Designer Apparel Incorporated

eCustoms Partnership June 29, 2004Unrestricted

Global Business Blueprint (GBB)Business Process Overview to the Trade Community

June 29, 2004

eCustoms Partnership June 29, 2004 2Unrestricted

Agenda Opening Remarks …….…………………………………. 1:00 – 1:15

SAP Fundamentals… …………………………………… 1:15 – 1:45

GBB Approach.…………………………………………… 1:45 – 2:15

Break .………………………………………………………. 2:15 – 2:30

GBB Results .………………………………………………2:30 – 5:00

Integration Scenario (Designer Apparel Incorporated) Scenario & Supportive System Solution Process Improvement Opportunities Bureau of Customs and Border Protection (CBP) Issues

being Addressed Business Benefits for the Trade Community


Commissioner Bonner has established the following prioritized strategic goals for the next five-year period: Preventing Terrorism Balancing Legitimate Trade and Travel with Security One Face at the Border Strengthening Our Control of the United States Borders Protecting America and its Citizens Modernizing and Managing

The U.S. Customs and Border Protection Modernization Mission and Vision:

“is to build a dynamic CBP organization, enabled by information and technology to meet agency business expectations and thrive in the midst of tumultuous change. This new environment will build on robust technologies and global best practices with the capacity and flexibility to support future growth and changing business requirements in an ever-changing world.”

CBP 2005-2009 Strategic Goals; Modernization Mission and VisionOpening Remarks


Opening Remarks (continued)Why are we here?

Summit was presented to U.S Customs and Border Protection (CBP) stakeholders in context of people, process, and technology

Present results of GBB through a scenario

Background Presented GBB as new concept, new approach at Trade

Support Network (TSN) in January 2004 SAP already being used and will remain as backbone for

remaining Automated Commercial Environment (ACE) functionality

SAP 101 (Fundamentals): necessary to understand SAP concepts as we go through the scenario and also as we move forward to release-level work


Captured “to-be” vision for ACE Cargo Management Lifecycle via series of workshops with:

Collaboration with Headquarters (HQ) Business Process Owners (BPO)

Focus on “what,” rather than “how” Consideration of current trade requirements Trade community & Participating Government Agencies (PGA)

input at workshops in March using “straw model”

Deliverables of GBB: Business Process Flow Model: The “to-be” business processes,

capturing an integrated solution for the ACE Cargo Management Lifecycle

SAP Fit/Gap Analysis: The functional and technical solutions (SAP or otherwise) that best support the CBP business processes

Opening Remarks (continued)


SAP Fundamentals


Evolution of ERP

What is ERP?

Enterprise Resource Planning is a software solution that enables integration of various departments and functions across a company onto a single computer system that can serve all those different departments’ particular needs.


Evolution of ERP (continued)

Before ERP became popular, companies invested in:

Specialized computer systems Needs of an individual

department Hundreds of different systems Custom system

Many times the different computer systems were not integrated resulting in a “stovepipe effect”


SAP BenefitsFlexible: Configurable to meet business needs

Real-time Validation: Updates information immediately in the system as the data is saved Provides direct access to current data and reports Reduces operation costs

Audit Trail: All transactions can be tracked to the person entering or changing

data

Integrated: Data entry in one module is immediately available in others Eliminates duplication of data and increases data accuracy Increases the coordination between departments


SAP Public Services ExperienceSAP is successfully leveraging its historical success to make a significant impact with the public sector.

Productive Federal Clients include: Bureau of Engraving & Printing Defense Logistics Agency Department of Defense (DOD)

Enterprise Software Initiative General Services

Administration Internal Revenue Service (IRS) National Aeronautics and

Space Administrations (NASA) NAVAIR NAVSEA

NAVSUP NAVY Moral Welfare &

Recreation Oakridge National Lab Picatinny Arsenal SPAWAR Strategic Petroleum Reserve UNICOR U.S. Army (LMP) U.S. Geological Survey

SAP at CBP: Office of Finance


Data Organization in SAP The fundamental data framework within the SAP system

On-line tasks which combine to form integratedbusiness processes

Master Data

Transactions

Hierarchy SAPSAP’s static informational and processing/parameter data


Data Flow in SAP

* See Appendix for definitions

ConfigureConfigureSystemSystem

EnterEnterTransaction Transaction

DataData

Cross Cross ApplicationApplication

ComponentsComponents

* Configuration and Master Data must be set up to run * Configuration and Master Data must be set up to run Business TransactionsBusiness Transactions

Reporting, Workflow, Case Management, etcReporting, Workflow, Case Management, etc

EnterEnterMaster Master

DataData

OrganizationOrganizationDataData

Master Master DataData

Transaction Transaction DataData

Material Master (HTS, Schedule B)

Customer Master(All Account Types,

MIDs)Pricing (DTF, Trade Agreements)

Shipping Docs (Manifest, BOL)Shipping Docs (Manifest, BOL)

Sales Orders Sales Orders (Entry/Entry (Entry/Entry Summary, Summary,

Authorized Movements)Authorized Movements)

Invoices (Statements, Invoices (Statements, Credit Memo)Credit Memo)

Sales Deal/Rebate (Anti Dumping Case #)

