UNESCAP BPA for Simplification of Trade Procedures

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Business Process Analysis

Guide for Simplification ofTrade Procedures

OIC REGIONAL WORKSHOP ON TRADE FACILITATIONWITH AN EMPHASIS ON CROSS-BORDER COOPERATION & ROLES OF CUSTOM ADMINISTRATIONS

Ankara, Turkey, 21-23 November 2011

Yann Duval,Trade Facilitation Section

Trade and Investment Division,

United Nations Economic and SocialCommission for Asia and the Pacific (ESCAP)


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community of knowledge and practice to

facilitate the implementation of single window and

paperless trade in the region

Tools and guides development activities

Advocacy and Technical Training Workshops

Knowledge sharing and peer-to-peer support

On-going focus: Trade Process Analysis

Data Harmonization

Legal Framework for Single Window and Paperless Trade

2www.unescap.org/unnext/


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Agenda

1. Business Process Analysis for Trade Facilitation

2. Introduction into Unified Modeling Language(UML)

3. The three Phases of a Business ProcessAnalysis Project & an Example

4. ESCAP supported BPA for TF projects andlessons learned

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What is..

..a Business Process?

A Business Process is a collection of related, structured activities

or tasks that produce a specific service or product

Example

Ordering a product

Issuing a Certificate of Origin

Customs clearance at the port

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What is a Business Process Analysis?

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Business Process Analysis is a practical study to understand attributes ofbusiness processes,

and their relationships

Whoinvolved

Proceduresand Documents

required

Related Rulesand Regulations

Somequantitative

indicators


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Business Process Analysis & Trade Facil itation

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Economic impact of bottlenecks in business

processes of cross border trade

Each additional day of delay (e.g. because oftrade logistics procedures) reduces tradeby at least 1%

Source: Djankov, Simeon, Caroline Freund, and Cong S. Pham.

(2007). Trading on Time. World Bank.

Direct and indirect cost from import/export-relatedprocedures and documentation amount to 1-15%

of the value of traded goods.

Source: ADB/ESCAP (2009). Designing and Implementing Trade

Facilitation in Asia and the Pacific.

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What are benefits of Business Process Analysis?

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Process Analysis helps benchmarking country

efficiency on trading across borders

Indicators can help decision makers to understand the importance ofefficient business processes for improving national competitiveness

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Indicator Kyrgyzstan Lao DPR Thailand

Documents to export (number) 7 9 4

Time to export (days) 63 48 14Cost to export (US$ per container) 3010 1860 625

Reference - World Banks Doing Business Trading Across Border (2011) www.doingbusiness.org

The costs and procedures involved in exporting (and importing) a standardized shipment of goods are studied.Every official procedure involved is recorded - starting from the final contractual agreement between the two parties,

and ending with the delivery of the goods.

Laoss rank in 2010: 169Laoss rank in 2011: 171

Change in rank: -2(Trading-Across-Border Ranking among 184 countries)
http://www.doingbusiness.org/http://www.doingbusiness.org/


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Documents for exporting a standardized cargo

Kyrgyzstan Thailand

Source: www.doingbusiness.org, 2011
http://www.doingbusiness.org/data/exploreeconomies/thailandhttp://www.doingbusiness.org/data/exploreeconomies/kyrgyz-republic


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BPA provides basis for simplifying trade

procedures, and implementing single window

BPA is the first technical step in preparing forpaperless trade and SW

It provides Inventory of processes, documents, data, parties, rules

& regulations..

