Triple Point received the prestigious “ETRM Software House of the Year” from Energy Risk magazine this week at an awards dinner held this past week at the Energy Risk USA conference in Houston. Triple Point was selected as the winner because of its revenue, profit, and customer growth in 2012 along with its unique ability to deliver innovative, next generation commodity trading and risk management (CTRM) solutions including mobile applications.

In 2012 Triple Point grew its revenue by 30% and its profit by 40%, and added 28 new energy companies to its base of 400+ customers including Spanish power generator Iberdrola Generation, Korean-based oil refiner and marketer SK Energy, Brazil energy giant Petrobras, and China National Offshore Oil Corporation (CNOOC) Limited.

Energy Risk also named Triple Point “Software House of the Year – Asia” in 2012. In addition, Triple Point has been named a Leader by two top analyst firms – by IDC in its 2013 IDC Marketscape: Energy Trading and Risk Management (ETRM) Vendor Assessment, and for four straight years by Gartner in its Magic Quadrant for ETRM Platforms.

When accepting the award on behalf of Triple Point, Sr. Vice President and Chief Marketing Officer Michael Schwartz emphasized that what makes Triple Point successful is the people behind the software, who are committed to delivering unsurpassed value.

We recently returned from sponsoring Logichem Europe where over 250 supply chain planning professionals discussed top industry trends.  A topic of particular interest this year was supply chain segmentation. 

What is supply chain segmentation?  It’s a way to have your physical supply chain support multiple, virtual supply chains—each focusing on a different segment of products or markets with unique production costs, distribution costs, and customer requirements. 

For example, companies can use segmentation to have their low margin products follow the most cost-effective paths through the supply chain, isolate unpredictable customers into separately forecasted groups to improve overall accuracy, or give premium service only to their highly profitable customers. 

That’s good news for an industry facing extreme volatility and price pressures.

If you were to group your company’s products into different categories having similar expected customer service levels, lead times, and packaging varieties, you’d find that each group places different demands on your supply chain and represents different levels of profitability to your company.  So why not treat each group differently with product and service offerings tailored to each group’s unique needs? 

Supply chain segmentation allows you to do this. 

Mature segmentation strategies extend across several areas of your supply chain, involving differentiated customer replenishment programs, supplier replenishment programs, inventory policies, demand policies, allocation and order promising, and Sales & Operations Planning strategies.  With segmentation, you can introduce more stability in your production, leverage more economical distribution, and minimize the impact of volatility.

It’s easy to see why segmentation was a main point of focus at the Logichem conference.  At Triple Point, we understand the value of segmentation to our customers, which is why our Supply Chain Optimization solution supports such strategies.  Contact us to find out how you can implement a segmentation strategy for your company and begin reducing the impact of today’s volatility.

Whatever you do, don’t collaborate with your supply chain planning peers.  No need to share information about inventory levels, customer orders or transportation woes.  And definitely don’t try to predict sales out into the future, because there’s just no evidence that it’s a worthwhile endeavor.

OK, I didn’t think you’d agree with that.  If nothing else, the previous paragraph was an unexpected swim against the current of overwhelming support for doing the exact opposite.  Of course you should be collaborating.  Of course you need to share information upon which critical supply chain planning decisions are made.  Of course you should be doing everything possible to plan out as far as it is practical with as much accuracy as possible.  And of course you should be leveraging advanced planning and optimization technologies to help create highly profitable operating plans.  Why?  Because it’s your best defense against the supply chain planning risk and unpredictability that is here to stay.

A recent survey from Deloitte shows that global executives are increasingly concerned about the growing risks to their supply chains and costly negative impacts, such as margin erosion and inability to keep up with demand.  Of the 600 executives surveyed, most converged on the need for a strong risk management strategy to mitigate the impact of ever-present disruptions.  Yet, an alarming 45% of the surveyed executives said their supply chain risk management programs are only somewhat effective or not effective at all.  And the number one reason why their supply chain risk management programs are not successful: “lack of acceptable cross-functional collaboration.”

Despite strong evidence from all corners of supply chain outlining the benefits of collaboration, including increased visibility, flexibility and control, many companies continue to struggle to achieve an effective level of collaboration across the enterprise.  They continue to operate in an array of information silos, preventing the creation of a true picture of the current state and future outcome of the current supply chain operating plan.  Look deeper into the Deloitte survey results and you’ll find that “current tools and limited adoption of advanced technologies are often constraining companies’ ability to understand and mitigate today’s evolving supply chain risks. Although many of the surveyed executives report using a wide range of tools to manage risk, only 36% use predictive modeling and less than one-third (29%) use risk sensing data, worst case scenario modeling, or business simulation—tools that can help drive more proactive management of supply chain risk.”

With many advancements in supply chain software over the last decade, it is surprising that companies continue to struggle in these areas.  Triple Point’s Supply Chain Optimization solution has been helping process manufacturers achieve enterprise-wide collaboration enabling tactical and strategic supply chain planning for over twenty years.

Learn more.

Triple Point officially opened its Latin American headquarters in Rio de Janeiro this week with a special reception hosting Vale, NORSUL, and other leading companies that rely on Triple Point’s Commodity Management solutions.

The new office enables Triple Point to service its rapidly growing customer base throughout the region. Latin America has always been an important market to Triple Point, with Petrobras becoming a customer back in 2000. 

The Latin American economy is very commodity-driven because of rich natural resources including coffee, sugar, oil, and iron ore. The Brazilian economy in particular is the largest in the region, and the country is also one of the world’s largest commodity exporters.