Equipment Master(Conveyance)

Currency Conversions


SAP Components

GTS: Global Trade Services Foreign Trade Sanction Party List Denied Party List

GTS: Global Trade Services Foreign Trade Sanction Party List Denied Party List

FI: Financial Accounting General Ledger Accounts Receivable Accounts Payable Special Ledgers

FI: Financial Accounting General Ledger Accounts Receivable Accounts Payable Special Ledgers

WF: Workflow Event Handling Task Notification Parallel Work

Routing

WF: Workflow Event Handling Task Notification Parallel Work

Routing

SCM: Supply Chain Management Event Management Delivery Scheduling Demand Management

SCM: Supply Chain Management Event Management Delivery Scheduling Demand Management

CRM: Customer Relationship Management Communication Tools Business Partner

CRM: Customer Relationship Management Communication Tools Business Partner

SD: Sales & Distribution Sales Order Outbound Delivery Billing Foreign Trade

SD: Sales & Distribution Sales Order Outbound Delivery Billing Foreign Trade

GTSR/3

FISDCRM

SAP

FI

WF

SD

MM

SCM IS-PS

IS-PS: Industry Solutions for the Public Sector Budgetary Ledger Postings Proprietary Ledger Postings

IS-PS: Industry Solutions for the Public Sector Budgetary Ledger Postings Proprietary Ledger Postings

MM: Material Management Procurement Inventory Management Foreign Trade

MM: Material Management Procurement Inventory Management Foreign Trade



Questions


Global Business Blueprint (GBB) Approach & Results


GBB: Purpose Define an end-state integrated process vision for future

technology which is a collection of documentation defining “to be” business processes and how CBP will use SAP and other technology applications and tools to perform these functions

Define an integration approach leveraging current ACE technologies

Develop or refine existing program strategies, including project schedule, cost and implementation sequence

Define the baseline scope Provide updates to the ACE Program Plan Determine the appropriate system solution for future

functionality


Refined process flows as a result of GBB Business Process Decomposition:

GBB started by performing…

A breakdown of a business process to the sub-process level to obtain a high level understanding of the business process requirements, synergies with other common processes, and the key inputs and outputs.

FOCUS on “What needs to be done, why it needs to be done, & who does it”

GBB started by performing…

A breakdown of a business process to the sub-process level to obtain a high level understanding of the business process requirements, synergies with other common processes, and the key inputs and outputs.

FOCUS on “What needs to be done, why it needs to be done, & who does it”

At the start we did not focus on “how”?A process flow is not a detailed understanding of “how” the tasks in a process are executed currently nor the detailed requirements of that process.

At the start we did not focus on “how”?A process flow is not a detailed understanding of “how” the tasks in a process are executed currently nor the detailed requirements of that process.

Where we are now. . .Analysis has been completed within the team that reviewed the collected business processes and determined appropriate technical solutions for each business process. FOCUS on “how” SAP or other technical components may be used to support CBP business processes in the future.

Where we are now. . .Analysis has been completed within the team that reviewed the collected business processes and determined appropriate technical solutions for each business process. FOCUS on “how” SAP or other technical components may be used to support CBP business processes in the future.

Create Straw Model

Review & Refine Model

Conduct Model

Integration Reviews

Validate Model w/ PGAs &

TSN

February March/April

Where we ended up was understanding the integrated processes and “how” theywill work in the future end state

Complete Gap

Analysis & Develop

Model #2

Confirm Model #1

GBB: Approach


Provides an integrated process / technical framework for the ACE Cargo Management Lifecycle. This framework emphasizes the right information for the right people at the right time.

Leverages the best for all modes of transportation and provides the flexibility to support the variations within each mode.

Includes a framework which fully integrates the export process to realize the benefits of a closed-loop system.

Moves to a master data-driven system from a transactional-based approach, providing greater visibility and access to centralized data.

Provides CBP, PGAs, and the trade community with a future direction through an integrated solution suited for a dynamic external environment.

GBB Results: Summary


GBB Results: Quick FactsBusiness Process Flow DevelopmentTotal Workshops: 77 Process Breakdown:

CBP Process: 55 Level 2: 33

TSN & PGA: 11 Level 3/4: 162

Other: 11

Port Visits: 4

Touch Points Evaluated:PGA & TSN – 11 workshops conducted across all major process areas All major TSN groups participated in Workshops 8 PGAs were involved in the Workshops (Census Bureau, Food &

Drug Administration, Federal Communication Commission, USDA/Animal Plant Health Inspection Service, International Trade Commission, Federal Maritime Administration, Federal Motor Carrier Safety Administration and U.S. Army Corps of Engineers)

Duties, Taxes and Fees, HTS, and other data objects


GBB Results: TSN/PGA WorkshopsSessions held late March/early April Account Management: Export Accounts Account Management: Carrier and Courier Account Management: Importer, Broker, Warehouse Operator Account Management: Foreign Trade Zones (FTZ) Account Management and Manage Finance: Sureties, e-Bond

and Bond Sufficiency Manage Finance: Protest, Liquidation, Netting Manage Release: (Export Process) Pre-Departure,

