Bill of Materials Management
|Direct import of multi-level BOMs from ERP, manufacturing, and WMS systems|
|Automatic calculations and analysis for multiple trade preference programs simultaneously|
Multiple Qualification Rules
|Rules of origin for numerous free trade agreements|
|Various regional value content (RVC) methods|
|Cumulation or double substantial transformation|
|Archive and Audit||Storage and retention of BOM analysis results|
Bill of Material Qualification
Issues and Challenges
Exporters are responsible for providing complete and accurate origin information to their customers for compliance purposes and free trade agreement (FTA) eligibility. For those exporters that manufacture finished goods, this can be particularly complex, since raw materials may come from numerous suppliers worldwide.
The rules of origin of each FTA determine preferential treatment eligibility, so each product must be analyzed for its conformance to those rules. To perform the analysis, it is necessary to break down a product into parts or ingredients - more commonly known as a bill of materials (BOM). The BOM gives a complete and hierarchical listing of any raw materials, sub-assemblies, components, or ingredients and the quantities and costs used in the product.
- Entering complex BOMs that may contain thousands of components into a qualification system
- Understanding and applying the complex rules of origin to BOM line items for each FTA of interest
- Determining whether the product qualifies for duty preference using several evaluation methods per FTA and HS
How Amber Road Can Help
Amber Road speeds up the BOM analysis process by enabling direct import of these complex documents from the manufacturer's BOM management system (potentially an ERP, engineering, or other specialized system) or via XML or Excel.
Amber Road's Trade Agreement Management solution helps exporters automate the analysis of BOMs. It does this by applying the relevant rules of origin and automatically assessing tariff shift, wholly obtained checks, several variations of regional value content, cumulation logic, and de minimis. Amber Road analyzes each line item of the BOM to determine whether the product satisfies the rule criteria. The outcome is a summary qualification report for the finished good, and a detailed account of how each component fared against the rule. The results are then posted to the Global Product Master where trade agreements can be managed centrally.
The qualification system is scalable and supports multiple trade agreements. A content plugin for each target FTA contains the claim details, documents and rules of origin for each target agreement. These rules are constantly updated and maintained in our Global Knowledge® database. Once the framework is in place, additional plugins can be added seamlessly.
Qualification results are tied back into the product record for a complete, centralized view of each item.
Free trade agreements such as NAFTA, CAFTA and others represent an attractive opportunity for exporters to grow their business overseas by making their products more affordable in growing markets. And for importers, FTAs allow them to dramatically lower the duties and taxes they pay.
Today there are more than 500 free or preferential agreements around the world for companies to use.
“By automating the NAFTA qualification process, generating accurate trade documentation to maintain export compliance, and taking advantage of preferential duties, we save $1.2 million in duties and taxes.”
Project Manager Global Logistics, Trade and Compliance