US-Based Agriculture Cooperative Digitizes trading Operations with Quoreka

Background 

Our customer is one of America's premier agribusiness and food companies, known for its state-of-the-art operations and industry leadership in butter and cheese production. 

As a pioneer in the U.S. dairy industry, they have revolutionized cooking across the country. With a vast network of more than 4,000 local cooperatives, independent dealers, and retailers, they serve producers, animal owners, and families, providing high-quality dairy products. 

Business Problem 

Despite their success, the client faced operational challenges due to their reliance on an outdated on-premises application that lacked the flexibility required for growth. This legacy system hindered their ability to adapt to market changes and scale their operations. Additionally, their existing application struggled to manage complex derivative instruments, which became a critical issue as they sought to enhance their risk management capabilities. 

The client aimed to improve their derivatives system by transitioning to a scalable, cloud-based solution that could handle intricate financial instruments like accumulators while providing on-demand reporting. 

After successfully scaling their derivatives exposure with Quoreka's support, they encountered similar challenges in their physical trading operations, which were also managed by an archaic on-premises application. Recognizing the need for digital transformation, they sought a solution that would enable rapid scalability without sacrificing efficiency. 

Solution  

Quoreka collaborated closely with the client to deliver a comprehensive, cloud-based platform tailored to their evolving business needs. This single, scalable platform addressed their physical and financial trading requirements, offering enhanced control, flexibility, and digital capabilities. Key to this transformation was the seamless integration with the client’s existing ERP system, ensuring connectivity and scalability as per their specifications.  

The project began with intensive workshops to understand the intricacies of the client’s processes and demands. Given the transition from a traditional system, maintaining operational efficiency was crucial. Our solution not only met these demands but also significantly augmented their performance. 

Business Benefits  

The client experienced substantial improvements in operational efficiency and risk management after implementing Quoreka’s platform. They gained:  

• A unified digital platform for managing both physical trades and derivatives. 

• Enhanced control over their data, enabling real-time decision-making. 

• The ability to link pricing and hedging strategies for better risk management. 

Key Applications Deployed

Physical Trades Management 

• This application allowed the client to manage various types of contracts across regions and provided real-time exposure management. Workflow management features enabled efficient task planning and tracking. 

Supply Chain Management 

•  The SCM application helped the client manage risks, track shipments, monitor orders, and oversee inventory more accurately. This improved decision-making and overall operational efficiency. 

Derivatives Management 

• Our derivatives management solution empowered the client to manage market exposure across different underlying assets, handling risks such as price, credit, and foreign exchange. It provided end-to- end management of financial contracts for hedging and trading. 

Position Mark to Market 

• This tool enabled the client to immediately identify opportunities and risks, reducing the manual workload associated with creating position reports. It offered real-time visibility into inventory positions and exposure, supporting informed hedge strategies. 

Value at Risk (VaR)

• Quoreka’s VaR application helped the client analyze potential market risks by running multiple scenarios across different portfolios. This provided a clear view of risk exposure and allowed for more strategic risk mitigation.

Credit Risk

• The credit risk module provided a comprehensive view of the client’s counterparty credit risk exposure, enabling them to track movements, view exposure across business units, and take timely actions when necessary.

Option Valuation 

• Our solution simplified the valuation of options by allowing the client to upload trades, prices, and interest rates, and calculate option greeks and implied volatility. This reduced the time spent on analysis, enabling the design of optimized trading strategies. 

With Quoreka’s digital platform, the client successfully modernized their trading and risk management processes, gaining the scalability and flexibility they needed to grow without compromising efficiency.  

This transformation empowered them to make better, real-time decisions and manage their operations with greater control, positioning them for continued success in the agribusiness industry.