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The impact of downsizing on import departments.

The term "downsizing" has become a familiar one in the business world in the 1980s and 1990s. Downsizing occurs to varying degrees and encompasses a range of activities. The research literature on downsizing defines three main approaches: (1) downscoping, which involves product line pruning, market withdrawal, eliminating supply input production, and eliminating ownership of distribution or retail facilities; (2) downscaling, which involves production facility idling, extended vacation shutdowns, and temporary employee furloughs; and (3) retrenchment, involving permanent closure of smaller facilities, closure and elimination of redundant facilities and jobs, centralization and specialization of production, and reallocation of volume to retained facilities.(1)

Downsizing has occurred in the logistics areas of firms. In a recent study of the impact of downsizing on the logistics function, the researchers suggest logistics has been a logical candidate for downsizing because of the economic deregulation of transportation; logistics' key role in customer service; and the information-intensive nature of logistics.(2) The study measured the impact of downsizing on perceived changes in performance (speed, reliability, special services, and cost performances); employee fulfillment (stress, morale, loyalty, salary); and logistics achievement (logistics quality, customer satisfaction, and financial contribution). The conclusions of the study are as follows: The respondent firms in the study that downsized logistics perceived they improved their logistics performance, but not significantly more so than firms that did not downsize. Stress, morale, and loyalty have worsened for logistics employees in firms that downsized; salaries have increased but not to the extent that salaries have increased in firms that did not downsize. Firms that downsized did not report significantly higher improvements in logistics quality and customer satisfaction but did report greater perceived financial contribution to the firm than firms that did not downsize.

The above study examined the impact of downsizing on the overall logistics function of firms. Downsizing may occur in specific areas of logistics. In this study the impact of downsizing on one area in international logistics - the import department in firms - is examined.

THE IMPORT PROCESS

When a shipment enters most countries, including the United States, the importer of record must take certain actions to permit the goods to enter the country legally. These actions are determined by the customs laws of the specific country, although there are many customs provisions that have been adopted by a large proportion of the world's countries. Within five working days of the date of arrival of a shipment at a United States port of entry, via either ocean or air, customs entry documents must be filed.(3) Three main reasons for customs inspections of imported goods are (1) to determine if the goods can legally be imported into a country; (2) to ensure the goods meet the country's regulatory requirements that are relevant to the specific product; and (3) to assess customs duty that may be payable on the imported goods. The importer must be knowledgeable of all of the above and, with regard to the third reason, must have the goods classified properly so that the appropriate duty, if any, can be applied. The importer of record may be the owner, purchaser, consignee, or licensed customs broker appointed by the owner, purchaser, or consignee. Licensed customs brokers are the only third parties authorized by the tariff laws of the United States to act as agents for importers in the transaction of their customs business. Customs brokers may be individuals or firms and are often parts of international freight forwarding companies. Although large, experienced companies may handle customs clearance of imports in-house, most companies, large and small, use customs brokers to some extent.

A detailed knowledge of customs regulations and classifications is required of the importer of record. The customs clearance process is technical and can be complex. Errors in filing customs entry can add to the cost of the import, through increased duties, taxes, penalties, or costly delays. Business operations can be affected through delay of deliveries or even, in extreme cases, temporary shutdown of operations. Thus, the import department's activities in customs clearance can be vital to a firm. Yet the importance of the role is often not recognized by the firm's management, both inside of and outside of the firm's logistics department.

The unique role that import departments play in firms is the reason the area was selected for examination of evidence of downsizing. Importing may be viewed as a function suitable for downsizing or outsourcing for the following reasons: (1) As mentioned above, its importance is often unrecognized by the firm's management; (2) There are third parties (customs brokers) who often work with import departments in clearing customs; (3) It is often perceived as an isolated function; and (4) EDI is having an impact on simplifying the required import documentation. On the other hand, because of the complexity of product classification for customs purposes and the financial and legal consequences that can result from errors in the customs process, many firms prefer to keep import expertise in-house. These influences, and others discussed throughout the article, are depicted in Figure 1.

