Enterprise Wide Quality Management Made Easy

1. Enterprise Wide Quality Management Made Easy Tony Tan – American RENOLIT Corp LA Bob Herdoiza – CEBOS Enterprise Wide Quality Management System

2. Enterprise Wide Quality Management System Agenda • Introduction • Industry issues & challenges • CEBOS overview • Enterprise quality management • Company Case study • Integration • Why quality • Q & A

3. Enterprise Wide Quality Management System Industry Issues and Challenges New product development Product quality concerns Product safety concerns Continuing pricingand margin pressures Demanding customer requirements Manufacturers Global consolidationand alliances Intense shareholder pressures Customer compliance Regulatory compliance

4. Enterprise Wide Quality Management System Recalls Johnson & Johnson issued a massive recall Friday of over-the-counter drugs including Tylenol, Motrin and St. Joseph's aspirin because of a moldy smell that has made people sick. Jan 15, 2010

5. Enterprise Wide Quality Management System More Recalls Mattel Does Damage Control After New Recall Toyota Recall Aug 15, 2007 Jan 26, 2011 Toyota Motor Corp said it would recall more than 1.7 million vehicles worldwide, bringing total recalls to nearly 16 million since late 2009 and dealing a blow to its efforts to restore its reputation for quality. …a world-wide recall Aug. 1 of about 1.5 million Mattel toys believed to contain lead contamination, including items featuring such popular characters as Elmo and Big Bird.

6. Enterprise Wide Quality Management System Compliance • Industry standards • TS 16949 • ISO 9000 • ISO 13485 • Regulatory • FDA 21 CFR Part 210 & 211 • FDA 21 CFR Part 820 • FDA’s Quality System Inspection Technique (QSIT) • FDA Bioterrorism Act of 2002 • Hazard Analysis and Critical Control Point (HAACP)

7. Enterprise Wide Quality Management System Legislation • U.S. Congress passed the Consumer Product Safety Commission Reform Act, H.R.4040 • 3rd party laboratory test to ensure safety standards • Searchable database on reports of safety hazards

8. Enterprise Wide Quality Management System FDA Quality System Requirements Corrective and preventative actions Design controls Production and process controls Management Material controls Equipment and facility controls Records, documents, change controls http://www.fda.gov/MedicalDevices/ResourcesforYou/Industry/ucm126252.htm

9. Enterprise Wide Quality Management System CEBOS Overview • Software company • Seventeenth year • Hundreds of deployments - thousands of users • Currently supporting 12 languages • Serve vertical markets of QAD • Registered to ISO 9001:2008

10. Enterprise Wide Quality Management System CEBOS Overview • Comply with quality standards (ISO, TS, AS, FDA, etc.) • Automate required business processes • Integrate related quality processes and QAD

11. Enterprise Wide Quality Management System CEBOS’ MQ1

12. Enterprise Wide Quality Management System Integration

13. Enterprise Wide Quality Management System WhyImportant? “To achieve Best-in-Class performance, companies must… implement Quality Management Systems at an enterprise wide level…“ --Aberdeen Group August 2008

14. What is BIC? • Aberdeen Completed Research on Best in Class Manufacturers • Findings & Definition – What is Best in Class?: • 99% products in compliance • 98% complete and on-time shipments • 98% first pass yield • What are the Drivers to Being Best in Class? • Ensure Customer Satisfaction • Reduce Cost of Good & Bad Quality • Increase Profitability and Competitive Advantage

15. What is BIC? • What Were the Actions that Drove Achievement of Best in Class? • Create Visibility of Quality Processes (Ops/Suppliers) • Implement Business & QMS at an Enterprise Level • Establish Integration from Business System and QMS • What are the Enablers to Be Best in Class?

16. Enterprise Wide Quality Management System Driving Results • Enables higher customer satisfaction • Reduces product planning time • Reduces time to market • Reduces non-conformances

17. Enterprise Wide Quality Management System Customer Case Study - American RENOLIT • Manufacturer of plastic films • International company with over 4,000 employees spanning 30 manufacturing and sales locations globally • Los Angeles site is one of the facilities that manufactures film for the medical industry • Some applications of our film go into blood bags, IV, dialysis, nutritional, cardiovascular, biotech, collection and urological drain bags

18. Enterprise Wide Quality Management System Customer Case Study - Business Problem • Stand alone non-integrated systems • Excel spreadsheets primary automation tool • Unable to view trends across the organization • Correct information was often difficult to locate • User and IT management high • Inconsistent processes / not standardized

19. Enterprise Wide Quality Management System Customer Case Study - Specific Areas Targeted • Document control • Corrective/preventive action (CAPA) management • Employee training tracking • Audit management • Project management • Shop floor inspection management • APQP documentation management

20. Enterprise Wide Quality Management System Customer Case Study - Solution • CEBOS MQ1 software • 13 modules highlighting: • Documents • Problem solver • Audits • Human resources • Data collection • Work manager • APQP • E-sync • Integration from QAD to MQ1

