With Safety Comes Savings

February 13, 2008 by Ian Alexander

As international trade continues to expand, the world’s economy becomes more thoroughly integrated, further complicating import and export processes. Rohm and Haas, a world leader in specialty materials manufacturing with headquarters in Philadelphia, knows this as well as anyone. With over 100 locations spread across dozens of countries, delivering materials is as big a challenge as producing materials. When a clipboard full of signatures was no longer the best method for operating Rohm and Haas’s trade management, they looked to SAP GRC Global Trade Services to get things safely and efficiently from Shelf to Dock.

The late 90s were a busy time for Rohm and Haas. The company was thriving due to the increased demand for small electronics equipment. They added a number of electronics materials companies to their roster, and in late 1999 acquired Morton International, which included locations all over the world. While this USD $ three billion plus acquisition broadened their market share, it also gave birth to significant operational and logistics issues, leaving Rohm and Haas with an incredibly diverse and fragmented IT environment.

“Imagine a global company trying to operate globally with different systems in every region trying to do the same thing. It was very, very difficult,” says Anthony Patalocchi, business process manager in Environment, Health and Safety (EHS) and Compliance for Rohm and Haas.

By 2000, the manufacturing climate was facing an explosion of electronic commerce requirements. More and more suppliers and customers wanted to do electronic commerce with Rohm and Haas. But the company’s collection of diverse IT systems, coupled with new global trade regulations, proved challenging for even the simplest of tasks. Late that year, the company began implementation of SAP R/3, tying together finance, sales, logistics, manufacturing, supply planning, demand planning, EHS, and business warehouse and solidifying a singular infrastructure for the company.

People, precautions and paperwork

The global economy’s growth into 2004 showed Rohm and Haas that managing the manufacturing of product was only half the battle – until materials were delivered and paid for, they were little more than boxes full of promises. While SAP R/3 readily handled the ERP portion of their business, global trade was becoming more of an issue. A dizzying number of regulations such as the updated United Nations regulations, Prohibited Parties list, SOX (Sarbanes-Oxley Act), ITAR (International Traffic in Arms Regulations), C-TPAT (Customs – Trade Partnership against Terrorism), Dual Use, and Export Administration Regulations were being more ardently enforced post 9/11.

Shipping products over borders and off to customers was a constant challenge – manually navigating customs procedures and thumbing through denied sanctioned party lists proved to be time consuming and costly. During the SAP ERP implementation, Rohm and Haas learned of SAP GRC Global Trade Services and saw it as a beneficial adjunct to their ERP.

“Obviously we, like every company, wanted to participate in the growth of developing markets. But we needed to make sure that we complied with local laws, as well as met our own standards in countries we do business in and companies we do business with. For trade compliance, SAP GRC Global Trade Services allows us to do all those things,” Patalocchi says.

Signed, secured and delivered

To date, Rohm and Haas has completed implementation of the import and export management module and finds that its biggest value is the integration with SAP R/3. When a sales order is created, when a purchase order is created, or when a delivery is created, those actions are immediately checked against SAP GRC Global Trade Services by departure and destination country for sanctioned party list, licensing, drug precursors, and embargo situations.

In addition to the difficulties moving into developing countries, Rohm and Haas faces the pressures of manufacturing and delivering products identified by the U.S. Drug Enforcement Agency (DEA) as drug precursors. These are materials from which solvents can be extracted and used in illicit drug manufacturing. Manually, these checks and double checks would eat up man-hours at an astronomical rate. With SAP GRC Global Trade Services they happen in the blink of an eye.

Rohm and Haas users utilize one dashboard in SAP GRC Global Trade Services, to manage their entire global trade system. Items being shipped can be selected to show users and which licenses are needed for a product to reach the selected destination. The Rohm and Haas SAP GTS solution collects data from different sources, including their ERP system, CRM, and a third-party data provider. The application has the ability however to draw data from anywhere including government agencies and customer ERPs.

Being compliant – a requirement for growth

With the help of SAP GRC Global Trade Services, Rohm and Haas is able to screen multitudes of different business partners and uses roughly 35 different boycott lists to screen customers and vendors. “Being compliant is a requirement for us to be able to grow. If we couldn’t do it, we would be bottle-necked into only selling where we currently sell, which is not a growth strategy at all,” says Rhett Fuller, business process specialist – Foreign Trade/Global Trade Services, at Rohm and Haas.

SAP GRC Global Trade Services ensures compliant execution of international transactions, providing Rohm and Haas with a competitive advantage in the global marketplace through increased speed to market, lower delivered costs and a reliable product delivery network. It also mitigates the risk of extended customs audits, fines, and penalties, the suspension of import/export activities, and – most of all – brand name damage due to global trade compliance failures.

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