FACTORS AFFECTING DOWNSIZING

A review of the logistics literature turned up few studies on importing, the customs process as it impacts logistics, or downsizing in logistics. Heaver discussed the role of customs on the efficiency of international logistics in his comparative study of the customs administrations of four countries.(4) Carr and Crum examined the potential impact of the Customs Modernization Act on international logistics.(5) Anderson et al. conducted the study of downsizing in logistics mentioned in the beginning of this article. The study discussed in this manuscript can be considered exploratory. Although the intent was not to conduct rigorous hypothesis testing, the researchers identified several relevant factors that might affect downsizing in the import area. The factors were identified through periodic discussions with a group of importers and were formulated into the model shown in Figure 2. The factors and their likely impact on import downsizing are discussed in the following sections.

Downsizing in the Firm

The decision to downsize occurs at corporate strategic levels. A main objective of downsizing is to improve productivity through cost reduction. Downsizing is often the result of the application of total quality management (TQM) techniques, particularly process reengineering efforts.(6) Functional areas or processes in firms, such as logistics and the areas within or related to logistics, may be identified as candidates for reengineering or downsizing to achieve productivity improvements or cost reductions. Thus, it was deduced that the propensity of a firm to engage in downsizing would be a factor in whether downsizing occurred in logistics, or more specifically, in importing. That is, an import department itself would not make the decision to downsize; rather, this would be a decision consistent with the firm's overall decision to reengineer or downsize.

The factors that would contribute to a firm downsizing its import department were mentioned above: lack of recognition by management as an important function, an abundance of third parties who work in import clearance, and the use of EDI. The factor cited above that would work against a firm downsizing its import department has to do with the legal implications of not being in compliance. Firms may want to retain control of import clearance because of the penalties resulting for not being in compliance. There is yet another reason for firms not downsizing import departments. If firms engage in downsizing to greater degrees in other areas, to the effect of eliminating production facilities, they may end up outsourcing from other countries and importing to a greater extent. Thus, importing may become an even more important function than before the firm downsized. Because of these conflicting factors no direction was predicted with regard to the relationship between firm downsizing and downsizing in the import area.

Import Compliance

The interactions of import departments and U.S. Customs can be compared to interactions of businesses and the Internal Revenue Service. Customs duties are assessed and the correct duty must be paid to the government or penalties may result. Thus attention to compliance with import laws and regulations is important. However, there is considerable variation by type of business or product with regard to degree of customs oversight. For example, some items are exempt from customs duty, while others may require considerable customs assessment and inspection. Therefore, while all companies are required to comply with customs regulations, for some companies the task of compliance may be less burdensome than for others. As an approximation for measuring degree of compliance in the companies studied, tracking of import costs at both entry and line item levels was used.(7) The researchers expected that firms with a greater degree of compliance, as indicated by tracking of import costs at line and entry levels, would be less likely to downsize.

The Customs Modernization Act

The Customs Modernization and Informed Compliance Act (Mod Act) was incorporated into the North American Free Trade Agreement (NAFTA) that was signed into law in 1993. The Mod Act attempts to improve customs' efficiency through increased automation, reducing bottlenecks at ports, and shifting customs' responsibilities to others in the logistics pipeline.(8) Some importers or shipments may qualify as low risk and utilize remote entry procedures, which should result in faster clearances and reduced cross-border transaction costs. In improving the efficiency and effectiveness of the customs process, improved logistics performance for importers should also occur. However, because customs will be examining fewer imports at the initial ports of entry, they will verify compliance more through the audit process than through the clearance process. There will also be greater penalties for noncompliance, with fines up to $100,000. Thus, the Act increases recordkeeping requirements, penalties, and audit procedures for importers.

The Mod Act has conflicting implications for the downsizing of import departments. On the one hand, the increased efficiency of the customs process should facilitate importing, at least for importers who qualify as low risk, which would work in favor of downsizing import departments. On the other hand, there will be greater responsibility for recordkeeping and more severe penalties for noncompliance, even for low-risk shippers, which would tend to work against downsizing. Also, the emphasis in types of skills needed in import departments might change, from those required for efficient and problem-free clearance to those required for fastidious recordkeeping and auditing. The impact of the Mod Act will also differ according to firms' volume of imports, specific items imported, and past history of compliance. Because of these conflicting factors no direction was predicted with regard to the implications of the Mod Act on import downsizing.

