Looking to Manage Inventory Costs for Liquid Commodities Effectively?

Conventional manual methods and third-party systems might not provide the needed real-time accuracy for inventory costs and valuation. Additionally, calculating costs for individual units of inventory, especially within a range of contracts, can be time-consuming. The introduction of RightAngle’s latest version, S21.1, featuring the Daily WACOG by Contract capability, addresses the need for accurate, real-time inventory valuation.

Unlike traditional methods that struggle to reflect daily commodity price fluctuations, the new feature in the latest version of RightAngle closely aligns inventory valuation with market dynamics, benefiting businesses with high daily sales volumes. Implementing inventory valuation methodology of WACOG in an integrated system like RightAngle streamlines inventory management and enhances risk and accounting practices. We recommend that our clients embrace RightAngle’s WACOG method, as it offers a comprehensive remedy for efficient inventory management. This solution capitalizes on industry-specific attributes, tailoring options, and alignment with regulations, all of which combine to enhance effectiveness, accuracy, financial gains, and competitiveness. 

Addressing Inventory Cost Challenges

Challenges in managing inventory costs accurately are widespread. Manual methods can lead to inefficiencies, errors, and compliance risks that affect decision-making. The absence of real-time inventory data visibility can hamper competitiveness, and the complexities of calculating costs for liquid products are a recognized concern.

Current complexities involve disjointed systems, manual calculations, lack of integration with workflows, and the inability to capture frequent price fluctuations inherent in liquid commodities, which ultimately leads to inaccurate cost estimates. Additionally, the continuous flow nature of liquid commodities makes precise inventory tracking difficult, as factors like shrinkage, blending, and measurement inaccuracies can lead to discrepancies in quantity and cost assessments. Managing inventory across various storage facilities, determining appropriate pricing points for cost allocation, and adhering to regulatory standards further contribute to the complexity of the process.

Commodity companies will employ specialized ETRM software and other peripheral systems to address some of these challenges however even then other issues like maintaining data integrity, resource-intensive inventory data updates, error-prone reconciliation processes, and the manual marking of transactions are prevalent in accurately tracking inventory costs and value. 

Benefit from Real-Time Insights, Customization, and Precise Reporting

Selecting RightAngle for implementing WACOG inventory valuation for liquids commodities offers several advantages over other ETRM solution alternatives. The integration of WACOG modeling into RightAngle is customized to suit the business’s needs, utilizing the platform’s robust reporting capabilities. This encompasses features like contract-based cost tracking, flexible pool-based cost calculations, and daily WACOG reports for precise cost insights.

To maximize the utility of RightAngle’s inventory valuation capabilities, we recommend crafting bespoke reports within the platform that consolidate diverse inventory data points. By doing so, businesses can streamline their inventory management processes effectively. A notable case involves our creation of tailored reports for a client within RightAngle, where we amalgamated data from various sources. For instance, this approach integrated information from multiple reports, yielding insights into tank-level inventory through the Physical Inventory Interface. This encompassed valuable details, including estimates of daily end-of-day inventory. Furthermore, our solution seamlessly incorporates the Terminal Data Staging Interface, which validates terminal data to facilitate reconciliation. Moreover, the Search Terminal Inventory Recon Interface was utilized to meticulously compare terminal net quantity against transaction records, ensuring the continual updating of reconciliation statuses to promote a well-balanced inventory control system.

Additionally, RightAngle solution provides risk assessment via daily WACOG risk mark-to-market reports. Notably, the “Use Zero Values to Market for WACOG” function refines inventory valuation accuracy. Additional advantages include prior period adjustments, efficient accounting, seamless system integration, tailored reporting, and real-time data access for adaptive decision-making. This tailored implementation ensures accurate cost management, risk assessment, and reporting while catering to the client’s distinct operational requirements.

We advise clients to focus on unique business contexts and leverage RightAngle’s specialized capabilities in WACOG by contract, WACOG by pool, and Daily WACOG calculations. This tailored approach, aligned with industry best practices, sets our recommended implementation of RightAngle features apart from other available options and ensures that it precisely meets the client’s current situation and needs.

Strategic Edge: Enabling WACOG Implementation

The utilization of RightAngle for WACOG implementation for an organization brings a multitude of advantages, specifically tailored to meet the unique needs of the liquid energy industry:

Effective Cost Allocation

WACOG by Contract provides detailed cost insights for better financial control. WACOG by Pool offers market-responsive cost calculations.

