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Automotive Vertical UpdateTom Roberts, QADTerry Onica, QAD
Safe HarborAutomotive Vertical Update
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This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to significant risks and uncertainties. Actual results and events may differ materially from those set forth in these forward-looking statements. These risks and uncertainties are detailed in QAD’s SEC filings, including its latest Annual Report on Form 10-K and in particular the section titled “Risk Factors” therein and other periodic reports subsequently filed by QAD with the Securities and Exchange Commission.
This presentation contains references to certain financial measures that have been adjusted to exclude certain expenses and other specified items. These financial measures differ from comparable measures calculated and presented in accordance with accountingprinciples generally accepted in the United States of America (“GAAP”) in that they exclude unusual or non-recurring charges, losses, credits or gains. Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is important to a proper understanding of the Company’s results. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.
This presentation is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD.
QAD undertakes no obligation to update forward-looking statements.
IntroductionAutomotive Vertical Update
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Tom RobertsVP- Automotive
QAD
Terry OnicaDirector, Automotive
QAD
AgendaAutomotive Vertical Update
• Driving Disruptive Innovation- Where Did I Go Wrong? - Top Disruptors
• The Problem with Disparate Systems- Multiple ERPs- Integration
• The Case for Adaptive ERP
• Summary: Own the Disruption
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Driving Disruptive InnovationAutomotive Vertical Update
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Where Did I Go Wrong?Automotive Vertical Update
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Where Did I Go Wrong?Automotive Vertical Update
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The All Important “S” – Existing or Exiting?Automotive Vertical Update
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By 2027, the average company lifespan on
the S&P 500 will be less than 12 years
Will Your Company Be Here in 10 Years?Automotive Vertical Update
“My company is ready for disruption”
“We will deal with disruption when it gets here”
“We will follow the lead of the customer”
“We don’t have a plan”
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We Will Not Go QuietlyAutomotive Vertical Update
• Exploit Advanced Technology
• Squeeze Out Waste and Cost
• Execute M&A Initiatives with Speed and Intent
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Top DisruptorsAutomotive Vertical Update
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MAKE TO ORDER AT SCALE
DIGITAL TRANSFORMATIONOF MANUFACTURING
ANYTHING AS A SERVICE (XAAS)
Additive Manufacturing – The World is Changing
Airbus
Adidas
US Navy
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Automotive Vertical Update
Additive Manufacturing Brings Unique OpportunityAutomotive Vertical Update
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Expect the lines between manufacturing verticals to blur
Imagine the same printer printing a door panel, then a seat, then a vehicle front grille – this is not far away, and it will blur the lines between manufacturing
company divisions and change the manufacturing plant footprint
Design/Tech Companies vs. Manufacturing CompaniesAutomotive Vertical Update
Follow the money…• Apple does not manufacture mobile phones – FoxConn• Cruise Automation is worth more than the rest
of GM combined• Ford and Adidas are working with Carbon, Inc
on 3D Printing• Companies want the ongoing subscription revenue
from XaaS
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Will there be a larger movement toward “Build where consumed?”Will Tier Ones Exist or Exit? The all important “S”All companies say they are tech companies, but…
XaaS3D printed HVAC lever arm for an
older model Ford Focus
Optimized, Standardized and Put on RailsAutomotive Vertical Update
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Could you manage those high frequency production changes enabled by additive manufacturing in your current process scenario? Manual? Excel? Direct Integration?
BOM / Routings / Bill of Process
8 ERPs
PLM
Best Practice in AutomotiveBOM Integration - PLM to ERP 8x Cost
What about potentially hundreds of dealers that now not only order parts, but build them as well?
Aftermarket?
Auto parts
Dealers?
The Problem with Disparate SystemsAutomotive Vertical Update
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Multiple ERPs are a Barrier to Absorbing DisruptionAutomotive Vertical Update
Today’s companies have
• Significant levels of disparate processes and data
• Siloed manufacturing divisions• Widening manufacturing skills gap • High frequency of on-premise applications• Expensive, aging, slowly deployed
physical IT assets
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HOWDO YOU
CONSOLIDATE
?
CPO
CommodityDirector - Indirect
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Operational Director
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Operational Director
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
NA
How Did We Get Here? Multiple ERPs…Automotive Vertical Update
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EU
EU2
AP
Company A
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2
3
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Company A merges with Company B, with immediate blind task reduction in overall spend and FTEs without a planned process roadmap.
40% miss synergy targets…
CPO
CommodityDirector - Indirect
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Operational Director
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Operational Director
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Company B
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7
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5
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NA
EU
AP
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Single ERP Processes and Shared Services Is the Key
FOR EXAMPLE
Companies that are supported by flexible architecture and a single ERP capture a broader range of synergies at a faster pace - McKinsey
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Ask three people to log into four different websites and order the
same 10 productsLog into a website and
order 10 items
10 or
• Automotive Vertical Update
Disparate Systems Drive Cost in Industry 4.0Automotive Vertical Update
Robotic Process Automation (RPA) automates business processes through the linking of screens and systems through scripting and screen recordings.
Each unique system, process, and data set requires its own scripting activity
ERP 1ERP 2ERP 3ERP 4
Automated Operations Deck
RPA Script must be created 4 separate times for each ERP –multiplying cost and
time by 4
A single ERP strategy only requires a single point of change to
introduce innovation
RPA
Automated Operations Deck
Operations Deck – Machine Up Time, Scrap Postings, Budget to Actual, Spend Aggregation, Sales, AR/AP, DSO, etc.
