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ABB CUSTOMER WORLD – MELBOURNE – MARCH 15

Food and Beverage WorkshopABB Ability™ Rejane Lobo – Mano Suliman – Richard Matonich – John Rieusset

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Welcome and introduction John Rieusset, Food and Beverage, ABB Australia

F&B enterprise of the future Rejane Lobo, ABB Global Account Manager – Nestlé

ABB Ability™ F&B portfolio Mano Suliman, ABB Global Account Manager – Saputo

Broader ABB portfolio Richard Matonich, ABB Global OEM manager

Q&A session John Rieusset

March 28, 2018 Slide 2

Food and Beverage Workshop

Agenda

—ABB CUSTOMER WORLD – MELBOURNE – MARCH 15

Accelerating toward a future F&B digital enterpriseFood and Beverage WorkshopRejane Lobo – Global Account Manager - NESTLÉ

—Use of automation, digitalisation and robotics in F&B today

March 28, 2018 Source: __Slide 4

F&B lags today, however there will be a quick increase over the next 5 years

Food & beverage

Aerospace and defense

Engineering and construction

Forest paper and packaging

Transport & logistics

Industrial manufacturing

Metals

Automotive

Electronics

Food & beverage

Aerospace and defense

Engineering and construction

Forest paper and packaging

Transport & logistics

Industrial manufacturing

Metals

Automotive

Electronics

33%

Today’s average

72%

Average in 5 year’s time

68%

71%

69%

62%

76%

76%

72%

65%

77%

26%

28%

30%

31%

32%

35%

38%

41%

45%

—Context – F&B experiencing rise of the Food as a Service Model

March 28, 2018 Slide 5

More product choices More places of purchase

Packaging

Flavors

PersonalisedProducts

Categories

Discounter (e.g. Target)

On-the-go mini-markets

On-line (e.g. Amazon)

—These new consumer preferences are changing the F&B value chain

March 28, 2018 Slide 6

Fulfilling consumer expectations add complexity, time, and cost

SuppliersInbound Logistics

Production PackagingOutbound Logistics

Distribution & Retail

Consumers› › › › › ›

personalisationindividual packagingindividual mixes, flavors

direct to consumerconvenience, time

in-store preparationease, freshness

mix w/in shipmentsproduct, packaging, and labeling variety

material inventory

different packaging,mix w/in shipments

batch run lengthsmaterial mix

non-retail distribution

—Digitalisation and the manufacturer’s production

March 28, 2018 Slide 7

Factory of the future is evolving driven by consumer demands

Variety

Point of purchase

personalisation

“Light out” production

Self configurable equipment

Factory in a box

Distributed, flexible, agile

Dynamic, demand driven

optimised value chains›1987 2017

—Meeting consumer expectations requires agile operations and low unit costs

March 28, 2018 Slide 8

Distributed production & packaging Dynamic processes

Integrated sensors, data, communication, AI analysis, and real-time control links entire value chain

Efficient, large scale, bulk production at central facilities

personalisation processed at smaller facilities closer to customer

Synchronisation critical to insure quality, safety, and cost management

Shorter run lengths; faster change-overs

Standardised modular micro factories

Programmable and cost efficient work cells

—Example 1 - Purina Just Right

March 28, 2018 Slide 9

Highly personalised with significant price premium

Customer inputs profile – Just Right recommends custom nutrition plan – personalised package delivered to customer (DTC)

SuppliersInbound

LogisticsProduction Packaging

Outbound Logistics

Distribution & Retail

Consumers› › › › › › ›

Phase 1: offer launched

High productions costs (manual?)

