Automation Project
`
`Automation Project
`
`Manual Processes by Area ............................................................................................ ..4
`
`Technology Discussion .................................................................................................. ..5
`
`Options .......................................................................................................................... ..6
`
`Pinpoint“ Paper Solution (PPS) ............................................................................... ..7
`
`DFIDW vs. Pinpoint” Comparison ............................................................................ ..8
`
`Savings per Facility ..................................................................................................... .. 11
`
`Savings Breakdown by Area ........................................................................................ ..12
`
`Errors in FG & Shipping ........................................................................................... ..12
`
`Productivity Gains in FG & Shipping ........................................................................ .. 14
`
`Cost of Rollstock Upgrades at Wet End ................................................................... .. 15
`
`Productivity Gains Rollstock ..................................................................................... .. 16
`
`Finishing Area .......................................................................................................... .. 17
`
`Banding Area ........................................................................................................... .. 18
`
`Cap Cutting .............................................................................................................. .. 19
`
`Cash Flow Advantage .............................................................................................. ..20
`
`Total Annualized Savings in 7 Areas ........................................................................... ..21
`
`Other Areas of Potential Savings ................................................................................. ..22
`
`Commercial Summary ................................................................................................. ..23
`
`Payment TERMS: .................................................................................................... ..23
`
`Additional Costs ....................................................................................................... ..23
`
`Inclusions ................................................................................................................. ..24
`
`Exclusions ................................................................................................................ ..24
`
`Site Survey — Process Mapping ................................................................................... ..25
`
`Current Site 1/Site 2 Process Flow & Changes using the Pinpoint“ Process - by Area
`................................................................................................................................. ..27
`
`Area 1 — Receiving & Rollstock ............................................................................ ..27
`
`Area 2 — Issue from Rollstock to Wet-end ............................................................ ..28
`
`Area 3 —— Coming Off the Corrugator ..................................................................... ..29
`
`Area 4 — WIP (Work in Process) ........................................................................... ..3O
`
`RFC - Exhibit 1004
`
`

`
`
`
`Area 5 —- Finishing Area 8. Banding ....................................................................... ..31
`
`Area 6 -« FG (Finished Goods) ............................................................................. ..32
`
`Area 7 -— Shipping ................................................................................................. ..33
`
`Area 8 - Butt Rolls ................................................................................................ ..34
`
`Area 9 —— Offsite Storage & Warehousing .............................................................. ..35
`
`Pinpoint” Equipment Layouts for Site 1 & Site 2 .................................................... ..36
`
`

`
`
`
`Implementing the Pinpoint” Paper Solution will provide Savings of $1,400,000 in year 1
`(and $10,000,000 over 5 years) with a Payback of less than 2 months under an operating
`lease. Providing “real-time" and accurate information will allow Kiwi to perform at a much
`higher level and help achieve the low-cost position CLIENT is working towards.
`
`This improvement will come by making key changes in how information is feed into Kiwi.
`1. Remove manual intervention so the correct information flows to Kiwi and cannot be
`
`corrupted
`2. Automate the process/flow ofinformation
`3. Buy-in from site management team is essential to these changes
`
`These changes will:
`0 Eliminate labor
`
`0 Reduce Downtime
`
`0 Better control /reduce inventories
`
`0
`
`Increase Productivity
`
`D
`
`I
`
`,1.
`
`.
`
`The first site could be implemented in less than 6 months with additional sites deployed
`weekly thereafter. CLIENT will see savings within 2 months. Additionally, Pinpoint” is
`easily integrated with other software platforms and could easily be integrated with Mills
`and Pre-print facilities to give CLIENT a National Platform.
`
`Pinpoint” implementation will support your Kiwiplan software implementation.
`Our evaluation looked at all areas of the operation keeping in mind our OHIO principle:
`0 - Zero
`
`H - Human
`
`I — Intervention
`
`O — Operation
`
`

`
`Qutgome
`
`While we do not indorse any particular software, the Kiwi software appears to be a good
`product. Given what we observed, this product alone will not significantly reduce costs due
`to the manner in which it receives information.
`
`o The information the Kiwi software is utilizing to make precise & accurate decisions
`is being feed into the system by a 4-0 year old Hardware process (barcode
`technology)
`that
`requires
`enormous
`human
`intervention
`thereby
`corrupting/challenging any software system.
`0 The information required by Kiwi relies on up to 34 Manual Processes — most of
`which require manual barcode scanning
`- Barcoding Process is Easily bypassed or Subverted by employees/management
`0 Barcode Equipment is unreliable
`
`

