Clarkston-Potomac Helping Water Treatment Systems Company Purify Operations and Upgrade Efficiency.

DURHAM, N.C.--(BUSINESS WIRE)--July 6, 1999--

Osmonics rolling out SAP R/3 along with new decision-making

structures, team approach

Change is afoot at Osmonics, Inc. (NYSE: OSM), and Clarkston-Potomac Group, Inc. is helping to facilitate it.

Clarkston-Potomac is helping Osmonics, a world leader in the design and manufacture of fluid treatment systems, to complete the implementation of several modules of SAP R/3, and roll out the new functionality to its plants. As an enterprise-wide, large-scale IT project, it is an unprecedented success at Osmonics.

In collaborating on that project, Osmonics and Clarkston-Potomac have begun an even deeper, fundamental shift in Osmonics' operations: re-engineering its business processes to align with the capabilities of the SAP system. It is a shift aimed at streamlining operations, centralizing the company's manufacturing activities and generally enhancing efficiency and reducing expenses.

"We are here to facilitate these changes at Osmonics, not to impose change," said Matthew Heim, the project coordinator at Clarkston-Potomac. "Make no mistake, these are substantial shifts that Osmonics is undergoing. We believe it will result in vastly improved efficiency for the company and its shareholders, and is further proof of the excellent IT and change management work that Clarkston-Potomac delivers for middle-market clients."

Osmonics is positioning itself to take advantage of the growing opportunities in the fluid separations and water purification industry. According to Kent Toomey, Executive Vice President of Operations and Corporate Services, "Reengineering our business processes to take advantage of SAP's state of the art business information capabilities is a major part of our change to be more customer responsive than ever. However, this is a major undertaking requiring dedicated and committed resources. Clarkston-Potomac has provided superior project management and expert consultation to shorten the implementation time by complementing our internal industry knowledge with their business transformation know-how."

Among the project's primary goals is to centralize operation of Osmonics' multiple plants. Until now, the plants have operated largely independent of one another. That is changing.

Purchasing, sales, production planning and materials management are being optimized, and in some cases, centralized. This streamlines operations, generates purchasing volume discounts, allows planners to coordinate materials and production among multiple plants, and improves customer service because representatives have much more efficient access to information.

In addition, as the rollout continues to additional plants, Osmonics upper management will gain a much clearer idea of which plants are operating most efficiently and where they need to make improvements or consolidate operations.

Osmonics "went live" with its enhanced SAP system in early April at its Minnetonka, MN and Syracuse, NY plants, and simultaneously introduced its Phoenix plant to the SAP system in the same cutover cycle. After earlier difficulties with the implementation, Osmonics engaged Clarkston-Potomac, and the SAP system has been stabilized and rollouts to multiple manufacturing plants are on schedule. Osmonics is using SAP financials, sales and distribution, materials management, production planning and warehouse management modules, and the Osmonics/Clarkston-Potomac team is implementing bar coding capabilities.

Osmonics now has clean, reliable operations data for the first time. The company can conduct forecasts and plan manufacturing activities across multiple plants with confidence in the accuracy of the data that form the foundation of the plans.

Equally important, Osmonics personnel are working effectively in teams, and the company is instituting horizontal decision-making structures, another major evolution in the corporate culture. Osmonics teams are set up around processes - a financial team to help rethink the company's financial operations to align with SAP; an orders-to-cash team responsible for activities leading from product orders through getting paid; a plan-to-produce team responsible for the entire production process beginning with planning; and a requisition-to-pay team that oversees system rollout with regard to procurement of materials and supplies.

About Osmonics

Osmonics is a leading manufacturer and worldwide marketer of high-technology water purification and fluid filtration, fluid separation, and fluid handling equipment, as well as the replaceable components used in purification, filtration, and separation equipment. These products are used by a broad range of industrial, commercial, and institutional customers. Osmonics is traded on the New York Stock Exchange under the symbol OSM. For further information call [phone]; write to Osmonics, 5951 Clearwater Drive, Minnetonka, Minnesota 55343-8995 USA; fax [phone]; or visit our web site at www.osmonics.com.

About Clarkston-Potomac

Clarkston-Potomac is a global business and technology consulting firm that provides full-service strategic and information technology planning, project management, change management, training and implementation services to mid-sized companies. Ranked by Inc. magazine as one of 500 fastest-growing U.S. companies, the firm combines the expertise of a larger consulting organization with the agility of a smaller one to deliver high value services scaled to the middle market.

Established in 1991 by former Big 6 consultants, the firm's global headquarters is in Research Triangle Park, N.C., along with its highly regarded Training and Technology Center. Clarkston-Potomac's service offerings include Strategic Business and IT Planning, Process Management, Enterprise-Wide Solutions, Front Office Solutions, Application Integration Solutions, Supply Chain Solutions, E-Commerce and Training and Change Management. All services are delivered through a proven methodology designed to facilitate rapid results. Clarkston-Potomac serves clients in a diverse mix of industries including pharmaceutical, apparel and footwear, automotive, biotechnology, chemicals, consumer-packaged goods, forest products, healthcare, high technology, manufacturing, medical products, software, telecommunications and utilities.