Newsletter
TradeCard News - January 2005
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.
To read this newsletter in other languages, please click here:
CHINESE
KOREAN
JAPANESE
In our sixth installment of "Principles of Global Trade," we discuss "Better Global Trading Partner
Management". 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: U.S. DRUGSTORE CHAIN RITE AID SELECTS TRADECARD
- NEWS: TRADECARD REPORTS STELLAR 2004 GROWTH
- PRINCIPLES OF GLOBAL TRADE: BETTER GLOBAL TRADING PARTNER MANAGEMENT
- NOTES FROM THE ROAD: CARL WEGNER, VP, BUSINESS DEVELOPMENT, DISCUSSES HOW WEB-ENABLED
TECHNOLOGY CAN HELP TRADERS OVERCOME CULTURAL BARRIERS
- HEADLINES: RECENT ARTICLES THAT HAVE FEATURED TRADECARD
- EVENTS: UPCOMING TRADESHOWS, CONFERENCES, WEB SEMINARS AND MORE
If you think that a friend or colleague would like to receive this monthly e-mail newsletter, ask them to sign
up by visiting: http://www.tradecard.com/resources/index.html
NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS *
U.S. DRUGSTORE CHAIN RITE AID TO SELECT TRADECARD
Rite Aid, one of the leading drugstore chains in the U.S., has selected TradeCard to automate its trade
transactions with approximately 200 international suppliers - from purchase order delivery through payment.
Rite Aid operates 3,400 drugstores in the U.S. and is ranked number 128 on the Fortune 500. Benefits for the
company include streamlined procurement processes, the elimination of costly letters of credit, and improved
supplier relations.
According to Jerry Cardinale, Rite Aid's senior vice president, category management, "We evaluated a
number of solutions from banks and technology vendors, considering both their hard and soft benefits. Our
team unanimously preferred TradeCard's web-based platform, primarily because of the visibility it provides.
With minimal capital investment, Rite Aid and its suppliers can see the status of their transactions in real
time. We expect our savings to be significant."
To read the full announcement, please click here http://www.tradecard.com/news/pressreleases/riteAid.html
NEWS: TRADECARD REPORTS STELLAR 2004 GROWTH
TradeCard's success continued on many fronts in 2004. Results included an increase in 2004 revenue by 129
percent compared with 2003 revenue, as well as a near 100% increase in the volume of transactions processed.
The company also had a series of high-profile customer wins. TradeCard is fast approaching industry-standard
status in apparel and footwear, amassing a customer roster that reads like a virtual "who's who" of
these industries. Within retail - a newer market for TradeCard - the company already has seven industry
stalwarts as customers.
"According to Kurt Cavano, TradeCard's chairman and chief executive officer, "Today, you can't go
into a home in North America that doesn't have a product procured over TradeCard. 2004 was more than a great
growth story for us - it was the year we took automation of the financial supply chain mainstream."
To find out more, please go to http://www.tradecard.com/news/pressreleases/2004results.html
PRINCIPLES OF GLOBAL TRADE * PRINCIPLES OF GLOBAL TRADE *
This is the sixth installment of our ten-part series.
PRINCIPLE 6: Better global trading partner management
Strategic sourcing is one of the latest buzzwords in international trade management. It implies a more
intimate relationship between buyers and suppliers. These days, buyers tend to work more closely with a
smaller number of assorted suppliers. The idea is to ensure better product quality and price, along with a
more efficient supply chain. Suppliers, of course, are keen to enter into long-term relationships with buyers
in order to secure long-term revenue streams.
As a rule, enterprises have difficulties managing and balancing internal supply chain processes and associated
communications. Strategic sourcing presents a good opportunity to iron these kinks out, as part of the
process is establishing tighter bonds with suppliers.
Over the past years, web-enabled global trade management systems have matured significantly and offer a viable
option to help solve the problem, particularly by extending processes and communications across trading
partners and third-parties involved in a trade.
Many of these concepts were pioneered by electronic data interchange (EDI). Yet migrating the concepts
embodied by EDI to the Internet provides a simple way to increase the number of collaborative participants
because the technology and cost barriers to entry are minimized. In addition, web-enabled financial supply
chain services automated the complete supply chain from purchase order to payment, and going even further,
all the way to warehouse receipts and chargebacks thereby connecting the physical and financial processes in
the supply chain. As a result, suppliers can offer reduced transaction cycles, faster discrepancy resolution
and better inventory management; buyer can improve payment terms and extend cost savings up the supply chain.