`
`
`
`As part of our analysis we reviewed the Kiwiplan product. While we do not endorse any
`specific software platform, it appears that the Kiwi software is a substantial software
`product and, with some modifications on how Kiwi receives input data, could be an
`excellent system. The challenge CLIENT faces is all software systems require input and the
`input CLIENT currently provides requires enormous human intervention using an old,
`manual technology - Barcodes. The opportunity for errors, or employees subverting the
`system, is enormous. No software platform can possibly provide the functionality CLIENT
`is attempting to achieve with Kiwi under this scenario. Site 1 has up to 23 manual
`functions that must occur and Site 2 has up to 19 that must occur for the Kiwi system to
`run as it was intended (see table 1 below).
`
`Analysis of Manual Tasks by Area
`
`23
`
`Table 1
`
`19
`
`Processes by
`Area
`
`Rollstock
`
`Receiving &
`1 Inventory
`Deliver to Wet
`
`End
`
`Coming Off
`Corrugator
`
`2
`
`3
`
`4 WIP
`
`Finishing Area &
`Banding
`
`«-
`
`FG
`
`Shipping
`
`5 6
`
`7
`
`Manual Process -
`Subtotal
`
`If you add in Butt Rolls and Offsite Warehousing to the scenario, the Manual processes
`increase substantially.
`
`

`
`Additional ProcessesIAreas
`
`ll ButtR°"s T
`E Offsitestorase ———n
`
`
`
`TOTAL Manual
`
`Processes
`
`34
`
`31
`
`Table 2
`
`Most of these manual operations involve barcodes. The chance for errors, omissions or
`subversion of the process, increases with each human intervention. During our visit we
`observed numerous situations where barcode scanning didn't occur or the equipment was
`malfunctioning. Several employees indicated they quit using the scanning equipment
`because it wasn't reliable.
`
`Shortcomings of any Barcode system:
`1. Processes
`that utilize barcodes are and highly
`dg which minimizes or neutralizes any
`software's effectiveness.
`
`2. 40+ year old technology — using barcodes in 2012 can only be compared to
`using Typewriters instead of Computers.
`3. Equipment is not maintainable & unreliable
`a. Many of the employees we talked with at both plants indicated the
`scanning equipment was unreliable so they stopped using it.
`4. Employees at these facilities should be commended for their initiative.
`Because of unreliable equipment, much of what is occurring in these 2
`facilities is done by "tribal" knowledge.
`It
`is infeasible to run a major
`corporation on "tribal" knowledge in today's technology driven environment.
`
`While the Site 2 facility is highly automated, the process of moving rollstock around
`warehouses, loading the wet-end, transferring from the finishing area to bander, then onto
`finished goods, to shipping, still involvesmultiple In fact,
`to take Rollstock from unloading through to loading customer orders, there are a
`minimum 19 manual functions to be able to load 1 pallet. 1
`9
`' .
`.
`.
`J.
`..I.
`.'. 5
`I Q. J :
`..
`..
`.I.
`.1.
`'.
`_
`.
`.
`. ..
`_
`-_.
`-..
`1..
`' J
`_.
`.
`_
`
` . If the FG are stored in an offsite warehouse, as in
`
`Site 1, the number of manual ste s increases b at least 6.
`
`For a least a decade, companies in different industries have used RFID (radio frequency
`identification) technology to reduce internal costs and help better manage their internal
`
`

