Partners In Process 2nd Meeting of the Board of Management2nd Meeting of the Board of Management

Montreal, April 22Montreal, April 22ndnd, 2002, 2002

Introductions

Objectives of meeting

• Review objectives of programReview objectives of program• Review financial statisticsReview financial statistics• Receive update on progressReceive update on progress• Discuss re-supply and inventory profileDiscuss re-supply and inventory profile• Review PIP champion progress reportsReview PIP champion progress reports• Discuss competitive situationDiscuss competitive situation• Review future developmentsReview future developments• Agree action planAgree action plan

Objectives of program

• Multiply the sales of Peerless Process products in Multiply the sales of Peerless Process products in Canada.Canada.

• Provide a mutually profitable mechanism to Provide a mutually profitable mechanism to achieve the growth through commitment to achieve the growth through commitment to CanadaCanada

• Develop strong and lasting bonds between Develop strong and lasting bonds between Peerless, our business partners and our customersPeerless, our business partners and our customers

Business Plan Sales Goals

20012001 20022002 20032003

ShipmentShipments Goals Goal

$90k$90k $500k$500k $1,000k$1,000k

PIP Value Proposition

• Access to over $1M CDN inventory Access to over $1M CDN inventory landed in Canadalanded in Canada

• Upgraded parts (CD4) at 316 pricesUpgraded parts (CD4) at 316 prices• Unquestioned quality (3 year warranty Unquestioned quality (3 year warranty

on pump)on pump)• Anywhere in Canada within 2-3 daysAnywhere in Canada within 2-3 days• Aggressive and active sales campaignAggressive and active sales campaign

Achievements since the last meeting

• 100% of inventory delivered100% of inventory delivered• Systems improved and streamlinedSystems improved and streamlined• Marketing program in full swingMarketing program in full swing• Sponsor program implemented and Sponsor program implemented and

joint visits madejoint visits made• Exciting successes made with some Exciting successes made with some

key customerskey customers

Some conclusions from sales visits• High energy sales effort is neededHigh energy sales effort is needed• We are not well known in the key areasWe are not well known in the key areas• We have to work hard to prove We have to work hard to prove

ourselvesourselves• Way in is to show customers Goulds is Way in is to show customers Goulds is

not doing the good job they think they not doing the good job they think they areare

• Access to business will come from Access to business will come from added value not priceadded value not price

• It is entirely achievableIt is entirely achievable

What we need to go away with

• Understand where we areUnderstand where we are• Learn the best ideas from each otherLearn the best ideas from each other• Re-energize sales effortRe-energize sales effort• Remove any obstaclesRemove any obstacles• Clear targets and action plansClear targets and action plans

Do you know how to sell a Peerless Process Pump ?

ForFor

ForFor

Example – PIP value sale

The Top Sixteen ReasonsThe Top Sixteen Reasons To Upgrade Your Installation To Upgrade Your Installation With a Peerless Model 8196 With a Peerless Model 8196

Performer SeriesPerformer Series

1.1. 3 Year Warranty3 Year Warranty• Peerless extended MTBPM feature is Peerless extended MTBPM feature is

backed by a three (3) year, no questions backed by a three (3) year, no questions asked warranty, you can’t beat it anywhere.asked warranty, you can’t beat it anywhere.

2.2. InterchangeabilityInterchangeability• Part for part interchangeability with the Part for part interchangeability with the

Goulds 3196 “X” series provides for Goulds 3196 “X” series provides for maximum flexibility and reduced inventory maximum flexibility and reduced inventory requirementsrequirements

• 3.3.     AlloysAlloys•         A wide range of alloys handle the full spectrum A wide range of alloys handle the full spectrum

of chemical liquids, including ductile iron, of chemical liquids, including ductile iron, 304/304L, 316/316L stainless steel, CD4MCU, alloy 304/304L, 316/316L stainless steel, CD4MCU, alloy 20, R-55 proprietary, Hastelloy C,B; monel, nickel, 20, R-55 proprietary, Hastelloy C,B; monel, nickel, zirconium, titanium and others. Our captive zirconium, titanium and others. Our captive foundry is world renown for it’s metallurgical foundry is world renown for it’s metallurgical expertise for casing integrity, consistency, and expertise for casing integrity, consistency, and conformance to material specification gives us an conformance to material specification gives us an edge over the competition.edge over the competition.

• 4.4.        Frame foot        Frame foot• Rigid frame foot reduces effects of pipe Rigid frame foot reduces effects of pipe

strain on shaft alignment. This resulted in a 10 strain on shaft alignment. This resulted in a 10 deg F temperature reduction in the oil bath.deg F temperature reduction in the oil bath.

