insights - December 2019 - 3

platform, or ledger, for greater trust and transparency.
Blockchain cuts costs and enhances trust not just in a
business-to-business way but in a business to consumer
way, as consumers can access more information on a
product's origin and how it was produced.
In addition, better technologies have allowed for the
use of more and better data, which enables companies
to better manage their supply chain or their part in the
supply chain. A robust database can also be used to tailor
solutions to better manage a manufacturer's problems
and risks and focus on profitability.

Risk Management Tools for Supply
Chain and Supply and Demand
A supply chain that is traditional, fragmented or
vertically integrated or structured another way can be
optimized for greater efficiencies, including in volatile
markets, regions and times.
Saving money on logistics is one way to optimize a
supply chain. Transloading - the process of transferring
inventory from one type of transportation to another
on its way to the end user - can help bridge the gap in
infrastructure and aid in order fulfillment, in breaking
down shipments and in improving efficiencies and
reducing costs. A single-site company using trucks only
would benefit by transloading with nearby rail sites.
For example, when providing its supply chain services,
INTL FCStone works with companies to see if and where
transloading makes sense. "We work with procurement
groups of various manufacturers, first asking where
they're single sourced on a particular commodity or if
they feel they don't have adequate or efficient supply. If
not, we will then go out and look at nearby rail sitings
and work with the supply base to see if breaking bulk
into trucks makes sense," says Taylor Schrage, Risk
Management Consultant for INTL FCStone Financial
Inc.'s FCM Division, which through its parent company
and its subsidiaries provides a diverse range of financial
services, from logistics to pricing to market information
and more.
Another way to optimize a supply chain is by freeing
up cash flow, something INTL FCStone's subsidiary,
FCStone Merchant Services, LLC, a dedicated team of
supply chain experts often manage. "We can work with
a food company on extended terms or a just-in-time
mechanism. We'll own the commodity from the supply
source, and in many cases through to the manufacturer's
production line which can be delivered in many different

modes of transportation and storage units, such as
warehouses, bins, trucks, railcars, barges, or vessels."
Working with a team of experts with global reach and
knowledge also allows manufacturers to take advantage
of a wide variety of risk management tools, everything
from exchange-traded products like futures and options
to custom solutions like over-the-counter products.
"These products allow you to tailor your risk management
strategy to your specific goals within standard, physical
delivered contracts familiar to manufacturers, alleviating
the accounting work around margining a futures or OTC
account.  It also allows flexibility to the end-user when it
comes to selecting their supplier," Schrage points out.
Having robust, actionable data helps companies
determine the best solutions, from transportation to
financials to other considerations, that fit their needs. In
today's operating environment, customization is crucial


insights - December 2019

Table of Contents for the Digital Edition of insights - December 2019

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