Broad SAP Project Approach & Functionality Implemented 06/23/06

Agenda Project Goals Project Scope and Approach Timeline Functionality –Master Data Management –Planning –Procurement –Inventory Management –Cost Tracking –Production –Quality Management

Project Goals Enable the Broad to be the lowest cost provider of genomic sequencing data. –Improve Production cost tracking –Implement product costing (cost per read) –Simplify Purchasing and Financials, including the addition of ECAT purchasing –Simplify batch creation and inventory management processes –Improve “ease of use” for highly repetitive transactions Enhance operational performance –Improve shop floor tracking of batch numbers to enable timely troubleshooting –Improve quality management by tying inspections results to materials and batches produced Fully integrate with the MIT SAP system, to reduce long term IT costs –Eliminate a grant funded legacy system (OPM), & multiple system interfaces –Eliminate the dual User licenses and system maintenance contracts –Provide a scalable platform, that supports the addition of new/more complex business processes

Project Scope Replace Oracle OPM with SAP functionality in the following areas –Master Data Management –Planning –Procurement –Inventory Management –Cost Tracking –Production –Quality Management Provide specific functional enhancements to improve ease of use & increase efficiency –Including direct use of MIT SAP Purchasing & Financials Out of scope items – clearly defined and agreed upon

Project Approach Team expectations clearly defined Team members educated on basic project truths –Scope, Schedule, Budget (resources) Measurable acceptance criteria for project success Collaborative effort between Broad and IS&T –Co-team leaders – established a cohesive team –Broad business and IS&T members “paired” –Active sponsorship and steering committee Business Power Users dedicated to the project –You are empowered. Make the decisions! –Deal with tough or controversial issues up front – don’t wait! –Involve everyone, at every step Extensive planning and scoping analysis conducted prior to project kick-off (2 month effort) Project scope under change control at the onset

Project Timeline Project Prep Plan Resources Infrastructure Blueprint Flows Policy & Process Spec’s Walkthrough Realization Config (DEV & TST) Playbacks FRICE Integrated Test 1 UAT (IT2 & Regression) Final Prep Build (PS1) User Training Convert Go Live & Support Week 1 Support Nov Dec Jan Feb Mar Apr May Jun

SAP Functionality Implemented

SAP Receive PO’s Print/Display Reports Create PO’s Print/Display Reports Pass data to/from SQUID Release Req’s Print/Display Reports Purchase Expensed Material Run MRP Input a Forecast Set up Master Data Materials BOM/Recipe Costs Info Record Misc Goods Receipt Inventory Movements Goods Issue Create & use an Inspection Lot Backflush (fixing as necessary) Create a Process Order Project Expensed Material Mini-Mart Expensed Material Set up Quality Master Data Groups MIC’s Insp. Plans SPC param Print/Display Reports & SPC Overview Broad Flow Pay Invoices Print/Display Reports Print Checks

SAP Modules at Broad SAP Modules include –Materials Management (MM) Master data (material, vendor, purchasing information record), Purchasing Material Requirements Planning (MRP) Inventory management (goods issue, goods receipts, goods transfer, physical inventory) Batch management –Quality Management (QM) Inspection plans / Master Inspection Characteristics, Inspection lots, Inspection Results Recording and Statistical Process Control –Quality inspection stock –Production Planning (PP) Process orders and master recipes including Bill of Materials –Financial and Controlling (FI/CO) Product Costing –Cross-Application Components Document Management Workflow

Broad is an SAP Plant SAP defines a plant as a location that holds stock (inventory), contains service or maintenance facilities and or manufactures products Each plant within SAP can have many unique features –Factory calendar – identifies working days –Storage locations – location where stock is physically kept in a plant –Master data - materials, work centers, bills or material, recipes, batch –Planning requirements – reorder point, forecast based –Quality mgt – inspection plans/master inspection characteristics

Master Data Management Plant Calendar specific for broad Organizational Structure (Plant, Purchasing group, etc.) Material Master (Part Numbers) –Re-Order Points –Lead time –Standard cost Bills Of Material (BOM’s) Master Inspection Characteristics (MIC’s) Inspection Plans Recipes Reason Codes Purchasing Info Records Purchasing Source Lists Release/Approval Levels (Req. & PO)

Planning Forecasting Long Term Planning (LTP) Materials Requirement Planning (MRP) –Finished and Semi-finished (Make) –Raw materials/Components (Buy) –Bulk materials (Buy) Cash Flow Analysis Actuals vs Budget Comparisons

Procurement MRP generated Purchase Requisitions Directly created Purchase Requisitions –In SAP –Via SAP Web Purchase Requisition approval workflow Purchase Order creation using Req info & master data Electronic document management for both Requisitions and PO’s (RFQ, Quotes, Spec’s, etc) Purchase Order approval workflow Automatic Purchase Order print/fax Single screen for Expensed material Receiving Custom “Confirmation” transaction for Inventory Quality Hold on Invoice payment until after approval (where desired) Automated 3 way match for Invoice payment

Inventory Management Goods receipts –Purchase Orders/Production Orders –Cost Centers –Projects/Internal Orders –Mini-Marts/Groups (WBS cost objects) Goods Issues –Production Orders (including Backflush) –Cost Centers –Projects/Internal Orders –Mini-Marts/Groups (WBS cost objects) Goods movements within Stockroom Cycle Counting & Physical Inventory Restricted and Un-restricted stock Connected/Synchronized Unit and $$$

Production Process orders –Capturing costs –Goods Issue and/or Back Flush Automated batch assignment Debugging via Lot Genealogy (from Supplier to finished product) Yield tracking Integration to Quality results tracking MRP Planning capability

Quality Management Automated Batch # assignment Lot Genealogy from Supplier to End Product –Feeds to Broad Data Warehouse (SQUID) reporting Invoice payment hold until Quality approval on Receipts (where desired) Pre-defined Master Inspection Characteristics’ and Inspection Plans –Consistency –Ease of maintenance On Line Usage Decisions –Inventory Units and $$$ moves to correct bucket automatically Results tracking and Alerts Statistical Process Control (SPC) charts

Cost Tracking Monthly Updated Standard Cost tied to each material Material $$$ tracked to individual WBS cost objects, internal orders (projects). –Based on Standard cost X Unit Qty –For PO’s, Goods Issues, Returns, etc –Single transaction moves $$$ and Units Variance accounts to isolate particular activities –Reason codes to provide granularity Expanded reporting (Inventory $$$, PPV, etc) Ability to track actual cost expended against a pre- established budget Capability to plan and track Labor costs as well, though this is not being used by the Broad