SED/Manifest, Licensing Manage Release: FTZ Admission, Entry and Export Process Manage Release: e-Manifest for Sea, Rail, Air Manage Post Release: Entry/Entry Summary, Recon, Post-

Summary Corrections, Importer Activity Summary Statement (IASS)

Manage Post Release: Drawback


GBB Results: (continued)Trade community/PGA overview of high-level process, with

understanding that further detail to be defined in next stage of process 93% said expectations met 90% said level of detail adequate 100% said joint sessions with Trade community/ PGAs are valuable

“These sessions allow the PGAs to see first hand that the trade is sincerely interested in the same goals as the PGA. (i.e. full compliance)”

“As a PGA, it gives a better understanding of what the trade goes through to get me this information”

Need to provide more detail – confirmation/validation not possible at level presented

“It would be helpful to have agenda and information for discussion prior to meeting so could do preparation”


Arrival/Pre-Arrival Export Controls

Accounts Brokers Setting up Importer Accounts Air Industry Business Practices PGA-granted Licenses, Certificates, Permits

Post Release Foreign Trade Zone (FTZ) Weekly Entries Importer Activity Summary Statement (IASS) Post-Summary Corrections

Finance Statement and Netting

Follow-up Focus Sessions


Introduction to the Integrated CBP Cargo Management Lifecycle Process


End to End Process

Integrated CBP Cargo Management Lifecycle


The following SAP Software Components have been initially identified as necessary to enable the business process scope.

Account Relationship Management

CRM – Customer Relationship Management SD – Sales & Distribution GTS – Global Trade Services EM – Event Manager

Account Relationship Management

CRM – Customer Relationship Management SD – Sales & Distribution GTS – Global Trade Services EM – Event Manager

Release: Pre-Arrival Arrival GTS – Global Trade Services CRM – Customer Relationship Management SD – Sales & Distribution MM – Materials Management EM – Event Manager

Release: Pre-Arrival Arrival GTS – Global Trade Services CRM – Customer Relationship Management SD – Sales & Distribution MM – Materials Management EM – Event Manager

Post Release

CRM – Customer Relationship Management GTS – Global Trade Services SD – Sales & Distribution MM – Materials Management EM – Event Manager

Post Release

CRM – Customer Relationship Management GTS – Global Trade Services SD – Sales & Distribution MM – Materials Management EM – Event Manager

Finance

FI – G/L – General Ledger FI – A/R – Accounts Receivable FI – FM – Funds Management ISPS-CD- Public Sector Collections & Disbursement Financial Reporting

Finance

FI – G/L – General Ledger FI – A/R – Accounts Receivable FI – FM – Funds Management ISPS-CD- Public Sector Collections & Disbursement Financial Reporting

BI – Reporting, Analysis BW – Business Information Warehouse R/3 - Reporting

BI – Reporting, Analysis BW – Business Information Warehouse R/3 - Reporting

SAP Technical

Enterprise Portal

SAP Technical

Enterprise Portal


SAP Functional Scope


Level of Technical FitLow ------------------------------------------------------------------------------------------------High

(Gap: Manifest Processing)

GBB Results: Fit / Gap AnalysisA Fit/Gap analysis is a rating for determining the technical solution to meet the

requirements of the business process

Basic Definitions:

FIT – The defined “to be” business process can be mapped to the SAP system through configuration.

GAP – The defined “to be” business process cannot be mapped to the SAP system through configuration.

Overall a high degree of process FIT has been identified with the process areas


Major Process Gaps Identified to date: Manifest Document – A complex multi-level document is required to

support the Manifest process in SAP. The structure of the document requires a series of nested levels with large amounts of data required at each level. Additionally, the manifest documents must be correlated to the Filer / Entry documents that allow the release of cargo into the commerce of the US. Currently, this process is not enabled by any SAP solution, however, eCP and SAP are co-developing the Multi-Modal Manifest solution for incorporation into the SAP GTS software.

Visibility of all Cargo Management Lifecycle transactions – An important aspect of CBP process is the ability to have traceability to the transaction lifecycle of cargo, conveyance, equipment, and individuals moving in and out of the US. While SAP provides excellent workflow capabilities, there will have to be enhancements to provide full lifecycle visibility of all transactions across SAP systems.

GBB Results: Process Gaps


GBB Combined People, Process, &

Technology Perspective Process and Technical Integration Standardization / Commonality of

Processes Data and Process Discipline Information Accuracy,

Harmonization, and Accessibility Quality at the Source: Right

Information Available to the Right People at the Right Time throughout the Process

Building on ACE work done to date End-to-End solution showing one

thread

Trade Incorporates Best Business practices

from the trade community Opportunity to re-engineer the Trade

processes to fit within proposed CBP design

Ensures the smooth flow of legitimate trade

Reduces redundant information requirements

Promotes uniformity among CBP ports Reduces reliance on paper processes Eliminates unnecessary processes Provides for incorporation of PGA

requirements

The solution framework we will be walking through today is focused on the following themes:

Key Themes


Imp

ort

Man

ifest

Account Management

ENFORCEMENT

F I N A N C E - REVENUE & COLLECTIONS

Ent

ry

Adm

issi

bilit

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elea

se

Ent

ryS

umm

ary

Bill

ing/

Liqu

idat

ion/

Pro

test

SE

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C

argo

Rec

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Exp

ort

Man

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Dra

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This diagram represents the logical view of the process areas.

