QAD Proprietary

Direct Store Delivery& QAD’s Consumer Centric Solution

Hank Canitz: Senior Director Industry Marketing - QAD

Robert Hochberg: President & CEO - NCS

QAD Proprietary

Agenda

Top consumer product manufacturing issues

Direct Store Delivery for QAD Customers

QAD’s consumer centric solution

35,000 New Products Annually

62 Days of Supply

(Average)

50% - 70% Forecast Accuracy

15% of Trade Promotions Turn a Profit

8% - 15% Out of Stock, 20%

During Promotions

Typical Dilemmas of a Customer-Centric Manufacturer

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Top 4 Consumer Product Manufacturing Issues

Ensuring global product safety & quality

Complying with sustainability (Green) regulations and customer demands

Enabling the business imperative to do more with less

Meeting more demanding customer requirements

– Lower Costs

– Fresher product

– Higher fill-rate at the shelf

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Consumer Centric Approach “A system of technologies and processes that senses

and reacts to real-time demand across a network of customers, suppliers, and employees”

Outside InInformation

Inside OutInformation

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Balancing Push – Pull Dynamics A consumer centric approach balances the pull from

customers with a push from the supply chain.Product & Service Innovation

Pull

Cu

sto

mer

s ,

Bu

yers

, U

sers

,

& C

on

sum

ers

Channel Demand

&Demand

Management

Demand Visibility

User/ Consumer/Demand Insights

Su

pp

liers & P

artners

Push

Reliable,Profitable Response

from Supply Based on Demand

Supply Visibility

decoupling

Demand Translation

& Trade Offs

Integrated Strategy, Business & Value Network Planning

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Average = 10 days

The Time to Sense True Customer DemandQ. How long does it take your organization to sense

true customer demand in your primary value network?

20%

24%

15%

21%

7%

5%

4%

5%

Less than 48 hours

2-5 days

6-7 days

1 week to less than 2

2 weeks to less than 3

3 weeks to less than 4

4 weeks to less than 5

5 or more weeks

N = 164 manufacturers

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1- 30% out of stock rates at the SKU-location level depending on product & characteristics

1- 30% out of stock rates at the SKU-location level depending on product & characteristics

Latency in Sensing Customer Demand

Manufacturer mentioned by “name” in stock out

Manufacturer mentioned by “name” in stock out

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Deliver 20% More Perfect Orders…

68%

90%

Laggards

Leaders

…hold a third less inventory…

Laggards

Leaders

72 Days

54 Days

…have lower SC costsequal to 5% of revenue

26%

21%

Laggards

Leaders

The Value of a Consumer Centric Strategy

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QAD’s Consumer Centric Solution Suite

Supplier Manufacturer Distributor Retailer Consumer

Supply

Visualization Product

Development

Lean

ManufacturingTrade Promotion

Management

DemandManagement

S&OP

PLAN

Direct StoreDelivery

CustomerCollaboration

Global DataSynchronization

AutomatedData

Collection

Vendor ManagedInventory

POS Data &Analytics

PULL

Supplier Distributor Retailer CustomerManufacturer

To succeed today and into the future consumer products manufacturers must ensure their products are available when and where customers want them. Manufacturers can’t assume that customers will come back if their product is out of stock. Success is not assured operating with the average supply chain.

CustomerRelationshipManagement

BI

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Product Distribution Strategies

10

Directly from Suppliers Shipments from whole-sale distributors

Warehouse shipments DSD

2007 0.19 0.24 0.320000000000002 0.24

2008 0.2 0.26 0.3 0.25

3%

8%

13%

18%

23%

28%

33%

% o

f R

espondents

Source: FMCG Retailers are Becoming Demand Driven- AMR Research, April 2008

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11

DSD Industry Issues & Drivers Industry analysts estimate that half of the top 10

packaged foods at retail today are delivered by DSD Many DSD categories are among the highest

revenue and margin performers DSD is becoming increasingly critical to maintaining

high sales levels in the industry Trends expected to continue as consumer demand

for "fresh" requires increased speed of product from manufacturer to retailer shelf

DSD presents a challenge to the industry’s SC – Extremely high turns drive a high frequency of deliveries

and merchandising services calls to individual stores– Extremely high impulse buying makes forecasting difficult– Large number of invoices and other in-store transactions

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Why Direct Store Delivery? Manage and maintain store shelf inventory Interface with store mgt & consumers multiple

times/week Move product to market faster Lower costs for yourself and your retail partners Provide a competitive speed edge against the

retailer’s own logistics services Facilitate more effective promotions Provide better package integrity & product safety Effectively compete against growing % of store

brands Sense & react faster to customer demand changes

“The Last Mile is the Hardest”

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Direct Store Delivery for QAD Customers

Robert Hochberg, President and CEO, NCS

Numeric Computer Systems, Inc

www.ncssuite.comYour Solution Partner For In-

StoreDirect Store Delivery

Execution

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Company History

NCS - established more than 25 years ago as a total software solution provider for the Fast Moving Consumer Goods (FMCG).

