Case Study
Cleansing a large customs classification database
Navigating the complexities of customs classification is paramount for companies engaged in global trade, especially within the highly regulated chemical industry. A leading chemical company faced significant challenges in this arena, struggling with discrepancies in product classifications across various jurisdictions and a disorganised product database. These issues not only led to operational disruptions but also exposed the company to substantial compliance risks and penalties. To address these challenges head-on and ensure the readiness of their database for a sophisticated trade management system, the company enlisted DOJÖ's expertise for a comprehensive database cleansing and classification project.
The Story
With an expansive portfolio of over 90,000 SKUs and a history of classification challenges that hindered regulatory compliance and operational efficiency, the company was at a crossroads. Discrepancies in customs classifications across different jurisdictions had resulted in a labyrinth of compliance issues, including penalties that underscored the urgent need for a resolution. The existing product database was not conducive to the deployment of an advanced trade management system, further complicating the situation. Recognising the critical importance of addressing these issues, the company sought DOJÖ's specialised assistance to embark on a rigorous cleansing and reclassification endeavour.
The Approach
DOJÖ's strategy was rooted in a meticulous and methodical approach, utilising the dual strengths of artificial intelligence and its seasoned classification team's expertise. The initial step involved categorising the diverse range of chemical products, which laid the groundwork for developing detailed decision trees. These decision trees were instrumental in guiding the reclassification process, ensuring a systematic and accurate approach. Leveraging AI technology, DOJÖ’s team meticulously worked through the database, cleansing and updating each SKU to reflect accurate customs classifications in line with the latest international standards. This comprehensive process was underpinned by a steadfast commitment to achieving the highest level of regulatory compliance and operational accuracy.
The Results
The collaboration between the chemical company and DOJÖ achieved transformative results within six months, marking a significant milestone in the company's compliance and operational management. Key outcomes of this project included:
The creation of a thoroughly cleansed and accurately classified product database, which significantly minimised compliance risks and operational disruptions.
The establishment of a harmonised rationale for each product classification, ensuring consistency across regions and product lines. This harmonisation is crucial for multinational companies where discrepancies in classification can lead to compliance issues and inefficiencies.
Massive collateral benefits have also been brought to the chemical company:
The preparedness of the company's database for the integration of a trade management system, setting the stage for enhanced operational efficiencies and continued compliance with international trade regulations.
A marked decrease in penalties and compliance-related costs, reinforcing the company's commitment to adhering to international trade regulations.
Critical foundations for establishing an Export Control program by relying on a uniform and correct customs classification.
This support was instrumental in navigating the complexities of customs classification and in laying a robust foundation for future compliance initiatives.
For this essential project, the company did not need to hire additional staff, mobilise internal teams, or deploy a specific tool. All essential resources and expertise were provided by DOJÖ, enabling the company to accurately and efficiently classify all products, and to remain completely agile in its organisation.
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