Entries for February 2013

I would be hard-pressed to cite a manufacturing process that didn’t inevitably lead to the co-manufacture of some form of waste. Throughout history, successful companies have developed creative ways of breathing new life into those by-products. When Henry Ford, of Ford Motor Company, began his assembly line production of Model T’s; he discovered that scrap wood pieces could be used to manufacture charcoal. That discovery not only repurposed the wood but allowed Ford to earn additional profit and ultimately spinoff the business. Today, Kingsford Products Company remains the leading U.S. charcoal manufacturer.

 In the same vein, Natural Gas Liquids (NGLs) have proven to be valuable by-products of crude oil and natural gas. The raw mix (Y-Grade) gas that remains as part of the refining process does not have a price index and is considered waste, but the individual hydrocarbons comprising the mix are profitable. The process of fractionation yields ethane, propane, isobutane, butane, and pentane which are priced and actively traded throughout the world. They are considered key components of chemical and plastic manufacture, and the heavier hydrocarbons are used as fuel.

 The boom of shale oil and gas production in the United States has left the country with a surplus of NGLs. Asked a decade ago; no analyst would have surmised that the U.S. would be poised for becoming the world’s largest exporter of any fossil fuel, but an increase in global demand has set the stage for it to happen. The energy market is always changing and remains highly unpredictable.

 The demand for NGLs is growing and now is the time to develop a strategy to profit from market movements. Companies seeking to enter the NGLs arena need to be aware of the many factors affecting the process of isolating the individual components of Y-Grade, potential yields, and ultimately bringing the end products to market.

 Triple Point Technology’s solution offers a comprehensive Energy Trading and Risk Management (ETRM) system with the unique capability of providing physical supply chain management, risk management, and optimization of energy trading strategies on a single platform. Commodity XL provides companies with the tools necessary to interpret complex data that is paramount to understanding the complicated relationships that exist in today’s NGLs market. Click here to learn more about Triple Point’s software.

As you read this, Triple Point headquarters is emerging from the second of two headline-grabbing storms to wreak havoc on the northeastern United States.  Winter storm Nemo dumped 40 inches of snow on New England, cutting power to 650,000 customers across eight states and paralyzing air, rail and road networks.  And while recovery should not take too long this time, that was not the case with Hurricane Sandy last October whose 110 mph winds caused $74 billion in damages in a swath from the Caribbean to Cape Cod. 

If your job is managing the distribution of materials across a supply chain, storms like these mean big headaches.

When transportation lines are cut, product does not move.  Customer orders are delayed or canceled.  Raw materials are not delivered.  Production assets are offline.  You must respond with supply chain planning and scheduling revisions that somehow accommodate your customers while avoiding impact to margins.

The complexity of revising integrated supply chain production and distribution schedules cannot be overstated.  Maintaining balance during plan revisions is virtually impossible without accurate, timely data from across your enterprise.  Creating and evaluating feasible recovery scenarios is equally impossible if attempted using inadequate planning technologies.  Simply put, you need supply chain software that gives you clearly-defined options and lets you make planning decisions that help you quickly get your supply chain back on track.

When 100-year storms start occurring every six months, supply chain professionals trade their spreadsheets for advanced supply chain planning solutions that deliver enterprise-wide visibility and enable optimal plan revision.  Triple Point’s Supply Chain Optimization solution lets you maintain optimized plans and schedules in the face of such disruptions.  Learn more.

Shipping has been an important part of history dating back to the Egyptian coastal sailships of 3200 B.C., predominantly in areas where prosperity has depended primarily on international and interregional trade.  The maritime shipping industry is responsible for moving over approximately 90% of the world’s traded goods.  Entire countries down to your local mom-and-pop stores rely heavily on the success of this industry.

With that said, the shipping industry is currently battling some very strong headwinds due to soaring bunker costs and sinking freight prices, among other things.

Today, we have seen bunker costs represent more than 50% of total costs. Not only have these costs reached record highs - they continually become extremely volatile due to widespread fluctuations in crude oil prices.  Companies must find a way to successfully manage bunker volatility, or they will not fare well in today’s stormy business environment.

A recent article by The Boston Consulting Group (BCG), “Fueling a Competitive Advantage: An End-to-End Approach to Cutting Bunker Costs,” proposes a holistic approach to managing bunker costs.  The article, aside from addressing a number of concerns around analytical and organizational complexities, details an important key to success--using real-time decision support tools.

Since all fuel price increases can't be passed through to customers, the shipping company that best manages price risk will gain competitive advantage. To succeed, shipping companies need enterprise-wide information transparency and fast access to actionable data.

Triple Point’s Softmar Chartering and VesselOps™ is a next generation shipping solution that delivers a complete picture of enterprise position and exposure, and analyzes any combination of cargoes, vessels, load, and discharge operations. It enables the commercial maritime community to protect profits, make more informed and proactive decisions, and streamline day-to-day operations by providing advanced, actionable business intelligence.  Learn more

Events

Procemin 10th International Mineral Processing Conference

October 15-18, 2013 | Chile

XXV Brazilian National Meeting of Mineral Treatment and Extractive Metallurgy (ENTMME)

October 20-24, 2013 | Brazil



Opinions expressed on this blog are those of its individual contributors, and do not necessarily reflect the views of Triple Point Technology, Inc.