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Enron Mail |
Very good cross over of ideas - I will push Andy to see the communication
expand - there must be substantive correlation between these physical businesses at the operational level !! Mike ---------------------- Forwarded by Mike Jordan/LON/ECT on 24/01/2001 13:53 --------------------------- Enron Capital & Trade Resources Corp. From: Brenda F Herod 23/01/2001 23:40 To: Andrew Cornfield/LON/ECT@ECT cc: Mike Jordan/LON/ECT@ECT, Paul Wallace/LON/ECT@ECT, John Jacobsen/HOU/ECT@ECT, Roy Lipsett/HOU/ECT@ECT, Michael E Moscoso/HOU/ECT@ECT, Kristen J Hanson/HOU/ECT@ECT, Yvette G Connevey/Corp/Enron@ENRON, Jill Lafave/ENRON@enronXgate, Delmar Davis/ENRON@enronXgate, Daniel Hamilton/ENRON@enronXgate Subject: Re: Metals Andy, Thanks so much for your message. I had you on my "To Do" list today to follow-up from our conversation last week. I appreciate your responses, and will follow-up as needed. Just to recap EIM's current inititives. PriceWaterhouseCoopers (PWC) was engaged in 10/00 to develop a business plan for tactical and strategic solutions for the projected growth in the physical business. In 11/00, AA was engaged to develop a "Blueprint" of EIM major processes (Deal Execution, Deal Capture, Risk Management, Logistics, Settlements and Financial Reporting), down to level 2 processes. The initiatives have been combined into one team focused on delivering the "Blueprint", a gap analysis of Enron systems to business needs and recommended systems. A complete "roadmap" should be laid out with a 0-3months, 4-6months, 7-9 months and 10-12months timeline. The plan addresses tactical also. Our overall objective: Build an infrastructure (people, processes and systems) that is scalable and supports the trading business of EIM. The current industries are Forest Products and Steel. However, additional industries may be added. The targeted infrastructure would require little change to support new industries. The delieverable is expected by the end of 2/01. We'd be happy to visit with you all (video conference or Houston,....) to give you more information. Let me know how to proceed. Thanks again for your time. Since I wasn't able to attend the Controllers' Conference last 10/00, I'm glad I got to meet you last week. Stay in touch. Brenda To: Brenda F Herod/HOU/ECT@ECT cc: Mike Jordan/LON/ECT@ECT, Paul Wallace/LON/ECT@ECT Subject: Metals Brenda As discussed at our meeting last week there are a few areas of commonality between Enron Metals and EIM that should allow leverage off common goals. In particular I promised info on a few areas: Project Q assessment A lot of the issues raised in the report are particular to Enron Metals (being to do with interfaces with our AS400 ysstem) however high level issues which formed part of the decision to not develop this for Enron metals were: Q is over specified for metals. Traffic / logistics for metals is less complex than oil & coal. Metals process tends towards Buy<Store<Sell whereas for liquids the storage is not as prevelant Metals logistics typically involves trucks whereas liquids is ship/barge 2. Inventory Controls Again the reports produced here have been very specific to Enron Metals. Paul Wallace a manager in the co-ordination function is working extensively on developing the controls in this area. I would suggest that you contact Paul directly if you wish to discuss specific areas or inventory controls in general. 3. Funding of inventory We have a structured finance facility here in London. The deal is specific to Enron Metals markets in that it works by reference to LME prices as these are the base index for all the positions placed in the facility. If structured financing is sort for EIM then it would be appropriate to talk to either David Tregar (Metals Commercial) or Bill Appleby (Global Finance) as an intro to the issues faced. 4. Curve Management Process The markets in which our merchanting division trades are based on the LME curves but are linked to a large number of basis curves for quality and location. Given the vast number we have opted to break down the markets by brand group and port location. E.G. for Copper this means we have a grid with 5 brand groups and 3 sets of port groups (13 for europe, 7 for the US and 6 for the Far East). The maintaince & price testing of the grids is made manageable by the fact the premiums only need be entered for brand and port groups by the traders yet prices can be tested by reference to node points i.e. price of specific brand at a given location which can be checked to a market quote. 5. Re recruitment of paper traders I haven't been able to contact him but I recall that the brother of David Rosenblum, one of the metals traders in Chicago, is a trader of recylced paper. I'll keep you posted on long term system development plans here in London. I'd appreciate same for EIM. Regards Andy
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