Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

TAL Apparel TAL Apparel by liwenting


									TAL Apparel
 takes online goods trading to
   the next stage with TradeCard
                                                                                           TAL CASE STUDY 2003

"We find that our suppliers can adopt TradeCard easily, because they                       • Increase efficiency of
benefit immediately from the reduction in transaction costs"                                 trading operations
 - Dr Harry Lee, Managing Director, TAL Apparel
                                                                                           • ERP systems only automate
                                                                                             internal processes

                                                                                           • Need to eliminate handling
TAL Apparel Ltd, one of the world’s                                                          cost of L/Cs, which
leading garment manufacturers, has                                                           traditionally require the
adopted the TradeCard online global trade                                                    generation of a minimum of
transaction management system, to                                                            15 pages of paper documents
increase the operational efficiency of its
                                                                                           • Bank fees for L/Cs are
buying and selling operations. Data
                                                                                             growing, as many small
transmission on the new system has                                                           consignments are needed
proved 100% reliable, with no lost data                                                      for modern trade
and no system downtime.
                                                                                           • It takes four weeks for banks
TAL Apparel, a member of the TAP                                                             to process L/Cs and for
                                                                                             customers to receive payment
Group, was founded in Hong Kong in
1947 and has built its reputation mainly                                                   • Paper trade documents make
by manufacturing shirts, blouses, trousers,                                                  it impossible to check
men's tailoring suits and outerwear in its                                                   transaction status easily, or
Asian factories, for delivery to markets in                                                  find errors fast
the USA and Europe. The company                                                            • TAL Apparel uses expensive
produces 40 million garments a year,                                                         EDI systems on private
generating revenues of US$600m and its                                                       networks for transacting with
customers include Brooks Brothers,            including invoice and statements, shipping     its large retail customers
Calvin Klein, Debenhams, Dillards,            documents, insurance, and inspection.
Giordano, Hugo Boss, JC Penney, Liz           Letters of Credit can be replaced by
Claiborne, Nautica, Ralph Lauren, Talbots     payment protection provided by
and Tommy Hilfiger. A continually high        TradeCard partners coupled with a
level of R&D expenditure has resulted         patented online compliance process, and
in innovations that include patents for       the system also supports open account
non-iron, non-wrinkle shirts, and the         trading.
De-Odorant technology which protects
textiles against bacteria and fungi.          TAL emphasizes technology in its trade
                                              operations, and was an early adopter of
                                                                                           TradeCard Optimizes
TAL Apparel began using TradeCard in          email in the 1980s and a pioneer in EDI      Financial Processes in
the middle of 2002, initially to process      (electronic document interchange). By        Your Global Supply Chain
orders sent to suppliers and soon began to    1995, the company was using ecommerce
also use it with buyers. Using TradeCard,     technologies in the supply chain, but key
complete trade buying transactions are        areas were not covered, says Dr Harry
taken online and automated right through      Lee, managing director. "In general, we
to financial settlement.                      have spent many years automating the
                                              physical supply chain, mainly with EDI,
The buyer and seller negotiate online to      but the shipping documents and payments
agree the purchase order and the same         have been left behind and we are now
data is used to create all other documents,   focusing on those areas," he said.
"Using bank L/Cs payment takes four weeks, but
TradeCard payments take two weeks."
 - Ruth Kan, Financial Controller, TAL Apparel

