need a blog. Firstly, a manufacturing business isn’t like a retail one. In retail businesses, you’ll be mainly selling stuff directly to a consumer. For a manufacturing business, you’ll be selling to both, the direct end-user of the product or even to an intermediary party.

In such cases, a blog can prove very useful to grow the business because an intermediate party might not promote your products as much as you would prefer. And furthermore, a good blog for a manufacturing business can also popularize your products in today’s highly competitive market.

A blog is a superb resource for branding your business and letting people online know that you’re offering excellent products that they would love to use, regardless of whether they are Business-to-Business (B2B) customers or Business-to-Consumer (B2C) buyers.

Tips to Grow Your Manufacturing Business with a Blog

Therefore, here are some excellent tips on how to grow your manufacturing business with a blog. You can adapt these tips to meet your own needs for marketing and promoting your business and products according to their nature and target clientele.

Provide Excellent Content

It goes without saying that content is the king of the blog. Therefore, to attract more visitors to your blog, it would require compelling content that people find interesting, engaging, and relevant to their needs. Content is also called the king of any blog.

This would also help you with the digital marketing processes necessary to promote your blog and get it on top of the Google search engine result page. The better the content, the higher your chances of attracting buyers that translate as customers.

Superb Digital Marketing

While we’re on the topic of digital marketing, here are some tips to consider. Hire a good digital marketer, either as a freelancer or full-time employee to do various digital marketing processes on your blog. That would be useful to rank your blog in the topmost searches of Google. And getting on the top always attracts more attention since nobody usually looks for websites or blogs that appear on the second or third page of Google search results.

Digital marketing processes include Search Engine Optimization- both on-page and off-page, social media marketing, and email marketing, among others. A good digital marketer will be able to offer these services that can help your manufacturing business to have a strong online presence and create a superb brand through a blog and your business website.

Spread Out Through Social Media

As part of efforts to promote your blog for the manufacturing business, also open Facebook, Twitter, LinkedIn, Instagram and Pinterest accounts. That way, you can disseminate information about any new posts on your blog very quickly to your followers. And one of the best things about social media posts about your blog is that it would attract people to share your posts if they’re interesting.

Social media also provides you with an opportunity to interact with potential buyers or others that are interested in your manufacturing business and its products. These people can be your prospective customers. If you handle their queries and suggestions or comments carefully, you could convert them as buyers for your products.

Provide Affiliate Links

You can also provide affiliate links to your own products through your manufacturing business blog. That’s because some 90 percent of buyers trust blogs more than company websites and ads. And they read blogs in the initial stages of buying anything before placing an order. Therefore, a superb blog about your manufacturing business can help swing the decision in your favor.

When you provide affiliate links even to your own business website, you’re actually asking potential leads to take action immediately. Very often, this translates as instant sales for your products and helps your manufacturing business to grow.

Create an Email Marketing List

Generally, every blog has a contact form. And you can capture the names, locations, and email IDs of persons that comment on your blog through this contact form or comments section. Now, why would a person part with their email IDs? The answer is simple. They’ll give their email IDs only when your content is attractive, useful, and relevant to their needs.

And you can create an email list and use it for email marketing. If you find that any person comments, or contacts you, through the blog, you could convert them as customers by making special offers or asking your marketing team to approach these potential leads to secure business for your organization.

Speak About Your Industry

As a blogger for your manufacturing business, you can also provide news and views about the latest happenings in your industry in general. That keeps readers and other stakeholders in such businesses interested in your blog. And that’s also one way of increasing your business blog following. Speaking about your industry through news and news analysis also helps establish yourself and your manufacturing business as a formidable brand in the broader industry.

One more thing that occurs when you speak about the industry is that consumers know that you’re serious about your business. And generally, such consumers can translate as loyal customers too, provided you handle them appropriately. There’s always news and views about the industry and you can simplify these and inform your followers and customers through the blog for self-branding.

