Good morning everyone, thank you for joining us today. My name is Hervé Kostaniak and I'm thrilled to be co-presenting this webinar in the Sandvik Coromant Center in Milano together with my colleague Simone Del Piero. Hello everyone, it's a pleasure to be here. Hervé and I have an exciting session planned for you today. That's right Simone! We will be diving into Payment-Per-Part model and sharing our expertise to help you. Yes, and we encourage you to participate actively. Feel free to ask questions and share your thoughts in the chat. Without any further ado, let's get started! Over to you Hervé! Thank you. In the current industrial and economic context in which we operate, we must constantly question ourselves and adapt to new challenges. Simultaneously, we believe that the relationship between customer and supplier should also evolve well beyond the classic format "selling-purchasing" and thus position itself at the core of your challenges. Drawing upon our experiences in the field, we would like to offer you an innovative approach that could help you to take your overall performance to the next level. At Sandvik Coromant, we have identified four main challenges that our customers face. Efficiency Today we must do more with less. Markets are moving fast and our customers expect quick deliveries and top quality. This means that we need to be efficient in everything we do. Continuous improvement is no longer optional. It's part of our daily routine. We must always look for ways to optimize our processes, save time and reduce waste. And then transparency is key. When we see clearly, we act quickly. Digitalization Digital tools are changing the way we work. We now rely more and more on data to guide our decisions. A data-driven approach helps us understand what is happening in real time and take faster and better actions. But with digitalization also comes complexity, particularly when it comes to finding where and how to start. Systems must be well connected and we need to ensure IT security at every level. Cost pressure We all feel the pressure of rising costs. Raw materials are more expensive and budgeting is becoming harder. To stay competitive, we need to manage our spending carefully. Every pound counts. We must balance cost control with the need to invest in innovation and quality. This is a delicate but necessary balance. Last but not least: People Our most important asset. Today, we face a lack of skilled workers and limited resources. At the same time, we need to keep our teams engaged and motivated. This is not always easy. Training, support and strong communication are essential. We truly believe by adopting the Pay-Per-Part model we are about to present you today, we can not only mitigate the impact of these challenges, but also position your business for long-term growth and resilience. Cutting tools may be considered a commodity, but we all know that they play a key role in the manufacturing value chain because of their direct impact on many aspects. Cost-per-part: utilization of the most optimized and competitive solution for the best value. Overall equipment efficiency (OEE): by applying the right strategy, using the right tool, with optimized cutting data and avoiding production stops. Component quality: how to reach the requested quality at a lower cost. Engineering: to define and select the right technology to implement. Internal processes: Cutting tools need to be managed with care for stocking, transportation and reconditioning. They have a significant impact on the internal manufacturing process flow. Financial performance: tools have a cost and a value that will impact the total machining spend and also the net working capital (NWC). Resource allocation: the management of tools requires an organization to source, stock, assemble, adjust, and analyze. Even if the subject of Payment-Per-Part may seem self-explanatory, it's important to provide you with a precise definition. "Payment-Per-Part is a strategic partnership agreement where the customer pays a fixed and predetermined price based on parts produced instead of tool consumption." The foundation of the Payment-Per-Part consists of four pillars. First of all, it's about offering a yearly stable cost-per-component along with guaranteed performance. Depending on the project, we can also evaluate together to commit to yearly savings. These three elements gain significant value with the support from the Sandvik Coromant Engineering department. This is an important slide that will help you understand the key benefits of the Payment-Per-Part model. The vertical axis represents the cost-per-part evolution over the years. This is a typical pattern showing rising and fluctuating tooling costs with peaks and troughs. Several factors explain this, such as shorter tool lives, tool breakage, misuse of tools, supply price increase, quality deviation, and so on. In contrast, the Pay-Per-Part model allows you to pay a fixed yearly cost-per-part. Meanwhile, we can commit on a contracted savings plan applied systematically after Year 1 and Year 2. Additionally, we can also commit to productivity increases depending on the component, the product scope, and, of course, your objectives. The orange color represents your net savings. One option is to commit to a stable cycle time throughout the three years. Depending on the scope, we can also commit to a stable cost-per-part model. This model is very common in aerospace for which the process cannot be changed and the cutting parameters are frozen. Our service offer comprises several customizable enablers that Simone is going to describe more precisely. It's about engineering, cost-per-part. sourcing, reconditioning, consignment stock, tool logistics, analytics, and service team. Okay. Let's analyze or let's talk about Engineering. We offer state-of-the-art tooling solutions designed to meet the highest standards of quality and performance. Our selections are not only cost-effective, but also proven to deliver exceptional results across various components. We ensure strict quality compliance in all of our offerings, providing you with peace of mind and reliability. Additionally, our expertise extends to CAM programming, enabling precise and efficient manufacturing processes. To further assist your operations, we offer comprehensive run-off support, ensuring smooth implementation and optimal performance of our solutions. Sourcing and reconditioning Consumable product sourcing and solid round tools reconditioning