Newsletter
TradeCard News - November 2004
Financial Supply Chain Automation - The Hosted way to Procure-To-Pay
Welcome to TradeCard's monthly e-mail newsletter - a summary of the latest news from TradeCard.
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Be sure to check out the fourth installment of "Principles of Global Trade." Each month's principle is
based on our members' experiences.
We'd love to hear from you. Send trade tips, suggested topics, or questions for our management
team to sales@tradecard.com
NEWS: TAIWAN'S CHANG HWA BANK TO OFFER FINANCING ON TRADECARD
PRINCIPLES OF GLOBAL TRADE: WEB COMMUNICATION CUTS LANGUAGE AND CULTURE BARRIERS
NOTES FROM THE ROAD: LOIS BRUU - TRADECARD'S VICE PRESIDENT, MARKET DEVELOPMENT - DISCUSSES HOW
COMPANIES ARE BETTER LINKING THEIR FINANCE AND SUPPLY CHAIN TEAMS
HEADLINES: RECENT ARTICLES THAT HAVE FEATURED TRADECARD
EVENTS: UPCOMING TRADESHOWS, CONFERENCES, WEB SEMINARS AND MORE
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NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS *
TAIWAN'S CHANG HWA BANK TO OFFER FINANCING ON TRADECARD
Chang Hwa Bank, one of the top three trade finance banks in Taiwan and one of the top 500 banks worldwide, has
signed an agreement with TradeCard to offer financing to TradeCard members in Taiwan. Chang Hwa Bank offers three
types of financing: pre-export, post-export and early payment financing. Chang Hwa Bank is the seventh bank in
Taiwan to partner with TradeCard and the sixteenth bank globally to officially announce financing services on
TradeCard. Since TradeCard started offering financing to companies who use its automated global trade platform in
2000, the financing volume has grown by over 60% each year. For more information, please click on
http://tradecard.com/news/pressreleases/changHwa.html
PRINCIPLES OF GLOBAL TRADE * PRINCIPLES OF GLOBAL TRADE *
This is the fourth installment of our ten-part series.
PRINCIPLE 4:
Web communication cuts language and culture barriers
Successful trade is based on good communication. What can be a relatively easy process between trading partners in
the same location, becomes complex and difficult to manage when physical as well as invisible borders such as
language barriers are involved. Today, traders increasingly source their products from offshore locations. Not
only that - they are ready to move on when market conditions and prices dictate it. This means frequently dealing
with new trade partners and unfamiliar cultural practices.
Online trading communities have proven that web applications and the Internet go a long way toward bridging
cultural differences. People worldwide have similar expectations of Internet communication and the processes
involved, and it is easy and quick to communicate without being bound by different time zones. In comparison,
paper documents may contain data keying errors, leading to misunderstandings in trading partner communication and
possibly loss of income. Paper documents also need to be manually created and then faxed or couriered to another
location, adding considerable time to the transaction cycle.
Electronic documents used for communication over the Internet allow all parties in a trade to work with the same
document version in real-time, speeding up the transaction cycle. With English as the international language of
trade, it is generally used to communicate with all global trade partners, but a huge number of discrepancies are
the result of lack of proficiency in the English language and simple typing errors. These can be avoided by using
an electronic purchase order as the base document. Invoice and packing list are then automatically created based
on PO data. As global trade spreads into ever more remote corners of the world, the internet offers a cost-effective and flexible way of managing your global trade communications.
- Use web based trade applications to reduce trade cycle time
- Adopt global web culture to bridge national differences
- Create error-free documents automatically using data inheritance
- Use electronic documents to reduce discrepancies caused by lack of English language proficiency
- Benefit from easy communication across the globe without considerable up-front costs for technology purchases
NOTES FROM THE ROAD * NOTES FROM THE ROAD * NOTES FROM THE ROAD *
This month, Lois Bruu - TradeCard's vice president, market development - discusses how companies are better
linking their finance and supply chain teams.
Over the past few weeks, I've spent a good deal of time with industry analysts - experts on logistics,
international trade, the supply chain. Each analyst has their own discipline so I was intrigued when nearly all
of them touched on the same topic: closer collaboration between finance and supply chain staff. It's becoming an
imperative, particularly for companies who do a good deal of international sourcing.
