- 1 -

Revised: July 2004

Standard Business Process Document

The purpose of this document is to suggest a standard business process for an entity (manufacturing and/or service organization) and its employee to follow the defined process (workflow). This genetic standard process document describes a typical work process, and it can be serves as a template for an entity’s process documentation. It provides a common format and language that enable an entity to convey the essence of their businesses efficiently and effectively. One of the ways to assuring the entity’s output quality is to document the work process in a standard form. A revision controlled and actively used standard business process document will be the base for continuous improvement of the business process. The best way to customize this genetic work process is to have an experienced worker to modify this template to describe current process. The objective is to document each process and sub-process as it is developed or as it is practiced, then verify that the steps are written correctly by a person who is not familiar with the work process tries to follow it through the process. Each process document should have a Process Owner and Process Approver. The Process Owner is responsible for maintain and improve the process. Each time the process is changed or improved in any significant way, the Process Owner should update the process document and submit it for approval. When the Process Approver approves the updated process document, the document should be controlled with revision information.

Standard business process Template

- 2 -

Standard Business Process Document

Business Planning Process

Revised: July 8, 2004

- 3 -

1.1 Opportunity assessment: “Where are we?”

Objective is to assess and understand the current business environment. Collect enough information about the market, competitors, customers and channels of distribution to analyze current situation. This assessed information should drive the decision of the entity’s strategic direction and business objectives.

1.1.1 Market environment Conduct extensive market research (in-bound marketing) and continuous market scanning to analyze the market environment and the trends. Tools, such as Michael Porter’s Five Forces, can be used to evaluate the market attractiveness. Create market model to understand the value delivery chain of this market and dynamics of the industry. Define and prioritize the segments based on market attractiveness and the needs of the market. 1.1.2 Competitive environment Understand the competitor’s intention regarding the target market segment and strengths and weaknesses of their position, products and services. 1.1.3 Customers in this market Identify who are the customers in this market. Understand the business challenges facing these customers. Describe the necessary products and/or services that customers are seeking.

1.2 Setting the goals: “Where are we going?”

Objective is to decide the entity’s long term core value and mid range business objectives that adapt to the changing world.

1.2.1 Strategic direction Describe what kind of entity it wants to be. The entity’s vision, purpose of existence and value proposition should be remaining fixed over a long period. 1.2.2 Business objectives Describe a specific “mission” and a series of milestone for the entity to achieve in a foreseeable future. The mission describes an achievable goal or finish line to work toward. The mission should be reviewed periodically and endlessly adapting to changing world.

1.3 Implementation plan: “How are we going to get there?”

Objective is to create the plans to accomplishing entity’s mission and achieve the goals. Both, changes in business environment and business objectives are to be considered in making the implementation plan.

2.3.1 Strategies (to achieve the business objectives)

- 4 -

It is a strategic response to the ideal customer solution. Translate user’s and customer’s needs into a specific set of products and services to be provided (from customer’s point of view). Describe “how” the set of products and services are to be implemented. 2.3.2 Resource requirement Analyze resource requirement, such as financial implication, to carryout the strategies. 2.3.3 Contingency Scenarios that could affect entity’s ability meet the goals. Describe potential problems to accomplish the mission and/or achieve the goals. Explain the contingency plan to deal with potential risks and opportunities, including competitor’s move that affect the plan. 2.3.4 Interdependencies (with business partners) Describe the critical dependencies to deliver the solutions. Explicitly states the dependencies on partners in value delivery system that are necessary for the plan to be successful. 2.3.5 Action plan Set target performance measure, assign an owner and due date for each action item.

1.4 Deployment

Objective is to implement the plan, monitor the progress against the plan and take corrective action if required.

1.4.1 Do, implant the plan Communicate the plan to stake holders to initiate the plan deployment. 1.4.2 Check, the progress against the plan The entity manager is responsible for conducting the review of the plan implementation by checking performance result periodically. Stay the course if performance results are on target. 1.4.3 Act, to improve Do analysis of deviation from the plan if performance results missed the target. Then, take corrective action to get back on track.

- 5 -

Standard Business Process Document

Product Development Process

Revised: July 8, 2004

- 6 -

2.1 Investigation

Objective is to investigate technology feasibility to meet the market requirement and solidify the product definition. Do analysis of preliminary ROI (return on the investment) to convince management team for fund such project based on the technical feasibility and market viability.

2.1.1 Market requirement Marketing people are responsible for extensive market research to identify the need of such product in the market. Proposed product idea is compared to similar competitive solution already exist and potential available in the market. Product definition is completed based on input from target users. 2.1.2 Technical feasibility R&D is responsible for evaluating all technical alternatives and develops feasibility of technology to be implemented. Product costing model and product development ROI are evaluated.

2.2 Development

Objective is to implement the design to meet market requirement.

2.2.1 Team formation Assemble and fund a product development team including R&D, marketing, manufacturing and QA people. 2.2.2 Project schedule Project manager establishes the overall project plan, definition, resource requirements and detail schedule. Project manager publishes weekly project progress to management team. 2.2.3 Product ERS (external reference specification) review Project manager publishes finalizing ERS and reviewed by representatives from other functions such as manufacturing, marketing, etc.

2.2.4 Prototyping Hardware is assembled and firmware (and software) is debugged to prove the product concept does conform to market requirement. 2.2.5 Manufacturability and serviceability review Preliminary product design concept is reviewed by manufacturing engineer and service support engineer to verify manufacturability and serviceability are incorporated in the design. 2.2.6 Product design review Project manager prepares final design document. Both manufacturing and marketing departments will initiate their document development based on

- 7 -

this design document. The design document includes mechanical drawings, schematic circuits, theory of operation, material list, firmware (software) source code, etc.