Quality of the Import Process

Firms downsize to improve productivity and reduce costs. In achieving both of these objectives performance quality should not be lowered. In the Anderson et al. study(9) firms that downsized logistics perceived they improved their logistics performance, but not significantly moreso than firms that did not downsize. In this study the following variables were used to measure the quality of the import process: entry resubmissions, pre-liquidation changes, post-liquidation changes (liquidation is the term used to signify the end of the entry process for a shipment), loss of immediate delivery privileges, fines or penalties, increase in the level of customs duties, and refunds from customs. Of the preceding, all but refunds can be considered the consequences of some inefficiency in the import transaction between the importer and customs. The assumption is made that these consequences occur less frequently for better performing import departments. Refunds from customs reflect judgments favorable to the importer, and more refunds suggest better performance on the part of the import department. Based on the Anderson study cited above, downsizing in the import area would not be expected to affect quality of the import process, as measured by the preceding variables.

METHODOLOGY

A mail survey was conducted of 350 companies randomly selected from the 1995 Directory of U.S. Importers(10) in April 1996. Only companies with 1,000 or more employees were selected because it was assumed that these firms would be the most likely to have import departments. There were 969 Firms in this size range listed in the directory. A second mailing was sent to the nonrespondents of the first mailing. Seventy-seven usable responses were obtained from the two mailings for a response rate of 22 percent. Responses from the second mailing were statistically compared to the first twenty responses of the first mailing and were negative for nonrespondent bias. Chi-square goodness-of-fit tests were used to compare SIC codes and work force size of the respondent sample of 77 and the survey sample of 350. Work force size distributions and the most frequently occurring SICs are listed in Table 1 and Table 2, respectively. The chi-square test indicated that SIC 35 (industrial commercial machinery and computer equipment) and SIC 56 (apparel and accessories stores) were underrepresented in the respondent sample. The chi-square test indicated the respondent sample was not statistically different in work force size in comparison with the survey sample.
Table 1. Most Frequently Occurring SIC Codes of Respondent Firms

 Number of
SIC Code Observations

28 - Chemicals & allied products 5

30 - Rubber & miscellaneous plastics 3
products

34 - Fabricated metal products, except 3
machinery & transportation

36 - Electronic and other electrical 6
equipment & components

37 - Transportation equipment 6

50 - Wholesale trade durable goods 13

51 - Wholesale trade nondurable goods 5

53 - General merchandise stores 4

59 - Miscellaneous retail 4
Table 2. Work Force Size

1,000 - 4,999 48
5,000 - 9,999 9
10,000 - 14,999 6
15,000 - 19,999 5
[greater than]20,000 10


A seven-point Likert scale was used to test the respondents' perceptions on downsizing that occurred in their firms; downsizing that occurred in their import departments; their firms' import compliance; the Customs Mod Act; and the quality of their import processes. T-tests were used to investigate statistical significance between (1) respondents' perceptions of the degree of downsizing that occurred in their firms compared to downsizing in their import departments; and (2) perceptions of firms that downsized and firms that did not. The questionnaire also contained some open-ended questions about the respondents' expectations of changes in their firms' future import functions. The results of the survey are presented in the following section.

RESULTS

Firm and Import Department Downsizing

The mean responses to the items on the survey questionnaire are shown in Tables 3 through 6. The survey respondents were asked to rate the degree to which they perceived the different forms of downsizing, as defined in the introduction of this article, to have occurred in their firms: (1) "downscoping" - product line pruning, market withdrawal eliminating supply input production, and eliminating ownership of distribution or retail facilities; (2) "downscaling" - production facility idling, extended vacation shutdowns, and temporary employee furloughs; and (3) "retrenchment" - permanent closure of smaller facilities, closure and elimination of redundant facilities and jobs, centralization and specialization of production, and reallocation of volume to retained facilities. Their perception of the extent to which outsourcing had occurred was also measured. It is possible, but not necessarily the case, that outsourcing could occur with any of the above three forms of downsizing. "Outsourcing" was included as an additional factor to indicate the extent of downsizing perceived to have occurred in a firm. The mean responses to the three types of downsizing and outsourcing were averaged to obtain a "firm downsizing index."
Table 3. Mean Responses to Questionnaire

