Northvale, NJ (September 2003) — Fred W. Depuy, president of AERCO International, Inc., announces that the company’s first phase of its new business model has resulted in more efficient operations and better service to its customers. In making the announcement, Depuy noted that the implementation of three key elements – Demand Flow™ Technology (DFT), Linearity, and Visual Business Outflow – has produced a scalable, mathematically-based business strategy that has resulted in AERCO customers realizing improved customer service, better product cycle times, and improved quality in AERCO’s commercial boilers and water heaters.

"The decision to integrate a new business model into AERCO in 1999 has revolutionized the manner in which we operate. As one of the few companies in our industry to utilize this strategy, we have clearly differentiated ourselves from the competition and are able to provide customers with a number of benefits," explained Depuy. "No other commercial boiler and water heater company can design and deliver high quality products from raw material faster."

AERCO has developed numerous processes involving employees at all levels as part of its DFT. The result has been improved productivity throughout the company – from product design and manufacturing, to accounting and information technology. The Linearity element ensures that all operations match immediate market demand so daily build rates match customer orders, thereby improving customer satisfaction. Visual Business Outflow is designed to add value to overall operations so customers can rely on AERCO for a growing base of high quality products.

The success of the first phase can be seen in the results. Since the implementation of the business model, AERCO’s warranty requests have dropped from 4% to less than 1%, part availability has increased to 99%, customer lead time is only 3 weeks (from 6-12 weeks), and manufacturing cycle time has dropped from 5-12 weeks to 2-3 days. Depuy noted that AERCO’s previous turnaround times in all these areas were either at or better than the industry average.

"We were able to accomplish all of these improvements because of our employees. They are our most important asset," said Depuy. "They know that their input matters because we have implemented their ideas into some of our daily processes. Because of that, they have a keen interest in their jobs, the products we sell, and the company as a whole."

In addition to allowing AERCO to better serve its customers, the new business model has also improved AERCO’s corporate stability. The company has slashed its debt-to-equity ratio and has enjoyed 25 consecutive months of profitability, challenging the normal seasonality that characterizes this industry.

About AERCO
AERCO offers commercial boilers and water heaters that simplify infrastructure, reduce project costs and minimize lifecycle expenses for value-driven schools, hospitals and others seeking long-lasting, reliable, high-efficiency equipment. Founded in 1949, AERCO originated semi-instantaneous water heating, introduced the first modulating and condensing gas-fired unit for the commercial market and helped pioneer the high-efficiency boiler category. For more information, contact AERCO at 800.526.0288 or visit www.aerco.com.