Case Study; Innovation at Firm Level

INNOVATION THROUGH

AUTOMATION

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Salem Nasser Al-Bortmany

A Case Study

Areej Vegetable Oils

& Derivatives (AVOD)

INDUSTRIAL INNOVATION FORUM

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Outline of the presentation

AVOD’s Business Model & Challenges

Managing changes through Innovation

AVOD’s Innovation Value Chain

History of Innovation & Automation

Bottle and handle fixing

Robotic palletization

Automation in warehouse and logistics

Link on AVOD’s Innovation through automation

AREEJ VEGETABLE OILS & DERIVATIVES

(AVOD)

BUSINESS MODEL

About the Factory:-

Established in 1982

Current Plant Capacity : 240kMT

Export : 80%

Total Employees : 736

Omani : above 53%

Customer Mix : Institutional, bakeries, wholesales, retailers, modern

trades.

Export Customer Mix : AVOD’s brands, MNC’s brands, potential

customers brands.

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GLANCE ABOUT AVOD

Products Range :-

• Vegetable oils, vegetable ghee, margarine, butter, specialty

fats, shortenings, mayonnaise, dressings.

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Uncontrollable External Factors :-

13 Factories in GCC for edible oils and fats.

Installed capacity more than 2 million MT per year.

GCC consumption estimated at 0.7 million MT per year.

35% utilization, GCC is a net exporter of edible oils and fats.

Stiff competition, more than 45 brands in the market.

Increasing bargaining power of retail & distribution channels

Change of legislation, regulations and laws; products, labeling

Non-tariff barriers of entry & logistics issues within the GCC.

Continuous increase in operating costs, utility costs, logistics,

BUSINESS CHALLENGES

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Changes through Innovation:-

Process Innovation (RBDF)

Manufacturing Innovation (Automation)

System Innovation (ERP SAP, WMS)

Products Innovation (AVODs, MNCs)

Utilization of modern technology

Upgrading HR skills & operating systems

MANAGING CONTROLLABLE FACTORS

INNOVATION

THROUGH AVOD’s VALUE CHAIN

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Critical Needs & Requirements Identify frying habits; taste, lightness.

Innovation Cycle

Create Product Value Physical / Clarity /Colour/Bottle & caps

Actively Engaged Customers

Partnerships / loyal / Quality

Strategy

Resources

Competences

Operation Cycle

Service Cycle

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DEFINITION OF INNOVATION

“The implementation of creative ideas in order to generate value,

through increased revenues, reduced costs or both”

“Executing an idea which addresses a specific challenge and

achieves value for both the company and customer”

• A Add

• V Value

• O On

• D Day-to-day activities

VALUE ON BOTTLE BLOWING

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Improvement in Process Technologies

Manual Handle Fixing

Improvement in Process Technologies

Handle Fixing

BENEFITS FROM HANDLE FIXING AUTOMATION

• Utilize capacity by aligning bottle making and filling lines.

• Increase productivity, double the output.

• Accuracy in handle fixing.

• Eliminate rejection/wastages.

• Operate in hygienic and safety environment

• Upgrade skills of same team

to handle automated systems.

Improvement in Process Technologies

Robotic Palletization

Improvement in Process Technologies

Robotic Palletization

Improvement in Process Technologies

Robotic Palletization

Advantages on Robotic Palletization

• Increase in productivity, double the output.

• Eliminate incidents and accidents of stacking manually.

• Reduce higher turnover of employees

• Increase overall safety of workers

• Upgraded the Skill of workforces

• Increase food safety & hygienic work environment

Improvement in Loading & Material Handling

Improvement in Logistics and WMS

Semi Automated Warehousing

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Automated Warehouse – Automha

BENEFITS FROM WAREHOUSING AUTOMATION

• Fully automated warehouse

• Better Space Utilization.

• Pallet position more than 15k

• Managing FIFO effectively.

• Real time Traceability

• Accuracy in Warehousing, physical stock vs system

• Eliminate multiple handling, maintain quality.

• Upgraded skills to handle automated systems

Skill Up-gradation

System Innovation

Update

Master Data

in SAP

Master Data is

uploaded in

WMS

AUTOMHA is

updated with

Master Data

Integrated System Design

Boomi SAP WMS

AUTOMHA

Location

• WMS provide visibility on stock in AUTOMHA by Item & Batch

• AUTOMHA control the stock movement inside the storage area

• Ability to maintain several locations under AUTOMHA

• SAP controls order-to-despatch.

System Integration

Inbound (Production – WMS)

Creation Production Order

in SAP

ASN is created in WMS

Inbound Planner prepares ASN and

prints IDs

Receiving of produced pallets in

Whrs using RF

Putaway to be done in AUTOMHA

AUTOMHA will confirm Putaway in

WMS

ASN Confirmation ( WMS – SAP)

System Integration

Outbound (SAP – WMS – SO)

Creation Sales Order in SAP

SO is created in WMS Allocation of Orders

in WMS (From AUTOMHA)

WMS to release picking tasks to

AUTOMHA

Stock Moved to STAGE.

AUTOMHA to confirm picking tasks in WMS

Picking to start using pick list printed from

WMS

SO Confirmation

( WMS – SAP)

Overall Automation Benefits

• Upgrade staff to skilled, specialist, supervisors

• ROI (Robots and automation) = 3 years

• Improve overall productivity = more than 35%

• Reduce or eliminate routine manual work

• Improve product quality

• Eliminate waste

• Increase loyal customers

• Reduce order-to-delivery lead time

• Improve profitability

• Increase market share

• Expanding and increase in capacity

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Overall Automation Benefits

Local and Export Sales Growth

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0

20000

40000

60000

80000

100000

120000

140000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

CAGR = 17.5%

Local Export

MT

INNOVATION THROUGH AUTOMATION

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“Innovation remains as the ability to convert ideas into invoices” “Business can survive only if it’s globally competitive”

INNOVATION THROUGH AUTOMATION

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THANK YOU