1 = No implementation; 7 = Fully implemented

Perception of Downsizing in the Firm

Downscoping 3.07
Downscaling 2.36
Retrenchment 3.78
Outsourcing 3.21
Firm Downsizing Index 3.11(*)

Perception of Downsizing in the Import Department

Work Force Reductions 2.31
Outsourcing 2.05
Import Downsizing Index 2.18(*)

* Paired t-test between Firm Downsizing Indices and Import
Downsizing Indices; p [less than] 0.001
Table 4. Comparisons of Firms That Downsized in Importing with Firms
That Did not Downsize in Importing

Factor No-Downsizing Downsizing

Perception of Firm Downsizing

Downscoping 2.44 3.63(*)
Downscaling 1.94 2.74(**)
Retrenchment 2.97 4.54(*)
Outsourcing 2.46 3.95(*)
Firm Downsizing Index 2.46 3.72(*)

* p [less than] 0.01

** p [less than] 0.10

Perception of Import
Downsizing No-Downsizing Downsizing

Work Force Reductions 1.00 3.58(*)
Outsourcing 1.00 3.03(*)
Import Downsizing Index 1.00 3.38(*)

* p [less than] 0.000


To obtain a measure of downsizing that occurred in import departments, the downsizing forms that occur in a firm overall were not used. This was done because in most cases the forms would not apply to import departments, which tend to be small departments relative to the total firm. Instead, "work force reductions" was used to approximate downsizing in import departments; however, "outsourcing" was used in the same manner as it was used for the firm. The mean responses to "work force reductions" and "outsourcing" were averaged to obtain an "import downsizing index."
Table 5. Import Compliance as Measured by Tracking Import Costs

1 = Never performed; 7 = Always performed

Factor No-Downsizing Downsizing

Entry Level 5.16 4.89

Line Level 4.70 4.49

Import Cost Tracking 4.93 4.72
Index

Expectation of Customs Modernization Act

1 = Strongly disagree; 7 = Strongly agree

Factor No-Downsizing Downsizing

CMA will simplify 2.03 2.39(*)
import process

CMA will shift burden 5.26 5.37
of proof to importer

* p = 0.06
Table 6. Mean Responses of Quality Indicators

1 = Decrease; 4 = No change; 7 = Increase

Factor No-Downsizing Downsizing

Quality Indicators

Entry resubmissions 4.00 3.71(*)

Pre-liquidation changes 4.00 3.85
to entries

Post-liquidation change 4.00 3.77
to entries

Loss of immediate 4.00 3.90
delivery privileges

Fines or penalties 4.10 3.73(**)
imposed by customs

Substantial refunds 4.00 3.88
from customs

Increase in level of 4.20 3.64
duties paid

* p [less than] 0.05 for a one-way t-test against a mean of 4.00 (no
change)

** p [less than] 0.06 for a one-way t-test against a mean of 4.00
(no change)


The value of the firm downsizing index for the sample is 3.11, which indicates a small to moderate degree of downsizing perceived to be occurring in the firms. The value of the import downsizing index is 2.18, which indicates less downsizing perceived to be occurring in import departments. Paired t-tests were used to test for statistical differences between the respondents' firm downsizing indices and their import downsizing indices. The t-test is highly significant, with a p-value [less than]0.001, which indicates a difference in the degree of downsizing (as perceived by the import managers) at the firm and the import department levels. Retrenchment was the type of firm downsizing perceived to have occurred to the greatest degree, while downscaling was the type perceived to have occurred to the least degree.

The data were analyzed using another approach. The respondent firms were divided into firms that downsized in the import department and firms that did not. (From this point on in the manuscript, "downsizing" firms refer to those that downsized importing and "no-downsizing" firms refer to those that did not downsize importing). There were thirty-nine firms that downsized in importing and thirty-eight that did not. The two groups were compared with respect to the degree of outsourcing and the different types of downsizing perceived to have occurred in the firms and in the import departments (Table 4). In the case of firm downsizing, differences between the downsizing and no-downsizing firms were highly significant at the 0.01 level for downscoping, retrenchment, outsourcing, and the firm downsizing index; downscaling was moderately significant at the 0.10 level. Differences between the two categories (downsizing and no-downsizing) were highly significant for workforce reductions and outsourcing in import departments, as well as for the import downsizing index. Thus, the statistical analysis supports the premise that the respondent import managers perceived a moderate degree of downsizing in their firms overall and a lesser degree of downsizing in the import departments.

