February 13, 2013 | Jeff Burns
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.
February 06, 2013 | Peter Saridakis
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
January 25, 2013 | Jeff Burns
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.
January 14, 2013 | Michael Schwartz
The energy industry and its associated supply chains are fast-changing and very complex. Just a few years back, several companies built LNG import terminals to meet the energy needs of the U.S.
According to a NY Times article “the billion-dollar terminals were obsolete even before the concrete was dry as an unexpected drilling boom in new shale fields from Pennsylvania to Texas produced a glut of cheap domestic natural gas. Now, the same companies that had such high hopes for imports are proposing to salvage those white elephants by spending billions more to convert them into terminals to export some of the nation’s extra gas to Asia and Europe, where gas is roughly triple the American price.”
Currently there are 25 LNG-importing countries in Europe, Asia, South America, Central America, North America and the Middle East, up from 17 importing countries in 2007.
Cheniere’s Sabine Pass LNG Terminal in Louisiana was the first to receive approval to export LNG. According to Steven Chu, the U.S. Energy Secretary, "Our long term economic strength depends on safely and responsibly harnessing America's domestic energy resources while developing new and innovative clean energy technologies. This project reflects a broad, 'all of the above' approach that will put Americans to work producing the energy the world needs."
The open question is whether this a good investment, or is the market changing so rapidly that the investment in LNG export terminals will also be obsolete before the terminals are fully functional? The same NY Times article mentions, “countries around the world are importing drilling expertise and equipment in hopes of cracking open their own gas reserves through the same techniques of hydraulic fracturing and horizontal drilling that unleashed shale gas production in the United States. Demand for American gas — which would be shipped in a condensed form called liquefied natural gas, or LNG — could easily taper off by the time the new export terminals really get going, some energy specialists say.”
Whether it’s Crude, LNG, Natural Gas, Power, Biofuels or other energy commodities, the common denominator is volatility and complex supply chains. The combination of volatility and complexity is the reason Triple Point’s ETRM (energy trading and risk management) software has been in great demand over the last five years. Energy companies that have not invested in sophisticated ETRM software have put their businesses at a competitive disadvantage.
January 11, 2013 | Peter Cooperman
The gas in our cars, cleaning chemicals in our cabinets, and reusable cups from which we drink our coffee or tea all have ties to the crude oil industry. As feedstock for a wide array of goods, crude oil and crude products are among the most widely traded commodities in the world. The market attracts diverse participants; however, many of the challenges faced are universal.
CommodityPoint’s latest white paper, “Global Oil Markets- Increasing Uncertainty and Risk,” highlights several of these challenges and concludes that now is the time to invest in an advanced energy trading and risk management (ETRM) software solution to combat rising volatility.
This white paper discusses how the political unrest affecting many of the world’s crude-producing regions is having a direct effect on oil supply. Tensions in the Middle East threaten to shut down the busiest port in the region, which could interrupt the delivery of 17MMbbl/day. Should this situation come to fruition, market volatility will be further exacerbated, and those companies that are not properly equipped to manage it will suffer.
While the threat of a continued reduction in crude supply looms, crude demand continues to grow each year. CommodityPoint’s paper suggests the only way to effectively navigate the market fluctuations caused by scenarios such as this is to implement a sophisticated trading solution that can not only capture, manage, and value trades and hedge positions; but that can also model the entirety of the physical operations of market positions. Read the paper now and find out why it’s imperative to have an ETRM solution such as Commodity XL™ that provides an integrated, real-time view of physical and financial exposure alongside operational, credit and regulatory risk exposure.
Download the CommodityPoint white paper
January 03, 2013 | Lauren LaFronz
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
October 24, 2012 | Ann Surratt
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:
View the webinar on demand here.
- 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
September 03, 2012 | Kate Lothian
In less than a decade the price of iron ore has risen tenfold, with China’s economic boom leading the increase in global demand. However, last week iron ore prices hit their lowest level since November 2009; the commodity crashed 4.6%, closing at $94 from a 2012 peak of $149.
With several recent reports of profit slumps, the world’s largest mining companies are starting to struggle in this environment. According to Platts, most market participants remain bearish in their expectations for the iron ore market, with predictions that prices might extend their losing streak until next week and beyond.