- Maximize the benefits received from your investment in EDI
- Employ the internet to communicate with all parties in a trade, both internally and externally
- Improve operational coordination and increase execution efficiencies
- Reduce supply chain costs for both buyer and supplier
- As a supplier, maintain a higher level of customer service and retain your buyers' custom
To learn more about TradeCard's automated document management and how it improves trading partner
relationships, go to http://www.tradecard.com/what/partner.html
NOTES FROM THE ROAD * NOTES FROM THE ROAD * NOTES FROM THE ROAD *
This month, Carl Wegner, VP Business Development, Asia Pacific, based in TradeCard's Taiwan office, discusses
how web-enabled technology can help traders overcome cultural barriers.
During my 20 years of living and working in Asia I have seen countless times how negotiations between customer
and supplier can go down the wrong path if the two parties do not understand each other's cultural background
and, in turn, style of conducting business. Foreign business practice can often seem strange, or even
unreasonable, and this sometimes makes it harder to negotiate or collaborate effectively. Therefore, cultural
and linguistic misunderstandings can have a serious impact on the efficiency with which trade transactions
are run.
International trading companies, however, are discovering a surprising fact - that electronic trading systems
can act as a kind of neutral buffer, reducing the friction caused by cultural differences. While face-to-face
negotiations will always be with us, e-business provides a valuable alternative in the form of online
negotiation using the telephone and email. As agreements are made online, they can be confirmed in a draft
purchase order that is then modified until all the trading partners are satisfied.
When I talk to our supplier customers I find that they regard global electronic trading systems, such as
TradeCard, as a communications bridge with their overseas business partners. They also tell me that TradeCard
improves their performance. One of TradeCard's customers in Korea found that the discrepancy rate in their
transactions with a major global sporting goods brand went down from 30% to just 2%. "Our buyer is happy
because we detect discrepancies early and can drive the order completion forward. When we used Letters of
Credit, they were discrepant over 30 percent of the time. Although this is relatively low compared to the
average LC discrepancy rate, we felt it was still too high. Now, discrepancies are close to two
percent." The high discrepancy rate is often due to simple keying errors, many of which may be caused by
a low proficiency in English, the language of international trade. Electronic purchase orders allow that
shipping documents such as invoice and packing list are prepopulated based on PO data and effectively
eliminate this source of error. Checking data is far easier than keying them in.
Trading with partners in different time zones is also easier online, because email messages can be sent anytime
and responses can be received as soon as trade partners become available. Another key benefit of using
automated global trade management systems is the ability on the buyer side to evaluate a supplier's
performance without having to ask their trading partner to provide key data themselves. Buyers can evaluate
suppliers based on a wealth of transaction data stored in the system. When there are questions, both sides
see the facts, rather than having different interpretations of what happened.
As we do business with people from faraway countries, we may find ourselves surprised at our trade partner's
aggression, hesitation, decisiveness, independence, or even unusually good manners. Efficient electronic trade
systems can help us bridge the cultural barriers.
HEADLINES * HEADLINES * HEADLINES * HEADLINES * HEADLINES * HEADLINES
Recent TradeCard headlines with some article excerpts:
- Dollars and Sense - January 17, 2005 - Journal of Commerce
This article includes a case study of Burton Snowboards' use of TradeCard.
[O]ne day, [Burton's Tom] D'Urso received a cold call from a sales representative at TradeCard, a provider of
online trade-finance services…. A key point in the pitch: The moment a Burton supplier updated a document
anywhere around the world, Burton's U.S.-based buyers and product managers would be notified, and could view
online the latest version of that document. All authorized parties would have up-to-the-minute access to all
documents. Transactions would be transparent, and each would create its own accurate electronic trail. There
would be no more accounts-payable surprises for Burton's vendors, and no more anxiety about accounts receivable
for suppliers. Burton and its vendors could focus on strategy, not on tracing and reconciling documents.
"I figured, if this can do what it is supposed to do, it has got to be the greatest thing since sliced
bread," D'Urso said.
- The end of a paperwork nightmare - November 2004, Frontline Solutions
This article covers how an alternative to financing international trade with letters of credit helped
International Playthings streamline its international supply chain.
Back in the old days, Holly Harrington, director of imports for International Playthings, was faced with a
paperwork nightmare every time she had to deal with an international shipment. And she was dealing with many of
them.
