How OTRM Enables Effective Management of Supply Chain Disruptions
By Irina Reitgruber and originally published on CTRMCenter.
In today’s environment, supply chain disruptions and the resulting uncertainty around prices, deliveries, and physical availability of commodities have become some of the most critical challenges facing commodity businesses. According to Chart: Supply Chain Disruptions Are Back at 2022 Levels | Statista the supply chain stress which increased sharply throughout 2020 and 2021 due to COVID-19, and then returned to normal in 2023, is once again at the same level as during the pandemics.
Traditional risk management tools can model certain aspects of these risks through stress testing and scenario analysis, but they cannot fully capture the operational realities of a disruption as it unfolds.
When a major disruption occurs, businesses need more than hypothetical scenarios. They require a real-time understanding of the consequences for their operations, together with timely access to both internal and external information that can support decision-making. Companies that can quickly answer critical operational questions and maintain a consolidated view of their activities are in a significantly stronger position to respond.
According to ClearOpx, this is precisely the role of OTRM (Operations Trade Risk Management). The term OTRM, recently introduced by ClearOpx, describes a solution designed to serve as an operational “control tower” for organizations involved in the physical and financial trading, transportation, and settlement of commodities, including energy products, metals, and agricultural goods, see more here OTRM: The Emergence of a New Software Category in Commodity and Energy Trading Operations – CTRM Center. Beyond automating manual processes, an OTRM platform aims to maintain a continuously updated view of operational data and orchestrate trading operations end-to-end.
The situation can be illustrated with some examples.
Consider a company purchasing gasoline under a long-term supply agreement. Under normal market conditions, a company which contracts for one million gallons to be delivered over nine months can expect balanced supply and demand and smooth operations. Contractual obligations would be fulfilled largely as planned.
In a disrupted environment, however, refineries may underproduce, suppliers may be unable to deliver committed volumes, and cargoes may need to be reallocated, rebid, or rerouted. Operations teams suddenly find themselves asking critical questions:
- Where are we actually sourcing our contracted volumes?
- Was a particular truck or shipment loaded as planned?
- Is the supplier still capable of fulfilling its obligations?
- Which contracts are at risk of underperformance?
With an OTRM platform, operational events such as truck loadings are captured and digitized immediately. The system automatically reconciles physical movements against contracts, identifies discrepancies, classifies deliveries as fully or partially fulfilled, and initiates follow-up actions such as sourcing alternative supply or preparing settlement workflows.
As a result, what might otherwise become a logistical crisis can be managed more effectively because contracts, physical movements, and operational actions remain continuously synchronized rather than being tracked manually through spreadsheets, emails, and disconnected systems.
A second example can be drawn from geopolitical disruptions affecting major trade routes such as the Strait of Hormuz. Imagine oil cargoes purchased when crude prices were $75 per barrel becoming stranded due to geopolitical events while market prices subsequently rise to $120 per barrel.
In such a situation, traders and operators need immediate answers to questions such as:
- Which vessels are affected, and what cargoes do they carry?
- Which contracts are linked to those cargoes?
- What are the financial consequences of delays, diversions, or contractual breaches?
- Which shipments have the greatest downstream commercial impact and should therefore be prioritized?
This example illustrates that, in a disrupted world, organizations need more than workflow automation. They require a platform capable of maintaining a live view of positions, contracts, logistics activities, and risk exposures, while connecting physical operations to contractual and financial obligations. Such visibility enables informed decisions regarding prioritization, mitigation, and potential renegotiation of commercial commitments.
Point solutions focused on individual workflow automation can improve efficiency and reduce manual effort. However, they offer limited support when rapid decision-making is required in response to major supply chain disruptions. In such situations, the ability to maintain current operational data in a single environment and respond to business-critical questions in real time becomes essential. Ultimately, decisions must be made by traders and operators based on accurate, timely, and easily accessible information. According to ClearOpx, providing this real-time operational intelligence and visibility is one of the core objectives of the OTRM concept.