--- title: Value Chain Optimization description: Energy value chain optimization requires ETRM, analytics and big data. image: http://info.ekaplus.com/hubfs/energy_2.jpg --- [![Eka - Power of One](https://blog.eka1.com/hs-fs/hubfs/Logo-On-White-RGB.png?width=9601&height=5401&name=Logo-On-White-RGB.png "Eka - Power of One")](http://ekaplus.com) - [PLATFORM](https://www.ekaplus.com/platform/) - SOLUTIONS - [CTRM & ETRM](https://www.ekaplus.com/solutions/trading-and-risk-management/) - [Commodity Analytics](https://www.ekaplus.com/solutions/commodity-analytics/) - Supply Chain & Ops - [Eka CSM](https://www.ekaplus.com/solutions/eka-commodity-site-manager/) - [Eka Control Systems](https://www.ekaplus.com/solutions/eka-control-systems) - [Eka QMS](https://www.ekaplus.com/solutions/eka-quality-management-system) - Collaboration - [Eka Connect](https://www.ekaplus.com/solutions/eka-connect) - [Farmer Connect](https://www.ekaplus.com/app/farmer-connect/) - [Supplier Connect](https://www.ekaplus.com/app/supplier-connect/) - [Customer Connect](https://www.ekaplus.com/app/customer-connect/) - Digital Transformation - [Eka AI](https://www.ekaplus.com/app/customer-connect/) - [Eka Blockchain](https://www.ekaplus.com/solutions/eka-blockchain/) - [Eka Source](https://www.ekaplus.com/solutions/eka-source) - [Eka App Store](https://www.ekaplus.com/solutions/eka-app-store) - INDUSTRIES - [Agriculture](https://www.ekaplus.com/agriculture/) - [Metals & Mining](https://www.ekaplus.com/metals-and-mining/) - [Energy](https://www.ekaplus.com/energy) - [Crude Oil & Refined](https://www.ekaplus.com/energy/crude-and-refined/) - [Natural Gas & LNG](https://www.ekaplus.com/energy/natural-gas-lng/) - [Power](https://www.ekaplus.com/energy/power/) - [Manufacturing](https://www.ekaplus.com/manufacturing/) - [CUSTOMERS](https://www.ekaplus.com/customer-directory/) - [COMPANY](https://www.ekaplus.com/company) - [RESOURCES](https://www.ekaplus.com/resource-center/) - [News](https://www.ekaplus.com/news/) - [Blog](http://blog.ekaplus.com/blog) - [Events](https://www.ekaplus.com/event-center/) - [App Sheets](https://www.ekaplus.com/appsheets/) - [Brochures](https://www.ekaplus.com/brochures/) - [Case Studies](https://www.ekaplus.com/casestudies/) - [Whitepapers](https://www.ekaplus.com/whitepapers/) - [Webinars](https://www.ekaplus.com/webinars/) - [PLANS](https://www.ekaplus.com/plans/) - [Contact](https://www.ekaplus.com/contact/) - [GET STARTED](https://www.ekaplus.com/get-started/) - [GET STARTED](https://www.ekaplus.com/get-started/) [EKA](http://ekaplus.com/) > Value Chain Optimization March 16, 2017 # Value Chain Optimization [![Commodity-Analytics-Cloud-provides-visiblity-across-the-entire-value-chain](http://info.ekaplus.com/hubfs/energy_2.jpg)](https://blog.eka1.com/blog/value-chain-optimization) ![energy_2.jpg](http://info.ekaplus.com/hubfs/energy_2.jpg) Continued oil price volatility has increased pressure on oil companies to find new ways to decrease costs to maintain margins. Unpredictable revenues make it difficult for companies to accurately manage and deliver on their profit commitments. Effective value chain optimization and inventory management is one area where savings can be made. ## The oil value chain - complexity offers opportunity The oil value chain is complex. There are interdependencies throughout the chain, covering everything from domestic and international transportation, trading, inventory visibility and control, commodity handling, import/export facilitation, and information technology. A company is linked to its upstream suppliers and downstream distributors as commodities, information, and capital flow throughout the value chain. With this complexity comes inefficiency, and a real opportunity to transform processes and deliver significant cost savings. The challenge is where and how to find those savings. ## **Technology gaps create inefficiency** With so many interdependencies and different parties involved across the value chain, business challenges are inevitable. Many of today’s oil companies operate their value chains using multiple, disconnected solutions including outdated legacy systems, spreadsheets, and ETRM software. Data is in silos within business units and often not shared. This impacts operations, drives up operating costs, and presents challenges at strategic and operational levels. An inefficient and uncoordinated value chain makes it difficult for oil companies to respond quickly to the needs of their customers, protect themselves from problems with suppliers, or buffer operations from the demand and supply uncertainty they face. ## **Collaboration, integration, and information technology provide the way forward** Oil companies need a strategy to take costs out of the value chain that delivers results fast. Transforming the entire value chain can be a long and expensive undertaking, but improving inventory management can be a good first step. Effective inventory management is critical to maintaining good margins and reducing working capital. Efficient inventory management requires visibility through every step of the value chain. Oil companies need a single software solution that integrates and analyzes data from different systems throughout the value chain, including ERP, ETRM, and spreadsheets – a centralized system that provides the complete picture of inventory levels, placement, and movement. At a strategic level oil companies need: -  “What-if” scenarios and situational analysis (i.e. create private plans to duplicate situations when there is a refinery shut down to verify potential business impacts) - Real-time reporting to establish optimal inventory levels to improve ROCE & ROA. - The visibility to understand risk and exposure - Transparency and increased control At an operational level they need: - Increased visibility of inventory levels - Accurate forecasting and scheduling of refined product movements by means of truck, rail, vessel, or pipeline - Product quality tracking from refinery to marketing terminals - Alerts to schedulers when inventory levels are reaching min and max tolerance levels ## **Our solution** Eka’s [Commodity Analytics Cloud](https://www.ekaplus.com/analytics/commodity-analytics-cloud-overview.aspx) is a single, integrated solution that tracks and analyzes commodities with real-time data from multiple systems throughout the value chain, including ETRM, ERP, CRM, treasury, and spreadsheets. Commodity Analytics Cloud provides real-time visibility over positions and inventory levels across all products at all locations, enabling oil companies to more effectively manage inventory. Commodity Analytics Cloud processes massive amounts of data and creates predictive analytics in seconds. It provides an end-to-end analysis of the entire value chain, spanning multiple categories including positions, P&L, trading, procurement, risk, credit, finance, supply chain, reconciliation, counterparties, and more. The software continually identifies anomalies as deviations from plan occur and enables users to quickly run ‘what if’ scenarios. Organizations can better manage labor costs, improve production, gain real-time visibility into inventory, lower compliance costs, and justify infrastructure changes. ## **Conclusion** Oil companies are searching for ways to combat price volatility. Many have disconnected and inadequate processes with data residing in different silos, making cost management and reacting to changing market conditions difficult. They need to evaluate all of the information throughout the value chain using advanced analytics to make the best decisions. Opportunities can be short-lived. Rapid identification and decision-making across business units are key to successfully exploiting opportunities as they arise. The ability to react to market changes before competitors provides a significant advantage. 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