Supply Chain design at Amminex

Presentation to the 2nd Copenhagen SCM Summit
October 13th 2010
Jens E Hinnerskov, CEO at Amminex A/S
Uffe Nørtoft, cand.merc SCM and consultant
at SCOPTI Management Consulting
Confidential
Automotive Exhaust Aftertreatment
& Energy Storage
Ammonia Storage and Delivery System (ASDS)
For NOx emission reduction by SCR
(Market size: EUR 5 Bill. , CAGR 20%)
ASDS
SCR catalyst
Spectacular features:
100 ml of Hydrogen pill Mg(NH3)6Cl2*…………. stores 10,0 g Hydrogen
100 ml of liquid Hydrogen (-240C) ……………. stores 7,0 g Hydrogen
100 ml of pressurized Hydrogen (500bar) …….. stores 3,2 g Hydrogen
Hydrogen generation for fuel cells
(No commercial fuel cell market)
*
Amminex core invention the ammonia solid : AdAmmine
Confidential
Leading OEM’s wants the Amminex ASDS
Amminex is the key to future aftertreatment systems (DeNOx);
it solves most of the problems that the prevailing Urea SCR intrinsically
possesses
Fundamentals
Amminex delivers 100% pure ammonia gas on demand from any ECU very accurately
to the catalyst
No extra burden is put on the customer (driver); it’s a complete solution
The basic problem with Urea SCR (AdBlue)
Bosch and a few others injects an organic substance that contains 62% water and about 20% ammonia to the catalyst
AdBlue is a perishable and the OEM’s ask their customers and the distributors to deal with it.
NOx is a big problem, but it is overshadowed by CO2 or the need to reduce fuel consumption
Amminex enables fuel consumption reduction
The future of fuel efficiency is smaller engines and lower exhaust temperatures
Amminex ASDS works well at lower exhaust temperatures and closed coupled
Confidential
Strategy
Meet the Euro 6 window (speed is of the essence; urea train, early cash flow)
Amminex ASDS can become a new industry standard
Manning up to meet OEM requirements for the
Series Development Programs
Demonstrate large scale production capability
(credibility to deliver)
Value creation changes from technology to
capability to produce large scale low cost
Main AdAmmine cartridge
(replaceable at oil-service interval)
ASDS
Boundaries
Shareholders requirements
Exit strategy
Investment strategy (limited capital)
Ammonia Flow Manifold
Amminex software for
dosing control and OBD
Dynamic ammonia
dosing
OEM requirements
Security for performance
Tier-1 partnering
Confidential
Energy storage and fuel cell power
Amminex energy storage and ”carbon
free” fuell cell power unit
500 W peak power
( Display 2010 FC Expo, Tokyo)
H2 generator
Telecom backup
(Dantherm
Power)
(2 kW)
APU
(5 kW)
Airport transit bus
(Navistar)
APU
(2 kW)
Airplane galley
Power(Boeing)
Confidential
Master Thesis:
Supply chain design
at AMMINEX
Presentation to the 2nd Copenhagen SCM Summit at CBS
Confidential
background for master thesis
In the spring of 2009...
– Amminex worked closely with its potential customers in the
prototype phase; the challenge was to move into
industrialization
– Amminex was still searching for first customer, but focus
was on the European automotive industry having to
comply with Euro 6 emission regulations
– Amminex was well into the projection of its first production
facility, but how would the expansion and the
distribution system look like?
Confidential
background for master thesis
Thus I was asked to:
”...assess and optimize plant location and
capacity allocation for the forward and
reversed flow of AdAmmine cartridges.”
SUPPLY CHAIN DESIGN
Confidential
task conceptualizing & definition
Based on a contingency approach...
a supply chain design must define a valid
and solid match between:
Contextual
variables
Response
variables
Performance
variables
• Product characteristics
• Location of facilities
• Net Present Value
• Industrial conditions &
contraints
• Capacity allocation
• Volatility in demand
• High-level process
design
• Volatility in return flows
• Cost structure (incl. tax)
• Ramp-up time
• Market/customer
proximity
• Supplier proximity
• Risk elements
Confidential
scoping product components
The product:
Ammonia Storage and Delivery System
– AdAmmine cartridge
– Start-up unit
– Fittings
– Control unit
Confidential
analysis assessing the demand
Customers - the first-fit market:
Selected potential diesel passenger car
producers in EU:
– 5 car producers
– 24 car production
sites
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analysis assessing the demand
Customers - The aftermarket:
The buyers of diesel passenger cars in EU
with ASDS mounted:
– Cartridge needs to be
replaced every 24th
month
– 70+ spare parts
wholesalers in 25+
countries
Confidential
analysis assessing the demand
Total forecasted demand (‘000 cartridges):
25.000
20.000
15.000
10.000
5.000
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Total First-fit demand
Total AfterMarket demand
Confidential
analysis ressource flows
Gross need of raw materials (Tonnes):
160.000
140.000
120.000
100.000
80.000
60.000
40.000
20.000
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Gross Demand SALT
Gross demand NH3
Gross Demand Alu-additive
Gross Demand Fittings
Confidential
Gross Demand Stainless Steel
analysis ressource flows
Netto need materials (Tonnes) – including
return flow:
160.000
140.000
120.000
100.000
80.000
60.000
40.000
20.000
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
-20.000
-40.000
Net Demand SALT
NetNeed NH3
NetNeed Stainless Steel
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NetNeed Alu-additive
Net-need Fittings
solution supply chain configuration
Integrated recycling
Location X
Sales to
First-fit &
aftermarket
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External
markets
Recycling
Scrap metal
AdAmmine
Cartridge
production
Returns from
aftermarket
Salt / Fittings /
NH3 / Alu
Ordinary
supply flow
solution supply chain configuration
Pre-Ponement – disintegrating recycling
Returns from
aftermarket
Ordinary
supply flow
Location X
Recycling
Sales to
First-fit &
aftermarket
External Location Z
Confidential
External
markets
External Location Y
Scrap metal /
NH3
AdAmmine
Cartridge
production
Salt / Fittings
Recycling
solution modelling and simulation
Using the power of Excel to assess
and find solution
Confidential
solution recommendations
The results of simulations:
– 4 production sites
– No pre-ponement of
recycling processes
– Main drivers:
• Tax
• Market proximity
• Supply chain risks
Confidential
Any questions?
Confidential