Needed high prices limit sales

Hard to scale profitably

Future Phase 2: scale-up

Lower cost with agile production supports lower price

Connected, automated production enables scale-up

Able to expand market share with lower price

Custom product

Custom label Direct ship to consumer

Customer ‘designs’ product Subscription

replenishment

Automatedmixing

Flexible packagingDynamic labeling

Automated single pack shipping, tracking

Connected data enables automation of full value chain

—Personalisation/DTC increases margins

March 28, 2018* Web price of Purina Just Right vs. comparable Amazon delivered price for Purina ONE** Team analysis

Slide 10

Digital manufacturing enables scale and margin expansion

Example 1 – Purina Just Right

personalisation & DTC created a niche offering, new business Industry 4.0 offers the opportunity to make the market

– personalisationcommands price premium

– Production and distribution costs drive high price

– Price limits market capture

– Production scale

– Margin improvement

– Market share expansion

Price

Costs

Volume

Profit

Variable Costs

Fixed Costs

Price +75%?

Cost +??%

Cost +20%?

Price

Costs

Volume

Profit

Variable Costs

Fixed Costs

Extra Profit

e.g. Price

+30%?

—Example 2 - the digital enterprise will enable the meal kit business to scale

March 28, 2018 Source: company sites, Slice Intelligence Slide 11

Growing segment with evolving business models (Freshly, Blue Apron, Plated, Hello Fresh, Amazon, …)

Product varietyingredients, packaging, ...

Point of purchaseRetail, DTC, …

“There is no way we could have reached the scale that we’re at without the custom software. We’ve been going through everything that is a manual process and seeing if we can turn it into software. “

Ilia Papas, Blue Apron CTO

Digital foundation Food as a Service

Jan 15 Jul 15 Jan 16 Jul 16 Jan 17

Me

al k

it b

uy

ers

Copyright © Slice Intelligence 2017. Jan. 1, 2015 – Feb. 28,2017. n=156,566 U.S. online shoppers

Plated

Hello Fresh

Blue Apron

Month

—Example 3 – end-to-end connectivity and visibility enables distributed production and DTC

March 28, 2018 Source: company sites, Slice IntelligenceSlide 12

On-line only, no store front

Order/delivery data feeds AI predictive engine

Ensures consistency along value chain

Dynamic and distributed production

Cooking and transport combined

More efficient asset utilisation

Consumer satisfaction

Faster, hotter, less expensive,

“Just what I ordered”

Zume Pizza – predictive order forecasts, cooking en route, standardised modular/mobile work cells (trucks)

—

Visibility across the value chain facilitates personalisation and dynamic production

The Digital Enterprise – Agility enables cost efficiency and new business models

March 28, 2018 Slide 13

Agile operations New business models

Digitally enabled

enterprise

Subscription Replenishment

Direct to Consumer

personalisedProducts

Produce at customer site

Distributed Manufacturing

Dynamic Production

optimised Value Chain

—Digital will enable F&B customers to transition quickly, incrementally, effectively

March 28, 2018 Slide 14

ABB Ability™ IoT products and services Intercloud connectivity of existing platforms

ABB Ability™ connects factory floor components to site and cloud based systems – intercloud connectivity

Lumada

PredixMindsphere

ABB Ability™

Ecostruxure

—Digital will enable Nestlé to transition quickly, incrementally, effectively

March 28, 2018 Slide 15

ABB Ability™ Platform and Solutions Intercloud connectivity of existing platforms

ABB Ability™ connects factory floor components to site and cloud based systems – intercloud connectivity

Lumada

PredixMindsphere

ABB Ability™

Ecostruxure

—Case Study – ABB Ability™ at Heidelberg factory enables operational agility

March 28, 2018 Slide 16

Increased customer satisfaction

Adaptive, flexible production

Smaller batch sizes

Self-learning via QA feedback

Inventory minimisation

Optimised logistics

Predictive maintenance

Agile/Fast

Efficient

Quality

Safe

—Summary – ABB Ability™ brings value today, during the transition, and through tomorrow

March 28, 2018 Slide 17

F&B’s transition F&B – future enterprise

Operations

Agile, Fast

Efficient

Quality

Safe

Financial results

Low unit cost

Higher margins

High inventory turn

Higher ROIC

F&B – today

Operations

Large scale

Process focused

Cost oriented

Centralised

Financial emphasis

Lower costs

Capacity utilisation

Low CapEx

Cash flow

—ABB CUSTOMER WORLD – MELBOURNE – MARCH 15

The factory of the future: ABB Ability™Food & Beverage WorkshopMano Suliman – ABB Global Account Manager - Saputo

—What is digitalisation?

