Keywords

1 Introduction

The control tower was originally conceived as a central place where analysts collect data from multiple trading partners. In this way, the management of the entire supply chain and its visibility is enabled. Such a control tower remained closed within the four walls of the company that formed it. With the development of technical capabilities, cloud technology is increasingly used. The control tower becomes a kind of virtual control panel. In this way, it goes beyond the four walls of the company and becomes visible to all members of the supply chain.

According to research by Geodis [1], the vast majority of executives ranked visibility as the third most important challenge to the functioning of the tower. Only 6% of them claimed to have full visibility, while 62% of them claimed to have visibility only with direct trading partners.

To successfully plan and manage a supply network, it is necessary to see the entire supply chain. Nigel Duckworth [2] compares this to playing chess when you can see only part of the chessboard.

Control towers are often built on poorly interconnected legacy systems. This leads to the fact that although we have invested considerable effort and significant funds, we have not obtained the desired financial effect. In the development of control towers, network access gives better results. Network-based control towers have the following advantages: visibility outside the company walls, connecting trading partners and providing real-time visibility, ability to respond to changing business needs or goals, quick engage, and activate online partners. The network approach allows each partner to connect to the control tower only once, which contributes to simplicity. If a certain economic entity and all its partners are connected to one control tower, then the visibility and management of the supply chain are ensured by proper functioning. At the same time, each of his partners connects only once to the control tower. If now his partners connect to the same tower, then they also gain visibility and the ability to monitor and manage the supply chain. In a network environment, information is collected and exchanged in real time. Connecting direct and indirect partners now introduces a new quality where artificial intelligence and software agents can plan the supply chain far better and more accurately. They notice anomalies on time and make decisions and corrections of the flow faster and more precisely.

A control tower built on a common network platform puts the entire supply network under control, eliminates blind spots, and improves compliance. The system built in this way provides the conditions for joint planning of all involved partners, which gives a fluent flow of the supply chain. We know that such an uninterrupted supply flow significantly reduces the need for stockpiling, which directly and indirectly reduces operating costs.

2 Standardization of Trade Documents

2.1 Significance and Role of Standardization: The Layout of Trade Documents

Standardization is a mechanism that facilitates and enables the exchange, interchangeability, and use of standard elements in different situations. Manufacturers of complex products can use standard elements and thus make their production cheaper, freeing it from the need to produce standard elements in small quantities. At the same time, it gives them the freedom to choose the manufacturer of standard elements either according to its geographical location, possibilities of delivery, delivery, or the like. At the same time, it is possible to later replace the standard elements with the same standard elements without fear of a malfunction.

Trade is the exchange of goods and services. Trading partners communicate with each other through trade documents. The basic requirement related to these documents is their comprehensibility and readability by all participants. This is where the importance of standardizing the layout of a document as one of the key elements of comprehensibility and readability of a document comes to the fore. At the same place on a series of documents is the same information. This allows for quick reading whether the documents are read by a human or scanned for the purpose of performing translation into electronic form via OCR. In business practice, at least in Bosnia and Herzegovina and the surrounding countries, there is no clearly defined standard or recommendation on what trade documents such as invoices, orders, and other documents related to business communication between business partners should look like. There is standardization of appearance only when it comes to documents defined by international conventions , such as the international consignment note CMR. Standardizing the appearance of a document increases readability and speed and reduces the cost of exchanging data between partners.

We can say that the standardization of the layout of a document, in a same way, is a precursor to the electronic exchange of data. Why? In addition to the visual position of which data is located, the standardization of the document layout also defines which data must be located on the document. In this way, the definition of data to be transmitted by electronic communication was performed. This is the first step toward the digitization of commercial documents. Why document layout standardization is also important in control towers whose imperative is electronic data exchange can best be seen from the following diagram (Fig. 37.1):

Fig. 37.1
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Transformation and transfer documents

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The document is visually (via appropriate software) created by one of the members of the supply chain within the control tower. It transforms it into an electronic form and sends it to the control tower. The recipient of the document can transfer it electronically from the control tower and perform its visualization. If the standardization of the document layout is followed, the recipient or other participant in the supply chain will visually see an identical document. Visualization can also include the translation of standard document labels. For example, if the sender is from China, the labels on his document can be in Chinese and in B&H in one of the languages spoken in B&H or at will or need in the original language.

