Navigating Complexity with Automation

Most commodity trading firm or firms that engage in some aspect of commodity supply chains, have a huge and well-known challenge in dealing with complexity, especially when they deal in multiple commodities. This complexity can be boiled down for the sake of this article to the following, Each commodity has different physical properties that impact things like transportation and movement, quality and pricing, and packaging and storage, Each commodity supply chain involves different processes and assets – all of which need to be managed and optimised, Commodity consumers have a growing awareness of environmental and social issues related to commodity supply chains from child labour to deforestation and require reassurances, Many of these supply chains continue to rely on the exchange of paper documents and the performance of third-parties like shippers and agents, for example, To help mitigate risk and also to encourage investor appetites, there are more and more derivative instruments, and financial and physical products available; many based on a ‘standard’ commodity definition, Commodity trading has come under the keen eye of the regulator in recent years and trades are subject to increased regulation from trade reporting and trade surveillance to position limits and other rules. There are… continue reading

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Source: CTRM Center

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