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Global Valve Cross-reference eCatalog (GVCC) A proposed FIATECH project in cooperation with PIP to MAKE IT EASY to select the RIGHT valve for the RIGHT purpose

Valve Supplier Workshop: July 13, 2005 John Fish - S&B/FB&D Tom Teague – ePlantData, Inc. GVCC Valve Supplier Workshop, July 13, 2005

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Workshop Welcome ¾ John Fish –

S&B Engineering (host) Ford, Bacon & Davis

¾ Tom Teague – ePlantData (FIATECH) ¾ Ken Hamilton – PIP ¾ Participant introductions — Name, organization, role — Your objectives for this workshop

GVCC Valve Supplier Workshop, July 13, 2005

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FIATECH ROAD MAP Apply Innovative Technology to improve capital utilization

GVCC Valve Supplier Workshop, July 13, 2005

AVP is a high-priority project in Element 3 of the Road Map

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OPPORTUNITY ¾

Technical verification required during bid evaluation — —

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Every submitted valve must be researched Potential disaster if not technically sound

PIP has extensive reference valve catalog — Currently in WORD (requires human interpretation) — Needs computer-interpretable format

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FIATECH has computer-interpretable format — Automating Equipment info eXchange (AEX) — EXtensible Markup Language (XML) format • Internet standard text file format for structured data • Essentially a “database in a text file”

GVCC Valve Supplier Workshop, July 13, 2005

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EXISTING NEED ¾ A way to quickly verify that submitted valve is

technically suitable for service — Engineers verify valve details manually — Correct valve materials, trim, etc are CRITICAL — Can take hours to verify several valves SAMPLE VALVE ORDER 20 Different Types of Valves

EXISTING WORK PROCESS Manual Research to Technically Verify Valves Submitted Place Order

Receive Quotes

Technical Evaluation 4 Valve Manufacturers Approx. 2 hours/valve type Or 20 x 2 = 40 hours per order

Select Valves that meet Technical Requirements

2 hours per TYPE of valve is conservative. Researching Manufacturer sites and information can be time consuming GVCC Valve Supplier Workshop, July 13, 2005

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ESTIMATED COST TO INDUSTRY MIDSIZE CONTRACTOR A: Approximately 1,400 hours researching valves last year

Note ALL of this work was performed on Cost Plus basis: 1,400 at $80/hr billing rate =

$112,000 / yr

Estimates are that 200 engineers perform a similar function every year.

Assume they ONLY spend 1,000 hours per year 1,000 at $80/hr billing rate x 200 engineers =

$16,000,000/year EVERY YEAR SEEMS LIKE TOO MUCH MONEY????

Still spending be automated.

Cut it in HALF.

$8,000,000/year on a repetitive task that can

Whether LUMP SUM or Cost Plus this cost is built in to the project.

That is Millions of dollars per year that can used to improve capital utilization.

GVCC Valve Supplier Workshop, July 13, 2005

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OBJECTIVE: Online Valve Matching ¾

PIP valve catalog becomes the comparison basis

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Suppliers load their equivalents to PIP — Supplier/Manufacturer Number mapped to PIP number

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Owners/Contractors load their equivalents to PIP — Internal Number mapped to PIP number

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Everyone use their preferred catalog numbers — Electronically cross-reference to anyone else as needed

GVCC Valve Supplier Workshop, July 13, 2005

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BENEFITS: Win-Win-Win ¾ Owners, contractors and suppliers — Use preferred internal valve catalog & cross reference to others — Reduce engineering hours spent on verifying equivalent valves (Technical Evaluation) • Reduce hours spent by supplier engineers preparing quote • Reduce hours spent by contractor engineers verifying quote – For cost plus projects a real time saver – For Lump Sum - will take labor out to ensure lower overall bids

• Reduces hours spent by owner engineers finding info

— PIP/FIATECH maintains the master list

GVCC Valve Supplier Workshop, July 13, 2005

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BENEFITS: Win-Win-Win ¾

Owners & Contractors — EXPAND internal valve catalogs without doing a lot of research — Suppliers maintain equivalency list for manufacturer offerings — Owner: Maintenance staff gain: • •

Access to technical data and equivalent valve replacements Potential to link to asset management system

— Contractor: Provide designers with technical information • • •

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Geometry: Dimensional Data for models and design Weights for Stress Analysis Technical information for performance/hydraulic characteristics

