Automation Gives Global Trade A Boost Of Speed
In global trade, the international chain of supply was historically slowed due to mountainous paperwork, time zone obstacles and communication barriers. Manual processes and paper often hampered the buying and selling of manufactured goods and raw materials across the world, regardless of how compatible the buyers and sellers might be.
Today, technology and services are available to speed up processes and break down barriers. Automated systems that connect buyers, suppliers and service providers have brought several changes to industries where global sourcing is prevalent..
Speed
The automation of supply chain networks has changed the way manufacturing and sourcing is being done. Process and workflow automation between parties allows for collaboration, speed and accuracy. This eliminates headaches affiliated with placing orders, sending requests for information and other forms of communication that involve manual paper based processes such as phone, fax, email, mail or overnight shipping. Transaction settlement and trade financing is one area being impacted. Letters of credit, an antiquated financing instrument, is a guarantee from a bank that a company will be able to pay its manufacturer or supplier for its goods when they are ready. This was historically a necessary and time-consuming tool in overseas trade to protect parties and cover risk in commercial deals. Electronic environments that connect buyers, suppliers and financial institutions enable open account transactions, a faster, cheaper and more efficient alternative to the letter of credit. Through a web-based supply chain collaboration platform, financial institutions can be connected to buyers and suppliers, enabling the financial institution to affirm that both parties have fulfilled their obligation to the transaction, and trigger the release of funds. This model allows trade financing, or supply chain financing, to occur at various steps across the transaction. . Trade financing, in the forms of pre- and post- export financing and invoice discounts, can be delivered faster and more efficiently in this environment. More importantly, capital is made available to supply chain parties in less time than traditional forms of financing.
Going Green
In addition to eliminating slow and clumsy tools such as letters of credit, one of the most significant features to automating transaction documents and processes on a supply chain collaboration platform is the elimination of paper from thousands of purchase orders, invoices, amendments, ASNs and other trade documents. When information is created and stored in an electronic environment rather than a manual, paper format, the process is more environmentally friendly. Often, just a secure Internet connection is needed for exchanging purchase orders, invoices and agreements through a third-party platform.
As a growing number of companies attempt to go paperless, this method of doing business is becoming more widely accepted.
Some automated platforms also use an Internet portal to track inventory and production, replacing e-mail or electronic faxes that hinder visibility. Invoicing in triplicate has been replaced by electronic invoicing to reduce the volume of paper packing slips, and to ensure that all key parties to the transaction can view important data.
Author is a freelance copywriter. For more information about electronic invoicing, please visit http://www.tradecard.com.
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