A PROCESS ANALYSIS OF GLOBAL TRADE MANAGEMENT: AN INDUCTIVE APPROACH

TLDR

Global Trade Management (GTM) encompasses the processes that support cross‑border transactions among importers, exporters, trading partners, and governments, and IT‑GTM refers to the information technologies that streamline these processes. The study presents a detailed process model of GTM that enables estimation of the benefits of IT‑GTM. The authors use a grounded‑theory approach combined with data analysis and analytical modeling, collecting time‑reduction data for individual trade steps and applying Critical Path Analysis to estimate improvements in key metrics such as the Manufacture‑to‑Invoice Cycle, Days Sales Outstanding, and Order‑to‑Receipt Cycle. The model estimates that IT‑GTM yields gross savings of 1.7 % of annual sales for exporters and 0.6 % for importers under conservative scenarios.

Abstract

This paper describes a new, detailed process model for Global Trade Management (GTM) that contains sufficient detail on cross-border trade processes to estimate the benefits of Information Technology-Enabled Global Trade Management (IT-GTM). Our methodology combines a grounded theory approach with data analysis and analytical modeling. GTM describes the processes required to support cross-border transactions between importers, exporters, their trading partners and governments. IT-GTM is the set of information technologies and software solutions that can be used by companies to carry out their global trading processes in a streamlined manner. We collect data on time reductions for individual trade process steps using IT-GTM and use Critical Path Analysis to calculate the resulting improvements in key metrics such as the Manufacture to Invoice Cycle and Days Sales Outstanding for exporters, and the Order to Receipt Cycle for importers. Under reasonably conservative scenarios the gross savings from IT-GTM amount to 1.7 percent and 0.6 percent of annual sales for exporters and importers, respectively.