In Conclusion

These six tips could help your manufacturing business to grow steadily. Nowadays, a blog is a vital resource for every organization serious about doing business and serving its customers. Some of the largest brands in the world also have their own blogs. And you can open one too for your manufacturing business.

supply chain
Archives, Global Logistics, Global Trade Daily, International Trade

Navigating the 12 Pitfalls of the Global Supply Chain

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With over 30+ years of international trade experience, I have witnessed numerous and repeated errors made by Sales, Purchasing, Logistics Managers, Supply Chain, and International Business Executives.

There are tremendous opportunities and benefits to be derived through global sourcing and foreign business development. Along with these opportunities are considerable challenges, obstacles, and pitfalls. In order to succeed in international business, management must mitigate these concerns through gaining knowledge and implementing processes and controls over import and export operations, including the development of robust training for all personnel.

The following section contains twelve steps companies can take to manage the solutions that will allow the navigation through these challenges and delivering success to the international operation.

These twelve steps create a pathway forward in a concise, straightforward methodology and time-tested process to ensure management accomplishes their desired corporate goals of profits, growth, and sustainability.

Avoid the following:

Step 1: “We have no personal liability”.

There is significant personal liability for individuals who operate in global supply chains.

U.S. Government enforcement agencies, such as but not limited to:

– Department of Justice

– Customs and Border Protection

– Departments of State, Commerce and Treasury

– Bureau of Alcohol, Tobacco and Firearms

– United States Department of Agriculture and the Food and Drug Administration

All above are a few of the agencies that will prosecute both organizations and individuals who are seriously out of trade compliance with their import and export regulatory responsibilities.

While criminal prosecution is a rare occurrence … it does happen every day in the supply chain, somewhere in the world of international trade.

Trade Compliance Management in companies with an international footprint is a necessary evil that needs to be managed and integrated into the fabric of the organization’s culture and business model.

Step 2: “The FOB Term is Always a Safe Incoterm to Utilize”.

The FOB Incoterm has three deadly areas of concern:

-It is used in domestic trade

-It is a gray area in the loading process

-There can be ambiguity when the point in time responsibility and liability shift from the seller to the buyer (exporter to importer).

It is used in domestic trade

For domestic trade in the United States, the UCCP (Uniform Commercial Code of Practice) currently (though in contention) utilizes the FOB term as a “term of sale or purchase”, where there are two primary options FOB Origin and FOB Destination.

Within the UCCP, FOB is defined as:

Uniform Commercial Code › U.C.C. – ARTICLE 2 – SALES (2002) › PART 3. GENERAL OBLIGATION AND CONSTRUCTION OF CONTRACT

2-319. F.O.B. and F.A.S. Terms.

Unless otherwise agreed the term F.O.B. (which means “free on board”) at a named place, even though used only in connection with the stated price, is a delivery term under which:

(a) when the term is F.O.B. the place of shipment, the seller must at that place ship the goods in the manner provided in this Article (Section 2-504) and bear the expense and risk of putting them into the possession of the carrier; or

(b) when the term is F.O.B. the place of destination, the seller must at his own expense and risk transport the goods to that place and their tender delivery of them in the manner provided in this Article (Section 2-503);

(c) when under either (a) or (b) the term is also F.O.B. vessel, car, or another vehicle, the seller must in addition at his own expense and risk load the goods on board. If the term is F.O.B. vessel the buyer must name the vessel and in an appropriate case, the seller must comply with the provisions of this Article on the form of a bill of lading (Section 2-323).

The UCCP Term allows any mode of transit or conveyance.

Some sources claim that FOB stands for “Freight on Board”. This is not the case. “Freight On Board” is not mentioned in any version of Incoterms, and is not defined by the Uniform Commercial Code in the USA.[10] Further to that, it has been found in court that “Freight On Board” is not a recognized industry term.[11] The use of “Freight on Board” in contracts is therefore very likely to cause confusion. The correct term is “free onboard”.