Headquartered in New York with additional sales, support and development locations in San Francisco, Dallas, Sydney, Jakarta, Auckland, & San Juan

Primary business has been to automate the ‘Order to Cash’ Sales & Distribution cycle for FMCG firms including front end integration to back office ERP.

Successfully services a diverse group of FMCG companies.

Dair

y

Ice C

ream

Bakery

Snack F

ood

Cheese

Juic

e

Tobacco

Pet

Food

Coff

ee

Ice

Bevera

ge

Confe

cte

ry

Oth

er

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Source: AMR Research powered by ChangeWave

5%

10%

10%

17%

28%

36%

50%

3%

10%

13%

45%

26%

58%

26%

0% 20% 40% 60%

Energy Efficient IT

Increased Flexibility

Regulatory Compliance

Security

Aligning IT with theBusiness

InfrastructureImprovements/Upgrades

Cost Control

CP Mfg (N=31)

Total U.S. (N=532)

Driving Principles for I/T Budget Spending, November 2009

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eRMS Enables Quicker Information Movement

36%

27%

14%

9%

5%

5%

5%

Make information more timely and available forbetter and faster decision-making

Improve sales productivity

Improve return on marketing spend

To reduce the cost of selling /cost to serve

Improve internal collaboration between functions

Regulatory compliance

To reduce time spent on administrative processes

N=22

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FMCG Firms Face Unique Challenges

Unique business dynamics

High volume of low value transactions Extraordinary product cycle velocity Challenging profit margins Direct store delivery (DSD) Cash collections & returnables policies Multiple points of inventory control Varied and fragmented sales channels Promotion flexibility and tracking Route Accounting & Control Container Management

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What kinds of companies are FMGC?

Baked Goods (Breads, Cakes) Beverage (Beer, Juice, Liquor, Soda, Water) Coffee Dairy (Cheese, Fluid Milk, Ice Cream) Food Service Meats (Beef, Chicken, Pork) Pet Food Tobacco Snack (Confectionary, Salty Snacks) Greeting Cards Automotive Aftermarket Flowers Welding Supplies Other

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Examples of NCS Successes Integrated to UPS MobileCast for real time delivery fleet

communications for Northeast US based full service dairy manufacturer

Integrated e-Commerce applications for a leading US dairy manufacturer

Shortened order cycle time for an Indonesian division of a US based manufacturer

Assisted with centralizing business functions for a NE US based dairy and ice cream company.

Enabled GPS tracking of hazardous materials for a NE US based Gas and Welding supplier.

Streamlined intercompany transfers for one of the largest independent dairy and juice manufacturers with distribution throughout eastern United States.

Facilitated control of independent operator activities for a leading US based manufacturer of cakes, cookies, donuts, breads English muffins.

Enabled scan based trading for US leading natural health beverage company.

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NCS Customer Success Story

Customer Background: – Customer is a full line dairy and food distributor with 100 trucks on the

road each day– Wanted to track drivers real time with GPS coordinates– Wanted do to full Route Accounting – This solution needed two devices and two data plans and duplicated

work– Needed to use both systems at store Level

Solution:– Went to the GPS solution provider (UPS Mobile Cast) and integrated

data to their servers using NCS advanced technology and mobility solution

Results: – The design was one system/one device, which led to reduced

hardware costs, wireless radios and labor savings while increasing productivity and accuracy at store and route level

Savings were greater than $150K annually

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NCS Customer Success Story

Customer Background: – Customer is the leading provider of premium juices in the country– Retailers were demanding a new trade arrangement that the provider

couldn’t support and new prospects were demanding a solution that they didn’t have

Solution:– The solution was to install Xpress Route which is fully Scan Based

Trading capable– eRMS Route Accounting was able to support the difference between

consignment through the cash register and a sale at back door Results:

– They were able to attract the largest retailer in Michigan with this solution and were able to keep their relationship with several chains that they would have otherwise lost

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NCS Customers by Category and Region

Sales by Category

Dairy 41%

Bakery 19%

Snack Foods 10%

Juice 8%

Beverage 6%

Confectionary 4%

Tobacco 3%

All Other 9%

Sales by Region

North America 65%

LA/PR 20%

Australia 8.5%

Asia 4.5%

NZ 2.5%

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QAD-NCS Solution Diagram

QAD

XpediumxMobility

xLink

QXtend

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NCS Solution Suite

The Solution Set has three different components: eRMS, xLink & Xpedium xMobility

eRMS

xLink

XpediumxMobility

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eRMS Route Management Solution

Route PlanningRoute Balancing

– UPS Mobile Cast– Turn by Turn Navigation

Route SettlementCash Inventory

Route OptimizationTrade AssetsContainers and CartsMerchandising SupportSurveysIn-Store Business Reviews

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Example of eRMS Efficient Routing

Optimized Routing

Route BalancingWeightCubeStopsTimeMileage

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Example of eRMS Route Settlement

Route Level Inventory

Van and Inventory Control

Cash CollectionsDriver SettlementVan Settlement

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xLink Middleware Components

Mobility Connector: Mobile Middleware DB Mobility Console: DB Extension, Doc Retrieval,

