 Procurement, hedging, futures
Joe
Petrowski is the managing director of JHP
Associates, LLC, a consulting firm that specializes
in supply management, business development and acquisitions,
located in Wilton, Conn. Joe graduated in 1976 from Harvard
College with a BA in economics and government. He worked for
Louis Dreyfus Company for 21 years and was president and CEO
of Louis Dreyfus Energy North America. Joe was executive vice
president of Duke Louis Dreyfus, which was a power and natural
gas trader and marketer second only to Enron, at the time,
in volume. Joe was also the president and CEO of Consolidated
Natural Gas Energy Services, a fortune 500 utility. He is
on the board of directors for Cumberland Farms Inc., the seventh
largest retail gasoline and convenience store chain in U.S.
Joe has written articles for several trade publications, including
National Petroleum News, and has been a featured
speaker at several conferences throughout the industry.
Web: www.jhpassociates.com
CLICK HERE TO ASK YOUR QUESTION
Recent Questions:
Q&A
1) What type of information do I need on
a real-time basis to procure well?
Having
all of the postings from all of the appropriate suppliers
is a minimum but not sufficient to maximizing procurement
results. Understanding how each supplier hedges is critical
to understanding what "deals" can be made and
when. Knowing the wholesale supply data, especially markets
that are tributary to the racks influencing your prices
is critical information also.
2) What are the key success factors in implementing
a professional procurement effort?
Having
full and accurate real-time information. Having a professional
staff that understands procurement economics, putting together
a plan of action so that decisions can be made quickly and
on an informed basis. Having a software information system
that can give you your contract and inventory position in
an accurate and useful fashion.
3)
Are there ways to hedge retail margins?
There
are ways to hedge retail margins in a spot tp sixty-day
time frame. Beyond that there are hedges that can be implemented
that will protect against collapsing margins, but at a cost
of giving up some of the upside from expanded margins.
4)
Do long term contracts help to ensure security of supply?
Long-term contracts can be a useful addition to a retailer's
overall supply plan and portfolio. But a buyer must be careful
that it is the right type of contract, otherwise a poorly
constructed term contract cannot only not assure you of
supply, but might guarantee any supply is a burden to profitability
not an enhancement and therefore defeats the very reason
that it was entered into in the first place.
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