supply chains & digital information current & future trends in international trade

UNITED NATIONS CENTRE FOR TRADE FACILITATION AND ELECTRONIC BUSINESSUnited Nations Economic Commission for Europe

UN/CEFACT

Supply Chains & Digital InformationCurrent & Future Trends in

International Trade

Mike Doran

UN/CEFACT Plenary Vice-Chair 3rd Executive Forum on Trade Facilitation, Geneva, 20-21 June 2005

UN/CEFACT

Agenda

1. UN/CEFACT2. International Trade Transaction Process

- International Supply Chain Reference Model

- Trade Facilitation & Trade Security

- Single Windows

3. From Paper to Digital documents- Document Standards - International Trade

- The UNeDocs Project

4. A Roadmap Towards Paperless Trade

UN/CEFACT

UN/CEFACT

MissionTo deliver trade facilitation recommendations & e-business standards which can improve the ability of business, trade and administrative organizations within developed, developing and transitional economies, to trade products and relevant services more effectively - and so contribute to the growth of global commerce.

FocusThe worldwide facilitation of national AND international trade transactions, through the simplification and harmonization of business processes, procedures and information flows.

UN/CEFACT

UN/CEFACT Structure

STRATEGY

VISION

TACTICAL

UN/CEFACT

Agenda

1. UN/CEFACT2. International Trade Transaction Process

- International Supply Chain Reference Model

- Trade Facilitation & Trade Security

- Single Windows

3. From Paper to Digital documents- Document Standards - International Trade

- The UNeDocs Project

4. A Roadmap Towards Paperless Trade

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UN/CEFACT

International Supply Chain Reference Model

The Challenge:-

To enable trade facilitation & e-business solutions to be developed that meet the needs of the potential 45 Parties involved in the execution of National and International Trade Transactions involving Several hundred activities undertaken in some 70 relationships whilst recognising the variety of technical and business capabilities of the parties and contribute to cost savings of some 3 to 10 % of International Trade.

UN/CEFACT

International Supply Chain Reference Model

The Model consists of Text Descriptions of the major trade processes and information

Pictorial representations of the information using Unified Modelling Language (UML) standard

A Model linking these representations together

A Catalog of common business processes

UN/CEFACT

International Supply Chain - Many Parties

Source : Complex Networked Supply Chain (Harwick, 1999 )

UN/CEFACT

International Trade Transaction Process

BUY SHIP PAYCustomer Supplier

Intermediary

Authority

The International Trade Transaction Process consists ofThe International Trade Transaction Process consists of integrated and coordinated flows of information, goods & payments

Source: The UN/CEFACT International Supply Chain Reference Model

UN/CEFACT

International Trade Transaction Process

CommercialProcedures

• Establish Contract• Order Goods• Advise On Delivery• Request Payment

TransportProcedures

• Establish Transport Contract

• Collect,Transport and Deliver Goods

• Provide Waybills, Goods Receipts Status reports etc.

RegulatoryProcudures

• Obtain Import/Export Licences etc

• Provide Customs Declarations

• Provide Cargo Declaration

• Apply Trade Security Procedures

• Clear Goods for Export/Import

Financial Procedures

• Provide Credit Rating• Provide Insurance• Provide Credit• Execute Payment• Issue Statements

INVOLVES

Prepare For

ExportExport Transport Import

SHIPBUY PAY

Prepare For

Import

UN/CEFACT

Trade Facilitation & Trade SecurityNew processes to ensure the security of international trade

• World Customs Organization’s Advanced Cargo World Customs Organization’s Advanced Cargo Information (ACI)Information (ACI)

• US Customs 24 Hour RuleUS Customs 24 Hour Rule

• International Maritime Organization’s International Maritime Organization’s International Ship & Port Facility Security Code International Ship & Port Facility Security Code (ISPS)(ISPS)

• The European Commission communication on a The European Commission communication on a Simple & Paperless environment for Customs & Simple & Paperless environment for Customs & TradeTrade

UN/CEFACT

Sub Processes of the Ship Use Case

UN/CEFACT

Single Windows

UN/CEFACT

Meeting regulatory requirements and exchanging information with government

Electronic

Agriculture

Paper

Trader

Customs

Health Dept

Transport

Current Situation for Government & Traders

UN/CEFACT

A Single Window

Electronic

Agriculture

SingleWindow

TraderTransport

Customs

Health Dept

A 'Single Window' environment

Paper

The new The new approach - a approach - a simple, one-simple, one-stop solution stop solution offering offering official official control with control with trade trade facilitation.facilitation.

