SAPs Global Trade Services 3.0 Eases Trade Regulation Compliance

After several years of pushing its NetWeaver integration stack and Composite Application Framework, SAP AG is unveiling the next iteration of one of its half-dozen Composite Applications. Global Trade Services 3.0 can help companies that trade commodities globally better comply with trade mandates.

GTS 3.0 is based on three precepts: the need for companies to closely comply with federal and global mandates developed after the Sept. 11, 2001, terrorist attacks; the modernization of government IT systems; and globalization that requires companies to explore global sourcing, said officials of the Walldorf, Germany, company.

GTS 3.0 helps users automate import and export trade processes along the supply chain, officials said. Version 3.0 adds capabilities that let users better comply with regulations mandated by NAFTA (North American Free Trade Agreement) and European Union agreements.

A new Risk Management component streamlines trade mandate compliance by providing automated supplier certificates. Under trade agreements, companies get reduced rates or exemptions on customs duties, based on established rules and a products country of origin, which in turn determine rate eligibility, according to SAP officials.

The Risk Management component automates the process, including requesting vendor declarations from suppliers and calculating and publishing eligibility information in sales documents, and providing reports on the process. The new component is also integrated with the business intelligence capabilities from NetWeaver—SAPs integration stack and underlying technology for xApps.

Prior to implementing GTS, Eric Vennekens, director of International Trade and Customs at semiconductor manufacturer ASML Holding N.V., had his group manually check every order. Because ASML manufactures chips that are considered strategic goods that can be used for military purposes, every order must be checked against an international sanction list.

"You have to train an awful lot of people. Generally, they are from logistics, and it is not their area of expertise," said Vennekens, in Veldhoven, Netherlands. With the GTS xApp interfaced with ASMLs SAP R/3 4.6 system, that process is now automated. Once an order is placed, the R/3 system defines which transactions are relevant to trade verifications and transfers those to GTS, which creates its own Customs Document.

The GTS xApp itself sits on top of a companys existing technology stack—generally back-end ERP (enterprise resource planning) systems—and pulls data from the underlying applications.

Including the half-dozen internally developed xApps and those developed by partners, SAP has 18 such applications on the market.

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