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Improves collaboration with suppliers, lowers financing costs
NEW YORK, January 18, 2005 - TradeCard Inc., the leading provider of on-demand financial supply chain products, today announced that it is automating Rite Aid's (NYSE: RAD) trade transactions with approximately 200 international suppliers - from purchase order delivery through payment.
Rite Aid operates 3,400 drugstores and is ranked number 128 on the Fortune 500. Benefits for the company include streamlined procurement processes, the elimination of costly letters of credit, and improved supplier relations.
According to Jerry Cardinale, Rite Aid's senior vice president, category management, "We evaluated a number of solutions from banks and technology vendors, considering both their hard and soft benefits. Our team unanimously preferred TradeCard's web-based platform, primarily because of the visibility it provides. With minimal capital investment, Rite Aid and its suppliers can see the status of their transactions in real time. We expect our savings to be significant."
Approximately 85 of Rite Aid's international suppliers are now on board and able to transact. The remaining suppliers - most of which provide seasonal merchandise - will be connected over the coming weeks, when Rite Aid requires their goods.
Rite Aid And Suppliers Collaborate Online
Through its web-based platform, TradeCard automatically creates, routes, matches and stores trade documentation - such as electronic purchase orders, supplier invoices, freight receipts, and other information - to facilitate payment and financing. Each party has appropriate access to view and amend documents as a transaction progresses. Payment decisions are automated based on supplier compliance to purchase order terms and conditions. Discrepancies are systematically flagged and managed online.
Suppliers Access On-demand Financing, Eliminate Letters of Credit
Issued by banks, letters of credit guarantee payment to suppliers once pre-set conditions - such as a buyer's receipt of goods - are met. Many suppliers rely on letters of credit not only for this guarantee, but also to obtain export financing from financing providers.
"We have to open up a letter of credit for our international suppliers, so that they can go into production," explains Cardinale. "This requires preparing documents, resolving discrepancies, and going back and forth with banks and suppliers. It's a costly, labor-intensive process - both for our organization and our suppliers. All those inefficiencies trickle back into the cost of goods."
To remedy these issues, TradeCard and its financial partners provide integrated services over the platform, including settlement and automated early payment discount programs, as well as credit protection and pre- and post- export financing. Cardinale notes, "Our suppliers can access the financial services they need - with the click of a mouse. Meanwhile, we don't have to tie up our credit lines or take on more administrative work. TradeCard is permanently removing costs from our supply chain."
TradeCard Orchestrates Smooth Rollout to Suppliers
"During our evaluation, we discovered that TradeCard had consistently high supplier acceptance rates and satisfaction," says Cardinale. "We've now seen this firsthand, as our suppliers are quickly signing on. Between the visibility and more efficient financing, TradeCard is a win for them and for Rite Aid."
In Hong Kong, TradeCard recently led a seminar introducing the platform to Rite Aid's international supplier community. "TradeCard's resources on the ground, in the places where Rite Aid trades, are critical to expediting supplier adoption," adds Cardinale. "Localized support is available if a supplier needs it."
Kurt Cavano, TradeCard's chairman and chief executive officer, notes, "Rite Aid is one of the top drugstore chains. We're proud to have them as a customer - and excited about helping them and their suppliers to do business more cost-effectively."
About Rite Aid
Rite Aid Corporation is one of the nation's leading drugstore chains, combining its modern store base, strong brand name, modern distribution centers and superior pharmacy technology with a talented team of approximately 72,000 full and part-time associates serving customers in 28 states and the District of Columbia. Rite Aid currently operates approximately 3400 stores, reporting total sales of $16.5 billion at the end of its 2004 fiscal year.
About TradeCard
TradeCard, the leading provider of on-demand financial supply chain products, is revolutionizing global trade with a web-based platform that automates the financial processes in supply chains that have been plagued with decades-old paper-based solutions. By using TradeCard, buyers and sellers can manage their transactions with complete visibility to initial orders through final settlement. TradeCard's global network of partners provides additional automated services on the platform including supply chain financing, credit protection, money movement and inspection. In addition to process improvements, customers realize immediate cost savings, optimized cash flow, reduced reliance on credit lines and improved supply chain relationships. Headquartered in New York City, TradeCard Inc. has offices in San Francisco, Hong Kong, Brussels, Taipei, Seoul, Tokyo and Shenzhen. TradeCard is a registered trademark in the United States and elsewhere throughout the world. TradeCard is located online at www.tradecard.com.