Suppliers — Provide improved service to customers – quotes & tech info — Opportunity to cross-reference with customer internal catalogs

GVCC Valve Supplier Workshop, July 13, 2005

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BENEFITS: Work Process SAMPLE VALVE ORDER 20 Different Types of Valves

EXISTING WORK PROCESS – Manual Research to Technically Validate Valves Submitted Place Order

Receive Quotes

Technical Evaluation 4 Valve Manufacturers Approx. 2 hours/valve type Or 20 x 2 = 40 hours

Select Valves that meet Technical Requirements

2 hours per TYPE of valve is conservative. Researching Manufacturer sites and information can be time consuming

PROPOSED WORK PROCESS – Using online VALVE MATCHER Catalog System Place Order

Receive Quotes

GVCC Valve Supplier Workshop, July 13, 2005

in n Select Valves that o Technical Evaluation i n t c o i u t meetdTechnical a r e 4 Valve Manufacturers u R Requirements D d Approx. 2 hours total95% n a r o 10 Lab

“Valve Matcher� Prototype Supplier Valve Catalog (Only a few users)

(Most users)

Valve Matcher Validate/look up valve equivalents List / report available valves

PIP Valve Catalog Internal Valve Catalog

Valve Editor Add/update MY valve catalog Look up valve equivalents

Research valve technical data

Store internal matches & verifications

Access supplier technical data

Provide access to technical data

GVCC Valve Supplier Workshop, July 13, 2005

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Implementation Steps FIATECH

SUPPLIERS

OWNERS CONTRACTORS

Extend AEX XML schemas for PIP valve catalog data Load Equivalents Load Internal Catalog

Convert PIP Catalog Deploy Valve Matcher from Word Document / Editor Web Site to XML File

Model Number

Size Range

Weights

Links

Internal Number

Use for Technical Evaluations when purchasing valves Allows contractors to use THEIR internal valve numbering system through design and create an easy cross reference for valve tagging at time of purchase Valve Matcher will automatically time/date stamp all activity and provide last update information for each entry.

GVCC Valve Supplier Workshop, July 13, 2005

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ESTIMATED COST TO INDUSTRY MIDSIZE CONTRACTOR A: Approximately 1,400 hours researching valves last year

Note ALL of this work was performed on Cost Plus basis: 1,400 at $80/hr billing rate =

$112,000 / yr

Estimates are that 200 engineers perform a similar function every year.

Assume they ONLY spend 1,000 hours per year 1,000 at $80/hr billing rate x 200 engineers =

$16,000,000/year EVERY YEAR

POTENTIAL 80% REDUCTION RESULTS IN

$16,000,000 x 80% =

SAVINGS OF $ 12,800,000/year GVCC Valve Supplier Workshop, July 13, 2005

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Break

GVCC Valve Supplier Workshop, July 13, 2005

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Workshop Objectives ¾ Confirm industry interest — Define benefits for valve distributors and manufacturers — Identify barriers & strategies/actions to overcome ¾ Improve requirements definition ¾ Define data integrity issues/requirements ¾ Review detailed project proposal & funding ¾ Develop action plan to go forward GVCC Valve Supplier Workshop, July 13, 2005

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Work Session – Define Benefits ¾ Valve Distributors ¾ Valve Manufacturers

GVCC Valve Supplier Workshop, July 13, 2005

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Work Session – Define Barriers ¾ Barriers for valve distributors ¾ Barriers for valve manufacturers ¾ Strategies/Actions to overcome barriers

GVCC Valve Supplier Workshop, July 13, 2005

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Work Session – Improve Requirements ¾ Review current usage scenarios ¾ Review current user interface prototype ¾ Usage scenarios – what do you want to

do?

— Distributors — Manufacturers ¾ How can we improve the user interface?

GVCC Valve Supplier Workshop, July 13, 2005

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Usage Scenarios ¾

Anyone: Match “my” valve against PIP reference valve catalog entry

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Supplier: Select valves from catalog to prepare quote that meets customer requirements — Match customer valve spec with valve catalog offering

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EPC: Verify supplier quote against requirements — Match supplier valve offering against specs

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Owner: Find “equivalent” valve to repair/replace valve in operating facility — Match current valve spec against potential supplier offerings

GVCC Valve Supplier Workshop, July 13, 2005

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Discussion – Data Integrity/Security ¾

Ensuring correct and accurate data

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Who is responsible for data integrity?

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How will information be shared/protected?

