Trends in Automating the Financial Supply Chain

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www.tradecard.com
Trends in Automating the Financial Supply Chain
Presented at
BAFT Annual Conference Puerto Rico
Kurt Cavano, CEO and Chairman, TradeCard,
Inc. May 8, 2001
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The e-Commerce Challenge of Today
Buyers and sellers are faced with a disconnect
between the physical movement of goods/materials
throughout their value chain and the management
of their working capital and cash flows.
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The Physical Supply Chain
Automation of the Physical Supply Chain has
provided significant benefits to enterprises by
reducing inventory levels and coordinating
production and delivery schedules amongst
international trading partners.
But the financial and information components
have not been integrated into the automated
process!
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Just- in-Time Management
Just-in-Time Working Capital Management
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What are the Effects on the Parties?
Working capital inefficiencies!

• Buyers
• Excess cash balances
• Inaccurate cash flow forecasts
• Inability to take advantage of discount terms
• Inability to optimize use of credit capacity

• Sellers
• Excess DSO
• Inadequate cash balances
• Inaccurate sales forecasts
• Increased borrowing costs

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What are the Effects on Processes?
Inefficient business processes exacerbate the
disconnect and increase risk

• Inefficient Processes
• Offline reconciliation between transaction
  documents and physical movement of goods
• Multiple data entry points lead to discrepancies
• Limited visibility into the flow of goods and
  documents forces multiple use of phone calls and
  faxes to resolve issues
• Too many disconnected parties and documents
  involved in the process

• Additional Risk
• Loss of control of inventory while payment is not
  yet assured
• Offline and costly credit risk management
• Higher factoring costs due to lack of visibility
  in receivables
• Customer service and vendor relations suffer from
  a lack of accurate and timely transaction
  information

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The Answer is a Bridge
Order Management P.O. Amendment
Exposure Management
Payment Decision
Reconciliation Discrepancy Resolution
Financing
Risk Management
Inspection Logistics
Money Movement Foreign Exchange
Invoicing