Presentation on theme: "AEMK Systems inc. Deltabot for food packaging industry"— Presentation transcript:
1AEMK Systems inc. Deltabot for food packaging industry Making Automation Affordable
2Problems Expensive Existing Automation Solutions Rising Manual Labour CostIncreasing Employee TurnoverTraining CostsProductivity CompromisesCompetitionQuality and Production CycleExpensive Existing Automation SolutionsLimited FlexibilityHigh Cost and MaintenanceThere are many players in the in industries that utilize a combination of manual labour and automation.They are currently facing a dilemma, which is whether to use more of manual labour or automation.There has been a 60% increase on cost of manual labour for the last 10 to 15 years.There has been an increase in employee turnover due to workplace injuries and other factors.Training costs and Compensations have been the issues for these companies.Competitions among industry players is an ongoing challenge. For these type of competitors, quality and production cycle time are the two main factors in competitive advantages. Companies need a good enough automation system in order to create an edge over other competitors.The current automation solutions are very costly with limited flexibility and high maintenance. Therefore many companies are still reluctant to adopt automation.
3Solution Automation System Integration Flexible to integrate High Speed and PrecisionQuality and ProductivityCompetitive AdvantageReplace Manual LabourEliminates Workplace InjuryLow Cost and MaintenancePatented TechnologyWith AEMK’s Deltabot, adopters can solve all the previously mentioned problems.AEMK provides the Automation System Integration that uses their patented cable-based technology.It is very flexible to integrate and scalable into any size.The Deltabot technology provides high speed and precision to increase quality and productivity to a degree where it become the adopters’ competitive advantageAEMK’s technology eliminates workplace injury because the automation system integrated to replace manual labour on the dangerous tasks.Since it is automation, it has consistent and high quality performance unlike manual labours, which have varying performance.AEMK’s technology can also reduce the costs and the need to maintain the system.
4Design – Customers Experience Food Packaging IndustryPick and Pack SolutionEliminate Manual LaboursLimited BudgetsChoosing Automation SolutionCompetitive AdvantageHigh Speed and PrecisionIntegration ExpertiseLow Cost and MaintenanceSustainabilityPatented Cable-based TechnologySolid Client Base and RelationshipAfter-sale Services/MaintenanceFood packaging industry who needs pick-and-place automation solutionsWanting to eliminate manual labours from dangerous tasksReluctant to apply for currently high cost automation solutionsWho also have limited budgets for automation system upgradesAEMK’s competitive advantage is to provide systems integration expertise with high speed and precision that is lost cost and low maintenanceAEMK can keep the competitive advantages by having the patented cable-based technology, create strong and long lasting relationship with clients, and provide after-sale services and maintenance.
5Core Technology and Product Automation System Integration Design – ProductCore Technology and ProductPatented TechnologyDeltabotCore ServiceAutomation System IntegrationCosts$35,000 - $45,000Price Point$49,000 - $63,000AEMK’s core product is called Deltabot that houses the patented cable-based technology.AEMK’s core service is the automation system integration where AEMK have engineers inspect, analyze and design compatible integrated automation systemsThe costs per robot is from $35,000 to $45,000 and the price is a 40% markup - $49,000 to $63,000 respectively.The difference in price is based on the material used and the difficulty of the projects.
6Design – Process Automation System Integration Consulting and QuotingSystem DesignPrototyping and Beta TestingFinalization and InstallationAfter-sale Services MaintenanceAutomation System IntegrationAEMK’s sales process is to first have engineers provide consulting and quoting services to give the clients an basic understanding of what they need and how much it costs. Then the engineers start to design and implement the system. Once a prototype is done, the system is brought in and beta testing is performed to make adjustments. Once everything is done the final version is installed and final adjustment and testing is made.AEMK’s product comes with a 1-year warranty and is available for after-one-year maintenance subscription.
7Deltabot System Integration Subscription for 1+ year Maintenance Design – Revenue ModelDeltabot System Integration$49,000 for Regular Model Integration$63,000 for Stainless Steel material (FDA requirement)Subscription for 1+ year Maintenance$300 annual recurring for 5 years$450 annual recurring for 3 yearsAEMK generate revenue by selling the automation system integration package which includes the actual system and the design and implement service. As mentioned before, the Deltabot system integration is priced at $49,000 for regular material and $63,000 for stainless steel material that according to FDA regulation needed if it is touching food products.After the initial sales cycle is completed and 1 year warranty period is expired, AEMK also provides the subscribed maintenance service that is $300 annual recurring for 5 years and $450 for 3 years.
8Design – Organization Capabilities ManagementVP-R&DVP-Marketing and SalesTechnicalEngineersMachinistsVP-R&DResponsibilitiesTo supervise the design and development of projectsTo analyze and validate current technological trends and demandsTo initiate and engage quality, productivity, and innovationResourcesThe technical expertise from the engineers and machinistsGoalsTo sustain competitive advantage, maintain quality of products, increase productivity, and reduce development timeVP-Marketing and SalesTo design and implement marketing strategiesTo analyze and create market demandsTo create and maintain client relationshipThe market research resultsTo update the company with industry trend and demandsTo strengthen client relationships and ensure sales leadsEngineersTo investigate and analyze clients’ automation needsTo design and implement system integrationsGoalTo deliver quality and timely products and servicesMachinistsTo construct parts and machines based on engineers’ designsTo install and maintain automation integrations
9Tests - Narrative Manual Labour Patented Technology NeedDevelopSolutionManual LabourAutomation adoptersPatented TechnologyTargeted MarketIntegration ExpertiseLow Cost and MaintenanceThe industries have a need to address the issues with existing manual labours, there is a high manual labour turnover rate and overhead costs.There are many dangerous tasks that need to be done and it is too risky to keep the manual labours at these kind of tasks.The companies that have automation systems are suffering from high switching costs and limited flexibility.AEMK has developed a solution that is patented and has a existing demand. The targeted market, food packaging industry, has a 67% growth rate and current size is $50 million. The future expansion into other robotic industries is possible and has a total size of $5.6 billion.AEMK has in inventory the patented technology and the expertise in system integration that provides quality and low cost and maintenance. Other existing competitors provide the similar solutions with similar performance but much costly. AEMK has enough sustainable competitive advantage to enter the industry and obtain market share.
