PROFITABILITY ANALYSIS edinnM2

N of machines to control Total investment inEdinnM2 RESULTS FCF ROI NPV in 3 years (30%) (This cell is calculated in the Savings by OEE improvement data sheet) (This cell is calculated in the Savings by OEE 29,000 improvement data sheet) 6 2nd and next years "= savings by data taking + 132,698 290,156 savings by OEE improvement Investment - Maintenance" 458% 901% 405,834.00 1st year

CONCLUSIONS: EdinnM2 is amortized in the first year simply because of the savings on production data taking. EdinnM2 facilitates the improvement of the production efficiency (OEE), which makes it incredibly profitable. NOTES: In order to calculate the production improvement, the OEE ratio is used (Overall Equipment Effectiveness). For more information on OEE consult http://en.wikipedia.org/wiki/Overall_equipment_effectiveness In a conservative way, it is supposed that the maximum improvement in the OEE indicated in the Savings by OEE improvement sheet is not achieved before 6 months.

SAVINGS BY DATA TAKING

WITHOUT EDINNM2 WITH EDINNM2 hours / week hours / week Manual production data taking, including personal or telephone inquiries of all parties involved, of the state of the machines and the amount of production 30 0 (Calculation: 20 min x shift x day x machine) Report preparation for coordination meetings or decisions 1.5 0 (Calculation: 1 h x month x machine) TOTAL HOURS x WEEK 31.5 0 COST x HOUR 20 20 (The cost/ hour could be less than 20 euro in case of trainees or similar, but the Management as well dedicates time to it continuously by asking how the production is going and what is the condition of the machines. Therefore, an average cost/ hour is taken) MINIMUM COST x WEEK 630 - MINIMUM COST x YEAR 30,240 -

REASONS OEE IMPROVEMENT

WITHOUT EDINNM2 We know the concrete details about the losses. Where did each lost minute or each lost product go. This means that we are on the way to continuous improvement. The operator and the Management graphically and in real time see if the production is within the targets ("production profitability path") and if not, they take the appropriate actions to improve. If there have been problems, it is possible to get to know them in real time. All implied persons share the same information, like for example the actual and aggregated state of the machines and the realized production. It is possible to identify accurately which are the main problems of the production process and act consequently. Wrong decisions based on errors made by manual production data taking, are not taken. It is possible to measure certain variables and to realice a statistic control (SPC) in real time. The existence of an accessible register in real time which shows what results and problems there were the previous day, the previous shift or any other period. It is possible to realize automatically and in real time a control of the presence of the operators It is possible to know the production losses, in real time and in any other period, including idle times and defective or reworked production. It is possible to anticipate on machine problems by means of the 2 technologies recognized by the industry: pattern analysis with neural networks and MTBF. It is possible to control working procedures and to indicate them to the operator It is possible to solve any client's need, by means of programming on the UDL (User Defined Logic) module. Quality is now controlled at the process (SPC), improving efficiency, the perception of the company's quality, reducing quality losses and customer's complaints WITH EDINNM2

Reductions on maintenance costs of up to 40% are achieved. Improvements in maintenance also improve availability and therefore efficiency.

ROI Analysis of edinn M2 because of OEE Improvements

Operation costs in the factory
Average cost by hour and by machine Average hours by week by machine Cost by machine Weeks per year that the factory is working Total direct cost per machine per year Overcharge % for machine and plant maintenance costs Total cost by machine per year Number of machines in the factory that are monitored by EdinnM2 Total operation costs excluding Low Quality Costs. Costs by defects, quality and losses. Total operation costs of the factory
50.00 160 8,000 48 384,000 20.0% 460,800 6 2,764,800 200,000 2,964,800

Return on Investment
Investment in EdinnM2 Inverstment in hardware and training for using EdinnM2 Total investment Annual maintenance cost of EdinnM2 Actual ratio of Availability Actual ratio of Speed Actual ratio of Quality Actual OEE Required period in years to recover investments Estimated Availability ratio after the improvement in the period Estimated Speed ratio after the improvement in the period Estimated Quality ratio after the improvement in the period OEE after the improvement in the period Additional capacity with the same machines and costs Annual savings if the same quantities are produced but quicker Annual savings by quality improvements Total annual savings Total savings in the period Return on Investment
23,000 6,000 29,000 3,000 75.0% 90.0% 97.0% 65.5% 1 80.0% 90.0% 98.0% 70.6% 7.8% 199,249 66,667 262,916 262,916

807%

Necessary data for the Savings by OEE improvement data sheet

Average cost by hour and by machine (euros) Average hours by week by machine Weeks per year that the factory is working Overcharge % for machine and plant maintenance costs Number of machines in the factory that are monitored by EdinnM2 Costs by defects, quality and losses. Actual ratio of Availability Actual ratio of Speed Actual ratio of Quality Required period in years to recover investments

2004-2010, www.edinn.com

4-2010, www.edinn.com