—

Cyber security

What is digitalisation?

March 28, 2018 Slide 21

It is the combination of connected technologies that add value in new ways

Connecting and communicating

Collecting and controlling

Analysingand acting

New business models

—Digitalisation and the manufacturer’s supply chain

March 28, 2018 Source: McKinseySlide 22

Tomorrow’s supply chains will be faster and smarter

Tomorrow: continuous, instant communication, automatic & decision making

Today: a complex network of suppliers and systems

– Construction index

– Customer data

– Capacities

– GDP

– History

– Competitor pricing

—Factory of the Future (1/2)

March 28, 2018 Slide 23

Production

Preventive & Predictive maintenance

Fully integrated automated process control

Manufacturing analytics for Yield, Energy, Throughput, OEE ...

Paperless production

Digitally enabled traceability

Smart Energy systems

Dynamic in-line quality inspection and process control

—Factory of the Future (2/2)

March 28, 2018 Slide 24

Filling and Packaging

Robotic palletizing and packing with flexible robotsRemote monitoring by suppliers and OEMs

Equipment requesting maintenanceMachines aware of next production orders, automatically changing over

Automated material handling and transportation, AGVs

Remote monitoring of equipment

Inline quality monitoring

Vision and Augmented reality solutions

Packaging on demand, mixed pallets

—Warehouse of the future

March 28, 2018 Slide 25

Real time optimisationof transportation network

Predictive analytics to support accurate forecasting

Complete E2E connectivity and transparency

Automated shelf systems

Full traceability across value chain

AGV and automated transport solutions

Advanced robotics to support higher customisation

—Factory of the future – today and tomorrow’s capabilitiesDigitalisation offers new opportunities – How will F&B manufacturing take advantage?

—Digitalisation provides plant performance insight

March 28, 2018 * Asset loop actions are often done manually todaySlide 27

The benefits: react quickly, and analyse data over time to optimise

Analyse

ActSense

Control

Over timeRealtime

Cloud

HybridCloud

Edge

Device

In y

ou

r p

lan

t

Analyse

Act*Sense

optimise

—Saving costs, improving flexibility: Integration

March 28, 2018 Impact on: Cost Quality Safety Agility/SpeedSlide 28

Vertical integration for inventory levels reduction

Before Today

Integrated business and production system:

– Enables real time production information visibility

– Throughput time reduced from 3 to 1.5 days

– Raw material delivered fresh to production

– Logistics for produced goods planned near real-time

Manual, paper driven process

– Inherent quality losses and delays

– Real time production status not available

– High inventory levels to keep process running

Integrated islands of informationManual interaction between SAP and Control

Raw Material Cooling Production Cooling Dispatch Raw Material Production Cooling Dispatch

—

Impact on: Cost Quality Safety Agility/Speed

Flexible and agile operations

March 28, 2018 Slide 29

Control, track and trace across production – boundaries removed between processing & packaging

Palletizing robotManufacturing Operations

Management System

100% increase in production

From 400 bags/hr to 800/hr

2.3 year ROI

Investment payback time

—

Impact on: Cost Quality Safety Agility/Speed

Flexibility, quality, safety: operational excellence with MOM

March 28, 2018 Slide 30

Modular with rich functionality. Evolutionary approach

Weigh & Dispense

Inventory Management

Workflow Management

Order Management

Downtime managementQuality Management

Electronic Work Instr.

