SCAN High assurance, light touch at the border - GS1 New Zealand
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SCAN ISSUE 38 NOVEMBER 2014 GS1NZ.ORG High assurance, light touch at the border Interview with Carolyn Tremain – Comptroller of Customs PRODUCTFLOW ROLLOUT 5 EASTPACK’S EPC/RFID 7 BIG IDEAS 8 MITEK ON GS1NET 16
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GS1 NEWS Global connection by the numbers Like it or not, New Zealand is increasingly part of a highly dynamic global economy. It’s a simple fact evident in headline numbers on www.gs1nzconnect.org. I encourage everyone More immediately, companies in two New most days – Global Dairy Trade index prices, to experience some of CONNECT 2014 online Zealand export industries are making progress statistics on growth in migrants settling here and to help keep the discussion going. with the GS1 standard for radio frequency from overseas, the monthly merchandise trade identification (Electronic Product Code, or EPC/ GS1 New Zealand certainly will because global surplus or deficit and so on. They are constant RFID) as also reported in this SCAN (page 7). connectedness is actually our business. GS1 reminders that global connections are what EastPack has again in 2014 proved the benefits Standards for globally-unique identification, drive New Zealand’s economic performance and of EPC/RFID in its post-harvest operations that data capture and sharing, and supply chain ultimately determine our standard of living. are central to kiwifruit exporting, while meat management are key enablers for much of the processor ANZCO Foods has engaged with Obviously then, we must build and maintain trade and information exchange mentioned supply chain partners on a trial of the standard the strongest possible connections with the above. Our numbers do not make headlines for authentication of Halal-accredited products global markets and trading partners that offer but, through their usage in thousands of ways into the Malaysian market. most advantage to this country. And for this, each day, they are also drivers of New Zealand we simply must have efficient, timely and performance in the global economy! New Zealand has always been a small country meaningful exchanges of information and dependent on international trade and capital. This SCAN takes that theme further by knowledge that support growth and diversity Globalisation has made that more a reality interviewing Comptroller of Customs Carolyn in our international trade, and that attract the than ever before – and exposed us to greater Tremain on New Zealand’s advance in border products, people and capital needed so much opportunities and threats than ever before. management and trade facilitation. Our world- by New Zealand. The implications flow through New Zealand’s leading Trade Single Window employs the economy, well beyond those directly engaged These were the ideas behind GS1 New Zealand’s new global standard for data formatting by in exporting and importing. Businesses and CONNECT 2014 one-day conference in August customs agencies and this, in turn is designed government agencies need to think globally, – our modest push for more “big picture” to leverage GS1 identifiers. Our border control and to embrace tools that strengthen our discussion on current issues for New Zealand agencies increasingly use the same data as most advantageous global connections. in the global economy. We asked: “what’s next?” supply chain partners to speed-up trade GS1 New Zealand is ready to help wherever in connection to China; how do we capture clearance processes and to sharpen their focus we can. more value from our trading relationships?; on specific areas of risk. and how do we stimulate more New Zealand In fact, New Zealanders generally are becoming business innovation on the world stage? more aware of the advantages, actual and CONNECT 2014 attracted a powerful line-up potential, from using global data standards to of international and New Zealand speakers streamline business processes at home and (including executives from two of our most to facilitate global connections (current or accomplished international companies, Fonterra future). We note (page 4) that the New Zealand Dr Peter Stevens and Xero). A great day of thinking global! Business Number (NZBN) is being extended Chief Executive as a GS1-based form of identification for every Six big ideas from the conference are reported form of business, with far-ranging benefits to back in this issue of SCAN (pages 8, 9) – and our economy over time. you can see and hear more from the speakers SCAN magazine is produced twice yearly for the benefit of GS1 New Zealand Unless otherwise indicated, articles appearing in SCAN may be members. It has a circulation of approximately 5,700 readers throughout the reprinted provided that GS1 New Zealand is acknowledged. GS1 New Zealand country as well as 101 GS1 member organisations worldwide. PO Box 11 110 For editorial or advertising enquiries please contact: Wellington SCAN reaches decision-makers in a wide range of industry sectors Pauline Prince on 04 494 1067 or pauline.prince@gs1nz.org. T +64 4 494 1050 including grocery, FMCG, healthcare, logistics, manufacturing, retailing, Advertising rates are on our website at 0800 10 23 56 wholesaling and transport. Our readership includes chief executives, www.gs1nz.org/news-and-events/scan-magazine/ F +64 4 494 1051 sales and marketing managers, account managers, brand and product For copies of SCAN: If you are a member and would like more E info@gs1nz.org managers, IT personnel, operations managers, production managers, copies of SCAN, or if you are not a member and would like to logistics and supply chain personnel, bar coding staff and packaging subscribe, please contact Bev Gough on 04 494 1050 or coordinators. bev.gough@gs1nz.org ISSUE 38 GS1NZ.ORG 3
