1. Best Practices That Enable the Effective Enterprise Hank Canitz Sr. Director Manufacturing Industries, QAD QAD Explore 2012

2. 2 The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD. Safe Harbor Statement Best Practices That Enable the Effective Enterprise

3. 3 Manufacturing mega-trends The effective enterprise High potential best practices Key take-a-ways Next steps Agenda Best Practices That Enable the Effective Enterprise

4. 4 Manufacturing Mega-Trends Best Practices That Enable the Effective Enterprise

5. 5 Long-term, far-reaching transformational processes -Can be predicted with fairly high probability at least 10 years into the future -Have a broad impact Extends to most regions of the world and many companies -Bring about radical, multidimensional political, social, and economic revolution What Are Mega-Trends Best Practices That Enable the Effective Enterprise

6. 6 The challenge -Global demand increasing while availability is decreasing -Over next 25 years energy consumption will increase by 60% with majority of growth in developing countries The impact -Strong up & down-steam partnerships will be key -Integrated, efficient, & flexible supply chain delivers a competitive advantage -Efficient & effective production is fundamental Decreasing Dependence on Fossil Fuels Best Practices That Enable the Effective Enterprise

7. 7 The challenge -In a recent study more than 35% of consumers are interested in purchasing build-to-order products -A polarized economy will develop The impact -To meet CTO requirements manufacturers must adopt: SC technologies that enable more efficient production Customer-facing technologies, like order configurators More effective management of engineering changes More accurate new product demand projections The Emergence of Mass Customization Best Practices That Enable the Effective Enterprise Commoditized Products High Value Offerings

8. 8 The challenge -Knowledge/data is king -Information has become a mass product and is universally available -Information communication technology (ICT) has unleashed a huge flood of data and information The impact -Global data management to match customer global data access -Develop global strategies to enable workers with relevant and actionable data -Business intelligence systems, intuitive user interfaces, and management by exception Knowledge Society Best Practices That Enable the Effective Enterprise

9. 9 Knowledge Society Best Practices That Enable the Effective Enterprise The Importance of production factors Digital universe set to grow by a factor of 40 by 2020

10. 10 The Effective Enterprise Best Practices That Enable the Effective Enterprise

11. Our Vision – The Effective Enterprise Best Practices That Enable the Effective Enterprise Where every business process is working at peak efficiency and perfectly aligned with a companies strategic goals. 11

12. 12 What does it really mean to you? Speak the language of the CFO Learn from others You can't manage what you don't measure Establish standards The Effective Enterprise Best Practices That Enable the Effective Enterprise

13. 13 Effective Enterprise Indicators Best Practices That Enable the Effective Enterprise QAD KPIs Fixed Assets Return on Net Assets/EVA/Value /Free Cash Flow Net Income Net Assets Revenue Costs Working Capital COGS SG&A Distribution Inventory R&D Receivables Cash

14. 14 KPI Framework and Elements Best Practices That Enable the Effective Enterprise MetricsBest PracticesQAD Analytics

15. 15 Example KPI and Metrics Best Practices That Enable the Effective Enterprise Business Intelligence Ops Metrics Browses & Reports Analytics Inventory Accuracy Inventory Turns Obsolete Inventory Expedited Orders Stockouts Safety Stock

16. 16 Example Best Practices & Enabling Solutions Best Practices That Enable the Effective Enterprise Improve Planning and Scheduling Automated Cycle Count Manage Overall Material Costs Leverage Sophisticated Forecasting Monitor Supplier Performance Deploy S&OP Feedback Loop Manage Pricing, Discounts, Rebates Improve Inventory Manage Outsourced MFG Bar Coding / RF Lean Manufacturing Techniques Real Time Pick / Put Away QAD Solution And/or Service

17. 17 Best Practices Best Practices That Enable the Effective Enterprise

18. High Potential Best Practice Areas Best Practices That Enable the Effective Enterprise Trade Promotions Management 18

19. 19 Best Practice - Pyramid Forecasting Best Practices That Enable the Effective Enterprise A forecasting technique that enables management to review and adjust forecasts made at an aggregate level and to keep lower level forecasts in balance. (APICS) DEMAND-SIDE HIERARCHY SUPPLY-SIDE HIERARCHY Roll Up Forecast Force Down Adjustment

20. 20 Extensive statistical algorithms Alerts for exceptions Collaborative forecasting Support for S&OP Support for planning bills Enables multi-faced pyramid forecasting How QAD Enables – QAD Demand Mgt Best Practices That Enable the Effective Enterprise

21. 21 QAD Demand Management 6.1 Best Practices That Enable the Effective Enterprise

22. 22 Improved DIFOT 10-40% Inventory level reductions 12-70% Reduced obsolescence 30-50% Distribution & transportation savings 5-30% Improved plant efficiency 2-33% Improvement in forecast accuracy 5-20% Achievable Value Best Practices That Enable the Effective Enterprise

