All companies have the possibility to do business abroad, for example, to make imports, but it is necessary to consider a sequence that includes suppliers, formalities and contributions. It is also important to consider key questions, such as, is the company ready to respond to high levels of demand and is the product competitive enough. These are just a few of the things to keep in mind before taking the step into the import/export business. Randall Castillo Ortega, an expert on importing and exporting in Centra America, shares insight into how importation businesses can optimize their processes to achieve better results.
Logistics accounts for nearly 30% of the total expenditures of small and medium-sized enterprises. In addition, the activities involved such as packaging, storage, transportation and distribution of the product are vital to the operation of the company. The impact that good logistics management can have on the performance of other areas and the great contribution it has to the development of the overall results of each company is generally unknown.
When working with export and import, it is essential to consider three points. First, sales abroad must be carried out by an intermediary collecting the goods and selling them on the right market. The second point is to consider having a local partner who knows the market and promotes sales and growth. The third point is the production implemented—whether on each or outside. Asserts Castillo, “Many times, companies, especially small ones, choose to do the process alone. However, if it is an emerging or highly competitive foreign market, it is always advisable to start with a partnership.”
Proper organization means having good inventory control, properly organizing warehouses, effectively and on-time product delivery to the customer. The company favors logistics processes and, contrary to what is thought, does not require a large amount of investment.
It is essential to post the products that are in stock, the number of raw materials, how much is delivered, how long deliveries are made and how long it takes to sell. Asserts Castillo, “By having inventory metrics, you can work on improvement and optimization plans, so the availability of a product will be available to the consumer when required.” This process is achieved by finding the most appropriate balance between supply and demand.
Demand and level are key management indicators for the company to retroactively process and be able to respond more efficiently to consumer needs. This goes hand-in-hand with an optimal supply chain. Clarity in the supply and supply chain must also be manifested in each of the parties that make up it, including partners. It is important that employees perfectly identify which link in the supply chain the company is in. In turn, this will serve when it comes to creating goals.
The company will be affected if production exceeds distribution capacity, so investment should only be made in means of delivery rather than more machinery. All levels of the distribution network must grow on a par with the level of production. In other words, there will be extra goods in inventories that will surely be lost.
Constant communication with company staff, customers and suppliers will allow having a wide overview of the areas of opportunity in the company, so including new and better effective forms of communication will allow having clarity in each part of the supply chain.
Getting ahead of problems is essential to have a complete view of what happens to goods along the supply chain and to have timely information related to both physical and logistical characteristics. If small and medium-sized enterprises focused more attention on logistics, their processes would achieve an improvement rate of up to 12-15%. Any company that understands how to monetize its distribution, storage and transport will have a higher chance of excelling from all its competitors.