Performance Enhancement

A commodity trading firm wanted to maximize the efficiency of its gas trading operations. However, ensuring seamless coordination between Payment Date adjustments and nomination volumes, while avoiding disruptions like exposure drop-offs, presents a complex operational challenge. This necessitates innovative solutions to streamline processes, enhance accuracy, and align financial settlement with operational realities for sustained success in gas trading.

On Value Creed’s suggestion the company successfully implemented gas trading solution, integrating Physical and Financial Legs, to manage long-term gas supply contracts effectively in Endur. The solution addresses Payment Date dynamics, influencing both financial settlement and Physical Leg operations.

KEY RESULTS

90%

Efficiency Improvement from reduced manual efforts

~$1.5 million

Minimized Exposure Drop offs  for a month

90%

Timely Decision-Making with reduced discrepancies

90%

Operational efficiency and reduced disruptions

A Systematic Approach to Project Success

To address crucial transformation requirements, Value Creed implemented the following strategic solutions:

Implement Endur AutoMatch Reconciliation: Introducing an automated reconciliation process to validate deals post-nomination efficiently.

Enhance Validity Filtering: Utilizing advanced algorithms to filter valid scenarios and prevent unnecessary flags for 0 volume nominations.

Enable Multi-Step Validation: Leveraging Endur modules we incorporate multiple validation steps to identify and address discrepancies promptly.

Initiate Contract Amendments: Swiftly amending contracts to synchronize Payment Dates with Delivery Dates, mitigating the risk of premature Physical Leg drop-offs.

Facilitate Ongoing Monitoring: Encouraging proactive monitoring by Operators and the Risk Team to assess and mitigate risks associated with exposure dropoffs.

Value Creed Services Mobilized:

Expertise on Demand

Unlock operational effectiveness and elevate the efficiency and reliability of your database through Value Creed’s services. Optimize performance with fast and accurate data extraction, reconciliation, calculation, and reporting.

Key Takeaways

With a comprehensive approach, Value Creed tackles gas trading challenges by assessing and implementing solutions. By harnessing Endur tools like AutoMatch reconciliation and advanced algorithms, we drive measurable improvements, ensuring operational efficiency, minimizing risks, and delivering reliable results. Opting for Value Creed guarantees a strategic approach to optimizing gas trading operations.

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Performance Enhancement

A North American midstream producer sought to enhance the performance of their Endur ETRM system. Their primary goal was to streamline the Order to Cash Process, reducing turnaround times, and ensuring efficient operations across deal lifecycle stages, scheduling, and accounting interfaces.

While the client’s Endur ETRM landscape exhibited robust functionality, there were opportunities for improvement, particularly during peak periods like month ends and times of high utilization with numerous user logins. Moreover, the system experienced some challenges in managing increased interfacing throughput, which affected overall operational effectiveness. To address these opportunities, Value Creed proposed leveraging performance engineering principles to systematically optimize the application-level performance metrics of the Endur ETRM system, aligning it more closely with the client’s evolving needs.

KEY RESULTS

~90%

Production Outage Reduction

3 Months

Month-End Stability Achievement

~60%

Database Peak Load Reduction

~70%

Remediation of Month-End Critical Path

A Systematic Approach to Project Success

Operational Impacts: Client business teams encountered Database deadlocks and system slowness during peak usage, including high user logins, led to severe delays in the Order to Cash Process, potentially impacting revenue by $1.5 million monthly.

Two-Phased Approach: Value Creed’s Performance Engineering program for the client followed a two-phased approach: Assessment and Implementation.

Assessment Phase: Workshops were conducted with business teams and SMEs for a comprehensive understanding of processes, pain points, and technical challenges. Critical paths were identified, and Product Backlogs (PBIs) were created to address performance issues and outline strategic improvements.

Implementation Phase: Prioritized PBIs were based on criticality and business value, emphasizing two types: Enabler PBIs for implementing instrumentation with Azure Application Insights, and Performance fix PBIs addressing critical paths within the system.

Azure Application Insights: Facilitated performance tracking with application dashboards, availability view, alerts, logs, and user/session/event tracking.

Performance Enhancements: included code and SQL optimizations, business process improvements, and technical changes.

