Leveraging Automation for Leveraging Automation for Global AcceptanceGlobal Acceptance

Rakesh Verma Rakesh Verma –– Nestle India LtdNestle India Ltd77thth April 2006April 2006

Automation in F &B Industry

Outline

• Food business emerging trends / Challenges

• Nestle Business drivers and key initiatives

• Nestle automation strategy and Benefits

leveraged

• Feedback and way forward

• On-shelf Availability with Innovative Packaging

• Freshness• Value for money• Assured Food Safety

and Quality• Health and Wellness

attributes

Is she going to pick up our product every time?Yes if we are superior in

Food Industry - emerging trends ...

Food Safety & Stricter regulatory norms• Focus on raw material potential contaminants,

Pathogenic bacteria, foreign body management, net contents control

Process consistency and traceability across Supply Chain from farm to fork

Freshness of stocks• Taste, aroma, flavor, texture of processed food expected

close to fresh stockLean pipeline for freshness demand reliable and consistent Plant Performance

“Value for Money” first for the consumer• Low Cost, efficient & flexible in Logistics, production

Affordable Products with Market penetration

Food Industry - emerging trends ...

Discerning consumer• Less disposable income for food, more for consumer

durables e.g. Mobile phones, cars etc.

Leadership through Innovation- Renovation using R & D and Consumer in-sight

Consumer education towards health- well being with appropriate consumer communication

Strong hope into future• Food is fundamental to basic need for human masses

800 million people still go to bed without food, another 1200 million yet to touch processed food

Evolution of Need States in Food ...

GOOD FOOD GOOD FOOD, GOOD LIFE

Sustenance Enjoyment Health/ Nutrition Psychological Contentment

Good Food Health & Wellness Wellbeing

Feeling GoodTaking Control

EquilibriumBody & Mind

PerceivedNutritional

value +Taste/Pleasure

Variety/BalanceSafety/Quality

For all+

Nestlé – World’s leading food and beverage company

• Founded 140 years ago, in 1866 by Henri Nestlé

• 71 billion USD turnover and 6.2 bio USD net profit in 2005

• 254,000 employees

• Over 8500 brands

• operating in more than 120 countries

• 521 factories

Nestle Logo, universally understood, simultaneously evokes security & affection, nature & nourishing, family & tradition.

Worldwide number 1 in……..

• Soluble Coffee• Infant Nutrition• Confectionery• Dairy• Chocolate Milk Beverages• Bottled Water• PetCare• Ice Cream• We own 26.4 % of L’Oreal, world’s leading

cosmetics company

Nestle India – partner to economic growth

Established: year 1912

Manufacturing: Year 1961

Sales: INR 2,480 crores

Factories: 7

Employees: 3,500

Sales: 4 Branches, 3900 distributors and 900,000 outlets

Third largest Food Industry in India

Nestlé India - manufacturing ...

NANJANGUDNANJANGUD…….1989.1989Instant coffeeInstant coffeeHealth BeveragesHealth Beverages

CHOLADICHOLADI…19671967

Instant TeaInstant Tea

MOGA ...1962MOGA ...1962Milk ProductsMilk ProductsInfant Milk ProductsInfant Milk ProductsWeaning CerealsWeaning CerealsCulinary ProductsCulinary Products

HEAD OFFICE HEAD OFFICE

GurgaonGurgaon

SAMALKHASAMALKHA……19921992Weaning CerealsWeaning CerealsInfant Milk ProductsInfant Milk ProductsDahi Dahi NoodlesNoodles

PONDAPONDA……19951995ChocolatesChocolates

BICHOLIMBICHOLIM……..1997..1997

Culinary ProductsCulinary Products

Our core values reflect in businesses....

• High commitment to quality products and brands

• Respect for other cultures and traditions

• The Nestlé culture– Strong work ethic, integrity, honesty and quality– Personal relations based on trust– Personalized and direct way of dealing with each other– More pragmatic than dogmatic approach to business– Openness and curiosity for dynamic and future trends– Pride in contributing to the reputation and performance of the

Company– Loyalty to and identification with the Company

Our core values reflect in businesses....

Global Business drivers

• Long term Sustainable & profitable growth

– Low cost highly efficient operations

– Product availability whenever, wherever, however

– Innovation and Renovation

– Consumer communication

• Focus on its biggest assets: people, brands, products

• High quality products for health, nutrition & well-being

• Leverage Nestle Global strength with common business Process & IS/ IT architecture and Best practices

• Culture of continuous improvement

Operation Excellence at work

Lean Technical Overheads

Product Complexity Optimization

GLOBE

Low cost / High effective operations

Total Delivered Costs

improvement

Challenges for Food Industry

Asset Productivity– Down time reduction

• Automated start up and shut down of plant• Focus on Unplanned downtime with people ownership• “Fast pit stop” changeovers• Efficient cleaning and Continuous runs of equipment• Condition Based Preventive Maintenance systems

– Enhanced plant Throughput• Minimized process variability• Challenge the process all the time “Toyota Principle”

• Reduced Rework/ loss thru people involvement and training

Quality is part of plant design, Processes, People mind setQuality is part of plant design, Processes, People mind setQuality is part of plant design, Processes, People mind set