are part of our service offer. We provide what is necessary to fulfill production needs according to your forecast, ensuring that your production processes run smoothly and without an interruption. Consignment stock For all consumable items, the key objective is to never stop the production. Seemlessly, we'll provide production security, 24/7 accessibility through vending machines, transfer of property, transfer of inventory management, streamlined production flows. Digitally enabled What we need to implement is our tool management software like CoroPlus® Tool Supply which allows you to secure tool availability, minimize the risk of errors, provide 24/7 controlled access, offer a user-friendly interface, manage assemblies and spare parts, ensure it's always up-to-date. And then, in terms of required software, we can also mention - while it's not mandatory, but it's better to have - manufacturing data analytics software, like our CoroPlus® Machining Insights, which ensures real-time information, automated OEE calculation, tool and machine utilization dashboards, shop log for actions and improvements, full production transparency. As mentioned previously, financial and technical commitments are defined at the beginning of the project. For each single component, we commit to a CPP and machining time, as you can see here. Every component has its own cost-per-part and cutting time. This is what a Pay-Per-Part invoice looks like. It's important for you to know. So the main bar here represents the quantity of part produced multiplied by the contracted cost-per-part in the past month. Depending on the project scope, we may charge a service package, which may include a cabinet and/or a software subscription. Overconsumption may also occur. The diagram here illustrates the process flow that is quite simple: at the core is the vending machine system, allowing customers to pick goods whenever needed. Once the tool life is reached, here, the consumable is either returned to the vending machine for reconditioning, or disposed of. Here, each month, the customer reports the quantity of parts produced in the past month in order for us to trigger the monthly invoice following the terms of the contracts. We have two complementary models to offer. In the first model here on the left-hand side, Sandvik Coromant manages the entire project independently. In the second one, Sandvik Coromant collaborates with a service partner who operates at the customer's site on behalf of Sandvik Coromant. Simone, Simone, can you tell me which production types we can apply with that model? Yes, of course. This is a versatile project allowing for seamless application across various levels of production. Whether it's a single machine, an entire production line, a workshop, or even an entire plant, this project adapts to meet your needs. One of the remarkable features of this project is its compatibility with both new and existing production setups. It is essential to recognize three simple prerequisites that form the foundation for a successful deal. Firstly, a serial or repetitive production is crucial. Secondly, mid- to long-term visibility is necessary, at least to forecast the production. Lastly, a stable component, in terms of constant stock material to remove is vital. Global implementation of Payment-Per-Part As of now, we have been running Payment-Per-Part not only on all continents but also across various segments, such as automotive, aerospace, and increasingly in aero-engine. Once more, the success is evident everywhere with repetitive production. This slide summarizes all the benefits the Payment-Per-Part model can offer to a company. Hervé, can you please elaborate? Yes, of course. For the top management, it is essential to have assurances that the business will be steered profitably through a partnership with a leading metal cutting expert. Continuous improvement is made possible through process digitalization. For purchasing teams, securing fixed price and guaranteed savings is crucial to enable more accurate forecasting and budgeting. In operations, numerous tasks are outsourced to Sandvik Coromant, who implements robust processes across logistics and procurement flows. And finally, for engineering department, Sandvik Coromant cutting-edge processes ensures the expected performance while minimizing the risk of unforeseen events. The process typically unfolds across five key milestones. The first step is a joint project analysis with the customer, during which we assess your requirements and specifications, and collect also all necessary data such as drawings and machine capabilities. In the second phase "Quotation" Sandvik Coromant engineers will collaborate to design the most suitable machine process and propose a tailored logistic solution. The goal is to provide a comprehensive Pay-Per-Part quotation covering all the aspects. Once the quotation is approved, the next step is to drive a detailed contract clearly outlining mutual commitments. Upon signing, we begin process implementation with a limited time learning phase, also referred to as "Miles 0". After this "Miles 0" phase is completed, we transition to a limited time learning phase, we transition to full operations under the Pay-Per-Part billing model. Please, feel free to type your question in the chat box. Hi, Hervé and Simone. We have a couple of questions for you. The first one is, "You highlighted mid-long term visibility. What does it mean precisely?" Basically, we aim for a three-year contract. This is what we are looking for. But generally speaking, we use customer forecast based on assumptions. Even though the volume may fluctuate, we can accommodate them. The second one is, "What's the minimum size of a project to join this Payment-Per-Part concept?" Yeah, this is a typical question. Actually, there is no minimum. It depends on the yearly production volume and cost-per-part. Let's say, we often see customers starting small and gradually adding some more components. It very much depends on the case. But we can start small and think big. Do we have some more questions, Giacomo? No. Okay. Thank you all for joining today's webinar on Payment-Per-Part. We hope you found this session informative and valuable for you and your company. We encourage you to ask any questions you may have regarding this topic. And we leave the chat open for a while to address your queries. Thank you very much. And hope we can see you in the next future. Thank you very much. Thank you.