To suggest that commodity markets are volatile is an understatement. Volatility is driven by various factors, including constantly shifting trade agreements, political turmoil, and climate change. Commodity trading and risk management are essential decision-making tools in today’s complicated and unpredictable commodities market. Commodity traders may now manage their business processes more efficiently and profitably than ever before the ctrm software company. The latest CTRM software may be adjusted to fit different industries, different types of commodities, and different kinds of users, thanks to a fantastic range of functions on board.
Risk Management Must Be Improved
Modern CTRM systems provide more effective risk management by providing a current, accurate, and comprehensive view of exposure, pricing, market circumstances, and more. Commodity trading firms stay on top of risk drivers because of real-time data that is swiftly examined.
These systems offer real-time warnings, allowing you to be notified as soon as risk limits are exceeded, allowing you to take rapid action to resolve issues.
Pricing Methods: Fixed Vs. Commodity
To reduce the risk of conducting business in potentially unpredictable markets, many CTRM companies adopt ‘commodity-based’ pricing. Market pricing determines the final price of the commodity. Because most ERP solutions can’t handle such pricing, they can’t accurately reflect an organization’s possible exposures and risks.
Managing Cash Flow
You can estimate payment dates by analyzing payment history and behavior patterns using all available payment information – both current and previous data. To evaluate alternative options, you can anticipate projected cash flow based on payment terms and analyze scenarios based on shipping start, middle, and end dates.
Enhance Operational Effectiveness
Inventory tracking at each location and data maintenance becomes easier with information available across the value chain. You can reduce wait times and lineups by matching available time slots for projected deliveries to vehicle availability.
Scalability
Your teams’ productivity will be impacted by the timing and performance of intraday and EOD calculations. Critical business decisions are put on hold unnecessarily because massive batch procedures take place overnight.
Position Management
ERPs for position management collect and quantify an organization’s existing state of resources. They’re made to take a single picture. CTRM-enabled ERPs are built for more dynamic risk analysis, allowing businesses to assess what outcomes are likely to occur given their current situation.
Contract Management Can Be Challenging
Contract management deals with complicated business terms, such as price, costs, and quality pricing changes. With a focus on profitability, all transactions are linked back to a Contract. These requirements are challenging to meet with traditional ERP solutions. These are the foundations of CTRM.
Automation Saves Both Time and Resources
The value of corresponding data isn’t just about boosting efficiency; it’s also about acquiring better insights sooner. Modern ctrm software company organizes data without manual interaction with automated methods. Trading firms no longer spend many hours, days, or even weeks manually gathering data and manually entering it into spreadsheets to generate reports.
There are many more benefits of employing current technology for commodity management, such as how AI and machine learning enhance decision making and how creating the appropriate CTRM system for your organization may boost profitability. It’s time to make use of new technology if you want to compete in today’s volatile marketplace.