Keep in mind that a huge amount, if not a clear majority of domestic commercial transactions, are sold or purchased on a FOB basis and moved by truck, rail, or air. This would be ok if the FOB Term was the UCCP intent and not intended utilization under Incoterms 2020.

There is a very clear line of confusion between the domestic and international “FOB” terms in selling and purchasing. It is only when it causes a problem when it is seen as an issue.

Free on Board, or FOB is an Incoterm, which means the seller is responsible for loading the purchased cargo onto the ship, and all costs associated with same. At the point, the goods are safely onboard the vessel, the risk transfers to the buyer, who assumes the responsibility of the remainder of the transport.

FOB is the most common agreement between an international buyer and seller when shipping cargo via sea. This Incoterm only applies to sea and inland waterway shipments.

The 2020 edition of Incoterms opened the door for domestic utilization of the FOB term. The FOB UCCP term varies greatly from the FOB Incoterm.

Under Incoterms 2020, the preferred term for domestic utilization, since that door was opened, is FCA (Free Carrier At).

It is a gray area in the loading process

Under Incoterms 2000 and prior, the FOB term transferred risk and cost from the seller to the buyer once the goods passed the ship’s rail.

This factor was changed in the 2010 edition of Incoterms and continues in the 2020 edition. The term now read “…passes when the goods are on board the vessel”.

However, “on board” is not clearly defined. Is that when the goods are placed on the deck, in the hold, not yet secured, secured, etc.?

We had a case in our office, where a U.S. exporter, sold a huge piece of equipment, (25 Tons, $11m in value) to a customer in Europe. It was going to be shipped via ocean, secured in a cargo hold under deck.

During the loading process, the goods were being lifted onto the vessel by a crane and longshoreman crew. In the handling, the equipment was laid down on the deck of the hold several times, while the longshoreman positioned the cargo.

In that repositioning process, the freight was damaged. The issue now became who is responsible, based upon the Incoterm of FOB Port Elizabeth – the seller or the buyer?

Were the goods actually “on board” when they were damaged? The maritime judicial system will eventually resolve that issue and court precedence will be established.

But today there is an ambiguity in defining “on board” in the FOB Incoterm. There are references to being “secured in place”, but it appears ambiguous.

Sellers and buyers need to address these specific concerns in the contract of sale and attempt to minimize the gray areas of liability, that may present themselves when using the FOB term.

There can be ambiguity when the point in time responsibility and liability shift from the seller to the buyer (exporter to importer).

This is the explanation of the FOB term from the Incoterms 2020 edition.

A2 (Delivery)

The seller delivers by placing the goods on board the vessel nominated or provided by the buyer on the agreed date, or within the agreed period as notified by the buyer, or if there is no such time notified then at the end of that period.

There is still a belief that the ship’s rail is the defining point, i.e.: before the notional vertical line above the rail is the seller’s cost and risk, and after is the buyer’s cost and risk. A court ruled that the delivery point was when the goods were on the deck but that then caused the question was the notional vertical line replaced with a notional horizontal one in line with the deck itself and what if the goods were being placed below deck? This ship’s rail concept was removed in the Incoterms® 2010 version. Typically, then, “on board” is taken to mean when the goods are safely on the deck or in the hold. If the cargo needs to be then further secured for transportation such as being lashed or separated with some material or spread evenly throughout the hold for bulk goods like grain the seller and buyer should agree in their contract what is needed and at whose cost and risk this is done.

B2 (Delivery)

The buyer’s obligation is to take delivery when the goods have been delivered as described in A2.

FOB A3 / B3: Transfer of Risk

A3 (Transfer of risk)

In all the rules the seller bears all risks of loss or damage to the goods until they have been delivered in accordance with A2 described above. The exception is loss or damage in circumstances described in B3 below, which varies depending on the buyer’s role in B2

B3 (Transfer of risk)

The buyer bears all risks of loss or damage to the goods once the seller has delivered them as described in A2.

If the buyer fails to inform the seller of where and when the vessel will be presented or if the vessel fails to arrive on time, or it fails to take the goods so that the seller cannot deliver, then the buyer bears the risk of loss or damage to the goods from the agreed date or at the end of the agreed period.