Description of the processes

Specifications for harmonizing data and developmentof electronic documents

Specifications to develop software for the automation of

procedures A basis for maintenance and improvement


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Agenda





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Business Process Modeling

What A technique for documenting a business process and itsattributes Activities that come in a specific order and decision points Actors who perform those activities Defined inputs and outputs of each activity

Criteria for entering and exiting the business process Relationships among actors Information flow Associated rules and regulations Quantitative indicators such as number of steps as well as time and

cost required to complete a particular business process

Why To establish a common understanding about a business process

that is shared by all relevant parties To communicate better all aspects of a business process


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Unified Modeling Language (UML)

A set of standard graphical notations fordocumenting a business process

http://en.wikipedia.org/wiki/Unified_Modeling_Language

Is widely recognized andused among practitioners inbusiness community as wellas those in IT industry

Allows business domainexperts to communicateprocedural and documentaryrequirements with ITimplementation or softwaredevelopment teams

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http://en.wikipedia.org/wiki/Unified_Modeling_Languagehttp://en.wikipedia.org/wiki/Unified_Modeling_Language


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UML Diagrams for BPA

Use Case Diagram A frame of reference illustrating ahigh level business process and itsassociated actors

Activity Diagram A detailed elaboration of a use case

diagram A graphical representation of a

business process and its attributes Activities that come in a specific

order and decision points Actors who perform those activities Defined inputs and outputs of each

activity Criteria for entering and exiting the

business process Relationships among actors Information flow

Buy - Concludesales contract and

trade termsExporter or

RepresentativeImporter

Quote price

and term of trade

Confirm the

intent to purchase

Proforma Invoice

Purchase Order

Not acceptable

Acceptable

Cancel

Prepare the shipment

of goods

Exporter or

RepresentativeImporter

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UML Notations for Use Case Diagram

Notation Description

Actor

Represents a role in a particular business process

Is labeled with a role name

Use Case

Represents a business process Is labeled with a descriptive verb phrase

Relationship Association

Link actors with business processes that they participate in

Subject Boundary

Represents a process area

Includes the name of a subject boundary on top

Boundary

Actor/Role

Use case


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Use Case Diagram forThailands Export of Frozen Shrimp


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UML Notations for Activity Diagram


Initial State

Represents the beginning of a set of activities

Final Activity State

Indicates the completion of the business process

Final Flow State

Indicates that further activities cannot be pursued

Transition Line

Indicates a sequential flow of actions and information

in an activity diagram

Fork (Splitting of Control)

Visualizes a set of parallel or concurrent flow of

actions

Join (Synchronization of Control) Indicates the end of parallel or concurrent flow of

activities

Object

Represents a document or information that flows from

one activity to another activity (labeled with the name of

a document)


Swimlane

Is used to break up individual actions

to individuals/ agencies that are

responsible for executing their actions

Is labeled with the name of the

responsible individual or agency

Activity

Represents a non-decomposable

piece of behavior

Is labeled with a name that 1) begins

with a verb and ends with a noun; and 2)

is short yet contain enough information

for readers to comprehend

Decision

Represents the point where a

decision has to be made given specific

conditions

Attached with labels addressing the

condition on each transition line that

comes out of an activities and connects

to a decision point or vice versa

ProcessParticipant 1

ProcessParticipant 2

ProcessParticipant n


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Exercise Read the Activity Diagram

Exporter (or Representative) Department of Fisheries

(DoF)

Authorized Private

Inspector2.1)Haveproduct sampled

and examinedExporter or

RepresentativeDepartment

of Fisheries (DoF)

Authorized Private

Inspector

Collectsample

Examine

sample

Record the result

of examination

Test Report

Deliver

sample

Collect

Test Report

Additional

examination required

Additional examination

not required Schedule the

sampling date

Record result

of examination

Examine

sample

Collect

Test ReportTest Report

Have product

ready for sampling

Notify the date for

sample collection

Submit Request

for Sampling

Record sampling

result

Request for

Sampling

Collect

sample


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Agenda





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BPA phases, steps, and outputs

Step Deliverable

Step 1: Define project

scope

Use case diagram illustrating business domain, process areas, process participants, and key

business processes

Step 2: Develop a detailed

plan and secure resources

Detailed project plan including an estimation of human resources required, schedules, and

software supported tools

A list of potential interviewees and their contact information

Step 3: Acquire background

information

A folder of background information about the business processes under the investigation

