Quality Management for High Technology Hank Canitz – Sr. Director Industry Solutions, QAD Bob Herdoiza – President of Cebos QAD Midwest User Group

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 QAD Midwest User Group

3 Problem Statement Relevant global safety & environmental regulations and how to comply QAD core solutions that meet the requirements of these regulations How Cebos QMS can help with compliance Agenda QAD Midwest User Group

4 Regulation has risen dramatically over the past 20 years (over 2100 unique regulations) In the US the average number of new major regulations has risen with each administration -Bill Clinton: 27 per year -George W. Bush: 35 per year -Barack Hussein Obama: 44 per year The cost of regulation has been growing much faster than the output of manufacturing Regulatory burden on manufacturers has more than tripled in the last 10 years Problem Statement QAD Midwest User Group

5 Cost of Regulations on Manufacturing QAD Midwest User Group

6 Good Manufacturing Principles (GMP) International Standards Organization (ISO) Waste Electrical and Electronic Equipment (WEEE) Restrictions on Hazardous Substances (RoHS) Wall Street Reform and Consumer Protection Act (Conflict Minerals) Important Regulations for High Tech QAD Midwest User Group

7 Term for Good Practice quality guidelines and regulationsquality GxP current Good Manufacturing Practices cGMP current Good Distribution Practices cGDP current Good Transportation Practices cGTP What do we mean by “GxP?” QAD Midwest User Group

8 ISO 9000 Family -Addresses various aspects of quality management -Guidance & tools to ensure products / services consistently meet customer’s requirements, & are consistently improved -ISO 9001:2008 can be certified to ISO14001 Family -Addresses various aspects of environmental mgt -Tools to identify and control environmental impact and constantly improve environmental performance -ISO 14001:2004 can be certified to Relevant ISO Standards QAD Midwest User Group

9 What is it? -Encourages the collection, treatment, recycling and recovery of electrical waste & electronic equipment -Makes producers & importers responsible for financing of the collection, treatment & recovery of WEEE -More information available by reviewing Directive 2002/96/EC, as amended by 2003/108/EC Who does it apply to? Just about all Electronic Mfgs. Complying -Register with a compliance scheme -End of product life plan -Mark the products Waste Electrical & Electronic Equipment (WEEE) QAD Midwest User Group

10 What is it? -Bans new electronic equipment in EU market -Works in conjunction with WEEE -Effective July 1, More information available at Who does it apply to? -Any mfg who distributes or sells their products in the EU. How do you comply? -Documentation to show that products are compliant before placing them on the market -If requested, documentation must be provided to the RoHS Enforcement Authority within 28 days -Documentation must continue to be maintained for 4 yrs after product is sold on the market Restriction of Hazardous Substances (RoHS) QAD Midwest User Group

11 What is it? -New law imposing requirements relating certain minerals that are sourced from mines Under the control of violent forces Democratic Republic of Congo (DRC) -Aims to cut funding to armed groups that commit violent human rights violations Who does it apply to? All publicly traded mfg companies Must report annually to the SEC on use of conflict minerals Private companies are not required to report to the SEC −However your customers may have reporting obligations that you may have to support Conflict Minerals QAD Midwest User Group

12 Starting in New Form SD must be filed with the SEC - By May 31 for the previous calendar year Form SD requires the issuer to -Conduct a “reasonable country of origin” inquiry -Determine the source of Conflict Minerals in its products The issuer is required to disclose findings of the inquiry in the Form SD Based on the outcome of the inquiry -May be required to attach a Conflict Minerals report -As an exhibit to the Form SD Conflict Minerals - Compliance QAD Midwest User Group

13 SEC Flowchart QAD Midwest User Group

14 QAD’s Core Quality Mgt Solution QAD Midwest User Group

15 Core Quality Management Traceability Solutions Item Attributes Enhanced Quality QAD’s Core Quality Mgt Solution QAD Midwest User Group

16 Stores the definitions of standard testing procedures Applies tests to works orders & repetitive schedules Holds quality test results Manages inventory sampling plans & quality orders Tracks supplier product quality at incoming inspection, testing, during manufacturing, and inventory sampling Trend reports by supplier or part to help identify potential problem parts or suppliers Certificate of Analysis generated for parts indicating testing performed, detailed comments, pass/fail Core Quality Management – SE & EE QAD Midwest User Group

