Adoption global data standard for substainable and security supply chain across APEC

Wider adoption of global data standard on supply chain will promote sustainable and security trade across APEC. Photo: Thanh Thuy

As known that In 2013 APEC Trade Ministers endorsed GDS to address supply chain connectivity and complexity challenges thereby relieving the supply chain choke points. Then APEC reaffirmed the importance of supply chain connectivity to reduce choke point pressure and aimed to reduce 10% transaction cost across APEC in 2015.

The workshop discussed the following topics: Study on the applications of Global Data Standard for APEC Supply Chain Connectivity; Experience sharing on the outcome of the pilot projects; Case sharing on facilitation and global data standards and promoting a wider adoption of GDS.

In particular, the discussion on the study released the study results from the tracking, cost benefit analysis and risk management of GDS pilots projects and recommend next actions or policy option to enhance supply chain connectivity through GDS, thereby contributing to broader APEC objectives on connectivity Framework Action Plan and Bogor Goals.

Mr. Akhmad Bayhaqi, Policy Analyst, APEC policy Support Unit, indicated the uses of Global Data Standards (GDS) were relevant to most of the stakeholders of the supply chain, starting from the exporter, third party logistics providers, customs and border agencies up till the importers.The aim of this projects was to examine how the application of GDS can iprove the visiblity and effeciency of the supply chain based on three GDS piolt projects. In addion, the performane is evaluated in term of visibility/ traceability, risk management/ integrity, responsibility, collaboration, and innovation.

Besides that, the pilot projects use interoperable cloud-based EPCIS platforms (such as exTRACK or Mi-Trac) to capture data throughout the supply chain including cargo movement to provide visibility and data sharing to relevant parties, hence enabling better communications among stakeholders.

Through the pilots, it has demonstrated the potential benefits and costs that could be delivered by GDS. Moreover, dependent on the firms’ adaptation process of using GDS system, the benefits could be further realized in the long-term. Once a firm is more familiar with GDS, it could develop more efficient processes for operating the system and costs could be further reduced and it may find additional benefits of GDS application in the long term, not only for multi-international companies but only for small and medium enterprises.

There are several drivers that determine the adoption of GDS. One of the main drivers for its implementation is the firm’s technological capacity. The size of the company is another determinant as it establishes the potential for GDS to simplify processes and the ability to afford the system.

A multi-pronged strategy is being advised from the phase 1 report to facilitate the adoption of global data standard across APEC supply chains industry facilitation needs to be supported through initiatives with manufacturers and logistics service providers such as establishing a global data standards certification system and linking micro, small and medium enterprises (MSMEs) to standards compliant suppliers. The need for product authenticity to maintain the firm’s goodwill and integrity also promotes the adoption of GDS. Lastly, the high regulatory risk that could lead to cost detention encourages firms to adopt a more efficient mode of data exchange.

However, there are several main challenges to GDS adoptions mainly are the lack of awareness of the possible uses of GDS and the need for stronger justification to change existing systems.

Mr. Nick Allision, General Manager Government, GS1 New Zealand, also pointed out some barriers on GDS adoption including Legistative or regulatory hurdles such as content and form of declaration information, agency discretion and much more, often set out in legislation or rules that are slow to change. People have their day jobs with a little free resource to invest in change to systems that are proven or suffice to do the job. Organisational change hurdles and incentives getting agreement inside large organizations, multi agencies and the full costs systems are not carried by agencies so it led to risky for agency revenue. Public risk aversion to any wholesale change of systems that already do the job. Constituencies resistant to change, consignment filers and freight forwarders might not welcome data flowing directly from firms or data pools to agencies. He stressed that financial cost is not a significant barrier to adoption of GDS.

The supply chain stakeholders should have close collaboration and engagement in order to further understand the opportunities, as well as the challenges for GDS implementation, is necessary to improve its wider adoption.

Therefore, he recommended that APEC should engage with border agencies to scope business needs and how GDS can assist with risk management and rapid border clearance well in advance of GDS pilots. Furthermore, the pilots should continue but it needs to be led by border agencies or through a private public partnership. It should focus on adding supplemental data o enhance existing agency processes, in areas of high volume regular trading areas; supporting new agency initiatives such as AEO/ trust trader programmes aimed at faster border clearance where GDS could substantially enhance agencies processes; management of high risk and value goods such as traceability and authentication of products.

Moreover, Ms. Maria Lucana, Supply chain Specialist, Trade facilitation Department, Ministry of Foreign Trade and Tourism, Peru, stated that more than 70% of the foreign trade use the maritime route. Thus she proposed to initiatives of border agencies to improve the risk management in their processes such as single window interoperability, Customs Cooperation, and others. Also, initiatives of the public sector to reinforce the security in the supply chain as AEO program, electronic invoice and others.

Therefore, this is the way for small and medium enterprises to join e-commerce easily through GDS. Through the workshop, enterprises and competent authorities in APEC region will adopt global data standard (GDS) for wider acceptance for sustainable and security supply chain across APEC.