It will be used to facilitate the process scenario discussion depicted on the following pages.

Process View



CRM

GTS

R/3

BW

SAP Systems

Other Legacy and Touch Point SystemsOther Government Agency Systems

Office of Finance - SAPLegal and Policy

During GBB, the team mapped the processes to SAP software components and identified interfaces to other required systems.

Technical Enablers

Imp

ort

Man

ifest

Account Management

ENFORCEMENT

F I N A N C E - REVENUE & COLLECTIONS

Ent

ry

Adm

issi

bilit

y\R

elea

se

Ent

ryS

umm

ary

Bill

ing/

Liqu

idat

ion/

Pro

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SE

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Rec

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Exp

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Man

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Dra

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GTS - (Global Trade Services) is an international trade compliance solution that provides import and export control functionality for screening legal responsibilities, business partners and trade documents. Automation includes: processing the in bound manifest, entry and authorized movement documents. The correlation of trade data for checking for licenses, permits, certificates and integrated admissibility screening prior to release.

CRM - (Customer Relationship Management) enables key processes in Account Management, Release, and Post Release. Automates core business operations across all account touch points: Entry/Entry Summary, Quota, DTF (CRM Sales), Account Management (CRM Business Partners), Trend analysis (CRM Marketing), and Case Management, Verification (CRM Service).

SAP Technical Enablers


SAP Technical EnablersR/3 - Enterprise handles Billing, Inventory Management and

Finance. All of the SAP solutions listed above are born out of SAP R/3. Any sales document created in the GTS/CRM system will be replicated into R/3 so that process in Billing, Statement Processing, and Finance can be executed. Master data like Account Data will be replicated to R/3 while data like HTS and DTF will be maintained in R/3 and replicated to the appropriate systems ‘real-time’.

BW – (Business Information Warehouse) is SAP’s data warehouse and business intelligence solution for reporting, decision support, analysis and data mining. It will enable CBP to access and analyze combined historical data from GTS, CRM, R/3 and non-SAP applications. Master data (like account, HTS, DTF) and transaction level data (entry/entry summary, authorized movements, quota, AD/CVD etc…) will be extracted from the SAP solutions to provide both operational and analytical reporting to support the Cargo Management Lifecycle.


= Data,

Transaction, and Work Flows

R/3 Enterprise

IncomingDocuments

CRME-ManifestEntry,License, Permits, CertificatesQuota / VisaHAZMATSRelease

AccountsAccount MgmtCase MgmtProtestDTF

FI

Event Manager

Leg

acy

Oth

er 3

rd P

arty

KeyFunctionality

GTS

Leg

acy

Fin

ance

-

OF

BillingRebatesTariff Rate QuotaDrawback

•Business Warehouse•Portal

Systems Viewpoint




Integration ScenarioThis Transaction scenario depicts the “to be” end-to-end process for importing and exporting goods into

and out of the commerce of the United States


Integration Scenario

Designer Apparel, Inc. has been importing for three years and has decided to initiate an import venture of silk from Hong Kong from “Wormer, Inc.,” a silk producing factory.

There are manufacturing plants in the U.S. and Canada that will each receive portions of the shipments to be manufactured into the Evans fall 2004 Clothing Line.

Designer Apparel, Inc. will send a portion of their imported cargo to a subsidiary company in England and claim drawback against the import entries.

Additionally, Designer Apparel wants to use a new Broker, Hall Brokerage.

Designer Apparel Inc.


Request Portal View of AccountMark Porter, the newly designated import/export Manager for

Designer Apparel, Inc., has decided that he would like to view and update the existing account data for Designer Apparel, Inc.

Step 1: Mark locates the ACE user ID Application on the Customs Modernization tab and completes the online application through a CBP secure Internet web page.

Step 2: Mark submits the online application on the CBP website with the following data a list of the company’s principal officers and their contact

information the company’s fiscal year end date relationships to other business entities Agreed to the Terms and Conditions document


Creation of ACE user IDStep 3: The CBP Account Administrator (role to be defined),

Roberta Bruno, logs into ACE and sees that she has a received a message on her homepage that an application for a new ACE user ID needs to be reviewed.

Step 4: Roberta Bruno reviews Mark Porter’s application to confirm that all the required information has been provided on the online application. Information entered is automatically validated by ACE After all validations have successfully passed, the CBP

Account Administrator establishes the user ID and password in ACE.

Step 5: Notification sent to Mark Porter (Account Owner) by ACE with his new ACE user ID and password for access to the Designer Apparel, Inc account.


Creating a Broker AccountDesigner Apparel, Inc., wants to use new broker, Hall Brokerage.

Hall Brokerage has received their CBP broker license, which they applied for one year ago. Now Hall Brokerage would like to manage their account in ACE and applies for a user ID and password.

