unnext workshop on paperless trade facilitation for small

UNNExT workshop on

Paperless trade facilitation for

Small and Medium-sized Enterprises

2-4 February 2015

United Nations Conference Center (UNCC)

Bangkok, Thailand

A journey from BPA to TTFMM

key issues for trade facilitation

TengfeiWang

Economic Affairs Officer

Trade Facilitation Unit

United Nations Economic and Social Commission

for Asia and the Pacific (UNESCAP)

Email: [email protected]

Agenda

1. Business Process Analysis at the core of trade

facilitation

2. Ad-hoc and short-term vs. sustainable and long term

3. Trade and Transport Facilitation Monitoring

Mechanism (TTFMM)

4. Conclusion

3

What is a Business Process?

�A Business Process is a collection of

related and structured activities or tasks

that produce a specific service or product.

�Example

� Import fabric products

from China to Kyrgyzstan

� Customs Clearance Process

at Birgunj dry port, Nepal

4

What is..

� ..a Business Process Analysis?

An analysis and modelling of business processes

for improvement and automation

�Example

� Documenting procedure for customs clearance

� Listing the documents required

� Measuring time/cost

5

Documents related to Exportation of Rice(from purchase order until the cargo container leaving the sea port)

21. Master Sea Cargo Manifest(17)

22. House Sea Cargo Manifest (37)

23. Export Declaration (114)

24. Good Transition Control List (27)

25. Application for Permission to Export Rice (KP. 2) (24)

26. Sales Report (KP 3) (21)

27. Application for the Collection of the Permit for the

Export of Rice (A. 3) (35)

28. Permit for the Export of Rice (A. 4) (35)

29. Application for Certificate of Standards of Product (MS.

13/1) (44)

30. Certificate of Analysis (17)

31. Certificate of Product Standards (MS. 24/1) (45)

32. Certificate of Fumigation (21)

33. Application for Phytosanitary Certificate (PQ. 9) (29)

34. Phytosanitary Certificate (33)

35. Application for Certificate of Origin (42)

36. Certificate of Origin (38)

1. Proforma Invoice (35)

2. Purchase Order (39)

3. Commercial Invoice (51)

4. Application for Letter of Credit (24)

5. Letter of Credit (32)

6. Packing List (25)

7. Cargo Insurance Application Form (20)

8. Cover Note (23)

9. Insurance Policy (24)

10. Booking Request Form – Border Crossing (25)

11. Booking Confirmation – Border Crossing (30)

12. Booking Request Form – Inland Transport (16)

13. Booking Confirmation – Inland Transport (18)

14. Bill of Lading (42)

15. Empty Container Movement Request (TKT 305) (20)

16. Request for Port Entry (TKT 308.2) (27)

17. Equipment Interchange Report (EIR) (24)

18. Container Loading List (28)

19. Container List Message (32)

20. Outward Container List (34)* Number in parenthesis is the no. of data elements

36 Documents involving 15 parties, and more than 1,140 data elements to be filled in

A Thai Case BPA Example

Regulatory Docs

Transport Docs

Buy/Pay Docs

Information BPA captures

7

Who involved

Proceduresand Documents

required

Related Rulesand Regulations

Some quantitative

indicators

8

Business Process Analysis (BPA) for trade facilitation:

a technique for documenting business processes

1. A use case diagram showing the scope of the business process analysis

project;

2. A set of activity diagrams; each explains a core business process as

represented by a use case in the use case diagram; (together with a set of

process descriptions);

3. A list of trade forms and documents which may be accompanied with

samples of physical copies;

4. Costs and time for each procedure;

5. A time-procedure chart;

6. A list of identified bottlenecks; and

7. Recommendations to improve the business process and/or to-be business

process models.

Experience from ESCAP shows that almost any professional in

trade facilitation can conduct BPA after receiving training.

A Business Process Analysis

- in Exporting Jasmine Rice from Thailand -

1. Buy - Conclude sales contract and trade terms2. Obtain export permit3. Arrange transport4. Arrange the inspection and fumigation 5. Obtain cargo insurance6. Provide customs declaration 7. Collect empty container(s) from yard

8. Stuff container(s)9. Transfer to port of departure10. Clear goods through customs 11. Handle container at terminal and stow on vessel12. Prepare documents required by importer13. Verify the accuracy/authenticity of exported cargo14. Pay - Claim payment of goods

