Discover what ION can do for you
Over half of the world’s crude oil volume is traded and tracked on ION products
The increasing frequency of major market disruptions, paired with complex supply chains, makes an effective commodity management system (CMS) critical to sustaining and growing your business. Whether your business is just moving off spreadsheets or a global enterprise spanning the entire oil and gas value chain, ION offers a solution to meet your needs. Only ION has the breadth of CMS solutions designed for the oil industry to effectively navigate the challenges and risks in today’s commodity markets.
Value delivered
- Challenge
Reducing the risk of volatile commodity prices
The increasing volatility of commodity prices stresses the importance of protecting the business with effective hedging strategies. Hedging is a useful tool to achieve your goals, whether you are a:
- Producer concerned that crude oil prices cover your exploration and production costs
- Refiner trying to preserve your crack spreads
- Marketer trying to lock in a margin
- Fuels consumer trying to control costs
When a major disruption causes extreme volatility, effective hedging can keep your company solvent, while others may fail.
SolutionHedging reduces the impacts of price volatility and preserves margins
ION offers solutions to help you determine appropriate hedging strategies, execute those strategies, track the results, and report on your hedging to stakeholders and regulators. This leads to hedging strategies that are not only more effective, but also more efficient.
- Challenge
Accurately capturing and executing contract and pricing terms
Pricing and contractual terms get more complicated every year. Those who cannot constantly adapt their business model to handle new pricing, products, terms, and conditions will lose business to competitors that do. With significant commodity price swings in a matter of minutes, executing trading strategies quickly can mean the difference between huge profits or huge losses. A system that can adapt to changes, accurately record pricing and terms, and execute quickly is essential to survive in today’s commodity markets.
SolutionExecute simple and complex transactions quickly and correctly
ION offers solutions that capture and execute deals from simple, exchange-traded futures to complex, over-the-counter deals with multiple terms and conditions. These transactions are recorded in a database so you can retrieve and report your positions as needed. ION’s solutions can integrate with major trading exchanges to record and flow your exchange trades and fills, simplifying trade capture. Our commodity management solutions can also integrate with pricing services to keep your prices and valuation up to date.
- Challenge
Increasing frequency of major market disruptions
A single event—like an extreme demand collapse, supply shortfall, or price collapse—can put a commodity company out of business. In recent years, these “once in a lifetime” events have occurred more frequently. Effective risk management is the only way for an organization to survive and thrive in such an environment.
SolutionIdentify and proactively manage risks and volatility
ION solutions enable businesses to manage risk effectively in today’s challenging environment. Our tools automate workflows to help reduce errors and show exactly where risks are across your entire business portfolio, along with the rate of change of those risks. This insight facilitates both preemptive actions before disruptive events occur and targeted, rapid mitigation actions when events occur. Depending upon the event, effective risk management often empowers businesses to capitalize on disruptions and gain customers from less prepared competitors.
- Challenge
Managing increasingly complex supply chains
Worldwide demand for petroleum products continues to grow, primarily outside of the traditional European and North American markets. Years of logistics optimization have led to highly efficient supply chains, but with strained capacity across most logistics assets. Supply chain disruptions are increasing in frequency and severity. All of this makes scheduling and managing logistics more difficult than ever, which is especially risky when done via spreadsheets.
SolutionMore robust and cost-effective commodity supply chains
ION’s commodity management solutions help to manage your logistics supply chains across all major modes of petroleum commodity transportation, including pipeline, vessel, barge, rail, and truck. Our solutions enable your business to better manage daily operations, while also letting you pre-plan for disruptions, enabling more rapid mitigation. In today’s challenging business environment, better supply chain management is a huge competitive advantage.
- Challenge
Understanding your portfolio’s inventory positions
Knowing exactly what commodities your business has and where they are is critical to running an efficient operation. When a disruption occurs, like a canal blockage or pipeline outage, those with the most complete knowledge of their inventory positions across their business can reroute quicker and more cost effectively. Further, knowing what future inventories will look like can ensure that your business meets its contractual obligations and minimizes imbalances. Effective inventory management not only makes operations more efficient, but also keeps the business running when problems occur.
SolutionImprove the visibility of your global physical portfolio
ION solutions can track and manage your inventories, from a global level down to individual tanks. This tracking can also be projected into the future, enabling your business to keep the right amount of stock on hand and prevent large imbalances from occurring. When problems occur due to disruptions, modeling can provide you with a plan for tackling the disruption before your competitors. ION provides the best tools for you to manage your inventory across commodity lifecycles.
- Challenge
Managing vessel-borne logistics
Managing the transportation of liquids via vessel charters is becoming more challenging due to rising charter costs and increasing volatility. IMO 2020 compliance and disruptive events like the Suez Canal blockage can further complicate things. If you use vessel chartering as a primary means to receive or deliver commodity products, active management of your chartering activities is critical.
SolutionImprove the visibility and efficiency of vessel chartering
ION’s vessel charting solution, Softmar, provides visibility into the location and status of the vessels transporting your valuable commodities. This information is critical when disruptions happen and you have to find alternate routes, sources, or markets for your commodities. Softmar also provides visibility into chartering costs, enabling you to better understand your cost structure and find opportunities for savings.
