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Mitsui & Co. CASE STUDY 2003 cuts the cost of trade transactions Challenges 50% by using TradeCard • Offline payments systems were an obstacle to Mitsui’s plan for Integrated Logistics • Excessive paper involved in purchase orders and payments "TradeCard is the most advanced and most tested service available." Shinya Imai, general manager of trade function • Letters of Credit often slowed the payments cycle business department, Mitsui & Co. • Trade finance difficult to manage because of uncertainty over Letters of Credit The leading Japanese trading group, Mitsui & Co. Ltd, adopted TradeCard’s Focus on compliance dates transaction management platform for streamlining logistics • Direct and indirect payment costs too high some of its business in 2002 and has since been rewarded with significant cost In particular, the logistics unit within the • Too much staff time spent savings and improved efficiency in all processing purchase orders parent company accumulates information, and payments processes involved in the trade, know-how and personnel to meet client encouraging the company to extend needs. Its mission is to assist the operating • Lack of visibility into TradeCard to other parts of their trading groups in developing the most trade transactions operations. sophisticated procedures for supply chain management and other value-added Mitsui owns a total of over 850 logistics solutions and to use the companies and subsidiaries in five company’s know-how as a basis for operating groups: Metal Products & developing new business opportunities. Minerals; Machinery, Electronics & Mitsui & Co.’s technological expertise in Information; Chemical; Energy; and trading and business management is Consumer Products & Services. available not only to its own group companies, but also to its customers. Mitsui also has equity investments in such diverse activities as oil and gas "We have credit, finance and logistics, all exploration, broadcasting satellites and sorts of know-how and skills in this TV programmes. The company is active company and we intend to make all these in mergers, acquisitions and joint functions into one integrated service ventures, and provides expertise in platform, a shared service centre, investment, finance and business available to both internal users and our development to its customers. clients," says Shinya Imai, general manager of the trade function business Currently, Mitsui is introducing a department. TradeCard Optimizes management concept called the Value Financial Processes in Creation Hub, in order to enhance the In the first half of 2004 Mitsui is planning Your Global Supply Chain group’s leading edge capabilities in to introduce an ERP (Enterprise information technology, financial Resources Planning) system and, in technology, and logistics technology, and preparation for the new system, the make them available to the entire company is rationalizing the business company. processes within the company and also looking for suitable tools and services to support this goal. www.tradecard.com "Using TradeCard..,the overall cost saving compared with our Letter of Credit operation is about 50%." CASE STUDY 2003 Why Mitsui & Co. Solutions On the import side, there are frequent • Adopt TradeCard after chose TradeCard amendments of L/Cs, a serious issue, evaluating alternative systems which slows the payments cycle. Our in the market as the most advanced and most proven In early 2002, Mitsui began looking for a systems have been in urgent need of service available way of taking its purchase orders and rationalization. We also decided to trial payments transactions online. Says Imai, TradeCard for the export of synthetic • Use TradeCard for both "We needed a web-based solution that resin to Korea." transactions with payment would allow us to electronically exchange assurance and in open account trading documents both within our company and with our trade partners, thus reducing the amount of paper involved in the process." Implementation of • Employ TradeCard in the textiles and synthetic resin TradeCard is simple export group first and roll out Mr Imai evaluated the alternative systems to other divisions in the available on the market, and made his near future Implementation of TradeCard was very selection: "TradeCard is the most simple. In the synthetic resin trade, it • Rapidly implement TradeCard advanced and most tested service took two months from planning to within a timeframe of six available," he said. implementation, up to May 2002, whereas weeks to two months for the textile import trade, it took six • Plan to integrate TradeCard weeks and by September 2002 the system with Mitsui’s future ERP system was up and running. • TradeCard’s online platform Cost savings were immediate, reports contributes to Mitsui’s Imai, "On the import side, we had two Integrated Logistics program US$50,000 shipments a week from Hong Kong to Japan and the direct cost of the TradeCard payment assured transaction per consignment was $150 on average. Using TradeCard, with its