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Commodity Intelligence

Better manage your exposure to commodity risk with easy-to-consume market insights and predictive price analytics, prepared by market specialists

Commodity Intelligence at a glance:

  • Contextualised commodity forecasts that make the potential business, operational and budgetary impacts of market shifts clear.
  • Ongoing insight delivery ensuring that commodity managers are always operating with relevant, timely forecasts and category insights.
  • Deep procurement expertise and broad basket coverage spanning a huge range of commodities – from Agro and Livestock, to Fuels and Petrochemicals.
  • 95%+ forecast accuracy across most commodity markets – enabling procurement teams to act with confidence on the insights we deliver.
  • Holistic risk management support through event-related risk mitigation frameworks, technical analysis, hedge modelling and risk governance.
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Get ahead of commodity market fluctuations – and stay there

Commodity market volatility in pricing, supply and demand has a direct and significant impact on your organisation’s procurement budget, ability to deliver savings and overall profitability. The trouble is, many commodity markets are exactly that – volatile.

 

To effectively mitigate the risks associated with volatile commodity prices and supply/ demand fundamentals on budgetary targets, category managers must be able to:

  • Access reliable forecasts and analysis reports to gain a true picture of their position in the market – and a view of where category markets are headed.

  • Accelerate information gathering and spend more time focusing on creating mitigation strategies than piecing together diverse, incomplete data.

  • Cut through market noise and understand which risk indicators truly pose a threat to their category and broader procurement strategies.

  • Build ongoing, always-on insight programmes that free them to achieve their full potential as strategic advisors to the rest of the business.

We do more than just provide commodity market data…

Our Commodity Intelligence solution combines The Smart Cube’s proven forecasting models with analysis of your internal data, to deliver reliable commodity price forecasts and impact assessments that are contextualised for your business. Accessed through Amplifi PRO, our on-demand procurement intelligence platform, your custom Commodity Intelligence solution gives you:

  • Robust commodity intelligence
    Robust commodity intelligence

    Our dedicated specialists use a combination of technical and fundamental methodologies, and supplement quantitative price forecasts with reasoning and analysis to give you full visibility.

  • Coverage across a huge range of markets
    Coverage across a huge range of markets

    We provide broad basket coverage across industries and commodities including Agro, Dairy, Livestock, Energy, Fuels, Resins, Petrochemicals, Metals and more. 

  • Assessments based on prescriptive and predictive analytics
    Assessments based on prescriptive and predictive analytics

    Clearly see how volatility can impact your category spend with analytical insights that enable you to respond proactively.

  • Risk management support
    Risk management support

    We support you with defining commodity purchase strategies, mitigating event-related risks and ongoing hedging governance. 

  • Access to commodity specialists
    Access to commodity specialists

    When you work with The Smart Cube, our team becomes an extension of yours – providing contextualised insights and recommendations as required.

How your business benefits

With Commodity Intelligence from The Smart Cube, you can:

  • Accurately predict commodity price volatility with forecasts and deep insights into underlying drivers.
  • Adopt a proactive approach to commodity volatility management and make informed decisions faster to mitigate risk.
  • Become a strategic advisor to business stakeholders and use your insights to guide their product pricing decisions.
  • Quantify the business impact of market shifts and build scenarios to understand the true pressure they could put on budgets.
  • Improve supplier negotiations and use facts and intelligence to secure the commodities you need at the right price.
  • Spend less time searching for data and more time focusing on supplier management and risk mitigation.
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How we work with you

We combine your internal data with our proprietary assets and deep commodity market expertise to create the contextualised forecasts you need – and we deliver them through custom digital portals and web-based dashboards, so your whole team can make use of them.

Step 1

We work with you to identify the commodity markets impacting your spend, and map out their value chains.

Step 2

We identify key variables across the value chain and correlate them to commodity prices using historical data.

Step 3

Our team develops statistical models to determine the relationships between shortlisted variables, drivers and events, and commodity prices.

Step 4

We test the model by calculating historical prices, then measuring deviation from actual historical prices levels.

Step 5

We create detailed forecasts, enabling category managers and procurement teams to reliably anticipate future commodity price fluctuations.

Step 6

We marry these forecasts with your internal business data to help you understand and mitigate the volatility impact.

Why choose The Smart Cube?

When you choose The Smart Cube’s Commodity Intelligence solution, you always get:

A dedicated team of commodity experts: Our team of commodity specialists have extensive experience providing contextualised market insights, proactive supply recommendations and deep category knowledge.


Customised self-service dashboards: With pre-built assets and custom solution elements, we build insight delivery portals around you – enabling everyone to access intelligence conveniently.


High accuracy rates: Consistently delivering a 95%+ accuracy rate for most commodity price forecasts.


Contextualised insights: We combine internal data with reliable price forecasts to provide full context for your organisation – visualising the impact shifts will have on your budgets and strategies.


Procurement-specific forecasts: Our background is in procurement intelligence – so we know the kind of information you need to manage risk and deliver savings, and how you want it delivered.


Broad basket coverage: The Smart Cube offers broad basket coverage across a wide range of industries, enabling a consistent approach to commodity management across your organisation.


Commodity Intelligence in action

Regression modelling and scenario analysis kept this global confectionary business sweet by avoiding rising sugar prices

  • THE CHALLENGE

    The category team at this Global top 20 confectionary company was anticipating a rise in sugar prices globally, and wanted to identify levers to mitigate this risk.

  • OUR APPROACH

    The Smart Cube identified 2 key drivers impacting the sugar prices, and used regression modelling and scenario analysis on these drivers to assess the impact on sugar prices. We recommended a long-term hedge position in the futures market to mitigate the risk of rising sugar prices.

  • VALUE DELIVERED

    Based on our recommendation, the category team not only negated the impact of rise in sugar prices, but also achieved an annual savings of $2.5 million annually.

Price benchmarking exercise helped global steel manufacturer negotiate better deals with its suppliers and reduce risk

  • THE CHALLENGE

    A leading global steel manufacturer was facing volatile commodity prices and challenging overall business conditions, which together led to pressure to deliver higher cost savings.

  • OUR APPROACH

    We ran a price benchmarking exercise to map current costs of the client’s various commodities against underlying price indexes, and provide information on market rates, trends, market dynamics, price movements, availability of alternative suppliers, products and Forex rates to produce insights into various cost drivers. We identified key demand-based and commercial negotiation levers, and created precise messaging and talking points to negotiate with suppliers.

  • VALUE DELIVERED

    Using our recommendations, the client generated savings worth £4million (10% of spend) across its key commodity suppliers and agreed new contract terms with suppliers to capitalise on positive commodity price changes and mitigate negative changes, thus reducing risk exposure in the future.

Better contract management for meat category delivered quarterly savings of around 5%

  • THE CHALLENGE

    The client wanted to achieve cost savings by optimising spend on meat categories and wanted to assess potential hedging strategies to mitigate price hikes in meat category.

  • OUR APPROACH

    Our custom dashboard showcased the forecast prices of beef and pork for a year and estimated a savings of 8.8% based on the annual spend data. We recommended bringing the contract forward, buying these commodities upfront with delivery in the next quarter to avoid extra spend of 5% that would have otherwise been incurred due to expected price hikes.

  • VALUE DELIVERED

    The client followed our recommendations and bought next quarter’s supplies with a later delivery option to avoid an additional spend of €3 million (5% of quarterly spend).

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