Strategies that prepare you for whatever the market may do.
If you’re responsible for purchasing commodities to produce goods, you know that market volatility adds uncertainty and price risk to what you do. Strategists – be it in chess, war or business – understand that the future can unfold in a number of potential scenarios. Those who excel make sure they are looking several steps ahead. They plan for the expected and the unexpected.
This strategic approach is what’s going on behind the scenes when our Market360 team meets. Using math and in-depth analytical tools, they calculate possible price scenarios, consider every useful risk management tool, and hammer out recommendations to help you manage the price you pay for commodities.
The goal of this team approach is to make sure we have a complete picture of what could happen in the market. Our team anticipates how scenarios could unfold and help position you for them.
As you prepare for whatever the market may do, you still maintain control. We help you become more disciplined, structured and consistent in your price management efforts, and you maintain your relationships with your suppliers.
Your process. Your suppliers. Just protected.
Market360 answers some of the toughest questions.
What tools to use?
We help you make all necessary decisions, such as which hedging tools you should use or which types of cash contracts make sense and how to blend and balance all tools for maximum effect. We’ll help you understand how each tool works. Our risk managers create recommendations and you have the final say.
How to decide when to take action?
A disciplined process ensures that the emotions of the market don’t sabotage a carefully thought-out, strategic plan. With Market360, you see potential effects of your decisions in advance by modeling the full range of market potential – both the upside and downside. Then, we help you build solutions and set triggers that help you build a strong average price for your purchases.
How much to purchase?
We help you plan ahead on volume and timing of purchases. By planning ahead, you can avoid emotional decision making. Market360 risk managers help you make volume decisions that make a material impact on your business.
How to make sense of market noise?
Data overload can be the enemy of disciplined decision-making. It can make people buy when they should wait or wait when it’s time to make a planned purchase. Market360’s risk managers take a disciplined, math-based approach to the market to help eliminate the noise and to focus on the information that matters.
Active management of your commodity input costs.
Successful price risk management is not concerned with capturing the bottom of a market move. Rather, the objective is to build a favorable average price over time. You can do this with strategies that maximize the separation between your weighted average price and the market price in bull markets, and minimize the separation in bear markets.
By managing price risk in this way, you can reap dividends over just taking the market price, position your business against market bottoms that cut into profitability, and maintain budgets.
Focus price risk management strategies on building a favorable average price throughout your buying cycle.
It’s about building a favorable average price.
Your commodity expenses for any year aren’t based solely on your first purchase, or your second purchase, or any one particular purchase. It’s what you pay for all your purchases. And if a purchase was particularly large? That large purchase has a huge impact on your commodity expenses and the weighted average price you pay for the year. That’s because a big portion of your expenses is weighted to that purchase, and that’s why focusing on your overall weighted average price is so important.
Market360’s focus on weighted average price paints a picture of your expense potential in the future, as well as how you are doing today. Using a math-based process, we see what you might give up in downward potential in order to protect yourself from upward price risk. Most importantly, it helps you see the effect of your decisions in any market environment and sharpen your strategies.