UN/CEFACT

Business Model of the MauritiusSingle Window

• Joint venture functioning 100% as a private concernJoint venture functioning 100% as a private concern

• Equity (± USD 1 million) provided by shareholders

• Self-sustainability perspective right from the start

• Activities financed from 2 sources:

• a software single-user licence of $ 1300

• a service fee of USD 5.- per declaration

• Highly successful and profitable activity:

• share value multiplied by eight since 1994

• yearly dividends = ± 90% of funds invested

UN/CEFACT

UN/CEFACT Recommendation Number 33

Recommendation & Guidelines on Establishing a Single Window

To enhance the efficient exchange of information between trade and government

http://www.unece.org/cefact/recommendations/rec33/rec33_ecetrd352_e.pdf

UN/CEFACT

SINGLE WINDOWSNext Steps

Developing a Standard for the

Establishment of Single Windows

Developing Commonly Agreed Data Structures for Single Windows

Benefits have to be higher than implementation costs

UN/CEFACT

Agenda

1. UN/CEFACT2. International Trade Transaction Process

- International Supply Chain Reference Model

- Trade Facilitation & Trade Security

- Single Windows

3. From Paper to Digital documents- Document Standards - International Trade

- The UNeDocs Project

4. A Roadmap Towards Paperless Trade

UN/CEFACT

International Trade & Digital Information• Exchange of information - covers the entire trade Exchange of information - covers the entire trade transaction processtransaction process

• Trade documents are the core means of Trade documents are the core means of exchanging informationexchanging information

• Goods cannot move faster than the information Goods cannot move faster than the information that controls themthat controls them

• There are increasing requirements for just-in-time There are increasing requirements for just-in-time delivery, approved supply chains etcdelivery, approved supply chains etc

• Added impact of security measures on Added impact of security measures on

information requirements (ACI, 24 hour rule etc)information requirements (ACI, 24 hour rule etc)

UN/CEFACT

Paper Document Standards

The United Nations Layout Key

• First started in the 1950sFirst started in the 1950s

• During 60s & 70s the UN Layout Key (UNLK) During 60s & 70s the UN Layout Key (UNLK) was in use in many countries worldwide through was in use in many countries worldwide through the work of UNECE & UNCTADthe work of UNECE & UNCTAD

• In 1978 the UNLK Recommendation had gained In 1978 the UNLK Recommendation had gained world-wide acceptance and was re-named, the:world-wide acceptance and was re-named, the:

United Nations Layout Key for Trade DocumentsUnited Nations Layout Key for Trade Documents

(Recommendation No 1 - ISO 6422)(Recommendation No 1 - ISO 6422)

Borders

Data Elements and Boxes

Boxes

UNLK Set of standards

UN/CEFACT

The ability to allow traders to move from a form to an The ability to allow traders to move from a form to an

electronic message AND BACK AGAIN at any point in the electronic message AND BACK AGAIN at any point in the

trade transactiontrade transaction

Market Requirements for International TradersMarket Requirements for International Traders

UN/CEFACT

eDocument DevelopmentsElecTra - SITPRO (UK)

FormForm UN/EDIFACTUN/EDIFACTEDI EquivalentEDI Equivalent

UN/CEFACT

Digital Document StandardsThe UNeDocs Project

Developing the initial work of SITPRO for international trade. Based on the following standards:

• UN Layout Key for Trade Documents (UNECE Recommendation 1/ISO6422)

• United Nations Trade Data Elements Directory (UNTDED/ISO7372)

• UN/CEFACT ebXML Core Components (ISO 15000 Part 5)

• UN/EDIFACT - for EDI applications • UN/CEFACT XML Naming & Design Rules• UN/ECE Trade Facilitation Recommendations

