trading application implementation at suek 2018 · combination of cpe & cpf & brf+:...

TRADING APPLICATIONIMPLEMENTATION AT SUEK 2018

ABOUT SUEK – 1/2

Copyright © 2018 Accenture. All rights reserved. 2

34,293 SUEK’s railcar fleet under management

including:

15,664fleet of higher capacity railcars under management

Kemerovo

Krasnoyarsk

Khakasia

Buryatia

Zabaikalye

Primorye

Murmansk

Commercial Seaport

15 Mt capacity

Vanino Bulk

Terminal

24 Mt capacity

Maly Port

3 Mt capacity

1

2 6

73

4

5

6

73

Rail fleet

12

4

5

Khabarovsk

KAZAKHSTAN

MONGOLIA

CHINA

Number one Coal producer in Russia

107.8 mlntonnes

Severstal

Sibuglemet

KTK

Russian coal

En+ Group

Mechel

Evraz Group

SDS-Ugol

UGMK

SUEK

No.1 Russian coal producer and seller by volume

2017

Source: SUEK estimates, public filings

ABOUT SUEK – 2/2


One of the world’s largest Coal companies

54.2 mln

tonnes

Kideco

Peabody

Banpu

UGMK

Adaro

Anglo American

Bumi

SUEK

BHP Billiton

Glencore

SUEK’s markets

Hard coal assets

Brown coal assets

Sales offices

Dedicated port facilities

Third-party ports

Germany

2.6 Mt Morocco

2.4 Mt Other Atlantic

14.5 Mt South Korea

8.3 Mt Japan

6.7 Mt Other Pacific

8.4 Mt

Atlantic

23.7 MtAsia-Pacific

32.7 Mt

109.7 MtSUEK’s total sales, incl.:

Murmansk Commercial Seaport

Vanino Bulk Terminal

Maly Port

Ust-Luga Port

Azov Port

Vostochny Port

Netherlands

4.2 Mt

• Russian Sales

53.3 Mt• International Sales

56.4 Mt, incl:

No.3 in the world by international sales volume

2017

Source: SUEK estimates, public filings

TRADING IN SUEK


International Trading – statistics

10 offers per day

1 of 10 – Deal done

~300 deals per year

74% of

revenue

$4,213 mln

51% of

sales volume

56.4 Mt


Unified Trading Information System

PROJECT GOALS

Business processes

optimization, standardization and automation

Digitalization of the business,

data quality improvement

Management transparency and

flexibility of decision making

process

Operational efficiency increase

UTIS ARCHITECTURE


Fro

nt O

ffic

eM

idd

le

Off

ice

Ba

ck

Off

ice

Fiori / BRF+ –

Deal Approval

Deal Execution

Risk Management

SD-Sales

MM-Purchasing

TM/TSW-Logistics

FI/CO-Finance

CTRM

Model

Services & Sales Cloud – Customer

Relationships Management

IBP / River Logic –

Planning Export Delivery Optimization

Finance

Sales

SUEK AG SUEK (Head Office)

BI-IP – Business Planning / Budgeting

BO – Business Analytics, Reporting

International Trading Domestic Market

Logistics

ER

P

- Release 1

(current project)

- Release 2

- Integration with

Front Office

- Integration with

Back Office

GTM

TRM, ...

…

High-level system landscape

PHASED PROJECT APPROACH


Release 1Implementation of Offer / Deal Creation & Approvalfunctionality based on initial business requirements

• GTM TC customizing & extension (Deal management)

• Fiori Pre-TC application development (Offer management)

• Customer Risk compliance management

• Benchmark calculation• Flexible Approval procedure

Release 2.1Development of CTRM Operating Model Design

• Operating Model Structure • Strategic Business Imperatives on

Operations & Organization• Trading Book Structure Hierarchy• Risk evaluation methodologies• To-Be Business Processes incl. RACI • Internal Controls

(incl. Risk Matrix)• List of Business Logics for System

Requirements• To-Be Org-Structure

recommendations

Release 3+Implementation of extended functionality

• Integration with Planning & Optimization system

• Merging with C4C (SAP C/4HANA Services & Sales Cloud)

• Usage of various SAP Leonardo scenarios(Voice Recognition for Offer capture, Predictive Analytics for Deal formula price determination,Blockchain for marine shipping contracts, …)

Release 2.2CTRM system Design & Implementation based on R2.1 methodological results

Flexible combination of Agile & Waterfall


Level 2

Level 3

Trading and OriginationFinance,

Accounting

& Treasury

Logistics Operations Risk Management &

Controlling*

Market

Intelligence

Planning and

Optimization

Treasury &

Cash Mgmt

Mine-to-Port/Station Batch Mgmt.

Front Office Back OfficeMiddle Office

Market Risk

Analytics &

Reporting

Manage Risk

Policy &

Limits

Operational Risk Analytics

Conduct

Credit

Assessment

Credit Risk

Analytics &

Reporting

Payroll

Business planning (Finance)

Marine

Secondary

Cost Mgmt.