Post-implementation: Improvements were measured using Azure Dashboards against application logs, ensuring tangible performance gains.

Value Creed Services Mobilized:

Expertise on Demand

Unlock operational effectiveness and elevate the efficiency and reliability of your database through Value Creed’s services. Optimize performance with fast and accurate data extraction, reconciliation, calculation, and reporting.

DevOps

Value Creed helps organizations integrate DevOps across CTRM and manage the cultural shift that perpetually feeds on itself to deliver continuous improvement and proactive identification and creation of desirable product features.

Key Takeaways

Value Creed ensures a holistic approach to performance challenges with meticulous assessment and implementation phases. By leveraging cutting-edge technologies like Azure Application Insights, Value Creed delivers measurable enhancements, yielding tangible results, ensuring seamless operations, and maximizing revenue potential. Choosing Value Creed guarantees a comprehensive strategy addressing performance hurdles in Endur ETRM systems.

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Performance Challenge

In a rapidly evolving market, being efficient is a key competitive edge. A global trading firm with diverse operations across all major commodities was facing issues with their manual processes for Natural Gas Pipeline Tariffs. Users were facing the burdensome task of manually scraping tariffs from numerous pipeline websites, monitoring these sites for changes without clear notification, and painstakingly inputting tariff data line by line into Endur. Moreover, market data changes, especially tariffs, incur substantial reconfiguration costs. Modern API interfaces for tariff imports reduce manual work, enhance customization, and streamline tariff management within the Endur system, improving ETRM efficiency.

Our proposed solution enhances decision-making by driving competitive advantage and efficiency gains. The NatGasHub.com integration offers benefits related to gas scheduling, real-time tracking, mobile accessibility, and tech support. The integration also eliminates the need for a manual data entry process and daily monitoring of various gas pipeline websites. 

KEY RESULTS

63

Onboarded Pipelines

1.1 million

Tariff records across the pipelines

100%

Success Rate for Tariff Import

Increased reliability

Built a reconciliation script for the interface for error handling

Increased Responsiveness

Processing over 1000 tariff records in ~10 seconds

Embrace Efficiency and Optimize Your Operations

In the ever-evolving world of natural gas trading, seamless integration and streamlined processes are crucial for efficient operations. We have worked on this integration by creating a custom-built interface that seamlessly integrates Tariff data from NatGasHub.com into Endur. The interface enables NGH’s secure, pre-built API to easily access standardized tariffs for all pipelines across all gas scheduling systems, without the need for manual coding.

Value Creed Services Mobilized:

Expertise on Demand

Expertise on Demand

Unlock operational effectiveness and elevate the efficiency and reliability of your database through Value Creed’s services. Optimize performance with fast and accurate data extraction, reconciliation, calculation, and reporting.

Key Takeaways

In a fast-paced market, efficiency is key. By leveraging Value Creed’s expertise in Endur implementation and customizations, we have harnessed the full potential of NatGasHub.com integration. The increased accuracy in the availability of tariff data in your trading system will lead to a more effective nomination process. Automation of tariffs also facilitated a closer alignment between the client’s monthly invoices and those from the pipeline. The pathing was optimized for greater efficiency, resulting in improved invoicing. Our improved solution not only strengthened energy trading operations but also elevated decision-making capabilities, fostering efficiency and competitiveness in the energy market.

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Enhancing Gas Scheduling Efficiency

Coordinating nominations across multiple pipeline operators can be complex due to differing procedures and timelines. Furthermore, capacity constraints and limited flexibility in scheduling can hinder a company’s ability to respond to sudden changes in demand or supply disruptions, making effective scheduling a continuous challenge in the natural gas industry. The integration of solutions like NatGasHub.com with your ETRM brings immense value to energy market participants and simplifies gas scheduling, automating the flow of information and streamlining the process from nominations to capacity management.

Integrating this with your ETRM systems streamlines natural gas scheduling and enhances secure communication. This integration empowers businesses with efficiency, transparency, and access to reliable information, fostering growth and competitiveness in today’s market. In this blog, we’ll delve into the significance of a natural gas scheduling portal and its integration with ETRM solutions, such as Endur, highlighting how it streamlines the natural gas market and supports informed decision-making.