- Challenge
Improving petroleum supply chain optimization
Today’s petroleum supply chains are increasingly complicated and charter rates are increasing dramatically. With petroleum products being the world’s most widely moved commodities, there are many options for where to source and deliver crude oil and refined products. All these challenges make it difficult to know the true impact of a choice and which choices will yield the lowest costs while still meeting contractual obligations.
SolutionGain competitive advantages through the optimization of your supply chain
ION’s supply and demand optimization solution, WAM, improves your decision making when dealing with a complex supply chain. WAM gathers supply, demand, logistics, and cost data to assess the impact of a transportation method, onload and offload dates, volumes, and other supply chain factors. This information is then used to determine the optimal choices that can minimize costs and maximize asset utilization, while ensuring contractual obligations are met. WAM gives you a significant competitive advantage in supply chain management.
- Challenge
Old option and risk models are less valid in today’s markets
As new liquid commodities are created, like sustainable fuels, markets are often so thinly traded that they can be difficult to price and value accurately. On the other hand, derivatives trading and programmed trading have dramatically increased the volumes and volatilities of commodity trading, making it harder to determine where prices will go. Consequently, the options and risk models that served well for many years are now less viable and can even increase risks.
SolutionUpdate and improve your options and risk modeling
ION’s FEA solution provides a comprehensive option for risk modeling to help with the increasing challenges in today’s commodity markets. Though traditionally used to model options and natural gas storage, FEA’s modeling features can also be applied to modeling the storage of liquid petroleum commodities. FEA can be integrated with existing commodity management systems or be used by itself and provide outputs in Excel. FEA provides access to sophisticated modeling without hiring a team of quantitative analysts.
Products
Aspect
A multi-tenant, SaaS CTRM for liquid hydrocarbons and metals traders moving off spreadsheets.
FEA
A suite of leading portfolio risk analytics and asset optimization tools for decision support.
RightAngle
A CTRM with robust scheduling and logistics capabilities for liquid hydrocarbon companies.
Softmar
A shipping solution for vessel chartering and operations integrated with ION’s CTRMs.
Why does my business need a commodity management system (CMS)?
Today’s business climate is becoming increasingly complex and volatile. Spreadsheets and legacy systems won’t suffice in today’s markets. Having a commodity management system to automate your key business processes reduces operational costs and errors. CMS solutions provide visibility into and across your business, acting as a single source of truth so you can make more informed decisions. With “once in a lifetime” events occurring more often, you need to quantify the actual or potential impact of events and decisions. Being able to determine exposures and risks of your current positions helps prevent highly volatile prices, supply or delivery disruptions, and counterparty bankruptcies from putting your organization’s solvency at risk.
I am a large company that transacts in multiple commodities, including many that are not liquid petroleum commodities. What ION products should I consider?
Regardless of your operating model, ION has a solution to meet your needs. If you are looking to manage all your commodities in a single system, Openlink—our most sophisticated and configurable multi-commodity product—may be the right fit for you. If you run your business units more independently and don’t require one system to manage all your commodities, RightAngle—our product focused on liquid commodities with comprehensive standard functionality and significant customization abilities—could be a better fit. Since many factors need to be considered, contact us so we can work together in determining the right ION commodity management system for your business.
We are a small shop with only a few users, no dedicated IT staff, and currently operate on spreadsheets. Can we afford a commodity management system?
Given the inherent risks of today’s marketplace, you likely cannot afford not to have a commodity management system (CMS). Fortunately, ION has you covered. For small companies with limited resources, Aspect offers the ability to move away from spreadsheets and grow a business without adding new staff. Aspect’s SaaS deployment model eliminates the need for an IT staff to manage your CMS. Contact us so we can get you off spreadsheets and into a CMS solution that meets your needs.
For my sophisticated, high-trading volume liquid petroleum business, just coping with daily activities is a challenge. Is there a commodity management system option that can help?
RightAngle is an excellent choice for liquid petroleum organizations with broad and deep business requirements. RightAngle has been uniquely designed in cooperation with some of the world’s leading refiners and marketers to ensure it can support their trading and operational needs. To determine if RightAngle is the best solution for you, contact us so we can learn more about your business.
With all the buzz about energy transition, as a business involved in fossil fuels, should I hold off investing in a commodity management system?
By improving efficiencies, commodity management systems (CMS) can help you increase your margins and free up capital for investing in energy transition. At ION, we are innovating our CMS solutions to help organizations manage their businesses through energy transition. This includes new functionality to support energy transition commodities, like environmental certificates and biofuels.
It seems like my organization needs a commodity management system. How can I justify the investment?
The efficiencies gained through the automation and improved data accuracy that a commodity management system (CMS) provides can empower organizations to grow without additional staff. Further, the ability to better cope with disruptive events is an often larger and overlooked benefit of a CMS. Finding commodities, rerouting commodities, and initiating mitigation efforts rapidly during a single disruptive event can often save a company more than the cost of an implementation and several years of licensing. In extreme events, a CMS can be the key to keeping your business operating and solvent.
What do ION’s commodity solutions offer the oil industry?
Our solutions enable oil market participants to streamline all aspects of the value chain, including refining, blending, fuel supply, arbitrage, and import/export activities. Oil trading software offers vast improvements to efficiency and provides the necessary data to make faster, smarter decisions based on real-time market factors.