Master class 1:Building a professional commodity risk management framework

Master class 1: Building a professional commodity risk management framework

Wednesday 27th November 2013 at First Hotel in Copenhagen

Strategic commodity risk management is top of the agenda at Board and Top Management level – The question is; what is it, that procurement must deliver, and how do we integrate risk management with procurement work and how do we work in a structured manner in order to cope with volatile commodity at company level? What are the structures processes and mechanisms needed in order to embed good risk management into the company?

Our research shows that many companies are lagging in terms of good commodity risk management practice. One of the main reasons for this situation is the lack of a professional risk management framework and lack of insight into market price trends. This leads many companies to apply a static risk profile decoupled from the market development and only focusing on budget accuracy not taking cost competiveness into account. This is indeed a very expensive approach that decreases the competiveness of the company in the long run and there by destroys significant value.

The foundation of professional commodity risk management is a rigorous risk management framework, embedded in the organizational structures and governance model, which provides transparency, governance and the underlying structures and processes. In order to build the risk management framework the company needs to take a closer look at itself and its situational context in regards to a number of themes. This master class will address best practices within strategic commodity risk management, and give you an exclusive insight into leading edge tools and methodologies that can support your efforts in building up a structured risk management capability within (as well as beyond) the procurement organisation.

The program will take you through the process as well as the content and structures for building and implementing a solid risk management framework. By participating in this highly interactive master class you will be able to drive the development and implementation of a rigorous risk management framework in your own company.

As seats are limited we advise you to register immediately.

About the master class leaders:

Søren Vammen is the CEO of DILF – Danish Purchasing & Logistics Forum and the CEO of Kairos commodities. Søren Vammen has 20 years of experience within the field of supply management and has been deeply involved in developing the supply management practice among European companies for more than two decades. Søren is currently president of IFPSM and is an external examiner at the master program in Industrial Marketing & Purchasing and at the Executive MBA program in Business Strategy at Copenhagen Business School.

Program

08.30-09.00 Registration

09.00-10.00 Strategic commodity risk management framework – good practice – how does it look?

Get an overview of the organizational levers and enablers necessary to build a sustainable platform for coping with strategic commodity risk management and benchmark yourself against other European companies surveyed in the largest survey ever on strategic commodity risk management 2013.
• Commodity risk management impact on the bottom line – what is the difference between good and bad practice measured in hard money?
• How does companies across Europe work with Strategic Commodity Risk management - and what are the best companies doing – insight from the 2013 survey in Europe on strategic commodity risk management and experiences from +150 customers of Kairos Commodities
• What must be in place in terms of strategies, policies, structures, processes, etc. in order to demonstrate good practice?
• Results from the groups own assessment against the European sample – lessons learned

10.00-10.15 Break

10.15-11.45 Identifying market trends – how do you know where the commodity markets are heading?  

Get insight into available tools for market analysis and price forecasting and understand the complexity of commodity market dynamics. Learn how you apply the methodologies into practical procurement decisions and work.
• Business cycle analysis – the global economy and commodity markets
• Fundamental analysis – supply/demand balance, stock levels and cost drivers and market intelligence
• Technical analysis, mathematical analysis of historic prices
• Combination of the perspectives

11.45-13.00 Building the commodity risk management framework – workshop

(The delegates will apply the Kairos Commodites framework to their own company)
Structure and content of the Kairos commodity risk management framework:

• Risk strategy; risk capacity and risk appetite risk exposure and desired risk profile
• Self assessment; situational risk context 
• Defining hedging approach, hedging strategy and profile – static versus dynamic strategies
• What are the options in terms of practical mitigation strategies in regards to hedging of commodity
exposures and what are the risk profiles of the different strategies?
- The four types of hedging – what are the options for
procurement?
- Three practical examples of hedging practice and their consequences
- Different hedging profiles – pros and cons
• Different risk profiles for different risk strategies under volatile market circumstances
• The minimum and maximum hedging characteristics in terms of duration and quantity
• Setting up governance model – structures and processes
• Measuring and reporting on commodity risk management performance; What are the relevant
methodology and KPIs? How to establish transparency by quantifying and measure and report on
commodity and currency risks.
• Next step when you come back in your company – how to sell commodity risk management to your top
management and other relevant stakeholders.

13:00-14:00 Lunch & networking

14:00-16.00 Building the Commodity risk management framework - workshop continued

16.00-16.15 Wrap up and Closing remarks

Next level commodity risk management for you depends on where you are now with your current practice! We will wrap up the intensive program and seek to give you insights and recommendations on what are the next steps for companies at different maturity levels in order to catch up with competitors. Hands on practical guide for what to do when you get back in the office tomorrow!

Time and place

Wednesday 27th November 2013
Registration from 8.30am

Venue
First Hotel Copenhagen
Molestien 11
DK -2450 Copenhagen SV
Telephone: +45 36 15 51 34

Prices

EUR 602,- (DKK 4.475,-) Member of DILF/Kairos subscriber/AERCE/BME
EUR 535,- (DKK 3.975,-) Per extra participant from same company (member of DILF/Kairos subscriber/AERCE/BME)
EUR 804,- (DKK 5.975,-) Not member of DILF/not Kairos subscriber/AERCE/BME
EUR 737,- (DKK 5.475,-) Per extra participant from same company (not member of DILF/not Kairos participant/AERCE/BME)

The fee is inclusive of programme materials and refreshments as stated in the programme.
Full payment is required within eight days from receipt of invoice.
Payment must be received prior to the conference/master class. A receipt will be issued on payment.

VAT will be charged at 25% according to Danish regulation.
Partial refunding can be applied for under certain ciecumstances. Applications are handled by the Danish customs.
For further information please se www.skat.dk

Registration

Use the registration form at dilf.dk/en/registration/.

Invoice and confirmation are sent after you registration is received.

Cancellation and substitution

For cancellations received in writing no later than 30 days before the event a fee with a deduction of 10% for administration charges can be refunded. A 50% cancellation fee will be charged for cancellations received in writing no later than 14 days before the event. Cancellations received in writing later than 14 days before the event will not be refunded. Substitution is allowed at no extra charge and the invoice will be corrected according to new participants’ membership status. Please inform DILF of any substitutions.

DILF reserves the right to change or omit event features, dates and venue. In case of changes DILF is not responsible for covering airfare, hotel or other costs incurred by delegates. In case of cancellation the paid fees are refunded, but above mentioned costs are not. DILF reserves the right to decline participants from direct competitors to speakers or sponsors of the event.

Exhibitors

Other


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