Newsletter
TradeCard News May 2005
Financial Supply Chain Automation - The Hosted Way To Procure-To-Pay
Welcome to TradeCard's monthly e-mail newsletter.
We have news for you.
Starting with the next edition, you will receive this newsletter once a quarter instead of every month. This shift is a direct response to our readers' requests for more in-depth financial supply chain information. With quarterly, editions, we'll be able to take a deeper look at the latest trends in trade automation and financial services. We'll also provide additional real-world case studies on buyers and suppliers that have overcome major financial supply chain obstacles - to produce lasting value.
As always, we'd love to hear from you. If you have any trade tips, suggested topics, or questions for our management team, please send them to sales@tradecard.com.
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In our ninth installment of "Principles of Global Trade," we discuss "breaking down the wall between finance and operations".
NEWS: HIGH-PROFILE INDUSTRY VETERAN JOINS TRADECARD'S EXECUTIVE TEAM
PRINCIPLES OF GLOBAL TRADE: BREAKING DOWN THE WALL BETWEEN FINANCE AND OPERATIONS
HEADLINES: RECENT ARTICLES THAT HAVE FEATURED TRADECARD
EVENTS: UPCOMING TRADESHOWS, CONFERENCES, WEB SEMINARS AND MORE
NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS * NEWS *
HIGH-PROFILE INDUSTRY VETERAN JOINS TRADECARD'S EXECUTIVE TEAM
TradeCard appointed Marshall Gordon as senior vice president, worldwide sales and marketing. Gordon joins TradeCard from SAP (NYSE: SAP), where he most recently served as Industry Executive for Retail, Apparel and Footwear. Gordon's appointment follows TradeCard's announcement of record first quarter performance, including all-time highs for quarterly revenue and transaction volume. The strong results build upon two consecutive years of more than 100 percent year-over-year revenue growth.
With nearly two decades of supply chain experience, Gordon complements TradeCard's senior management team, which includes veterans from trade finance, banking and credit, technology, and consulting. During his seven-year tenure with SAP, Gordon led a team that won dominant market share in the retail, apparel and footwear verticals, garnering seven of the 10 industry leaders as customers. For more information go to
www.tradecard.com/news/pressreleases/mgordon.html
PRINCIPLES OF GLOBAL TRADE * PRINCIPLES OF GLOBAL TRADE *
This is the ninth installment of our ten-part series.
Principle 9: Breaking down the wall between finance and operations
In the majority of companies, the finance and operations departments work separately from each other with very little data sharing and communication between them. Improving their collaboration can lead to companies lowering the cost of goods, using capital more efficiently, and competing more effectively. Thus, finding a way to improve collaboration can fundamentally improve a company's competitiveness and financial health.
A good starting point is to automate the intersection of finance and operations - the financial processes from procurement to payment. Once these processes are automated, operations and finance teams have the procurement and financial information they need to partner. Here are three tips for ensuring that collaboration adds value to your organization.
Start with working capital management.
From an operations perspective, manual financial processes are error prone and labor intensive. These processes not only delay the flow of goods but also add 5% to the cost of global trade. 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. The result: short-term borrowing and its expense increase, and the capital available for other uses shrinks.
Automated financial processes indicate what accounts will be paid, at what time, and in what currency, and they do it far sooner than manual financial processes could. Your finance team can use this information to fund accounts used for payment at the last possible moment, liberating cash for higher yield investments, growth, and other business strategies. That's why working capital management is a great way to broach the subject of automation with finance.
Optimize supplier relationships for cost and speed.
Once financial processes are automated and working capital management is improved, finance and operations can collaboratively address more complex issues, such as helping suppliers support demand management. As an example, financial supply chain automation can be used to collect early payment discounts from suppliers. Suppliers get the capital they need to fill more frequent orders while creating savings for the retailer. Automation also gives suppliers advance notice on incoming orders. They use the extra time to procure the necessary fabrics and materials, and that shaves days off the retailer's procurement cycle.
Use the web to leverage existing systems-and lower your risk.
