Newsletter
TradeCard News - February 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.
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In our seventh installment of "Principles of Global Trade," we discuss "Strategies for Global
Sourcing". 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.
- PRINCIPLES OF GLOBAL TRADE: STRATEGIES FOR GLOBAL SOURCING
- NOTES FROM THE ROAD: NESTOR ZWYHUN, TRADECARD'S CHIEF TECHNOLOGY OFFICER DISCUSSES DATA SHARING
AMONGST GLOBAL TRADING PARTNERS
- HEADLINES: RECENT ARTICLES THAT HAVE FEATURED TRADECARD
- EVENTS: UPCOMING TRADESHOWS, CONFERENCES, WEB SEMINARS AND MORE
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PRINCIPLES OF GLOBAL TRADE * PRINCIPLES OF GLOBAL TRADE *
This is the seventh installment of our ten-part series.
PRINCIPLE 7: Strategies for global sourcing
For most companies the question is no longer whether to source globally, but how to go about it when they eventually
do. In recent years, trends such as globalization,
outsourcing and cost reduction pressure have accelerated the need for businesses to leverage offshore suppliers.
Another strong driving force behind overseas production and sourcing is the desire to penetrate emerging markets,
particularly rapidly growing markets such as China.
When companies weigh moving production offshore or sourcing from overseas they should take into account the
potential hidden costs and not be blinded by low labor, material and manufacturing costs. For instance, lead times
increase for goods sourced from overseas because shipping the goods takes much longer. This, in turn, makes it harder
for companies to forecast supply and demand. To compensate, companies might start holding additional inventory
domestically.
Many executives cite collaborating with suppliers as the leading challenge. This is often due to time zone and
language issues, and cross-border legal and financial details. According to a recent Aberdeen Group report on global
sourcing, the key to success is the level of automation applied to the process. So what should you do?
- Fill the communication gap with online collaboration tools
- Ensure that the sourcing and contract negotiation phases are a team effort including other functions such as
manufacturing, finance and business unit executives
- Encourage partnership between finance and procurement, to prevent complex international transactions from
disrupting the supply chain
- Upgrade certain internal roles such as the logistics function as additional skills are required to manage cross-border logistics
NOTES FROM THE ROAD * NOTES FROM THE ROAD * NOTES FROM THE ROAD *
This month, Nestor Zwyhun, TradeCard's Chief Technology Officer discusses data sharing amongst global trading
partners.
Collaborating vs. Sharing Data Among International Trading Partners
Financial supply chain data is most valuable when everyone can view and work from the same information - in real
time.
In the paper world, this "single point of truth" is impossible. But web-based technology has made this approach a
reality for hundreds of companies. These companies do more than share data with their trading partners and internal
users, such as via e-mail. They also deliver people to the data. The exact same set of data, updated in real time.
This is the proverbial "killer app" of B2B data collaboration. Imagine a single set of documents in one
place, accessible globally 24/7 - and appropriately shared among trading partners. Everyone from buyers and suppliers
to financial institutions and logistics providers could sync their activities with precision, reducing exception
processing and miscommunication headaches.
Take a footwear company that I visited with a few months ago. The company and its suppliers had just begun using a
web-based financial supply chain platform to reduce their financing and procurement costs. Now, when suppliers
prepare an electronic shipping notice, the platform automatically alerts the appropriate freight company via e-mail.
The freight company accesses the platform to view up-to-the-minute information - and then reserves container space
for the shipment, reducing wait time at the port.
Collaborating with the same data also cuts down on re-keying errors. For instance, the footwear company's web-based
platform can automatically create and populate invoices, packing lists and other documentation for suppliers. This
information is pulled from the footwear company's purchase order, as well as any amendments it makes to that order
over time. The result? Suppliers produce accurate documentation faster. Plus, the footwear company can standardize
documentation formats across its supplier base.