Import Compliance

The mean responses for degree of import compliance are shown in Table 5. Tracking import costs at the entry and the line levels were used as an approximation of import compliance. An import entry is applied against an import shipment and may contain numerous products (line items). Tracking costs at an entry level yields less information than tracking at a line level. Both the downsizing and no-downsizing groups show an above average level of import cost tracking overall. Both groups track costs to a greater degree at the entry level than at the line level. Although the no-downsizing group's mean cost tracking values are higher for entry, line, and the overall cost tracking index than the downsizing group, there were no statistically significant differences between the two groups. Therefore, the conclusion is that tracking, and by extension, import compliance, is regarded with the same importance for all of the firms in the respondent sample, regardless of their degree of downsizing. However, it must be noted that import compliance encompasses much more than import cost tracking, and for future research, other measures might be developed to better capture an import department's level of compliance.

The Customs Modernization Act (Mod Act)

As discussed earlier, the Mod Act has conflicting implications for importers, and many importers are uncertain how the Act will impact their import departments. With respect to the Mod Act in this study, the researchers' expectation was that downsizing companies would agree to a greater extent than the no-downsizing companies that the Mod Act would simplify the import process. This belief would be a contributing factor in the decision to downsize. These expectations were confirmed by the survey results, although not in a straightforward manner, as shown in Table 5. Both groups tended to disagree that the Mod Act would simplify the import process; however, the downsizing group disagreed to a lesser extent. The difference between the two groups' mean response values was statistically significant at p [less than] 0.06.

The other item relating to the Mod Act queried the respondents on whether they believed the Act would shift the burden of proof to the importer. The researchers' expectations were that the no-downsizing companies would more strongly agree with this item than the downsizing companies. In fact, the downsizing companies' mean response value was slightly stronger (in the direction of agreement) than the no-downsizing companies', but the difference in mean values between the two groups was not statistically significant. Thus, all companies in the respondent sample strongly agreed that the Mod Act would shift the burden of proof to the importer.

Quality Indicators

The mean responses to the quality indicators are shown in Table 6. A one-way t-test was used to test the downsizing and the no-downsizing groups' mean responses against a mean value of 4.00, which indicates no change in amount of activity in the specific areas. The responses of the no-downsizing group varied very little from 4.00. The downsizing group's responses indicated a slight decrease in all areas, including "substantial refunds from customs." Two of the quality indicators - entry resubmissions and fines or penalties imposed by customs - were statistically significant within the 0.10 level of significance. These results imply that in the downsizing group improvement did occur after downsizing. This finding is consistent with those of Anderson et al.,(11) in that the downsizing firms in their study did report improved logistics performance. However, in the Anderson study the no-downsizing firms also reported improvement, while in this study the no-downsizing firms did not. The finding in the present study is consistent with the underlying rationale for implementing downsizing, as was discussed earlier. Downsizing is often done in conjunction with TQM techniques and process reengineering efforts, the objectives of which are to improve performance and productivity. The results of this study offer tentative support for this use of downsizing.

One caveat must be mentioned regarding the interpretation of the quality indicator results. The item on the survey instrument was directed only at downsizing firms, as the intent was to determine changes in quality indicators after downsizing. However, over one-third of the no-downsizing firms responded to this item as well. For this reason the one-way t-test was used for each group, and the two groups were not directly compared with each other. Thus, the results of the no-downsizing group must be regarded as tenuous and should be confirmed in further research.