Large enterprise resource planning (ERP) or customer relationship management software implementations promised integration and automation, but many delivered results only after great pain and expense. Fortunately, new technologies make it possible to further automate without large upfront investments and long implementation cycles.
Web-technology, for example, makes it possible to automate financial processes across the buyer's finance and procurement division and its suppliers in a far less painless and costly way than implementing software. Web-based platforms can extract purchase orders from a company's ERP system and then automatically populate and route other documents necessary for the transaction, such as suppliers' invoices. From a technical standpoint, what makes this possible is open data exchange. The web-based platform can accept nearly any data formats and transport mode, from EDI and AS2 to XML and flat files. Thus, data on existing systems, such as ERP, for procurement, fulfillment, payment, and workflow can be reused. Each party can continue working with its existing technology, business processes and logistics, or financing partners while integrating operational and financial processes.
Anyway you look at it, collaboration between finance and operations is the way to go. It's a solution that improves everybody's business.
HEADLINES * HEADLINES * HEADLINES * HEADLINES * HEADLINES * HEADLINES
Recent TradeCard headlines with some article excerpts:
- Multiple Options and Sources Make Trade Finance More Available Than Ever - World Trade Magazine - April 2005
This article is about the latest developments in trade finance.
The days when trade was an exotic undertaking, reserved for only the biggest of players, are long gone. Globalization has transformed American manufacturers, regardless of size, into participants in the international market. This change has come in little more than a decade--faster, perhaps than some would have welcomed--but there is no turning back.
Trade finance keeps this flow of goods in play and it, too, has been transformed of late from mostly Letters of Credit issued by a handful of global giant banks to a dynamic marketplace of new products, new players and new approaches.
Still, letters of credit are embedded in East Asian business culture. Suppliers in Taiwan, Hong Kong, and Thailand take the LC to their local bank, which relies on it to lend them pre-shipment working capital. That's one reason why the Asia-to-U.S. supply chain generates the largest import LC volume on the planet.
However, the big banks, which run huge processing centers in Hong Kong and neighboring countries, are moving to a new strategy: their electronic systems convert purchase orders to letters of credit or open account automatically, while they use their presence on the ground in East Asia to finance the local suppliers.
That's where Stage Two may just be coming into sight. This combination of electronic information flow and the security of working on both ends of a transaction, with buyer and seller, creates a "club" that sharply mitigates risk.
Two clubs are already out there. One is TradeCard, based in New York, which has largely bypassed the letter of credit by requiring cross-border buyers and sellers to play by a set of rules and, in many cases, evaluating (underwriting) them up front for risk assessment. TradeCard focuses heavily on Asia-to-U.S. trade flows.
You can read the full story at www.worldtrademag.com/CDA/ArticleInformation/coverstory/BNPCoverStoryItem/0,3481,147633,00.html.
Other TradeCard headlines included:
- Calyon Signs Deal to Sell the TradeCard Platform's Financial Supply Chain Services Throughout Europe - about 50 press mentions including Global Trade Review and Journal des Finances
- Marshall Gordon joins TradeCard's Executive Team -Behind the Seams, May 1, 2005
- Columbia Sportswear uses TradeCard platform - Shin Sheng Daily, May 17, 2005 (in Chinese)
- TradeCard Helps Columbia Sportswear Reduce Supply Chain Costs - Just Style, May 2005
EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS * EVENTS
In the coming months, TradeCard will participate in:
NEW YORK CITY, June 8-9. A representative from TradeCard will speak at one of the seminars at the Indian Apparel Sourcing Expo at the Penn Plaza Pavilion in New York. To sign up, please contact mmakanova@strtrade.com.
SHANGHAI, June 21-22. TradeCard will participate in a panel discussion on "Making the Most of China Trade Opportunities" at the Exporta Group conference China: Trade & Export Finance Forum 2005. For more information or to register, please go to www.gtreview.com/conference/show_conference.php?List_ID=46
HONG KONG, July 14-15. TradeCard will present a customer case study at IBC's "Financial Supply Chain Management in Asia" conference.
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 www.chamber.org.hk/hknewsletters/