`
`processes. Standard Industry savings as reported by RFID Journal: The average company
`deploying RFID type products achieve the following savings:
`I
`3-9 % Savings on Operating Costs
`I
`3-5% Savings on Finished Goods Inventory
`I
`2-7% Sales Increase
`
`I Liability Reduction
`
`RFID is a proven technology that will substantially reduce CLIENT’s internal costs. With
`over 170 manufacturers of RFID products,
`the challenge is picking the correct
`products/systems for the most effective implementation. Many have _F_ai1e_d;
`1.
`International Paper trialed a system in 2003 and I quote, "The cost of the Hardware,
`Software and Tags was absolutely insignificant compared to the savings we
`received...the problem was we couldn’t keep it running" so they switched back to
`barcodes.
`
`2. GP has deployed RFID in 3 non-corrugated plants thus far. They have removed the
`original system and deployed a second system, only to fail.
`3. CAT has been working for 5 tears 8: spent ~$SO million and still does not have a
`system that works.
`4. Medtronic deployed RFID in 1 facility last year only to find the tags were rendered
`useless after the sterilization process. And the list goes on....
`Failure rates are high because what works in one area, doesn't necessarily work in others.
`
`A-1's management team are the leaders in this industry and have a combined 40+ years
`experience in Bar-codes, RFID, process automation, forklift automation, cost reduction, etc.
`We eliminate your risk of a costly mistake. A failed implementation will negatively impact
`acceptance and payback. Here are a few of our credentials:
`I
`40+ years RF ID /Automation Experience
`
`I Author of over 150 Papers on RFID
`I
`Founding Chairman of US RFID Standards Group
`I Original Chairman of RFID — ISO Group-NA & EU
`I Director Low Power Radio Association (LPRA)
`I
`Provides Expert Input to FCC & FDA
`I
`Inducted into the Smithsonian Institute in 2011
`
`
`
`Our initial discussions were focused on the value DFIDT” could bring to the CLIENT
`operations. After thoroughly reviewing your facilities, there is a better, proven option for
`automating corrugated and mill facilities to remove most of the human intervention and
`manual operations, thereby, reducing costs in a highly competitive environment. Below are
`the options with their respective advantages and challenges.
`1. DFID” (Dual Frequency Identification]
`
`

`
`DFIDT" was designed specifically for Rollstock and wet end inventory control in the
`paper industry. Changing to the DFlD”“ system in the Rollstock and wet end areas,
`several European companies have seen over 2.5% savings. The challenges with
`DFID”:
`
`a) The process still involves Manual insertion & removal of tags
`b) DFIDT” is intended for roll use monitoring where the core is the instrument of
`identity. DFID” works in Rollstock & wet end...but it is not viable and
`extendable to a plant wide model
`(i.e. FG, Shipping, Finishing Area,
`External Warehousing, etc).
`
`
`
`
`
`
`
`
`.0.‘ '-.‘-III!’ --90'IIIl'|0 J! ..I.‘_I_.l_-...9...-_
`
`c) System is Costly — Tags, although re-useable up to 20 times, are $20 each.
`d) DFID” needs its own software but still can be integrated into Kiwi
`e) To be 100% automated, the system still needs Pinpoint”
`
`2. Pinpoint” Paper Solution (PPS)
`the facility.
`required throughout
`Pinpoint” is utilized when localization is
`Pinpoint” acts as an air-traffic-controller and literally sees tagged product
`throughout
`the facility and automatically records movement.
`It provides
`"Exactness vs. Generality" in location management. The information Pinpoint”
`provides to Kiwi allows the Kiwi to perform at a very high level. This provides
`CLIENT management the utmost granularity to all the business processes and helps
`reduce costs and waste.
`It eliminates Human Intervention in 97% of the processes
`as seen in table 4 below.
`
`Banding Example: The Pinpoint” system would input into Kiwi what pallet is
`approaching the bander and Kiwi would automatically set the proper banding
`sequence for that pallet...thus eliminating the need for a banding operator on
`'- - - ' ' “‘ - -.
`
`
`eachshift.
`
`
`
`
`
`
`
`
`
`Below is an example of how the system works. NOTE: In figure 1 the Pinpoint” System shows
`the items on the pallet & figure 2 shows the location of the boxes/Pallet in a defined space
`(warehouse).
`In figure 3, the Pinpoint” System shows the items divided on 2 pallets and
`figure 4 shows the location of each box/pallet in a defined space (warehouse). The black area
`in Figure 4 will never be seen. An interface will convert this information into useable data for
`any software to communicate with clamp/fork truck drivers & the rest of the supply chain.
`
`

`
`
`
`Figure 1
`
`Figure 2
`
`Table 3 shows a comparison of what areas Pinpoint” covers versus DFID” and the cost
`associated with each.
`
`

`
` Comparing the Options
`
`
`
`DFIDTM
`
`Pl NPOINTTM
`
`$
`
`$
`
`729,500 $
`
`20,000
`
`2.5%
`
`
`
`507,500
`
`$
`
`14,000
`
`Area
`
`System Cost
`
`Lease Optionl Month
`
`Potential Savings
`
`Potential Savings
`
`
`
`
`
`
`
`
`
`3.5%
`
`1,400,000
`
`12%
`0.42%
`1.27%
`
`$ 1,000,000 $
`
`
`
`Lease cost as a % of Potential Savings
`% Savings Needed to Break-Even Leasing
`% Savings Needed to Break-Even Purchasing
`Areas of the Business Covered
`
`24%
`
`><><><l
` ><><><><><
`
`X
`
`X
`
`Rollstock
`
`Wetend
`
`Finishing Area
`
`Banding
`
`WIP
`
`Shipping
`
`Offsite Warehouses
`
`Outside Storage
`
`FG (Finished Goods)
`
`Table 3
`
`
`
`Pinpoint”
`
`Processes
`
`Site 1
`
`