On an operational level, the seller delivered the goods to the terminal, carrier, or other agreed named place, and the goods were not loaded on board as anticipated for an array of reasons, such as but not limited to the carriers having vessel timing or loading issues and the seller appropriately notified the buyer than delivery has been made and risk of loss and damage has passed from the seller to the buyer.

The important aspect to note here is that the buyer expected to take delivery “on board” and now that did not occur as the buyer will take delivery and assume all risks at a point short of “on board”.

In general, Incoterms need to be understood in their entirety including the consequences associated with using the incorrect Incoterm or not understanding the specific responsibilities as the buyer or seller. Incoterms training is a must for all personnel engaged in global trade and more particularly those operating in Procurement, Sales, Operations, Finance, and Customer Service.

Companies involved in international trade using best practices will switch Incoterms 2020 rules in quotations, purchase orders, contracts, commercial invoices, and other commercial documentation when determining the level of responsibilities and costs they want to take on; dividing the responsibilities for risk transfer, costs, and responsibility for carrier selection between the buyer and the seller.

Step 3: Contracts Override Relationships

In international trade, relationships trump contracts. Relationships will drive a successful deal and a long tenure. I have always extolled “you can contract out risk”, but you can seriously minimize and mitigate risk by establishing favored relationships that allow the best opportunity for problem resolution and working out issues that will likely occur over time and trade.

Contracts are important to make the deal have legal standing, but it is foolish to believe that the contract eliminates any risk in the transaction. In fact, sometimes contracts can cause risk when a false sense of security is at hand.

Obtaining legal support is prudent but spending money and time at building relationships with suppliers, vendors, agents, and customers will go a long way in mitigating many of the risks in global trade.

Step 4: Service Providers are Experts in all Aspects of the Global Supply Chain

Just not so! While a small percentage of service providers are clearly experts, professionals, and aligned with teams of knowledgeable staff the majority have serious limitations.

While many have the expertise to arrange affreightment, pick up and delivery many lacks:

-the necessary local connections in all foreign markets

-trade compliance knowledge

-an understanding of how best to eliminate risk and cost from the supply chain

A high degree of scrutiny, vetting, and discerning should take place when choosing service providers, 3PL’s, freight forwarders, and customhouse brokers.

Areas of evaluation:

Service providers can be very valued partners in your global supply chain. Just because they hang out a shingle does not mean they can provide real benefit. Scrutinize robustly and vet diligently. It will pay off in the long run. Having a quality partner will make your job easier and with a greater ability to meet all the challenges successfully.

Step 5: Manage the Supply Chain with Robust Technology

Supply chains that have expansive technology in every aspect of the operation will gain great leverage in performance metrics.

Areas of technology in the supply chain are:

Technology creates efficiency, ease of operations, robust information flow, security, and other benefits. It allows for the highest levels of performance in any organization, but more particularly in the global supply chain. Technology advances forward and expands every day. Keeping contemporary is a challenge that all supply chain executives face.

Cyber Security has grown to be a significant threat. It must be contemplated and managed in every moment and keystroke of the day. There are cybersecurity solutions that must be integrated into all aspects of operation, where there is a technology interface.

Step 6: We have been doing it this way … for over 5 years with no problems.

We hear this often and clearly because a company has not encountered a specific problem, does not necessarily mean things are being done correctly.

A volcano is not a problem until it erupts. The underlying problem is waiting for emergence. Dealing with potential issues proactively and anticipating “what ifs” are a much better option.

Potential problems along with potential betterments must be proactively pursued to assure you do not have serious issues and are doing all possible to reduce risk and cost and/or business process improvements.

Continually updating a logistic SWOT Analysis, risk management assessments and process evaluations are all necessary steps in mitigating any unanticipated problems in the future.

Because no one is complaining does not mean everything is ok. You must be proactive in making sure everything is ok, without assumptions. Err to the side of conservativism as it will prevent future headaches.