In recent years, the commodity markets have become very volatile, with companies struggling to mitigate exposure to market swings. Because of these conditions, effective risk management is more important than ever, and Triple Point has seen interest in its commodity trading and risk management  (CTRM) solutions increase significantly throughout Latin America.  

The energy, mining, agriculture, and consumer products (CP) industries within Latin America represent big opportunities for Triple Point because Triple Point’s solutions provide extensive functionality that addresses the unique challenges of each industry. Learn more.

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

It should come as no surprise that the commodity industry is predicting a continuation of 2012’s market volatility and slow economic growth for the balance of 2013.  Regional economies that were thought to be in recovery are now slipping back into recession. Major commodity price fluctuations are expected to persist, and global demand for oil is expected to rise only 0.8% to 90.4 million barrels per day this year.  Volatility will continue to be influenced by the euro-zone debt crisis, fluctuating demand in Asia, and continued political unrest in the Middle East. 

Commodity-consuming companies are challenged to respond to this volatility with supply chain strategies that drive top line performance while protecting the bottom line.  A strong pricing risk management strategy is essential to remain competitive.  However, it is not the only strategy that must be considered. The profitability advantages gained from insightful commodity purchasing and trading decisions can be obliterated by a poor volume management strategy that quickly erodes margins by causing costly mistakes such as expedited shipments, lost orders, missed sales opportunities, poor inventory staging, stock-outs and overruns.   

Global volatility only adds to the planning challenge. The importance of maintaining an accurate volume demand forecast, production schedule, distribution schedule, and inventory management strategy should not be lost on anyone.  

Triple Point’s Supply Chain Optimization (SCO) solutions help you address your risk mitigation strategy from a volume point of view.  Triple Point SCO integrates your data silos into a single planning database, allowing everyone to collaborate on one set of numbers to arrive at a highly accurate volume demand plan.  This plan then drives more efficient downstream production planning and scheduling decisions which translates to higher utilization, higher service levels and reduced inventory costs.  Learn more.

I’m excited to share the news that Triple Point has acquired WAM Systems, the premier provider of supply chain planning and optimization solutions for the process industry.

WAM has an impressive presence in the chemical industry, and its solutions are also beginning to see adoption within other process industry segments including oil and gas, pharmaceuticals, CPG, and food and beverage. WAM’s worldwide customer base includes leading companies such as PTT Global Chemical, Saudi Aramco, Celanese Chemicals, LyondellBasell, Honam Petrochemical, Indian Oil, PetroChina, Sasol Oil, and Solvay.

Like Triple Point’s previous acquisitions, the WAM acquisition furthers Triple Point’s commitment to having the most comprehensive, advanced solutions for handling all the financial and physical aspects of Commodity Management. Softmar was acquired for its superior chartering and vessel operations solution, and QMASTOR for its exceptional coal and mineral supply chain solutions. Acquiring WAM – the premier provider of process industry supply chain solutions – made perfect sense as a next step.

The process industry is facing many challenges including extreme raw material price volatility and increasingly complex global supply chains. This business environment mandates that process manufacturing companies leverage advanced technology solutions to ensure efficient and profitable operations. With the acquisition of WAM, Triple Point now offers the only Commodity Management solution that optimizes all the physical and financial supply chain complexities that process manufacturing companies deal with on a daily basis.

Read the press release

Uncertainty looms large in the European Gas and Power markets. What could cause the next big shock? Are you confident you are prepared for the next crisis? Policy developments and structural changes, such as the Electricity Market Reform (EMR) initiative in the UK, may drive extreme price volatility and uncertainty.

Triple Point recently hosted a webinar on How to Survive and Thrive in Volatile European Gas and Power Markets.  One of Baringa's European Energy Market experts, Nick Tallantyre, shared the key issues driving volatility in the European Gas and Power Markets –– and how to protect against them. Triple Point's Mark Earthey provided an in-depth overview of Triple Point's European Gas and Power Solution.  

It was a very interesting event full of valuable ideas on how to gain clarity in today’s uncertain world. Attendees learned:

• Key market implications arising from the structural and policy changes to the energy markets e.g. the Electricity Market Reform (EMR) programme in the UK
• What European market participants must do to prepare for growing global market connectivity
• Proven strategies to protect against market volatility
• How to optimize portfolios and improve trading operations
• How Commodity XL provides a real-time view of exposure, manages enterprise risk, and handles scheduling — all on an integrated platform

View the webinar on demand here.

According to McKinsey, Asia’s global middle class is likely to grow by three billion people over the next 20 years, and China and India are doubling per capita incomes by approximately 10 times the rate and 200 times the scale achieved by England’s Industrial Revolution in the 1800s.

This massive middle class expansion has fueled demand for commodities such as oil, coal, and wheat. More and more Commodity Management companies dealing in the Asia Pacific (APAC) region are realizing that in order to ensure price volatility doesn’t diminish profitability, they need advanced technology solutions such as Triple Point’s Commodity XL™ to optimize supply chains, improve decision-making, and minimize risk.
 
In 2011 Triple Point experienced record growth in APAC, with year-over-year revenue for the region increasing 75%. APAC customers include China National Offshore Oil Corporation (CNOOC) Limited, China’s largest producer of offshore crude oil and natural gas, as well as Bayin Resources, Dhanlaxmi Bank, Marubeni, Merit Chartering, and State Bank of India. Triple Point has also significantly expanded its staff in Asia Pacific, growing from 250 to over 400 employees, in order to ensure full support for the company’s growing customer base. In addition, Triple Point extended its Asia Pacific footprint with the acquisition of QMASTOR, the premier provider of mining software solutions, headquartered in Newcastle, Australia. 

Read more about Triple Point Commodity Management solutions.