Stanford university management science & engineering students evaluate APM′s 3DLevelScanner impact on Louis Dreyfus commodities plant

Tel Aviv, Israel – June 15, 2012 – APM Automation Solutions Ltd. (APM) today announced completion of an independent evaluation of the impact of APM's 3DLevelScanner™ on the real-life operations of a corn-to-ethanol plant owned by Louis Dreyfus Commodities (LDC), one of the world’s largest agricultural commodities suppliers. The study was carried out by graduate students in the Supply Chain Management Course taught by Prof. Warren H. Housman in Stanford University's Management Science and Engineering Department. Prof. Housman's research interests and expertise are in operations planning and control, with specific emphasis on production and distribution planning, inventory control, multi-echelon inventory systems, and supply chain management.

LDC operates a total of 6 plants throughout North America, two of which are devoted to corn-to-ethanol production. The target of the students' study was LDC's Grand Junction, Iowa corn-to-ethanol plant, operating 24/7, and including two large silos for storing corn. The plant maintains a minimum stock to cover 7 days of demand at 122,000 bushels per day.

The main objectives of the study were to ascertain whether improvement in level measurement in the plant’s two large corn silos would lead to any significant inventory/supply chain benefits, to enumerate the quantitative and qualitative benefits found, and to determine how attractive an investment in APM’s technology is from LDC’s point of view.

Key Findings

An average error in estimating volume of corn stored in silos using LDC's previous SmartBobs device (from BinMaster) was calculated at 5.41% compared of APM's 0.98%. Most of the savings made possible by APM's 3DLevelScanner system came from two sources: removal of the old, labor-intensive inventory measurement process, and reduction in stock levels. The reduced stock levels provided indirect savings through decreased inventory carrying costs. Combining these two factors, the installation of APM technology would save LDC $68,300 per year. The cost of the 3DLevelScanner system was estimated at $16,000 per large silo, and with two large silos at the Grand Junction plant, LDC’s cost would be about $32,000. The resulting repayment period of the investment would be $32,000 ÷ $68,300 per year = 5.6 months.

The Stanford students concluded that installation of APM 3DLevelScanners in LDC's two ethanol plants in North America will yield annual savings in the range of $97,700 to $102,350, depending on current inventory policy, with a one‐time installation cost of $48,000. The students also proposed a new delivery schedule for LDC made possible by APM’s technology that could reduce annual inventory costs by a further $185,180.

In addition to quantifying the impact of the 3DLevelScanner, the Stanford students found a number of qualitative benefits, including more accurate accounting, better awareness of yields, and alerts to unexpected inventory changes, together allowing APM to market the product as a holistic inventory management solution.

For more details see the Stanford University students' study, analysis and conclusions here.

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About APM

APM Automation Solutions Ltd. is a leading manufacturer and expert in volume and level measurement instrumentation. Its flagship product, the 3DLevelScanner™, first introduced in 2007, represented a new family of devices that eliminated the guesswork out of measuring the level, volume and mass of materials stored inside a silo or open bin with 3D mapping of the contents. APM’s offerings have since been expanded to provide inventory-savings solutions for range of industrial applications involving very large silos, storage bins and warehouses across multiple sites, adapting its technology to meet the needs of corporate as well production managers. APM’s unique patented technology addresses applications previously thought to be beyond the scope of level and volume measurement with unparalleled degrees of accuracy. APM products are sold and supported by a network of agents / distributors in Europe, the United States, and elsewhere.

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