Based in Parsippany, N.J., the privately held distributor of early-years educational toys sells 750 Tomy, iPlay,
and other branded products to retailers that range from mom-and-pop stores to major chains like Toys "R"
Us, Zany Brainy, and Learning Express. Almost all of the products are manufactured by 15 to 20 toymakers in China,
Hong Kong, Taiwan, South Korea, and other Asian countries. International Playthings reported $28 million in
revenue last year.
The paperwork problem stemmed from the insistence by Harrington's vendors on doing business through letters of
credit (LOCs). These provide international sellers with a guarantee of payment. But they're also complex documents
reflecting complicated transactions that involve two international banks, freight forwarders, customs brokers, and
others, all of whom must provide precise information before the LOC will be paid. This cumbersome process can lead
to shipment delays and extra costs. All of these difficulties led Harrington and International Playthings to turn
to a company called TradeCard to automate the company's international trade finance process. To read the full
article, go to http://www.tradecard.com/languages/EN/news/articles/FrontlineSolutions_Dec2004.pdf
- Chang Hwa Bank to offer export financing services on TradeCard - Dec/Jan issue - Trade Finance
As one of the leading trade finance banks in Taiwan, Chang Hwa offers three types of financing to TradeCard member
companies: pre-export, post-export and early payment financing. Chang Hwa is the seventh bank in Taiwan to partner
with TradeCard and the fifteenth globally to offer financing services on the web-based platform. For Chang Hwa,
financing of a TradeCard member is more cost-effective through its automation, reduced paperwork, and diminished
risk through transparency
Trade Finance recently caught up with TradeCard CEO Kurt Cavano, who spoke about the company's Asian activities.
Last year, his company saw business grow by 220%. And similar sets of figures are unfolding for 2004. TradeCard now
has customers in 34 countries and of those 34; probably 20 of them are Asian. "So it's an amazing spread
across Asia," he adds.
Interestingly, Cavano says one of the most exciting developments in Asia is its readiness to accept technology: "We find that sometimes these young growing companies in places such as Vietnam are more receptive to change than
established companies in the US or Europe."
TradeCard tends to focus on the upper end of the market. So that means the big to mid-size corporates. Certainly on
the buyer's side, they are dealing with big US companies like JC Penney, Staples, Columbia Sporting Goods and
Linens n' Things etc. "This is another reason why Asia has been so good to us," says Cavano. "We
focus primarily on retail space: apparel; sporting goods; footwear; home furnishings etc. These are tremendous
items for sourcing out of Asia."
- TradeCard Improves Transaction Workflow - December 22,2004 - Sing Tao Daily (in Chinese)
This is a case study of TradeCard's customer TAL Apparel (translated article summary):
In recent years, some large manufacturers have started deploying new transaction solutions to drive industry
adoption. TAL Apparel for example, one of the largest garment manufacturers in Asia, uses TradeCard to purchase raw
materials and accessories from its suppliers.
TAL decided to use TradeCard in early 2002. After a six-month system integration, they requested six major
suppliers to deploy the service in mid 2002. Now, approximately 40% of its procurement is conducted electronically
via TradeCard.
According to Ruth Kan, Financial Controller of TAL, the use of TradeCard significantly improves trade document
management. Through the network, all documents in a trade transaction will be filed in an electronic folder for
convenient cross referencing to avoid information errors. She said the TradeCard system is highly reliable and not a
single document has ever been lost, nor has she experienced any system failures.
Other TradeCard headlines included:
- Four steps to optimal vendor compliance - December, 2004 - Frontline Solutions
- Following the trend to the paperless office - December 2004, Capital CEO (in Chinese)
- Textile company TAL Apparel adopts automated supply chain management - December 2004 - Hi-Tech Weekly (in Chinese)
- Fear Surrounds end of textile quotas - December 14, 2004; South China Morning Post
- Chang Hwa Bank To Offer Export Financing Services on TradeCard - December 15, 2004; The Asian Banker Journal
EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS
In the coming months, TradeCard will participate in:
HONG KONG, January 28
TradeCard will participate in an E-business seminar organized by the Hong Kong Article Numbering Association.
MIAMI, FLORIDA, February 23-24
Structure Trade Finance in the Americas, organized by Euromoney Seminars. TradeCard's Chairman and CEO Kurt Cavano
will participate in a panel discussion about the potential of electronic trade platforms.
Be sure to check our web site for updates on where we'll be next.
If you have any questions about TradeCard or the above, please do not hesitate to contact us at info@tradecard.com.
This newsletter can also be viewed at the Hong Kong General Chamber of Commerce website at
http://www.chamber.org.hk/hknewsletters/
