> OQNҫ@ 2jbjb hhh,lNNNNNNN4 FFFFFFFF  ,  NFFFFF NNFFFF~NFNF b@@NNNNF  V NNs *q[ s g hhs CleanAir Europe / Profit Plan Answers and projects. CleanAir Europe AIM What is it the non financial purpose. What will be our legacy that we can tell our grandchildren we did? Did we make the world a better place? To increase our customers market value by more than double our charges on every project while making the world a healthly place to live. Your help, results of what we have done in 99 and what we are planing to do will contribute to achieve quicker some targets. Quality Targets Q - Target 1 - Customer problems reduction What is the numerical reduction target? 10% per quarter? What is the date it will be achieved? How will it be done? Will we define process (write it then improve it) or pray? How will it be measured? Will we ask for feedback or hope the phone doesn't ring? Who will be responsible for capturing data? How will data be used to improve process? Q - Target 2 Customer satisfaction improve, What is the numerical reduction target? 10% per quarter? What is the date it will be achieved? How will it be done? Will we define process (write it then improve it) or pray? How will it be measured? Will we ask for feedback or hope the phone doesn't ring? Who will be responsible for capturing data? How will data be used to improve process? Q -Target 3 Customer price complaints "Customer price complaints are all linked to the status of our equipment." To better understand this I need your problem tracking database classified by type of problem, estimated cost to customer, estimated cost to CleanAirE (include future lost business), Model, age of equipment and possible root causes of problem. ========================================================== Let us get some ____? better conditioned equipment and all three targets will improved more than 10% per quarter. PARTNERSHIP TARGET Also to improve our quality image we are trying to improve our cooperation with our shipping Company. Some complaints are regarding transportation conditions. We have been contacting new shipping Companies, but in Europe things are not so easy when you have gas to ship. Q -Target 4 will be more difficult to achieve in so short terms. We are dealing with Southern European mentality with long term payment terms. France is not the worst among the countries. We have developed a claiming system with Estelle first then with Rabbiah, but effects are long to come as every month you have to do it again. Every reason to delay the payment is unfortunately good for most of our customers. Financial Targets For the near future Target 1, Target 2 & Target 3 could be achieved with Sales of new equipment and be the results of our marketing efforts done in 98 and 99. For Rentals achieving Targets 1, 2 & 3 will depends on new investments, yours and ours. For Target 4, I supposed you are speaking about rented equipment. To day we are not in a position to give you so precise numbers about Return on assets. We need to invest in a new software to have better numbers. We hope to go on a new Software by the end of March next year. Elimination of 120 Volt Equipment To day we are still on the process to sell our last Jum VE7, 115 volts to Air Testing. For some other equipment we were successful to fix them in 220/230 Volts. It was the case of some TECO Analyzers. We will send you a list of some 115 Vs equipment we still have, but frankly speaking their condition is so bad that we feel very ashamed to propose a price for them. In other hand, last year Mary Ryan was very interested by our TECO 10S. So interested that we exchanged 2 TECO 10S against a 42H. Are you still Interested by this 10S? We still have one to sell or to exchange. Before to go on your next comments such as Free Phone & Shipping Boxes which are more linked to additional charges, let us speak about what we have done regarding our pricing policy. On December the first, our price list will be marked up by 5%. In fact this 5% represent our yearly price increase. Last year it was in September. For our 10 days rental period, the first Week End will be taken in account. So 10 days rental will become 12 days instead of 15 days. For the rest, transportation time, wont be included in our rental period. We cannot do it in Europe, it will be a kind of Suicide. Please keep in mind that we, as a Rental Company, must where the Customer still decide to rent instead of buying the equipment he needs for most of his operation. Also keep in mind that 60% of our Customers are Control Laboratories. In regard with prices, we have made some comparisons between your suggestions how to calculate rental prices (Price for Profit System) from purchase prices our customers are paying for new equipment. To our good surprise, most of our actual rental prices are quite near your suggestions, with an equipment close to no more legal value. It wont be a problem to accept your price list regarding new equipment we are planing to purchase. Please do take in accounts that next subjects are generating extra charges to us and that we have to be careful before to accept them. Free Phone & Shipping Boxes Free Phone : We had before such a Free Phone connected to our office in Brussels. At that time the cost was so important that we decided to stop it when we moved to Marseilles. Today we have new solutions such as what they call Azur Numbers. They are very closed to Free Numbers except that Customers are paying a small part of the call. Something like the equivalent of a local call. Telephone in Europe is nothing to compare with USA. Just for example, our E-Mail cost us last month 100 $. Shipping