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Energy Trading and Prescriptive Analytics
The document discusses the challenges and solutions in energy trading and supply chain optimization, emphasizing the benefits of prescriptive analytics as an effective tool for decision-making. It outlines how prescriptive analytics can streamline processes and enhance operational efficiency by optimizing complex data integration, simulation, and model configuration. Additionally, the document offers insights into implementing prescriptive analytics through workshops, training, and assessments tailored to improve revenue and decision-making in the energy sector.
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Energy Trading and Prescriptive Analytics
- 1. Energy Trading andPrescriptive Analytics Chris McManaman March 2017 Its nice to know the destination. Its awesome to know the best route to get there.
- 2. Agenda Challenges in EnergyTrading and Supply Chain Optimization Why is Prescriptive Analytics such a great solution? How does Prescriptive Analytics work?
- 3. Challenges in developing energysupply chain solutions Solutions to complex problems Partnerships and Acquisitions Collaboration among business functions Risk Management Preparing for the future
- 4. The Excel SupplyChain Optimization Solution Each asset on the supply chain is optimized using siloed spreadsheets, Access or one off applications
- 5. The Excel SupplyChain Optimization Solution The ability to simulate or optimize a solution across the entire energy supply chain which would include input from both trading and operational models requires the compilations of many spreadsheets into a super massive spreadsheet. The effort required to develop this massive spreadsheet outweighs the value that the spreadsheet provides because of the time its takes and the number of adjustments and assumptions required to merge all the data
- 6. Data required tooptimize an energy supply chain can get overwhelming…
- 7. Agenda Energy Trading andSupply Chain Optimization Why is Prescriptive Analytics such a great solution? How does Prescriptive Analytics work?
- 8. The benefits of5th Generation Prescriptive Analytics Software • Drag • Drop • Configure • Integrate • Run *notice the absence of the words: develop, compile, debug or the name of any programming language..
- 9. Energy trading supplychain analysts can stop building code to model and optimize scenarios…
- 10. …With this • Eachicon is drag and droppable • Each icon is configurable to set up constraints and variables • Each icon can import data
- 11. Integration of dataand report generation PnL Report Income Statement Balance Sheet MtM Report Credit Exposure Report ETRM ERP DWExcel/AccessMarket Data Prescriptive Analytic Software
- 12. Prescriptive Analytics optimizesdecision making Descriptive Diagnostic Predictive Prescriptive Information Optimization Hindsight Insight Foresight Purchased Below normal temperature Purchase Forecasts Purchase supply based on forecast
- 13. Prescriptive Analytics Introducing GPScapabilities to your trading, supply and origination capabilities
- 14. Descriptive Analytics You endedup here Hindsight + Information
- 15. Diagnostic Analytics You werehere You ended up here This is why you ended up at your destination Hindsight + Information
- 16. Predictive Analytics You needto be here Foresight + Information
- 17. Prescriptive Analytics You arehere You need to be here This is the best path to get to your objective Foresight + Optimization
- 18. Two ways thatprescriptive analytics can provide GPS capabilities Optimization Simulation Operational Strategic Balance exposure across industries Managing natural gas storage Increase revenue Determine optimal pipeline route Purchase additional capacity Enter new markets Change pricing index Divest assets
- 19. Sophistication of intelligence CompetitiveAdvantage Low market penetration
- 20. Agenda Challenges in EnergyTrading and Supply Chain Optimization Why is Prescriptive Analytics such a great solution? How does Prescriptive Analytics work?
- 21. Objectives The three keyelements used to determine the optimal solution Decision variables MaximizeGeneratesConstraintsData Pipeline capacity Injection and withdrawal rates Pipeline routes Accounts receivable Credit exposure Accounts payable Maximize net income Hedge 20% of production Minimize credit exposure
- 22. Developing the OptimizationModel What are we trying to optimize? On what factors will we base our decisions? What determines the most optimal solution? What constraints must be honored to be accepted as a feasible solution? Identify decision variables Define objectives Itemize constraints Understand problem
- 23. Data Decision VariablesConstraints Prescriptiveanalytics is easy to implement Maximize Net Profit Purchase Price and Volumes Production costs Crude transportation routes Prescriptive analytic optimization models combine: Objectives Tariffs and Volumes Pipeline costs Pipeline capacity Fees and Volumes Trucking costs Trucking capacity Sales Price and Volumes Sales ValueCredit limit
- 24. How to getstarted? Prescriptive Analytics Workshop 1 day in depth workshop on prescriptive analytics for a comprehensive discussion on prescriptive analytics Prescriptive Analytics Training 5 day training on prescriptive analytics so your company can get hands on experience with prescriptive analytics Prescriptive Analytics Assessment 2 weeks assessment of how prescriptive analytics can be applied to your company to improve net income Prescriptive Analytics Proof of Concept 4-6 week proof of concept to demonstrate how prescriptive analytics can speed up decision making and improve revenue and reduce costs
- 25. Energy Trading andSupply Chain Analytics https://www.linkedin.com/in/cmcmanaman/