GS1 NEWS Corporation; Callaghan Innovation; Inland NZBN Bill favours ‘all in’ Revenue Department; Ministry for Primary Industries; New Zealand Customs Service; New Zealand Trade and Enterprise; and any subsidiary of New Zealand Trade and Every form of business entity can have a New Zealand Business Number (NZBN) Enterprise. – a 13 digit identifier based on a GS1 Global Location Number (GLN) – if draft The Government’s policy objective with the legislation becomes law in the coming months. NZBN is that businesses have to spend less The Ministry of Business, Innovation and general location in New Zealand. To meet time and effort on administration, particularly Employment (MBIE) released an exposure privacy requirements, further information when interacting with agencies. The NZBN draft¹ of the NZBN Bill for public feedback displayed will be what is already public is also intended to facilitate e-commerce before 30 September and, after review of this through the source register, with some activity between businesses. feedback, legislation will be introduced to additional optional choices. Non registered The NZBN Bill will go through a Parliamentary Parliament, most likely in early 2015. business entities (such as sole traders) can select committee process, with public choose to make other selected information submitters having more opportunity then to The exposure draft provides for NZBNs to be public if they wish. The draft also has comment on specific provisions. On behalf of issued to sole traders, partnerships, registered prohibitions on the misuse of NZBNs – its members, GS1 New Zealand gave feedback societies, public sector entities and all other this includes their use by individuals in on the exposure draft. forms of entity which may be considered a their personal capacities – and the false “business undertaking”. Individuals acting presentation of a number as an NZBN if it ¹ Draft prepared only for public information in their personal capacity are not eligible for is not registered as such, or it belongs to and discussion before the drafting of a bill for the NZBN; sole traders may only use their introduction to Parliament. another business. NZBN when acting in their business capacity. Until now, NZBNs have been issued only to Eight government agencies will be required registered companies. to recognise NZBNs when interacting with business entities (including other agencies) The exposure draft proposes an electronic from 31 December 2017 onwards. These register (a directory) of all NZBNs, with their agencies are: MBIE; Accident Compensation Are Are Are Areyou you you you anan an an export export export export company? company? company? company? Are Are you reAre you you you exporting exporting exporting exporting from from from from Are Are New ew Are Areyou you New New you you in in Zealand? control in control control in Zealand? Zealand? 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GS1 NEWS ProductFlow for easier market access GS1 New Zealand’s ProductFlow service is being rolled out progressively to food and grocery companies after a successful pilot stage in recent months. ProductFlow facilitates the introduction of new products to market, and the notification of subsequent changes to retailers and buying organisations. Companies will find it easier to provide and Countdown – have been involved PRODUCTFLOW the product data and images required in the ProductFlow pilot: Barker Fruit BENEFITS by Foodstuffs and Countdown on new Processors, Bluebird Foods, Meadow products and product changes (new Mushrooms, Nestle New Zealand and Easier for supplier companies attributes, price changes etc). Picot Productions. These GS1 members to launch products into consumer vary widely in products, size of range and markets and to make changes to ProductFlow gives suppliers a simpler familiarity with GS1net but all successfully existing products. process for using GS1net™, and also for used ProductFlow for the simulated launch Certainty for Foodstuffs and providing the grocery retailers with the of new products, and changes to existing Countdown that all product data exact product images they require and with ranged products. and images they require are accurate bar code verification reports in regard to and delivered into their systems at product packaging. The pilot involved them using the ProductFlow the right time. application page – accessed through the Easier for supplier companies to GS1’s ProductFlow team will resolve any MyGS1 members’ area of www.gs1nz.org – to secure maximum value from using issues with the supplier concerned, and assemble and share product data and GS1net™ – they can get onboard more then issue both supplier and retailer with images for the specific purpose of launching quickly, then upload and/or change a concise ProductFlow Verification Report to market or introducing product changes. data on one or just a few products confirming that data, images and bar codes Standardised master data and images on at any given time. on each product have been reviewed and each product were uploaded to GS1 systems Clarity for all parties around the are “good to go”. for consumption by their customers. option of outsourcing to GS1 the work of gathering and uploading GS1, Foodstuffs and Countdown will make In each instance, Foodstuffs and Countdown data and images on new and/or ProductFlow progressively available to could clearly identify high quality data and changed products. suppliers in coming months. Individual images being received into their systems companies will receive advice on how and Seamless connection to GS1 Bar through ProductFlow– and this facilitated when they can begin using the new service. Code Verification services when these distribution, marketing and sales activities are needed for introduction of a new for the presentation of new products and/or product or of product changes. Five companies – a cross section of food changed products to consumers. manufacturers who supply Foodstuffs Digital image services Digital images are increasingly GS1 New Zealand has studios in Auckland and Wellington, providing members important in the marketing and sale and others with digital photography of of products. Suppliers