17 Traceability in QAD Enterprise Applications QAD Midwest User Group Receiving Production Shipment

Lot/Serial Control -Complete lot & serial no. tracking history -Foundation for cGMP compliance -Foundation for product liability tracking WIP lot tracking -Control combining and splitting of lot and component material -Control the WIP inventory quantity-on-hand -Trace component material lots consumed -Trace WIP material lots from operation to operation Core SE & EE Functionality QAD Midwest User Group

A Unique Identification Number Serialization – Core EE QAD Midwest User Group

Packaged Inventory using a unique ID What is License Plate Inventory? 20 QAD Midwest User Group

21 Single access point to current lot-controlled inventory and historical data Backward & forward tracing -Flexible and extended list of search criteria -Extended list of relevant information -Trace within a trace -Drill down capabilities -Data extraction -Saved search trails Lot Trace Workbench – Core EE QAD Midwest User Group

22 Expands the breadth and depth of information for items, and optionally for item lots and sub-lots Maintain attributes by managing attribute profiles for items to support business operations Item Attributes Solution – Core EE QAD Midwest User Group

23 Test specifications built using attributes Test records and quality orders -Test records for production operations -Quality orders with test records for inventory lots -Update item lot and sublot attributes Enhanced Quality Control – Core EE QAD Midwest User Group

24 Bob Herdoiza Cebos Quality Management System QAD Midwest User Group

Year Old Software Company Management System Standards Focus Division of QAD Division Headquarters in Brighton, MI Certified to ISO 9001:2008 CEBOS Overview Integrating QAD and the Quality Management System

26 Comply with quality standards (ISO, TS, AS, FDA, etc.) Automate required business processes Integrate related quality processes and QAD Integrating QAD and the Quality Management System Training Management Audit Management Gage Calibration Dashboard Reporting Supplier CAPA Document Control Corrective Action / Nonconformance Project Management APQP, PPAP, Risk Management Quality Data Collection

27 Current State QAD Midwest User Group Multiple databases (Office, Access, point solutions) Manual driven systems Minimal linkage of data Duplicate data entry Minimal structure and consistency

28 Current State QAD Midwest User Group GMP ISO WEEE/RoHS Doc’s Training CAPA Audits Supplier Doc’s Training CAPA Audits Supplier Doc’s Training CAPA Audits Supplier

29 Future State – Integration QAD Midwest User Group GMP ISO WEEE/RoHS Doc’s Training CAPA Audits Supplier Doc’s Training CAPA Audits Supplier Doc’s Training CAPA Audits Supplier

30 Integrating QAD and the Quality Management System Functionality – Dashboards & Workflow Gadgets Drag and Drop Graphical Configurable

31 Integrating QAD and the Quality Management System Functionality – Document Control Central repository Formal change request process Automation of the change request process

32 Integrating QAD and the Quality Management System Functionality – Problem Solving Configurable Closed loop Automated reporting

33 Integrating QAD and the Quality Management System Functionality – Training Tracking Recurring Competency Document control

34 Integrating QAD and the Quality Management System E-Sync E-Sync Functional Description Compare data source with MQ1 Add/update records in MQ1 Employees, items, customers, etc. XML File Transfer System’s Integration Tools Integration Toolkit XML Integration Functional Description Standard XML web services Push/Pull Data Inspection/Inventory/CAPA Training check Gauge calibration check

35 Conclusion QAD Midwest User Group

36 High Tech manufacturers face numerous safety and environmental regulations. Compliance requires a combination of internal controls, data collection and management, and reporting. QAD has the solutions to help you comply with current and future regulations whether you are running the Standard or Enterprise Edition. Summary QAD Midwest User Group

37 Determine what regulations your company must meet Visit QAD.Com for more information on QAD’s quality management solutions Schedule a Vision Engagement Let QAD help you determine an approach for compliance through a QSCAN engagement Next Steps QAD Midwest User Group

© QAD Inc Questions & Answers QAD Midwest User Group 38