InSYNC

	Moving up the ZGS ladder
	Made-to-measure solutions for DFS

Made-to-measure solutions for DFS

Since Singapore Customs revised the rules regulating the movement of DFS Venture Singapore Pte Ltd's (DFS) duty-free goods, the company has reaped efficiency gains, cost savings and many more benefits.

Customs officers studied DFS' operations and security procedures, and were impressed with the company's systems and
work processes.

At Singapore Customs, officers seek to provide customised solutions to facilitate trade and constantly explore innovative solutions that cater to companies' particular needs.

The agency has introduced measures to enhance the competitiveness of many businesses. One such company is DFS, the sole retailer of duty-free goods in Singapore.

Easing rules to improve
inventory flow
When Customs officers first reviewed DFS' operations in 2005, the company was operating one licensed warehouse, two shops at Singapore Cruise Centre, two shops at Tanah Merah Ferry Terminal, five shops at Changi Airport Terminal 1 (T1) and six shops at Terminal 2 (T2).

Benefits at a glance

•	faster inventory movement
•	less administrative work
•	better customer service
•	time and costs savings
•	enhanced reputation of Changi Airport as an global air hub and
•	world-class duty-free shoppers' paradise

Anytime DFS needed to move its dutiable liquors and tobacco products between its premises, it had to apply for a removal permit. As there was frequent transfer of goods between the shops at the two airport terminals to meet customer demands, DFS incurred high administrative costs.

Keen to cut red-tape for DFS, Customs officers evaluated its operations and found that the T1 and T2 shops were using an integrated system that adequately accounted for the movement of goods. Hence Singapore Customs decided to leverage on DFS' internal control framework to track inventory flow.

Since 1 July 2005, DFS does not need permits to move duty-free goods between its T1 and T2 shops. It has generated more sales and enjoys $25,000 in cost savings annually.

Taking initiative to cut more red-tape
Eager to further improve DFS' workflow and documentation process, Customs officers took the initiative to conduct an in-depth review of Customs' rules regulating DFS' operations, as well as the company's in-house inventory system in 2006.

Singapore Customs introduced measures to enhance the competitiveness of DFS.

Whenever goods had to be moved from the warehouse to the shops, DFS needed multiple removal permits and staff had to manually key in the inventory movement details, which amounted to about 500,000 line records every year.

Customs officers spent two months studying DFS' operations and security procedures, and were impressed with the company's systems and work processes.

Said Mr Neoh Kean Aun, Singapore Customs’ Account Manager for DFS: "DFS' in-house inventory control system is able to show the purchase, receipt and sales records of all dutiable goods moving into and out of its licensed warehouse and shops. The automated system can provide the actual locations of the goods as well as a precise tally of all the stocks in the licensed warehouse and each shop. DFS also has a team of inventory control officers who conduct daily random checks on stocks in the licensed warehouse and shops."

As a result of the findings, Singapore Customs decided to do away with multiple removal permits for transferring duty-free goods between DFS' licensed warehouse and shops, by leveraging on the company's in-house inventory system and documentation procedures to monitor stock movement.

Since the changes were introduced last September, DFS has reaped additional time and cost savings amounting to $40,000 annually.

Mr Ray Crosswell, DFS Singapore Venture’s Director of Logistics for Asia South, was pleased with the government agency's efforts to help DFS. He said: "We are pleased and honoured that Singapore Customs, after reviewing our internal process controls both operationally and administratively, have acknowledged they are 'water-tight' which merited your confidence to remove the requirement to take up customs removal permits for movements of dutiable liquor/tobacco between DFS licensed warehouse and all DFS duty-free retail outlets in Singapore.

“This facilitation of empowerment marks a significant milestone in Customs’ drive to be an active and valuable partner for the trading community and sets the platform for more interactive dialogue sessions between DFS and Singapore Customs to jointly scale greater heights in the business of travel retail.”