TRADING APPLICATIONIMPLEMENTATION AT SUEK 2018
ABOUT SUEK – 1/2
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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SAP Business Workflow Business Rule Framework
UTIS R1 DETAILSApproval customizing – example
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UTIS R1 DETAILSWebGUI + Personas examples: Deal maintenance
UTIS R1 DETAILS
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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