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CLIENT STORIES Ericsson Communicates At Ericsson Communications, the mere mention of a Customs broker brings back the nightmare of millions of dollars lost. "When I started here in 1990," says Tim Patrick, Ericsson's Logistics Manager, "we were not happy with our broker. But since we had little knowledge about new Customs clearance procedures, we simply substituted brokers and left everything in their hands." Says Patrick, "Eighteen months later, an MSR consulting team came in to audit our processes. As a result of their efforts, we were eventually able to recover $2.3 million in inaccurate duty rate assessments." Additional efficiencies and streamlining opportunities were explained as well. After installing MSR software, and as Ericsson's knowledge grew, they found further examples of the broker's sloppiness that had cost them dearly. These included: shipments of software repairs that had been improperly rated as upgrades, and Temporary Importation Bonds improperly cancelled. If this were not enough, the broker had also charged $310,000 in fees to handle Ericsson's annual transactions. Looking back, Patrick says "there was no professional accountability from the broker. They never once queried our internal procedures. They did not make the effort to be our partners. They just assigned junior people to key in the numbers. When an assessment came in from Customs Canada, they blindly paid it and passed the cost onto us along with their fees." The use of MSR software has had a bottom-line impact on Ericsson's business. "Eliminating these errors made us more competitive," says Patrick. "Any company can give itself a gift by preparing Customs documents in house. Its free money." Problems with Customs are not likely to happen again. "When they came in to audit our system," says Patrick, "they were very impressed with the accuracy of our records. That's the value of knowledge. Company: Ericsson |
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