Sub- Sub-Supptiei Supplier

FIGURE 10 Multi-firm information flow

FIGURE 10 Multi-firm information flow and absorbed as a sales and engineering overhead. This example actually understates the total number of inquiries issued indicating that the "wasted" effort is probably much greater than calculated.

To reduce costs, purchasers are seeking ways to reduce the engineering resources required to process this information without compromising the quality of the competitive evaluation. Similarly, suppliers are developing methods for responding to inquiries (or requests-for-quotation [RFQ]) with less resources and effort while striving to still provide high quality quotations to their customers. Simplifying the inquiry-quotation process is an attractive proposition for both purchaser and manufacturer.

Strategies for Improving the Selection and Purchasing Process Both purchaser and manufacturer in the Inquiry/Quotation Process are striving to enhance their competitiveness by reducing costs through process and information technology-oriented productivity improvements. Intracompany productivity gains have been the focus of many internal reengineering programs within a given firm. By their nature, these gains are limited to changes made within a single company and cannot effect improvements between multiple companies. However, the "ripple effect" on the total cost across multiple firms, described earlier, is a significant cost and represents a relatively unexplored opportunity for Intercompany productivity gains. Some of these cooperative strategies engaged by both purchaser and supplier include the following:

• Form alliances to streamline the Inquiry/Quotation process and flow of information across multiple firms

• Reduce the number of participants in the process by defining a preferred set of customers and suppliers

• Move the pump selection task earlier in the pumping system design process by providing purchasers' access to computerized selection programs allowing the purchaser to optimize their process design

• Structure the flow of information between companies to reduce ambiguity and enhance common work processes

Existing and emerging information technologies offer a technology platform necessary to implement many of these strategies. The next section describes four of the information technologies that are particularly important in improving intercompany activities in the selection and purchasing process for pumping equipment.

Applications of Emerging Information Technologies Information Technologies are used throughout the design, manufacture, and maintenance of pumping equipment and systems. With respect to the specific activity of selecting and purchasing pumps, there are four important information technologies that are playing a more meaningful role, including (1) Pump System and Selection Programs, (2) Pump Configuration and Pricing Systems, (3) Electronic Data Exchange, and (4) the Internet.

Pump System and Selection Programs Designing the piping network and sizing the components for a pumping system are performed very early in the overall pump selection and purchasing process. The piping system design involves numerous components that introduce friction losses in the system. These must be calculated in order to estimate the behavior of the system resistance curve needed to properly size the pumps needed in the system. Changes in process conditions (pressure, temperature, fluid properties, tank elevation, and so on) or multiple/variable branch systems introduce additional operating conditions in the system design that must be predicted. This design process, when done manually, is tedious and time-consuming. However, handling design iterations and performing system optimization studies have become more practical with the use of computerized design and analysis programs.

Use of design and analysis programs became more prevalent in the mid-1980s with the advent of personal computers as powerful engineering workstations on the desktops of pumping equipment designers. These computers, with their easier to use software interfaces, encouraged the development of more robust and capable software applications that were more economical to deploy. Consequently, a substantial amount of effort went into the development of engineering programs dedicated to the sizing of piping systems, pumps, and other components.

Numerous Piping System Design/Analysis computer applications are now available to aid in the design or analysis of piping systems and their components. Most of these programs are based on simultaneous path solutions. The more complete programs easily model piping networks and are capable of calculating friction losses through pipes and fittings. They also contain large libraries of standard pumped liquids and their fluid properties such as density, viscosity, and vapor pressure as a function of temperature. These programs are more time-efficient and give more predictable results than former manual methods.

Some of these piping design/analysis programs also contain integrated pump selection programs. Performance curves from various pump manufacturers are digitally programmed and accessed by the program to establish preliminary pump performance and design specifications. These programs can be reasonably sophisticated, using specialized mathematical algorithms to predict pump performance under varying operating conditions of speed, temperature, NPSHA, pressure, viscosity, and so on. Some are even capable of adjusting performance based on alternative mechanical seal design, wearing ring design and clearance, bearing design, materials of construction, or other mechanical design features. There are over 30 different pump selection programs used in the industry today (Cotter, 1996). With few exceptions, these pump selection programs were specially developed by each pump manufacturer using proprietary selection and searching methods. These programs are available under a licensing agreement directly from the pump manufacturer and are usually the same programs used by their internal applications engineers. Some third-party programs are available incorporating product lines from multiple pump manufacturers. Versions of both manufacturers and third-party programs are readily available for download from the Internet.

Pump system and selection programs have improved the ability to evaluate large numbers of alternative design alternatives in a short period of time. Accurate performance calculations, even with variable pump speeds, fluid properties (viscosity, temperature, pressure), and mechanical configurations are readily predicted. Design and calculation errors have diminished and the overall quality of the process has greatly improved.

Pump Configuration and Pricing The primary tool that pump manufacturers traditionally use during the Inquiry/Quotation process is commonly known as the Pricebook. The Pricebook is a manual that contains extensive pump performance curves, materials of construction, engineering data including dimensions and cross-sectional drawings, a plethora of guidelines on proper application of pumping equipment, and pricing information. Essentially, the Pricebook is an engineering design, specification, and pricing manual used by a trained pump applications engineer to convert a customer's inquiry into a customized quotation. These quotations include datasheets, performance curve, general arrangement drawings, and a price quotation including terms and conditions. In many cases, alternative selections, comments to the customer's specification, or other supplementary information are provided. The diverse array of information, expertise, and resources needed to generate a customized proposal has prompted the need to systematize the selection and configuration process using computer-aided tools.

