MWUG QAD Automation Solutions Automotive Case Study Adam

MWUG QAD Automation Solutions Automotive Case Study Adam Kacala MWUG October 2017

MWUG QAD Automation Solutions Safe Harbor This presentation includes forward-looking statements about QAD and its business. These statements are subject to risks and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in QAD’s SEC filings, including the company's latest Annual Report on Form 10 -K dated April 15, 2016 and in particular the section titled “Risk Factors” therein and other periodic reports the company files with the Securities and Exchange Commission thereafter. This presentation contains certain references to financial measures that have been adjusted to exclude certain expenses and other specified items. These financial measures differ from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) in that they exclude unusual or non-recurring charges, losses, credits or gains. This presentation identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is important to a proper understanding of the Company’s business results by investors. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies. 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 undertakes no obligation to update forward-looking statements. 2

MWUG QAD Automation Solutions Agenda • • Short Introduction to Automation Solutions Industry Challenges Typical Material Flow & Maturity Model Implementation Case Studies Sample ROI Summary Q&A 3

MWUG QAD Automation Solutions Products & Offerings Data Collection Framework MES Integration Label Printing AS Extensions Industrie 4. 0 4

MWUG QAD Automation Solutions Framework Library Templates + AS Extensions + Flexible Adjustments 5

MWUG QAD Automation Solutions What is New – AS Extensions Enhanced Shipping Directed Put. Away Shipping Load Browse Collection & Interactive Picklist Automated Transfer to the Warehouse Zone, Production or Shipping Dock Displays Image of the Scanned Item on a Separate Item Image Screen Production Easy and Intuitive, Touch-Screen Production Reporting Point To Point Integration with Sales, Gages, Flow Meters and Integrations Other Devices Honda Package Honda Approved Package of Transactions and Labels Warehouse Enhanced Warehouse Layout with Supporting Extensions Transactions 6

MWUG QAD Automation Solutions What is New – AS Extensions Enhanced Shipping Directed Put. Away Shipping Load Browse Collection & Interactive Picklist Automated Transfer to the Warehouse Zone, Newest Additions Production or Shipping Dock Displays Image of the Scanned Item on a Separate Item Image Screen Production Easy and Intuitive, Touch-Screen Production Warehouse Reporting. Touch Screen Reporting Extensions Point To Point Integration with Sales, Gages, Flow Meters and Production Integrations Other Devices (Advanced W/H Reporting Layout) Honda Package Honda Approved Package of Transactions and Labels Warehouse Enhanced Warehouse Layout with Supporting Extensions Transactions 7

MWUG QAD Automation Solutions Automotive Challenges Volatile Demand Supply Chain Visibility High Throughput Compliance Global Process 8

MWUG QAD Automation Solutions Typical Material Flow • Is process time consuming? Inbound Receiving • Are conflicting serial IDs causing problems? • Is label printing problematic? EDI ASN Manual ASN/PO Unload ASN Loose or Packaged 9

MWUG QAD Automation Solutions Typical Material Flow • How is the Warehouse • Organized? • Do I have capacity problems Inbound Put-Away Receiving Transfer • Is my put-away effective? • How do I manage “hot” materials 10

MWUG QAD Automation Solutions Typical Material Flow • Do I have shortages? • How do I know what is required? Inbound Replenish Put-Away Receiving ment • Are operators buried in papers? Transfer Return • Is my put-away process effective? • Is my warehouse picking process effective? 11

MWUG QAD Automation Solutions Typical Material Flow Inbound Replenish Put-Away Production Receiving ment • Am I paper based? • Is the process real time? • Am I capturing all data? • What about data accuracy? • Is my put-away effective? Manage Schedule Receive Goods Consume Materials Report Labor/Scrap 12

MWUG QAD Automation Solutions Typical Material Flow Inbound Replenish Put-Away Production Shipping Receiving ment • How do I schedule my dock • Am I missing shipments? • Are the pickers effective? • Do I struggle with papers? • Is OEM label print an issue? 13

MWUG QAD Automation Solutions Maturity Model Advanced Extensions & MES Integration AS Extensions Directed Transactions DC/LPS Predefined Set Paper Based Level 0 Simple Barcoding Proactive Guidance of Material Handlers Level 1 Level 2 W/H Mgmt & Shop Floor Data Capture Advanced W/H Mgmt & MES Level 3 Level 4 14

MWUG QAD Automation Solutions Case Study 1 Background • Manufacturer of suspensions, axle, lift systems, springs, stabilizers, bumper and trim components • 25 sites globally • Project start: 2014 • 1 st go live: 2015 • Currently 4 sites live with the AS • Recently Upgraded to 2016 EE this year • Continue to rollout the AS to remaining sites 15

MWUG QAD Automation Solutions Initial Technical Requirements • Synchronous execution - Complete device-specific transaction before allowing another • Interactive execution - QAD/Progress errors showed to users • Performance (max 5 seconds processing time) • Scalability Instance DC Devices DC Users Label Printers SPG + Intl 63 250 66 Trailer 174 247 69 Truck 49 211 100 16

