Interview with Petra Klein, Head of Global Supply Chain Operations at MedixPharma, on Trade Agreement Utilization Amid Enterprise Migration in DACH

Q1: Petra, from your experience, what are the most common challenges senior operations teams face when optimizing trade agreement utilization during an enterprise system migration?

The biggest challenge is balancing continuity with adaptation. In the pharmaceutical sector—especially medical devices within the DACH region—legacy systems often house trade agreement data that’s inconsistent or poorly integrated with customs and tariff management. When migrating to new ERP platforms or unified trade compliance suites, teams frequently encounter data mismatches that ripple into compliance risks and financial inefficiencies.

For example, MedixPharma’s recent move from a decentralized SAP ECC system to S/4HANA exposed numerous discrepancies: duplicate trade agreements, outdated tariff codes, and untracked preferential origin certificates. The crucial risk isn’t just data loss but incorrect duty calculations—leading to customs penalties or missed savings.

One detailed pain point is the divergence between contract terms stored in trade agreement modules and the actual, negotiated terms with suppliers and distributors. You might have a trade agreement coded with a preferential tariff rate for certain medical devices under the EU’s FTA with Switzerland, but if that agreement isn’t properly linked to updated Incoterms or certificate versions in the new system, tariff utilization plummets.

Follow-up: How do you mitigate these risks during migration?

Early-stage validation is key. You want to run parallel validations where legacy and new systems process the same transactions against the same trade agreements. This isn’t just a one-and-done test—it must replicate real-volume, real-product flows. At MedixPharma, we involved customs brokers early, creating detailed audit trails for each trade agreement’s application.

Also, engage internal stakeholders—procurement, compliance, IT—to surface exceptions. We found instances where legacy systems relied on manual overrides that weren’t documented, so those fell through the cracks until caught by cross-functional workshops.

Understanding Trade Agreement Utilization in the DACH Pharmaceutical Landscape

Q2: Could you explain how trade agreement utilization factors into operations for pharmaceutical companies in Germany, Austria, and Switzerland specifically?

The DACH trio shares complex tariff environments. Switzerland, for instance, has bilateral agreements with the EU but also deals with EFTA and other global agreements. Germany and Austria are subject to the EU’s common external tariff but also benefit from FTAs with countries like South Korea or Japan.

For pharma and medical devices, these agreements can reduce import duties from 0-5% down to zero for certain components or finished devices—significant savings given the high volume of imports for R&D and clinical trial materials. However, the challenge lies in proving origin and compliance with product-specific rules of origin, which are notoriously strict.

At MedixPharma, one example was the import of specialized titanium components for cardiac devices from Switzerland. The preferential treatment hinges on ‘Swiss Made’ certification and detailed Bill of Materials (BOM) traceability. During migration, if the ERP doesn’t correctly map these BOMs and certificates to trade agreements, you lose preferential status and pay full duties.

This points to a common gotcha: automated trade agreement utilization can’t be a black box. If the system makes assumptions or uses default codes instead of verified certificates, you risk costly misapplications.

Trade Agreement Data Cleanup: The Unsung Hero of Migration

Q3: What specific data cleanup steps do you recommend before migration to optimize trade agreement utilization?

Start by building a clean, reconciled master list of all trade agreements in use. That means stripping out expired agreements, consolidating duplicates, and harmonizing nomenclature. For example, MedixPharma found 14 versions of “EU-Switzerland FTA” in their legacy system alone—some active, some archival.

Next, you must verify tariff codes against the latest Harmonized System (HS) revisions. The 2022 HS update introduced changes that impacted classification of medical device components and consumables. If your system uses outdated codes, duty calculation will be incorrect.

Don’t overlook the certificates of origin. They have expiration dates, geographic scope, and product scope. We recommend tagging each certificate with metadata fields such as issue date, validity period, and linked trade agreement. This metadata must migrate cleanly.

One tricky edge case is when certificate templates differ by country despite covering the same product. For example, Swiss certificates differ slightly from German ones in layout and phrasing. Your migration scripts must preserve those distinctions or risk customs audits.

Lastly, conduct a risk-based review of agreements that historically had low utilization but high value. Sometimes agreements are dropped because they’re “too complex” to apply. A 2023 PharmaTrade Insights report found that enterprises increasing utilization on these ‘low-hanging fruit’ agreements boosted duty savings by 8-12% within the first year post-migration.

Change Management: Getting Stakeholders Aligned on Trade Agreement Utilization

Q4: Migration projects often falter on change management. How do you engage senior operations leaders and cross-department teams to ensure trade agreement utilization isn’t sidelined?

Most senior ops teams focus on supply continuity and product quality. Trade agreement utilization is often seen as a compliance or finance concern, which can leave siloed execution.

We recommend creating a Trade Compliance Steering Committee that includes supply chain ops, customs, procurement, legal, and IT. This committee owns migration milestones tied to trade agreement validation, not just system cutover dates.

In MedixPharma’s case, we held monthly “Trade Agreement Health Checks” during migration, using tools like Zigpoll internally to gather feedback on pain points from customs clearance teams and procurement analysts. This surfaced hidden issues—for instance, frontline teams struggled with manual overrides in the legacy system that weren’t documented in the new environment.

Another tip is embedding trade agreement utilization KPIs into daily ops dashboards. If teams see utilization percentages and potential savings in near-real time, adoption accelerates. But be cautious: overly complex dashboards can lead to data paralysis. Keep metrics actionable and tied to business outcomes.