and retailers products to the highest global standards. by, or on behalf of, product suppliers. need high quality “digital assets” for When requested, we will upload these Companies are also able to use SmartMedia use in printed collateral, websites, images into SmartMedia. as their own internal registry (intranet) of mobile apps and more. digital assets. Uploading can be done by any authorised user – a manufacturer, retailer, communications SmartMedia complements other GS1 GS1 New Zealand now offers high quality agency or other relevant supplier, along with services including ProductFlow and the product photography for many of these either GS1 New Zealand or GS1 Australia. GS1net™ platform for product master data. purposes. And we offer SmartMedia™ – an SmartMedia is a collaboration between the It is available to any company for a fixed Australasian-wide electronic repository two GS1 organisations, for use by trading annual fee, with no limitations thereafter for up-to-date and authenticated digital partners on both sides of the Tasman. on the numbers of digital assets uploaded assets. SmartMedia enables trading partners to exchange all such assets for and downloaded, and with no additional In New Zealand, Foodstuffs and Countdown any use in marketing and sales activity. costs. GS1 has a special subscription offer use the repository increasingly as a single, for its members. reliable source of digital images uploaded ISSUE 38 GS1NZ.ORG 5
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EPC/RFID Bigger RFID harvest for EastPack EPC/RFID continues to support In the early years, EPC/RFID enabled difference with continued growth forecast EastPack to radically improve productivity from now on. operating efficiency gains at in its use of staff and forklifts, and to EastPack, the largest grower- eliminate penalties for failing to deliver EastPack also now includes cool stores owned post-harvest supplier in some orders to the ship by deadline. previously owned by fellow post-harvest New Zealand’s kiwifruit industry. No longer would cool store operations supplier Satara. Investment decisions on descend into chaos at the height of the rolling EPC/RFID into these stores have EastPack has continued to reduce export season. yet to be made or announced. fruit losses this export season (March- November) by striving to optimise EastPack managers tell SCAN that shipping out sequence of product from the focus is now on precision in the its seven geographically dispersed sites. sequencing of product sent for export, For this, operators must be able to quickly and on reduction in spoilage risk as locate pallets designated for a specific pallets are moved around the store for load-out (ranking based on fruit storage fruit quality checking and for the performance). Reduced fruit losses lead preparation of next shipments. Higher directly to improved financial returns for quality fruit can, generally, be held in the company and its growers. storage till later in the export season. Optimum storage is at zero degrees but This season has been the seventh for regular movement of pallets to warmer EastPack’s EPC/RFID system as installed locations is inevitable. EPC/RFID readings with GS1 New Zealand design and support now alert staff to any pallet that is outside in 2007–08. Nearly 60 cool stores in Te zero degrees for 90 minutes or longer. Puke, Edgecumbe and Opotiki, in the Bay The system provides constantly-updated of Plenty now use the technology data on product status as a basis for shipping out sequence. Each pallet of graded kiwifruit has an EPC tag, used to track and trace its location EPC/RFID becomes a more important and movement within a cool store. The tool as fruit volumes grow. In 2014, system includes forklift-mounted tag EastPack has handled almost 25 readers and ceiling markers that enable million trays, up 14% from last year each read to be precisely located in the as the kiwifruit industry recovers from store: EastPack has a constantly updating the impact of PSA. New varieties that database on the whereabouts, history and are tolerant of this vine-killing disease status of each pallet-load of kiwifruit trays. have begun making a substantial and ANZCO Foods engaged with GS1 is defined as a process that uniquely Halal Malaysia and SMTRACK for the trial, in May–June this year. identifies a product and verifies that identity when needed in supply chains. meat trial Cartons of Halal product were tagged at ANZCO’s CMP Kokiri plant, Hokitika. The cartons and their shipping container Concern on the authenticity of Halal foods – prepared to Islamic dietary guidelines – is on the rise among Malaysia’s 21 million Further trialling of EPC/RFID were subject to 11 RFID read events Muslims. and related technologies has between there and a cool store in Kuala The trial report by GS1’s Gary Hartley Lumpur. Read data were uploaded to EPC demonstrated their efficacy for (“The use of EPC Standards and Radio Information Service repositories within export meat product traceability Frequency Identification technologies to the EPCglobal Network. The required demonstrate supply chain traceability and and authentication. traceability and product authentication product authenticity of Halal meat products outcomes were conclusively demonstrated. A shipment of Halal-certified meat products exported from New Zealand to Malaysia”) was tracked and traced between New Product authentication is increasingly is available from Pathfinder Group. Zealand and Malaysia using GS1 identifiers, sought for detection of counterfeit and UHF (ultra high frequency) RFID tags, and falsified products, and prevention of these Read the report www.rfid-pathfinder.org.nz EPCglobal Network Architecture for data moving through the distribution channels storage and analysis. GS1 New Zealand of genuine products. Authentication ISSUE 38 GS1NZ.ORG 7