`
`Onsite Process
`
`Butt & Offsite
`
`Storage
`
`Tle 4
`
`The highly automated Site 2 system only eliminated 4 of the 23 Onsite manual tasks
`we evaluated.
`
`Pinpoint” Advantages:
`a) The system can be used in all areas of all facilities including, rollstock
`stored outside, external warehouses, pre-print facilities &_Mi1ls,,,5_Q_1;h_e
`
`‘H -..o
`'-.
`I‘: ‘f
`«.
`‘I.
`I
`|..._'I|.
`-.1 03:3.
`-. Ion '
`'
` .
`b) Helps effectively manage FIFO and gives Pinpoint“ accuracy to your business
`model thereby reducing waste, errors, human intervention, etc.
`.1.
`'.u
`-:9!"-.
`.0"-.'|i.l
`.
`'1.
`011......‘
`
`
`C)
`
`
`
`While DFID"‘ 1s a great localized system, Pinpoint” is still less expensive and offers
`the advantage of maximum cost reduction & control over the whole facility,
`including outdoor roll storage — .
`
`10
`
`

`
`5 Year System Costs Comparison
`DFIDTM vs Pinpoint“
`
`Option
`
`DFIDT"
`
`Pinpoint”
`
`System cost®
`
`$729,500
`
`Year 1 Tag Cost
`
`$80,000
`
`$507,500
`
`$70,000
`
`Years 2-5 Tag Cost
`
`$240,000
`
`$230,o00®
`
`5 Year Totals
`
`$1 ,049,50O
`
`$857,500
`
`(D System cost include Hardware, Installation, and Training
`
`®Tag costs are little higher for Pinpoint” because CLIENT would be tagging all FG
`
`Reducing costs & liability is all about controlling what is occurring in in
`process - AS IT OCCURS!
`
`European companies have seen average savings of 2.5% using the DFIDT” system. Add in
`1% projected savings for FG (finished goods), shipping, finishing, and banding areas by
`deploying Pinpoint” and the total equals 3.5%. Customers report incremental gains in
`subsequent years.
`The Savings chart below represents a 3.5% savings (based on
`containerboard costs) in year 1 and incremental gains of 0.50% in years 2-5. Savings are
`cumulative over 5 years with the assumption Containerboard costs will rise 5% annually.
`
`
`0;
`Cumulative
`
`
`
`3.50%
`
`0.50%
`
`0.50%
`
`0.50%
`
`0.50%
`
`Savings for5
`Years
`
`
`'-1.400.000 jjj_ $ 1,400,000
`
`11
`
`
`
`
`
`
`
`Year
`Containerboard
`Costs
`
`$40,000,000
`
`“
`
`Annual
`
`
`
`

`
`
`
`
`$ 1,680,000
`$ 1,984,500
`
`
`
`:_—
`
`
`
`$ $
`
`2,315,250
`
`2 674 114
`
` $ 42,000,000
`$ 44,100,000
`
`$ 46,305,000
`
`
`
`
`$ 1,470,000
`
`$ 1,543,500
`
`$ 210,000
`
`$ 220,500
`
`
`
`$ 1,620,675
`
`$ 231,525
`
`$ 220,500 -
`
`
`$ 231,525
`
`$231,525
`
`
`
`U1-h0Jl\)
`
`
` 5
`
`IPOINTTM
`Savings
`
`.
`
`S t
`
`‘
`Payback
`
`.
`
`Tlmeframe
`
`1st Year
`
`$577,500
`
`$1 ,400,000 months
`
`Over 5 Years
`
`$857,500
`
`$10,000,000
`Table 7
`
`
`
`
`
`Errors in FG & shipping range from loading the wrong product and having to re-load it,
`giving the wrong paperwork, picking the wrong material, recording the wrong material as
`shipped, not recording pallets that are shipped, improper counts, etc. Companies have long
`recognized that the error rate using barcodes & manual intervention can easily run 3% or
`more. As you can see from table 8, the financial impact of reducing those errors.
`
`12
`
`