Monitoring, Scheduling Mobility Sync: Authentication, Encryption,

Security, Wireless/Wired Communications

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Xpedium xMobility

xMobility Development Suite:– Mobility Framework: Services– Mobility Designer: Report Writer, Screen Writer– Mobility Configurator: Rules, Work Flow

Xpedium Pre-Configured Applications:– xRoute, xMerchandiser, xPre-Sales, xVending

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Technology is Microsoft CentricNext Generation Back Office Technology

Multiple User Interface– Browser, Text

Platform Independent– Windows, System-I, UX/Linux

Database Independent– SQLServer, DB2, Oracle

Scalable– Stateless

Next Generation Mobile Technology Service Oriented Architecture C# .NET SQLServer CE Separation of Process and

Presentation Third Party Interfaces

– UPS Logistics MobileCast– Turn by Turn

Advanced Middleware XML Data Document Management GPS Integration Fleet Management

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Xpedium xMobility Customer Detail

Screen on a Mobile DeviceDisplays the

Customer Profile details:– Customer Messages– Fully Custom Detail

Fields– Delivery Sequence– Unpaid Invoices– Directions– Inventory– History– No Call Reason

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Xpedium xMobility Example Supports Multiple Order

Types:– Pre Sold Deliveries– Sell Through Orders– Build Up Orders– Forecast Orders– Peddle Orders

Detail View– Customer Price– Product Details– Line Discount

Support for:– Merchandising– Auditing– Surveys– Customer Business

Reviews

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QAD Interface

Cust OrderLoad

ItemCust

ItemPriceProm

PriceProm

OrderLoad

QAD

eRMS

QAD Invoicing

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NCS is a perfectly matched solution partner for QAD

Experienced Professional StaffDeep Industry ExperienceAdvanced Technology Implementation MethodologyWeb Based Tracking SystemStrong Help Desk and Customer SupportMulti-Regional Experience

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QAD’s Consumer Centric Solution

Hank Canitz, Sr. Director Marketing - QAD

QAD Proprietary

QA

D A

lig

nm

en

t to

th

e C

on

su

mer

Pro

du

cts

In

du

str

y

Complete Solution

for

Your Industry

QAD Proprietary

QAD’s Consumer Centric Solution Suite

Supplier Manufacturer Distributor Retailer Consumer

Supply

Visualization Product

Development

Lean

ManufacturingTrade Promotion

Management

DemandManagement

S&OP

PLAN

Direct StoreDelivery

CustomerCollaboration

Global DataSynchronization

AutomatedData

Collection

Vendor ManagedInventory

POS Data &Analytics

PULL

Supplier Distributor Retailer CustomerManufacturer

CustomerRelationshipManagement

BI

QAD Proprietary

38

Supply Chain Portal (SV): Supplier Quality

Closed loop supplier performance Collaboration via shared scorecards Dashboard

– Regional metrics– Service levels– Stock outs/overages

Supplier risk assessment– Non-conformance– Corrective action– Inactivate

Ability to link to non QAD systems

“Supply chain visibility is the most important application investment area for supply chain strategies“

Aberdeen Group, September 2008

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39

Supplier Quality - Dashboard

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Kanban & Process Sizing Workbenches

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QAD Business Intelligence 3.0

• Browser-based delivery in an industry-standard portal framework

• Queries, reports, dashboards and scorecards

• Fully customizable and extensible via QAD-supplied and customer-developed views.

• Provides full support for Cognos and other third-party BI tools

“Value -- for customers, shareholders and employees -- is either created, compromised or destroyed every time a decision is made inside an organization.” Aberdeen Research

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Demand Management Suite

V6.0 Demand Management Engine – (Availability September 2010)– Full update of underlying code base to support unicode requirements

– New user interface with ribbon style menus and on-the-fly filters

– Improved usability based on customer feedback including; filters & exceptions, profiles & lifecycle planning

V6.0 Collaborative Portal – (Availability Sept 2010)– Update of user interface to improve configurability and look and feel of the display

– Expanded formula and hierarchical capabilities

“QAD Demand Management has improved our forecast accuracy by 50% percent. We have seen slight

improvements in customer service, but the biggest improvement for RF industries is streamlining to get the

right stock at the right time.”

Tony MacGregor, National Operations Manager, RF Industries

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Recommended Actions

Visit the NCS BoothContact Robert or myself for more

informationSchedule an on-site discovery session to

let us help you develop a business case for a turn-key DSD solution or other consumer centric improvements.

1

2

3

Rapid value assessment

Map QAD potential solutions to business goals, strategies, tactics & processesDeeper ROI Potential Analysis

Recommendation4

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Where to go for assistance

Robert Hochberg, President and CEO– Robert.Hochberg@ncssuite.com– (631) 486-9000 x301– (917) 754-1836 (m)

Hank Canitz – Sr. Director Industry Marketing– HCC@QAD.com– 1-720-238-7439

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Thank You & Questions