TRADE FOR SME
INHOUDSOPGAVE
MODULE 1 Trade introduction........................................................................................................................ 4
0. But can we do it in a sustainble way? ......................................................................................................... 4
1. Why internation trade? ............................................................................................................................... 4
2. World trade – trade growth ........................................................................................................................ 4
3. Belgium’s status .......................................................................................................................................... 6
MODULE 2 Globalisations ............................................................................................................................... 8
1. What is globalization? ................................................................................................................................ 8
2. Drivers of globalization ............................................................................................................................... 9
3. Trade policies & agreements....................................................................................................................... 9
4. The emergence of global institutions ........................................................................................................ 11
MODULE 3 Transport modes ........................................................................................................................ 12
1. modes of transport ................................................................................................................................... 12
2. multi-/ intermodal transport..................................................................................................................... 14
3. containers (ISO) ......................................................................................................................................... 15
4. other standards ......................................................................................................................................... 16
MODULE 4 Transport intermediaries ............................................................................................................ 16
1. Freight forwarder (FF) ............................................................................................................................... 16
2. Freight handles ......................................................................................................................................... 16
3. Carrier ....................................................................................................................................................... 16
4. Customs representative ............................................................................................................................ 17
5. Nation ....................................................................................................................................................... 17
6. Shipping agent .......................................................................................................................................... 17
7. Ship broker ................................................................................................................................................ 18
8. Airline agent or airline representative ...................................................................................................... 18
9. Air freight agent ........................................................................................................................................ 18
MODULE 5 Risk of international trade .......................................................................................................... 18
1. Risk of non-payment ................................................................................................................................. 18
2. POLITICAL RISK .......................................................................................................................................... 19
Sofie Van Hulle
1
, 3. CURRENCY EXCHANGE RATE RISK ............................................................................................................. 20
4. Transport & logistical risk ......................................................................................................................... 21
5. Administrative risk .................................................................................................................................... 21
6. Economical risk ......................................................................................................................................... 21
7. Legal risk ................................................................................................................................................... 22
MODULE 6 Incoterms ................................................................................................................................... 22
1. Introduction .............................................................................................................................................. 22
2. What are incoterms? ................................................................................................................................ 22
3. Incoterms group 1 ..................................................................................................................................... 24
4. Incoterms group 2 ..................................................................................................................................... 27
5. Exercises .................................................................................................................................................... 28
6. Incorrect usage of incoterms..................................................................................................................... 29
MODULE 1 Procurement management ......................................................................................................... 30
1. Procurement management (= inkoopmanagement) ................................................................................ 30
2. Business context ........................................................................................................................................ 31
3. The importance of procurement ............................................................................................................... 33
4. Procurement functions/ roles & interaction with other departments....................................................... 33
MODULE 2 types of goods & types of procurement ...................................................................................... 35
1. 4 types of goods ........................................................................................................................................ 35
2. Direct vs indirect ....................................................................................................................................... 36
3. Goods vs services ...................................................................................................................................... 37
4. Investments ............................................................................................................................................... 38
5. Capex vs Opex ........................................................................................................................................... 39
6. OEM vs IAM .............................................................................................................................................. 40
7. Procurement categories ............................................................................................................................ 41
MODULE 3 Procurement process (step-by-step) ........................................................................................... 41
1. Specifying .................................................................................................................................................. 41
2. Selecting .................................................................................................................................................... 43
3. Contracting ............................................................................................................................................... 45
4. Ordering .................................................................................................................................................... 47
5. Deliveries/ follow up ................................................................................................................................. 48
6. Performance follow up .............................................................................................................................. 49
MODULE 4 tasks of a buyer and purchaser ................................................................................................... 50
Sofie Van Hulle
2
, 1. roles within procurement/ purchasing/ buying dept ................................................................................ 50
2. strategic- tactical- operational procurement ............................................................................................ 50
MODULE 5 Group purchasing organizations (GPO) ....................................................................................... 52
1. What is GPO? ............................................................................................................................................ 52
2. critical factors for success ......................................................................................................................... 53
3. types of GPO’s ........................................................................................................................................... 53
4. advantage of a GPO model ....................................................................................................................... 54
5. Disadvantages of a GPO model................................................................................................................. 54
6. Challenges: digitalization impact .............................................................................................................. 55
MODULE 6 procurement process EU tendering ............................................................................................. 55
1. Selection phase ......................................................................................................................................... 55
2. Eu tender procedure.................................................................................................................................. 55
3. Eu tender procedure -selection criteria ..................................................................................................... 56
4. EU tender procedure- awarding ciriteria .................................................................................................. 57
MODULE 7 strategic sourcing ....................................................................................................................... 57
1. definition ................................................................................................................................................... 57
2. outsourcing ............................................................................................................................................... 57
3. offshoring .................................................................................................................................................. 58
4. onshoring .................................................................................................................................................. 58
5. nearshoring ............................................................................................................................................... 58
Sofie Van Hulle
3
, MODULE 1 TRADE INTRODUCTION
“Trade is central to ending global poverty” WTO world bank.
