Managing Complexity While Meeting Customer Demand Bob White – CFO Encoder Products (EPC) Frank Feustel – Director Product Management, QAD Configure to Order

2 The following is intended to outline QADs 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 QADs products remains at the sole discretion of QAD. Safe Harbor Statement Configure to Order

Introduction to Configurator -Business drivers -Manufacturing strategies -Configurator -What is new and what will come soon Configurator at work -Encoder Products Company (EPC) -Challenges and opportunities -Configurator at work at EPC -Benefits -Future outlook -Product demo Question and answers Agenda Configure to Order 3

Lower prices Higher quality Faster delivery Customized products Customers Demanding Configure to Order Mass Customization Is (Finally) The Future Of Products Forrester, April

Standardize, reduced margins Reduce supply chain costs Improve order lead times Reduce quote and order errors Improve customer service Manufacturers Pressures Configure to Order 5

6 Manufacturing Strategies Configure to Order Variety Volume DesignPurchaseManufactureAssembleShip InventoryManufactureAssembleShip ManufactureInventoryAssembleShip ManufactureAssembleInventoryShip Delivery Lead Time Engineer-to-Order (ETO) Make-to-Order (MTO) Assemble-to-Order (ATO) Make-to-Stock (MTS) Configure-to- Order (CTO)

7 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 QAD Configurator Configure to Order

8 Guided sales -Flexible questionnaire design -Powerful price calculations Instant conversion of customer requirements into manufacturing requirements -Product configuration rules -Seamless integration Intuitive, Informative, Intelligent Configure to Order

9 Meet customers specific requirements Streamlined order and quotation process -Reduced error rates -Reduces lead time to fulfill orders Bridge knowledge gap Your Competitive Advantage Configure to Order

10 Forecast consumption for planning items Configuration rebuild User defined warning messages Oracle database support New browses and browse collections And much more... Recent Product Enhancements Configure to Order

Next Generation Configure to Order Enhanced for kits and links to sales quotes/ orders New attribute creation rules Integration with enhanced best pricing 11

Web based configured orders 12 Next Generation Configure to Order

EPC is a leading designer and manufacturer of premium rotary incremental and absolute encoders used for motion feedback Encoder Products Company (EPC) Configure to Order: Configurator at Work at EPC 13

Founded in ,000 sq. ft. manufacturing facility 10 miles south of Sandpoint, Idaho QAD customer since1986 EPC Facts Configure to Order: Configurator at Work at EPC 14

15 Encoders Configure to Order: Configurator at Work at EPC Encoders are highly configurable and governed by a complex rule set EPC distinguishes itself from the competition in cost, quality, delivery and value

Customer Service -Speeding up order entry -Shorten training time for operators Engineering -Support for MTS, ATO, MTO and ETO -Complete and accurate BOMs -Convert lengthy catalog numbers Marketing -Sales trends by encoder options Challenges and Opportunities Configure to Order: Configurator at Work at EPC 16

17 EPC Ordering Guide Configure to Order: Configurator at Work at EPC 17

18 Implementation Approach Configure to Order: Configurator at Work at EPC Creation of modular BOMs Creation of generic router Creation of variant item data rules for unique catalog description Capturing engineering knowledge

19 Quantitative Benefits Configure to Order: Configurator at Work at EPC Cutting down order entry training from 6 to 1 month Reduction of order entry errors by over 50 % Satisfying customers standard delivery times

20 Qualitative Benefits Configure to Order: Configurator at Work at EPC Links variant items to customer item numbers Auto-label creation Extrapolation of sales trends on features and options 20

21 Future Outlook Configure to Order: Configurator at Work at EPC Purchasing of configured sub-assemblies Configuration inside QAD CRM and QAD CSS

22 Demo Configure to Order: Configurator at Work at EPC

23 Metrics Affected Configure to Order ProcessBenefitValue Configure complex products based on pre-approved engineering and sales business rules Product personalization / customization by semi-skilled sales staff Reduce errors Reduce selling time Increase market share Improved sales productivity $000s 50% to 90% 5% to 10% 10% to 50% Rules automatically translate possible configurations into actual items, product structures and routings Lower costs Reduce errors Reduced product lead- time 5% to 25% $000s 10% to 50% Rules based generation of variant item numbers enable re-order of configured items Increase customer satisfaction Increase market share 10% to 20% 5% to 10%

24 Attend Collaboration: From Supplier to Customer Solutions -Thursday at 9:45 -Speaker: Mark Williams QAD Contact your account manager to arrange a Configurator QScan Next Steps Configure to Order

25 Bob Frank Feustel Questions & Answers Configure to Order

© QAD Inc 26