District & Industrial Heating

Intra group trading consolidation

Complex industrial intra group trading brought to ease

Implementation Man-days

0

Days

Interconnected Models

0

Models

Business Acc. Units

0

Units

General Ledger Accounts

0

Accounts

Operating Accounts

0

Accounts

Data records available online

0

Thousands

Project Highlights

Challenging intra group trading.

Automated calculation of heat and power generation performance indicators.

Budgeting process shortened from 9 weeks to 2 weeks.

Pain Points & Operational Challenges

10

Production locations engaged in a complex intragroup commodity flow

The company managed 10 production locations with numerous off-take points. Their production units were engaged in a rather complex intragroup commodity flow involving steam, pressured air, and power that determined individual pricing at each off-take point.

Once a year, the company produced a commodity supply reconciliation sheet and a commodity flow review in a spreadsheet, covering the supply of over €60 million, which was a key document for price difference settlements, offtake agreement pricing and for budgeting.

10

Production locations engaged in a complex intragroup commodity flow

The budgeting process was fragmented and took over 9 weeks, often completed in the first quarter of the year it covered. Management reports were published quarterly involving production of some 20 plus partially linked spreadsheet files; Effectively they included 2 month old data; no rolling forecast or regular strategic planning was in place. Source data was manually copied into spreadsheets from various places. Partial ad hoc analyses were produced on an as need basis.

Operational data was reconciled to accounting data at an aggregate level only. Operational drivers (e.g. boiler efficiencies, technological losses, heat factors, etc.) were included in budgeting as best guesses, calculated ad hoc and input into models manually.

Key Benefits

78%

The decrease in annual budgeting process time required

A bespoke modelling & planning environment reflecting industrial and district heating, and power distribution business model was available for real time collaboration for all stakeholders.

A consolidated view of 3 companies (different currencies) and over 51 business units, each having its own bespoke and comprehensive financial and production model, with automated intra group trading calculations.

Detailed commodity consumption and supply report linked with SAP (later with Oracle) for business unit instant performance analyses, rolling forecast, and strategic plan.

Operational analysis (e.g. boiler efficiencies, technological losses, heat factors, etc.) available monthly.

78%

The decrease in annual budgeting process time required

Detailed commodity balance sheet (measure of units and currency) available monthly.

Automated client commodity supply reconciliation process (measure of units and currency).

With active forecasting and instant performance analysis, the budgeting process was shortened to 2 weeks

Data in the management report are now only between 1-2 weeks old.

Project Milestones

  • 14th Day

    Production commodity flow analysis and conversion of company’s existing spreadsheets to MYGIDE.

  • 30th Day

    Commodities data linked to accounting, serving as the basis for production models, including intragroup trading, and made available for the first client experience.

  • 40th Day

    Production models combined with general and administration data into complete consolidated financial models.

  • 55th Day

    Review of company’s current performance, variance to budget. Rolling forecasting and year end forecast revision.

  • 60th Day

    First top management meeting using MYGIDE reports.

  • 90th Day

    Company’s employees began adjusting the models and modelling functions with assistance of the implementation team.

  • 120th Day

    MYGIDE was routinely used.