UNECE is involved in the development of standards and recommendations for the appearance of trade documents. In its recommendation, Recommendation No. 1: United Nations Layout Key for Trade Documents [3] deals in detail with the layout of data on trade documents. The recommendation for the document layout development process is presented in Fig. 37.2.

Fig. 37.2
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Develop company master document. (Source f2g)

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2.2 Invoice: Layout

The invoicing process is used to exchange invoices between suppliers and to deliver goods or services that have been ordered, delivered, received, consumed, etc. In recent years, a great deal of work has been done on standardization and electronic invoicing. When it comes to the appearance, we consider Recommendation 6: Aligned Invoice Layout Key for International Trade as the first and umbrella document [4] (Fig. 37.3).

Fig. 37.3
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Aligned invoice layout key. (Source [4])

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For the needs of the functioning control tower of supply chain, it is necessary to visualize the received or sent invoice. The logical sequence is to choose this recommended layout in communication within the control tower. The original invoice will of course always accompany the goods. Examining the available invoices in both domestic and foreign trade, we noticed that most of them are burdened with image elements (oversized logo) as well as a lot of descriptive and contact information that significantly affect the deviation of the appearance of the invoice from this in the recommendation . For the visibility of the document within the control tower, this layout is the right choice because it contains all the essential elements. When defining the layout of the invoice for actual use, it is necessary to take into account and include all regional and national standards and rules, and they are mainly related to taxation and are visible in the umbrella document. When it comes to international trade with the EU and countries with which there are bilateral agreements, within the space of “free disposal,” we define the space for declarations of origin of goods because they must be visible and important in customs procedures and must be specially processed.

We will use this layout whenever we render the received data inside the control tower. We will give recommendations to other participants to use it. After the electronic transfer of the document , the client can use another layout within his system in accordance with his software solutions.

2.3 Electronic Transmission

Electronic data interchange is not new in the business world. It has been present since the 1960s of the last century and took place on mutually agreed standards of business partners. The development of exchange standards is being developed by the UN/EDIFACT (United Nations/Electronic Data Interchange for Administration, Commerce and Transport). In 1987, the UN/EDIFACT syntax and grammar were approved as ISO standard 9735. Many countries and international organizations support the development of the UN/EDIFACT.

European Article Number Communication (ANCOM®) is a subset of the UN/EDIFACT internationally standardized standard for messages. EANCOM® is based on the GS1 numeric system for the physical identification of products, addresses (companies), and logistics units (GTIN [Global Trade Item Number], GLN [Global Location Number], and SSCC [Serial Shipping Container Code]). It is the most commonly used and internationally unique standard format for electronic data interchange (EDI).

The GS1 system is a set of standards that enable efficient management of global, multi-industrial supply chains through unique identification of products, transportation units, assets, locations, and services. It facilitates e-commerce processes including full tracking of shipments

All the systems listed above are in active use. Many countries even more so enable the electronic exchange of EDI under the auspices of their tax administrations. Active use of these systems facilitates our proper selection of standards for use in our control tower.

The UN/EDIFACT is a complete well-developed and well-documented system. It is publicly available. It is the source of all other standards. It is clear then why we choose to have the UN/EDIFACT fully implemented in our electronic exchange control tower, not only for invoices but also for all procedures in the supply chain. Cross Industry Invoicing (CII) is a complete standard that covers almost all aspects of invoicing, including elements for displaying tax impost. Based on it, the European CORE INVOICE data model was made. This model is based on EU standards EN 16931-1.