• 5.5.                Bull’s-eye sight glassBull’s-eye sight glass • provides for easy, accurate monitoring of provides for easy, accurate monitoring of

oil level and conditionoil level and condition

• 6.6.        Heavy-duty design        Heavy-duty design• Advanced design techniques and heavy-Advanced design techniques and heavy-

duty construction throughout ensure high duty construction throughout ensure high performance and a long, trouble-free service life.performance and a long, trouble-free service life.

• 7.7.        Thrust bearings        Thrust bearings• Heavy duty, Conrad-style, double-row thrust bearings extends Heavy duty, Conrad-style, double-row thrust bearings extends

bearing life.bearing life.

• 8.8.        Investment-cast        Investment-cast• 316SS investment-cast impeller for better hydraulic 316SS investment-cast impeller for better hydraulic

performance.performance.

• 9.9.       Key/bolt option       Key/bolt option• The impeller key/bolt option that prevents loosening in case of The impeller key/bolt option that prevents loosening in case of

accidental reverse rotationaccidental reverse rotation..

• 10.10. Impeller adjustmentImpeller adjustmentExternal adjustment of impeller clearance ensures long efficient External adjustment of impeller clearance ensures long efficient hydraulic performance.hydraulic performance.

• 11.11.     Oil sump     Oil sump• Large capacity oil sump improves heat transfer for more Large capacity oil sump improves heat transfer for more

effective cooling. A 10 deg F temperature reduction is realized.effective cooling. A 10 deg F temperature reduction is realized.

• 12.12.    Inpro-bearing    Inpro-bearing• The vapor blocking, VBX-D bearing isolator, protects the The vapor blocking, VBX-D bearing isolator, protects the

bearings from environmental contamination in both static and bearings from environmental contamination in both static and dynamic modes. A 10 deg F temperature reduction is realized.dynamic modes. A 10 deg F temperature reduction is realized.

• 13.13.     Shaft pin     Shaft pin• The positive shaft pin drive of the shaft sleeve ensures The positive shaft pin drive of the shaft sleeve ensures

that mechanical reliability of the shaft and sleeve design with that mechanical reliability of the shaft and sleeve design with spinning and galling minimized.spinning and galling minimized.

• 14.14.     Wear extender     Wear extender• The renewal “wear extender” option is design for The renewal “wear extender” option is design for

sideplate to handle the wear rather than the casingsideplate to handle the wear rather than the casing

• 15.15.     Coating     Coating• Internal bearing frame coating with an oil resistant Internal bearing frame coating with an oil resistant

sealer minimizes the corrosion and contamination and sealer minimizes the corrosion and contamination and increases the MTBFincreases the MTBF

• 16.16.     Vibration points     Vibration points• Vibration point bosses are provided on the Vibration point bosses are provided on the

horizontal and vertical positions of the bearing frame.horizontal and vertical positions of the bearing frame.

Power end PerformerExchange Large oil sump, Coated internal, Labyrinth inpro bearings, Larger shaft, Eye glass

STP MTP LTP XLTP STP MTP XLTPParts costSleeve $95.50 $118.00 $184.00 $192.00 $360.00 $475.00 $717.00Shaft $175.00 $179.00 $240.00 $468.00 $548.00 $548.00 $856.00Inboard bearing $11.00 $26.00 $36.00 $46.00 $120.00 $273.00 $371.00Outboard bearing $47.00 $81.00 $122.00 $192.00 $288.00 $760.00 $1,064.00Inpro Labyrinth seal $407.00 $600.00 $683.00 $868.00 $868.00 $1,336.00 $1,558.00Oring $5.00 $7.00 $9.00 $9.00 $40.00 $56.00 $95.00

Other costs

Labor expense: disassemble, assemble, sand blast sump, paint $40.00 $40.00 $60.00 $80.00 $80.00 $100.00 $120.00Number of hours 1 1 1.5 2 2 2.5 3Ordering $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00Accounting $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00

Total $1,021.50 $1,292.00 $1,575.50 $2,097.00 $2,546.00 $3,790.50 $5,024.00New power end $895.00 $1,040.00 $1,553.00 $2,561.00 $3,005.00 $4,725.00 $6,775.00

Ratio new vs rebuild 88% 80% 99% 122% 118% 125% 135%Ratio rebuild vs new 114% 124% 101% 82% 85% 80% 74%

8196 8175

Features & BenefitsPower End (Goulds 3196, 3796, 3196NM)

1” Bulls-eye 1” Bulls-eye Oil Sight GlassOil Sight Glass

Pre-Drilled Pre-Drilled C-Face AdapterC-Face Adapter

Instrument Monitoring PointsInstrument Monitoring Points

Coated InternalsCoated Internals of Power Endof Power End

Optional Finned Tube Oil CoolerOptional Finned Tube Oil Cooler(above 300 Deg F)(above 300 Deg F)

Inpro VBX Labyrinth BearingInpro VBX Labyrinth BearingIsolatorsIsolators

LTP Upgrade on LTP Upgrade on 10” & 13” MTP’s10” & 13” MTP’s

Pre-Drilled for Pre-Drilled for Optional LubricationOptional Lubrication

3 Year Warranty

3 Year Warranty On PowerOn Power EndsEnds

  

The “performer series” is a The “performer series” is a problem solver!!!problem solver!!!