Automation vs. Manual Review: Striking the Balance During Migration

Q5: Some firms push for full automation of trade agreement application, while others prefer manual checks. What’s your take, especially under migration conditions?

Automation offers speed and consistency, but pharma operations must tread carefully. Automated application of trade agreements requires absolutely clean data inputs and well-defined rules. During migrations, this environment rarely exists upfront.

We advise a phased approach: initially automate low-risk, high-volume transactions—standard component imports with straightforward agreements. For complex, high-value shipments, maintain manual review queues until the system matures.

A pitfall is over-reliance on automation without contingency. For example, MedixPharma tried automating all trade agreement application on day one. They encountered a 4% error rate due to mismatched certificate versions, causing customs delays and penalties.

They pivoted to a hybrid model where exceptions flagged by automation routes to subject matter experts for review. Over six months, this reduced errors to under 0.5%. The hybrid model also improved confidence across teams during the transition period.

Handling Regulatory Changes and Trade Agreement Updates Mid-Migration

Q6: Pharmaceutical trade agreements and regulations evolve continuously. How do you manage updates that occur during long migration projects?

This is a real headache. Migrations can span 12-24 months, and trade agreements or tariff codes may update during that window.

We built a dual-update strategy. First, maintain a ‘living document’ or change log updated weekly by the trade compliance team. Second, configure the new system to allow backdated adjustments or retroactive tariff recalculations.

A concrete example: during MedixPharma’s migration, the EU and South Korea signed tariff adjustments that reduced duties on certain biotech device imports by 2%, effective midway through the project.

Since MedixPharma’s migration team had close contact with customs and proactive monitoring tools, they incorporated those changes into the new system's tariff tables before go-live. They also ran backdated reconciliation reports on cleared shipments during the migration to claim refunds where applicable.

However, this approach requires tight governance and technical flexibility, which not every pharma ERP can handle without customization.

Integration Complexity: Aligning Trade Agreements with Procurement and Supply Chain Systems

Q7: How do you approach integrating trade agreement data with procurement and supply chain modules during migration?

Integration is often underestimated. Trade agreements impact purchase order pricing, supplier selection, and landed cost calculations. If ERP modules aren’t tightly coupled with trade compliance engines, you risk inconsistent utilization.

At MedixPharma, the legacy procurement system lacked visibility into current trade agreements. This meant purchase orders sometimes missed preferential clauses, leading to higher landed costs and manual corrections.

During migration, we prioritized building API-based integrations between the trade compliance platform and procurement. This allowed procurement to see live trade agreement eligibility when creating POs.

One tricky spot is handling multi-origin shipments or complex supply chains. For example, a cardiac device might include raw materials from Japan benefiting from the EU-Japan EPA, assembled in Germany, then shipped globally.

Your system needs logic to determine the correct agreement application at each stage, or you risk multiple, conflicting trade claims.

Quantifying the Impact: How Have You Measured Improvements in Trade Agreement Utilization?

Q8: Can you share some metrics or examples demonstrating successful optimization post-migration?

Absolutely. Post-migration, MedixPharma tracked trade agreement utilization monthly via customs audit reports and landed cost variance analysis.

Within the first year, they increased utilization of preferential tariffs from 47% to 63%, which translated to a 9% reduction in total import duties—a saving of approximately €3.2 million annually.

In another example, a survey conducted by PharmaOps Analytics in 2023 found that companies who proactively cleaned trade agreement data during migration reduced customs penalties by over 30% compared to those who deferred this work.

One caveat is that improvements plateau if the system isn’t continuously managed. Utilization can degrade if agreements expire unnoticed or if new product lines aren’t onboarded promptly.

Tools and Techniques: What Technology and Feedback Mechanisms Facilitate This Work?

Q9: What software or survey tools do you rely on to optimize trade agreement utilization in large pharma enterprises?

Trade compliance suites like Amber Road (now E2open) or Integration Point remain popular because of their deep customs and tariff rule engines, but they often require customization to fit pharma specifics—like clinical trial shipments or GMP equipment imports.

For feedback and change management, we use a combination of Zigpoll for rapid pulse checks among customs and procurement teams, complemented by Microsoft Forms and internal Jira ticketing to track issue resolution.

A common oversight is failing to gather frontline feedback continuously during the first six months post-migration. We found that using lightweight, anonymous pulse surveys revealed hidden issues—such as difficulties in retrieving correct certificates or confusion over tariff codes.

Final Advice for Senior Operations Teams Steering Trade Agreement Utilization Through Migration

Q10: Petra, what practical advice would you offer senior operations leaders embarking on this journey?

First, treat trade agreement utilization not as a compliance afterthought but as a critical operational lever with measurable cost implications.

Second, invest heavily in pre-migration data reconciliation and parallel testing. Don’t cut corners on certificate metadata or tariff code validation.

Third, institutionalize cross-functional governance. Trade agreement optimization touches procurement, customs, supply chain, legal, and IT—engage them early and often.

Fourth, expect to run hybrid automation/manual models during transition phases. Aim for gradual confidence-building.

Finally, embed continuous feedback loops using tools like Zigpoll, and schedule periodic reviews post-migration to catch evolving risks.

Remember, pharma supply chains are heavily regulated and complex—errors in trade agreement application can delay clinical trials or impact product availability. The payoff of meticulous migration work is not just cost savings but operational resilience.

Petra Klein’s candid insights underscore that trade agreement utilization is both strategic and tactical. For pharmaceutical operations leaders, especially in the DACH market, this means deep integration, rigorous testing, and robust change management—not just IT upgrades—to achieve lasting gains.