Step 6: CBP Account Administrator (role to be defined) reviews the Broker Account information and sees that Sarah Combs will be account owner for Hall Brokerage and enters the information into ACE: name, address, and contact information within the account Broker Exam, License, Permit EIN number Any related information


Account ValidationStep 7: ACE validates that…

The address is correct and within the accepted format, A duplicate account is not entered by verifying that the

combination of Broker EIN number and address does not exist

Step 8: ACE account activation and notification sent After all validations and verifications have passed, a

notification is sent to Sara Combs at Hall Brokerage that the ACE account has been created and is provided an ACE Broker account, user ID, and password


View Account InformationStep 9: Sara Combs signs onto the ACE Secure Data Portal using

her ACE user ID and password to enter ACE and searches in the system with Hall Brokerage ACE account number to manage the Hall Brokerage account


Designer Apparel has expanded their line of business to accessories by acquiring a new subsidiary, Accessories Etc Company. Now that Mark has an ACE user ID, he would like to update the Designer Apparel account with new information

Step 10: Mark Porter logs onto ACE using his ACE user ID and

password to maintain the Designer Apparel account Mark searches for the Designer Apparel account using his

Importer of Record number The Designer Apparel account number is a uniquely

generated by SAP and is different than the Importer of Record (IR) number; however, the IR number is an attribute of the account

Account Management


Account Management

Step 11: Within the Designer Apparel account, Mark Porter has the authority to: Maintain Designer Apparel, Inc.’s name, address, and

updates his new contact information within the account. Assigns user access rights to specific account information to

those individuals involved with the Designer Apparel, Inc. account. Grants access to his Brokers: Hall Brokerage (existing

CBP account) Grants access to his Carriers: Sunkist Ocean Liners

(existing CBP account) Grants access to his Surety (existing CBP account)

Maintain Designer Apparel, Inc. account structure by linking existing Importer of Record (IR) numbers of newly acquired Accessories Etc Company.


Account Management

Step 12: ACE validates updated/changed data Once the account information is updated and changed by Mark, ACE

will validate the data

Step 13: Notification After all validations are passed, a notification is sent to Mark and the

account manager that the ACE account has been updated


Relevant GBB FindingsAccount Management


Account ManagementProcess Improvements Mistake-proofing the account creation and maintenance

processes through the use of SAP CRM account data edit checking and portal technologies. Ensuring account data is set up properly up-front in the process reduces the number of times the account data is handled during routine maintenance, as well as daily in the field.

Elimination of duplicate account entries and centralized account data, affording full visibility to accounts; better decision support in the field and at HQ


CBP Issues Being Addressed Creating an account for every entity that does business with

CBP Maintaining centralized data Requiring accurate account data up-front Eliminating the port-generated ID ACE-generated unique identifier

Account Management


Business Benefits to the Trade Community Use of current and consistent technology enablers Access to ACE with a single user ID and relevant security

permissions Access to CBP forms & communications according to need Uniform account view for both CBP, account, and authorized

government agencies Access to historical and transactional information Centralized account updates, rather than port-by-port Visibility to special instructions for trade community from CBP

headquarters Improved and streamlined communication with CBP, PGAs

Account Management


Sunkist Ocean Liners, owner operator of the vessel, has an International Carrier Bond already established.

Step 14: Fred, working for Sunkist Ocean Liners, submits the manifest data via EDI

A list of the separate items of merchandise being transported by the carrier

Includes both trip and shipment data twenty-four hours in advance of lading in Hong Kong

Includes in-bond data for the 6 containers (900 rolls) of goods being exported to Canada, filed as part of the Multi-Modal Manifest data filed twenty-four hours prior to lading

The silk shipment is expected to arrive in San Francisco from Hong Kong in twenty working days after departure.

The Carrier Transports the Cargo

Real Time Report

Manifest InformationAvailable


The Broker Files Transaction DataStep 15 : Sara Comb at Hall

Brokerage, Designer Apparel, Inc.’s Broker, enters the entry transaction into the brokerage’s electronic message data for transmission to ACE (new ABI). Ms. Comb files entry/entry summary for the 4 containers (600 rolls) of woven silk fabric (5007.10.60.30) entering the U.S. commerce


Process the Entry

Real Time Report

Step 16: Once the entry data has been received and validated by ACE, the correlating process links the entry to the corresponding bill of lading.

Note: Since the in-bond document information was filed as part of the multi-modal manifest, an automatic correlation occurred as part of the filing. If a separate in-bond transaction is produced by an entity other than the carrier, correlating will be required

Step 17: Following the successful correlation, ACE indicates two containers require further review.


Process the Entry Summary

Real Time Report

Continuous Bond Liability

Real Time Report

Quota Information

Step 18: Following the successful correlation, the ACE system will now validate the duties, taxes, and fees associated with the entry summary.

Step 19: Real time Bond Sufficiency check


Step 20: Sunkist Ocean submits the electronic departure message from the last foreign port of Hong Kong. In addition, Sunkist Ocean submits the entrance data to CBP. ACE checks against carrier account master data for

applicable Licenses, Permits, Certificates Check Lloyds number against carrier account Check the conveyance safety certificate

All released cargo statistics are updated and distributed to the relevant PGAs and Other Government Agencies (OGAs)

Entrance and Clearance for Sunkist Ocean


Step 21: 5 days prior to arrival, CBP communicates that the previously identified containers (shipments) are on HOLD and will require inspection in San Francisco. The other shipments are released

Step 22: Sunkist Ocean Liners submits electronic Pre - Arrival Notification to CBP

Step 23: Sunkist Ocean Liners receives permission to unlade.