Navigating the Complexities of Natural Gas Scheduling

Natural gas scheduling is complex due to coordination among multiple stakeholders, pipeline capacities, seasonalities, regulatory compliance, and the need for real-time adjustments. Efficient scheduling relies on a comprehensive and integrated platform for communication among various stakeholders in the industry. 

Users want to streamline the complex scheduling process by automating tasks, improving data accuracy, and enhancing real-time visibility into gas nominations and confirmations. Below are some significant factors that necessitate Natural Gas Scheduling Portal:

Due to a complex network of pipeline interconnects data is shared between different sources and data accuracy and integration between these sources is crucial. Real-time data can foster reliable scheduling. 

Handling gas nominations and confirmations can be complex. A gas scheduling portal automates and streamlines the process, making it easier to manage nominations, updates, and confirmations in real time.

Natural gas scheduling involves coordination among producers, shippers, pipelines, and regulators. A gas scheduling portal provides a centralized platform for efficient communication and collaboration among these stakeholders, ensuring smooth scheduling operations.

Pipelines have limited capacities and operational constraints, which must be considered during scheduling. A gas scheduling portal helps optimize scheduling to match supply and demand with available pipeline capacities effectively.

Natural gas scheduling must comply with interstate and intrastate regulations and tariffs. A gas scheduling portal facilitates adherence to regulatory requirements, ensuring scheduling operations are in line with industry standards.

Natural gas demand and supply can fluctuate, requiring real-time adjustments. A gas scheduling portal enables swift intra-day scheduling changes to adapt to sudden shifts in market conditions.

International gas pipelines involve cross-border scheduling, which requires coordination with different authorities and stakeholders. A gas scheduling portal helps manage cross-border scheduling complexities efficiently.

Unexpected events like pipeline outages or emergencies can disrupt scheduling plans. A gas scheduling portal facilitates swift adjustments during force majeure events to maintain operational continuity.

Even though there are several ways in which gas trading organizations can bring a scheduling portal into their landscape like having in-built customizations for their systems or opting for off-the-shelf solutions like NatGasHub.com (NGH). Usually, the customizations must be updated and there’s an additional maintenance cost to keep up with the industry standards whereas solutions like NGH ensure to maintain industry-leading solutions which are also NAESB-certified & FERC compliant to ensure the utmost security. In this blog, we will explore NGH integrations and how they provide effective solutions to the complexities faced in the gas trading market. Let’s delve into the features and benefits of NGH.

Web-Based Platform

NatGasHub integration offers schedulers a user-friendly, cloud-based platform with no software installation required. It allows easy access and seamless integration.

Pre-Built APIs

NatGasHub provides schedulers with pre-built APIs for ETRM tools like Endur and Allegro, simplifying integration and enhancing functionality.

Nominations and Scheduling

Schedulers can easily digitize and centralize all nominations and scheduled quantities, making the scheduling process more efficient.

Pipeline Tariffs

NatGasHub simplifies tariff data integration by covering 225+ pipes across the U.S. & Canada, eliminating manual entry and scraping from multiple pipeline sources, much like Nymex prices, making ETRM system management more efficient

Real-Time Tracking

NatGasHub integration enables schedulers to instantly accept/reject nomination statuses and view scheduled quantities from every pipeline.

Tech Support

NatGasHub provides constant support from ex-gas schedulers.

Security

Collaborated with a Microsoft Partner for secure hosting.

Auto Renom

The platform features an auto re-nomination function, allowing schedulers to automatically re-nominate all gas nominations with a single click, saving time and effort.

Streamline And Empower Businesses to Make Informed Decisions

The complexities of natural gas scheduling demand a robust, integrated platform that addresses the challenges faced by stakeholders at every level. NatGasHub.com empowers organizations to navigate the complexities of natural gas scheduling with efficiency, accuracy, and confidence, ultimately contributing to a more resilient and competitive energy sector. 

This integration enhances decision-making by providing accurate, real-time data, streamlining processes, ensuring compliance, enabling adaptability to market dynamics, facilitating collaboration, and offering resilience during disruptions. These capabilities empower organizations to make well-informed decisions that optimize scheduling, reduce risks, and enhance operational efficiency in this dynamic industry.