Daily WACOG by Contract

RightAngle recalculates daily WACOG, aligning cost structures with market fluctuations. Crucial for industries like retail fuel, ensuring accurate decisions and risk management.

Customization

RightAngle's customization aligns tools with business goals, enhancing performance without compromise.

Smooth Integration

Seamlessly integrating RightAngle optimizes data flow, boosting efficiency across functions.

Strategic Insights

Leverage specialized WACOG reporting for real-time informed decisions and market competitiveness.

Holistic Approach

RightAngle tailors to client needs, offering a dedicated team for success. Partner with experts for a comprehensive solution that drives success.

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Performance Challenge

The zenith of a company’s CBOL’s journey converges with a pivotal juncture during the software selection phase. This crucial phase aligns seamlessly with our Advisory Services, where our expertise in commodity trading, risk management, and technology come to bear in performing the upfront planning & due diligence to establish a solid foundation. This fusion empowers us to guide enterprises in selecting software solutions that perfectly match their strategic goals. 

In this context, a renowned Power Trading Company wanted to improve the system performance while ensuring accurate accounting and reporting. The Customer’s goal was to evaluate various software options and select a consolidated solution with robust CTRM capabilities that was better aligned with their evolved trading needs & technology capabilities. Following Value Creed’s analysis & recommendations, the power trading company chose a suitable software over incorporating new applications.. This decision aimed to prioritize reliability and peak performance while achieving their operational aspirations. The case study encapsulates how prudent software selection can significantly impact a company’s journey toward excellence.

KEY RESULTS

Alignment with Strategic Objectives

Comprehensive Fit/Gap Analysis

Expected Costs & Benefits

Software Selection

Value Creed Services Mobilized:

Software Selection

Our comprehensive Software Selection process ensures a complete study of the business operations. Workshops help us to understand the key requirements of business operations to design a process map and conduct a gap analysis. Since our team is formed of industry-experienced personnel, we’re able to understand the future requirements and needs of the business which plays a key role in software selection service

CBOL™

CBOLis a proprietary framework designed to assist trading companies realize their strategic objectives throughout the evolution of their trading operations. This encompassing framework addresses specific needs at each stage, including future state design, software evaluation, implementation, and process optimization.

Key Takeaways

Our comprehensive software solution engaged stakeholders through surveys and workshops to unearth trading strategies and operational challenges. This process led to an all-encompassing evaluation of available software, assessing alignment with current and future business needs across factors like usability, cost, implementation, extensibility, and integration. Strategic alignment took precedence to future-proof investments and ensure adaptability.

To mitigate implementation risks, a Project Charter, Governance Model, and safeguards were instituted. A holistic Total Cost of Ownership model evaluated software options, managing costs during implementation to achieve anticipated benefits. This approach effectively bridged CBOL’s vision with execution, underscoring technology’s pivotal role in operational excellence.

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Performance Challenge

A leading global trading company was challenged with streamlining the underlying infrastructure within tight timeframes and was in search of a vigilant project management team and a structured approach for precise migration while maintaining the data integrity and ensuring security compliance. It’s in this context that the company recently partnered with Value Creed’s Advisory Services.

This partnership focused on migrating the ETRM infrastructure & data  from an on-premise Oracle database to a cloud hosted SQL database instance, ensuring data integrity and optimizing the database & the Azure setup to deliver the desired performance enhancements to improve the user experience and the backend computational times. It underscores the vital role of Value Creed’s expert program management in driving cost-effective and efficient transformations.

KEY RESULTS

Accountable &

Quantifiable Results

Tangible, measurable outcomes that exceeded expectations

 

Strong Program 

Governance

Structured framework to ensure success & adherence to enterprise standards

 

Streamlined

Execution

Efficient project delivery that met tight deadlines and optimized resources

 

Program Management

Value Creed Services Mobilized:

Program Management

Embark on your project with Value Creed’s comprehensive Program Management service. We bring in the right people and assets together to coordinate tight schedules and dependencies. Our industry-experienced team not only enforces but constructs and operates office governance, manages budgets, and meets project deadlines

Key Takeaways

Value Creed’s program management service, empowered the company to achieve quantifiable results within a challenging schedule. Identification and  involvement of all critical stakeholders from a diverse vendor ecosystem with defined roles, ensured a benchmarked practice. This enhanced confidence in our service, adding substantial value to the entire project. Moreover, we ensured complete security and prevention of any data loss during the project since the company had off-shore IT Support.