CONNECT 2014 6 BIG ideas In August, GS1 New Zealand hosted the CONNECT 2014 forum for global thinking on our future as an online economy, on innovation in our businesses and on our connections to China. Here are 6 of the big ideas from the event. New Zealand companies need their There’s huge value in using data We’re all creative “just below own creativity and also a willing- about our lives to make and the surface” – companies should ness to adopt the most effective provide products and services empower people to come up global standards – both promote in new, lower cost ways. with good ideas. innovation and success. DR ANDREAS WEIGEND SIR KEN ROBINSON PHIL O’REILLY FORMER AMAZON CHIEF SCIENTIST INTERNATIONAL EDUCATIONALIST CHIEF EXECUTIVE OF BUSINESS NEW ZEALAND Andreas says: The world is increasingly Sir Ken says: Innovation comes from data rich, and there’s huge value in turning the creativity that is latent ir partially Phil says: Global standards can be critically the most relevant data into decisions on developed in all people. Creativity is important to making New Zealand how to meet human needs and desires the process of having original ideas companies globally more competitive, in new, lower cost ways. “Big data” of value – and creative skills can be provided they are not standards set by refers to the constant creation of digital developed in everyone because we all larger international companies for their information on what we do, where we have imagination. Moreover, creativity can own purposes. “Just how we help create, move and how we spend money: We all be applied to any aspect of business – in and engage with, global standards is a leave “digital traces” when purchasing, fact, any aspect of life. We can be creative very important issue for us.” using smartphones and moving around. in thinking about a company’s products, Business NZ is a keen supporter, for The world now creates more data in a processes and systems, workplaces and example, of the New Zealand Business single day than it did throughout history so on. Number (NZBN) – based on GS1 standard until 2000. Andreas said: “Big data is a “Your job as a company leader is to create identifiers – despite earlier concerns that mindset… it’s about turning mess into a culture where everyone can have good small businesses would see it raising meaning, raw data into valuable decisions”. ideas”. To do that, a leader needs to admin. costs and privacy issues. In fact, Businesses only get value from data by believe staff generally have more talent there has been no push-back on the NZBN using it to answer relevant questions, than they give themselves credit for and because firms see its benefits. “Standards and to bridge the digital and physical to see the company more as a dynamic and how they work should be thought worlds. Amazon, for example, pioneered organism than mechanistic hierarchy. about as a business-enabling, and a the offering of new choices to customers country-enabling, tool.” based on past purchases. Joining the Companies must be innovative if they are to adapt and succeed in the face of Comments on creativity by Sir Ken Robinson “social data revolution” requires people changes in markets, technologies and the align with surveys that show manufacturing to give up information and to trust. “My environment. Leaders need to create the firms rank “talent-led innovation” as the rule is to embrace the transparency… it right organisational environment for their key driver of global competitive advantage is the new privacy”. AirB&B and Uber people to be creative in. Most companies today. In NZ, companies are increasingly are examples – owners of “latent assets” have tremendous potential for innovation keen on recruiting people with “soft skills” (private accommodation or vehicles) and “just below the surface”. that enhance creative thinking, as well as potential users exchange their data through those with the traditional “hard skills” in smartphone apps and find matches. “Value science, technology and maths (si-called is created at the interface between the “STEM” subjects). physical and the digital.” 8 GS1NZ.ORG NOVEMBER 2014
We are innovative people but New Zealand can lead the world Our business success in China for NZ companies to succeed in online innovation — it’s our requires understanding of how globally, they need to really, next ‘moonshot’. critical the Internet and social really want it. media are to the Chinese. DR MARY QUIN CHRIS TEELING JAMIL ANDERLINI CHIEF EXECUTIVE OF CALLAGHAN GLOBAL HEAD OF STRATEGY BEIJING BUREAU CHIEF, FINANCIAL INNOVATION FOR XERO TIMES (AND EXPAT KIWI) Mary says: NZ’s innovative business Chris says: Our last moon shot was the Jamil says: China has 600 million Internet owners tend to resist sharing ownership 1880s innovation in refrigerated shipping users and rising, and they rely heavily on and control, and that could be holding –and it worked, opening a huge export social media and online messages from the economy back from greater global trade in frozen meat that enabled NZ to trusted friends when buying consumer success. Callaghan Innovation sees a role prosper. Today’s opportunity arises with goods. That’s because food safety and fake in helping Kiwi entrepreneurs learn how Internet 3.0 (defined by explosive growth products are such real threats in China, to work with investors and others so they in data flows) and this country’s capacity and official information sources are not can grow bigger. “There’s often a problem for creating new data-based products and trusted. “There are no transparent trust- with people preferring to have 100% of services. In Xero has a “dairy and digital” worthy institutions… the usual checks and a small pie rather than 30% or 40% of vision: Its cloud computing business balances are flawed or non-existent.” The a much bigger pie… collectively, we can will grow to have the same economic 2008 San Lu milk contamination crisis and and have to change that (mindset)”. significance to NZ as Fonterra does today, its initial cover-up by officials made people Ultimately, business owners must want to with an “eco system” of other online and even more suspicious. On the other hand, succeed