Embracing such technology is a leap toward a more sustainable and competitive future in the natural gas industry. Gain an unfair advantage today by allowing Value Creed to automate noms & tariffs for your scheduling team.

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Elevating Trading Operations Excellence Through Strategic Business Process Design

In today’s rapidly evolving commodity landscape, the quest for trading strategy, precision, and having the right tools at your disposal for efficiency is paramount.  

Whether your organization is in its infancy, grappling with growth challenges or aiming to diversify into new industry sectors, the strategic design and foundation of your business processes are essential. In this blog, we delve into why business process design is your secret weapon in the world of commodity trading and how it can transform your operations. We will also pinpoint when it’s time for a redesign.

Significance of Business Process Design

Business Process Design is the foundation of success in Commodity Trading and Risk Operations. Its importance can be broken down into key principles that strengthen a company’s competitive position in this complex field.

Efficiency

Efficiency reigns supreme in the world of commodity trading and risk operations. The meticulous coordination of processes can mean the difference between profit and loss. With well-designed operations, you'll be able to execute trades with the strategic precision, reducing operational errors, and optimizing every crucial opportunity to enhance profitability.

Risk Management

Risk management is at the core of commodity trading, beating like a steady heart. In this dynamic world of price swings, supply chain hiccups, and global complexities, a robust strategy is essential. A well-crafted business process design blends together thorough risk evaluation, effective risk reduction, and vigilant monitoring, serving as your protective shield to spot and skillfully navigate potential dangers.

Compliance

Compliance forms the bedrock of ethical and legal stability in commodity trading. Diverse regulatory requirements, varying by region and commodity type, demand meticulous adherence. Business process design serves as a compliance compass, guiding your operations through the labyrinth of regulations and ensuring your business avoids the pitfalls of non-compliance, financial penalties, and legal entanglements.

In summary, a well-designed business process seamlessly integrates with existing systems,  and workflows, while also defining how these processes interact with each other. Meticulously crafted processes foster better coordination and synergy across the organization, leading to improved overall efficiency and productivity. Additionally, it enhances visibility, providing near real-time access to information facilitating swift decision-making, and identifying any performance or compliance gaps. 

When to Consider Business Process Redesign

Commodity trading organizations progress through distinct phases in their lifecycle.  We have used CBOLTM as a guiding framework to gauge whether a company is in its early formation and maturity stages or experiencing significant growth, either through organic expansion into new markets or via inorganic means such as acquisitions. In both scenarios, it is imperative for companies to assess and potentially adapt their business processes, albeit for different reasons. 

When a company finds itself in the formation and maturity stages, it often grapples with resource limitations. Consequently, its processes must factor in the expertise gap and the technological challenges inherent in managing complex ETRM systems.

Conversely, in the case of substantial growth, a comprehensive review of business processes becomes essential. This review should aim to establish consistency and scalability across various business segments while accommodating variances that may arise due to differences in commodities traded or the regions in which the company operates.

Navigating the transitions between these stages demands addressing distinct sets of responsibilities, risk variables, and pivotal decisions. Effective management, especially during a period of sustained expansion, is not only crucial but also entails the additional challenge of resource optimization. This is especially pertinent in the current landscape marked by constraints on both capital and human resources.

Strategic Approach to Business Process Design in Commodity Trading: Building for the Future

In the realm of commodity trading risk management, the process of designing business procedures extends beyond merely assessing the current state; it necessitates a keen understanding of the future vision. Your business processes must exhibit the resilience required to seamlessly execute that envisioned future.

Consider, for instance, the case of incorporating a robust risk governance framework into your trading operations as a future imperative. It becomes paramount to integrate these considerations into your current process design efforts. In our approach, we accomplish this by aligning with industry best practices and engaging in in-depth dialogues with pertinent stakeholders. Through this collaborative effort, we pinpoint process gaps and strategically prioritize those aligning with the company’s future vision thereby ensuring long term efficiency, scalability and flexibility in trading operations.