A list of guiding questions for the interview

Step4: Conduct interview

and document captured

data

A set of activity diagrams illustrating activities that come in a specific order and decision points,

actors who perform those activities, defined inputs and outputs of each activity, criteria for entering

and exiting the business process, relationships among actors, and information flow

A set of business process descriptions that describes activity diagram and lists all related rules

and regulations

Activity diagram illustrating integrated processes in the business domain

Time-Procedure chart displaying time required to complete each business process

Step 5: Analyze the as-is

processes and identify

bottlenecks

A set of observations of the as-is business processes that have the potential for improvement

Step 6: Develop and

propose recommendations

Final report with recommendations which may include diagrams of to-be business processes

Phase

I

Phase

II

Phase

III

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Phase I: Scope Setting

Example:

Regulatory and businessrequirements related to the operationand management of port before,upon, and after the import and exportof containerized ordinary cargoes

through all modes of transportations

(road, rail, air, and sea) Carrier scheduling for port use

Cargo handling

Import Starting point: when a carrier enters port

Ending point: when cargo is picked up

and transferred to an importer

Export Starting point: when cargo arrives port

Ending point: when cargo is on board andready to be transferred to the country ofimporter

Airport (Chiengmai)Sea Port(Chiengsan)Dry Port (Maesai)

Dry Port (Mukdahan)Dry Port (Nongkai)

Train StationDry Port

ICD (Ladkrabang)SuvannabhumiAirportSea Port (Unithai)Etc.

Sea Port(Lamchabang)

- Site VisitedNo. of Interviews= 45

- Phone & email interviewsNo. of Interviews = 16

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Phase I: Scope SettingExample: Importation by Sea

Vessel Agent Maritime Pilots Station Marine Department

Port Operator Customs Other Government Agencies Importer or Representative Terminal Operator Haulage/Truck

Example: Capturing theStakeholders involved inimportation by sea

Draw a use case diagram to

illustrate the business domainwith process areas andhigh-level business processesas well as stakeholdersassociated with each of them

Vessel Agent

Port Operator

MarineDepartment

TerminalOperator

Haulage/Truck

Maritime PilotsStation

Customs

Importer

or Representative

Other GovernmentAgencies

Business Processes

Actor

Enter a seaport

Report cargo

manifest

Unload cargo

Clear go ods

through customs

Ar rang e the

transport for thepick-up of goods

Handle cargo at

the terminal

Prepare toenter a seaport

Prepare documents

for import

Pay for goodsBank


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Phase II: Data Collection and Process DocumentationExample: Prepare to Enter a Seaport Process

For each process, draw anactivity diagram that describesactivities and associateddocumentary requirements

Vessel Agent

Port Operator

MarineDepartment

Maritime PilotsStation

Prepare to

enter a seaport

Maritime Pilots StationMarine Department Port OperatorVessel Agent

Prepare

documents

Request for

Maritime Pilotage

General

Declaration

Application for

Vessel Entering

Port Area

Prepare the

allocation of

equipments

Assign pilot officerReceive

Receive

Receive


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Phase II: Data Collection and Process DocumentationExample: Activ ity Diagram of Prepare to Enter a Seaport Process


Prepare

documents

Request for

Maritime Pilotage

General

Declaration

Application for

Vessel Entering

Port Area

Prepare the

allocation of

equipments


Receive

Receive

Sequence ofactions carriedoutto achievea specific goal

Swimlane shows a boundary of activities

to be carried out by a responsible actor.

Document associatedwith each action

Initial State shows thestarting point for thesequence of activities.

Final State shows where thesequence of activities reachesits end.


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Phase III-1: Process AnalysisExample: Prepare to Enter a Seaport Process (Existing Process)


Prepare

documents

Request for

Maritime Pilotage

General

Declaration

Application for

Vessel Entering

Port Area

Prepare the

allocation of

equipments


Receive

Receive

Duplicated datasubmission: Threedocuments with almostidentical data arehanded-in to differentreceivers.

