Direct Store Delivery& QAD’s Consumer Centric Solution

Hank Canitz: Senior Director Vertical Solutions - QADAllen Dickason: Executive Vice President- NCS

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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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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

Latency in Sensing Customer Demand

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

SupplyVisualization Product

Development

LeanManufacturing

Trade PromotionManagement

DemandManagement

S&OP

PLAN

Direct StoreDelivery

CustomerCollaboration

Global DataSynchronization

AutomatedData

CollectionVendor Managed

InventoryPOS 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.

CustomerRelationshipManagementBI

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Product Distribution Strategies

9

Directly from Suppliers Shipments from wholesale distributors

Warehouse shipments DSD0%

5%

10%

15%

20%

25%

30%

35%

% o

f Re

spon

dent

s

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

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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 unique supply chain challenge– 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”

Direct Store Delivery for QAD CustomersAllen Dickason, Executive V/P, NCS

Numeric Computer Systems, Incwww.ncssuite.com

Your 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.

Dairy

Ice

Crea

m

Bake

ry

Snac

k Fo

od

Chee

se

Juic

e

Toba

cco

Pet F

ood

Coffe

e

Ice

Beve

rage

Conf

ecte

ry

Othe

r

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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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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 SuiteThe Solution Set has three different components:

eRMS, xLink & Xpedium xMobility

eRMS

xLink

XpediumxMobility

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eRMS Route Management SolutionRoute 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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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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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

QAD’s Consumer Centric SolutionHank Canitz, Sr. Director Vertical Solutions - QAD

QAD Proprietary

QAD’s Consumer Centric Solution Suite

Supplier Manufacturer Distributor Retailer Consumer

SupplyVisualization Product

Development

LeanManufacturing

Trade PromotionManagement

DemandManagement

S&OP

PLAN

Direct StoreDelivery

CustomerCollaboration

Global DataSynchronization

AutomatedData

CollectionVendor Managed

InventoryPOS Data &Analytics

PULL

Supplier Distributor Retailer CustomerManufacturer

CustomerRelationshipManagementBI

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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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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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Recommended ActionsVisit the NCS BoothContact Allen 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 bus goals, strategies, tactics & processes

Deeper ROI Potential Analysis

Recommendation4

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Where to go for assistance Allen Dickason, Exec. V/P– Allen.Dickason@ncssuite.com– 1-214-734-9632

Hank Canitz – Sr. Director Vertical Solutions– HCC@QAD.com– 1-720-238-7439

Thank You & Questions