Step 24: An SAP business document will be created to calculate conveyance fees and taxes.

Entrance and Clearance for Sunkist Ocean


Release Processing of CargoThe 2 previously identified containers are un-laden for verification at the designated pier staging area.

Step 25: The containers are processed via the mobile VACIS and the findings are recorded.

The first container (shipment) is released. The second container requires further examination: Route to CES for further examination

Step 26: CBP officer informs carrier (electronically) that container 2 is required at a local CES.

Real Time Report

Auth Move Status


Release Processing of CargoStep 27: Carrier submits electronic PTT via ACE to move container 2 to the local CES. After CBP approval, the electronic PTT will be sent to the assigned CES inbox via workflow.

Step 28: Once container 2 arrives at the CES, the CBP officer performs the examination and releases the container.

Meanwhile . . . Back at the pier. . .

Step 29: The remaining 9 containers have been released upon arrival

Real Time Report

Auth Move Status


Wheeler Trucking proceeds to move a container from the Port of San Francisco to the Port of Blaine for export to Vancouver. Wheeler will be transporting the cargo under the Sunkist carrier bond.

Step 30: CBP receives in-bond (T&E) initiation message from the carrier once the freight is in possession.

Step 31: 25 days has elapsed and the in-bond cargo has not arrived in Blaine. The system automatically notifies the carrier that 5 days remain to complete the authorized movement.

Carrier closes Authorized Movement


Step 32: The carrier issues an arrival message once the conveyance has reached Blaine.

Step 33: The carrier issues a departure message to CBP and the in-bond (T&E) document is closed.

Carrier closes Authorized Movement


Relevant GBB FindingsManage Release


Process Improvements Better security due to improved conveyance and equipment tracking Improved data accuracy - the manifest information is filed only once,

electronically. (This does not imply that changes cannot be processed)

All import and export manifests will use the same format for filing of data (Multi-Modal Manifest). This will ease operational complexities for both the trade community and CBP.

A more tightly integrated process from pre-arrival through release. Maintaining certificates electronically will greatly reduce the need for

paper and manual verification which facilitates reduced cycle times for release processing

Better tracking and visibility of all warehouse transactions/movements

Common verification process for all transport modes

Manage Release


Manage ReleaseCBP Issues Being Addressed Developing a common manifest document for import and export Matching the entry to the corresponding manifest item to

secure release of the merchandise Tracking and status for Authorized Movements (including

Delivery Tickets and PTT) Requiring advanced manifest data which will include

information about the cargo, conveyance, individuals and equipment in compliance with the Trade Act of 2002

Handling User fees in ACE Developing a mitigation strategy for the accumulation of

transaction data for shipments that never arrive Reviewing regulations which address the automation of the

zone admission process


Manage ReleaseBusiness Benefits to the Trade Community Common processes and new technology for all modes of transport Integration of the Import & Export processes Greater visibility of data for Trade & PGAs ACE will be the “one system” that will support the life cycle of a

shipment within CBP Automation of Entrance & Clearance process Elimination of paper documents Improve data accuracy for intermodal moves Improve ease of use by utilizing Web Portal and/or EDI Increased uniformity of CBP processes between ports Faster processing and releasing of cargo Master/House bill processing will be common to all modes Opportunity to re-engineer trade processes to fit within proposed

CBP design


Financial Processing for ImportsAccounts Receivable / “Revenue” is recognized and posted to the general ledger accounts

Step 34: Subsequent to the successful verification of the entry summary (7501) or certified at entry (3461), SAP billing process is initiated, accounts receivable is recognized.

Step 35: During the month, the importer / broker logs onto the ACE portal to review their outstanding accounts receivable(s). The importer / broker verifies the entry summaries / accounts receivables that will appear on periodic statements and / or bills.

Real Time Report


Financial Processing for ImportsExamples of Financial Master Data maintained within ACE: General Ledger – SAP R/3 set up and maintained via Office of

Finance Funds Management – SAP R/3 set up and maintained via

Office of Finance Accounts supporting financial transactions (i.e. Importer,

Broker, Surety, etc.) – SAP CRM set and maintained via Trade and Account Managers

Bonds – SAP CRM value contracts maintained via Office of Finance, along with Surety / Importer / Broker relationship


Financial Processing for ImportsDesigner Apparel verifies the entry summaries that will appear on

the periodic statement of their duties, taxes, and fees for the imported goods from Hong Kong

Step 36: Based upon the payment terms submitted with the original entry summary (s), ACE will automatically generate the periodic statement on the requisite delivery date.

Step 37: The filer reviews the periodic statement(s) and provides ACH debit authorization for payment to be processed.

Step 38: Mellon Bank processes the ACH debit transaction.

