One of the challenges facing British small business exporters is the complexity that surrounds the actual delivery process. When it comes to quality standards, the fact is that they must be able to respond to different, and potentially higher, levels of customer expectation in foreign markets.
The US in particular has very high quality standards, especially where agricultural and consumer goods are concerned, and understanding these is critical.
Roman Itskovich, vice president of currency services firm Ebury, says: “Those exporting to foreign markets with different standards and expectations need to understand the industry-specific regulations they may come across, which can vary between regions. For example, an electronics business exporting to the US will need to make sure that its goods meet the Federal Communications Commission (FCC) Declaration of Conformity.
“Exporters should learn from their clients exactly what they need, asking for samples if possible to make sure their client is happy. This is hugely important in the US.”
Securing the supply chain
Security of the supply chain is taken particularly seriously in the US. For UK firms that are unable to prove the quality of their management systems this can act as a barrier to sales.
Yet, according to research from business standards organisation BSI, while most businesses have good information about the top 15% of their suppliers, they have little, if any, knowledge about the rest.
In order to help businesses reduce their supply chain risk, BSI has developed a new specification – PAS 7000 Supply Chain Risk Management – a supplier pre-qualification.
Brian Such, project manager at BSI British Standards Solutions, says: “The standard is based on an existing and successful standard already in use in the construction trade that allows one-stop verification between business partners. PAS 7000 takes this into the international domain, and took into account feedback from a number of US firms.”
Reliability leads to customer satisfaction
American businesses value service and reliability extremely highly. Businesses that look after the supply chain infrastructure can make the process of exporting to the US much easier and maintain high levels of customer satisfaction.
“Ensuring a smooth supply chain and on time delivery can help you create a reputation as a trusted supplier. The right support in the supply chain process can therefore be a valuable asset to exporters,” adds Itskovich.
In fact, a good supply chain infrastructure logistics company can dramatically enhance the flexibility and high quality customer-service value that exporters need to succeed in a tough US destination market.
Professor David Menachof, from the Logistics Institute at Hull Business School, says: “As well as handling the paperwork needed to clear customs, your logistics provider can provide the expertise needed to get your product to its final destination. That means getting it packed properly into the shipping container, moved to the port, then across the ocean in a timely manner, and finally arrange to haul the goods inland to your customer in the US.”
Longer term, exporters could consider pre-positioning goods at a port-centric logistics facility in the US, ready to ship to a customer as soon as an order comes in, reducing customers’ lead time by at least 10 days.
Help from third-party logistics
Third-party logistic companies’ service offerings have evolved from supporting simple logistics processes to facilitating end-to-end supply chain processes. This involves dealing with higher volumes with increased logistics complexity and individual customer orders, which need to be delivered to a store or direct to a customer.
And customers have become much more demanding around product customisation and delivery times, expecting services such as same-day or next-day delivery with guaranteed delivery slots.
Global shipment and logistics company UPS recently expanded UPS My Choice and the UPS Access Point network – two of the services it offers to retailers and consumers to make it easier for them to manage their residential package deliveries. Currently, more than 10 million consumers in the US are using UPS My Choice to plan for their deliveries.
The importance of exporting know-how
One of the biggest challenges for UK SMEs aiming to penetrate the US market is a basic lack of export knowledge.
For example, a recent pan-European SME survey carried out by UPS found that many exporters are unaware of the TTIP (Transatlantic Trade and Investment Partnership) trade agreement being negotiated by the EU and US to remove some of the financial barriers and red tape to help them break into US markets.
Awareness and understanding of the agreement is low across all European markets surveyed, on average 21% or less.
Help is also available from the UPS Export Toolkit, a central source of export support and information designed to help them navigate the ‘how to’ of shipping to export markets, understand export regulations and procedures.
Another emerging trend, which will improve flexibility and customer service and streamline the US export process, is third party logistics company investment in cloud-based technology to further improve services.
Peter van Merode, at supply chain specialists JDA, says: “This technology enables better inventory management, more detailed picking, support of value added activities and more efficient warehouse and transportation management processes, with a strong focus on efficient ‘last mile’ execution.
“Ultimately, exporters need to ensure that their logistics partner has the capabilities to succeed in this new market dynamic.”
Content on this page is paid for and provided by UPS, sponsor of the Exporting to New Markets Hub on the Small Business Network.
