External gear pumps are positive displacement devices which perform with excellent efficiencies over a wide load and speed range. This wide range of performance is primarily due to micron-level leakage gaps in such machines which prevent large leakages at increasing loads. The present paper details a novel approach implemented in the commercial CFD tool PumpLinx that can capture the details of the micron level gaps, and model such machines accurately. The steps in creation of the model from original CAD geometry are described. In particular, the CFD mesh is created using a specialized template structured meshing method within PumpLinx especially created for external gear pumps and motors. This makes process of mesh creation and flow solution through complicated geometries of a gear pump efficient and streamlined. The above approach is used to create a model of an electronic hydraulic power steering gear pump and the model is validated by comparing the flow rate predictions with experimental measurements for a range of speeds and loads and an excellent agreement is observed.The validated pump model is then used to create design improvements on the component level. Design features are introduced within the simulation environment to demonstrate a reduction in the cavitation and pressure ripple, thereby providing directions for a pump with reduced noise. A novel method of using PumpLinx simulations together with test result for system level optimizations, including dynamic response and efficiency performance is also introduced with examples. The efficiency of model creation and the speed of the solver within PumpLinx enable the integration of CFD analysis of gear pumps into the product design and development process.