Project Title

Application of Global Data Standards for Supply Chain Connectivity 

Project Year

2015   

Project Number

CTI 21 2015A 

Project Session

Session 2   

Project Type

Standard 

Project Status

Completed Project   
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Project No.

CTI 21 2015A 

Project Title

Application of Global Data Standards for Supply Chain Connectivity 

Project Status

Completed Project 

Publication (if any)

 

Fund Account

APEC Support Fund 

Sub-fund

ASF: APEC Supply Chain Connectivity 

Project Year

2015 

Project Session

Session 2 

APEC Funding

200,000 

Co-funding Amount

26,000 

Total Project Value

226,000 

Sponsoring Forum

Committee on Trade and Investment (CTI) 

Topics

Trade Facilitation 

Committee

Committee on Trade and Investment (CTI) 

Other Fora Involved

 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Hong Kong, China; New Zealand 

Co-Sponsoring Economies

Australia; Malaysia; Mexico; Peru 

Expected Start Date

01/10/2015 

Expected Completion Date

31/12/2016 

Project Proponent Name 1

Vega Wong 

Job Title 1

Assistant Director-General (Regional Cooperation) 

Organization 1

Trade and Industry Department of the Hong Kong Special Administrative Region 

Postal Address 1

Room 1736, Trade and Industry Department Tower, 700 Nathan Road, Kowloon, Hong Kong 

Telephone 1

852 23985305 

Fax 1

Not Applicable 

Email 1

vegawong@tid.gov.hk 

Project Proponent Name 2

Hamish Orbell 

Job Title 2

Senior Policy Officer 

Organization 2

New Zealand Ministry of Foreign Affairs and Trade 

Postal Address 2

195 Lambton Quay, Private Bag 18-901, Wellington 6160, New Zealand 

Telephone 2

64-4 4397185 

Fax 2

Not Applicable 

Email 2

hamish.orbell@mfat.govt.nz 

Declaration

Vega Wong and Hamish Orbell 

Project Summary

APEC Ministers have recognised that Global Data Standards (GDS) can enhance supply chain performance and instructed officials to advance work on GDS by developing pilot projects, conducting a study and establishing a set of policy-based principles or recommendations for future GDS initiatives.  This project aims to implement this mandate by providing hands-on technical assistance to interested member economies (Malaysia, Mexico, Peru and Russia) by applying GDS on their nominating specific goods and trade routes in five pilot projects.  These pilot projects will be carried out, and completed by end of 2016.  

Separately, the outcome of the above APEC-funded pilots will be brought together with additional self-funded pilots (led by Australia, Hong Kong, China, New Zealand and United States/ABAC) into a study undertaken by the APEC Policy Support Unit (PSU) to conduct a proof of concept and further cost-benefit analysis, with a view to proposing policy recommendations or actions to further enhance supply chain connectivity through GDS.

Relevance

This project is aimed at improving Supply Chain Performance (a rank 1 priority) by enhancing the efficiency, integrity, visibility, and innovation of supply chains through the application of GDS. This project will contribute to efforts of member economies to meet their obligations under the WTO Trade Facilitation Agreement (TFA) including the provision on risk management.  The project will also contribute to other rank 1 priorities including connectivity, trade facilitation, GVCs, standards, information and digital economy, protection of intellectual property, as well as food and medicine safety and security. 

APEC Leaders and Ministers have recognised that a wider use of GDS can improve supply chain performance.  In any international transaction of goods, a range of information needs to be exchanged between various parties as the goods move along global supply chains.  GDS is used to ensure that relevant information is provided in a common format which is easily understood and sharable by all parties.  As transactions by governments and the private sector become increasingly electronic, it is more important and useful to ensure that systems used by stakeholders are interoperable. 

This project aims to implement the mandate of the Leaders and Ministers by providing hands-on technical assistance to a suite of pilot projects using GDS in the supply chains for a range of products.  In January 2015, Hong Kong, China and New Zealand invited Member Economies to indicate their interest to join the pilot by nominating a product having regard to its own feature or factor, namely of high-value, easily perishable, origin-sensitive and subject to regulatory control, etc.  Invitation was extended to the Committee on Trade and Investment (CTI), its relevant sub-fora and ABAC.  Finally, four member economies showed interest to lead/participate in five pilots requiring technical and financial assistance, viz.furs (led by Russia), asparagus (Peru), durian (Malaysia), tequila and wine (Mexico).  Technical assistance will be provided for, among others, the purpose of improving risk management programmes run by border agencies, as well as promoting and raising awareness on the availability and utilisation of interoperable GDS for pre- or on-arrival processing of customs-related documentation to facilitate and expedite the clearance of goods at and across borders. The technical assistance will also help demonstrate how GDS can be used to secure the supply chain and give visibility to all the actors that are part of this global supply chain. 