globally. “You’ve got to want it software business growing around it (of NZ and Fonterra came out of that crisis and want it badly.” which 300 already exist). US analysts pretty well. liken Xero’s growth pattern to earlier NZ actually has many innovative, online start-ups. “We’re on the same China recognises the importance of the technology intensive companies – most trajectory as the Microsofts, the Googles Internet by maintaining the “Great Chinese relatively small – doing a wide range of and Facebooks were… if we’re doing that, Fire Wall” to stop its people using Google, things (eg building aircraft and boats, there is every opportunity for us to pull Facebook and other major Western pharmaceuticals, media entertainment, through a lot of other IT innovations and services: China has domestic versions of engineering services). In this year’s Global online opportunities”. these. The Government also uses Chinese Innovation Index, we rank in the top 20 social media to propagandize against among 143 countries on various measures With growth in its customers (most outside foreign brands and encourage consumption of innovation. “There’s no question about NZ) and their data, Xero is developing new of domestic goods. Fonterra’s false our ability as a people to innovate.” services that add speed and ease to doing botulism scare in 2013 “couldn’t have been Our tradition of innovation in primary business online. “We’re going to be a multi- better timed for those in China wanting to industries is good but NZ needs to billion dollar company and we’re going to support the domestic dairy industry”. diversify with businesses of bigger scale in add a whole lot of export services to NZ”. other industries. Xero calls for Government action to: expand Today Chinese consumers still see our food connectivity so Kiwis have unconstrained products as the safe, clean “gold standard”. Growth in innovative businesses here is access to data worldwide; promote standard- China’s rising affluence continues to spell hampered (as elsewhere) by shortages of ised unique identification of businesses, enormous opportunity for trustworthy people with the right skills and by access industries, places and products; and appoint brands from NZ. For this, companies are to capital (especially in the $2-10 million a chief technology adviser for NZ leadership best to do as Fonterra has done – use range). Callaghan Innovation is looking on the digital economy. services provided by Alibaba*, rather than at how to connect groups of smaller set up their own sites. It’s critical to have businesses with global investors who have employees who know Chinese culture and $50 million to invest here, and to help what is happening online. business owners make the transition. See Fonterra’s ‘trusted source’ purpose page 15 ISSUE 38 GS1NZ.ORG 9
Better data exchanges at the border WILL SPEED PROCESSING, PROMOTE TRADE AND BENEFIT OUR ECONOMY Comptroller of Customs Carolyn Tremain is leading the New Zealand Customs Service into a brave new world of “high assurance, light touch” for border protection and trade facilitation. It is a world of more precise and timely data exchanges about trade and people, where border processing is faster and Customs risk assessment is more targeted. Customs and the Ministry for Primary Industries (MPI) have taken a first big step by rolling out a Trade Single Window for all our international trade. Carolyn has over 20 years’ experience leading large, complex service delivery organisations, and substantial change programmes. Prior to joining Customs in 2011, she held Deputy Commissioner roles at Inland Revenue with responsibilities that included oversight of audit and investigations, contact centres, customer operations, customer and product innovation, and litigation management. Earlier, Carolyn was a senior manager with Air New Zealand where she was Head of the Human Resources and Organisational Change for the group. Q What does ‘high assurance, light for example, by postal companies on Q So there’s a direct relationship touch’ mean in the border environment? goods being mailed into the country and between the information provided High assurance really means us receiving yet we struggle in our mail channel to upfront by traders and the level of the right information in advance of the have sufficient advance data for really intervention they might encounter? cargo or the traveler arriving at the focusing down on such goods. Shipping Absolutely. In the past we have relied on border, and taking that information lines and freight forwarders are very large just our own knowledge and data view into account in determining the level organisations with tremendous amounts of a customer. Under our processes, if of risk and the degree of intervention of data for their own purposes and some you’re a first time trader you are going that might be required. In the future it of that is of interest to us. to concern us more than someone whose may not be relying exclusively on our So, ‘high assurance’ is about border seasonal peaks in business we understand, own administrative data, but also using management agencies getting the right along with all the other variables. The information that exists in supply chains information in advance. ‘Light touch’ is more we know about a trader, the easier and that we don’t normally see. what an organisation can expect from it is for us to determine whether they’re It might incorporate data from other us at the border if we do, indeed, have legitimate or not. And if we are assured parts of government or from completely confidence that they are a legitimate on their legitimacy, we will let their goods open sources. There’s a lot of data held, trader. flow more easily across the border. 10 GS1NZ.ORG NOVEMBER 2014