                                                                                           TAL CASE STUDY 2003
TradeCard’s fast
   response time
                                                                                           • Applying web-based online
After rejecting the option to build a
                                                                                             trade transactions
purchase order gateway in-house, TAL                                                         with TradeCard
found that TradeCard had all the
functionality needed. Explains Ruth Kan,                                                   • ERP system is being linked
financial controller: "We have tried a few                                                   to customers and suppliers
Internet platforms, but we found that                                                        through TradeCard
TradeCard was easy to learn, and we have                                                   • Substitute TradeCard’s
experienced no data loss or mix-ups. Also,                                                   online compliance
unlike traditional networks, TradeCard has                                                   engine for L/Cs
no delays in online response time."
                                                                                           • Replace expensive and
The company’s export documents fall into                                                     cumbersome L/Cs with
                                                                                             low-cost efficient
four major groups: government returns,                                                       TradeCard transactions
banking, shipping and insurance.
Government papers are already electronic                                                   • TradeCard system provides
in Hong Kong, handled through the                                                            direct online access and
Tradelink organization. "For banking,        Large customers with legacy systems may         reports on all transactions
shipping and insurance documents,            take a little longer to switch, explains Dr
                                             Lee, but the low upfront investment and       • Customers are now
TradeCard will play a very significant                                                       transferring from private
part," said Dr Lee.                          superior cost-effectiveness of TradeCard
                                                                                             networks to the web-based
                                             are powerful business arguments.                TradeCard system
TAL Apparel owns its main garment
supply factories, with a total production    The first seamlessly
space of over three million square feet,
located in Hong Kong, Taiwan, Thailand,            integrated eLC
Malaysia, Indonesia and China. The
company also has a garment factory in        "Of our major suppliers that previously
Mexico and a spinning and weaving mill       billed us more than US$1m a year using
in North Carolina. To support its            paper L/Cs (letters of credit), six
manufacturing activities, TAL deals with     suppliers, accounting for more than half
external suppliers that provide items such   the total dollar volume, have adopted
as fabric, thread, garment pieces, buttons   TradeCard," said Ms Kan. TAL
and zips.                                    Apparel’s suppliers previously paid a
                                             myriad of L/C charges. After moving to
TAL Apparel is now implementing              TradeCard they immediately benefit from
TradeCard with its suppliers, and the                                                      TradeCard Optimizes
                                             increased visibility and process savings."    Financial Processes in
response has been very positive, with                                                      Your Global Supply Chain
steadily-growing confidence based on the     "Our charges today are much lower than
success achieved so far. Now that TAL        the bank charge for issuing a paper L/C
has mastered the TradeCard system, the       which is over US$150. We are adopting
reduced set-up time with new trade           the online compliance process, and when
partners is proving to be another            we can fully link this to our ERP system,
advantage. "We find that our suppliers       the savings will be even more significant
can adopt TradeCard easily, because they     in other areas," explains Ms Kan.      
benefit immediately from the reduction in
transaction costs," said Dr Lee.
TradeCard …enables us to communicate with our
buyers more effectively, especially in case of problems
or delays.
 - Dr Harry Lee, Managing Director, TAL Apparel
                                                                                             TAL CASE STUDY 2003