Below is a high level view of our approach to business process design:

01
Assessment

Review and analysis of current state functions

02
Prioritization

Target the processes most amenable to optimization

03
Planning

Interview stakeholders to define process goals

04
Comparison

Confirm current practices to industry best practices

05
Execution

Carry out client approved workflow optimization

06
Future Proof

Plan future-state scalability and functionality

Unlocking Success with Meticulous Business Processes: Building a Strong Foundation

By prioritizing well-crafted processes, commodity trading companies are empowered to secure their competitive edge, enhance scalability, and navigate the ever-evolving landscape. Whether as an organization you are at the inception stage or experiencing rapid growth, it’s essential to recognize that your business processes form the very foundation upon which trading operational excellence is built.

Strategic business process design serves as the key for achieving success, driving efficiency, managing trading risks, and ensuring compliance. It serves as a compass guiding organizations through diverse phases of their lifecycle, adapting to resource constraints or growth challenges.

Strategic business process design serves as the key to success, driving efficiency, managing risks, and ensuring compliance. It is a compass guiding organizations through different phases of their lifecycle, adapting to resource limitations or growth challenges.

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The world of Energy Trading and Risk Management is multifaceted, with each commodity presenting its own unique set of challenges. When it comes to liquid commodities such as crude oil and refined products, managing the intricacies of the market can be an uphill battle due to various reasons such as the high volume, fast-paced nature, complex logistics, diverse contracts, credit and risk considerations, and regulatory compliance. We’ve empowered clients to maximize Endur’s potential in liquid commodities space. Our expert team streamlines operations across front, middle, and back offices, unlocking value for your business.

In this blog, we will delve into some of the challenges that Liquid commodity traders face when it comes to managing their books in a ETRM system. We will also discuss, key functionalities of Endur and how we have leveraged them for our clients to optimize their liquid commodities business in Endur.

Effective Management of the Liquid Value Chain

Endur offers capabilities specifically tailored for the dynamic world of liquid commodities. From managing production forecasts, capturing physical deals to valuing inventory and everything in between, Endur empowers businesses to navigate the complexities of the liquid value chain seamlessly. With our expertise, we aim to educate our clients on how to leverage Endur’s powerful functionalities to optimize their transactional lifecycle, streamline operations, and gain a competitive edge in the market.

Let’s explore the key challenges of managing liquids in ETRM systems and how we assisted numerous clients in leveraging the Endur solution and empower their businesses to thrive in this fast-paced environment.

Production forecasts are crucial in liquid commodity trading, enabling efficient supply chain management, informed trading strategies, and risk mitigation. Integrating production forecasts into ETRM systems empowers companies to make data-driven decisions, optimize operations, and succeed in dynamic energy markets.
We have used Endur’s Data Series module that provides the ability to model and analyze various forecasts and probabilities associated with deals. This has empowered our clients to make well-informed decisions and manage positions effectively.
With global variance in equalization calculations rules, crude production forecasting can be hard to model with Endur’s OOB capabilities but with customizations that is also possible.
Liquids market participants engage in diverse contractual structures for transportation and storage, including take-or-pay agreements and throughput arrangements.
Furthermore, these contracts are complex to manage due to factors such as long-term volume commitments, price fluctuations, diverse shippers, and regulatory compliance.
The interconnected infrastructure, force majeure events, and the long-term nature of contracts further add to the intricacies, requiring expert oversight and strategic planning to ensure smooth operations and adherence to contractual obligations.
We have helped several of our clients use Endur’s customizable contract management modules to accommodate various complex contract structures in different regions, ensuring precise contract settlements and reducing contractual risks.
In liquid commodity trading, counterparties can include various entities, from large corporations to financial institutions and small traders. For some of the medium and small trading shops, managing credit risk in liquid commodity trading presents significant challenges due to counterparty risk, short-term contracts, and logistics complexities.
With a high volume of transactions occurring rapidly, assessing the creditworthiness of diverse counterparties becomes crucial to mitigate potential losses.
Additionally, short-term contracts demand constant credit evaluations and adjustments to accommodate changing market conditions, while intricacies in logistics pose logistical challenges in ensuring timely and efficient deliveries.
To navigate these complexities successfully, market participants must employ robust credit risk management strategies, real-time monitoring tools, and seamless integration with logistics operations to optimize their trading activities and financial stability.
We empower clients with Endur’s robust credit management tools for better risk mitigation, including setting credit limits and enforcing blocks based on credit exposure. Our expertise enables accurate OTC derivatives credit valuation using overnight index swap rates, while also computing weighted credit exposure by facility, legal entity, and maturity bucket for comprehensive risk analysis.
Managing liquid commodity trading is a complex task, especially when dealing with the diverse contract structures and intricate pricing strategies involved. The wide range of contract types, each with unique terms and specifications, demands a flexible system.
Additionally, the complexity of pricing strategies, influenced by factors like geopolitical events and supply-demand dynamics, requires sophisticated deal modeling and real-time deal analysis within the ETRM system to ensure accurate pricing and risk management.
Using Endur’s flexibility in deal modeling allows for customization of pricing and payment formulas for physical deals, providing traders with comprehensive and tailored solutions.

