CTRM / CM as an Architecture
A ComTechAdvisory Whitepaper
DEFINING COMMODITY MANAGEMENT
ComTech defines Commodity Management as the superset of software solutions that encompasses CTRM and ERP for Commodities where:
1 / ERP for Commodities naturally focuses on physical commodities and emphasizes production / procurement / origination, movement, storage, and handling of bulk and packaged commodities. This will usually include contract management, procurement, production, logistics, inventory management, assays / chemical analysis, pricing and fixation, hedging, settlements, and accounting. The primary users of this type of software are producers, industrial consumers, and processers.
2 / CTRM will have a trade-centric design with a focus on capturing and tracking both physical and financial trades, with configurable book and reporting structures, position calculation and valuation, PnL, and various aspects of risk, including market and credit risk. The primary users of CTRM software are traders and merchants.
That being said, there is considerable overlap between ERP and CTRM both in practice and in the marketing by various software vendors. In reality, many CTRM solutions will offer a good deal of ERP-type functionality, while ERP solutions are increasingly migrating into the trading and risk management arena.
/ Geographic differences including any unique business processes, language requirements, etc.
/ The type of company using the software( industry segment coverage)
/ Local, regional and / or national regulations
A number of complexities must also be taken into account as the requirements for any Commodity Management solution will vary considerably based on factors, including:
/ The commodities to be managed, the quality characteristics of those commodities that must be accounted for, and the nature of their unique supply chain( s)
/ The assets employed in the supply chain( s)
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