UNNExT Workshops on Trade Facilitation UNNExT Workshop on Trade Facilitation and Paperless Systems for Agrifood Products Almaty, Kazakhstan 4-6 May 2015 1
BUSINESS PROCESS ANALYSIS OF IMPORT OF FABRIC FROM CHINA TO KYRGYZSTAN URMAT TAKIROV, KYRGYZSTAN Workshop on Trade Facilitation and Paperless Systems for Agrifood Products, Almaty, Kazakhstan, 4-6 May 2015
Social and economic importance of fabric import Apparel industry is priority sector of Kyrgyzstan’s export Employment of apparel industry between 100 000 and 300 000 (up to 12% of employed population) Export of apparel industry 8% of Kyrgyz non-gold exports Main supplying countries of fabric to Kyrgyzstan are China, Turkey, Russian Federation, etc. 1.9% 1.6% 3.9% 4.2% 4.4% China Turkey Russian Federation Belarus Uzbekistan 83.9% Other countries • Key supplying countries of fabric products to Kyrgyz Republic in 2008-2012 3
The Modelling of the “As -Is ” 4
USE CASE OF IMPORT OF FABRIC 3 process areas of supply chain: • BUY – 1 process • SHIP – 21 processes • PAY – 1 process Total # of procedures: 23 22 participants 5
Core business process area 2.18: APPLY FOR CONDITIONAL RELEASE OF GOODS Participants: Customs Broker Importer State Customs Service of KR State Inspectorate on Veterinary and Phytosanitary Safety Bank of State Customs Service Consists of 9 steps Average time required: 3 hours Cost: 7 000 $ (including taxes) Output and criteria to exit the business process: Conditional release of goods is completed. Importer can move goods to own warehouse but cannot sell. Regulation: 7 documents 6
Core business process area 2.20: APPLY FOR SANITARY AND EPIDEMIOLOGICAL CONCLUSION Participants: Importer Department of State Sanitary and Epidemiological Surveillance under the Ministry of Health of KR (DSSES) Laboratory of the DSSES of KR Consists of 12 steps Average time required: 12 days Cost: 30$ Output and criteria to exit the business process: Exporter obtained the Sanitary and Epidemiological Conclusion at the DSSES Regulation: 10 documents 7
TIME-PROCEDURE CHART FOR IMPORT OF FABRIC FROM CHINA TO KYRGYZSTAN 8
COST-PROCEDURE CHART FOR IMPORT OF FABRIC FROM CHINA TO KYRGYZSTAN 9
Identification of Bottlenecks and Redundancies 10
USE CASE OF IMPORT PROCESSED 2.4. Pass weight control at Customs terminal in Naryn FRUIT 3 process areas of supply chain: • BUY – 1 process • SHIP – 21 processes 17 • PAY – 1 process 2.13. Conduct weight Total # of procedures: 23 19 control in At-Bashi 2.14. Conduct registration in customs terminal Naryn 22 participants 2.15. Conduct “To - be” model “As - is” model weight control in Kemin 11
Proposed simplification of “Conduct Sanitary and Epidemiological Inspection” Model of simplification aims: “As - is” model Reduction number of paper-based documents by 5 (referral, refusal, test report and conclusion) Avoid procedures on manual internal registration and transferring of documents by 5 procedures 12
Proposed simplification of “Conduct Sanitary and Epidemiological Inspection” Model of simplification aims: feedback “To - be” model Reduction number of automatically paper-based documents by 5 (referral, refusal, test report and conclusion) click Avoid procedures on feedback manual internal registration and transferring of documents click by 5 procedures Automation of data exchange between agency, laboratory and automatically trader Transparent feedback to trader (status of sms click notification or online) Use of e-document in customs clearance 13
REDUCING THE DELIVERY TIME FOR IMPORT OF FABRIC FROM CHINA TO KYRGYZSTAN > 5 days 14
Recommendation for improvement 15
RECOMMENDATIONS FOR OPTIMIZATION OF TRADING PROCESSES 1. Termination of redundant processes Will be excluded the 4 business processes in supply chain, (creation one-stop- shop at Torugart BCC) Pass weight control at the terminal of State Customs Service of KR in Naryn (2.4.) Conduct axial weight control in At-Bashi (2.13.) Conduct registration in customs terminal Naryn (2.14.) Conduct axial weight control in Kemin (2.15.) 2. Simplification of business processes of agencies (e.g. Conduct Sanitary and Epidemiological Inspection) Reengineering of agencies’ processes Automation of data and documents exchange Further simplification such as data harmonization, reduction of required documents etc. 16
ACTION PLAN FOR SIMPLIFICATION OF TRADE PROCESS 17
SUMMARY Implementation of measures on optimization of trading processes will : Reduce number of procedures up to 19 instead of 23 Eliminate 4 agencies controlling points Reduce delivery time up to 28 days instead of 34 days (by 16%) Decrease of current assets balance “frozen” in importing fabrics because of shorter time of delivery AS A CONSEQUENCE COST OF PRODUCTION OF APPAREL COMPANIES IN KYRGYZSTAN WILL DECREASE 18
THANK YOU FOR ATTENTION! QUESTIONS?
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