Entries for July 2013

The Federal Energy Regulatory Commission (FERC) made headlines after it issued a record fine of $453M against Barclays PLC and several of its power traders. FERC stated that the bank manipulated energy prices in California and other western markets between November 2006 and December 2008. The agency is also working towards a similar settlement with J.P. Morgan Chase.

When I read the news, the dollar amount of the fine wasn’t what resonated. The fact that it was issued for manipulation that began over 7 years ago did. FERC doesn’t have to abide by a statute of limitations, and other agencies often use revisions to extend any that do exist. Energy traders are exposed to heightening levels of regulatory risk with every passing day, and FERC may be the least of their concerns.

The introductions of Dodd-Frank, EMIR, MIFID, and REMIT, among others, have elevated complexity in U.S. and E.U. power and gas markets. Rules within each regulation continue to evolve, making it extremely difficult to interpret them. Traders cannot keep up. The task of capturing necessary information and knowing where to send it becomes more convoluted as more parties become involved in each transaction and the number of transactions processed increase. The only effective means to ensure compliance is to partner with an energy trading and risk management (ETRM) provider to implement a regulatory solution.

Triple Point Technology’s ETRM, Commodity XL, has dedicated modules to meet the stringent requirements of Dodd-Frank and regulations in the E.U. Triple Point also employs dedicated experts to remain vigilant in proactively developing and adapting its enterprise software to meet the demands of regulators so your company can focus on making profitable trading decisions. Contact us at info@tpt.com to learn more.

Recently, Supply Chain Digest’s (SCD) Editor-in-Chief, Dan Gilmore, shared insights from a joint SCD-Gartner study focused on identifying the top priorities of supply chain professionals.  In its sixth year, this study, led by Gartner analysts Dwight Klappich and Chad Eschinger, showed a shift in priorities over the last few years.  As the economy ever-so-slowly recovers, it’s becoming apparent that companies are striving to return to “pre-recession volumes and activity without adding back all the supply chain head count and costs”—a trend arguably supported by recent employment numbers.

While the last few years have predictably seen cost-cutting measures holding the top spots on the survey, for 2013, companies have set their sights on using the supply chain to drive business growth as the primary goal, with customer service following a close second and reducing costs at number three.  This is further recognition of the supply chain’s journey to the board room table as a key contributor, and now driver, of overall business strategy and development.

So what’s holding companies back from achieving these goals? 

As many might expect, forecast accuracy/demand variability came out on top, followed by an inability to synchronize end-to-end processes, and a lack of enterprise-wide supply chain visibility.  Interestingly, these problematic issues are mainstays that supply chain solution providers address with advanced supply chain planning solutions.  You’d expect most companies to have solved these issues by leveraging such technologies by now.  Yet the study identifies a discrepancy between the desire of companies for supply chain agility, and the flexibility of the supply chain software they currently have. This "agility gap" is large, with some 85% of respondents saying that flexible supply chain applications are critical, but only 42% saying their current software provides that flexibility.

Curious indeed.  Triple Point’s Supply Chain Optimization (SCO) solution has been helping companies with these issues for over 25 years.  We’ve worked with companies throughout the process industry to achieve flexibility to respond to unplanned events, obtain visibility to see the entire supply chain at a glance, and improve accuracy in forecasting, scheduling, and distribution. 

So, what’s happening behind the scenes?  Are these companies not recognizing this disconnect?  Are they establishing their supply chain priorities without a tangible plan in place to achieve them?

This notable discrepancy makes us agree with Dan’s concluding remarks that “companies should probably raise the flexibility to make needed changes higher up in the selection criteria weighting versus functionality differences that dominate selection processes today.”  Well said, Dan.  Stay tuned.

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.