Equipment MaintenanceManagement

LaborMgmt

OEEVirtual Trainer

Buffer management

MaterialManagement

—

Impact on: Cost Quality Safety Agility/Speed

Saving cost and reducing risk: virtualisation and robotics

March 28, 2018 Slide 31

Capabilities constantly increasing

Digitalised workflows

(simulation and modeling)

Collaborative robots, machine learning, vision

—Safety, cost and flexibility: Reliable power supply and electrification

March 28, 2018 Impact on: Cost Quality Safety Agility/SpeedSlide 32

Digitalisation across entire power chain HV-MV-LV

Highest safety of personnel & assets Risk reduction in case of failures

Condition becomes predictive Preventive & predictive maintenance Integration & consolidation

Smart distribution network

Connect

ABB Ability Dashboard

—ABB Ability for F&B (1/3)

March 28, 2018Source: www.abb.com/abb-ability 1: MOM = Manufacturing Operations Management | 2: LV = Low Voltage | 3: MV = Medium Voltage | 4: DCS = Digital Control System

Slide 33

More Productivity, Less Energy, Longer Product Life

Remote / On-Site Condition Monitoring Preventive Maintenance Remote Assistance

Monitor remotely and/or on-site critical plant equipment

to get early health warnings

Use data gathered from

monitored critical equipment

to plan maintenance

Get immediate remote support from ABB experts in case

of an equipment issue

Plant: • Operations Data Mgmt.

MOM1: • Downtime Mgmt.

MV3 Elt. Syst.: • Asset Condition & Risk Mgmt.

• Circuit Breaker RemoteCare

LV2: • On-Site Condition Monitoring

Drives: • Condition Monitoring

Motors: • Smart Sensor for LV Motors

• Smart Sensor for MV Motors

Transformers: • Asset Health

Robots: • Condition Monitoring

MOM1: • Maintenance Mgmt.

Switchgear: • Predictive Maintenance

Robots: • Preventive Care

Drives: • Preventive Maintenance

Robots: • Remote Trouble Shooting

Drives: • Remote Support

Instrument.: • Remote Services

—ABB Ability for F&B (2/3)

March 28, 2018Source: www.abb.com/abb-ability 1: MOM = Manufacturing Operations Management | 2: LV = Low Voltage | 3: MV = Medium Voltage | 4: DCS = Digital Control System

Slide 34

Optimising mass customisation takes ability – ABB Ability™

Fleet Supervision Flexible Manufacturing Food Safety

Lower operating costs through

business intelligence for

improved predictive maintenance

Reduce product cycles, shorten

changeover and launch times

through off-line programming

& commissioning

Improve quality control through data analysis and automation

Manufacturing Efficiency

Higher Return on Investment

through optimised production

and processes

MOM1: • Production Order Mgmt.

• Material & Warehouse Mgmt.

• Weigh & Dispense

• Quality Mgmt.

• OEE Software

Plant DCS4: • My Control System web portal

• ServicePort Remote Access

MV3/LV2: • MySiteCondition Asset Mgmt.

LV2: • Control Syst. with Emax2

Robots: • Fleet Supervision

Drives • Lifecycle Assessment

MOM1: • Genealogy Software

• Electronic Batch Record

Measurement: • Paperless Recorders

• Measurement & Analytics

Plant DCS4: • System 800xA

• Control System Simulator

• Automation Builder

Robots: • RobotStudio

—ABB Ability for F&B (3/3)

March 28, 2018Source: www.abb.com/abb-ability 1: MOM = Manufacturing Operations Management | 2: LV = Low Voltage | 3: MV = Medium Voltage | 4: DCS = Digital Control System

Slide 35

Optimising mass customisation takes ability – ABB Ability™

Energy Management Virtual Commissioning Cyber Security

Improved energy management

through control of the electrical

system via cloud

4-D simulated factories can now

be created in the digital space, so

that commissioning issues can be

solved in advanced

Address gaps vs. industry standards that could threatened

production and quality

Connected Services

Reduce downtime and improve

performance through actionable

intelligence and advanced

analytics

Plant DCS4: • Connected Services

MV3: • Asset Condition & Risk Mgmt.

LV2: • Predictive Maintenance

Robots: • Connected Services

Motors: • Smart Sensor

Drives: • Remote Assistance

MOM1: • Enterprise Energy Manager

LV2: • Elt. Distribution Control Syst.