Its Not Just Additive Manufacturing and RPAAutomotive Vertical Update
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ECC 6.0 EB2
EE 2016
EE 2016
ECC 6.0 EB2
EE 2016
EE 2016
ECC 6.0 EB2 Fujitsu
EE 2016
ECC 6.0 EB2 Fujitsu
EE 2016
ECC 6.0 EB2 Fujitsu
QAD 9.0
4.7 EB2 BaanQAD 9.0
4.7 EB2Oracle
/1CQAD 9.0
ACME Inc. 28 sites globally
1 2 3
4
5
7
8
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Each Process, Code set, and Unique Master Data Element Requires Investment and Integration of EACH
I4.0 Technology
ACME Corp Legacy System LandscapeAutomotive Vertical Update
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ACME Application ListAutomotive Vertical Update
• ERP• Sales / CRM• Shop Floor• Sequencing• EDI • PLM/PDM• Design CAD/CATIA• Financial Consolidation• Collaboration/Office Tools• Data Storage• Human Capital Management• Recruiting• Performance Management• Learning Management• Time and Attendance• Scheduling
• PPM• Process Flow Software• Business Intelligence• Asset Management• Travel and Expense• Enterprise Integration• Testing Management• Quality Management• Trade Management • Transportation Management• Information Security• Badge Readers• Volume Forecasting• E-Procurement• Virtualized Desktop• Plant Maintenance
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What Acme Really Looks LikeAutomotive Vertical Update
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1 2 3
5 76
4
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Scenarios
• Organization and Headcount
• Customer Changes
• Adapting I4.0 Technologies
NONE OF THIS WILL SHOW UP IN A CURSORY BUSINESS CASE
What projects have you executed in the last 3-5 years?
The Case for Adaptive ERPAutomotive Vertical Update
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The Rise of Cloud and 5GAutomotive Industry Update
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• Manufacturing Plants may no longer need physical network gear or servers
• May reduce or remove (?) full time plant IT employees
• Companies that have moved to cloud operations and SD-WAN will be more easily able to benefit from the technology
• Companies that can evolve their system landscape with speed in the next 5 years will be disruptors
• 5G will clearly drive capital reductions and increased EBITDA
“By placing sensors that use 5G directly on the components or tools, Ericsson was able to detect faults in real time and reduce the error rate to 15%. [from 25%] The average production cost of a blade was reduced by 3,600 EUR ($4,075).” CNN
But, What If…?Automotive Vertical Update
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QAD is Driving Disruptive InnovationAutomotive Vertical Update
• Speed to Benefit- Easy On Boarding Methodology- Business Process Workbook tools- Augmented Resources- Proven Speed
• Purpose Built- Automotive Best Practices (MMOG/LE)- Adaptability
• Commitment to Customer
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QAD Adaptive ERPAutomotive Vertical Update
• Globally Enabled, Financially Localized ERP System as a service
• No Data Centers/Servers needed for ERP• No Aging Versions and Maintenance• No DBAs - Oracle/SQLServer/Progress/etc.• No Technical Designers/Coders• No Release Managers• No Functional Analysts, Configurators• Fewer Supplier Relationships and Contracts• Advantages of Economy of Scale• Simplified payment/commerce
connections• New technology releases proliferate
quickly and completely
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Channel Islands UX
FUTURE
Data Lake
QAD Cloud ERP 2016
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2016
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2016
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2016
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
QAD Cloud ERP 2019
Summary: Own the DisruptionAutomotive Vertical Update
The Best Practices for Absorbing Technological Change• Single Code set/Process Template/Master Data• High System Adaptability • Cloud• Embedded Industry 4.0 technologies • Strategic Platform for M&A• Swiftly acting today to absorb the change of tomorrow
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Companies moving now to transform their operations have a massive competitive and cost advantage over the unprepared
Next StepsAutomotive Vertical Update
• Visit the Automotive page of QAD.com• Attend Related Explore Sessions• Visit the Demo Center
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Highlighted SessionsAutomotive Vertical Update
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A Hands-On Digital Transformation Journey
Raman Mehta, VisteonTuesday, 3:00 PM-4:00 PMRhythms 2/3
ERP Moves to Real Time via Integrated
Production Execution
Glenn GraneyTuesday, 4:15 PM-5:15 PMWaterbury Ballroom
Yanfeng’sImplementation of QAD
Automation Solutions and Integration
Lucian Manolache, YanfengAutomotive Interiors &Waseemuddin Safiri, QADWed, 3:00 PM-4:00 PM, Rhythms 2/3
Highlighted SessionsAutomotive Vertical Update
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Drive Customer Satisfaction and
Profitability through the Customer Lifecycle
Guthrie, Andrews, Fitchett, QADWednesday, 3:00 PM-4:00 PMWaterbury Ballroom
Yanfeng’s Rapid Upgrade to EE and
Move to QAD Cloud
Mike Silletti, YanfengAutomotive Interiors Wednesday 4:15 PM-5:15 pmRhythms 2/3
Procure to Pay - A Day in the Life
Marta Losada and Eladi Minguez, QADThursday, 9:45 AM-10:45 AMWaterbury Ballroom
Question and AnswerAutomotive Vertical Update
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Tom RobertsVP- Automotive
QAD
Terry OnicaDirector, Automotive
QAD
Contact InformationAutomotive Vertical Update
• Tom Roberts, [email protected]• Terry Onica, [email protected]
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