UN/CEFACT

UNeDocs Deliverables

A Digital Document Standard for international trade documents

Business Process model derived from the UN/CEFACT International Supply Chain Reference Model

ebXML UN/CEFACT Core Component-based Data Model from which the set of UNeDocs documents are derived which…

UN/CEFACT

… comply with the UN Layout Key standard …

UN/CEFACT

…and are delivered with box completion guidelines, …

UN/CEFACT

Plus UN/CEFACT XML schemas and…

UN/CEFACT

…and UN/EDIFACT message implementation guides

UN/CEFACT

UNeDocs Project - Current Status• Project transferred to the UN/CEFACT Forum Project transferred to the UN/CEFACT Forum TBG 2 - Digital Paper Working Group TBG 2 - Digital Paper Working Group

• A Call for Participation in this WG launched in A Call for Participation in this WG launched in document TRADE/CEFACT/2005/27document TRADE/CEFACT/2005/27

• Feasability study carried out with OASIS - UBL Feasability study carried out with OASIS - UBL TC for UBL 2.0 with UNeDocs alignmentTC for UBL 2.0 with UNeDocs alignment

• A Stakeholder Group will now be set up to A Stakeholder Group will now be set up to formulate the needs & documentary requirements formulate the needs & documentary requirements of stakeholders and provide support for the of stakeholders and provide support for the development & implementation of digital document development & implementation of digital document

standardsstandards

UN/CEFACT

Agenda

1. UN/CEFACT2. International Trade Transaction Process

- International Supply Chain Reference Model

- Trade Facilitation & Trade Security

- Single Windows

3. From Paper to Digital documents- Document Standards - International Trade

- The UNeDocs Project

4. A Roadmap Towards Paperless Trade

UN/CEFACT

“A Roadmap towards Paperless Trade”

TheThe Executive Forum is invited toExecutive Forum is invited to::

• Review the draft RoadmapReview the draft Roadmap

• Assess the current state of implementationAssess the current state of implementation

• Take stock of experience & lessons learned, Take stock of experience & lessons learned, to:to:

• Identify steps that governments & business need Identify steps that governments & business need

to take to change to paperlessto take to change to paperless

UN/CEFACT

What is a Roadmap?

It is a tool to facilitate the passage from the current situation to a future commonly agreed

objective, the implementation of paperless trade.

UN/CEFACT

What are the issues?

• Benefits: who benefits & how?Benefits: who benefits & how?

• Costs: what are the costs & who will pay?Costs: what are the costs & who will pay?

• Policy & Strategy considerationsPolicy & Strategy considerations

- Time frame & process- Time frame & process

- Role of governments- Role of governments

- Scope of Paperless Trade- Scope of Paperless Trade

- Trade Facilitation & Open Standards- Trade Facilitation & Open Standards

UN/CEFACT

What are the next steps for the Roadmap?

TheThe Roadmap is not a negotiated text. It is a living Roadmap is not a negotiated text. It is a living document to establish a framework, based on document to establish a framework, based on agreed objectives, which:agreed objectives, which:

• Includes the input of previous WorkshopsIncludes the input of previous Workshops

• Will include comments & recommendations from the Will include comments & recommendations from the Executive Forum on Paperless TradeExecutive Forum on Paperless Trade

• Will provide an initial “simple tool” for the implementation of paperless trade

• Could provide thematic input into the World Summit Could provide thematic input into the World Summit on the Information Society (WSIS), Tunis - Nov ‘05 on the Information Society (WSIS), Tunis - Nov ‘05

UN/CEFACT

Development of the Roadmap

The Roadmap will be further developed during the course of the Executive Forum & will be reviewed in the closing Round Table:

“Creating an enabling Environment to make Paperless Trade a Reality”

..and will then be forwarded to UN/CEFACT for consolidation & circulation.

UN/CEFACT

Next UN/CEFACT Forum Meetings

- 7th UN/CEFACT Forum

Lyon, France - 26 to 30 September 2005

- 8th UN/CEFACT Forum

Vancouver, Canada - March 2006

- 9th UN/CEFACT Forum

New Delhi, India - September 2006

UN/CEFACT

Mike.Doran@cern.ch

For further information see:

http://www.uncefact.org