FEATURE INTERVIEW But our fastest growing partners are some of the countries that we traditionally regarded as being higher risk. The challenge for New Zealand Customs with its counterparts in different countries is, ‘how do we actually get the confidence needed in each other’s data?’ If they’re a free trade partner, how do we get to the point of having the knowledge and exchange that really allows goods to flow more easily, and especially if they’re a trade partner with whom we traditionally saw higher risk. Q It sounds like Customs is taking on a broader role in the economy? We traditionally worried about things at the border and what I am outlining is an expanded pre-border function… in the future, there’ll be something of a post- border function too. We can help industries because of our understanding of certain provisions in FTAs and whether they are actually being used. Particular sectors might have an advantage negotiated under an FTA which is not yet being taken advantage of. Do traders understand what advantages they might have in access to another market, for example? Some small and medium sized companies can be put off by perceived and actual complexities in newer markets. If companies are Q How can Customs move in this Q Are data exchanges between experiencing problems getting goods direction while facing growth in trade customs agencies becoming a through the border, then Customs can volumes and in the risks that need to be means of facilitating trade? help them. managed at the border? Yes, particularly trade with countries The value of trade is increasing but with whom New Zealand has Mutual There’s an important difference in actually the volume of export shipping Recognition Arrangements. These are Asian economies where business and containers is declining. Import container Korea, Japan and the US. Going forward government tend to be much more numbers are increasing and for us, having with FTAs of various kinds, we will see an closely tied. Sometimes our counterparts the highest amount of data on them in emphasis on greater recognition of each in some of those Asian countries expect advance of their arrival at the border is the other’s data and on allowing trade to flow. the government to have a view on what answer. It means imported goods can be business is doing and to participate cleared more quickly and distribution to In New Zealand we are particularly in trade. For example, if a sector or market becomes much quicker, and that comfortable about exchanging data with organisation is experiencing difficulty has productivity benefits to New Zealand. some of our traditional trade partners. getting their goods through an Asian Continue on page 12 Similar requirements are emerging with exports in a more inter-connected world. Our partner border agencies in other countries will increasingly rely on our knowledge and understanding of particular exporters from New Zealand to allow them Imported goods can be cleared more to potentially flow those exporters’ goods across their borders more easily. As a quickly and distribution to market Customs authority, we will be relied on – particularly by countries with whom becomes much quicker, and that has New Zealand has free trade agreements (FTAs) or secure export schemes (SESs) – productivity benefits to New Zealand. for quality information relating to the legitimacy of traders and goods. ISSUE 38 GS1NZ.ORG 11
FEATURE INTERVIEW country border – and I am thinking mainly GFC (Global Financial Crisis) era, there’s about particular goods and to clear them of China here – we can work with our been quite an emphasis on growing through the border faster than otherwise. counterpart agency to help sort things out. trade as a way of economies overcoming the damage done through that crisis. Q How is the Trade Single Window We did this successfully for the wine Everyone is interested in growing trade, progressing since launch on 1 August industry which was experiencing issues and a lot of things we’re doing now are as last year? with the clearance of goods held in much about promoting trade as they are Taking on a large IT system change is, bonded storage in China. We could see about protecting New Zealand. frankly, not for the faint hearted and we’ve the situation was clear under the FTA but certainly had some challenges with this they were not getting the benefits. Now, Q Again, it sounds like information programme. But the Trade Single Window we have a good working mechanism with flows are critically important? (TSW) has been up and running for a year our counterparts in China and we were Absolutely. In future, initiatives like trusted now. We are now up to 58.2% of all inwards able to help the exporters to get their trader schemes for importers will be really transactions from traders going through wine to market. important. We certainly know that our the TSW. Of outwards messages from MPI Secure Export Scheme has a lot of value and ourselves, 100% are going through the Q How much does this change for exporters. For example, containers window. Around 950,000 messages have your focus? from New Zealand going across the United now gone through the TSW. Our mission is about protecting New States border under that scheme will Zealand but also promoting trade. A be cleared faster than other containers We gave an undertaking to industry that lot of the work we do internationally arriving at the same time with the same we would not release anything without with the World Customs Organisation type of goods but from other origins. This thorough testing first – and that has and, increasingly, with other customs has real economic benefits to traders in meant it has taken us longer to turn on agencies is focused on how we can get New Zealand. modules in the programme. It was initially trade flowing more between different to be a single-date implementation but economies. Our role is providing assurance to US we switched to a modular approach authorities. We have a secure export because that gives us greater confidence If we think back to the post-9/11 era, seal that goes on the container. Our that deployment won’t disrupt industry. then security was very much the central relationship with the US is such that over There are graphic examples of customs focus. That resulted in a lot of change in time we have developed agreements to organisations elsewhere in the world how supply chains are managed and, for facilitate trade. They audit our Secure bringing in new processes only to find example, in the introduction of the Secure Export Scheme processes and that gives that, after an OK start, trade was being Export Scheme. More recently, in the post- them the confidence to accept our data significantly disrupted. We’ve been very 12 GS1NZ.ORG NOVEMBER 2014
