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Neiman Marcus Sails through Customs
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With a new Web-based supply chain management system, the Neiman Marcus Group has shaved about two days from its shipping cycle, and also gained visibility into the whereabouts of its goods.
To avoid delays in the time its shipments spent clearing U.S. Customs and Border Protection, the Neiman Marcus Group Inc. wanted to ensure that suppliers properly filled out their paperwork sooner in the shipment cycle. After all, a delay at the border could ripple forward through the retailer’s shipping system to cause further hold-ups down the line.
New software has not only eased customs headaches but also trimmed one to two days from the retailer’s shipping cycle.
The group, headquartered in Dallas, includes Neiman Marcus Stores, Bergdorf Goodman and its direct marketing segment, Neiman Marcus Direct.
Together they sell apparel, accessories, jewelry, beauty and decorative home products—and trends in these categories change quickly.
Neiman Marcus couldn’t afford to have this year’s little black dress sitting idly while customers were already eyeing next year’s model. Any time it saved at customs would be key for the retailer, which relies heavily on air shipments to get its fashionable merchandise into stores in season.
“The specialty retail fashion business of Neiman Marcus is heavily reliant on the timely movement of merchandise through our supply chain,” says David Wortman, vice president of international operations and government compliance.
To streamline its customs process, the retailer first found a way to ensure that all necessary paperwork would be filled out properly, even before shipments arrived in the United States.
But beyond customs compliance, executives sought software that would give them a bird’s-eye view into product information and shipment data from all the retailer’s pertinent suppliers, freight forwarders and carriers.
Such visibility would ensure that all business partners who’d touched the shipment had properly prepared the data needed by U.S. customs officials. But it would also let them see where shipments were in the system and when they’d cleared customs.
To that end, the Neiman Marcus Group recently implemented the Web-based supply chain management system from TradeBeam Inc. of San Mateo, CA.
The software system allows the retailer to follow products electronically from their point of origin through the customs clearance process. It automatically manages the retailer’s pre-classification, trade compliance and shipment activities.
Trimmed shipment times
The solution allows Neiman Marcus to centrally manage the high import volumes for all of its business units and to collaborate electronically with all business partners involved in shipping, including freight forwarders, transportation providers, brokers and consolidators.
Neiman Marcus now uses the software to comply with import regulations, such as classifying products by country of origin, calculating cross-border duties, processing international bank letters of credit to pay for shipments, and sharing order and shipment information with suppliers, carriers and freight consolidators to ensure the steady flow of goods through customs and into stores.
Since software implementation, Neiman Marcus has trimmed an average of one to two days off overall shipment times.
“TradeBeam functions as an eye on our international logistics business, giving us the ability to better manage our shipments through exception reporting and alert messaging,” Wortman says.
The software helps the retailer ensure that all of its domestic and foreign suppliers comply with the slew of government and international customs and rules.
This is particularly helpful for large apparel manufacturers that source globally, which often have difficulty getting timely previews of shipment and product data from suppliers in Asia and elsewhere that don’t have easy access to up-to-the-minute, updatable software and technologies.
With the TradeBeam solution, the retailer’s suppliers fill out an entry release form via the hosted software. That form can be used as a base document for entry. The software audits all entries filed by Neiman Marcus suppliers to catch any discrepancies between the entry, shipment and product details before the shipment arrives in the United States.
If data is missing from one of those files, the system sends an alert message to the appropriate business partner, who can rectify the situation before the goods arrive in country. That way, paperwork snafus are remedied while the shipment is en route to the United States, rather than while it’s sitting in customs.
Reduced duty paid
The supply chain software also has helped reduce the duties Neiman Marcus pays. One software feature ensures that the retailer properly complies with the duties each country applies to particular materials, such as cotton or silk. The rules pertaining to duties change often.
To keep up to date with duty rules for more than 60 countries, about 15 TradeBeam staff and 30 consultants continually monitor changes throughout the world, says a TradeBeam spokesperson. The vendor guarantees that rules are updated in its global trade management system within 24 hours of any changes by the host country.
Neiman Marcus also takes advantage of an import module within its new software system. The module contains a product catalog in which the styles on purchase orders are classified with HTSUS numbers prior to importation. (HTSUS stands for harmonized tariff schedule of the United States).
This pre-classification allows Neiman Marcus customs brokers to have immediate access to tariff information when import shipments land in the United States, which speeds the clearance process.
Thanks to advantages such as these, Neiman Marcus now has a greater ability to maintain a low-risk rating from U.S. customs officials. That low rating means the retailer’s shipments can clear customs even faster.
But the software is also useful after customs officials have cleared the shipments, says Jimmy Howell, vice president of transportation and logistics.
“In addition to the help the solution provides in managing the customs process, it also provides visibility into order status and events that occur throughout the supply chain,” he says. “It will reduce our costs and complement our vision for logistics control.”
After the goods have entered the United States, the software continues to track the shipment and gives supply chain managers access to the status of an entry.
It also automatically conducts an audit of all final statements, comparing them against entry information and ensuring that amounts that were entered match the duties received by customs, thus reducing the number of protests filed.
Also, advance ship notices generated during the shipping process automatically move into the retailer’s own enterprise resource planning system for tracking and record keeping.
The solution has significantly sped Neiman Marcus’s imports—which is good for all those fashionistas who want tomorrow’s fashions to appear at department stores today.
Jean Thilmany is a free-lance writer based in St. Paul, MN. She frequently writes about retail and business technology.
Fast Facts
- Business units: Neiman Marcus Stores, Bergdorf Goodman, Neiman Marcus Direct
- Product offerings: Upscale assortments of apparel, accessories, jewelry, beauty and decorative home products
- Number of stores: 37 Neiman Marcus stores, two Bergdorf Goodman stores, 20 Last Call clearance centers
- Sales: $4.39 billion
- Growth: Revenue up 8.9% in ’07 vs. ’06
