Broad SAP Project Approach & Functionality Implemented

1. Broad SAP ProjectApproach & Functionality Implemented 06/23/06

2. Agenda • Project Goals • Project Scope and Approach • Timeline • Functionality • Master Data Management • Planning • Procurement • Inventory Management • Cost Tracking • Production • Quality Management

3. Project Goals • Enable the Broad to be the lowest cost provider of genomic sequencing data. • Improve Production cost tracking • Implement product costing (cost per read) • Simplify Purchasing and Financials, including the addition of ECAT purchasing • Simplify batch creation and inventory management processes • Improve “ease of use” for highly repetitive transactions • Enhance operational performance • Improve shop floor tracking of batch numbers to enable timely troubleshooting • Improve quality management by tying inspections results to materials and batches produced • Fully integrate with the MIT SAP system, to reduce long term IT costs • Eliminate a grant funded legacy system (OPM), & multiple system interfaces • Eliminate the dual User licenses and system maintenance contracts • Provide a scalable platform, that supports the addition of new/more complex business processes

4. Project Scope • Replace Oracle OPM with SAP functionality in the following areas • Master Data Management • Planning • Procurement • Inventory Management • Cost Tracking • Production • Quality Management • Provide specific functional enhancements to improve ease of use & increase efficiency • Including direct use of MIT SAP Purchasing & Financials • Out of scope items – clearly defined and agreed upon

5. Project Approach • Team expectations clearly defined • Team members educated on basic project truths • Scope, Schedule, Budget (resources) • Measurable acceptance criteria for project success • Collaborative effort between Broad and IS&T • Co-team leaders – established a cohesive team • Broad business and IS&T members “paired” • Active sponsorship and steering committee • Business Power Users dedicated to the project • You are empowered. Make the decisions! • Deal with tough or controversial issues up front – don’t wait! • Involve everyone, at every step • Extensive planning and scoping analysis conducted prior to project kick-off (2 month effort) • Project scope under change control at the onset

6. Project Timeline Nov Dec Jan Feb Mar Apr May Jun • Project Prep • Plan • Resources • Infrastructure • Blueprint • Flows • Policy & Process • Spec’s • Walkthrough • Realization • Config (DEV & TST) • Playbacks • FRICE • Integrated Test 1 • UAT (IT2 & Regression) • Final Prep • Build (PS1) • User Training • Convert • Go Live & Support • Week 1 Support

7. SAP Functionality Implemented

8. SAP Overview Broad Flow Print/Display Reports Print/Display Reports Print/Display Reports • Set up • Master Data • Materials • BOM/Recipe • Costs • Info Record Run MRP Release Req’s Create PO’s Receive PO’s Inventory Movements Goods Issue Project Expensed Material Print/Display Reports Pay Invoices Misc Goods Receipt Input a Forecast Create a Process Order Mini-Mart Expensed Material Backflush (fixing as necessary) Purchase Expensed Material • Set up Quality • Master Data • Groups • MIC’s • Insp. Plans • SPC param Create & use an Inspection Lot Pass data to/from SQUID Print/Display Reports & SPC Print Checks

9. SAP Modules at Broad • SAP Modules include • Materials Management (MM) • Master data (material, vendor, purchasing information record), • Purchasing • Material Requirements Planning (MRP) • Inventory management (goods issue, goods receipts, goods transfer, physical inventory) • Batch management • Quality Management (QM) • Inspection plans / Master Inspection Characteristics, Inspection lots, Inspection Results Recording and Statistical Process Control • Quality inspection stock • Production Planning (PP) • Process orders and master recipes including Bill of Materials • Financial and Controlling (FI/CO) • Product Costing • Cross-Application Components • Document Management • Workflow

10. Broad is an SAP Plant • SAP defines a plant as a location that holds stock (inventory), contains service or maintenance facilities and or manufactures products • Each plant within SAP can have many unique features • Factory calendar – identifies working days • Storage locations – location where stock is physically kept in a plant • Master data - materials, work centers, bills or material, recipes, batch • Planning requirements – reorder point, forecast based • Quality mgt – inspection plans/master inspection characteristics

11. Master Data Management • Plant Calendar specific for broad • Organizational Structure (Plant, Purchasing group, etc.) • Material Master (Part Numbers) • Re-Order Points • Lead time • Standard cost • Bills Of Material (BOM’s) • Master Inspection Characteristics (MIC’s) • Inspection Plans • Recipes • Reason Codes • Purchasing Info Records • Purchasing Source Lists • Release/Approval Levels (Req. & PO)

12. Planning • Forecasting • Long Term Planning (LTP) • Materials Requirement Planning (MRP) • Finished and Semi-finished (Make) • Raw materials/Components (Buy) • Bulk materials (Buy) • Cash Flow Analysis • Actuals vs Budget Comparisons

13. Procurement • MRP generated Purchase Requisitions • Directly created Purchase Requisitions • In SAP • Via SAP Web • Purchase Requisition approval workflow • Purchase Order creation using Req info & master data • Electronic document management for both Requisitions and PO’s (RFQ, Quotes, Spec’s, etc) • Purchase Order approval workflow • Automatic Purchase Order print/fax • Single screen for Expensed material Receiving • Custom “Confirmation” transaction for Inventory • Quality Hold on Invoice payment until after approval (where desired) • Automated 3 way match for Invoice payment

14. Inventory Management • Goods receipts • Purchase Orders/Production Orders • Cost Centers • Projects/Internal Orders • Mini-Marts/Groups (WBS cost objects) • Goods Issues • Production Orders (including Backflush) • Cost Centers • Projects/Internal Orders • Mini-Marts/Groups (WBS cost objects) • Goods movements within Stockroom • Cycle Counting & Physical Inventory • Restricted and Un-restricted stock • Connected/Synchronized Unit and $$$

15. Production • Process orders • Capturing costs • Goods Issue and/or Back Flush • Automated batch assignment • Debugging via Lot Genealogy (from Supplier to finished product) • Yield tracking • Integration to Quality results tracking • MRP Planning capability

16. Quality Management • Automated Batch # assignment • Lot Genealogy from Supplier to End Product • Feeds to Broad Data Warehouse (SQUID) reporting • Invoice payment hold until Quality approval on Receipts (where desired) • Pre-defined Master Inspection Characteristics’ and Inspection Plans • Consistency • Ease of maintenance • On Line Usage Decisions • Inventory Units and $$$ moves to correct bucket automatically • Results tracking and Alerts • Statistical Process Control (SPC) charts

17. Cost Tracking • Monthly Updated Standard Cost tied to each material • Material $$$ tracked to individual WBS cost objects, internal orders (projects). • Based on Standard cost X Unit Qty • For PO’s, Goods Issues, Returns, etc • Single transaction moves $$$ and Units • Variance accounts to isolate particular activities • Reason codes to provide granularity • Expanded reporting (Inventory $$$, PPV, etc) • Ability to track actual cost expended against a pre-established budget • Capability to plan and track Labor costs as well, though this is not being used by the Broad