The pilots address numerous issues including efficiency (by eliminating unnecessary transactions, preventing the proliferation of separate domestic standards, and enabling better informed and more accurate risk assessments); integrity (by verifying the integrity of the supply chain at each step); visibility (by increasing the transparency of supply chain processes) and innovation (by enabling new ways to use information through ‘smart’ supply chain processes). In the absence of GDS, such benefits may be lost and it is likely that a number of different systems for sharing different types of information are established, reducing the efficiency of trade.

Together with other self-funded pilots on boxed meat (Australia), wine (Hong Kong, China), deer velvet (New Zealand), and pharmaceuticals (United States/ABAC), the APEC-funded pilots will help prove the concept and establish the benefits and costs of applying GDS on supply chains and thus, facilitate consideration of further work on, and potentially the wider adoption of, GDS across APEC.

Objectives

The key objectives of this project are to: 

1) demonstrate whether and how GDS will enhance supply chain performance, improve consumer safety and contribute to better compliance and risk management through the pilot projects, and identify enablers, challenges and mitigation policies;

2)  provide capacity building to member economies in using GDS; 

3) determine if it is cost-effective to adopt GDS in supply chains for relevant stakeholders (e.g. traders, logistic operators and border agencies); and 

4) depending on the results of the pilot projects, encourage wider adoption of interoperable GDS to facilitate trade and to assist economies to implement their existing commitments under the WTO TFA.

Alignment

In 2013, APEC Ministers “recognized the contribution that global data standards can make to enhancing supply chain efficiency, and encouraged officials to explore what more can be done to facilitate mutual compatibility amongst data standards frameworks, and the compatibility of economies’ frameworks with the use of global data standards.” In 2014, they instructed officials “to further advance work on global data standards by developing pilot projects with the participation of the private sector.”  And, in their 2014 Declaration, Leaders encouraged APEC member economies to work with the private sector to promote further cooperation on GDS and their wider use by developing pilot projects.

This project seeks to carry out these instructions.  The pilots will contribute to the Supply Chain Framework Action Plan by addressing various chokepoints, GVC work on trade and investment issues, trade facilitation measures and SMEs access to GVCs (as SMEs are most heavily affected by supply chain costs and delays), etc.  In considering innovative means to achieve efficiencies in supply chain management, particularly related to cross-border transactions for goods, the project will also contribute to the achievement of the Bogor Goals.   The project will assist APEC member economies to implement their WTO TFA commitments (e.g. by providing advance and detailed information which can help government agencies focus risk assessments on high risk consignments and expedite the release of low risk consignments). 

This GDS project will be carried out under the oversight of the Committee on Trade and Investment.  It is a Trade and Investment Liberalization and Facilitation (TILF) deliverable against CTI’s agenda to enhance regional economic integration agenda.  The project links directly with CTI’s work on the Connectivity Blueprint, GVCs, TFA implementation and the Bogor Goals.  The project will assist APEC member economies to consider whether and how GDS can improve their supply chain performance in terms of reduction of time, cost and uncertainty as well as improvement in risk management.

TILF/ASF Justification

Member economies, government agencies (including Customs and border agencies) and private companies which volunteered to participate in the pilot projects are the immediate beneficiaries of the pilots.  Developing economies participating in the ASF-funded pilots will include China, Malaysia, Mexico, Peru and Russia. 

All APEC member economies, including developing economies, will also be benefited from the pilots and the related PSU Study that will demonstrate the benefits and costs of applying GDS to improve supply chain connectivity, as described in points 1-3 above. The pilots themselves will  illustrate best practices that can be adopted by other relevant public and private stakeholders, particularly SME policy makers and SMEs in developing economies which have yet to use interoperable GDS in their export/import operations.