When it comes to this kind of collaboration, the key is to use solutions that support nearly any data format and
transport, from EDI and AS2 to XML and flat files. This allows trading partners to integrate shared processes - while
continuing to work with their existing technology and logistics and financing partners.
HEADLINES * HEADLINES * HEADLINES * HEADLINES * HEADLINES * HEADLINES
Recent TradeCard headlines with some article excerpts:
- Going Global, Virtually - Stores Magazine, January 2005
This is a case study of Rite Aid's use of TradeCard.
In an effort to squeeze every nickel out of the supply chain, retailers have deployed web-enabled planning and
optimization applications and implemented collaborative tools that provide a broad view of their network of
partners. Ironically, with all the attention focused on front-end supply chain process efficiencies, the back end
- the financial piece of global trade - remains stuck in the past. Most retail companies continue to rely on
letters of credit to pay for goods, a paper-heavy process that has been "cutting edge" since the 15th
century.
Not Rite Aid. Jerry Cardinale, senior vice president of category management at the Camp Hill, PA - based drug
store chain, recently switched to an Internet-based platform to manage transactions with 200 vendors in Asia that
supply the company with seasonal goods. The system, known as TradeCard, automates financial supply chain
transactions from the procurement of goods to the completion of payment... Implementing TradeCard did not require
a large capital investment for the drug chain, nor does it place a financial burden on the vendors with whom they
partner on the other side of the globe. [Says Jerry Cardinale]"Using TradeCard provides them with the same
potential cost savings and the same visibility we have on our end. We're looking at this as a win/win for us and
our vendors."
Read the full article at http://www.tradecard.com/languages/EN/news/articles/StoresMagazine_January2005.pdf
- Technology that aims to make trade a little less risky - January 2005, World Trade Magazine
This article is about the ability to manage risks in international trade.
"We live in a world full of global opportunities and global risks. Terrorists or geopolitical disputes can
upturn shipments of everything from sneakers to computer chips and lingerie. No matter the product, there are always
worries about lost cargo, the buyer's credit and general ability to pay, currency fluctuations, and meeting
compliance and security regulations.
But that's not the end of what today's risk managers call all the elements of a "risk portfolio." In
volatile markets like electronics, shippers worry about slow downs that make a product obsolete by the time it hits
retailers' shelves...So new technologies, and the application of some old technologies, are starting to change the
face of the risk management arena, Hagerty explains. Consider TradeCard, Inc. in New York City, which focuses on
automating what CEO Kurt Cavano calls "the financial supply chain-the process that exists between when the
order happens and when settlement takes place."
TradeCard is one of those new web-based services that aims to replace the letter of credit by providing a sort of
credit card for international trade. While "providing the technology to allow global buyers and sellers to
connect," Cavano says TradeCard, Inc. also offers "the kind of legal infrastructure to make sure you can
move the money, provide guarantees, and do that kind of stuff electronically." The company also works in alliance
with 18 financial institutions "that can move the money when it's time to move the money and provide guarantees
so you can be assured (you or your customer) is going to be get paid."
To read the full article, go to http://www.tradecard.com/languages/EN/news/articles/FrontlineSolutions_Dec2004.pdf
Other TradeCard headlines included:
- Rite Aid automates international transactions with TradeCard - covered in various publications including Drug
Store News, Internet Retailer, Supply & Demand Chain Executive, January 2005
- TradeCard shows impressive growth in sales revenue - January 31, 2005, China Daily (in Chinese)
- TradeCard Achieves Stellar Growth in 2004 - covered in various media including Investor news, Marketwatch, Retail
Technology Milestones, Internet Retailer
EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS
In the coming months, TradeCard will participate in:
Miami, Florida, March 16-17
Kurt Cavano will speak about optimizing finance in global supply chains as part of a panel arranged by the American
Apparel and Footwear Association (AAFA) at Material World.
San Antonio, Texas, April 10-13
Kurt Cavano and Holly Harrington of International Playthings will jointly give a presentation on payment
decisioning with International Playthings/TradeCard case study.
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/
