https://radarradar.com/cases/success-case-transoil

About

TRANS-OIL GROUP (the GROUP) is an agro-industrial conglomerate with a wide range of activities; including oilseed crushing, grain handling and storage, international commodities trading, vegetable oil in bulk, bottled oil, and meal production. The GROUP employs 2,800 people and is an important originator and exporter of grains and oilseeds in Central and Eastern Europe.

The GROUP owns and operates all their facilities; 49 storage facilities with a total capacity of over 1 million metric ton, 5 oilseeds crushing and refining facilities and export terminals with a capacity of over 6 million metric ton per year. Their sunflower oil brands, such as FLORIS and ISKON are leaders in the local markets and are expanding in Europe, Asia, Africa, and the Middle East.

Alex Hanson, Chief Risk Officer

“Apart from giving us accessible and accurate information, the RadarRadar is also helping us to improve our ways of working.”

Challenge

The GROUP has four different processing and trading entities resulting in a high level of operational complexity. Every entity works with at least one different crushing plant with the purpose of generating the highest quality and quantity of oil and meal as possible. However, every entity was facing the same challenge: there was no clear understanding of how their various exposures were affecting each other and the overall GROUP’s position. A risk exposure most processing companies are facing, mostly because their focus and expertise is on manufacturing alone without including a trading and risk management perspective.

As processor with a trader mindset, the GROUP understood the importance of including risk management tools in their operational strategy to get a better understanding of what, when and how they had to buy and sell in order to optimize processing and successfully fulfill all orders. The GROUP was accustomed to doing such calculations in Excel spreadsheets, with estimated and sometimes outdated numbers. The standard routine was to combine all data from the different entities and create one consolidated Excel spreadsheet, which was shared with the key stakeholders every day. This process was very time consuming and due to the manual workload, left a big margin for error. Also, with the rapidly increasing growth, it was clear that this would not be sustainable and that something had to change.

Objective

The key objective was to implement a holistic data management system that would create a localized and consolidated view from both a processing and a trading perspective. The tailor-made software solution had to have the functionalities to identify risk exposures, quantify these exposures, and integrate this knowledge into actionable insights for their daily operations.

In addition, the GROUP was at the start of implementing an ERP system. ERP systems focuses on the operational aspects of the physical materials. Implementing the Radar technology in advance, enables a better understanding of what is needed from the ERP system and how to organize the GROUP internally to get the most out of the system. RadarRadar brings a level of reporting maturity that is nowadays lacking during ERP blueprint processes.

The GROUP found a great fit with RadarRadar to achieve their objectives. RadarRadar combines a strong professional background in the commodity industry with extensive experience in data integration and risk management, enabling a successful fit between technology and business.

Alex Hanson, Chief Risk Officer

"RadarRadar is a software supplier that really understands our company and our operations."

Solution

RadarRadar started with a consulting period to understand the GROUP’s business, data landscape and organizational challenges, and to define the information and process needed to successfully enable the digital transition. Based on these insights, RadarRadar implemented a robust data management system that created localized and consolidated views from both a processing and a trading perspective.

By creating one common language of the different data from all various teams, RadarRadar enabled the different entities to communicate more effectively and remain in control of their portfolio. The result of this holistic approach was the foundation of strong interdisciplinary collaboration: logistics, operations, procurement, trading, finance and risk all working together to significantly improve overall performance.

In addition, RadarRadar implemented tools to provide a real-time view on relevant insights, such as transport costs and exchange costs and their equivalent positions creating an accurate, consolidated view. This also improved reporting discipline and working only with data and numbers that can be trusted.

RadarRadar implemented the software efficiently and quickly, along with minimal disruption to the daily operations (which for the GROUP was very important). No new resources had to be allocated to the project by the GROUP.

Results

Improving and locking in margins
By improving commercial discipline, every entity is now able to lock in their margin through better understanding of their actual exposures.

Operational efficiency improved substantially
A common language and reporting discipline enables knowledge and awareness throughout the entire organization and creates one robust information environment to use and refer to.

Average daily time saving of 1 hour per entity
One automated and sustainable reporting tool reduces the time taken to integrate, harmonize, enrich, and analyze data.

Thierry Beaupied, Chief Operating Officer

“With RadarRadar, we have a much improved understanding of our exposures. We can manage our risks better and seize the right opportunities for the various entities and for the GROUP."