Configure to Order Managing Complexity While Meeting Customer

Configure to Order Managing Complexity While Meeting Customer Demand Bob White – CFO Encoder Products (EPC) Frank Feustel – Director Product Management, QAD

Configure to Order Safe Harbor Statement 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. 2

Configure to Order Agenda • Introduction to Configurator - Business drivers Manufacturing strategies Configurator What is new and what will come soon • Configurator at work - Encoder Products Company (EPC) Challenges and opportunities Configurator at work at EPC Benefits Future outlook Product demo • Question and answers 3

Configure to Order Customers Demanding • • Lower prices Higher quality Faster delivery Customized products “Mass Customization Is (Finally) The Future Of Products” Forrester, April 15 2011 4

Configure to Order Manufacturer’s Pressures • • • Standardize, reduced margins Reduce supply chain costs Improve order lead times Reduce quote and order errors Improve customer service 5

Configure to Order Manufacturing Strategies Variety Delivery Lead Time Design Purchase Manufacture Assemble Ship Engineer-to-Order (ETO) Ship Make-to-Order (MTO) Delivery Lead Time Inventory Manufacture Assemble Delivery Lead Time Manufacture Inventory Assemble Ship Configure-to. Order (CTO) Assemble-to-Order (ATO) Delivery Lead Time Manufacture Assemble Inventory Ship Make-to-Stock (MTS) Volume 6

Configure to Order QAD Configurator A powerful application designed to simplify processing of configure-to-order products - Captures engineering knowledge - Guides through the selling process - Automatically generates work orders and routings 7

Configure to Order Intuitive, Informative, Intelligent • Guided sales - Flexible questionnaire design - Powerful price calculations • Instant conversion of customer requirements into manufacturing requirements - Product configuration rules - Seamless integration 8

Configure to Order Your Competitive Advantage • Meet customers’ specific requirements • Streamlined order and quotation process - Reduced error rates - Reduces lead time to fulfill orders • Bridge knowledge gap 9

Configure to Order Recent Product Enhancements • • • Forecast consumption for planning items Configuration rebuild User defined warning messages Oracle database support New browses and browse collections And much more. . . 10

Configure to Order Next Generation • Enhanced for kits and links to sales quotes/ orders • New attribute creation rules • Integration with enhanced best pricing 11

Configure to Order Next Generation • Web based configured orders 12

Configure to Order: Configurator at Work at EPC Encoder Products Company (EPC) • EPC is a leading designer and manufacturer of premium rotary incremental and absolute encoders used for motion feedback 13

Configure to Order: Configurator at Work at EPC Facts • Founded in 1969 • 98, 000 sq. ft. manufacturing facility 10 miles south of Sandpoint, Idaho • QAD customer since 1986 14

Configure to Order: Configurator at Work at EPC Encoders • Encoders are highly configurable and governed by a complex rule set • EPC distinguishes itself from the competition in cost, quality, delivery and value 15

Configure to Order: Configurator at Work at EPC Challenges and Opportunities • Customer Service - Speeding up order entry - Shorten training time for operators • Engineering - Support for MTS, ATO, MTO and ETO - Complete and accurate BOMs - Convert lengthy catalog numbers • Marketing - Sales trends by encoder options 16

Configure to Order: Configurator at Work at EPC Ordering Guide 17

Configure to Order: Configurator at Work at EPC Implementation Approach • Creation of modular BOMs • Creation of generic router • Creation of variant item data rules for unique catalog description • Capturing engineering knowledge 18

Configure to Order: Configurator at Work at EPC Quantitative Benefits • Cutting down order entry training from 6 to 1 month • Reduction of order entry errors by over 50 % • Satisfying customers standard delivery times 19

Configure to Order: Configurator at Work at EPC Qualitative Benefits • Links variant items to customer item numbers • Auto-label creation • Extrapolation of sales trends on features and options 20

Configure to Order: Configurator at Work at EPC Future Outlook • Purchasing of configured sub-assemblies • Configuration inside QAD CRM and QAD CSS 21

Configure to Order: Configurator at Work at EPC Demo 22

Configure to Order Metrics Affected Process Benefit Value • Reduce errors • Reduce selling time • Increase market share • Improved sales productivity • $000’s Rules automatically translate possible configurations into actual items, product structures and routings • Lower costs • 5% to 25% • Reduce errors • $000’s • Reduced product lead-time • 10% to 50% Rules based generation of variant item numbers enable re-order of configured items • Increase customer satisfaction • 10% to 20% Configure complex products based on pre-approved engineering and sales business rules Product personalization / customization by semi-skilled sales staff • 50% to 90% • 5% to 10% • 10% to 50% • 5% to 10% • Increase market share 23

Configure to Order Next Steps • Attend Collaboration: From Supplier to Customer Solutions - Thursday at 9: 45 - Speaker: • Mark Williams QAD • Contact your account manager to arrange a Configurator Q−Scan 24

Configure to Order Questions & Answers Bob White bobw@encoder. com Frank Feustel fzf@qad. com 25

www. qad. com © QAD Inc 26