Financially Sound

Cutter & Buck has evolved its supply chain into a "best run" operation that synchronizes the flow of products and cash. In September of 2005, Cutter & Buck kicked off an initiative to automate transaction processes from purchase order (PO) to payment and chargeback. The apparel maker partnered with TradeCard, the provider of a hosted sourcing collaboration platform offering online financial services, to remove paper from the transaction processes to cut costs and improve visibility in the supply chain.

 

"We chose TradeCard because it is extremely user friendly, quick to implement and it saved us on our settlement expenses as well as streamlined our purchase order delivery," says Jon Runkel, vice president, global sourcing and distribution, Cutter & Buck.

 

THE BENEFITS
Today, Cutter & Buck conducts 80 percent of its sourcing on the TradeCard platform, including 33 vendors and four agents in Asia, India and Peru. It has recently transitioned all orders for vendors, including samples, into TradeCard. Here, Runkel comments on a sampling of the benefits realized so far:

Eliminated the e-mail/fax/mail of the PO, receiving the signed PO, and filing the PO. "This has been a huge win. We have saved many hours and trees by having the PO delivered via TradeCard. We no longer have to FedEx signed copies nor file paperwork."

Enhanced cash management forecasting. "We are able to more accurately forecast short-term cash requirements using TradeCard's forecasted settlements report. This is certainly an improvement and has helped us manage our cash more effectively," says Runkel.

Obtain L/C fee reduction. "This is by far the most significant impact as our annual savings are considerable. We also have saved time within the accounting department due to less administration associated with TradeCard versus L/C financing."

L/C processing elimination (manual issuance, amendments and approvals). "We have enjoyed time savings by not administering letters of credit. It is difficult to quantify the number of hours, but it is in the range of five to ten hours per month."

Implementation of a discrepancy resolution and payment approval process. "The implementation of TradeCard has caused us to shift responsibilities in the organization. Essentially, we now have our assistant controller seeking approval for any discrepancies. Over time, the vendors have become increasingly familiar with TradeCard, which has reduced the number of discrepancies. The buyers love it, because they no longer need to approve the vendor invoices (unless there are discrepancies)."

Supplier visibility to the payment. "This has reduced the number of inquiries we get from vendors regarding payment from up to five per day to almost zero. This has been very positive from a time savings standpoint in accounts payable."

 

NEXT STEPS
Cutter & Buck is now implementing TradeCard's Work in Process (WIP) and Supplier Enablement solutions to extend visibility into production, make better decisions for postponement and just-in-time sourcing strategies, and automate the creation of UCC 128 labels and ASNs. The company also expects to go live soon with a project to automate agents commission invoicing. "Our future plans are still being written," says Runkel. "The more we benefit from technology, the more ideas we have for new technology." CG