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Day

Process

20

10

0

5

15

3 days

2 days

3 days

4 days

1 day

1

3

5

6 7 8 9

12

14

2

2 days

4

2 days 10

1 day

13

1 day

16

11

Time-Procedure Chart

16 days are required for these procedures

and documents transaction

e-Single Window and paperless trading

National Data Harmonization

BPA: the first step to be taken before introducing other trade facilitation measures

Document Simplification & Standardization

Cross Border Data Exchange

Business Process Analysis for Trade Facilitation1

6

5

3

2

4

Process Simplification and Harmonization

11

Business Process Modeling

What

� A technique for documenting a business process and its attributes� Activities that come in a specific order and decision points

� Actors who perform those activities

� Defined inputs and outputs of each activity

� Criteria for entering and exiting the business process

� Relationships among actors

� Information flow

� Associated rules and regulations

� Quantitative indicators such as number of steps as well as time and cost required to complete a particular business process

Why

� To establish a common understanding about a business process that is shared by all relevant parties

� To communicate better all aspects of a business process

Unified Modeling Language (UML)

�A set of standard graphical notations for documenting a

business process and business requirements

http://en.wikipedia.org/wiki/Unified_Modeling_Language

� Is widely recognized and

used among practitioners in

business community as well

as those in IT and software

industry

� Allows business domain

experts to communicate

procedural and documentary

requirements with IT

implementation or software

development team

12

13

Why UML

�UML can help quickly clarify complex problems and

scenarios

� UML can help establish a common understanding about a

business process

A common language for electrical engineer A common language for musician

UML Diagrams for BPA

Use Case Diagram

� A frame of reference illustrating a high level business process and its associated actors

Activity Diagram

� A detailed elaboration of a use case diagram

� A graphical representation of a business process and its attributes

� Activities that come in a specific order and decision points

� Actors who perform those activities

� Defined inputs and outputs of each activity

� Criteria for entering and exiting the business process

� Relationships among actors

� Information flow

Buy - Conclude

sales contract and

trade termsExporter or

RepresentativeImporter

Quote price

and term of trade

Confirm the

intent to purchase

Proforma Invoice

Purchase Order

Not acceptable

Acceptable

Cancel

Prepare the shipment

of goods

Exporter or

RepresentativeImporter

14

15

UML Notations for Use Case Diagram

Notation Description

Actor

� Represents a role in a particular business process

� Is labeled with a role name

Use Case

� Represents a business process

� Is labeled with a descriptive verb phrase

Relationship Association

� Link actors with business processes that they participate in

Subject Boundary

� Represents a process area

� Includes the name of a subject boundary on top

Boundary

Actor/Role

Use case

16

UML Notations for Activity Diagram


Initial State

� Represents the beginning of a set of activities

Final Activity State

� Indicates the completion of the business process

Final Flow State

� Indicates that further activities cannot be pursued

Transition Line

� Indicates a sequential flow of actions and information

in an activity diagram

Fork (Splitting of Control)

� Visualizes a set of parallel or concurrent flow of

actions

Join (Synchronization of Control)

� Indicates the end of parallel or concurrent flow of

activities

Object

� Represents a document or information that flows from

one activity to another activity (labeled with the name of

a document)


Swimlane

� Is used to break up individual actions

to individuals/ agencies that are

responsible for executing their actions

� Is labeled with the name of the

responsible individual or agency

Activity

� Represents a non-decomposable

piece of behavior

� Is labeled with a name that 1) begins

with a verb and ends with a noun; and 2)

is short yet contain enough information

for readers to comprehend

Decision

� Represents the point where a

decision has to be made given specific

conditions

� Attached with labels addressing the

condition on each transition line that

comes out of an activities and connects

to a decision point or vice versa

Process

Participant 1

Process

Participant 2

Process

Participant n

How many actors are involved in trade process?

Exporter (or Representative) Department of Fisheries

(DoF)

Authorized Private

Inspector2.1) Haveproduct sampled

and examinedExporter or

RepresentativeDepartment

of Fisheries (DoF)

Authorized Private

Inspector

Collect

sample

Examine

sample

Record the result

of examination

Test Report

Deliver

sample

Collect

Test Report

Additional

examination required

Additional examination

not required Schedule the

sampling date

Record result

of examination

Examine

sample

Collect

Test ReportTest Report

Have product

ready for sampling

Notify the date for

sample collection

Submit Request

for Sampling

Record sampling

result

Request for

Sampling

Collect

sample

BPA Phases

I. Scope setting – Specify a scope of processes to be analyzed

� e.g. import and/or export processes of a specified product,

through a certain mode of transportation (trucks, trains, ships or airplanes)

