Steve Pitsos, Director, EAM Product Management

1. Engage to Empower: A QAD Strategy for Reducing Enterprise CostsQAD EAM (Enterprise Asset Management) Steve Pitsos, Director, EAM Product Management

2. Manufacturing Company’s Challenges Companies are driven to find ways to: Increase production output Improve product quality Reduce cost Plant Operations is responsible for a company’s most critical assets, its production equipment. Reliable equipment will: Maximize production performance Minimize scrap / rework Lower cost Costs 4X more to repair broken equipment than to maintain it

3. How QAD EAM Supports Manufacturing QAD EAM is responsible for the management of the manufacturing assets including; The design, construction and commissioning Operations and maintenance (preventive and repairs) Capital replacement / upgrade of equipment • Maximum Utilization at Lowest Cost • Uptime Analysis / Breakdowns • Failure Analysis / Production Impact • Cost Analysis / Capital Forecasting Asset Lifecycle Management Goal of Asset Lifecycle Management

4. Extending the Value of Your QAD Investment Most companies simply ‘check-the-box’ if they have a CMMS/EAM solution in-house The tool satisfies a compliance requirement Sarbanes-Oxley (Finance & Accounting Controls) CFR 21 Part 11 (Life Sciences) TS (Automotive) Customer Tooling (demonstrated care of their assets through audits) ISO (customer driven PM program) OSHA (Risk Management)

5. Extending the Value of Your QAD Investment Does your company have an EAM strategy? If production asset reliability and availability is vital to your business, you need an asset care strategy! 350,000 manufacturing facilities in the US MRO spend in the United States is nearly $150B 40% of this is reactive and unplanned (if a company is reactive, so will your spend be) If sustainability is vital and important to your business, you need an asset care strategy! Commercial energy cost is nearly $400B 38% Manufacturing / 32% Transportation / 30% Buildings The success of an asset-intensive company, and ultimately the bottom line, is dependent on the effectiveness of it’s maintenance strategy. KnowledgeStorm – Sept 2007

6. Extending the Value of Your QAD Investment Leading companies are implementing EAM strategies for: Implementing Production Asset Reliability as a competitive advantage Comprehensive alignment and management of MRO inventories across the enterprise Reduction in MRO spending across the enterprise to improve cash flow and bottom line performance Introduction of sustainability into the manufacturing process to: drive energy costs down reduce carbon emissions replace hazardous production chemicals with ‘green’ chemicals It’s an Attitude: “Asset Care” versus “Asset Repair”

7. How We Do It Plant Operations How do you do it now?

8. Business Challenges The current economic downturn requires asset intensive industries to get the maximum value out of the company’s existing assets. Aberdeen Group, November 2008 8

9. Business Challenges Project Controls (Accounting) No visibility to what projects will actually costs verses budget Reports are maintained through spreadsheets, which are labor intensive, time-consuming, out-of-date and inaccurate Inability to control spending Plant Maintenance 90% of maintenance activities are fixing broken equipment Repair maintenance cost 4X more than planned maintenance Only 50% Overall Equipment Effectiveness (OEE) MRO 30% of MRO inventory is obsolete 25% of purchases are incorrect or unnecessary Expensive spare parts cannot be shared between plants

10. QAD Solution - EAM • Project Controls (Accounting) • Budget spending control • Project work breakdown structure • Tracks internal and external expenditures • Production Assets and Facility Maintenance • Schedules preventive and predictive maintenance • Tracks internal and external costs associated with repairs • Integrates production into the maintenance process • MRO • Electronic requisitions workflow tied to department budget • Automatic stock replenishment based on stocking levels and demand • Track slow moving and obsolete inventory

11. QAD EAM & QAD ERP Compared Enterprise Asset Management

12. MRP / MaterialReleases ProductionWork Order FinishedGoods ProductionPlanning Cost trackedto: Components Finish Goods COGS Bill-of-MaterialPlanning Bill-of-materials Operator Instructions ERP Manufacturing Components Machine & LaborScheduling

13. EAM Maintenance & Tooling Components Stock Replenishment Maintenance/ Tooling Work Order Work Order Complete / Release toProduction MaintenancePlanning Cost tracked To: Asset or Tool for LifecycleAnalysis Bill-of-MaterialPlanning Bill-of-materials Operator Instructions Machine & LaborScheduling

14. EAM Seeks Granular Visibility Maintenance, Engineering & Tooling Performance Capital Project Budget Against Spend Performance Leveraged Purchasing Performance

15. Value & Benefits Enterprise Asset Management

16. EAM Value & Benefits to Your Company • Value: Consistent equipment reliability and streamlined operations processes ensure production can meet sales requirements at all times. • Benefits: • Increase revenues • Capital Projects: Well-run projects come in on time and on budget, so revenue objectives can be met • Plant Maintenance: Reduced equipment downtime increases production yield

17. EAM Value & Benefits to Your Company • Benefits: • Improve margins • Plant Maintenance: Efficient equipment reduces scrap and rework lowering the cost of goods sold • Lower Costs • Plant Maintenance: Improved maintenance planning results in lower repair costs and longer equipment life • MRO Inventory & Purchasing: Well-managed MRO supply chain means purchasing-related costs decrease & inventory levels are right-sized

18. QAD EAM .Net Product Enterprise Asset Management The Next Frontier: March 2009 Early Adopter Release (v12)

19. Solution Review: QAD EAM Integrating Project Engineering, Plant Maintenance and MRO into single solution

20. Solution Review: QAD EAM Scheduling PM’s based on actual production results in more reliable equipment EAM reports on the effectiveness of each PM

21. Solution Review: QAD EAM Reduce inventory through EAM’s consignment capabilities • Track inventory stock outs • Identify and eliminate slow moving inventory

22. Solution Review: QAD EAM • Control spending through electronic approval • Visibility into current budget data • Approval via PDA

23. Conclusion & Final Thoughts Enterprise Asset Management

24. Conclusion and Final Thoughts Review your company’s Asset Reliability Strategy and set a new course for cost reduction and asset performance improvement initiatives Maintenance & Tooling MRO / Indirect Purchasing MRO / Indirect Inventory Project Accounting (CapEx and OpEx) Align ERP and EAM initiatives with a common focus on production operations Make asset reliability a factor in production planning, scheduling, and execution Development common communication channels between production, maintenance & engineering departments Leverage standardization of maintenance practices, inventory management and purchasing

25. Conclusion and Final Thoughts Your Mission & Challenge: ‘Asset Care’ versus ‘Asset Repair’ Strategy It a Choice! Are you in the business of caring for your production assets or simply repairing your assets when they fail? Empower yourself to take the next important steps in developing an EAM strategy within your organization as a competitive advantage Empower your organization to execute with success! In Your Role, you are the Commander of your company ship! During revenue growth periods, an EAM tool is a weapon for increasing capacity and gross profit margins During business downturn periods, an EAM solution is a weapon for cost containment, managing & controlling spend & improving operating cash flow

26. Questions Enterprise Asset Management • Steve Pitsos, Director • QAD EAM Product Management • Email: zsp@qad.com • Phone: 678-463-0759