Endur Liquids Management Lifecycle

High Impact

Medium Impact

Little/No Impact

Out of Scope

Logistics complexities in liquid commodity trading stem from high trading volumes, geographical dispersion, and diverse transport modes. Managing the movement of significant quantities across multiple regions and modes of transportation demands efficient planning and coordination.
Moreover, seasonal demand patterns introduce fluctuations in transportation requirements, while adherence to specific quality standards during handling and storage is crucial to meet contractual obligations and ensure commodity integrity throughout the supply chain.
Endur’s logistics and scheduling capabilities go beyond traditional systems. With the ability to handle regrades, blending, and redirection of deliveries, our clients have effectively managed changing market conditions and optimize their supply chain.
ETRM systems need to integrate with multiple market data sources to access real-time and historical market data, including commodity prices, indices and other relevant information.
Consolidating and analyzing data from different sources can be challenging. Furthermore, liquid commodity pricing complexity arises in markets with less liquidity, where trader marks play a crucial role in determining accurate pricing due to limited buyer and seller availability.
Ensuring effective decision-making for traders requires a flexible and robust ETRM system capable of seamlessly managing and integrating data from various sources.
For non-liquid markets, Endur allows modeling of market values, though stress testing in such cases may require careful consideration.
Our clients have achieved their goals through our expert utilization of Endur’s capabilities, which include accurate fee modeling and the flexibility to replace default MTM pricing with more precise benchmarks based on intended sale or inventory locations.
Leveraging the Mark to Intent (MTI) approach within Endur, we provided multiple deal views, catering to the specific needs of various stakeholders within their organization.
Capturing actual volumes into a system for liquid commodities presents complex challenges due to data accuracy, timing, and integration from multiple sources.
Timeliness is crucial to accommodate real-time and intraday trades accurately. Integrating data from diverse sources, handling quality specifications, and reconciling physical delivery and inventory management add further intricacy.
A robust system, along with effective data governance and validation processes, is essential to ensure accurate risk management and decision-making in the dynamic world of liquid commodity trading.
While some customization may be needed based on the business model, for one of the biggest pain points where the actual tickets need to be automatically associated to the right deal, Endur offers out-of-the-box functionality to autolink movement tickets.
The liquid commodity inventory valuation in ETRM systems is complex due to dynamic pricing, different valuation methods, and quality adjustments. Fluctuating market prices and the need to consider specific quality specifications add intricacy to the valuation process.
Additionally, reconciling valuation with actual volumes after blending/regrading products, managing storage costs, and complying with regulatory requirements further contribute to the challenges of accurately valuing liquid commodity inventory within ETRM systems.
We have empowered our clients with effective inventory management solutions by harnessing the capabilities of Endur.
Through our expertise, we have guided them in implementing various inventory valuation methods, such as FIFO, LIFO, LCM adjustments, spot adjustments, and market value inventory, ensuring accuracy and efficiency in their operations.

Master the Liquid Value Chain with Value Creed

With extensive experience in Endur implementation and optimization, Value Creed is committed to empowering our clients with the knowledge and expertise they need to thrive in the liquid commodities market. With Endur’s cutting-edge capabilities and our tailored solutions, our clients can unlock new opportunities, streamline operations, and make informed decisions. Partner with us today to discover how we can help transform your business into a dynamic and thriving force in the industry.

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