II. Data collection and process documentation – Define and

document a sequence of steps in actual practices and their attributes

� Who involved (stakeholders/actors)

� Procedures and documents required (input to/output from)

� Related rules and regulation

III. Process analysis – Locate bottlenecks, examine what causes them,

and develop measurable and quantitative process indicators (e.g. the

number of steps, time and costs required to fulfill those processes)

Recommendation development – Determine how to eliminate

each bottleneck and prioritize improvement actions

18

Trade Facilitation Analysis Database (TPAD):

Summarizing most, if not all, BPA studies

�A database of business process

analyses of country and product-

specific import and export

procedures conducted in Asia-

Pacific developing countries.

�Over 50 import and export

process cases are included, based

on studies conducted since 2009

by international organizations

such as ESCAP, ECE, ADB and

their member states.

19

Key functions of TPAD

� Data analysis:

enables the users

to compare trade

process and

procedures across

countries

� TPAD is also a tool

to assist

researchers to

standardize the BPA

studies in the future

21

Agenda


facilitation



Mechanism (TTFMM)

4. Conclusion

22

Why is sustainable national trade and transport facilitation

monitoring mechanism important and essential?

� Available international cross-country trade

and transport indicators are useful but

not sufficiently detailed or reliable

�Many trade facilitation studies often done in developing

countries, but

� One-off / Ad hoc assessment studies; Overlapping and not

coordinated; No uniform method & approach

� Lack of ownership of results, with no follow-up

Need for an integrated and sustainable mechanism:

(1) To provide adequate data & information to support

decision making and to monitor implementation and impact of

these decisions on trade facilitation measures

(2) To reduce unnecessary duplication of efforts & ensure

recommendations are implemented

Agenda


facilitation



Mechanism (TTFMM)

4. Conclusion

24

Integrated and Sustainable Trade & Transport

Facilitation Monitoring Mechanism (TTFMM)

Measure, monitor and assess

progress in trade facilitation

Trade facilitation reform

Implementation

Integrated Methodology: BPA+

Baseline trade and transport facilitation assessment study

Formulate, update and prioritize

recommendations for advancing trade facilitation

Institutional ArrangementNational Human Capacity

TTFMM – Key Outputs

26

� TTFMM Database, including:

� Description, activity diagram and related rules/regulations for

each trade & transport procedure for selected products along

selected corridors

� Time, Cost, No. of documents for each process/procedure

� Set of Indicators (dashboard)

� Include Time, Cost, No. of documents for each

process/procedure

� Average speed along the corridor

� Average border crossing time

� An annual report

� Presenting relevant summary information from the database

to the public, as decided by the NTTFC, as well as an analysis and recommendations

27

Shipping company

Shipping agent

Port Authority,

etc.

Customs,Bank,

Customsbroker

Port AuthorityContainer Yard

Warehouse,Forwarder,

etc.

Importer,Customs brokerContainer Yard

OGAs, etc.

Time Release Study (TRS): Measuring ‘time’ for

border crossing procedures

Arrival of

cargo

Unloading

/StorageSubmission of

Declaration

Customs

release

permission

Removal

of cargo 27

Transport to border

Wait at border

crossing/change

transport mode

Transport

to sea port

Wait at

sea port

Sea transport

500 km 1000 km 2000 km1500 km

Day 4

Day 3

Day 2

Day 1

$400

$300

$200

$100

Point of OriginPoint of OriginPoint of OriginPoint of Origin

DestinationDestinationDestinationDestination

Time-Cost-Distance Method: record ‘time’ and

‘cost’ of physical movement of cargoes

BPA+: An Integrated Methodology

Trade-related

procedures

before cargo

movement

Cargo

origin

Border

crossing

point

Border

crossing

point

Cargo

destination

Trade-

related

procedures

after cargo

arrival

TRS TRS

TCD

BPA of Trade Procedures

Business Process Analysis (BPA) for diagnosis of TF bottlenecks along entire supply chain

Time-Cost Distance Method (TCD) & Time Release Study (TRS)to Improve/verify BPA time and cost estimates

TTFMM implementation in Bangladesh, Bhutan and Nepal(with support of ADB, ESCAP and WCO)

30

Agenda


facilitation



Mechanism (TTFMM)

4. Conclusion

31

Concluding Remarks

� BPA is the first step for any trade facilitation reform

� Monitoring trade and transport facilitation in a sustainable

manner is essential and possible for all countries - it does not

have to be expensive

32