Organisations that want to successfully weather this storm will need to transform their supply chains to ensure maximum efficiency throughout their operations. Only by reducing risk to penalties, demurrage and transportation costs and stockpiling where necessary will companies survive. This level of supply chain management can only be achieved successfully with sophisticated mining software solutions like QMASTOR Pit to Port.
August 15, 2012 | Michael Schwartz
The US Midwest is suffering its worst drought in decades. The US Department of Agriculture (USDA) recently dropped its corn yield forecast from 166 bushels per acre, made earlier this year, to 123 bushels per acre. The expected shortage of corn is causing prices to surge.
Corn has multiple uses – it is used as fuel (ethanol), animal feed, or directly as food. Roughly 40% of US corn production goes towards ethanol, 36% towards feed, and the rest towards food.
There are several concerned groups that believe the Environmental Protection Agency (EPA) should relax the ethanol requirement under the Federal Renewable Fuels Standard act, which states that there must be 13.2 billion gallons of corn starch-derived biofuel produced in 2012. The UN has called for an immediate suspension of the US-mandated use of ethanol. In addition, a coalition of beef, pork, and poultry producer associations have called for a cessation of the ethanol requirement.
Whether the EPA will ease the ethanol requirement is not the most important question – the real question is how do we plan to deal with rising agricultural commodity prices and volatility in the long term? The corn shortage might be a one season event, but volatile agriculture and softs prices are here for the long term.
We have an expanding world population that is forecasted to grow from 7 billion to 10 billion in the next 35+ years. As part of this population growth, there is a rapidly growing middle class across China, India, and other parts of Asia. China and India alone are doubling their per capita incomes at approximately 10 times the rate and 200 times the scale achieved by Britain’s Industrial Revolution in the 1800s. This growing middle class wants to eat higher on the protein scale (more meat which needs more animal feed). And it appears we’ve hit a pattern of severe weather events including droughts, floods, extreme temperatures, etc. These long term trends will drive acute commodity price swings – which is, as we’ve said before, the new normal.
All companies in the food supply chain, from upstream to downstream, should be putting plans and commodity risk management systems in place to handle price volatility.
Posted in: Commodity Management Strategies and Tools
, Thoughts on Commodity Management
, Regulation and Standards
| Tagged Commodity Management
, Food and Beverage
, commodity risk management
, corn risk management
, softs risk management
, agriculture trading software
, biofuel sotware
, ethanol software
July 30, 2012 | Neil Ayaz
In just a few years, mobile technology has reshaped the landscape for businesses everywhere. The growing presence of smartphones and tablet devices in the workplace has forced companies to take a sharper look at the benefits mobile applications offer.
Previously, it was impossible for certain jobs to be performed away from a workstation. The mobile revolution has changed those rules. With the arrival of powerful mobile devices and sophisticated mobile applications, it is now possible for employees to perform tasks, previously restricted to their desktops, from any location at any time. And therein lies the value that mobile technology can offer: the ability to untether employees from their workspaces while increasing productivity. For this reason alone, companies are exploring ways to adopt new mobile solutions into their infrastructure in order to maintain an edge over the competition.
Software vendors across all industries are looking for ways to establish themselves in the mobile frontier. The challenge facing these vendors is to find a way to deliver solutions that make sense in a mobile world. The first temptation is to simply repackage existing desktop software and offer it on mobile platforms. This tactic fails, however, to recognize that a mobile solution cannot comfortably accommodate the same movements and actions that might be found in standard computer software. Vendors must accept that the answer lies in preserving functionality while promoting simplicity.
This fundamental concept has helped distinguish the visionaries in mobile technology from the rest of the competition. As software industries saturated with players hum with promises of new mobile initiatives, only a handful of companies actually deliver on such promises. This is especially true of the Commodity Management world. For almost two decades, Triple Point Technology has outpaced its competitors in this industry by producing unmatched Energy and Commodity Trading and Risk Management (CTRM) solutions. When it comes to mobility, Triple Point is the only Commodity Management company today that has managed to bring mobile CTRM products to market. In just under a year, Triple Point has already managed to produce four distinct mobile applications capable of transforming the way companies manage commodities by empowering staff to perform key operations anytime, anywhere.
To read more about Triple Point’s mobile commodity management solutions, click here.
Posted in: Commodity Management Strategies and Tools
| Tagged Commodity Management
, Commodity XL
, Voyage Estimator
, Voyage Estimating
, Inventory Navigator
, Management Dashboard
, System Console