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Bunkering Operations Management System - Fuel Oil Supplier In US
Summary
Our client, Chemoil Corporation, is a large supplier of fuel to ships. Beginning with a strong presence in major US ports, the company has, over the past decade, expanded into global ports such as Singapore, Rotterdam, Panama, Istanbul and others.
Chemoil needed a Supply Chain Management solution that would coordinate its entire bunkering operations, from fuel purchase to retail sales, operations, inventory and back-office processes. Given the thin margins in this business, senior management needed good visibility on the revenues against the purchase fuel cost and various other costs associated with each sale and purchase. Also, to manage volatility in prices of fuel oil, senior management needed to monitor risks, facilitate trading and hedging with paper deals. As the company expanded into other ports, it needed a system that can integrate and standardize the core business processes as well as satisfy the specific needs of each location.
Challenge
Calsoft rolled out its Bunkering Operations Management System (BOMS) for the client’s US business more than ten years ago. BOMS is a combination of two of Calsoft’s products - OBIS (Online Bunkering Information System) and DeRisk (Trading and Risk Monitoring system).
OBIS Covers All Aspects Of The Workflow Coordination, Costing And Analysis Needed Of Bunkering Activities.
Workflow Automation
- Track inquiries from customers, quotes and sales confirmations
- Alerts for exceeding customer credit limits and unattended inquiry
- Automate email, fax and telex communications with customer, vendor and brokers
- Scheduling the sales orders for timely deliveries
- Capture various claims and track it to resolution
- Capture various claims and track it to resolution
- Invoicing, adjustments to invoices, tracking invoices upto cash receipts
- Purchasing different grades of fuel from Vendors through spot and term contracts
- Raising vouchers against purchases and costs, adjust the vouchers and track payments
- Optimizing the blending of fuels and recording the blends
- Record fuel inflows/outflows to tanks and vessels
- Tracking fuel grade and quantity at each location
- Posting/Interfacing with General Ledger
Costing & Analysis
- Calculating the inventory cost including the fuel and secondary costs
- Cost of Sale report – sale wise profitability analysis
- Accounts Receivable and Accounts Payable aging analysis
- Cash Flows based on aging analysis
DeRisk Handles The Trading And Risk Monitoring For Chemoil
Trading & Risk Management
- Helps bulk fuel purchase/sales on spot or term contract, with comprehensive formula pricing options
- Capture of various secondary costs for each bulk deal
- Imports market prices and evaluates the mark to market and profitability of the deals including the secondary costs
- Allows grouping of physical/paper deals into strategies and evaluate the exposure including inventory at risk.
Multi Company Organizational needs
- Inter company deals.
- VAT in Europe, and different tax regimes in other locations.
- Different inventory costing approaches leading to variations in inventory tracking.
- Specific requirements of invoicing individual fuels before blending rather than the final delivered product.
- Language customizations to handle different locations requirements.
- Different Currencies
Calsoft products help in Decision Support and Analysis
- Lost inquiry report for lost business analysis
- Sales statistics report
- Bunker Position Report for scheduling and bunker delivery
- Multi-level Claims Analysis for delivery feedback
- Inventory availability - quantity and price
- Blending Optimizer for calculating optimum blending volumes
- Sale wise Profitability report
- Aging analysis of AR and AP vendor wise
- Value at Risk and barrels at risk
- Procurement performance report – term contract Vs spot prices Vs Bunker wire prices
Centralized back office activities lead to cost efficiency, increased profits and use of IT as competitive advantage.
Calsoft has helped centralize back office activities - invoicing, collections, accounting and IT support for Chemoil’s activities worldwide - leading to greater efficiencies.
BOMS helped Chemoil’s continued expansion by significantly reducing the company’s incremental cost of information systems for its multi company organization. It aided Chemoil’s process streamlining efforts of its operations, across countries, and in managing market price risk. Built on latest technology and featuring a flexible architecture, BOMS has helped our client show significant improvements in process efficiency, and use IT to further competitive advantage.