Beneficiaries and Outputs

Outputs: This project will provide hands-on technical assistance to member economies participating in the pilot projects by applying GDS on specific goods, including by offering a standard methodology for processes mapping. 

The project will provide information/data to demonstrate the impact and process of GDS in improving supply chain performance and contribute to better compliance and risk management, and identify enablers, challenges and mitigation policies. The project will also provide information about the cost-effectiveness of GDS for relevant stakeholders. 

For example, in the GDS pilot project on Malaysia durian exports, the types of technical assistance required include:

1) Expansion of the GDS elements/data in the existing MiTrace system to include real-time information that can measure/assess/highlight the cold chains’ integrity (i.e., EPCIS for real-time supply chain information as well as GS1 Standards and Identification Keys); and

2) Expansion of the trade routes to include a new ‘Malaysia-Hong Kong, China’ route. 

The purpose of technical assistance provided would be to:

1) Facilitate and expedite the clearance of durian exports (i.e., fresh frozen packed durians (processed), and fresh whole durian fruits) at the border of China and Hong Kong, China (i.e., 2 trade routes: MYS-HKC and MYS-CN) through enhanced visibility and traceability of the products via the use and recognition of GDS information/system (i.e. MiTrace System) by the border agencies (of both the exporting and importing economies) and other relevant stakeholders (including the exporters, importers, retailers, end-customers and logistics service providers); and

2) Promote and raise awareness of the authenticity and safety of the durian products to the retailers and end-customers (of both the exporting and importing economies) that can be tracked through the use and recognition of GDS information/system (i.e., MiTrace System).

NB: The target markets are exports of durian to China (Malaysia-China) and Hong Kong, China (Malaysia-Hong Kong, China). The current MiTrace system has only been utilised for Malaysia-China’s trade route. 

Outcomes: The project is expected to provide member economies with a greater understanding of the role GDS can play in enhancing supply chain efficiency (by eliminating unnecessary transactions, and enabling better informed and more accurate risk assessments), integrity (by verifying the integrity of the supply chain at each step), visibility (by increasing the transparency of supply chain processes), and innovation (by enabling new ways to use information through ‘smart’ supply chain processes), and its associated cost, benefits and challenges. 

In turn, this understanding is expected to facilitate consideration of further work on, and potentially the wider adoption of, GDS across APEC. 

Ultimately, over the medium to longer term, the project is expected to provide relevant experience and information to facilitate economies’ policy decisions related to supply chain management and cross-border trade facilitation. In addition, the project is also expected to increase the wider adoption of interoperable GDS in and across APEC economies by the public as well as private stakeholders. 

For example, the proposed outcomes from the durian pilot (Malaysia) include:

1) To understand the extent of which GDS can facilitate and expedite the clearance of durian exports at the border;

2)  To engage border agencies in the recognition and utilization of the GDS system for goods clearance purposes; and

3) To encourage exporters, importers, retailers and end-customers to opt for selling/buying genuine durian (the Musang King variety) products that can be tracked through the GDS system. 

Beneficiaries:  The immediate participants in the pilot projects will be private sector representatives from companies involved in the export/import of the named goods in the pilot projects (e.g. these might be the company producing or selling a good, or a third party distributor), as well as the border agency and customs officials from economies where the goods will move between, and relevant government regulators. 

While these participants will gain some practical knowledge about the use of GDS as a tool for supply chain management, ultimately the beneficiaries will be policy makers and decision makers in government border control and customs agencies in APEC member economies, as well as the relevant government regulators.  Information gathered from the pilot projects will be used by PSU to provide recommendations on future actions to enhance supply chain connectivity through GDS.  Policy makers and decision makers can use these recommendations for reference in their domestic policy settings, if considered appropriate. 

Border and customs agencies in the exporting and importing economies in the pilot projects will also be both participants and beneficiaries in the project.  Their participation is vital for the project’s success, and they will also benefit from the technical assistance being provided that should lead to a better understanding of compliance and risk management policy options. 

More efficient, safe, transparent and innovative supply chains would be beneficial to private sector firms who use supply chains to move goods and services across borders, potentially reducing their transaction costs and other costs associated with supply chain management.  ABAC is a strong supporter of project work on GDS and is working with the Life Sciences Innovation Forum (LSIF) on the GDS pilot project for the pharmaceutical industry.

