© UGS Corp All rights reserved. © UGS PLM Solutions Inc All rights reserved. © UGS PLM Solutions Inc All right reserved. Value Chain Synchronization “ Realizing the potential of your value chain as a strategic weapon in the battle for profitable growth with Best Practices ”

© UGS Corp What is Value Chain Synchronization? Synchronizing your product development efforts Product Customers Partners & Suppliers Manufacturer Specific Expertise Proximity to Markets & Customers Lower Cost Alternatives Align to Customer Requirements Shorten Product Lifecycles Increase Quality New & Growing Markets Increasing demands for Innovation Increasing Service Levels Commercialize Innovative Products Leverage Globally Distributed Teams Manage Product & Process Knowledge with your customer requirements, and closer supplier relationships, to increase product innovation and add customer value. Best Practice = Creating a Global Innovation Network

© UGS Corp Why you need Value Chain Synchronization? Business Integration  Global strategic coordination  Supplier relationship management  Value chain integration Local Responsiveness  Differing consumer tastes  Distribution channels and sales practices  Economic and political demands Value chain innovators - Leaders…  Invest more than 2X more to connect them with strategic partners and suppliers as their competitors  Capture 4x the information about their overall spending, enabling them to respond to opportunities more efficiently and effectively,  Operate Leaner and see more than a 30% reduction in finished goods inventory  Realize a 25% improvement in on-time delivery Source – AMR Research Design Anywhere, Build Anywhere

© UGS Corp Profitable Growth Through Value Chain Synchronization “… readily translates into an extra points of gross margin in the first year…” “…has helped them generate profit margins up to 73% greater than those of other manufacturers.” “…is paying dividends…  Product cost reduction of nearly 18%.  10% to 20% improvements in time- to-market cycles” Value Chain Synchronization…

© UGS Corp How Do You Synchronize Your Value Chain? “The focus must extend beyond the single enterprise to enhance collaboration and strategic partnering across the supply chain. It requires tight synchronization of business processes across both procurement and engineering organizations.” Collaborative Product Development Associates, LLC Supplier Relationship Management “Manufacturers should align processes, organizations, and metrics to bring sourcing knowledge and decision-making closer to the point of design. In addition, companies should support integrated processes with the appropriate enabling technology, including integrated sourcing and PLM solutions.” Jim Brown, AberdeenGroup

© UGS Corp How Do You Synchronize Your Value Chain? “Supply chain performance is all about integration – integration of strategy, processes, organization, and information systems.” Gordon Colborn, PRTM “We need to stop thinking of supply chains and value chains as different entities, but, rather, should integrate the two. Product design should be fully integrated with production capability, delivery processes, and information about customer demand.” Andrew Feller, Dr. Dan Shunk, and Dr. Tom Callarman ‘Value Chains Versus Supply Chains’, BP Trends – March 2006 Value Chain Integration

© UGS Corp Supplier Relationship Management Challenges addressed by Best Practices for Value Chain Synchronization Value Chain Integration Create and sustain a superior supply chain by synchronizing with procurement & product development processes Synchronize the processes of innovation across the product lifecycle  Globally dispersed suppliers  Supplier Performance  Increasing Supply Risks  Quality Issues  RFQ Accuracy/Errors  Engineering Changes  Shorter product lifecycles  Cost of late cycle change  Scrap, & wasted inventory  Spare parts not available  Increasing service costs ChallengesStrategyBest Practice

© UGS Corp Supplier C Supplier A Supplier B ProcurementEngineeringMfg Supplier Relationship Management Sourcing Automation Robust tools to improve procurement productivity Sourcing Integration w/ PLM Leverage PLM to improve sourcing accuracy Supplier Collaboration Connect global teams earlier in the design process to design cost out Supplier Management Instant access to supplier capabilities to make better design/sourcing decisions earlier “ Create and sustain a superior supply chain through tighter integration with procurement & product development processes “

© UGS Corp Mfg 2Mfg 1 Sourcing Integration with PLM RFQ Pkg Part RFQ Pkg Program 1 OEM 1 Program 2 OEM 2 Assy CR  Buyers need accurate product data  Need business data But products can be complex…. Easy access to managed data saves time & reduces errors Supplier C Supplier B Supplier A  But buyers add little value to these  Buyers need access to PLM And most RFQs are due to change…. Part

© UGS Corp Supplier C Supplier B Procurement Engineering Mfg Supplier Collaboration RFQ Pkg  Connect teams w/ suppliers earlier  Evaluate cost & schedule impact  Review issues in real-time  Capture and route issues for greater visibility & quicker resolution Changes need to be considered… Part Assy Make Better Decisions Faster Reduce Travel Costs Design Cost Out of Products Bring Teams Together Digitally

© UGS Corp Part Program 2 OEM 2 Program 1 OEM 1Mfg 2Mfg 1 CR Supplier Management RFQ Pkg Part Manage supplier data to improve performance & reduce sourcing risk Quote St. Louis Hi-Capacity Hi-Quality Taiwan Low-Capacity OK Quality Supplier C Supplier B Supplier A Comm. Part And Supplier information needs to be accessible….  Manage Supplier data (capabilities, quality, location, etc.) to make better sourcing decisions  Manage multiple commercial P/Ns representing commodity parts for flexible supply RFQ Pkg Assy Mfr 2 P/N XYZ Distr. Mfr 1 P/N ABC Mfr 3 P/N 123 Quote Part

© UGS Corp Development Integration Synchronize Teams Lead Site Remote Clients Mfg Supplier  Single source of up-to-date product knowledge  Shared with distributed partner locations  Remote clients for secure, real-time connectivity  Secure package exchange for partners with no PLM software  Synchronize requirements, product, and process data Immediate access across organizational and geographic boundaries Synchronize Package Exchange Partner/Supplier Site

© UGS Corp Manufacturing Integration Value Chain as an Extension of the Business Synchronize Supplier Data  Include partners & suppliers as part of core “team” for true concurrent development  Synchronize product Bills of Material (EBOM, MBOM), processes (BOP), & “As-Built” configurations  Monitor & manage supplier production to control compliance, quality, & inventory  Catch issues before they make it to production Work Instr. Oper Bill Of Process Work Instr. DesignRequirements Prototype Build Production In-Service ,000 COST (e 10 ) 1 Cost of Change Supplier

© UGS Corp Capabilities Supplier Relationship Management Summary - Value Attained Value Chain Integration Development Integration Manufacturing Integration Service Integration StrategyValue Sourcing Automation Supplier Collaboration Supplier Management Sourcing Integration w/ PLM  Synchronize Global Suppliers  Better Sourcing Decision  Reduce Sourcing Risks  Improve RFx Accuracy  Reduce Direct Material Costs  Improve Product Quality  Shorten Product Lifecycles  Reduce Impact of Change  Reduce Inventory Shortages  Ensure Availability of Parts  Reduce Service Cycle Times

© UGS Corp All rights reserved. © UGS PLM Solutions Inc All rights reserved. © UGS PLM Solutions Inc All right reserved. Thank You