conscious of international experiences, and want to take a thoroughly tested and deliberate approach. A lot of things we’re doing Q How many of the modules in the TSW are now deployed? now are as much about Looking at the interface with traders, there will eventually be nine message types on promoting trade as they the Trade Single Window platform. Four of the top five of these have now been are about protecting deployed and they enable processing of 71% of all border transactions. The New Zealand. remaining message types will be built out over the next 12 months. We have four pilot traders working with us. The thing that is very important about out their onboarding than try to do it all at Q Over time WCO3 must facilitate your New Zealand’s TSW compared with the same time. I encourage people to look ability to share data globally with other at our website or email us with questions. border agencies? systems in other countries is that we are using World Customs Organisation Data WCO3 helps us greatly in narrowing down Q For those using the TSW there is the description of goods. Tariff codes are Model Version 3 (WCO3) – and that really still a choice about the WCO3 message quite broad as they currently stand. Textiles, gives us greater granularity of trade data format. How is the migration to WCO3 for example, are a very broad tariff code and that, in turn, enables us to have a proceeding? firmer basis for our risk assessments. description of goods whereas under WCO3, This ability to work with WCO3 will There are some traders using WCO3 now. product codes can be narrowed down to future proof a lot of New Zealand’s trade Fonterra joined, in May, so has FedEx and specific types of textile and garment. It’s this management processes. also a small percentage of CargoWise clients. narrowing down that lets us know exactly what goods are and to have real confidence Most people are still using a legacy Q How is industry responding in making our risk assessments. message format. Getting them onto TSW to the TSW? is the first step and the next is moving In TSW we will ultimately require freight The real advantage with the TSW is that them from legacy to WCO3. If you’re a forwarders’ manifests, not just shipping you advise government once, whereas small trader, working through CargoWise lines. This was a complicating factor when previously you had to advise individual or another gateway, then you’ll probably the (container ship) Rena went down (in parts of government. One set of messages do what they suggest you do. the Bay of Plenty in 2010). People didn’t for all purposes, without having to worry know exactly what was in the cargo. If a about who is requiring which pieces of Some organisations like freight forwarders similar event occurred in the future we information in the different agencies. would want to see everything up and would have a much better understanding Traders will have different approaches to working well across all the message types of what the ship was carrying. the TSW depending on their size, needs before they move to WCO3. But there and sophistication. will be a point in the future when we will Q Where do you see GS1 data want all industry to start using the WCO3 standards contributing? Large organisations like Fonterra manage message format. There will be a deadline their own messages and have a direct GS1 identifiers are part of our TSW data for that some time in the future but it connection to our system. There are a lot set and they’re incorporated into the hasn’t been determined yet of organisations with their own systems information traders give us. There are like FedEx and others like CargoWise who fields where you can enter GS1 numbers Q How does New Zealand compare provide a gateway service for others. The with other countries in this regard? or alternative forms of identifier. TSW allows people to connect directly We’re the first country to have a Trade through a single portal but if you’re a Q Would you say that border agencies Single Window (TSW) based on WCO3. are, in fact, adapting themselves to be small organisation with a small number of There are very few comprehensive trade part of supply chains? consignments, the gateway or translator windows like ours operating in the world. approach might still be the best way to Yes. At the heart of our perspective is It is very much a leading, future-proofing import or export. an understanding that industry has high system for New Zealand traders. I regularly quality data and that as we become a We are ready to talk to any company say to people that it’s there for the next more globally connected set of countries, about what their adoption plans are for 20 years. It is a big investment and one having common standards for data and the TSW. We are at the point where we’re that is jointly funded with industry through formats at the border has big benefits to wanting to understand what peoples’ recovery of some of the government’s industry. If you’re a multinational working thoughts on the process are so that we can development cost. out of New Zealand and you distribute to smooth out the transition process. In fact 10 countries today, border requirements we would much rather have people spread Continue on page 15 ISSUE 38 GS1NZ.ORG 13
