Supply Chain Update Rob Cramer Director, Product Management, QAD Inc. QAD Explore 2012

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 Supply Chain Update

3 The Effective Enterprise Themes: -Visibility -Agility -Complexity (globalism) -Metrics New and under development Next steps Questions Agenda Supply Chain Update

4 “An Effective Enterprise is one where every business process is working at peak efficiency and perfectly aligned to the company’s strategic goals. ” Effective Enterprise Supply Chain Update

5 787 Dreamliner -Suppliers blamed Supply chain stole Christmas -Mattel orders massive recall due to supplier problems (Nov. 2007) Tsunami & iPad Supply Chain Issues Supply Chain Update Role of supply chain? Invisibility

6 Supply Chain Solution Supply Chain Update

7 Visibility Agility Complexity (globalism) Metrics Themes Supply Chain Update “ Today’s supply chain is a result of actions taken in the past” “Tomorrow’s supply chain will be the result of actions that we take today”

8 Volatile market resulting in high uncertainty in demand Shrinking margins due to price pressure Rising customer service expectations and diminishing brand loyalty Increasing global competition Business pressures to utilize expensive assets with maximum efficiency Global proliferation of value chain partners Visibility Supply Chain Update

9 Improve on-time delivery performance Improve responsiveness Proactively alert customers of late shipments Reduce lead times and variability Increase likelihood of mid-term change success Monitor carrier activities Regulatory and security issues Visibility – Why It Matters Supply Chain Update

10 Reality Causes “Moments of Truth” Supply Chain Update STICKY GLUE Product Supply Demand “ Balance ”

Supply Chain Orchestration Supply Chain Update Suppliers Partners Manufacturers Assemblers Distributors Wholesalers Customers Consumers Buyers Transporters Network Conductor 11

12 Supply Chain Portal Supply Chain Update

13 Supplier Performance Supply Chain Update

14 QAD On Demand Supply Chain Update

15 Market sensitive (Demand Driven) = supply chain is capable of reading and responding to real demand Rapid sharing of information through the supply chain Network as a confederation of partners focused on customer need Joint product development, common systems & shared, standardized information Agility Supply Chain Update

16 Rapidly align network and its operations to dynamic and turbulent requirements of customers Proactively anticipate changes and seek new emerging opportunities Rapidly changing preferences make it more important bring new products quickly Protection from forecast uncertainty instead of inventory Agility – Why It Matters Supply Chain Update

17 QAD TMS Supply Chain Update SCP & Transportation Tracking SCP & Transportation Tracking Rules & Workflow Enabled Multiple Deployment Options Content Driven Rules & Workflow Enabled Multiple Deployment Options Content Driven Base Freight Management Global Trade Management Global Trade Management Package Exception Management Package Exception Management Trade Compliance

18 TMS Workflow Portal Supply Chain Update

19 Source of competitive advantage Breaking up processes that were once within a single factory & dispersing them across many countries without losing control Minimize supply chain logistics & inventory costs Diversified, specialized knowledge base Reduced cost and improved responsiveness Capitalizing on Complexity Supply Chain Update

US Consumer China Fabrics Bangladesh Manufacture NY Design 20 “Right outside the gates” means anywhere on the planet Means assembling armies of small & medium business that act as one Recognizes that networks can be smarter than individuals Complexity – Why It Matters Supply Chain Update

Relationship with customer Predictability of demand “Lean” Loose Tight High “ Fully Flexible” “Continuous Replenishment” “ Agile ” “Fully Flexible” Low Not One Supply Chain Supply Chain Update

22 QAD Warehousing Supply Chain Update Putaway Task management Cross docking Walk sequencing Wave planning Picking Shipping

23 QAD EDI eCommerce Supply Chain Update QAD Enterprise Applications Other Apps Trading Partner Library EDI eCommerce Translator Gentran Integration Suite EDI Messages Engine

24 Metrics Supply Chain Update

25 Focus on overall supply chain metrics driven by the market and customer needs. Supply chain = strategy … Supply chain = supporting technology + applications + skills + competencies Determine the RIGHT metrics Metrics Supply Chain Update

26 If you want to influence the game, make sure that you determine how score is kept! It’s how to communicate with top management Metrics – Why It Matters Supply Chain Update

27 Leaders.... Make Balanced Trade-offs Across the Business Supply Chain Update Supply Chain Costs Inventory Perfect Orders

28 Related Metrics Analysis Supplier Performance Cost of poor quality Order fulfillment efficiency Procurement efficiency Supplier delivery performance Delivery schedule adherence Number of formal disputes Ratio of price paid to price quoted Supply Chain Update

29 Related Strategies Supplier Delivery Performance Track /monitor supplier performance Manage outsourced manufacturing Manage supply chain Automated trade compliance Improve planning Metrics and KPIs Collaborative messaging Alerts and notification Supply Chain Update

30 New and Under Development Supply Chain Update

31 TPM Business Processes Supply Chain Update Plan Execute Settle Analyze

32 Budgeting/Accounting Supply Chain Update

33 Summary Supply Chain Update

34 Effective supply chain management is ”invisibly” balancing demand, supply and product Future competition will be between supply networks which have the greatest collaboration and visibility Importance of utilizing the right combination of metrics and solutions to meet customer demand QAD’s supply chain solutions provide a wide range of tools to help balance, collaborate, and measure the effectiveness of your supply chain Summary Supply Chain Update

35 Attend these related sessions: - Driving to the Effective Enterprise with KPIs – May 9: 1:30pm - QAD's Business Process Management -May 9: 2:45pm - Shipment Execution for Domestic and International Movements -May 9: 4:15pm - Business Intelligence: A Closer Look -May 9: 4:15pm - Three Inventory Reduction Techniques -May 10: 9:45am - Business Intelligence Workshop (Thursday morning) Stop by the Solutions Expo Arrange a Supply Chain Q-Scan Next Steps Supply Chain Update

36 Rob Cramer Director, Product Management Questions & Answers Supply Chain Update

37 © QAD Inc 2012