Successful companies use metrics or key performance indicators (KPIs) to measure aspects of their performance. Often times, these metrics or KPIs apply to sales, marketing or manufacturing. But they can—and should—be used in import and export compliance functions, too.
When effectively applied, trade compliance metrics drive process efficiencies, provide better visibility, and promote the efforts of the trade compliance group to the executive team and throughout the entire organization.
How Metrics Improve Your Compliance Operations
The metrics you develop are tools to help you quickly assess and communicate what's happening every day within your compliance group. Develop metrics that add value or provide information that leads to improved performance.
Over time, metrics can be invaluable. For example, right at your fingertips you will know exactly how many entries the team handles per month, how the products arrive at each port, and the total entered value by mode and by port.
By capturing and trending this information you can identify process gaps that may be affect import and export compliance. In addition, you may identify other possible inefficiencies affecting the supply chain such as the influx of expedited freight—which could indicate supplier fulfillment problems or a higher percentage of entries requiring entry documents or intensive exam at a specific port of entry.
Some Compliance Metric Examples
You may wish to create import metrics that track the total number of entries by method of transportation and by port; the percentage of paperless entries that were entered paperless, EDR or intensive; and the total entered value by mode and by port. This information should be readily available from your broker on a monthly basis and can be quickly and easily compiled and graphed using Excel.
Export metrics could include the number of exports by country, method of transportation, value, number of AES entries, transit times, percentage of exports requiring an individual validated export license, and export order processing times.
Once defined, metrics can be used to help support compliance initiatives such as an importer self-assessment program and drive efficiencies through continuous improvement. Additionally, metrics can be used to justify additional staff and measure the overall effectiveness of the compliance organization.
Finally, metrics can help addressing and possibly avert potential supply chain disruptions. Metrics can provide a wealth of valuable information to you and your executive team and bring visibility and awareness to the critical nature of the activities performed by trade compliance personnel.
This post was originally published in June 2007 and has been updated to include current information and formatting.