Challenges for Food Industry

Compliances

– Robust recipe management

• A necessity for continuous and integrated process

• Human error avoidance

– Traceability

• Process conditions inclusive of CCPs

• Lot traceability of finished product back to Raw materials

– Calibration of Instruments

Quality– Integrating in-line quality data for instant product release

– Empowering line operators to take product release ownership

Shop Floor Process Management

S 88

Str

uctu

res

Control & Measuring Systems & ToolsPC Based (Ethernet) User Interface, Data Storage & Reporting

Real Time Data (INSQL Server), Event Data (SQL Sever)Sensors, Actuators, Logical Devices(PLC), Drives

Recipe Management Batch / Continuous Process

ManufacturingWork

Processes

ProductionManagementTransaction

PlanDefinition InformationCapabilityProductionS95-01S95-02S95-03

Overview Nestle Enterprise model

SAP Business Planning & Supply Chain Management

BusinessProcess

TransactionsBusiness

WorkProcesses

GLOBE IS-IT

Process Focus Traceability

Process Consistency

Mid

dlew

are

M E SM E SM E S

Tool BoxTool Box

Non ProductSpecific

ProductSpecific

Local

ProductSpecific

Re-usable

Coffee MES

SAP

Strategy: MES Integration

Factories

Factory FloorMES & Control SystemsApplications

Standard "XML Dialect" for control systems

SAP "Native Dialects, IDOC, XML, PCS Messages"

Data centers

Horizontal WorkflowApplication Software tools to Accomplish Full Fledged MES

GLOBE IS-IT Mapping and Mailing

Tool BoxTool Box

Non ProductSpecific

ProductSpecific

Local

ProductSpecific

Re-usable

Milk MES

Tool BoxTool Box

Non ProductSpecific

ProductSpecific

Local

FactoryA

FactoryB

FactoryXProduct

SpecificRe-usable

Milo MES

Middleware

Horizontal WorkflowApplication Software tools to Accomplish Full Fledged MES

Horizontal WorkflowApplication Software tools to Accomplish Full Fledged MES

Net working Process Control

APC OFF% TC Mean Value - 43.7

APC ON% TC Mean Value - 46.3

Advanced Process Controls -Process consistency

Process Focus: Real Time monitoring and Instant Release

Production run time Stoppage

Upper Limit

Lower Limit

Online trend of ingredient dosing rate is monitored continuouslyby control system and is visible for operator through out.

Data is available from Historian any time later.

Proactive SAFETY Solution: Spray dryers

Spark

Early warning at 0.5 PPM of CO

Instrument Calibration: Back bone of Food Safety

Class A: High Priority- CCP – Critical Control point. Critical in ensuring the food safety.

Temperature measurement used in Sterilization process. Metal Detectors.

Class B : Medium Priority- CP – Control Point. Direct influence on the quality of product, but do not affect food safety.

Weigh Scale Batching System. Pressure and temperature measurement on Evaporators.

Class C : Low Priority- Monitoring instruments other than CCP and CP.

DO and pH meters, Steam Flow measurement, Tank level.

Change Management Process

There are many “unconscious” changes... ones that do not really seem like changes at first glance... that are often missed and sometimes result in avoidable problems

We must first questioning its impact in relation to product safety, people safety and the environment

6 m Egron Output (Kg/Hr)

1500

2000

2500

3000

3500

4000

1999 2000 2001 2002 2003 2004 2005

Current output at ~3850 Kg/HrCurrent output at ~3850 Kg/Hr

Plant throughput

ProductivityKg/man hr

26.027.5

30.9

34.0

37.4

40

3.433.41

3.32

3.18

3.02

2.8500

2.90

3.00

3.10

3.20

3.30

3.40

3.50

2000 2001 2002 2003 2004 200520.0

22.0

24.0

26.0

28.0

30.0

32.0

34.0

36.0

38.0

40.0Mio Man Hours Used

Productivity -- Increasing trends

0

25

50

75

100

125

150

175

200

1997 1998 1999 2000 2001 2002 2003 Tgt 2004

YEARS

SAVI

NG

S IN

R M

IO

-

0.5

1.0

1.5

2.0

2.5

3.0

% O

F C

OP

Savings INR Mio % OF COP

Savings on Cost Of Production

Can we achieve 100% potential of our capabilities and Business ambition without your partnership?

Way forward….

• Consumer decides quality - Food plants ensure consistent quality based on perceived consumer insight.

Automation is integral part of consistent process and product quality

• Food Safety, Compliance, People Safety & Environment are Non-negotiable.

Automation is The Solution for Traceability and Reliability

Integrate People Safety related Standards & norms at design stage

Energy Savings, Waste reduction mindset to integrate in processes

• Standardization of automation systems in today’s rapidly changing technological advancement

• Value Pricing, not the lowest cost will sustain in long termUnderstand Customer’s Processes and key Deliverables

Educate customer with tailor-made training modules

Visit customers proactively: get feedback and improve

Nurture local service support: Global principles but local culture

Passion,Spirit,Work culture Passion,Spirit,Passion,Spirit,Work culture Work culture

Build a high performance culture to unleash 100% potential..

Without our burning out…

Ensure success for customers and it is WIN WIN for both…