Drives • Energy Optimization

Plant DCS4: • Cyber Security ServicesPlant DCS4: • Automation Builder

Robots: • RobotStudio

• Virtual Reality Production Line

• Virtual Reality Video

—ABB CUSTOMER WORLD – MELBOURNE – MARCH 15

True Superior Customer ExperienceFood & Beverage WorkshopRichard Matonich – ABB Division Head International OEM Business

—

March 28, 2018*Source: Cadent Consulting Group

Slide 38

Reduce or eliminate food recalls

Changing and tightening compliance standards

Food and people safety

Automation/digitalisation

Producing more with less

Limiting waste

Increased production capacity

Improved reliability of production lines

Robust products to survive harsh environment

Deliver products faster and fresher

Power quality and reliability

Expectations for variety

Health conscious consumers

Natural, organic, non-GMO, reduction in processed foods

Consistency, quality, freshness

Transparency in ingredients

Detailed nutrition facts

Increased convenience

Producer and regulatory drivers Consumer drivers*

Mega-shifts within the food & beverage industry

—

March 28, 2018 Slide 39

Smart manufacturing solutions. From reliable power to…

… final goods packaging

Electric power supply and control Cooling and refrigeration Wash down- motors & gearing Packaging automation Sensors and metering devices

Drives and motor controls Plant-wide control system

ABB has invested $13B+ since 2010 to provide Full Portfolio SolutionsEnd-to-End - Across the factory

—

March 28, 2018 Slide 40

Global technology leadership across power & automation: ABB’s integrated solution

Local expertise & service presence for the entire portfolio

Operational benefit – reduced OPEX (15-20%)

▪ Increased availability

▪ Improved safety, reduced risk

▪ Reduced lifecycle costs

▪ Enhanced energy

management

▪ Operator efficiency & productivity

▪ Reduced labor costs

▪ Faster project startup

▪ Reduced engineering

▪ Reduced risk

▪ Less spares inventory

Project benefits - reduced CAPEX (15-20%)

ABB optimises your facility with the most-efficient, best-integrated solution across power & automation giving you more control with less risk, including single source accountability, local service, and transparent pricing across our entire offering

Generation & critical power solutions

Substations Transformers

Low & med voltage

switchgear and MCCs

Power quality

Electrification products

Factory Automation :

Measurement – Control –Motion

Picker & packing robots

Comprehensive safety portfolio from incoming power to end-of-line packaging

Control, visibility & traceability across the value chain with MES/DCS automation portfolio

Customer’s see value and savings with Full Portfolio SolutionsEquipment optimisation across multiple packages

—

March 28, 2018 Slide 41

Picking, packing, palletizing Electrical & mechanical Power distribution, protection, quality

Factory automation/Process control Safety and protection Instrumentation

FlexPicker, PalletPack, RacerPack Motors, VS drives MV & LV SG, transformers, power protection & quality

Control systems, DCS, SCADA, MES, PLC, full factory automation

Electrical installation, motor control center, machine safety Hygienic master, volumetric laser scanner

Food & beverage marketAreas ABB serves

—

Source: Gartner public forecast (Nov. 2015);Cisco Virtual Networking Index (2014)March 28, 2018 Slide 42

The internet of Things, services and people for seamlessly integrated environment

Industry 4.0—Today and tomorrow

Internet of…Industry 1.0—1712First practical steam engine

Industry 3.0—1969Electronics/ software based control

Industry 2.0—1870First elevated conveyor belts

People

Services

Things

The Integrated Plant4th industrial revolution

—

March 28, 2018Source: www.abb.com/abb-ability 1: MOM = Manufacturing Operations Management | 2: LV = Low Voltage | 3: MV = Medium Voltage | 4: DCS = Digital Control System

Slide 43

Remote / On-Site Condition Monitoring Preventive Maintenance Remote Assistance

Monitor remotely and/or on-site critical plant equipment

to get early health warnings

Use data gathered from

monitored critical equipment

to plan maintenance

Get immediate remote support from ABB experts in case

of an equipment issue

Plant: • Operations Data Mgmt.

MOM1: • Downtime Mgmt.

MV3 Elt. Syst.: • Asset Condition & Risk Mgmt.