Box : Every time I go to Palatine, I am very impressed by the way you pack your instruments, even your gas cylinders, and every time I am thinking about the way to do the same knowing that: We need at least 4 different sizes of boxes. Each box costing us an average of 3 $. To have boxes printed we need to order 300 boxes per size. We need a additional space to store 1200 boxes. In summary, we need $3600 to buy our shipping box and we need to rent a special place to store them. This is not impossible but we need some time. Regarding the cost, we will increase our shipping cost and bill customers for packing. Guidelines for Maintenance Program Guidelines for Key Club Guidelines for Calibration Gas Calibration Gas : We understand your point of view and we would think about the same if we had the same system that you have in the States. Every profitable system attract the vultures. In France we dont have the same way to commercialize our gases. In fact we are selling gas per liter. Its also profitable but request a certain procedure that no Gas Company will accept to do. Air Liquide, our supplier is absolutely not interested in our way to sell gas. They are selling Millions of liter of gas per month, why to bother with few cylinders of calibration gas. To have a back up stock free of charge asked us a lot of negotiation. We really needed these extra cylinders of calibration gas but we could not store them in our facilities and we did not wanted to pay them in advance. This is what will happen if we want them in our facilities. Again an extra charge to pay. HOW MUCH? Guidelines for Accounting This is an important point that we are working on. We really would like to have all our revenues and cost well shared between our different fields of activity. We have the right person to do it, we dont have the right tool. We have investigated for a new software : We need an extra 4100 $ to have it; to re-program datas and to train people. Free Phone, Shipping boxes and Analytical Accounting can really give a better image of our Company and give us a much better tool to drive it. We fully approved about your suggestions but give us a little more time to do it, money have to be spent for these 3 points, and we must spend it step by step. For calibration gas, we are not in danger now with Air Liquide then lets avoid an additional spending just to have all gas cylinders with us. Price for Profit System Error Elimination System and Quality System Regarding all other suggestions, we are working on : Quality System , ISO 9002, even COFRAC certification for our Maintenance Department are our main concerns for year 2000 even if such a procedure can cost us a non negligible amount of money. We are very concerned by the respect of Standards and Certifications. Our CE certification for your CleanAir Express equipment will soon help us to improve our sales. 2 years ago our sales for this equipment were very poor. Since early 1999 we are on the way to sell one complete equipment per Month. Concerning Partnerships with Instruments Manufactures we have already set some agreements with AIR LIQUIDE VARIAN (Chrompack) and ECOM. ENVIRONMENT S.A. is ready to send us all their customers willing to rent or test their equipment. All we have to do is to buy Analyzers from them. Regarding AIR LIQUIDE, out of their customers they are sending to us when they need calibration gas urgently, they are willing to extend this partnership to field testing and field services worldwide. On December the 2sd. I have an appointment with the management to discuss details of this partnership. Bill I have already spoken with you about that, let me have this appointment and I will revert to you. We have contacted MEGATEC (Thermo Environmental) and MAILHAK (Jum Engineering) they did not accept the game. Partnerships with Instrument Manufactures Guidelines for Say "YES" Guidelines for Rental vs. Sales Decisions Bill this question is very clear for us. We fully approve on what you say and we dont accept any Rent to Own solution, on either the two situations before or during a rental contract. Since I can recall, only once we had such a proposal, we did not accept because our interest was to keep this rental contract as long as possible (It is still on..) and we had to buy the same equipment new to keep our inventory up dated. . The only situation when a rent is followed by a sale is the sale of a new equipment such as a CAI analyzer or a CleanAir Sampling train. We suggest the customer to rent the same equipment for 3 days and if he buy a new equipment within a month, the rental contract is free of charge. This situation is more seen as a sale argument. Leasing is absolutely not accepted, we had in the past 3 to 4 demands, I contacted Larry at that time who strongly said no to them. Our sales from our rental inventory are old equipment we dont need any more or we want to replace by new one. We try then to sell this old equipment outside France or to Industrials. Guidelines for Increasing Rental Demand O.K., your suggestions will be added to the ones we are using now such as Mailing, Magazine advertisements and Exhibitions. Guidelines for New Rental Equipment We have prepared a list of equipment we have selected for improving our Rental Activity. This list will be sent to you later on with the maximum of information. One more time I will come back to comments above, we need a better software to get right information on each analyzer. In resume you have most of our thoughts regarding your E-Mail. More information will come, but we have least some subjects to discuss. 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