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FEATURE INTERVIEW are probably different in all 10. There’s a A lot of what we are talking about is Key Terms lot of complexity in managing that. I and lessening the burden of compliance The Joint Border Management System is a new my colleagues in other border agencies and with the TSW, we’re working on information technology system for New Zealand hope that, over time, we can get to how to effectively measure the benefits Customs and the Ministry of Primary Industries to jointly handle all trade and passenger processing, something that looks like international flowing through to industry. Obviously and intelligence, risk and enforcement functions supply chains. there are many variables and it’s very in the border environment. The JBMS is being hard to capture the benefit of having an progressively introduced using a modular You have a limited number of shipping employee process a message in 15 minutes approach. The Trade Single Window is one of two companies that manage a lot of the as opposed to half an hour. The trader main components and has been operating since trade and if we could leverage off their 1 August 2013. can say, “how can I actually capture that data to get a really good sense of the 15 minutes?’ We’re looking at how we New Zealand’s Secure Exporters Scheme provides risk associated with each container, registered exporters with greater certainty on the can leverage work done with our pilot there could be huge benefits. GS1 is an passage of their goods across borders without partner organisations to get a better tampering, sabotage or other criminal disruption. enabler for all that – and I think it provides understanding of such benefits. Customs will allow exporters to join if they meet a mechanism for us to look for more and maintain a certain level of security and data competitive advantage for New Zealand. Goods clearance is occurring pretty integrity in their day-to-day operations. quickly through the TSW – it actually can The Trade Single Window provides importers Q Overall, what are the economic take less than 3 minutes for a clearance and exporters with a single point of online contact benefits of the TSW and the ongoing to go through. New Zealand has had a with Customs and MPI and other agencies for all roll-out of a new Joint Border good record in striving to improve trade data exchanges on the cross-border movement of Management System (JBMS)? clearance times while some countries are all craft, goods and people. We see the benefits in terms of advanced still happy at three to five days. Our times The World Customs Organisation Data Model management of border risk and protection are down to minutes and a simple message Version 3.0 (WCO3) is a standard format for assembling and exchanging the data required of this country from biosecurity and drug can go through in seconds. The question in common border processes worldwide. WCO3 harm, and in terms of facilitating more remains of course, ‘does the trader achieve differs from earlier versions through specific efficient and competitive supply chains. efficiencies out of that or not?’ inclusion of information required by border There’s also benefit in equipping New regulatory agencies other than customs. Zealand to handle future change and to Q What are Customs’ other priorities get improved agency efficiency and value in 2014/15? for money. Quantification on the benefit We are starting to update the Customs to date is primarily in the area of staff time and Excise Act, partly to reflect how supply savings – between MPI and ourselves that chains actually work today. If people have figure is approximately $19 million. There particular views on the legislative frame- are big benefits over time in our ability to work that sits over supply chains, there’s target our resources at the areas of greatest an opportunity over the next 12 months to For more information on using the Trade Single Window or for submissions on updating of the risk – something that border agencies are get involved. Our Act is quite old, certainly Customs and Excise Act, visit working towards round the world. pre the electronic era… it needs an overhaul www.customs.govt.nz or contact feedback@customs.govt.nz or phone to make it fit for the future. 0800 BORDER (0800 267 337) Overall, the anticipated savings from the JBMS over time are $535 million and we’re starting to see some of those benefits now. Fonterra’s “trusted source” purpose Fonterra has committed itself to being fastest growing consumer market… it’s an growing market where consumers the world’s most trusted source of dairy opportunity we at Fonterra want to grab want and need our products, and the nutrition, according to the company’s with both hands while retaining a sense of government generally welcomes us”. Director of Business Transformation, modesty and respect.” Philip Turner. He told CONNECT 2014 Asked to comment on product traceability that Fonterra has adopted this purpose Fonterra’s in-China milk production was within Fonterra’s global supply chains, after deep reflection on last year’s 150 million litres last year, with a target of Mr Turner said this was absolutely vital. false botulism scare in whey protein 1 billion by 2020 as it builds more dairy “We have an ambition to be able to trace exported to China. farm hubs. Mr Turner said Fonterra is also every single product from its origin to its working hard to grow its branded products: becoming a consumer product within three Mr Turner said Fonterra recognises more New Zealand-made UHT milk, for example, hours. We are a long way from that at the than ever that its enormous potential in has built a 5% market share in the Yangtze moment, but the more we can do with China hinges on maintaining consumer Delta region in only two years. governments to get common standards trust there. He outlined the company’s and to move beyond the point of having to plan for solid growth in all segments of Mr Turner said China’s openness and re-label products (as they move along the that market – ingredients, food service and respect for trade laws makes it a “happy supply chain), the better.” branded products. “China is the world’s space” for Fonterra. “We have a rapidly ISSUE 38 GS1NZ.ORG 15
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