ARI Improves Production Process For CD-Catalogs; Achieves Dramatic Reductions in Cycle Time to Enhance OEM Dealer Communications.

Business Editors/Technology Writers

MILWAUKEE--(BUSINESS WIRE)--June 27, 2001

ARI Network Services, Inc. (NASDAQ/NMS:ARIS), a leading provider of technology-enabled business solutions that connect equipment manufacturers and their service and distribution networks, today announced improvements to the production process for its CD-based electronic parts catalogs that significantly reduce cycle time, improve quality and reduce the associated production costs.

"Timeliness is a critical factor for our OEM customers who rely on our electronic catalogs to communicate changes in parts and pricing to their dealers. We are always asking ourselves, `How can we shorten the production time while also improving quality?' The recent improvements in our production process respond to both of these customer needs," said Brian E. Dearing, chairman and chief executive officer of ARI. "We used a team approach, analyzing every facet of the production process. The result was a dramatic reduction in the time it takes to produce and distribute our customers' catalogs."

Dearing said the new process has reduced the cycle time for producing CD-based catalogs from 140 days to 45 days. Replication and distribution has been reduced from 9-22 days to 0-3 days. Mailing accuracy has also been improved. "In addition to the value added to the customer relationship, the process improvements also reduce ARI's production costs. It's a win-win situation for everyone. While the new duplication and mailing process has only been in place for a month, based on the cost reductions we have seen to date, we project an annual savings of $150,000 per year."

According to Michael E. McGurk, vice president of technology operations for ARI, many of the company's OEM customers have taken advantage of this significantly reduced cycle time to increase the frequency of updating their parts catalog and service literature.

"A number of customers have already moved from quarterly updates to monthly updates. This increased frequency enables OEMs to replace other methods of communicating information to their dealers. For example, if the pricing in the catalog is current, there is no longer a need to provide interim pricing updates," said McGurk. "The dealer benefits by receiving more timely information. The OEM benefits by reduced calls to the dealer support group and by the added value of the CD catalog. And ARI benefits from the increased volume of business generated by the more frequent updates."

"Many of our dealers have been using PartSmart(TM) for over 3 years now. The recent move to monthly delivery is expected to give our dealers more timely information. Having the most current information increases their efficiency and helps their business, and that strengthens our relationship with them," said Greg Davis, manager, parts information/analysis for the John Deere Worldwide Commercial & Consumer Equipment Division located in Raleigh, North Carolina.

McGurk said the production improvements involved all areas of the catalog distribution -- duplicating, packaging, and addressing and mailing. State-of-the-art robotic equipment was installed for all three functions. New packaging was designed to fit the automated process and customer order and accounting information was integrated with automated addressing for an up-to-the-second method of determining package recipients. As a result, production-ready CD masters are duplicated, packed, addressed and on their way to the customer within a day or two of final OEM approval.

"For many of our OEM customers, our PartSmart CD-based catalog is the preferred method dealers use to look up parts because of its speed, exceptional functionality and friendly user interface. The challenge was keeping up with the timeliness of information provided by Web-based communications tools," Dearing explained.

"At first it might seem like the web alternative -- which ARI also offers -- would always be significantly more current. But, 80-90% of the elapsed time between updates to a manufacturer's repair catalog, is related to publishing, rather than production. The publishing process is a complex one, involving a myriad of quality crosschecks and proof reviews -- all of which are necessary to insure that the content is consistent, complete and correct. This publishing process must be done regardless of whether the ultimate destination is the web or CD Rom. Because we publish data for more than 80 manufacturers, ARI can often publish and quality check a manufacturer's data faster and more inexpensively than they can do the job themselves.

"With the new production improvements we've just instituted, compounding the advantages of our outsourced publishing services, our customers can have the functionality and lightning-fast response of PartSmart, along with the currency of information associated with the web. For the increasing number of customers who need both CDs for their high volume dealers and web-access for their occasional customers, the data content can be updated almost simultaneously, drastically reducing the production lag time previously associated with CDs. That makes PartSmart even more valuable than ever before," Dearing concluded.

ARI Network Services, Inc. is a leading provider of technology-enabled business solutions for sales, service and life cycle product support in the manufactured equipment market. ARI currently serves over 100 manufacturers and 20,000 dealers in more than 100 countries in 12 segments of the worldwide manufactured equipment market including outdoor power, recreation vehicle, floor maintenance, auto and truck parts aftermarket, powersports, marine and construction. The Company builds and supports a full suite of multi-media electronic catalog publishing and viewing software for the Web or CD. ARI communications systems provide a global electronic pathway for parts orders, product registrations, warranty claims and other transactions between manufacturers and their networks of sales and service points. ARI currently operates three offices in the United States and one in Europe and has sales and service agents in Australia, England and France providing marketing and support of its electronic catalog and dealer communications products.