The role of trade in supporting growth and reducing poverty
“Open trade policies enable economic growth for all” -world bank.
• Trade is central to ending global poverty. Countries that are open to international trade tend to grow
faster, innovate, improve productivity, and provide higher income and more opportunities to their people.
• Open trade also benefits lower-income households by offering consumers more affordable goods and
services.
• Integrating with the world economy through trade and global value chains helps drive economic growth
and reduce poverty locally and globally.
0. BUT CAN WE DO IT IN A SUSTAINBLE WAY?
• Air pollution deaths cost global economy $225 billion.
• Different critiques on globalization
• Link with UN SDG’s (sustainable development goals)
• However: trade has resulted in increased CO2 emissions
à always take the triple bottom line into account (people, planet, and profit)
Video: emissions of international versus local trade
1. WHY INTERNATION TRADE?
“Wealth of nations, Adam smith
• Smith applied the doctrine of laissez-faire to international trade. All nations would benefit from
unregulated, free trade that would allow individual countries to specialize in goods they were best suited
to produce of natural and acquired advantages.
• Smith’s theory of trade has come to be known as the theory of absolute advantage.
David Ricardo: on the principles of political economy and taxation
• The principle of comparative advantage postulates that all nations can gain from trade of each specializes
in producing what they are relatively more efficient at producing and import the rest.
• Do what you do best, import the rest.
Last few centuries:
• Greater openness and liberalized trade
• However, protectionism has always immersed.
• Advanced nations are realizing that economic growth and stability depend on a strategic mix of trade
policies: both free trade and protectionism
2. WORLD TRADE – TRADE GROWTH
• World trade volumes today are 42 times the level of 1950 (4220% growth)
• World trade values today are over 302 times the level of 1950.
Sofie Van Hulle
4
INHOUDSOPGAVE
MODULE 1 Trade introduction........................................................................................................................ 4
0. But can we do it in a sustainble way? ......................................................................................................... 4
1. Why internation trade? ............................................................................................................................... 4
2. World trade – trade growth ........................................................................................................................ 4
3. Belgium’s status .......................................................................................................................................... 6
MODULE 2 Globalisations ............................................................................................................................... 8
1. What is globalization? ................................................................................................................................ 8
2. Drivers of globalization ............................................................................................................................... 9
3. Trade policies & agreements....................................................................................................................... 9
4. The emergence of global institutions ........................................................................................................ 11
MODULE 3 Transport modes ........................................................................................................................ 12
1. modes of transport ................................................................................................................................... 12
2. multi-/ intermodal transport..................................................................................................................... 14
3. containers (ISO) ......................................................................................................................................... 15
4. other standards ......................................................................................................................................... 16
MODULE 4 Transport intermediaries ............................................................................................................ 16
1. Freight forwarder (FF) ............................................................................................................................... 16
2. Freight handles ......................................................................................................................................... 16
3. Carrier ....................................................................................................................................................... 16
4. Customs representative ............................................................................................................................ 17
5. Nation ....................................................................................................................................................... 17
6. Shipping agent .......................................................................................................................................... 17
7. Ship broker ................................................................................................................................................ 18
8. Airline agent or airline representative ...................................................................................................... 18
9. Air freight agent ........................................................................................................................................ 18
MODULE 5 Risk of international trade .......................................................................................................... 18
1. Risk of non-payment ................................................................................................................................. 18
2. POLITICAL RISK .......................................................................................................................................... 19
Sofie Van Hulle
1
, 3. CURRENCY EXCHANGE RATE RISK ............................................................................................................. 20
4. Transport & logistical risk ......................................................................................................................... 21
5. Administrative risk .................................................................................................................................... 21
6. Economical risk ......................................................................................................................................... 21
7. Legal risk ................................................................................................................................................... 22
MODULE 6 Incoterms ................................................................................................................................... 22
1. Introduction .............................................................................................................................................. 22
2. What are incoterms? ................................................................................................................................ 22
3. Incoterms group 1 ..................................................................................................................................... 24
4. Incoterms group 2 ..................................................................................................................................... 27
5. Exercises .................................................................................................................................................... 28
6. Incorrect usage of incoterms..................................................................................................................... 29