10Tests - Numbers BE in 2 Years BE volume 65 robots 1.6 Million Funding Payback in 4 yearsB/E volume = Fixed Costs /Contribution margin= $750,000/$11550= 65Payback period = Initial investment /Annual operating cash-flow= $1,600,000/$400,000= 4 years
11Milestones and Assumptions Business ConceptPrototype DevelopmentPrototype TestingProduct Introduction0 - 3 MonthsCorrect Market SizeCorrect CostingCorrect Sales ForecastMonthsProduction CostingBeta testingCosts1 – 2 YearsCustomer DemandsSales Cycle TimeSales ChannelMilestones for AEMK areBusiness ConceptPrototype DevelopmentPrototype TestingProduct IntroductionThere are assumptions to be tested at each stages in order to forecast business operations. They can be tested through market research and beta testing.The business needs to be planned with the correct market size, costing, and sales forecast.The initial prototype development will require the correct production and beta testing cost in order to design price point and sales forecast.The actual prototype testing will need the right customer demand criteria in order to make sure the right products and services are delivered.The sales cycle time is also needed in order to predict the annual sales volume and corresponding adjustments.Product Introduction will require the right sales channels in place.
12Tasks and Sales Cycle Tasks Research and Development Market Research Beta TestingMarketing PlanClient Relation3 daysAnalyzeQuoting1 monthDesign System HardwareDesign System Software1 weekBeta testingImplement PrototypeInstallFinalizeMajor tasks are needed by AEMK:Research and Development is to maintain and create competitive advantageMarket research is to make sure the right products and services is delivered and the right pricing is set.Beta Testing is to validate the feasibility of the technology and to test the average development time.Marketing Plan is to effectively create awareness of the technology and plan in order to attract sales.Client Relation is to maintain a strong and lasting business relationship and to utilize word-of-mouth marketing to create customer loyalty.The sales cycle is as shown above
13Growth and Financial Plan Growth PlanBeta-testing and PrototypingMarketing PlanStrategic PartnershipDevelop into new MarketBusiness ConceptPrototype DevelopmentPrototype TestingProduct IntroductionAEMK can grow by obtain desired results from beta-testing and prototyping. Customer demands and technological trend can be obtained in order to improve AEMK’s internal operations.Marketing Plan is to create awareness of the technology and the brand. It will draw business not only from the food packaging industry but also other industries that is interested to adopt AEMK’s technology.Creating Strategic partnership with one of the big robotic industry competitors such as ATS in order to utilize their resource and capital. It can provide AEMK a door to enter into other industries as well as create and maintain client relationship within the current industries.Once AEMK has an established group in the food packaging industry, AEMK can utilize the above to explore opportunities and feasibilities in other industries.The funding required at each stage is as shown, if all assumptions are correct, AEMK can generate 2M in the first year and 100M in the fourth year.0 - 3 Months200,000Self, Friends, and FamilyMonths800,000Angel Investors1 – 2 Years1,500,000Venture Capitalists2M First Year100M Fourth YearRevenues
14Appendices – Rationale for Automation Assume: 2 manual labourers = 1 robotAssume: 10 year periodFact: Employee turnover is in excess of 1% / week. ($1000-week)Assumptions for Manual Labour :$10/hour40 hours a weekAssumption for Turnover:-2 people turnover a week which costs $1000/week =$48,000/year or $480,000 for 10 yearsCalculation for Manual Labour Salary:$10 x 40hrs = $400/week x 4 weeks = $1600 x 12 months = $20,000/yr or $200,000 for 10 yrs
16Appendices – Market Size 126,700Newly Installed Robots worldwide in 20051,000Total newly installed robots in the food industry in 20051,000/126,700Calculation for market share percentage1% ( )Total food market share of industrial robots*$5.6 BillionEstimated market size based on the present worth of the industrial robot industry$44,184,000 MillionEstimated food industry expense in industrial robots to date
17Appendices – Management Team CEO ‘Acting’ Amir KhajepourVP Finance – ‘Acting’ Jas BanwaitVP Sales/Marketing – Jon Chang2 Sales AgentsVP Business DevelopmentVP OperationsVP R&D3 FT Engineer2 PT Machinists6 FT Engineers 2 MachinistsNeededOccupied
18Appendices – Hiring Schedule PositionTimingCEOMay 2007VP FinanceMay 2008VP Sales and MarketingVP OperationsAmir KhajepourVP R&DSales AgentsMay 2007, 1 following each yearEngineersMay 2008, 2 following each yearMachinistsMay 2008, 1 following each yearAdministrationMay 2007, one full time and one part time