MWUG QAD Automation Solutions Components • Inbound, Production and Outbound - 65 transactions implemented • LPS - around 90 unique label templates • AS Extensions: - Directed Put-Away EDL (Electronic Dispatch List) Shipping Load Collection Bulk Shipping 17

Key Processes 18

MWUG QAD Automation Solutions 1 Receiving - Putaway Logistics Packbay Putaway 3 2 Cell 1000 1 4 Delayed Second Move Zone 1 Loc 200 Production Control Quality 19

1 MWUG QAD Automation Solutions Large Part Kitting Steps 1 -3 Create Pack ID (. net with Automation Solutions) BOM Labels printed Pallet “weigh-in” Work Order Pick (Wedge Scanner) (DC RF Device) User scan's License Plate (long bar code) to capture skid weight AS displays list of components in a pick sequence 20

1 MWUG QAD Automation Solutions Large Part Kitting Steps 4 -6 Pack Receipt (DC PC/Telnet + Wedge Scanner) Labels Applied to Container Transfer Pack (DC RF Device) Automated 6 transactions Component Verify Weight Validation Pack Receipt Pre-Shipper Create Weight Update Label Print 21

Packing & Shipping . net UI Shipment Planning Load View (template) Shipment Preparations Pre-Shipper Workbench Truck Load WB (template) Shipper Pick List RF UI Warehouse Execution Load Truck Pick/ Pack Load Truck Verify Labels . net Or TMS Shipping Documentation Route Rate BOL Pack List Export Docs Finalization Confirm EDI 22

1 Picking Direct Pick – with Warehouse Bulk Pick Logistics • Material Handler Efficiency Packbay • On Time Shipments • Labeling Accuracy Pick • Reduce Expedites B 105 B 106 B 107 B 108 High Density Rack Storage B 205 B 206 B 207 B 208 • FIFO Compliance B 109 B 110 B 111 Packbay Pick Stage B 209 B 210 B 211 23

1 MWUG QAD Automation Solutions Pick to Ship Process Pre-Shipper Pack Build Weight Modify Pack Transfer Label Print Load Truck 24

MWUG QAD Automation Solutions Measured Benefits Directed Put. Away • 40% improvement in Material Handlers efficiency • Reduced wait time at Shipping & Work Centers Bulk Picking • 30% improvement in Packers efficiency • 60% improvement in Material Handlers efficiency • 50% reduction in picking lead time • Other benefits achieved, but not quantified 25

MWUG QAD Automation Solutions Case Study 2 • Manufacturer of braking and noise reduction systems • 30 sites globally • Implemented pilot AS site in Thailand • Automation Solutions project started in May 2016, go live October 2016 • 10 DC Transactions in scope (all banners), 2 labels 26

MWUG QAD Automation Solutions Business Challenges • • • Inventory Accuracy BOM Accuracy Supplier Performance Planning Parameters Accuracy Production Daily Plan Achievement Sales Order & Forecast Accuracy 27

MWUG QAD Automation Solutions Project Approach Identify KPIs for measurement Identify areas of improvement Review outcome results Identify key assumptions or baseline / collecting qualitative data Analyze and quantify the value 28

MWUG QAD Automation Solutions Sample KPI Measurement 29

MWUG QAD Automation Solutions Sample KPI Measurement 30

MWUG QAD Automation Solutions Sample KPI Measurement 31

MWUG QAD Automation Solutions Summary AS Benefits Process Inventory Control KPIs Inventory Accuracy Target Benefits Result Benefits or Saving per Year (mil THB) 3. 0 MB Purchasing User Productivity for PO Receipts 0. 045 MB Production User Productivity for Backflush and Inventory Transfers 0. 861 MB Production 4 hours Down-time per month Quality End to end lot traceability for Quality and MMOG/LE 0. 018 MB compliance Finance Month End Closing, Financial Statement Generation Total Potential Saving TBC Remarks • Inventory reconconciliation. • User Training on Backflushing • Assessment on simplifying the manufacturing operations or process to reduce data collection entries or backflushing. • Improve Inventory Accuracy by capturing transactions real time. Requirement from Auditor because of Inventory Accuracy : cycle count every month and 4 hours downtime quarterly 0. 0 MB • Improved with 1 person < 2 days • Implement Lot Trace Workbench 0. 338 MB 0. 17 MB • Capture transactions real time. 4 day improvement from 9 days Still 2 persons entering transactions on month-end 4. 26 MB 4. 08 MB • Red saving value to be confirmed by Akebono finance 32

MWUG QAD Automation Solutions Sample ROI 33

MWUG QAD Automation Solutions Sample ROI • ROI Break-Even Point: 10 months • Gain over 24 months: $671, 000 34

MWUG QAD Automation Solutions Summary Flexibility and Business Process Automation! 35

MWUG QAD Automation Solutions For More Information • Adam Kacala – Business Development Manager - ayk@qad. com - +1 901 -786 -2294 OR AS_SALES@QAD. COM

www. qad. com © QAD Inc 37