`
`Cost of Errors in FG & Shipping
`
`What method do you currentiy use to
`Pick Orders
`
`Barcode
`
`How many Pallets are shipped per
`day (average)
`
`How many errors per 1000 (3%)
`
`1800
`
`30
`
`How many Employees in the Picking
`Area for 3 shifts?
`
`Average Cost per Error?
`
`$ 12.00
`
`Cost of Errors Annuaiiy
`
`$ 149,000
`
`13
`
`

`
`
`
`With Pinpoint”, Kiwi automatically sends information to the driver on what to load, where
`to load it, and where the product is located.
`in the case of FG, it will notify the driver a
`pallet needs to be picked up from the banding area and where it should be placed.
`
`Alarms are built in so if the driver loads the wrong product in the wrong trailer, the system
`notifies management. Since the system knows what is being loaded and where, orders can
`be closed out automatically with accurate counts.
`Shipping documents would be
`automatically generated. Table 9 recognizes the effect of the Employees being 20% more
`productive.
`
`
`
`
`
`30
`
`7.5
`
`$ 486,000
`
`Productivity Gains - FG & Shipping Area
`Fun Time
`Labor Cost
`
`
`$30.00 Employees
`Annuany
`Fully Burdened Wage Rate
`(FTE)
`
`How many Pallets are shipped per day
`(average)
`
`Pallets picked per Hour
`$ 583,000
`
`Because of Pinpoint” a 20% increase
`in pallets picked
`
`
`Productivity Gains - FG &Shipping Area
`
`$ 97,000
`
`14
`
`

`
`
`
`Unauthorized Upgrades occur as drivers pick the incorrect material, stage the wrong
`material, the rollstock area is in disarray and employees are not (or cannot) use their
`barcode scanners. Table 10 shows the effect of just a 5% error rate using $100 cost per roll
`upgraded.
`
`Cost of Unauthorized Upgrades in Rolistock
`What method do you currently use to Pick Orders
`Barcode
`
`$ 172500
`
`How rolls loaded at Wet End per Day average
`How many errors per 100 (5%)
`How many Employees in the Picking Area?
`Average Cost per Upgrade?
`Cost of Upgrades in Rollstock
`Annually
`
`100
`
`$ 100.00
`
`15
`
`

`
`
`
`With Pinpoint“, Kiwi will tell the driver where the rolls need to go, which rolls to pick, etc.
`Table 25 assumes a 20% gain in productivity which will allow CLIENT to re-deploy 1/2 FTE
`to other more value added work...or as business picks up, handle more material with less
`people.
`
`Productivity Gains - Rollstock Area
`
`Fully Burdened Wage Rate
`
`Full Time
`
`$ 30.00 Employees
`(FTE)
`
`Rolls moved per day
`
`Rolls moved per Hour
`
`.
`
`Because of Pinpoint” a 20%
`increase in pallets picked
`
`Ligzigfist
`V
`
`NA
`
`$ 194,400
`
`$ 162,000
`
`Productivity Gains in Rollstock
`
`$ 32,400
`
`16
`
`

`
`
`
`We will use Site 2 as our model here since it is the most updated and modern of the 2
`facilities we have seen.
`
`The finishing area (folder & gluers) currently houses 6 machines with 2 FTE (full time
`employees) per machine per shift. One FTE is assigned to run the machine, the other to
`stack the boxes. Basically you have .
`
`We would propose changing this area in several ways:
`1. Use automatic stackers
`
`2. Have the in this area
`3. Have the Pinpoint” in this area
`
`This would allow a reduction in this area from 18 FTE’s to 9, possibly further. The financial
`implications are in the table 12 below.
`
`Labor Savings - Finishing Area
`Full Time
`
`Employees
`
`Fully Burdened Wage Rate
`Automatic Stacker
`Annual Reduction in Finishing Labor
`
`.
`
`$ 583 200 Table 12
`
`Labor Cost
`
`Annually
`
`$ 1,166,400
`
`Note: This system would require additional automated equipment in addition to the
`Pinpoint” system to achieve the total reduction.
`
`17
`
`

`
`
`
`Tags & caps would be placed on stacks/pallets at the end of the Finishing Area.
`accomplishes 2 items:
`1. Automates the banding process. As the pallet approaches the bander, the Pinpoint”
`system notifies Kiwi of the pallet
`ID and Kiwi
`loads the correct banding
`configuration.
`2. Eliminates the need for 3 FTE’s in the banding area.
`
`This
`
`The Financial implications are in the Table 13 below.
`
`Labor Savings - Banding Area
`per
`Eiggig/2:8
`Hour
`(FTE)
`$30.00
`3
`0
`
`Fully Burdened Wage Rate
`Because of Pinpoint“ process
`becomes automatic
`
`Labor Cost
`Annually
`$ 195,000
`$ _
`
`$195,000
`
`Annual Reduction in FG Labor
`
`18
`
`