Step 39: CBP clears Designer Apparel’s receivable in full for the ACH debit payment received


Relevant GBB FindingsManage Finance


Process Improvements Refunds / Payments – SAP to act as single source for all

refunds / payments to the trade community for both check and EFT payments routed through Treasury

Bond Sufficiency – real-time direct relationship between entry summary IR and associated bond sufficiency for given IR

Liquidate and Master File Extract / FOIA Requests – manual process reduction and query development reduced with all requisite data stored within ACE

Manage Finance


CBP Issues Being Addressed Assess bond sufficiency formula Allowable participation for end-state periodic statement

processing and / or other payment types beyond daily statements

Netting of receivables / refunds on same statement

Manage Finance


Business Benefits to the Trade Community Periodic Monthly Statement

Increased monetary float All inclusive (goal, pending policy change) Reduced number of payments Reduction of refund number not amount

Real-time check on bond sufficiency Electronic Bond Transparency of all receivable types to view amount due to CBP at

any given time Increased use of electronic funds transfers and report distribution Description for each transaction on the statement. Each transaction

uniquely identified.

Manage Finance


Process Team ReviewStep 40: ACE determines whether entry summary 1987234113

(for the 4 containers) should be bypassed.

Step 41: Entry summary is scheduled to be liquidated a year from now

Step 42: Import Specialist George Curious has been doing an analysis of the Designer Apparel Inc. account. He runs a report with all the open entry summaries of Designer Apparel. The entry summary 1987234113 for the 4 containers is one of them. The Import Specialist requests an electronic version of the commercial invoice. The prices in the invoice are uncharacteristically low. The Import Specialist sends an electronic CF-28 requesting price lists, catalogs, confirmation of price paid, and other evidence of arms length transactions

Real Time Report


Process Team ReviewStep 43: George uses the tools available in BW (Business

Warehouse) to do a trend analysis of Designer Apparel Inc. buying patterns and detects that their prices are lower than market value.

Step 44: George notifies the account via a CF-29 that he is proposing to add to the appraised value of all the open entries of Designer Apparel, Inc. The system automatically extends all Designer Apparel, Inc.

open entries with the same characteristics.

Step 45: Designer Apparel Inc. provides further clarification but Import Specialist Curious is not satisfied

Real Time Report


Process Team Review/LiquidationStep 46: Import Specialist George Curious appraises the shipment

adding $25,000.00 per line item. He inputs the corrected value once and mass recalculation of DTF occurs. Team review findings are captured on the entry summaries

Step 47: ACE calculates the additional duties

Step 48: ACE changes the status of the entry summaries to liquidated

Step 49: A liquidation notification is sent to the account and the surety


Process ProtestStep 50: As soon as the entry summaries are liquidated, Designer

Apparel, Inc. files an electronic protest on all the entry summaries. The protest includes various data elements including the value the importer believes is the correct value. ACE uses those data elements to fill in the protest fields. The new e-protest will include all the data elements needed to process protests electronically.

Step 51: The protest includes additional value information not available when the entry summary was appraised.

Step 52: Import Specialist Curious reviews the additional information and agrees in part with the importer. He decides on a new value that is less than the appraised value he had originally decided but more than the entered value.

Real Time Report

Protest Report


Process ProtestStep 53: The importer did not file for Application for Further

Review so the protest does not have to go to Headquarters. He inputs the new value and uses workflow to route the protest to the Supervisory Import Specialist to approve. After approval, ACE calculates the new extended value and the new duties.

Step 54: A notification is sent to the protest filer and the surety


Financial Processing for AdjustmentsSubsequent to Designer Apparel receiving positive acceptance of

their protest submission, ACE will process the adjustment of duties.

Step 55: Based upon protest decision, an adjustment document is generated referencing the original 7501 submitted. A new bill is issued for the amended amount including interest.

Step 56: Since Designer Apparel pays via ACH debit, the payable due will be remitted as an ACH debit adjustment during the next statement / bill cycle.


Managing Compliance

Real Time Report

Compliance

Step 57: The CBP Account Manager for Designer Apparel, Julie Johnson, executes the compliance report for Designer Apparel. Account Manager reviews the status of Designer Apparel,

Inc. Account Manager analyzes Designer Apparel, Inc. and runs

compliance reports Account Manager analyzes Designer Apparel, Inc.

transactions

Step 58: Mark Porter at Designer Apparel, Inc. is notified by Julie that Designer Apparel is having classification problems. Mark logs into ACE to view compliance report. Mark researches Designer Apparel, Inc. transactions within

ACE to investigate compliance issues.


Managing Compliance

Real Time Report

Step 59: Mark Porter works with the Account Manager to add an item to their Action Plan and the agreed upon action is placed within the Account information in ACE for visibility.


Designer Apparel Cargo for Export

Having successfully entered the merchandise into the commerce of the US, Designer Apparel is contacted by its London subsidiary and needs to ship silk fabric to England via an air shipment.

Step 60: Designer Apparel (USPPI) files an electronic Shippers Export Declaration (SED), the message is received, and the ITN number is issued.

Step 61: The USPPI delivers the cargo to Virgin Atlantic (Export Air Carrier). The export carrier files the cargo receipt message referencing the ITN number

Step 62: The ITN number of the cargo receipt is correlated to the ITN of the SED.


Designer Apparel Cargo for Export

Virgin Atlantic, having received the material from Designer Apparel, creates the export manifest.

