Commodity value chain and supply chain planning (SCP) software apps merged yesterday when Triple Point Technology acquired WAM Systems. Triple Point is a global provider of cloud and on-premises commodity management software that delivers advanced analytics for optimizing end-to-end commodity and energy value chains. Its solutions manage volatile commodity trading, procurement, enterprise risk management, logistics, scheduling, storage/inventory, processing, settlement, and accounting. More than 400 customers in over 35 countries across industries including energy, metals, minerals, chemicals, agriculture, shipping, consumer products, food and beverage, retail, and manufacturing depend on Triple Point solutions.
WAM is the premier provider of SCP and optimization solutions for process manufacturing industries including oil and gas, polymers, consumer packaged goods (CPG), food and beverage, pharmaceuticals, and chemicals. Notable customers include Indian Oil, LyondellBasell, PetroChina, PTT Global Chemical, Sasol Oil, Saudi Aramco, and Solvay. With WAM in its fold, Triple Point aspires to immediately deliver planning and optimization solutions to profitably manage commodity risk, material procurement, demand planning, finished goods forecasting, and sales and operations planning (S&OP).
Commodity management is very different than direct materials management, which is the primary focus of most supply chain operations. Still, commodity trading often involves supply chain management (SCM) issues. For example, a company may buy and then move oil to storage tanks or a refinery. Once it is in tanks, traders may buy and sell the commodity multiple times or incrementally release inventory. So what is the most effective and profitable way to do so?
These apps should thus be complimentary (Triple Point has been good at finding cross-sell opportunities for its customers, while WAM is quite strong with petrochemical companies), but we’ll have to see how the execution will pan out in light of these companies’ different expertise, cultures, etc. Indications are that WAM has great subject matter expertise, but its deployments are typically customized (vs. a “packaged” software solution), and therefore might take longer to complete and have a higher long-term total cost of execution. It will be interesting to watch the moves by Triple Point competitors, SunGard and DST Systems, as well as by WAM competitors, such as AspenTech, SAP APO, Infor, and, to a degree, Logility.