Supply Chain Brain

Customs Compliance Is
More Important Than Ever
Navistar Parts & Its
Lean Journey Challenge

It’s critical for importers to realize that they

‘own’ the obligation to comply with Customs

regulations, says Hu Huang, director of inter-

national logistics and customs compliance at

Kichler Lighting Group.

Globalization presents a great many opportunities, no doubt about it, but with it certainly comes a number of headaches as well, not the least of which is keeping on the right side of Customs authorities.

Twenty years ago or so, compliance documentation was so much simpler, Huang says. Importation and clearance often could be done manually, especially at smaller companies.

Huang knows something about that. Kichler Lighting Group, a privately held firm based in Cleveland, got its start in 1938 as a small decorative lighting company. The company changed hands in 1954 and has grown considerably since then, marketing its extensive line of products exclusively through a network of showrooms and dealers.

With that growth has come complexity in the Customs compliance process, especially for importers of record, who since 1993 have been responsible complying with extensive regulatory schemes. C-TPAT and 10 + 2 regulations are among the latest documentation burdens. The onus is great enough that large retailers often have their own dedicated Customs clearance departments.

Whether the job is performed in-house or outsourced, visibility is vitally important. And that’s not something that can be achieved without automation, Huang says.

The three-pronged flow of physical goods, information and financial payment is much too complex now to be done manually, she says. Not only do you need real-time tracking, you must be able to retrieve reports and documents instantly. Moreover, in the event that you need to reconstruct a transaction or entry in the future, it’s useful to have an electronic “paper trail.”

None of this, of course, is possible without the support of topline managers, who must authorize the investment in the needed systems.

To view this video interview in its entirety, visit www.SupplyChainBrain.com.

You learn that change is inevitable, but growth

is optional when you embark on a lean initia-

tive, says Nate Jolliff, director of worldwide logis-

tics and lean operations support with Navistar

Parts Group. Resistance often is great, and it

has to be overcome if you’re going to “focus the

operation forward.”

With a change in leadership of the distribution operations of the company came a new energy, new vision and a new culture, Jolliff says. The commitment to the lean journey, however, ran into the same old reluctance found almost anywhere that the old way of doing things is challenged.

“What we found is that change is inevitable, but that growth is optional,” Jolliff says. Sure, a lean project mandating that employees adhere to principles of waste reduction could be imposed from the top down. But that didn’t guarantee the program would be successful. Not when fear causes the workforce to ask how the initiative would affect their job.

Still, the so-called lean journey was critical with distribution taking place worldwide, including in 13 operations in North America alone.

With markets getting tougher and competitors multiplying, Navistar Parts also was determined to make sure that its customer service was not overlooked. The company customer base is quite diverse, with dealers, fleet and national accounts, and in the defense sector. “We realized that we had to enhance the customer experience somehow.”