21. Enterprise Wide Quality Management SystemMQ1- Module Roll Outs • Quality Management System - CEBOS MQ1 • Licensed Modules • Audits • Customer, Process, Product, Safety Audit • Customer & Supplier Mgmt • Document Mgmt • E-Sync • Maintenance • Problem Solver • Gage • Human Resources • Tooling • APQP – Advanced Product Quality Planning • Control Plan (FMEA & PPAP) • Process Planning & Control (Standard Conditions) • Inspection Plan (QA & Mfg Test Plan) • Data Collection • Work Mgmt Completed Partial / In Process Concept & Development

22. Enterprise Wide Quality Management System Customer Case Study - Results • Central data repository for all locations • Improved data for business decisions • Analysis capabilities across the organization • Consistent / standardized processes • Streamlined processes • Flexible reporting and process configuration

23. Enterprise Wide Quality Management System Customer Case Study - Results • Configured for simple for end users

24. Enterprise Wide Quality Management System Customer Case Study - Results

25. Enterprise Wide Quality Management System Customer Case Study – Lessons Learned • Document, Agree and Approve Processes • Management Involvement and Commitment • Defined Objectives Tied to Personnel Goals • Upfront Focus on One Module at a Time • Pilot • Appoint a Passionate Champion Per Module • Detailed Roll Out to End Users

26. Enterprise Wide Quality Management System QAD & QMS Integration Framework

27. Enterprise Quality Mangement SystemsQAD & MQ1 - Module Roll Outs Planning Workbenches: E-Sync Master Scheduling QAD - Item Master ODBC Production Scheduling QAD - Work Orders, Lot, Qty QAD - Inspection Plan APQP PBO Interfaces & Integration Control Plan Process Control (std conditions) Data Collection Business Intelligence PBO Integration MRP & CRP Process Condition & Seimens PLCs QA Inspection BOM, Blender Sheets PLCs, Barcoding Tablet Notebooks Suppliers Inventory Manufacturing Quality Assurance Shipping QAD MQ1

28. Enterprise Wide Quality Management System Sample Integration Points • Incoming Inspection: • Bidirectional Transaction Data • Upon purchase order receipt of an item that requires inspection in QAD a data collection event will be created in MQ1 with reference to the item number, lot and supplier. • Upon completion of the data collection event the results will be updated in QAD by transferring the inventory to the appropriate location based on the results of the inspection. • In-process Inspection: • Bidirectional Transaction Data • A data collection event will be created for a work order operation that is an inspection operation and the status is changed to “Q” (in Queue). • Upon completion of the data collection event the results will be updated in QAD identifying the disposition.  If the product has passed inspection it will be moved to the next operation, if the product does not pass the update will be based on the status: rework or scrap along with the appropriate reason code. • Problem Solver with Lot Inventory Data: • Bidirectional Transaction Data • If a problem (NCMR, CAPA, Customer Complaint) is generated in MQ1 and the inventory needs to be quarantined, the lot inventory data in QAD will be updated with the appropriate inventory status code.  • If an inventory item is moved from inventory to a MRB location in QAD and the inventory status is not a quarantined status then an NCMR will be generated in MQ1.  Item number and lot number information will be passed to MQ1.

29. Enterprise Wide Quality Management System Sample Integration Points • Problem Solver for Customer Complaints If an issue is created in Call Maintenance and the category is customer complaint then a CPR Type Customer Complaint will be created in MQ1. When the complaint is closed in MQ1 it will update the issue in QAD Call Maintenance. • Training Record Interface: • Transaction execution validation • A verification from QAD will be performed when an operator logs into a job using labor feedback by work order, a check will be made into MQ1 for the employee’s training records to verify that the employee is current on the training for this operation for the product.  If the employee is current in the training they will be allowed to proceed with the transaction, if the employee is not current an error message will appear and the employee cannot continue. • Calibration Record Interface: • Transaction execution validation • A verification from QAD will be performed when an operator logs into a job using labor feedback by work order and enters a machine, a check will be made into MQ1 for the machine/equipment to verify that the calibration is current.  If the equipment/machine is current in with calibration they will be allowed to proceed with the transaction, if the calibration is not current an error message will appear and the transaction cannot continue. • Master Data: • Unidirectional from QAD to MQ1 • Items • Suppliers • Customers • This data will be transferred from QAD to MQ1 using eSync.  QAD will be the system of record.

30. Enterprise Wide Quality Management System Next Steps • Stop by the CEBOS Table for a demo • Review and download information on the QAD Life Sciences website http://www.qad.com/erp/Life-Sciences/

31. Enterprise Wide Quality Management System Questions & Answers Bob Herdoiza, CEBOS bob.herdoiza@cebos.com Tony Tan, Renolit tony.tan@renolit.com