Problems :- Duplicated Information- High Cost and Time for sending and receiving documents- Data Inconsistency


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Phase III-2: Recommendation DevelopmentExample: Prepare to Enter a Seaport Process


Prepare

documents

Request for

Maritime Pilotage

General

Declaration

Application for

Vessel Entering

Port Area

Prepare the

allocation of

equipments


Receive

Receive

Process simplification

Single submission(electronic means)

Proposed Recommendations :- Remove unnecessary data requirements- Harmonize and standardize data requirements- Automate prepare to enter a seaport process


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Phase III-2: Recommendation DevelopmentExample: Prepare to Enter a Seaport Process (Proposed New Process)

Vessel Agents sendelectronic documentsto Marine Dept throughNSW Exchange

Maritime

Pilots Station

Port OperatorMarine Dept.

Stakeholders :1) Vessel2) Value Added Service3) NSW Exchange4) Marine Dept.5) Port Operator6) Maritime Pilots Station

Vessel Agent

Prepare

Update Status

Update Log

Update Log

Update Log

Application forVessel EnteringThe Port Area

PilotRequest Form

GeneralDeclaration

NSW

Exchange

Value-added

ServiceProvider

Marine Dept.


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Phase III-2: Recommendation DevelopmentExample: Time Procedure Chart of Importation by Sea

9 Main processes1. Prepare documents for import

2. Prepare to enter a seaport (Vessel)3. Enter a seaport (Vessel)4. Report cargo manifest5. Unload cargo6. Clear goods through customs7. Arrange the transport for the pick-up of goods8. Handle cargo at the terminal9. Pay for goods

1 2 3 4 5 6 7 8 9

Days

Process

20

10

0

5

151 days

1 day

3

8

6

1 day1 day4

7

2 day

1

10 day

9

4 day

1

2 3 4 5 6

7

8

9

20 days

12 days2

2 day1 day

5


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Agenda





31

Known Applications of the


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Known Applications of the

UNNExT BPA Guidefor Trade Facilitation

National level - BPA of entire in-country importand export processes

Cambodia, Mongolia, Nepal

generally product specific analysis (e.g., in Cambodia

to support National Rice Export Policy Formulation andimplementation)

Subregional / regional level BPA

China-Mongolia-Russia transit corridor (on-going)

Nepal-India-Bangladesh (planned for 2012)

ARTNeT Regional Trade Process Analysis study

China, Thailand, Nepal, Sri Lanka, India, Japan

(Regional synthesis to be released Dec. 2011)

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Lessons learned from Implementing BPA for TF

Get buy-in from officials and other stakeholders Choose a champion

Scope setting is important

Product-specific BPA more motivating

Phase II (process documentation) requires carefulvalidation

Phase III (recommendation step) difficult without[international] experience

Help increase awareness of all stakeholders onimportance of process streamlining

Cross-border BPA useful as a basis for

discussion / cooperation 34

What ESCAP


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What ESCAP& UNNExT can do to support BPA studies

For ESCAP member countries (on request) Assistance in designing and implementing a BPA for TF

project

Organize National UNNExT BPA for TF Training-of-AnalystWorkshop (3 days)

Train a local team on how to conduct BPA for TF

Support in conducting BPA, and validating anddisseminating results to policy makers

Updated version of the BPA for TF guide forthcoming

Collaboration with all IDB members welcome throughthe Joint UN regional commission mechanism fortrade facilitation

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OIC REGIONAL WORKSHOP ON TRADE FACILITATION


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THANK YOU

for your attention

OIC REGIONAL WORKSHOP ON TRADE FACILITATIONWITH AN EMPHASIS ON CROSS-BORDER COOPERATION & ROLES OF CUSTOM ADMINISTRATIONS

Ankara, Turkey, 21-23 November 2011

Yann Duval,[email protected]

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www unescap org/unnext/
mailto:[email protected]:[email protected]