Additional Analysis

The potential for bias of the nonrespondents is always a concern in survey research. Since this was a study on downsizing this issue is of even greater concern. If, in fact, an import department was severely downsized or outsourced, would there be anyone available to respond to a survey? In such cases, there would very likely be an employee or employees at least overseeing importing. However, the scope of their responsibilities might be such that they would be unable to respond to the type of survey used in this study. To at least partly address this issue, in addition to comparing the first twenty and last twenty questionnaires returned from the first and second mailings, an additional follow-up survey was conducted of nonrespondents. The follow-up survey was a one-page survey asking the subjects if either firm or import department downsizing had occurred during the period covered by the original survey. Thirty-nine responses were received. A seven-point Likert scale was used and the results were compared with the firm and import downsizing indices in the original survey. The responses are shown in Table 7. There were no statistically significant differences between this follow-up survey and the original data. This procedure does not rule out nonrespondent bias that might occur from downsizing, but it does offer some support for the validity of the survey data.
Table 7. Comparison of Original Survey and Follow-up Survey of
Nonrespondents

 Original Follow-up
 Survey Survey

Firm Downsizing 3.11 2.56
Index

Import Downsizing 2.18 1.92
Index


Another area in which analysis was conducted was among the different SIC codes represented among the respondents. SICs with five or more observations and their mean import downsizing indices are shown in Table 8. This analysis was performed to determine if there was any indication that import downsizing was done more or less in a particular industry, since import processes, tariffs, and regulations differ among industries, and industries are affected differently by economic conditions. One-way t-tests were performed against the Import Downsizing Index of 2.18 for SICs for which there were five or more observations. The results were statistically significant for one industry - transportation equipment. The implication is that import downsizing occurred to a greater degree for this industry than would be expected based on the overall sample results. However, the small number of observations for all SICs preclude definite conclusions.
Table 8. SIC Codes of Respondent Firms with Five or More
Observations

 Mean Import
SIC Code Downsizing Index

28 - Chemicals & allied products 1.88
36 - Electronic and other electrical 2.22
equipment & components
37 - Transportation equipment 4.42(*)
50 - Wholesale trade durable goods 2.00
51 - Wholesale trade nondurable goods 1.50

* p = 0.03 for a one-way t-test against a mean of 2.18 (import
downsizing index)


SUMMARY AND CONCLUSIONS

This investigation was an exploratory study of the perceived extent of downsizing in import departments of firms. The following conclusions were drawn from the analysis of the data and reflect the perceptions of the import managers included in the sample:

* The respondents of the survey reported a moderate level of downsizing for their firms overall, but a lesser degree of downsizing in the import area of the firms. This finding would support the premise that the import area is one over which firms wish to retain control because of the legal implications of noncompliance. Another possible reason explaining this finding is that as firms downsize in other areas, they tend to source globally more, hence, importing more, and the import area increases in importance.

* All of the respondents reported a high degree of tracking of import costs at both the entry and line levels. There were no statistically significant differences in degree of cost tracking between the firms that downsized in the import area and firms that did not. Thus, it appears that detailed attention to tracking of import costs is important for all of the firms involved in the study.

* The respondents of firms that downsized in importing agreed more strongly that the Customs Modernization Act would simplify the import process than the respondents of the firms that did not downsize in importing. This would support the rationale of the firms that did downsize importing. Both groups strongly agreed to about the same degree that the Customs Modernization Act would place more burden on the importer to prove compliance.

* Respondents whose firms downsized in importing tended to report more improvement in the quality measures of the import process, particularly with respect to entry resubmissions and paying fines or penalties to customs. If downsizing is undertaken for the proper reasons and implemented correctly as a part of process re-engineering, improvements in the quality of the process should result. From a conceptual standpoint this would explain this finding.

Downsizing is but one manifestation of how firms are reacting to the dynamics of today's business environment. In the import area there are some interesting trends that have implications both for reducing and for increasing the significance of import departments in firms. Among the forces that might reduce the role of import departments are movements by the World Trade Organization, the International Chamber of Commerce, the World Customs Organization, and the G-7 nations to simplify customs procedures on a worldwide basis.(12) Second, technology has and will continue to simplify customs and import procedures through electronic transmission of documents and data. Among the forces acting to increase the role of customs and import departments are the efforts to control drug movement across borders, efforts to contain terrorism by controlling international movement of products that might be used to construct weapons, and continued nationalistic and ethnic tendencies toward protectionism. The emergence of regional trading blocs, such as NAFTA, the European Union, and the Mercosur, tends to create mixed results for customs and import departments. Such blocs do simplify trade by reducing or eliminating tariffs but create other cumbersome procedures, such as proving country of origin.