Dissemination

Relevant processes, methodology and templates, in form of documents and presentational materials, assisting member economies to understand and/or apply GDS will be made available via the APEC document database.  The CTI will receive regular updates on the implementation of the pilots.  Report will be developed for each pilot and shared at CTI. 

There is no intention to sell outputs arising from this project.

Gender

This project and its intended objectives are equally relevant to both men and women in the private sector (involved in companies exporting/importing through a supply chain) and the public sector (policy/decision makers in government agencies overseeing border and customs procedures).  Women are directly and actively involved in this project.  For instance, over half of the team members of two project proponents (namely Hong Kong, China and New Zealand) are women.  Every effort will also be made to encourage women participants in the pilots, with an aim to achieve an overall target of 30 percent participation from women.  The project proponents will include the gender information into the survey questionnaire in the course of each pilot for assessment.

Work Plan

1) Q4 of 2015 to Q1 of 2016:Preparatory works including the identification and selection of the contractors, sharing of concept of the target capacity building among pilot project leads, i.e.:

a) Durian pilot (Malaysia);
b) Asparagus pilot (Peru);
c) Wine and tequila pilots (Mexico); and
d) Furs pilot (Russia).

Project leads to provide expected timelines (including commencement and end dates) once ready. 

Targeted capacity building for respective pilot projects will be implemented in accordance with APEC’s requirements and guidelines for contracting.  To ensure the consistency among pilot projects, Project Overseers (PO) intend to pursue contracting with one contractor, or one global team of contractors to provide more or less the same technical assistance and also cater for local or pilot-specific requirements, where practicable. 

2) Q1 of 2016 to Q2 of 2016: Conduct targeted capacity building for GDS pilot projects under this project.

3) Q3 of 2016: Last shipment made of the pilots.

4) Q4 of 2016 – Completion of all pilot findings and reports.

At each CTI meeting during 2016 – POs to update progress on individual pilot.

Risks

The major risk to this project is a lack of coordination or cooperation between officials of customs and border agencies in the two jurisdictions involved in each of the pilot projects.  This might prevent some pilot projects from proceeding or completing within the timeframe as planned.  Fewer completed pilots would reduce the quantity and somehow quality of data available to complete the overall evaluation report. 

On the other hand, individual pilot might have its own circumstances or customised requirements for technical assistance that would take more time in the tendering process and engagement of contractor(s), as well as the initial design process.  So, it might possibly not be ready for launching under the expected timeframe.  POs will work closely with project leads to ensure that appropriate contractor(s) for each pilot can be identified and engaged in a timely manner. 

This project will also require relevant and timely information/data from various stakeholders including private firms and government agencies to complete their findings and reports. 

To manage the above potential risks, Hong Kong, China and New Zealand have earlier met and discussed with CTI representatives and possibly relevant stakeholders from the lead and participating economies named in the pilots to seek their full cooperation.  We also have taken note of a GDS project on pharmaceuticals taking place under the auspices of the LSIF and will look to incorporate that project’s findings into the overall evaluation as appropriate.  One self-funded pilot (i.e. deer velvet) has already been concluded and its data is ready for incorporation. 

For the Peruvian case study (asparagus), Peru has identified as a risk the potential for one or more private sector participants to withdraw their participation in the project.  Peru will manage this risk by involving additional parties (two or more) as a contingency plan. 

Rapid technological change has also been identified as a potential risk.  While technological change might potentially disrupt the monitoring and reporting of goods movement along the supply chain, this risk would more likely happen in the medium term than the short term.  So, we do not consider it should affect the planned pilot projects.  But, it would be prudent for PSU to take this risk into account of its study later.

Monitoring and Evaluation

POs will seek feedback from those involved in the pilot projects at the commencement and conclusion of each pilot.  Participants will submit their data both before and after the pilots for evaluation.  To ensure that the pilots will be carried out as scheduled, pilot leads will provide their work plans to POs before the start of the pilot and provide regular updates to POs before each of CTI meetings in 2016.

Regular updates to CTI meetings will provide an opportunity for economies to comment on the progress of the project, potential benefits, and suggestions for future activities.

Linkages

This project will be reported to the CTI but also has links to the work of the A2C2, SCCP and LSIF which will remain closely informed of the pilots at relevant meetings.  The GDS pilot project on pharmaceuticals is being funded under the LSIF.  We expect findings from the pharmaceutical pilot will be useful in the PSU’s evaluation study and hence have included reference to it in this project proposal. 