TradeCard also reduces the cost of                                                           Results
processing paper documents. "Typically,                                                      • Online compliance with
there are ten pages of documents for each                                                      TradeCard cuts payment
L/C and often amendments add another                                                           time from four to two weeks
four to five pages. We have estimated                                                        • IT used for trade
that a full set of documents for a                                                             communications is a profitable
transaction may cost $250 to prepare and                                                       investment, no longer a cost
process," says Ms Kan.
                                                                                             • TAL Apparel now benefits
                                                                                               from computerization of the
Open account trading generates even
                                                                                               whole supply chain
more paper documents, and TAL has
many filing cabinets full of paper. "In                                                      • Direct Letter of Credit
the future, people will realize that online                                                    issuance charges are
process efficiencies outweigh the fee for                                                      significantly reduced
TradeCard transactions, so they will use
                                                                                             • TradeCard eLC with
the system for open account trading. In                                                        Shanghai Commercial Bank
the old days, if the purchase was over                                                         maintains existing
US$50,000 it would have been on L/C,                                                           banking relationship
but under that amount it would have been
open account. Today you have                                                                 • When TradeCard is used for
                                                                                               all transactions, it will save
TradeCard. TradeCard is the only
                                                                                               TAL Apparel US$20m in
purchase and payments system that can                                                          day’s sales outstanding
serve both large and small transactions,"     TradeCard provides an ‘open network’, in
adds Ms Kan.                                  which the same TradeCard on-line               • All trade partners now have
                                              interface can be used by all the trade           real-time window on
Faster payments are the key, says Ms          partners across multiple supply chains,          transactions, and powerful
                                                                                               instantaneous search facility
Kan: "Using bank L/Cs payment takes           instead of having to set up customer-
                                                                                               to track status and errors
four weeks, but TradeCard payments take       specific links and processes. TradeCard is
two weeks. For SMEs (Small and                bank-neutral, and provides access to           • TAL Apparel as well as all
Medium-Sized Enterprises) and small           multiple financial institutions. "Other          trading partners can keep their
suppliers it is very important to get paid    banks are offering L/Cs issued online, but       existing banking relationships
quickly and to turn the money around          these are stand-alone, private systems with
                                                                                             • As retail customers adopt
faster. Most of our largest suppliers have    no linkages with trade partners to create        TradeCard, supplier managed
adopted TradeCard and are benefiting. If      new documents, so a lot of manual data           inventory is facilitated, and
our buyers adopt the system, we get paid      entry is involved. Linking trade partners        customer relations improved
faster, too."                                 can reduce the time taken to process the
                                              L/Cs from four weeks to two weeks," said
TAL has a long-standing relationship with     Dr Lee.                                        TradeCard Optimizes
Shanghai Commercial Bank, Hong Kong,                                                         Financial Processes in
and TradeCard has automated the               "At the moment, TradeCard is only used         Your Global Supply Chain
processes of that relationship. TAL uses      in a part of our business. If we used it for
multiple credit coverage providers,           100% of our transactions, it would mean a
including an electronic L/C with their        reduction of about US$20 million in days'
bank. This is a unique arrangement that       sales outstanding," adds Dr Lee.
allows TAL to eliminate paper from the
L/C process, while benefiting from the
L/C credit line provided by Shanghai                                                  
Commercial Bank.
So far, TradeCard’s data transmission has proved 100%
reliable, with no lost data and no system downtime."
 - Ruth Kan, Financial Controller, TAL Apparel

                                                                                             CASE STUDY 2003
                                               Explains Ms Kan: "Some of our large
Customers profit                               customers intend to move away from
   from online trade                           private networks to the Internet, and I
                                               hope that TradeCard will meet their
                                               needs. Online systems using private
TAL’s buyers are mainly in the USA, to
                                               networks are very expensive and we have
which 80% of production is exported.
                                               experienced loss of documents and other
"Previously with some of our US
                                               errors using them. So far, TradeCard’s
customers such as JC Penney, we used
                                               data transmission has proved 100%
EDI over an expensive private network.
                                               reliable, with no lost data and no system
Since mid-2002, JC Penney has been
                                               downtime," she adds.
using TradeCard, which runs on the web,
and this could lower costs significantly,"
says Dr Lee.                                   Cut paper
                                                   – and costs
                                               A fundamental benefit of TradeCard and
                                               EDI is that no paper documents are used.
                                               "We are in the process of trying to make
                                               the whole company paperless and the
                                               progress is already visible. A few years
                                               ago, people were standing in line at our
                                               copying machines. Now we have fewer
                                               copiers, and there are no queues," says
                                               Dr Lee.

                                               TAL is moving towards the paperless
                                               office, but much of the benefit lies ahead,
                                               says Dr Lee: "Our company is highly
                                               computerized, but our trading partners
                                               often use paper documents that have to be
                                               manually entered, introducing many
                                               errors. At first, putting our documents
                                               online was an overhead cost, but as our
Large retailers have a crucial need to keep    trade partners send us more data in
their product selection wide, and their        electronic form, the benefits are beginning
inventory low. This demands ultra-fast         to snowball."
replenishment with frequent low-volume
shipments. Traditional EDI helped, but         TradeCard provides more than electronic       TradeCard Optimizes
the cost of private networks proved to be      payments; it also provides communication      Financial Processes in
too high. Now web technology, as used          with suppliers and customers and with         Your Global Supply Chain
by TradeCard, is radically increasing retail   government departments for export
efficiency and lowering costs.                 declarations. "In the past, our customers
                                               considered that a private network was
                                               more secure, but now more of our
                                               customers have the confidence to move to
                                               a web-based system – and it saves us a lot
                                               of money," says Dr Lee.                
“Our suppliers are happy to get paid punctually, and
also happy that, whatever country they are in, they have
instant visibility of the progress of the transaction.”
 - Ruth Kan, Financial Controller, TAL Apparel