Maintain Trading Models

Marine Freight Contract

Management

Prices , Curve & Model

Validation

Trade Control

Deal Review

& Validation

Trade

Confirmations

& Matching

Settlement

Calculation

Invoicing &

Payment

Instruction

Manage

Marine

Transportation

Finance

Operations*

P&L

Reporting

Margining

Regulatory

Reporting

(EMIR)

Performance

Reporting

Forex Risk

Mgmt./

Reporting

Mine Blending & Other

Processing

Marine Freight

Planning &

Scheduling

Port/Station Inventory Registry

Port/Station Stockpiling

Port/Station Blending

Operations

Finance & Accounting

AP / AR Management

Finished GoodsStockpiling

Finished Goods Invent.

Registry4)

Marine

Shipping

Trade Support

Pre-Account. & Position Reconcil.

Train Freight

Planning &

Scheduling

Manage Train

Transportation

Train & Truck

Cost Mgmt.

Train Freight Contract

Management

Discharge/ Port Offloading

Controlling

UTIS process scope

Legend

Out of scope

Origination

Manage

Counterpart

Relations

Conduct

Physical

Trading

Intercompany

Trading

Develop Price

Curves (Market

Models)

Market Data

Collection

Maintain Price

Curves (Market

Models)

Market Trends & Scenario Analysis

Market Data

Validation &

Provision

Conduct

Financial

Trading /

Hedging

3rd party

Procurement

Deal

Administration

Manage

Positions

Contract

Generation

and Review

Validate P&L

/ EoD

Product Structuring

Manage

Claims

(Qual./Quant)

Inventory Management

UTIS Release 1 scope

Develop Production

orders

Conduct

Planning &

Optimization

Develop

Blending

orders

Trading Strategy

Supply &

Demand

Management

Truck FreightTrain Freight

Manage Truck

Transportation

Daily

Reporting

Truck Freight

Planning &

Scheduling

Excluded from the scope during Operating Model Design

40+ L3 process diagrams, RACI Matrices and requirements were developed and described

UTIS R2.1TO-BE Business Process Scope


Functional scope:• Derivatives deals processing:

– OTC Commodity*: Swaps / Swaptions / Forwards / Options

(Euro/Asian style)

– Listed Commodity: Futures / Options

– Foreign Exchange: DF (Delivery Forward) / NDF

• FMIA & EMIR reporting• Exposure and Hedging

(trade and paper deals linking for total MtM and PnL calculations and accounting, exposure and position reporting)

• Market risk analysis (daily MtM for commodity and FX deals, scenario modeling, stop-loss limits, VAR)

• Credit risk analysis (limits processing, exposure calculations, collateral management)

Business improvements:• Easy Financial Trading:

– Automatic creation of derivative contracts

– Common FIORI interface for capturing derivative deals of

different types

• Easy Middle Office operations:– Common interface for mass deal processing (automatic

exercise/ settlement, price/rates fixing, expiration terms

control)

– “Calendar” deals processing (yearly/quarterly deals)

– Mass automatic long/short matching

– IM processing and collateral management improvements

• Easy Back Office operations:– Daily margining improvements (automatic clearing / invoicing

/ reporting)

– Integration with Reuters

* Not all instruments are covered by standard SAP TRM

UTIS R2.2TRM – Treasury & Risk Management

Functional features:• Flexible Pricing –

combination of CPE & CPF & BRF+:

– Commodity price is based on rules for determination of dynamic

periods and average quotations over price periods

– BRF+ is used to define parameters for CPF to calculate the condition

base / rate / value

• Logistical Options (logistics optimization)

• Associations:

– Sales/Purchasing TC can be associated based on Portfolio

Management

• Extended Document Flow


Technical features:• Significantly extended data model

– new virtual aggregated item levels were implemented:

– Products

– Volumes

– Delivery periods

• Custom screens – 30+

• All standard screens simplified with Personas

• Number of BAdi – 340+

• Number of Methods – 850+

UTIS R1 DETAILSGTM – Global Trade Management


TC Attributes & Master data

…

Business Rule

Framework

SAP Business

Workflow

Global Trader CEO Credit Committee Board of Directors

• > xxM $

• > yyyK Tonne

• …

• Company Code

• Contract Type

• Product Type

• …

• > xxxM $

• > yM Tonne

• …

TC Status Change

(triggering event)

Prerequisites:• Offer/Deal data• Master data

Configuration layer

Execution layer

• BRF tool is pre-configured with sets of different rules / conditions / formulas

• Combination of standard WF + BRF helps to manage flexible scenarios w/o programming

• Approval can be done from mobile devices

UTIS R1 DETAILSApproval process


SAP Business Workflow Business Rule Framework

UTIS R1 DETAILSApproval customizing – example


UTIS R1 DETAILSWebGUI + Personas examples: Deal maintenance

UTIS R1 DETAILS


Fiori examples: Offer Creation & Approval

Vadim Pestun [email protected], SUEK

Anastasiia Novoselova [email protected] Architect, SUEK

Stanislav Nagorski [email protected] Manager, Accenture

Vladimir [email protected] Manager, SUEK

Björn Bernhardt [email protected] Model Project Manager, Accenture

mailto:[email protected]





trading application implementation at suek 2018 · combination of cpe & cpf & brf+:...

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