— Owners — Suppliers — EPCs

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Is anyone liable?

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What are legal implications?

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What are the unseen complications?

GVCC Valve Supplier Workshop, July 13, 2005

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Lunch

GVCC Valve Supplier Workshop, July 13, 2005

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Project Proposal TASKS

Month > 1 2 3 4 5 6 7 8 9 10 11 12

Project Definition

Cost 7,500

Extend valve XML schemas

7,500

Convert PIP Valve Catalog to XML

10,000

Develop Valve Data Editor

15,000

Create initial valve catalog content

in-kind

Develop Valve Matcher Web Site

20,000

Deliver: Requirements Docs, UI prototype Deliver: XML Schemas Deliver: XML version of PIP valve catalog Deliver: Valve data editor

Deliver: Valve Matcher Web Site

PROJECT TOTAL SHARED COST

¾

60,000

Project Funding Commitment

Resource Approach — Combination of shared resource / internal resources — FIATECH/ePlantData provide project management and shared cost technical resources 22

GVCC Valve Supplier Workshop, July 13, 2005

Support Issues ¾ Web hosting ¾ Login ID administration, user permissions ¾ Ongoing maintenance of: — XML Schemas — XML version of PIP Valve Catalog — Valve data editor — Valve Matcher web site — Catalog content (each maintain their own) ¾ Others?

GVCC Valve Supplier Workshop, July 13, 2005

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Shared Resource Funding Proposal ¾

Conduct as FIATECH project — Offers non-profit status, open to anyone, no anti-trust — Convenient mechanism for shared funding — Can rapidly start, delivering value sooner rather than later

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FIATECH/PIP membership status requirements — 2005: Low-cost “limited membership” (this project only) available, recognizing annual budget cycle — Not required for valve suppliers

GVCC Valve Supplier Workshop, July 13, 2005

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Shared Resource Funding Proposal ¾

Principles: — Shared cost project fees should be kept low • Especially for 2005, non-budgeted item • The more sponsors the better (lower cost per company)

— Incentives for sponsor participation in 2005 • Adopting “wait and see” will cost companies more

— Because supplier content is critical to success, valve suppliers need special incentives — Valve Matcher users will be limited to project sponsors (must be FIATECH/PIP member or valve supplier to be sponsor)

GVCC Valve Supplier Workshop, July 13, 2005

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Shared Resource Funding Proposal ¾

FIATECH/PIP Members — Owners, EPCs, Suppliers Project Sponsor Fee •

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2005: $2,500 (one-time fee) 2006 on: $5,000 (one-time fee)

Non-FIATECH/PIP Members — Valve Distributors & Manufacturers •

2005: $2,500 (limited FIATECH membership)

•

2006: annual subscription fee (TBD) or become FIATECH member

•

2006 sponsor: $5,000 one-time fee over and above annual fee

— Owners & EPCs •

2005: Fee credited to project if your company joins FIATECH in 2005

•

2005: $5,000 (limited FIATECH project membership)

•

2006: Must become FIATECH member, then one-time $5,000 or pay annual subscription fee to be determined by FIATECH & project sponsors

— Everyone •

Must either join PIP or pay valve catalog subscription fee to PIP ($1,000/yr)

GVCC Valve Supplier Workshop, July 13, 2005

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FIATECH Membership Annual Gross Revenue $0-$50 million $50 million - $1 billion $1 billion and over

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Annual Membership Fee $5,000 $5,000 + (revenues over $50 million x .000021) $25,000

Benefits — Focused on technology deployment to get results — Leveraged funding — Anti-trust protection — Competitive advantage from early technology deployment — Technology needs identification / shared projects — Networking with industry technology leaders

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Current Sponsor Commitments ¾ Aramco Services Company ¾ BE&K, Inc. ¾ Chevron ¾ Degussa Corporation ¾ FMC ¾ Rohm & Haas ¾ S&B Engineering

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Action Plan ¾ Any barriers that prevent participation? ¾ Obtain owner, EPC, distributor, manufacturer commitments

— Currently have 5 owner and 2 EPC funding commitments — Need 9 more “conditional” commitments – no invoice sent until 16 conditional commitments obtained ($40,000) — Need distributor and supplier “conditional” commitments in order for owners/EPCs to participate ¾ Obtain project funding commitments

— Who is willing to ask management today?

— Can funding commitments be obtained in next 2-4 weeks? ¾ Initiate project (target date is to start in August)

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