`
`
`
`We observed people at both facilities cutting caps for the finished pallets. We would
`recommend the caps be standardized and cut by the corrugator. This would eliminate
`labor and create savings as indicated in the chart below. Also, as referenced above, caps
`would be applied in the Finishing area.
`
`Annual Reduction in Cap Cutting
`
`$ 194,400
`
`19
`
`Labor Savings — Cap Cutting
`Fun Time
`Empioyees
`
`Burdened Wae Rate
`
`$ 30.00
`
`3
`
`Standard Size Caps coming
`
`Labor Cost
`Annually
`
`$ 194,400
`
`

`
`
`
`One customer saw average rollstock inventory go from 480 rolls to below 200...over a 50%
`reduction. We used a more conservative value of 20% to visualize the impact corporately on
`Cash Flow and RONA.
`
`Reduction in Rollstock Inventory
`Area of Savings
`Annual Savings
`
`Rollstock inventory (rolls)
`Average Cost per Roll
`Total $$$ lnventory
`20% Reduction in Rollstock
`
`Cash Freed Up per Facility
`
`500
`$ 3,000
`$1,500,000
`$ 1,200,000
`
`$
`
`300,000
`
`Cash Flow Savings 100
`Facmfies
`
`$ 30,000,000
`
`Table 15
`
`20
`
`

`
`
`
`As you can see from Table 16 below, the savings in year 1 for these 7 areas.
`
`Projected 13‘: Year Savings by Area
`$ 149,040
`$ 97,200
`
`Productivity Savings in FG & Shipping
`
`Productivity Savings in Rollstock
`
`Cost of Upgrades - Wet End
`Labor Savings Finishing Area
`
`-
`
`t
`
`Total Projected 15 Year
`
`$ 32,400
`
`$ 172,500
`$ 583,200
`
`$ 1,423,140
`
`In table 17 below, you will see other areas companies have reported savings.
`
`21
`
`

`
`
`
`Table 17 below shows other areas corrugators have seen additional savings over and above
`what we have discussed previously. Savings are based on $40,000,000 annual
`containerboard costs.
`
`Savings
`
`Savings as a %
`
`of Annual
`Paper Cost
`
`Description
`
`0'm%
`
`Line of site to Reason for upgrades ~ Charge to Suppliers
`for Upgrades Caused by Late Delivery
`
`Through "Real-'fime Inventory Data, Reduced
`inventory/Working Capital - 7 Days
`Automated Re-order Prevents Stock-Outs and Reduces
`Labor Costs - Overtime
`
`Faster Access to Paper Inventory Reduced Downtime,
`Increased Production, Reduce Overtime
`
`Reduction in Butt Rolls, Reduce Working Capital —
`Decrease inventory
`
`Through Real-Time Data Acquisition and Visibility of
`internal Supply Chain, Sa\n'ngs in improved Stock
`Control/Stock Rotation/Reduced Handling/Write~Offs
`
`More accurately match production to "Butt" rolls helped
`eliminate waste
`
`Eliminated 1 Clamp-Truck & 2 Drivers with Accurate
`lnventory Locations - No Searching for Product
`
`Ensures Correct Delivery Amount
`
`88,000
`
`76,000
`
`MQOOO
`
`108,000
`
`56’°°°
`
`014%
`
`Know Exactly what Paper was used for which Products
`Reduced Quality Claims
`
`$
`
`$
`
`$780,000
`
`Table 17
`
`22
`
`

`
`
`
`Clommercial Summary - PINPOINTTM
`
` Timeframe
`
`Tag Cost
`
`Total Cost
`
`
`
`
`
`2nd Year
`
`$0
`
`
`
`
`
`4th Year
`
`5th Year
`
`$0
`
`$0
`
`$70,000
`
`$70,000
`
`$70,000
`
`$70,000
`
`
`
`
`5 Year Totals
`$507,500
`
`CD System includes Hardware, Installation and Training
`
`$350,000
`
`
`
`$857,500
`
`Reducing costs & liability is all about controlling what is occurring in the
`process - AS IT OCCURSl
`
`This system cost would be the same for both Site 1 and Site 2 and does NOT include
`external warehousing.
`
`
`
`FOB Plant
`
`50% deposit with order
`40% payment upon notification of Hardware shipment
`10% payment upon commissioning of system
`
`
`
`23
`
`