                                                                                           CASE STUDY 2003

Management visibility
and easy error detection
As well as being more efficient, online
working makes management easier, says
Dr Lee: "Putting the transactions online is
only the first step. The next question is
how we use the reports and data generated
by the system to analyze the business and
discover underlying trends and obtain
detailed costs. As all our documents go
electronic, this benefit will be even
greater. TradeCard also enables us to
communicate with our buyers more
effectively, especially in case of
problems or delays," he says.

In the past, with hundreds of millions of
dollars of transactions executed with
paper documents, it was difficult for the
finance department to identify mistakes.
But electronic documents can be searched
and reported within seconds. "For
example, I recently discovered that the       TAL is currently implementing Intentia
payments to our suppliers through             systems in order to serve their customers
TradeCard did not agree with my               better. With non-garment product lines,
accounting records. I ran one of many         there is future potential to break down an
reports available on the TradeCard            order from a TAL buyer and convert it
system and quickly discovered that            into multiple raw material orders for TAL
human error in processing paper               as a buyer. It is hoped to transfer all
documents was the source of this              documents, including invoices, packing
problem," said Ms Kan.                        lists, bills of lading, online and to
                                              integrate them with the Intentia ERP
"Our suppliers are happy to get paid          system within about
punctually, and also happy that,              a year.
whatever country they are in, they                                                         TradeCard Optimizes
have instant visibility of the progress of    When trading partners go online, they        Financial Processes in
the transaction. Using paper documents,       benefit from using standard systems,         Your Global Supply Chain
we would hear arguments like: ‘We did         says Dr Lee: "TradeCard is the transaction
not receive your fax,’ but now all parties    management platform of the future and I
can see and understand each transaction,"     have high hopes that it will even form
says Ms Kan.                                  part of the e-government initiative in
                                              Hong Kong," he notes.

About TradeCard
TradeCard is the only end-to-end financial supply chain service provider that enables
transparent commerce among global trade partners over an open, secure and neutral
network. For the first time, buyers and sellers can manage transaction workflow with               CASE STUDY 2003
complete visibility into purchasing and financial transactions, from order to settlement,
resulting in optimized cash flow and credit lines.

With TradeCard, global trading partners can realize unprecedented value from the
financial supply chain including immediate cost savings, improved partner relationships
and shortened trade cycles. TradeCard offers the most expansive network of extended
trade services including export and vendor financing, payment assurance, money
movement and inspection. This range of offerings makes TradeCard a proven
alternative to traditional paper-based, expensive and labor-intensive trade settlement
methods. Headquartered in New York City, TradeCard, Inc. has offices in the San
Francisco Bay Area, Hong Kong, Taipei, Seoul and Tokyo. TradeCard is a registered
trademark in the United States and elsewhere throughout the world. TradeCard is located
online at

For further information please contact one of
our offices below:                                                                                 TradeCard Optimizes
                                                                                                   Financial Processes in
                                                                                                   Your Global Supply Chain

TradeCard, Inc.                                                   TradeCard Asia/Pacific Limited
Corporate Headquarters                                            Unit 1106, Tower 2
75 Maiden Lane, 12th Floor                                        Lippo Centre, 89 Queensway,
New York, NY 10038                                                Admiralty, Hong Kong
Tel: (1) 212-405-1800                                             Tel: 852-2973-0578
Fax: (1) 212-405-1801                                             Fax: 852-2973-0199

To top