23. 23 The activities, including adjustments, replacements, and basic cleanliness, that forestall machine breakdowns. (APICS) Purpose is to ensure that production quality is maintained and that delivery schedules are met. Also to prolong machine life and to maximize machine efficiency. Best Practice - Preventative Maintenance Best Practices That Enable the Effective Enterprise

24. 24 Ensures a consistent maintenance work order process Captures maintenance labor and costs Improves maintenance labor utilization through planned preventative maintenance Allows scheduling of preventative and predictive maintenance based on elapsed time or actual throughput Provides for mean time between failure (MTBF) calculations and reporting Breakdown alerts How QAD Enables – QAD EAM Best Practices That Enable the Effective Enterprise

25. 25 QAD EAM Best Practices That Enable the Effective Enterprise

26. 26 Improved production scheduling efficiency Improved overall equipment effectiveness (OEE) Reduced maintenance related down time Reduced percentage of reactionary repairs Reduction in maintenance budget Achievable Value Best Practices That Enable the Effective Enterprise

27. 27 Reducing the total time required to manufacture an item, exclusive of lower level purchasing lead time. (APICS) For make-to-order (MTO) or configure-to- order (CTO), it is the length of time between the release of the order to the production process and shipment to the final customer. Best Practice - Lead Time Reduction Best Practices That Enable the Effective Enterprise

28. 28  A powerful application designed to simplify processing of configure-to-order products -Captures engineering knowledge -Guides through the selling process -Automatically generates work orders and routings How QAD Enables - QAD Configurator Best Practices That Enable the Effective Enterprise

29. 29 Guided sales -Flexible questionnaire design -Powerful price calculations Instant conversion of customer requirements into manufacturing requirements -Product configuration rules -Seamless integration Intuitive, Informative, Intelligent Best Practices That Enable the Effective Enterprise

30. 30 Decrease costs -Reduction of: quotation handling time order entry time order error rates and correction time Increase revenue -Attraction of new customers Ability to -Increased customer retention -Streamline quotation and order entry processes -Bridge communication gap between sales & engineering Ability to -Provide competitive advantage by allowing customers to “have it their way” -Allows engineering to focus on design and innovation Achievable Value Best Practices That Enable the Effective Enterprise

31. 31 Best Practice - Trade Promotions Mgt Sales & Marketing, Supply Chain, Finance Sales & Marketing, Supply Chain, Finance Supply Chain Finance Sales & Marketing, Supply Chain, Finance Sales & Marketing, Supply Chain, Finance Best Practices That Enable the Effective Enterprise Optimize Localize Execute Monitor Collaborate

32. 32 Averages 20% of gross sales TPM facts -Comprises as much as 70% of marketing budgets -Ranks as the 2nd highest cost behind CGS -$8B wasted every year in deduction management -Deduction investigation average $260 per event Customers often tell us -Can’t tell what value they are getting -Or if one promotion was more effective than another Why is TPM Important? Best Practices That Enable the Effective Enterprise

33. 33 Next generation of trade, promotions management solution from QAD -Powerful promotion planning -Efficient deduction resolution -Automated claims processing -Tight integration with financials -Robust reporting/analytical tools How QAD Enables – QAD TPM Best Practices That Enable the Effective Enterprise

34. 34 QAD Integrated Solution Best Practices That Enable the Effective Enterprise Enterprise Edition Groups Profiles Budgets Pricing Sales Orders Deductions Accruals Enterprise Edition Groups Profiles Budgets Pricing Sales Orders Deductions Accruals BI Reporting BI Reporting DM Forecasts DM Forecasts TPM Promotions Rebates Claims TPM Promotions Rebates Claims

35. 35 QAD Trade Promotions Management Best Practices That Enable the Effective Enterprise

36. Deal Profiles – Immediate Discount Best Practices That Enable the Effective Enterprise Discount Type: Percentage or Amount Combination Type: Combinable or Exclusive Quantity Type: The type of quantity to be used in determining quantity breaks in the price list detail (Amount or Quantity) 36

37. 37 Shortened planning cycle Improve pricing, invoicing, and accounting accuracy Improved ability to determine profitability of customers and products Shortened deduction investigation and resolution time Reduced outstanding claims and rebates Improved ability to make better promotion spending decisions Improved sales forecasts accuracy Achievable Value Best Practices That Enable the Effective Enterprise

38. 38 Key Take-A-Ways and Next Steps Best Practices That Enable the Effective Enterprise

39. 39 Key Take-A-Ways Best Practices That Enable the Effective Enterprise Financial Model QAD KPIs Metrics Best Practices QAD Solution or Service

40. 40 Next Steps Best Practices That Enable the Effective Enterprise Schedule a Discovery/Vision Engagement ConductDiscoveryMeetings ConductVisionWorkshop DeliverImplementations DeliverQ-ScanAssessments Key Performance Indicators Propose Alternatives Assess / Plan Standards

41. 41 Hank Canitz Sr. Director Manufacturing Industries hcc@qad.com Questions & Answers Best Practices That Enable the Effective Enterprise

42. 42 www.qad.com © QAD Inc 2012