`
`
`
`Site surveys must be done at each facility (corrugated, offsite warehouses, Pre-Print, or
`Mills) to collect data prior to any installation. Cost of site surveys are:
`
`Site Surveys
`
`Facility Scheduling
`
`Corrugated
`
`Mills
`
`Pre-Print
`
`Offsite
`
`Warehouses
`
`
`
`The price quoted includes the following:
`
`I
`
`I
`
`I
`
`Project Management and preparation.
`
`Installation, commissioning & training.
`
`System design.
`
`I Documentation and training.
`
`I Hardware engineers for installation.
`
`I
`
`12 months hardware warranty.
`
`I Equipment testing.
`
`
`
`'l:he following items are not included in the quoted prices:
`
`I Data Cable tray work and cabling to other systems.
`
`I
`
`Provision for required Electrical supplies.
`
`I Cat 6 Cabling to required points.
`
`I
`
`Installation of Clamp Truck terminals.
`
`24
`
`

`
`
`
`I Wireless network provision in areas requiring system to function
`
`I Pinpoint” tags
`
`I
`
`I
`
`Packaging, shipping and delivery costs.
`
`Purchase taxes, VAT, import duty or any other taxes.
`
`Proposals are valid for 60 days from the date of the proposal unless otherwise indicated.
`
`
`
`In viewing Site 1 and Site 2 facilities, utmost consideration was given to following practical,
`affordable, and accurate solutions using our OHIO principle:
`0 - Zero
`
`H - Human
`
`I — Intervention
`
`O — Operation
`In order to identify automation opportunities, we first compiled a list of all the manual
`tasks involved in the operations at the two facilities we inspected. The table below shows
`an analysis by area of the manual tasks at both facilities.
`
`The number of manual tasks involved is enormous. This is currently causing CLIENT
`significant issues and will continue to cause issues as markets grow and as CLIENT again
`increases capacity. Some additional concerns:
`
`0 Drivers picking wrong rolls — wasted time & Labor
`
`0
`
`0
`
`0
`
`Improper staging of rolls — wasted time & Labor
`
`Improper Location of rolls — wasted time & labor
`
`FG - Shipment incorrect — dissatisfied customers, wasted time to find out problem 8:
`
`correct...labor & time
`
`0 Under ship/Over ship — dissatisfied, distrustful customers. Wasted time & Labor to
`
`do inventory, assess problem
`
`0 Manual inventory processes for Rollstock, WIP and FG
`
`0
`
`ISO Compliance
`
`0 Duplicating Logistics Efforts
`
`25
`
`

`
`As CLIENT continues to expand capacity, these issues will become more pronounced. We
`have identified 4 problem areas:
`
`1. Manual processes in Rollstock area
`
`2. Manual processes in Finishing and Banding Areas
`
`3. Manual processes in FG
`
`4. Manual processes in Loading/Shipping
`
`26
`
`

`
` g»>zép7,e~‘*7“”-
`
`Below is the Process flow chart used to describe what the material flow process currently is
`Versus what the rocess could be with Pin oint”.
`
`Area 1 -— Receiving & Rollstock
`
`Area
`
`Current Process
`
`Pinpointm Process
`
`Receiving
`
`Currently clamp truck drivers
`manually receive a paper ASN
`(advance shipping Notice) before
`unloading truck. They use this
`document to compare against
`the shipping manifest manually.
`Rolls have barcodes and are
`
`manually scanned. Rolls are
`then put in Rollstock. Each aisle
`for Rollstock inventory has a
`barcode up in the rafters and that
`barcode must be manually
`scanned.
`If the driver forgets a
`scan or the hardware is
`
`inoperable, the system fails.
`
`Site 1 inventories some Rollstock
`
`outside their building on a
`concrete pad without location
`codes so the driver must record
`
`manually. Most rolls are not
`covered.
`
`Monthly inventories are taken to
`validate stock.
`
`The
`No need for paperwork.
`Kiwiplan system would receive
`the ASN. As the driver unloads
`
`stop
`would
`they
`rolls,
`instantaneously and a machine
`will verify the correct roll against
`the ASN and
`place
`a new
`CLIENT enabled RFID tag on the
`roll. As the driver puts the roll
`into
`rollstock,
`the Pinpoint”
`system automatically records the
`location of each roll.
`
`For outside storage, the system
`would be identical as above. We
`
`would place external antennas to
`keep track of location and FIFO
`of
`each
`outdoor
`ro||...if
`
`appropriate.
`Covered rolls.
`
`Tags read thru
`
`Even with Pinpoint” there will
`need
`to
`be
`a
`disciplined
`approach in this area.
`
`becomes
`process
`The
`completely
`automated
`and
`error
`proof
`and
`weekly
`inventories become obsolete.
`
`Table 19
`
`27
`
`