The pandemic was a complete disaster and disruption to all global supply chains. Having said that, some good came out of it as companies had time for internal introspection at risk and threats leading to proactive steps in mitigation.

Step 7: We Handed it to the Carrier, so it must be “on board”

Tracking and tracing need to be accomplished at a very detailed and exhaustive level.

Just because you have confirmation that a carrier has received freight, does not assure it made it on board the vessel, aircraft, railcar or truck.

You need affirmation that in fact the goods have actually made it on board the conveyance with an updated ETA, followed up with daily frequency, in case of any unanticipated delays, which occur all the time.

Step 8: We Always Check the Denied Parties List

Many international executives believe their companies are consistently checking and reviewed the various lists making up the “Denied Party Screening” regulations for importers and exporters.

In many years of auditing companies engaged in global trade, only a small percentage is fully compliant with the review, checking and compliance responsibilities associated with Denied Party Screening.

There are available direct connections into the government agencies and numerous third-party technology companies with DPL Screening Capabilities.

Step 9: I am the Ultimate Consignee on these Goods, but not the Importer of Record.

Many companies who are the recipients of imported merchandise who are not participative in the import process believe they have no import responsibilities.

That is potentially and totally incorrect! Customs (CBP) has the right to evaluate any import situation and determine that the ultimate consignee could be considered the “importer of record” and therefore has all the responsibilities as the “importer of record”. This would then require adherence to all import regulations HTSUS, valuation, recordkeeping, etc.

Step 10: Domestic Packing will work for my International Shipments

Claims for loss and damage on international shipments occur every day and a major cause is inadequate packing, marking and labeling.

Just check with any marine insurance companies they will advise of the frequency and the severity of claims occurring on import and export shipments directly attributed to inadequate packing marking and labeling which could jeopardize marine cargo insurance coverage as an implicit or explicit warranty.

Step 11: Do we really need to ensure the shipment?

Loss and damage to international freight is a daily occurrence worldwide. In the overall cost of the global supply chain, marine insurance is an inexpensive purchase offering a high value of the return.

Just looked at what happened this year in the Suez Canal, with the grounding of the Ever Given (Evergreen Lines) which potentially caused losses in excess of $ 1billion.

Direct claims in delays and damage and indirectly caused by a General Average Claim. The fines, penalties, delays and lost cargo is still mounting, as only in early July, has the vessel finally exited the Suez Canal.

Marine cargo insurance is a solid, responsible, value-driven, and best practice purchase for any company shipping goods internationally.

“All Risk”, “Warehouse to Warehouse” with contemporary customized underwriting terms under standard policies are available.

Step 12: Do I need to train my global supply chain team?

The challenges of the global supply chain are numerous and daunting. These challenges can only be met by experienced well-trained managers and staff. The training needs to be consistent, contemporary and robust. Key areas to include are:

-Compliance

-Documentation

-Negotiating Freight

-Sourcing Management

-Logistics Management

-Technology Management

-Warehousing & Distribution

-International Contracts

-Risk and Spend Directives

-Foreign Trade Zones

These outlined above show a handful of the necessary skill sets required for import and export personnel to master. And “training” is the pathway to successful global supply chain management.

Summary:

The twelve examples outlined above provide a synopsis and evidence that mistakes based upon a lack of knowledge and skillsets can cause great disruption in import and export activity in the global supply chain.

Developing resources, providing training, and implementing procedures will assist in mitigating the problems and challenges identified in the above article.

Resources in international business and supply chain management will provide informed intelligence that will allow for making better decisions.

Training and skill set development will better prepare supply chain, import & export executives, managers, and staff to better deal successfully with all the challenges of global trade.

Procedures, protocols, and disciplines in management are always critical to a company’s success in business. In the global supply chain, SOPs are an integral component of freight, logistics, trade compliance, foreign sales, and overseas procurement that assure a company’s success in its international footprint.

The author can be reached at: tomcook@bluetigerintl.com for questions and comments.