Non-APEC stakeholders include the private companies directly involved in the pilot project and the standards organisations delivering technical assistance. 

The proposing economies will also look to share the project results with relevant third parties, such as the World Customs Organisation, and explore the ongoing synergies that could be built with them.

Sustainability

APEC Ministers, in their 2014 Statement, endorsed the promotion of GDS as a means to meet APEC’s objectives on connectivity, global value chains, Bogor Goals and the goal to achieve a 10% improvement in supply chain performance among APEC economies by 2015 including efforts to address key supply chain chokepoints. It is therefore incumbent on all APEC economies to carry forward work on GDS.  It is also worth noting the strong support of ABAC for GDS projects in APEC. 

As discussed previously in this proposal, the project will assist APEC member economies to consider whether and how GDS can improve their supply chain performance in terms of reduction of time, cost and uncertainty as well as improvement in risk management.  Furthermore, the project will establish a base level of data and findings that could be used as the foundation for further projects on this topic. 

Using the information gained from all the pilot projects, the PSU will conduct separately a proof of concept and further cost-benefit analysis in the form of a report, with a view to proposing policy recommendations on future actions to enhance supply chain connectivity through GDS.  PSU’s conclusions and recommendations will be presented as a report by the end of 2016.  PSU, the proposing economies and economies conducting the pilots will be accountable for consulting with relevant CTI sub-fora (e.g. ECSG, LSIF, MAG, SCCP, and SCSC) and APEC bodies (e.g. A2C2 and ABAC) on the study report.  Depending on the report’s findings, work arising from the study’s findings could be proposed by interested economies at CTI and/or relevant CTI sub-fora and would be carried forward when agreed. 

Furthermore, depending on the feedback of member economies and the availability of funding, the project proponents will consider organising the following activities under CTI in 2017 and onwards to ensure the findings are carried forward, including:

1) Workshops and/or public-private dialogue (with ABAC support) on best practice policy to facilitate the use of GDS in supply chains; and

2) Technical assistance to developing economies to help them implement GDS-related policy measures.

Project Overseers

The project will be overseen by Miss Vega Wong, Assistant Director-General (Regional Cooperation) of the Trade and Industry Department of the Hong Kong Special Administrative Region, and Mr Justin Allen, Policy Officer, APEC Unit of the New Zealand Ministry of Foreign Affairs and Trade. 

POs have contracted the PSU to conduct a separate study using the data obtained from the pilot projects.  The contact point at the PSU is Mr Akhmad Bayhaqi, Senior Analyst.

Cost Efficiency

Not Applicable.

Drawdown Timetable

Not Applicable.

Direct Labour

Not Applicable.

Waivers

Not Applicable.

Are there any supporting document attached?

No 
Attachments
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Created at 07/12/2015 15:05  by Lucy Phua 
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Version HistoryVersion History

Project No.

Project Title

Project Status

Publication (if any)

Fund Account

Sub-fund

Project Year

Project Session

APEC Funding

Co-funding Amount

Total Project Value

Sponsoring Forum

Topics

Committee

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Co-Sponsoring Economies

Expected Start Date

Expected Completion Date

Project Proponent Name 1

Job Title 1

Organization 1

Postal Address 1

Telephone 1

Fax 1

Email 1

Project Proponent Name 2

Job Title 2

Organization 2

Postal Address 2

Telephone 2

Fax 2

Email 2

Declaration

Project Summary

Relevance

Objectives

Alignment

TILF/ASF Justification

Beneficiaries and Outputs

Dissemination

Gender

Work Plan

Risks

Monitoring and Evaluation

Linkages

Sustainability

Project Overseers

Cost Efficiency

Drawdown Timetable

Direct Labour

Waivers

Are there any supporting document attached?

hdFldAdmin

Project Number

Previous Fora

Secretariat Comments

Reprogramming Notes

Consolidated QAF

Endorsement By Fora

PD Sign Off

Batch

Forum Priority

Committee Ranking Category

Committee Priority

PDM Priority

Priority Within Funding Category

Monitoring Report Received

Completion Report Received

PMU Field 1

PMU Field 2

PMU Field 3

On Behalf Of

Proposal Status

Originating Sub-Forum

Approval Status
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