`
`Area 2 -~ Issue from Rollstock to Wet-end
`
`Area
`
`Current Process
`
`Pinpoint” Process
`
`Driver acquires papenivork
`manually and manually
`determines what roll needs to be
`
`acquired. Driver drives to
`expected aisle to retrieve the roll.
`The roll is manually scanned
`and moved to the wet end where
`
`it is manually scanned again to
`verify if it is the correct roll.
`If the
`roll is not in the correct aisle, the
`driver must manually look for
`the correct roll...or make a
`
`management decision and
`choose a different roll.
`
`Currently, If driver scans the
`wrong roll the system beeps
`but no one can hear it because
`
`of earplugs.
`
`The
`No need for paperwork.
`driver’s headset, or computer
`screen, will notify him what roll
`needs to be acquired and where
`the roll is located.
`
`As
`
`the
`
`driver
`
`leaves
`
`the
`
`Rollstock area, an antenna will
`verify they have the correct roll.
`A green light will indicate correct,
`a red light means go back.
`
`10 Antennas at
`
`the wet end
`
`1) The roll
`accomplish 2 tasks.
`is again automatically verified
`with Kiwi to ensure correct roll 2)
`The lnfonnation as to expected
`yi_e_l_gl_ is calculated in Kiwi against
`actual yield and a discrepancy
`report can be created.
`
`There will be a mechanism on
`
`each Rollstand to calculate roll
`
`yield and input the data into Kiwi.
`
`Transfer Roll
`
`to Wet End
`
`process
`The
`completely
`automated
`a roof.
`
`becomes
`
`and
`
`28
`
`

`
`Area 3 -- Coming Off the Corrugator
`Current Process
`Pinpoint” Process
`
`Area
`
`Sheets are stacked & loaded on
`
`conveyors. At Site 2, this
`process is automated in Kiwi and
`Kiwi assumes the coordination of
`
`End of
`
`the end of the corrugator area
`and places the material in the
`appropriate WIP (work in
`Corrugator Process) area or queue.
`
`In Site 1 (and older plants) the
`process requires someone to
`manually write the order number
`on the side of the sheet stacks.
`
`Our discussion with management
`revealed CLlENT's
`intention to
`
`change the plants to a Site 2 type
`process and continue to let Kiwi
`handle this process.
`The Kiwi
`process seems very capable so
`therefore,
`there would be little
`need for Pinpoint” in this area.
`
`If management wants to enhance
`the capabilities of plants that are
`not enabled with an auto process,
`we could employ a limited, short-
`term solution in this area for a
`minimal amount of cost. We
`
`would place an CLIENT enabled
`RFID tag on the stack as it comes
`off
`the
`corrugator
`for
`aid
`in
`tracking
`until
`the
`process
`becomes automated.
`
`29
`
`

`
`Area
`
`Area 4 -—- WIP (Work in Process)
`Pinpoint“ Process
`Our discussion with management
`revealed CLlENT’s
`intention to
`
`At Site 2 sheets are ordered
`
`from the finishing area and Kiwi
`determines their location and
`
`automatically delivers them to
`the finishing equipment.
`
`At Site 1 the process has
`someone manually find the
`stack of sheets with the proper
`order # written on them and
`
`manually delivers them to the
`finishing area.
`
`change the plants to a Site 2 type
`process and continue to let Kiwi
`handle this process.
`The Kiwi
`process seems very capable so
`therefore we would not deploy
`Pinpoint” in the WIP area.
`
`If management wants to enhance
`the capabilities of plants that are
`not enabled with an auto process,
`we could employ a limited, short-
`tenn solution in this area for a
`
`minimal amount of cost. We
`
`would place an CLIENT enabled
`RFID tag on the stack as it comes
`off
`the
`corrugator
`for
`aid
`in
`tracking
`until
`the
`process
`becomes automated.
`
`Table 22
`
`30
`
`

`
`Area 5 -— Finishing Area & Banding
`
`Area
`
`Current Process
`
`Pinpoint” Process
`
`Finishing
`Area &
`
`Banding
`
`As the boxes come off the
`
`finishing area they are manually
`stacked and a label is manually
`placed on the finished stack