Technologies such as horizontal drilling and fracking have changed the crude-extraction game in the U.S. and Canada, and refiners and marketers of petroleum products have moved rapidly to leverage lower-cost feedstock. However, in doing so, they have had to rapidly develop a purchasing and logistics infrastructure for acquiring and transporting shale crude and bitumen. A rapidly expanding network figured out along the way can lead to performance constraints and increase costs.
You have no consistent process for establishing contract terms with suppliers. Your traders each have their own approach for negotiating with suppliers and committing to contracts.
Your traders established contracts using mental math applied to complex costing scenarios. A poor trader assumption on crude loading and delivery logistics results in increased ‘actual’ costs.
- You’re not able to track monthly quotas for feedstock type and volume into the refinery in real time.
- You have no management process for reviewing and approving contract terms prior to committing.
- You have no means of tracking supplier communication, deal history, and price negotiations.
- You have difficulty onboarding new traders due to ‘unwritten’ knowledge of suppliers and business processes.
You’re not tracking and managing incidents related to transload facility fines.
You have no standard means of capturing and communicating crude chemical composition and handling precautions.
You’re not able to track the final quality of the delivered crude as compared to the assayed components provided at the time of purchase.
What it is
The Feedstock Purchasing accelerator provides a central system of record for managers, traders, and logistics and quality personnel involved in purchasing and transporting feedstock. The system provides cross-functional teams with a uniform business process and shared views of critical business objects including feedstock contracts, contract history, counterparties, feedstock quotas, pipelines, transload facilities, railways, routes, and crude analysis.
How it’s used
As well as:
- Track and report on monthly railcar quota by railcar, loading point, commodity, and trader.
- Load and view crude analysis data as decision criteria for contract commitment.
- Track and report on the frequency, type, and cost of railcar-related issues.
- Ensure capture of material safety data sheets (MSDSs) to ensure the safety of downstream users.
- Enforce trade approvals prior to trade commit.
- Increased management oversight on trade ticket approvals decreasing compliance risks
- Eliminated guess work on the costing side leading to less order rework and consistent trade margins
- Increased level of business engagement in the business solution generated by empowered subject matter experts resulting in high levels of user adoption and satisfaction
- Reduced time to train new staff to high levels of effectiveness, maintaining positive continuity with existing customers
- Increased efficiency, communication, and collaboration between traders, managers, and logistics and quality teams leading to better deal terms, less deal rework and increased predictability in supply
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