automatic online compliance engine as an alternative to L/Cs, reduced the direct costs by 50%, and the indirect costs, mainly labor, by 51%. The overall cost saving compared with L/C operation was about 50%. Shinya Imai, general manager, trade function business department, For our export business, the direct cost Mitsui & Co. reductions are about 30% and the labor costs are reduced by 68%, so the overall Mitsui decided that the first trial of cost reduction is also about 50%. We also TradeCard would be in the textiles group. use TradeCard for open account trading TradeCard Optimizes Said Imai: "In the textiles and apparel and it is successful in this application as Financial Processes in trading business, we handle frequent well," said Imai. Your Global Supply Chain shipments, which are paid for with letters of credit (L/Cs), and these generate floods of paper documents that have to be distributed manually within our offices and those of our suppliers and customers. www.tradecard.com "Using TradeCard's transaction management platform has allowed us to... achieve an unprecedented level CASE STUDY 2003 of speed, accuracy and full transparency for our trade processes." Results • Cost of purchase transactions Benefits of the Credit management has improved too, down 50% system are impressive says Imai: "TradeCard’s electronic documents, financial system and the • Increased customer satisfaction, due to greater process efficiencies guaranteed payments make credit more "TradeCard is very good at handling manageable." • TradeCard’s purchase trade payments for very frequent small- order-to-payment cycle or medium-sized consignments," says eliminates most paper Capital cost was not a problem, notes Imai, adding: "We wish to expand the documents moving Mitsui Imai: "Not only did we achieve all of this use of TradeCard as much as possible, closer to Just-in-Time processing with a very small upfront investment, but but this depends on the type of business. the implementation time and the interval • Through TradeCard, Mitsui For instance, for us TradeCard is most after which we saw the first results were has achieved an unprecedented successful at supporting frequent level of speed, accuracy and much shorter than expected." shipments in the value of about full transparency for their US$100,000." trade processes Mitsui intends to expand the use of TradeCard, says Imai: "We have • Online payments are much "Using TradeCard’s transaction thoroughly tested TradeCard and obtained more predictable than L/Cs management platform has allowed us to good results so far. In future, we will significantly cut down the amount of • Predictable payment dates encourage our trade partners to join the paper that is shuffled, and to achieve an make trade finance easier TradeCard system and bring unprecedented level of speed, accuracy to manage rationalization to both buyers and sellers." and full transparency for our trade • TradeCard brings the same processes," says Imai. process efficiencies to open Expanding the account trading as to Imai continues: "Just as JIT (Just-In- L/C-type transactions Time) systems reduce stock in the use of TradeCard manufacturing business, the online • Time spent processing purchase electronic transactions reduce the paper- orders and payments has been Imai is already talking to the managers of reduced significantly based documents on our hands, moving us other divisions, to persuade them of the closer to Just-In-Time processing, and we benefits of using TradeCard for the • All trade partners can have expend less time and labor on purchase-to-payment cycle. Each division instant visibility into the administering trade transactions. This has different commodities and trades progress of online transactions system will result in improvements for our differently, so Imai plans to talk to the • Low upfront costs of online clients in Japan and overseas." managers of each division in order to get purchase-to-payments system the best benefit out of the system. Another promising application for the online trade Increased platform is in the footwear trade. • Improved credit management, due to guaranteed payments customer satisfaction Back-end integration of TradeCard can Customer satisfaction also benefits, says improve efficiency further, says Imai: "At TradeCard Optimizes Imai: "The process efficiency contributed the moment, TradeCard is not connected Financial Processes in to Mitsui’s own computer systems, but we Your Global Supply Chain by TradeCard has also resulted in greater customer satisfaction, and we are are planning to integrate TradeCard with committed to extending this to other our divisional systems. In the longer term, industries in which Mitsui is active." we plan to link TradeCard to the new ERP system that we are planning." www.tradecard.com 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 www.tradecard.com. For further information please contact one of TradeCard Optimizes our offices below: 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 Email: firstname.lastname@example.org www.tradecard.com
"Mitsui _ Co"