1. AEMK Systems inc. Deltabot for food packaging industry
Making Automation Affordable

2. Problems Expensive Existing Automation Solutions
Rising Manual Labour Cost
Increasing Employee Turnover
Training Costs
Productivity Compromises
Competition
Quality and Production Cycle
Expensive Existing Automation Solutions
Limited Flexibility
High Cost and Maintenance
There 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.

3. Solution Automation System Integration Flexible to integrate
High Speed and Precision
Quality and Productivity
Competitive Advantage
Replace Manual Labour
Eliminates Workplace Injury
Low Cost and Maintenance
Patented Technology
With 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 advantage
AEMK’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.

4. Design – Customers Experience
Food Packaging Industry
Pick and Pack Solution
Eliminate Manual Labours
Limited Budgets
Choosing Automation Solution
Competitive Advantage
High Speed and Precision
Integration Expertise
Low Cost and Maintenance
Sustainability
Patented Cable-based Technology
Solid Client Base and Relationship
After-sale Services/Maintenance
Food packaging industry who needs pick-and-place automation solutions
Wanting to eliminate manual labours from dangerous tasks
Reluctant to apply for currently high cost automation solutions
Who also have limited budgets for automation system upgrades
AEMK’s competitive advantage is to provide systems integration expertise with high speed and precision that is lost cost and low maintenance
AEMK 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.

5. Core Technology and Product Automation System Integration
Design – Product
Core Technology and Product
Patented Technology
Deltabot
Core Service
Automation System Integration
Costs
$35,000 - $45,000
Price Point
$49,000 - $63,000
AEMK’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 systems
The 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.

6. Design – Process Automation System Integration
Consulting and Quoting
System Design
Prototyping and Beta Testing
Finalization and Installation
After-sale Services Maintenance
Automation System Integration
AEMK’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.

7. Deltabot System Integration Subscription for 1+ year Maintenance
Design – Revenue Model
Deltabot 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 years
AEMK 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.

8. Design – Organization Capabilities
Management
VP-R&D
VP-Marketing and Sales
Technical
Engineers
Machinists
VP-R&D
Responsibilities
To supervise the design and development of projects
To analyze and validate current technological trends and demands
To initiate and engage quality, productivity, and innovation
Resources
The technical expertise from the engineers and machinists
Goals
To sustain competitive advantage, maintain quality of products, increase productivity, and reduce development time
VP-Marketing and Sales
To design and implement marketing strategies
To analyze and create market demands
To create and maintain client relationship
The market research results
To update the company with industry trend and demands
To strengthen client relationships and ensure sales leads
Engineers
To investigate and analyze clients’ automation needs
To design and implement system integrations
Goal
To deliver quality and timely products and services
Machinists
To construct parts and machines based on engineers’ designs
To install and maintain automation integrations

9. Tests - Narrative Manual Labour Patented Technology
Need
Develop
Solution
Manual Labour
Automation adopters
Patented Technology
Targeted Market
Integration Expertise
Low Cost and Maintenance
The 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.

10. Tests - Numbers BE in 2 Years BE volume 65 robots 1.6 Million Funding
Payback in 4 years
B/E volume = Fixed Costs /Contribution margin
= $750,000/$11550
= 65
Payback period = Initial investment /Annual operating cash-flow
= $1,600,000/$400,000
= 4 years

11. Milestones and Assumptions
Business Concept
Prototype Development
Prototype Testing
Product Introduction
0 - 3 Months
Correct Market Size
Correct Costing
Correct Sales Forecast
Months
Production Costing
Beta testing
Costs
1 – 2 Years
Customer Demands
Sales Cycle Time
Sales Channel
Milestones for AEMK are
Business Concept
Prototype Development
Prototype Testing
Product Introduction
There 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.

12. Tasks and Sales Cycle Tasks Research and Development Market Research
Beta Testing
Marketing Plan
Client Relation
3 days
Analyze
Quoting
1 month
Design System Hardware
Design System Software
1 week
Beta testing
Implement Prototype
Install
Finalize
Major tasks are needed by AEMK:
Research and Development is to maintain and create competitive advantage
Market 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

13. Growth and Financial Plan
Growth Plan
Beta-testing and Prototyping
Marketing Plan
Strategic Partnership
Develop into new Market
Business Concept
Prototype Development
Prototype Testing
Product Introduction
AEMK 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 Months
200,000
Self, Friends, and Family
Months
800,000
Angel Investors
1 – 2 Years
1,500,000
Venture Capitalists
2M First Year
100M Fourth Year
Revenues

14. Appendices – Rationale for Automation
Assume: 2 manual labourers = 1 robot
Assume: 10 year period
Fact: Employee turnover is in excess of 1% / week. ($1000-week)
Assumptions for Manual Labour :
$10/hour
40 hours a week
Assumption for Turnover:
-2 people turnover a week which costs $1000/week =
$48,000/year or $480,000 for 10 years
Calculation 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

15. Appendices – Financial Projections
2005
$27M
Market Size Projections
2006/2007
2007/2008
2008/2009
2009/2010
2010/2011
Growth Rate
250%
375%
500%
Industry
$33M
$45M
$68M
$85M
Market share
$2M
$10M
$50M
$100M

16. Appendices – Market Size
126,700
Newly Installed Robots worldwide in 2005
1,000
Total newly installed robots in the food industry in 2005
1,000/126,700
Calculation for market share percentage
1% ( )
Total food market share of industrial robots
*$5.6 Billion
Estimated market size based on the present worth of the industrial robot industry
$44,184,000 Million
Estimated food industry expense in industrial robots to date

17. Appendices – Management Team
CEO ‘Acting’ Amir Khajepour
VP Finance – ‘Acting’ Jas Banwait
VP Sales/Marketing – Jon Chang
2 Sales Agents
VP Business Development
VP Operations
VP R&D
3 FT Engineer
2 PT Machinists
6 FT Engineers 2 Machinists
Needed
Occupied

18. Appendices – Hiring Schedule
Position
Timing
CEO
May 2007
VP Finance
May 2008
VP Sales and Marketing
VP Operations
Amir Khajepour
VP R&D
Sales Agents
May 2007, 1 following each year
Engineers
May 2008, 2 following each year
Machinists
May 2008, 1 following each year
Administration
May 2007, one full time and one part time