The question is, how exactly are companies delivering this collaboration? Many start by connecting with their
suppliers to automate the processes from a purchase order's issuance through its payment.
Think about it. From a procurement perspective, manual procure-to-pay processes are error prone and labor
intensive, adding costs and delays to the supply chain. These processes also impact finance. In addition to
swamping the payables department with paperwork, they make it hard to precisely predict when and in what currency
different suppliers must be paid. This increases short-term borrowing and its expense, while shrinking the
capital available for other uses.
When procure-to-pay automation is implemented - and finance and operations get on the same page - companies lower
the cost of goods, use capital more efficiently, and compete more effectively. Take one retailer I know. It uses
automation to consistently collect early payment discounts from suppliers, getting them the capital they need -
while creating savings for the retailer. Automation also gives the suppliers advance notice on incoming orders.
They use the extra time to procure the necessary fabrics and materials, shaving days off the retailer's
procurement cycle. It's a win for both sides.
You can learn more about these techniques at http://www.tradecard.com/customer/index.html
.
HEADLINES * HEADLINES * HEADLINES * HEADLINES * HEADLINES * HEADLINES
Recent TradeCard headlines with some article excerpts:
- Electronic Financial Supply Chains - November 12, Retail Week
This article talks about the need for retailers to automate the financial processes in their procure-to-pay
operations:
It is easy to forget that trade involves shifting money, a process still burdened by paper documents and
centuries-old bank practices. Hundreds of billions of dollars are locked up in these practices - a problem
compounded by the shift toward global sourcing and demand management techniques.
"Global sourcing has become the norm for large retailers, and frequent consignments are preferred to minimize
inventory at the retail end," says Kurt Cavano, chairman and chief executive of TradeCard, a leading
provider of financial supply chain services. "That's why we've seen so many retailers move to adopt
financial supply chain automation.
I talk with executives who have made these changes, or who are heading in the right direction. Their organizations
have typically cut up to US$6 million (£3.25 million) in costs for every US$1 billion of procurement, and
even more in soft costs." Many retailers have already gone electronic for parts of their transactions with
suppliers. They have also made huge investments in their physical supply chains and ERP systems. Together, these
factors make it critical for financial supply chain products to automate disconnected, manual processes.
- Trade Services: Banks Refocus On The EX/IM Business - November, 2004, Bank Technology News
This article discusses the banks' strategy to automate the import-export trade services space to entice
corporate customers to once again use them to secure payment and delivery of foreign goods:
"Seeing an opportunity, Internet-based upstarts like TradeCard, launched in 1994, leveraged the rise of the
Internet and moved first in offering Web-based services based on "open accounts" as an alternative to
facilitate electronic documentation and guarantee of payment and delivery among counterparties. The term "
open accounts" is another way of saying direct, typically monthly transacting between buyers and sellers.
Instead of a letter of credit, TradeCard offers insurance, via CoFace, a French trade credit insurance company, to
help guarantee services or payments rendered, and the electronic monitoring of the flows of funds and goods via
the Web. In the process, the New York-based firm has grabbed considerable market share in facilitating and
tracking payment guarantee, settlement and delivery for importing and exporting goods like clothing, electronics,
apparel, footwear and toys."
Other TradeCard headlines included:
- Burton Snowboards Uses TradeCard - November 13, Apparel
- Business Next -- Surprise in Indonesian Jungle! (in Chinese)
EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS
In the coming month, TradeCard will participate in:
SHANGHAI, December 6-7. Ruth Kan from TAL Apparel and Kurt Cavano will jointly give a presentation on trade
platforms in Asia at the "4th Annual Trade Finance in Asia" conference organized by Euromoney
Seminars.
SHANGHAI, December 7. Kurt Cavano will talk about "Streamlining Your Procurement in China and Improve Your
Supplier Management through Financial Supply Chain Automation" at a luncheon organized by the Sourcing and
Procurement Committee of the American Chamber of Commerce, Shanghai.
This newsletter can also be viewed at the Hong Kong General Chamber of Commerce website at
http://www.chamber.org.hk/hknewsletters/