  Pump More for Less!!!Pump More for Less!!!

What are the tools we have available to us ?

List on the boardList on the board

Tool Kit•SPEEDSPEED•WebXtender / COLDWebXtender / COLD•Goulds cross reference Goulds cross reference

spreadsheetspreadsheet•Vertical history databaseVertical history database•Executive and manager buy inExecutive and manager buy in•Lead time reduction initiativesLead time reduction initiatives•8196 Pages – located on Extranet8196 Pages – located on Extranet

Tool Kit• Marketing material Marketing material

– BrochuresBrochures– Service labelsService labels– Service brochures attached to every new pumpService brochures attached to every new pump

• Training programsTraining programs– Certified Service TechnicianCertified Service Technician– Certified Parts ExpertCertified Parts Expert

• Coming soonComing soon– SPEED upgradesSPEED upgrades– RPM type parts and service bookRPM type parts and service book

• Total Cost of Ownership spreadsheetTotal Cost of Ownership spreadsheet

The PIP ConceptExampleExample

End user concerns

• Quality: Quality: Poor quality parts from pirates, poor Poor quality parts from pirates, poor efficiencies, parts wont fit, wrong material, wrong efficiencies, parts wont fit, wrong material, wrong tolerances, sand cast impellers, 3180 replacing tolerances, sand cast impellers, 3180 replacing 31753175

• Availability: parts and customer service, breadth of Availability: parts and customer service, breadth of product on the shelf, high dollar inventory to carry product on the shelf, high dollar inventory to carry locally, Allis Chalmers parts being discontinued, locally, Allis Chalmers parts being discontinued, changes in distribution changes in distribution

• Deliveries: long lead time, inconsistent deliveriesDeliveries: long lead time, inconsistent deliveries• Pricing: THE MOST FOR THEIR MONEYPricing: THE MOST FOR THEIR MONEY• Value added: Reduce operating cost, MTBF, lack of Value added: Reduce operating cost, MTBF, lack of

support, inventory management, power support, inventory management, power consumption…consumption…

PIP Concept

• OEM quality and + OEM quality and + • Availability, Availability,

breadth of breadth of productsproducts

• Short deliveriesShort deliveries• PricingPricing• Value addedValue added

CD4MCu brings you savings

• Longer wear BHN + 50% (260 vs Longer wear BHN + 50% (260 vs 170)170)

• Yield strength + 200% over 316Yield strength + 200% over 316• Tensile strength + 30% over 316Tensile strength + 30% over 316• Corrosion resistance Chromium + Corrosion resistance Chromium +

56% over 31656% over 316• Nitric Acid+++Nitric Acid+++• Phosphoric acid ++Phosphoric acid ++• Sulfuric acid ++Sulfuric acid ++• Sodium hydroxide +Sodium hydroxide +

Tool Kit

• What else do you need ?What else do you need ?

Do you know how to sell Process Parts ?

Process Pumps – the new paradigm ?• Establish Peerless as a credible OEMEstablish Peerless as a credible OEM

– Demonstrate your knowledge of pumps, market, Demonstrate your knowledge of pumps, market, competition, history and technologycompetition, history and technology

– Tell them the Power D and ANSI storyTell them the Power D and ANSI story• Demonstrate the advantages of the 8196/8175 Demonstrate the advantages of the 8196/8175 • Mention ISO 9001 program and how we design Mention ISO 9001 program and how we design

pumpspumps• State that Peerless products are better from State that Peerless products are better from

the reliability standpoint and Peerless parts the reliability standpoint and Peerless parts fit the installed Goulds basefit the installed Goulds base

• We have a solution for the legacy products as We have a solution for the legacy products as wellwell

• State that the biggest obstacle to selling State that the biggest obstacle to selling process pumps is history and the installed process pumps is history and the installed populationpopulation

Process Pumps – the new paradigm ?

• Explain the importance of pump and Explain the importance of pump and inventory surveysinventory surveys

• Explain the inventory development Explain the inventory development methodology and how we tune our methodology and how we tune our inventory to match customer needsinventory to match customer needs

• Tell them that we have other products Tell them that we have other products that fit their pumping demandsthat fit their pumping demands

• Summarize the aboveSummarize the above• Ask them what they thinkAsk them what they think• Shut up and listenShut up and listen