Some manufacturers have responded by developing computerized product configurators. Product configurators aid the applications engineer in developing a pump quotation according to a prescribed product configuration model. These configurators are based on design rules and configuration rules that limit configuration choices. Examples of design rules are maximum casing pressure, maximum pump torque for a given shaft design, or the allowable temperature range for a given material. Using these design rules, a configurator could automatically upgrade a flange rating on a casing based on casing pressure or restrict the use of a gasket material as a function of temperature. Similarly, configuration rules ensure that a complete and permissible pump scope-of-supply is generated. For example, the mechanical seal type dictates the list of allowable seal flush piping options or the choice of pump and motor automatically defines coupling size required. These rules are coded into a knowledge base and serve to enforce product standardization and reduce configuration errors.

The pump selection program and the product configurator are the hub of the computer-aided tools used by the pump supplier to produce customized quotations. Supplementary programs are used to develop additional information such as pump performance curves, datasheets, general arrangement/outline drawings, and price make-ups. These programs have reduced the quotation cycle time while improving the quality and accuracy of the technical and commercial information required by the purchaser.

Electronic Data Exchange The communication of inquiry and quotation information is still predominately managed through paper-based methods in spite of the increasing use of computer-aided inquiry and quotation systems. The exchange of pump technical data has been traditionally handled using the pump datasheet. Both purchaser and manufacturer have developed their own datasheet formats. Consequently, each datasheet exchange requires a laborious translation and interpretation of information from one datasheet format to another.

With the implementation of computerized selection programs and bid-tab programs, this manual translation represents a lost opportunity to streamline the data communication process. In response, some firms have developed proprietary data exchange formats to leverage their own proprietary systems. Unfortunately, that approach has only shifted the burden to their trading partners who must develop special data translators to accommodate this wide variety of datasheet formats. It has been shown that the total number of translators needed for M data exchange formats follows the relationship, M • (M — 1). Therefore, 3 unique data formats require 6 translators, whereas 10 unique formats require 90 translators.

To halt this trend, a neutral data exchange specification was developed under the auspices of the American Petroleum Institute's Standard 610, Centrifugal Pumps for Petroleum, Heavy Duty Chemical, and Gas Industry Services (8th edition, August, 1995). This is used to exchange structured pump technical information reliably and efficiently between trading partners requiring each firm to develop only two translators (that is, input and output) to exchange pump data. The same neutral data exchange format has been adopted by Process Industry Practices (PIP). A number of purchasers and manufacturers are now using the data exchange file during the Inquiry/Quotation phase.

The Internet The use of the Internet has grown dramatically since the advent of the World Wide Web (WWW) in the mid-1990s. The rate of change on the Internet is witnessed in terms of days rather than years. Information or Web sites that exist on the Internet today may be eliminated or replaced by tomorrow. As a consequence, any references about the use of the Internet for the selection and purchasing of pumping equipment will most likely be obsolete at the time the reader sees it. Nonetheless, it is prudent to anticipate the effect the Internet will have on this process in the pump industry.

Routine communications between purchaser and supplier are increasingly performed over the Internet using electronic mail (e-mail). E-mail is replacing both the paper mailings as well as the use of the fax because of its rapid delivery and ease with which messages are routed to multiple addressees. Other electronic documents such as spreadsheets, proposals, and drawings are readily communicated as file attachments in e-mail messages. Similarly, most purchasers and suppliers are developing, or re-developing a presence on the Internet with their own Web sites. These sites started as relatively simple sites displaying information about the company, its products, and company contact information. These sites improve the access of general information between trading partners, often replacing the need for mailing of brochures or other marketing information. More sophisticated sites are capable of conducting electronic commerce (e-commerce), described next.

The Internet is rapidly becoming the medium by which business-to-business (B-to-B) or electronic commerce will be conducted between trading partners in the future. The pump selection and purchasing processes described in this chapter will be substantially performed across the Internet in the future. Purchasers and suppliers will team up by either contacting each other through their own Web sites or by meeting through special "portals" or exchanges specifically established on the Internet for pumping equipment. These exchanges provide a natural place to host bulletin boards or discuss technical issues about pumping equipment. The pump system and selection processes described earlier will be Web-enabled, allowing users to perform these activities directly on the Internet. Similarly, the process of electronic data exchange will be performed across the Internet using structured data exchange methods that eliminate the manual re-entry of technical information between different systems. Standards created by either international standard bodies or a de facto standard created by a commercial entity will provide the necessary framework for this data exchange.

Finally, the actual business transactions involving inquiry, quotation, purchase order, and invoice will expand over the Internet. This process will evolve starting with commodity-type pumps and eventually will involve more sophisticated types of pumping equipment. Interactions during the order fulfillment cycle will be available such as order status information. Drawings, certifications, test data, and other technical information will be available as secure business transactions. The use of voice and video are also capable of replacing face-to-face meetings or equipment inspections that often involve detailed coordination and expensive travel.

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