I interviewed Adrian Chen who discussed optimizing export controls in the supply chain.
Dustin: It’s good to speak with you again, Adrian. Today we look forward to hearing what you have to say about export controls and optimizing export controls in the supply chain. Can you start by providing a brief background of yourself?
Adrian: Thanks, Dustin. Thanks for the invitation again for today. I have been involved in supply chain and probably global trade compliance for over twenty years, twenty-plus years now, basically from end-to-end with global management experience. I still keep close professional relationships with a lot of various customs and governmental agencies in China and also within Asia Pacific, Europe and the U.S. due to my background in global trade compliance. Basically, in a nutshell, my qualifications and my experience, plus my knowledge come from various industry backgrounds, generally in the areas of electronics, electrical goods, manufacturing; specifically in acoustics, audio, finished goods, white good, home appliances, medical devices, and, especially, semiconductors, which is actually very close to my heart. I have been involved in industries like: mechanical; poly medicine; resins, which basically are pigmentation dyes used for the textile industry; I have been involved in commodities and raw materials as well; and also, from the 3PL, auditing integrated logistics providers. I also did a short stint in trade financing. Basically, my background is actually two decades of regional management experience, and I have both technical and operations and also client-facing roles that I’ve actually been involved with from a global trade compliance, logistics, and a supply chain perspective.
Dustin: Can you talk about optimizing export controls in the supply chain?
Adrian: Sure. The title itself, generally, the theme itself, optimizing export controls in the supply chain or channels operations is quite self-explanatory. The standard supply chain or channels operation is actually the lifeline of any exporter or manufacturer in developing, producing, and selling products. What any exporter or manufacturer hopes to achieve at the end of the day is to manufacture quality goods, being able to export all their produce without any hiccups or problems. A trouble-free supply chain, that’s what they’re looking at. Now, in my article that I’ve actually written on optimizing export controls in the supply chain (See article at bottom of this post) is basically to look at a process within the back-end of the supply chain, exporting products, exporting quality products trouble-free and how to optimize export controls, what actually assists a trouble-free supply chain. That’s the main objective and the main focus of the article.
Dustin: And why do you want to optimize the export controls in the supply chain?
Adrian: Very good question, Dustin. To have a hundred percent trouble-free supply chain, we have seen that in many supply chains, export controls tend to play a potential stumbling block, or it could be a potential hurdle in exporting products freely and trouble-free. Now, there are many controls that actually control or monitor how products are actually crossing borders or how products go into another country, who is using the products ultimately, why the products are being used and what is it being used for?
Export controls, at the end of the day, will be and could be a major hurdle when a product is actually ready, when it’s out of the production lines, into the warehouse, it’s been picked, packed, orders are ready, and prior to exporting, the physical exportation of the product, export controls come into play, and it could be either a hurdle that could actually stop the whole process, or it could be utilized to the fullest function whereby it could actually provide a trouble-free exporting process at the end of today. Why we need to optimize export controls in the supply chain is that instead of trying to overcome, find loopholes in trying to evade or go around the export controls within a supply chain or channel operations, I believe that the best solution for any major exporter or manufacturer is to actually look at optimizing what and how to use export controls to the benefit of the company in order to have a trouble-free supply chain, and that’s what the article discusses.
Dustin: Can you talk a little bit about how it’s done?
Adrian: Okay. One of the process diagrams that I had actually presented in the article is on the PGI process flow. The PGI process flow, or the Post-Goods Issue process flow, it’s generally quite a straightforward, simple process. It’s basically orders dropped into the system from customers and a certain product is actually allocated. The WMS, or the warehouse management system, does the pick list according to the sales distribution order. And once the order is approved and there’s an allocation from the warehouse for that particular product, the product is actually ready for exportation.
Now, prior to the physical exportation or prior to the physical product leaving the warehouse, there is a process, a final step in the process. That particular final step is actually called export controls. There will be a screening process to actually screen where the product is going to, who is it being sold to, and what is it being used for ultimately. Once that screening process has been given the green light, it will go into the second phase of export controls process; it will be called licensing. If licensing is required, it will then request for a licensing approval for the system to bypass and to approve the physical exportation. If no licensing is required, that particular product can actually leave the warehouse immediately.
Now, coming back half a step behind will be if there was no licensing required, physical exportation can happen. That is fantastic but if licensing is required, what if licensing was not done in preparation for the order that was picked and packed and ready for exportation? The order will be delayed, the whole supply chain will be frustrated, and at the end of the day, there will be a backlog of orders that will be facing the same difficulties because of the licensing requirements. This is where my article comes in, providing a PGI process flow that showcases a very clear step-by-step approach on when an order drops, the product is ready for exportation. Then the second phase, which is the export controls procedures, clearly shown in the PGI process flow to give a clear idea how, when, why, and who should actually be involved in the optimization program itself or the optimization activities itself.
Dustin: Thank you, Adrian. Do you have any final recommendations or conclusion?
Adrian: I’ve always believed very simply that having a trouble-free or gaining excellence in a supply chain will always be a contribution from various activities within the company itself. It could be from research and development, R& D; it could be from production; it could be from quality control; even from purchasing, logistics, and also trade compliance. Optimizing export controls in the supply chain isn’t just a job that’s actually confined to the trade compliance experts within the company. It’s basically a responsibility of every single employee within a company in trying to ensure that there’s a trouble-free supply chain.
My recommendation has always been that every single employee should take a personal interest (aside from the corporate interests) as a work interest to understand how export controls work. And at the same time, a particular person, let’s say from R& D, may not be a trade compliance expert involved in export controls work itself, but understanding that particular portion or having a general overview of what export controls do and how export controls could be optimized to obtain a hundred percent trouble-free supply chain would be ideal in any situation. It could be someone from the top-management level, at the C-levels, all the way down to the SVPs or the VPs, even down to the very lowest-ranking personnel in any company. Everyone should know export controls or at least have an idea how export controls work. At the end of the day, we could actually look at having their fair idea of how export controls work which will give them a very general idea on how to utilize or start doing things within their scope of work to be able to actually gain a hundred percent, trouble-free supply chain at the end of the day, when a product is ready to go out the front door.
About Adrian Chen
Global Supply Chain / Doctorate Candidate
University of Management & Technology