Progressive firms today are focusing on maximizing the efficiency and effectiveness of their supply chains. On an international or global level, processes like importing and exporting, though perceived as a small part of the supply chain, can greatly affect the efficiency of supply chains. Inefficient import and export processes can create bottlenecks in the supply chain and have a significant impact on cycle time. Thus, there are opportunities for research on improving import and export processes.

There are three areas in this exploratory study that suggest further research on import processes: (1) Import compliance is emphasized under the Mod Act. Better measures of compliance should be developed and analyses performed on how firms are responding to the implementation of the Mod Act with respect to compliance. (2) Similarly, better measures of import quality should be developed, along with an analysis of the impact of downsizing on import quality factors. This would provide useful information to firms on how downsizing in the import area affects the quality of the import process. (3) The Customs Modernization Act was intended to simplify the customs process for importers. Now is an appropriate time for an examination of the impact of the Customs Modernization Act on the efficiency of the import process.

Though not the specific focus of this study, the following two research areas are also suggested: (1) an analysis of the changing role of government customs agencies and the impact on import processes, and (2) a determination of the relationship of the import process on the efficacy of the supply chain. Research in these areas would help to identify inefficiencies in import processes and possibly improve supply chain performance.

The authors would like to acknowledge the assistance of Dr. Rocki-Lee DeWitt, assistant professor of management and director of the MBA program at The Pennsylvania State University, for her helpful discussions on downsizing research; and Dinesh Nihalchand, Stephanie Sinkovich, and Ana Liu for their assistance in the early stages of this research.

ENDNOTES

1 Rocki-Lee DeWitt, "Firm and Industry Influences on Choice of Downsizing Approach," presented at the Academy of Management meetings, Vancouver, B.C., 1995.

2 Ronald D. Anderson, Roger E. Jerman, and Michael R. Crum, "The Impact of Downsizing on Logistics Performance and Employees in Shipper Firms," Journal of Transportation Management, Vol. 9, No. 1, Spring 1997, pp. 1-10.

3 Department of the Treasury, U.S. Customs Service, Importing into the United States, Customs Publication No. 504 A.

4 Treavor D. Heaver, "The Role of Customs Administration in the Structure and Efficiency of International Logistics: An International Comparison," The International Journal of Logistics Management, Vol. 3, Number 1, 1992, pp. 63-71.

5 Carolyn M. Jones Cart and Michael R. Crum, "The U.S. Customs Modernization and Informed Compliance Act: Implications for the Logistics Pipeline," The International Journal of Logistics Management, Vol. 6, No. 2, 1995, pp. 67-81.

6 Anderson, Jerman, and Crum (1997), op.cit.

7 Entry is the legal customs process initiated and eventually terminated for each imported shipment; line items are specific products in the shipment.

8 Carr and Crum (1995), op. cit.

9 Anderson, Jerman, and Crum (1997), op.cit.

10 1995 Directory of U.S. Importers, New York, NY, Journal of Commerce, Inc. 1996.

11 Anderson, Jerman, and Crum (1997), op.cit.

12 Some typical articles on the subject: "Customs uniformity urged," The Journal of Commerce September 23, 1998, Maritime Section, online version, http://www.joc.com, and "Customs modernization a major issue for world business," ICC Business World, the electronic magazine of the International Chamber of Commerce, http://www.iccwbo.org.

Ms. Thomchick, EM-AST&L, is associate professor of business logistics, The Pennsylvania State University, University Park, Pennsylvania 16802; Mr. Young, SM-AST&L; FCIT, is assistant professor of business administration, The Pennsylvania State University; and Mr. Grenoble is administrative director, Center for Logistics Research, The Pennsylvania State University.

This research was supported by a grant from the Center for Logistics Research (CLR), Smeal College of Business Administration, The Pennsylvania State University, University Park, Pennsylvania. The authors are grateful to members of CLR's Import Benchmarking Consortium for their assistance in developing the basic research questions and for providing financial support for the study.
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Author:Thomchick, Evelyn; Young, Richard R.; Grenoble, William L.
Publication:Transportation Journal
Date:Jun 22, 1999
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