Comprehensive CTRM Solution for a Medium-Sized Grain Trading Company

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Challenge:

 

A medium-sized agricultural trading company specializing in wheat and other grains was struggling with outdated systems that couldn't handle the complexities of modern grain trading. They faced issues with risk management, inventory tracking, and adapting to rapidly changing market conditions.

 

Solution:

 

Orivyn provided end-to-end support in analyzing the company's needs, selecting an appropriate CTRM vendor, implementing the solution, and offering post-go-live support.

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Implementation:

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1. Business Analysis and Gap Identification:

   • Conducted a thorough analysis of current trading, risk management, and logistics processes.

   • Identified gaps in existing systems, particularly in areas of real-time market data integration and risk analytics.

   • Developed a detailed report outlining findings and recommendations tailored to the grain trading market.

2. Vendor Selection Process:

   • Created a comprehensive list of requirements specific to grain trading, including features for managing basis risk, quality premiums, and storage costs.

   • Conducted a market analysis of CTRM vendors with strong agricultural capabilities.

   • Organized vendor presentations and demos, ensuring they addressed grain-specific scenarios.

   • Facilitated the decision-making process, emphasizing the need for scalability and integration with weather data services.

3. Implementation and Integration:

   • Developed an implementation plan that accounted for the seasonal nature of grain trading.

   • Coordinated between the chosen vendor and the client's IT team for system integration, including connections to grain exchanges and price reporting agencies.

   • Oversaw data migration, paying special attention to historical crop year data and long-term contracts.

   • Conducted extensive testing, including simulations of full crop year cycles.

   • Provided change management support and training, with a focus on helping traders transition from spreadsheet-based systems to the new CTRM platform.

4. Go-Live and Post-Implementation Support:

   • Managed the go-live process, timing it to minimize disruption to trading activities.

   • Provided on-site support during the critical harvest season immediately following go-live.

   • Established a helpdesk for ongoing user support, with agricultural trade experts available for complex queries.

   • Conducted regular check-ins to address any issues and optimize system usage, particularly around key events in the agricultural calendar.

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Results:

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• Successfully implemented an integrated CTRM solution tailored for grain trading, replacing multiple legacy systems and spreadsheets.

• Achieved a 15% reduction in manual data entry and reconciliation efforts, freeing up traders to focus on market analysis and relationship management.

• Improved accuracy of position reporting, reducing discrepancies by 40% and minimizing potential regulatory issues.

• Enhanced ability to manage quality-based pricing and complex multi-grade contracts, leading to a 5% improvement in margin capture on specialty grain trades.

• Reduced hedging costs by 8% through more timely and accurate execution of hedge trades.

• Improved inventory turnover by 10% due to better visibility into storage levels and costs across multiple locations.

• Decreased time required for month-end close process by 30%, providing management with faster access to key performance indicators.

• Enabled real-time scenario analysis, allowing traders to assess the impact of potential trades on their overall position and risk exposure

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Long-term Impact:

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• The client gained the ability to quickly adapt to changing market conditions, reducing reaction time to major market moves from hours to minutes.

• Improved data analytics capabilities allowed for better trend analysis and seasonality planning, enhancing long-term strategic decision making.

• The new system provided a scalable foundation, supporting a 20% increase in trading volume without requiring additional back-office staff.

• Orivyn's ongoing support helped the client optimize their use of the system, resulting in continuous improvement in operational efficiency and risk management practices.