AEO – The Journey Is The Reward

Neu-Isenburg, Germany, February 17, 2009: Rainer Wilms, expert for supply chain management at ABeam Consulting Europe, describes the way how an enterprise can successfully get the Authorized Economic Operator certification while it is profiting from certification effort.

AEO (or ZWB) – oh please, not again! Following ATLAS Export, then Compliance Screening, and then facing the updated customs code, enterprises are now expected to scrutinize the quality of their supply chains and have that quality certified – provided there is any, of course. Much has been written about this topic so I will save you and myself from an in-depth discussion of the AEO. Many experts have done an excellent job at that.

Authorized Economic Operator – a magic expression. All enterprises in Europe are expected to take appropriate action. Some are still hesitant, while others are already in the process of making the necessary effort to tackle the challenge. Some regard the AEO as a useful certificate and are therefore ready to take the appropriate steps, while others, viewing the development with mixed feelings, prefer to wait and see.

Both views are understandable to a certain degree. It makes sense to consider the AEO as a certificate that deserves its place in a well-rounded security scheme for a supply chain. On the other hand, many still feel somewhat uncertain about the AEO, wondering what benefits their enterprise might ultimately reap from it. Be that as it may, this much can be said: Just being urged to take a closer look at the sensitive areas of your enterprise – maybe even from an outside perspective – would seem well worth your while.

Actually, the question can be answered quite quickly if you take a look at the effects of 9/11. I personally can still find ways to penetrate areas of an enterprise that should be deemed sensitive, without being asked to identify myself. So all in all, the AEO does seem to be a useful instrument when it comes to identifying reliable, safe partners within a supply chain.

Yet, it is important to remember that for successful certification, it is not enough to fill in the questionnaire, which is rather substantial. A variety of attachments must be submitted along with it: Process documentation, safety standards, a cross-check of address information against anti-terror lists (electronic) – all these are standards that some enterprises in Europe still fail to comply with or are at least unable to document properly.

This is where the actual effort involved in filing for an AEO begins. Enterprise departments must fill in the questionnaire jointly and document their processes. Result-oriented communication across all departments of an enterprise is hence a necessity that may be labour-intensive but could at the same time benefit the company by encouraging other, cross-departmental processes.

Implementing appropriate software to enhance visibility into the supply chain, streamline export processes, make calculations to identify the best options, and check candidates against anti-terror lists – all these are necessary steps in working towards a standard that will ultimately result in the status associated with an AEO. The same effort must go into scrutinising the security standards applied to protect the company premises.

But that is by no means all. All systems implemented must also be documented.

All this takes time, and it takes people within the enterprise who are committed to preparing the AEO internally, implementing it and keeping a close eye at it over the following years. An enterprise that has done all of this ‘homework’ is well prepared for certification: All processes have been discussed across department boundaries for documentation purposes, and written down subsequently. Vulnerabilities have been identified, and optimisation solutions have been developed.

Wherever software is needed to support the departments’ efforts, this need has been recognised, and an implementation project has been launched.

All these activities can enhance efficiency within an enterprise in many different ways. At the same time, security risks, once identified, can be mitigated effectively.

The employees involved in filing the AEO request have thus achieved an important objective even before the request is submitted: They have documented the processes and optimised them where appropriate; they have implemented supporting software wherever it made sense; and they have taken the necessary steps to fulfil legal requirements. The ultimate AEO certificate is thus a mere ‘by-product’ of all these beneficial efforts and successes.

Once the AEO has been granted, the company may, whether as a supplier, customer, logistics operator or in any other function, proudly present the certificate to let the other partners to the supply chain know it has done its homework and deserves to be respected as a reliable partner within the supply chain.

About ABeam Consulting

ABeam Consulting provides operational consulting services that create strategic advantage, improve business processes, leverage technology innovation, and enhance organizational performance for leading multinational and domestic companies worldwide. ABeam partners with clients to diagnose and solve their real challenges with solutions that combine industry and operational best practices with technical expertise. Pragmatic approaches ensure that clients gain measurable value more quickly. Headquartered in Tokyo, ABeam’s more than 4,200 professionals serve over 700 clients throughout Europe, the Americas and Asia. For more information, please visit http://www.abeam.com.

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