Our modules need to include a GS1 system for the unique identification of entities, locations, and, if necessary, goods that are the subject of trade. When it comes to foreign trade, CII in dictionaries has well-defined fields for participants in customs procedures: Customs Export Agent and Customs Import Agent.

The European Union has clearly defined rules for determining the preferential origin of goods. For the purposes of customs procedures, invoices contain elements that affect the amount of customs duties. These are invoice declarations either given by an approved exporter or up to a certain amount by any exporter for any goods. Unfortunately, specific support for customs clearance is outside the scope of norm EN 16931-1. We can overcome the problem by introducing a special document “statement” and stating its reference in the invoice. This would not compromise the integrity of the e-invoice. But that is not a good practice. These declarations must be specially signed either by the exporter or an approved exporter. But in any case, it is good to give a signal to the customs broker to prepare customs clearance as if there is a correct statement and at the time of arrival of the goods to make a final check. There are defined protocols for the transfer of information on the status of authorized importers, but they are at the level of customs administrations. This indicates that work should be intensified on defining international standards for the international exchange of invoices, i.e., adding special support for customs procedures.

In modern electronic business, the key issue in any exchange of electronic messages is the issue of security: verification of the identity of the sender and the authenticity of the transmitted messages [5]. In the control tower, we must implement a special software agent that deals with the verification of digital signatures and the authenticity of the transmitted data.

2.4 E-CMR

The CMR Convention was drawn up in 1956 by the United Nations with the aim of providing a single legal framework for national and international road transport. Most European countries have ratified the convention, as have several countries outside Europe. The CMR document not only contains accurate cargo data but is also an agreement between the three parties involved in the transport (consignor, carrier, and consignee). The CMR regulates liability, damages, and compensation. The CMR automatically applies to transport contracts for international road transport, where the place of receipt and place of delivery are in the signatory country.

In February 2008, an additional e-protocol was added to the CMR convention, which entered into force in June 2011. The e-protocol provides the legal framework and standards for the use of electronic means to record the CMR consignment note [6]. So far, the use of e-CMR has been ratified by 26 countries.In this paper, we do not intend to analyze the existing standards and protocols in wide application and officially verified by a number of countries.

This introductory research work was initiated by the freight forwarding company Ciambella export-import doo, which is based in a country that is not a signatory to the e-CMR protocol. Therefore, we will only discuss here the obligation to include this protocol in the future control tower and the guidelines for its creation. The CMR contains three different signatories as defined by the Geneva Convention. These are the sender, the carrier, and the recipient [6]:

  • The customer of the transport service gives consignment instructions to the transport service provider.

  • E-CMR is proof of the existence of a contract between the consignor or consignee and the carrier who has a legally binding condition provided for by the CMR Convention .

  • E-CMR must allow recording of the receipt of the goods by the consignor to the carrier, including reporting of any difference in the received goods with instructions on the consignment instructions.

  • E-CMR must allow the recording of proof of delivery of the goods by the carrier to the consignee and report any damage or difference in the delivered goods in relation to the shipment instructions.

We see that these are all functions that are needed in the functioning of the control tower. So the implementation of e-CMR in the control tower is necessary. Building a control tower so that it is also an e-CMR service provider is very demanding and coupled with many necessary certificates from the official authorities. It is desirable that the control tower, based on the authorization of the previously mentioned three e-CMR signatories, be set up as a kind of intermediary between the e-CMR service provider and the e-CMR signatory. Such support could also be built into the client software of the control tower users. In any case, it is necessary to develop and implement agents for receiving, translating, sending, visualizing, and recording e-CMR in control tower.

3 Conclusion

In this paper, we have analyzed the situation in the standards for electronic transmission of documents with an emphasis on invoices and CMR, which we consider a very important function. We have shown that there are internationally accepted standards by which this can be done. We have also shown that there are certain ambiguities in the transfer of invoices when it comes to foreign trade between the EU and countries that have preferential agreements as well as with CEFTA countries. Let this paper be a definite incentive to remove these ambiguities call for their faster definition in e-protocols.