Last month’s Board Adviser appointment of compliance heavyweight, Mike Melia, brings a whole new strength to our team.
Former Global Trade Compliance Programme Director at GlaxoSmithKline (GSK), Mike is a supply chain and trade compliance expert with four decades of experience in optimising supply chain risk management, cost control and efficiency.
For this web interview, we spent 10 minutes speaking to him about trade compliance, including challenges, misconceptions, the future and more.
Q: Mike, you’ve been described as a compliance veteran. Tell us about your experience.
A: I’ve worked across many areas of the supply chain and in my experience, moving products across borders presents the most issues. For this reason, I’ve focused on ensuring compliance with each country’s multitude of requirements. The objective being to minimise delays, reduce risk and maximise efficiencies.
Q: One of your most recent accomplishments was the implementation of an industry-leading global trade compliance solution for GSK. What were the drivers behind this project?
A: The need to be compliant with a multitude of requirements coupled with increased scrutiny from every external agency led to trade compliance becoming a distinct area of focus for GSK. Moreover, since many of its products are lifesaving medicines, delays at any border must be prevented as they could potentially have a dramatic impact on people’s wellbeing. Another driver was the potential effects of high-profile penalties and fines for non-compliance with trade rules, as we are increasingly seeing across multiple sectors.
Q: Your relationship with Napier began when you chose to install new customer and supplier screening technology. What benefits did this bring?
A: One major aspect of trade compliance is to ensure your business partners are not on any sanctioned lists. As a global company, GSK have many millions of business partners, so this screening process is by no means simple and needed to be automated. The most efficient approach was to work with Napier as part of a major multi-year compliance transformation programme. Napier’s technology achieved a 90% reduction in false positives compared to the original process and reduced the percentage of high-risk hits to be investigated by compliance officers from 5% to just 0.6%.
Q: How important is the application of the latest technologies to achieving and maintaining trade compliance?
A: Trade compliance regulations are always changing. What’s more, when you consider the number of global sanctioned partner lists and the rapid addition of new business partners, it’s easy to appreciate that screening can’t be achieved effectively or comprehensively through any form of manual process. It’s important to have a screening system that can rapidly give you the results you need to avoid delays in your supply chain. This is why companies need to ensure they are working with new technologies, which can be adapted quickly and provide long-term benefit.
Q: What do you think are the biggest challenges in trade compliance today?
A: Keeping on top of changes and recognising that your company needs to ensure they are doing things right – especially knowing you could incur a prison sentence for simply being unaware.
Q: Are there any common misconceptions in trade compliance? And how can these be addressed?
A: The major misconception I see is that many people rely on their broker to ensure compliance at the border. However, the broker is acting on your behalf and any issues or errors in the paperwork provided to customs agencies are never the responsibility of the broker – it’s your job to ensure the information and the process is right. The other misconception is “I haven’t been fined so it must be ok”.
Q: What are those who are getting trade compliance right doing?
A: Five things: they are on top of changes; they are utilising the latest technology; they learn from others; they have an effective oversight and audit management process; and they manage the central and local processes to ensure compliance and efficiency.
Q: How do you see the future of trade compliance?
A: It will get tougher. Customs agencies are also using the latest technologies to find the people who are getting it wrong. You need to be ahead of the moving compliance bar.
Q: Finally, let’s forget about trade compliance for a moment. If you were stranded on a desert island for a week, what three items would you take with you?
A: That’s an interesting question! If I was stranded on a desert island and I knew it was only for a week, I would take a sun lounger with some shade, sun cream and one of my favourite books (The Hitchhiker’s Guide to the Galaxy).