• Circuit Breaker RemoteCare

LV2: • On-Site Condition Monitoring

Drives: • Condition Monitoring

Motors: • Smart Sensor for LV Motors

• Smart Sensor for MV Motors

Transformers: • Asset Health

Robots: • Condition Monitoring

MOM1: • Maintenance Mgmt.

Switchgear: • Predictive Maintenance

Robots: • Preventive Care

Drives: • Preventive Maintenance

Robots: • Remote Trouble Shooting

Drives: • Remote Support

Instrument.: • Remote Services

ABB Ability for F&B More productivity, less energy, longer product life

—

March 28, 2018Source: www.abb.com/abb-ability 1: MOM = Manufacturing Operations Management | 2: LV = Low Voltage | 3: MV = Medium Voltage | 4: DCS = Digital Control System

Slide 44

Energy Management Virtual Commissioning Cyber Security

Improved energy management

through control of the electrical

system via cloud

4-D simulated factories can now

be created in the digital space, so

that commissioning issues can be

solved in advanced

Address gaps vs. industry standards that could threatened

production and quality

Connected Services

Reduce downtime and improve

performance through actionable

intelligence and advanced

analytics

Plant DCS4: • Connected Services

MV3: • Asset Condition & Risk Mgmt.

LV2: • Predictive Maintenance

Robots: • Connected Services

Motors: • Smart Sensor

Drives: • Remote Assistance

MOM1: • Enterprise Energy Manager

LV2: • Elt. Distribution Control Syst.

Drives • Energy Optimization

Plant DCS4: • Cyber Security ServicesPlant DCS4: • Automation Builder

Robots: • RobotStudio

• Virtual Reality Production Line

• Virtual Reality Video

ABB Ability for F&B Optimising mass customisation takes ability – ABB Ability™

—

March 28, 2018 Slide 45

Digital ABB offering across businesses: integrate, penetrate, replicate

Build on customer trust, domain expertise, deep process knowledge

Open access, intelligent cloud

Closing the loop with connected devices

New end-to-end digital solutions

Creating one common offering for digital end-to-end solutions

The Integrated Plant: ABB AbilityTM

—

March 28, 2018 Slide 46

Connectivity

Gateway supporting 300 protocols

Cybersecurity

Encrypted data storage and transfer

Overall Equipment Efficiency

Measures uptime on machine, section, or factory

Energy monitoring

Enables overview on energy consumption

Food safety

Tracking and tracing via audit trail

Real time data flow

Integration with IT level - MES or ERP system

IntegrityIntegration Insight

Fulfills all digital need for your machines

ABB – IoT software

—

March 28, 2018 Slide 47

Save time Reduce risk Be efficient

Simplify system maintenance Simulate effortless Convince your customers

Debug realistic systems without real hardware Verify logic, detect errors, prove quality 3D simulation in best-in-class tool RobotStudio®

Standardised modules in whole lifecycle Same configurations in simulation and reality Create insight and trust with functional models

Simulate systems easily Ensure quality Ease operator training

Digital Solutions – Virtual Tuning, Engineering and CommissiongValue propositions

—

March 28, 2018 Slide 48

1. Listen & understand 2. Assess 3. Analyse & discuss 4. Plan & implement

ABB 4 step process to begin the digitalisation journeyTailored to production and needs

—

Global Strategy -Collaborates with other division initiatives and coordinates cross BU and cross regional activities-Segment approach gives detailed and structured market information including market size, trends,

players and competitive landscape

Application Competence -Key level for differentiation / customer segment & industry specific applications

Global Foot Print -Build capacity in line with regional potential and localised requirements.

Global Service Support -Global reach & support network, direct and service partners

World Class Operations -Entire value chain from marketing/sales, product mgmt., including R&D up to production and logistics

Global Account Management -Provides detailed information about international OEM’s company profile-Global support & networking planned activities and action plans

Global Frame Agreements -Experience with frame agreements negotiating and implementing complex international terms and conditions

March 28, 2018 Slide 49

Collaboration – True Superior Customer Experience

ABB value propositions & deliverables Customer support