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Performance Challenge

A diversified trading firm with a wide range of trading activities, recognized the growing opportunities in the precious metals market and decided to establish a precious metals trading desk. This expansion posed significant operational challenges. They faced challenges due to substantial daily trade volume, intricate storage fee management, and the need for efficient exit position creation. To address the challenges faced by this client, we provided assistance in the design and optimization of their precious metals trading operations.  We achieved this by introducing modifications to their front office processes and implementing user friendly solutions aimed at effectively managing their trading volumes

KEY RESULTS

Real-time Insights into trading decisions

Reduced Operational Risks

Enhanced Efficiency in trading processes

Accurate Cost Management 

Business Process Design & Optimization

Some of the updates that we introduced to enhance our client’s effective management of their new metals business:

Value Creed Services Mobilized:

Business Process Design & Optimization

Partnering with Value Creed to perform your business process design and optimization tasks gives you a structured approach to current state performance and future state competitive advantage. Tailoring operational flow to your niche will continue to deliver efficiency and profitability dividends over the long term.

Key Takeaways

In collaboration with Value Creed, the trading firm successfully overcame the challenges associated with establishing a precious metals trading desk. The implementation of streamlined processes, accurate cost modeling, and automation not only improved efficiency but also enhanced risk management and profitability. This case study highlights the value of strategic business process design and optimization in navigating complex financial markets and achieving sustained success. The trading firm’s partnership with Value Creed demonstrates the importance of leveraging expertise to thrive in competitive trading environments.

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Customize & improve business processes with Value Creed’s Implementation Services

Performance Challenge

A well-known chain of gasoline service stations located across the Southern United States wanted to change CTRM platforms to address new business demands for performance, accessibility, and security. At Value Creed’s suggestion, the company decided to implement its new CTRM platform in the cloud rather than on-premises

KEY RESULTS

Future-Proof Infrastructure

 

Peak Performance

& Timely Backups

Full Ownership & 

Control Over Data

Quick Implementation

Advisory Services

Cloud Services

Agile Delivery with Security

Value Creed Services Mobilized:

Advisory

Our Advisory services not only will help you guide your operations but also help you achieve your vision by taking all stakeholders into consideration. Our highly experienced team has combined full lifecycle, functional and technical expertise to deliver frameworks and guidance around building reliable and scalable commodity trading businesses.  

Cloud Services

Bring your On-premise infrastructure to the cloud for greater speed, flexibility, and security. Maximize your operational advantages with our CTRM Cloud Infrastructure and enjoy cloud benefits—on-demand agility, flexibility with security, and cost savings.

Key Takeaways

Value Creed guided the client through the business case to implement a different CTRM application. The team further developed a roadmap design for the company to smoothly transition to the new application. The cloud design process provided an agile, holistic solution combining our CTRM Cloud Services and CTRM Cloud Infrastructure and Monitoring expertise. Our team created an infrastructure, established a secure VPN tunnel, and designed a custom virtual desktop for access to the cloud anytime, anywhere. We ensured consistent long-term success by installing our cloud CTRM security software and firewalls with multi-factor authentication.

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Performance Challenge

The company wanted to modernize its business processes with the goal to transition to a clean energy future. They also wanted to maintain sophisticated business processes across the organization, quickly and efficiently, for greater productivity and more efficiency. It sought to minimize the costs of maintaining the database and its infrastructure.

KEY RESULTS

99% Pass Percentage of UAT Test Cases

60% Cost – Saving

Zero Error in Daily Valuation Runs

CTRM Implementation

Value Creed Services Mobilized:

CTRM Implementation

The implementation services offered by Value Creed will help you in designing and set up your system’s workflows according to your business operations. In addition, we execute a change management & training program to assist your team in effectively maintaining system configurations as well as test the newly implemented CTRM application in accordance with the key requirements. 

Key Takeaways

By understanding the key requirements of the client, Value Creed developed tailored solutions to address all pain points. Additionally, the team developed custom configurations and set up a robust testing environment. Developing and implementing a comprehensive change management program and training enabled the company to not only reduce its infrastructure costs but also modernize its business processes. 

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Customize & improve business processes with Value Creed’s Implementation Services