Step 63: The carrier files the electronic export manifest.

Step 64: CBP provides permission to export for the cargo

Step 65: Virgin Atlantic files the clearance data with CBP. CBP provides permission to depart.

Step 66: Virgin Atlantic departs and the departure message is sent to CBP.


Drawback ClaimDesigner Apparel files a drawback claim based on the export of cargo to

England.

Step 67: The importer provides the necessary information on the drawback claim (referenced to the entry summary as well as the proof of export).Note: The classification of the goods on the import entry was

5007.10.60 and the classification of the exported goods was 5007.10.60. The importer also provided the average duty per unit of the line item on the entry summary and the average duty per unit of the exported item determined by applying the duty rates on the designated entry summary to the value and quantity of the exported item

Step 68: The original entry exists and the monies are available.Step 69: The drawback claim is approved and CBP issues the drawback

to Designer Apparel.


Relevant GBB FindingsManage Post Release


Process Improvements Alignment of expertise across the country to address certain

commodities entering the United States will allow for greater automation of workflow and a decrease in low value highly administrative tasks

Enhanced ability to verify calculation of Duties, Taxes, and Fees due to greater data integrity in Account and HTS management

Integration and automation between entry and receivables will minimize handling costs of the transaction and create the visibility of an accounts balance and integrity of the data

Manage Post Release


CBP Issues Being Addressed ACE will enhance the paperless entry process. Filers will have the

capability to forward electronic documents which will be associated with the entry document and forwarded for team review. Paper entries will still be accepted and processed similar to paperless entries

Reconciliation (types and flagging) Quota Process Improvements IASS link between reconfigured entry and release

Manage Post Release


Business Benefits to the Trade Community Reduction of paper documents Opportunity to stream line drawback processes IASS monthly entry summary Automation of Reconciliation by eliminating the spread sheet

and the disks Post Summary Correction Reduce time on drawback process Reduce time on protest process Improved data accuracy for government agencies

Manage Post Release


Appendix


GlossaryBW – (Business Information Warehouse) is SAP’s data warehouse and business intelligence

solution for reporting, decision support, analysis and data mining. It will enable CBP to access and analyze combined historical data from GTS, CRM, R/3 and non-SAP applications. Master data (like account, HTS, DTF) and transaction level data (entry/entry summary, authorized movements, quota, AD/CVD etc…) will be extracted from the SAP solutions to provide both operational and analytical reporting to support the Cargo Management Lifecycle.

COTS – Acronym for Commercial Off the Shelf product and is used to describe SAP.CRM - (Customer Relationship Management) enables key processes in Account Management,

Release, and Post Release. It incorporates CBPs integrated processes into CRM and will automate core business operations across all account touch points, for primary processes like; Entry/Entry Summary, Quota, DTF (CRM Sales), Account Management (CRM Business Partners), Trend analysis (CRM Marketing), and Case Management, Verification (CRM Service).

DTF – Duties, Taxes, and Fees

ERP – Enterprise Resource Planning. A packaged system that offers a single interface for performing major company transactions.

GTS - (Global Trade Services) is an international trade compliance solution that provides import and export control functionality for screening legal responsibilities, business partners and trade documents. Key processes for GTS automation include: processing the in bound manifest, entry and authorized movement documents. The correlation of trade data for checking for licenses, permits, certificates and integrated admissibility screening prior to release.

GUI – Acronym for Graphical User Interface.


Glossary (continued)HTS – Harmonized Tariff Schedule

MID – Manufacturer Identification number

mySAP Business Suite – A series of packaged SAP modules and New Dimension Products developed by SAP.

New Dimension Products – Series of products developed by SAP in the mid-Nineties.

Portal – One entry point for various system applications including ERP systems as well as legacy systems.

R/3 - Enterprise handles Billing, Inventory Management and Finance. All of the SAP solutions listed above are born out of SAP R/3. Any sales document created in the GTS/CRM system will be replicated into R/3 so that process in Billing, Statement Processing, and Finance can be executed. Master data like Account Data will be replicated to R/3 while data like HTS and DTF will be maintained in R/3 and replicated to the appropriate systems ‘real-time’.

SAP – Acronym for Systems, Applications, and Products in Data Processing. It is an enterprise resource planning (ERP) system.

Transaction Code – Shortcuts that take you directly into the SAP R/3 screen that begins a particular transaction.

Workflow - Functionality of routing tasks and approvals through SAP.


SAP Federal Clients:Bureau of Engraving & PrintingDLA: Defense Logistics AgencyDOD: Department of Defense Enterprise Software InitiativeGSA: General Services AdministrationIRS: Internal Revenue ServiceNASA: National Aeronautics and Space AdministrationNAVAIR: Naval Air CommandNAVSEA: Naval Sea Systems CommandNAVSUP: Naval Supply CommandNAVY Moral Welfare & RecreationOakridge National LabPicatinny ArsenalSPAWAR: Space and Naval Warfare CommandSPR: Strategic Petroleum ReserveUNICOR: Federal Prison Industries, IncU.S. Army (Logistics Modernization Project)USGS: U.S. Geological Survey

Glossary (continued)