MODULE 1 Procurement management ......................................................................................................... 30
1. Procurement management (= inkoopmanagement) ................................................................................ 30
2. Business context ........................................................................................................................................ 31
3. The importance of procurement ............................................................................................................... 33
4. Procurement functions/ roles & interaction with other departments....................................................... 33
MODULE 2 types of goods & types of procurement ...................................................................................... 35
1. 4 types of goods ........................................................................................................................................ 35
2. Direct vs indirect ....................................................................................................................................... 36
3. Goods vs services ...................................................................................................................................... 37
4. Investments ............................................................................................................................................... 38
5. Capex vs Opex ........................................................................................................................................... 39
6. OEM vs IAM .............................................................................................................................................. 40
7. Procurement categories ............................................................................................................................ 41
MODULE 3 Procurement process (step-by-step) ........................................................................................... 41
1. Specifying .................................................................................................................................................. 41
2. Selecting .................................................................................................................................................... 43
3. Contracting ............................................................................................................................................... 45
4. Ordering .................................................................................................................................................... 47
5. Deliveries/ follow up ................................................................................................................................. 48
6. Performance follow up .............................................................................................................................. 49
MODULE 4 tasks of a buyer and purchaser ................................................................................................... 50
Sofie Van Hulle
2
, 1. roles within procurement/ purchasing/ buying dept ................................................................................ 50
2. strategic- tactical- operational procurement ............................................................................................ 50
MODULE 5 Group purchasing organizations (GPO) ....................................................................................... 52
1. What is GPO? ............................................................................................................................................ 52
2. critical factors for success ......................................................................................................................... 53
3. types of GPO’s ........................................................................................................................................... 53
4. advantage of a GPO model ....................................................................................................................... 54
5. Disadvantages of a GPO model................................................................................................................. 54
6. Challenges: digitalization impact .............................................................................................................. 55
MODULE 6 procurement process EU tendering ............................................................................................. 55
1. Selection phase ......................................................................................................................................... 55
2. Eu tender procedure.................................................................................................................................. 55
3. Eu tender procedure -selection criteria ..................................................................................................... 56
4. EU tender procedure- awarding ciriteria .................................................................................................. 57
MODULE 7 strategic sourcing ....................................................................................................................... 57
1. definition ................................................................................................................................................... 57
2. outsourcing ............................................................................................................................................... 57
3. offshoring .................................................................................................................................................. 58
4. onshoring .................................................................................................................................................. 58
5. nearshoring ............................................................................................................................................... 58
Sofie Van Hulle
3
, MODULE 1 TRADE INTRODUCTION
“Trade is central to ending global poverty” WTO world bank.
The role of trade in supporting growth and reducing poverty
“Open trade policies enable economic growth for all” -world bank.
• Trade is central to ending global poverty. Countries that are open to international trade tend to grow
faster, innovate, improve productivity, and provide higher income and more opportunities to their people.
• Open trade also benefits lower-income households by offering consumers more affordable goods and
services.
• Integrating with the world economy through trade and global value chains helps drive economic growth
and reduce poverty locally and globally.
0. BUT CAN WE DO IT IN A SUSTAINBLE WAY?
• Air pollution deaths cost global economy $225 billion.
• Different critiques on globalization
• Link with UN SDG’s (sustainable development goals)
• However: trade has resulted in increased CO2 emissions
à always take the triple bottom line into account (people, planet, and profit)
Video: emissions of international versus local trade
1. WHY INTERNATION TRADE?
“Wealth of nations, Adam smith
• Smith applied the doctrine of laissez-faire to international trade. All nations would benefit from
unregulated, free trade that would allow individual countries to specialize in goods they were best suited
to produce of natural and acquired advantages.
• Smith’s theory of trade has come to be known as the theory of absolute advantage.
David Ricardo: on the principles of political economy and taxation
• The principle of comparative advantage postulates that all nations can gain from trade of each specializes
in producing what they are relatively more efficient at producing and import the rest.
• Do what you do best, import the rest.
Last few centuries:
• Greater openness and liberalized trade
• However, protectionism has always immersed.
• Advanced nations are realizing that economic growth and stability depend on a strategic mix of trade
policies: both free trade and protectionism
2. WORLD TRADE – TRADE GROWTH
• World trade volumes today are 42 times the level of 1950 (4220% growth)
• World trade values today are over 302 times the level of 1950.
Sofie Van Hulle
4
