1. Master the Power of QAD Supply Chain Risk Management Terry Onica, QAD February 8-9, 2016

2. Master the Power of QAD Agenda Supply Chain Risk −Risk Management and Industry Standards −Understanding Risk Exposure −Performing Risk Assessment Case Study: Cascade Engineering QAD Solutions Support 2

3. Master the Power of QAD News Headlines Keep Coming... TsunamiSnow StormsFire 3

4. Master the Power of QAD Risk Management Added to Quality & Delivery Automotive Quality in 2017 Materials Management Operations Guideline/ Logistics Evaluation Automotive Delivery in 2015 International Standard for Quality 2015 Life Sciences Quality for Medical Devices 4

5. Master the Power of QAD Understanding Risk and Requirements Risk definition (ISO31000 Guide 73) −Effect of uncertainty on objectives −An effect may be positive, negative or a deviation from the unexpected Risk responsibility (ISO9001:2015) −Top management shall demonstrate leadership and commitment −Actions taken shall be proportionate to the potential impact

6. Master the Power of QAD Natural disasters Geopolitical Risks Epidemics Terrorist Attacks Labor disruptions Raw material prices Currency volatility Material shortages Shipping disruptions Financial health of suppliers Supplier performance Quality issues Sources of Supply Chain Risk Unknown Known Uncontrollable Controllable Source: Ford-MIT Alliance / Simchi-Levi Managing Supply Chain Risk 6

7. Master the Power of QAD Requirements/Actions for Risk Assessment Process Define/identify Prioritize Create contingency plans Incorporate lessons learned Proactively reduce Alert sub suppliers Trained, tested, validated 7

8. Master the Power of QAD Transport Issues Prioritizing Risk 8 Natural Disasters Utility Outages New Opportunity Equipment Failures IT Failures Troubled Suppliers Labor Disruptions Skills Gaps Contingency Plans

9. Master the Power of QAD Develop Contingency Plans At a minimum the document should include −Key internal/external contacts −Containment actions −Recovery steps to return to normal operations −Identification of key personal responsible for execution Make sure they work for all shifts

10. Master the Power of QAD Tracking Sub Suppliers −Locations −Financial performance −Quality performance −Delivery Performance Turn insights into action Managing Sub Supplier Risk 10

11. Master the Power of QAD Risk Management Process 11

12. Master the Power of QAD Leverage Quality Management System Supply chain quality and delivery −Corrective actions −Audits −Performance Risk assessment plans Contingency plans Employee training 12

13. Master the Power of QAD Case Study: Cascade Engineering 13

14. Master the Power of QAD Cascade Engineering 14 facilities globally Present in11 markets supporting:  Automotive - Commercial truck/bus - Solid waste - Recycling - Furniture - Material handling - Renewable energy - RFID asset management 14

15. Master the Power of QAD 1. Communicate Expectations2. Track and communicate concerns, actions as needed3. Communicate performance4. Escalate concerns5. Audit against requirements Mitigate Risks for Known/Controllable items 15

16. Master the Power of QAD 1. Communicate Expectations QAD QMS Document Control Problem Solver Audits QAD Supplier Portal Work Manager 16

17. Master the Power of QAD QAD QMS – Supplier Portal Documentation 175 suppliers on the portal −Most current supplier manual −Inspection requirements −Photos −Suppliers use Cascade’s work instructions for consistency 17

18. Master the Power of QAD 2. Track and Communicate Concerns QAD QMS Document Control Problem Solver Audits Supplier Portal Work Manager QAD 18

19. Master the Power of QAD QAD QMS – Problem Solver Defect Log Log supplier concern −Document issues −Symptom −Cause (if known) −Disposition −Corrective action? −Repeat issue? −Impact scorecard? Use for quality and delivery 19

20. Master the Power of QAD Assign Corrective Action in the System QAD QMS – Problem Solver 20

21. Master the Power of QAD QAD QMS – Supplier Portal Resolve Issue Supplier response Checklist items Supporting documentation Submit corrective actions View status at any time 21

22. Master the Power of QAD 3. Communicate Performance QAD QMS Document Control Problem Solver Audits Supplier Portal Work Manager QAD 22

23. Master the Power of QAD QAD QMS – Problem Solver Tracking Supplier Performance Review of concern and reason for point deduction Look for trends (e.g., repeat issue?) Document point deduction information Communicate performance information back to supplier 23

24. Master the Power of QAD Supplier Performance Scorecard (Monthly) SectionsDescriptionValue Disruptions Quality/Delivery Repeat issues, impact on customer, doc error, action, poor communication 30 Points ValueQuoting, cost reductions, support24 Points QualityProduct not meeting requirement20 Points DeliveryEarly, late or short shipment20 Points Management SystemQuality/Environmental Systems in place6 Points 24

25. Master the Power of QAD 4. Evaluate Performance / Escalate Concerns QAD QMS Document Control Problem Solver Audits QAD Supplier Portal 25

26. Master the Power of QAD Supplier Scorecard Classifications Preferred (95 – 100) First in line for new business opportunities in their commodity Acceptable (80 – 94) May still be awarded new business Substandard (70 – 79) 3+ consecutive months possible new business hold Options: Corrective actions. Desource? Financially viable? Probationary (0 – 69) 3+ consecutive months corrective actions and desource Options: New business hold. Financially viable? 26

27. Master the Power of QAD 5. Audit Against Requirements QAD QMS Document Control Problem Solver Audits QAD Supplier Portal Work Manager 27

28. Master the Power of QAD QAD QMS – Audits Internal/supplier audits Document concerns −Assign corrective actions −Supplier views and corrects 28

29. Master the Power of QAD Risk Assessment QAD QMS Document Control Problem Solver Audits Supplier Portal Work Manager QAD 29

30. Master the Power of QAD Emergency Situation – Supplier Disruption QAD contains a list of all supplier locations 30

31. Master the Power of QAD Follow-up Contingency Plan Follow-up with Suppliers Concern Meeting Requirement? Determine Steps How Long Down? Other Supplier Available? Change Schedule with Customer? End No Yes 31

32. Master the Power of QAD Contingency Plan 32

33. Master the Power of QAD Supplier awareness of expectations Visibility of concerns and actions Portal reduces duplication of entries Reduction in supplier issues/repeat concerns Faster reaction time for concerns “We know we are prepared for current risks” Overall Benefits of Systems/Planning 33

34. Master the Power of QAD QAD Support for Risk Management 34

35. Master the Power of QAD QAD Solutions Mitigate Risks Internal/Sub Supplier Capability Material Shortages Supplier Performance Contingency Plans Supply Chain Visibility Quality and Traceability Issues Long-term Forecasting Visibility Knowledge Attrition IT Failures Managing Risk 35

36. Master the Power of QAD Risk management requirements are here or are coming −Quality −Delivery Organizations need to prepare QAD has solutions/services to support based on industry best practices Down load Risk Management White Paper at www.qad.com/autowww.qad.com/auto Join me for “Securing the Supply Chain” session at Explore Are you ready? Summary 36

37. Master the Power of QAD SAVE THE DATE FOR EXPLORE 2016 www.qad.com/explore 37

38. Master the Power of QAD Terry Onica: tjo@qad.com tjo@qad.com Questions and Answers 38

39. Master the Power of QAD www.qad.com © QAD Inc 39