2.3 Qualification

Objective is to prove that the developed product meets market requirement and conform to manufacturing and environmental specifications.

2.3.1 Environmental and strife test Project manager is responsible for the proof of conformance to environment specification and product reliability target. 2.3.2 Alpha & Beta-site performance review User input is taken in consideration to finalize the design of the product. 2.3.3 Design freeze No more changes to software code, hardware drawing and material list.

2.4 Production release

Objective is to commence volume production by manufacturing department.

2.4.1 Final spec, drawing and material list Manufacturing engineer takes control of product documents, including drawings, material list and firmware (software) code. Any changes will go through the ECO (Engineering Change Order) process. 2.4.2 Manufacturability proof Manufacturing engineer verify that they are capable of producing the product in volume. Communicate manufacturing capacity plan to management team. 2.4.3 Final costing Cost accounting (finance) determining production cost of the product based on manufacturing capacity plan.

2.5 Market release

Objective is to accept order from customer and commence volume shipment.

2.5.1 NPI to market Product marketing commences the product introduction to target market and prepares product promotional collaterals. 2.5.2 Training Product support leads program to provide user training and development of training materials.

- 8 -

Standard Business Process Document

Order fulfillment Process

Revised: July 8, 2004

- 9 -

3.1 Production Planning

Objective is to plan the production quantity and timing based on the anticipated demand. Demand Planning is a bi-weekly event initiated and coordinated by the supply chain manager.

3.1.1 Collect Sales Orders The Demand Planner collects all sales orders. Verify with Sales Manager, Marketing and Engineering to account for any orders that did not make it into the normal systems. 3.1.2 Collect Sales Forecasts The Demand Planner receives sales forecast from the Sales Managers for capacity planning and for obtaining critical or long lead-time components.

3.1.3 Create the Build Plan Knowing all of the needs and constraints, the Demand Planner creates a Build Plan of record for approval by the Supply Chain Manager. 3.1.6 Communicate the Plan Upon approval, this plan is communicated to the appropriate people in the Purchasing, Scheduling and Logistics departments.

3.2 Purchasing

Objective is to acquire direct material for manufacturing of products. Most cases, it is done automatically with preferred vendors connected via an EDI interface to the entity’s MRP (manufacturing resource planning) system.

3.2.1 Enter the Build Plan Demand Planner enters information into the MRP System (or a manual system) based on the build plan. 3.2.2 Explode out the Component Orders Run Explode on the MRP system (or parse manually) to list the individual equipment, parts and components needed for the Build Plan. 3.2.3 Analyze the needs Compare with the parts already in inventory or in the pipeline to find the new needs. Combine the needs for like parts into unified purchase orders. Check to see if we have preferred or qualified vendors for each order. 3.2.4 Place Orders Get a quote from the Qualified Vendor and look for his terms and lead-time quote. If the Vendor’s terms and lead-time are acceptable, place the order.

- 10 -

3.2.5 Notify Other Departments Upon the vendor’s acceptance and acknowledgement of the order, the Purchasing notifies the Scheduler of the particulars and the Logistics to prepare to receive and inspect the order, or to notify the end customer if it is a direct shipment.

3.2.6 Find a New Supplier If no qualified vendor is currently available (due to obsolescence, vendor insolvency, etc.), then qualify a new source of those components. For critical or key components, Purchasing is responsible for finding the right strategic supplier. For off-the-shelf or commodity parts or equipment, at least three suppliers should be studied. 3.2.7 Send RFQ to new Suppliers If only one supplier can be found, then a justification must be written to management of why there is a single source. For multiple suppliers, decision criteria should be written in advance and approved by management. The entity’s Standards of Business Conduct must be strictly followed when reviewing and selecting suppliers.

3.3 Scheduling

Objective is schedule production run to meet the product delivery demand. The build plan triggers the Master Scheduler to plan any entity’s manufacturing required staging or kitting of component and equipment and shipment.

3.3.1 Receive Customer Orders and Build Plan The Scheduler carefully reviews the customer orders and the build plan and points-out any discrepancies to the Demand Planner. 3.3.2 Review BOM The Scheduler reviews the BOM (bills of material) for the build orders and the acknowledged shipping/receive dates for the incoming parts and components to build customer orders, along with the required customer delivery dates. 3.3.3 Schedule and Plan Deliveries The Scheduler works with entity’s manufacturing (or contract manufacturing) to schedule the needed builds, and with Logistics to collect and stage or kit the parts for each order. 3.3.4 Launch the Build Plan If the plan meets customer commit dates and terms, the scheduler tells the manufacturers and Logistics to proceed with the builds and shipments.

- 11 -

3.4 Production

Objective is to produce quality (without any defects) product in most efficient (cost and time) method.

3.4.1 Receive Materials When all material is received at the staging consolidation location, Logistics inspects the material arranges for the material to be consolidated into “System” as ordered by the customer. 3.4.2 Stage and Kit the Order Per the purchase order and build instructions, collect, assemble and test the product to meet the specification. 3.4.3 Monitor the Process During the build, the Scheduler monitors the build process for any delays or deviations.

3.5 Shipping

Objective is to ship the product to correct customer site with appropriate shipping method on time.

3.5.1 Receive Shipment Orders Logistics receives instructions from the Scheduler to ship specified orders to specified customer on specified dates. Logistics is responsible to get the product to the customer site no damage. 3.5.2 Shipping Method Logistics determines the most appropriate method of shipping based on products size and weight, as well as the urgency of getting the material to its destination. 3.5.3 Prepare Invoices and Packing List Logistics prepares commercial invoices and packing lists for the shipment. Logistics reviews customer P.O., letter of credit, and other documents to ensure commercial invoice and packing lists contain all required information and ship requirements. 3.5.4 Arrange and Schedule Shipment Logistics schedules the pickup and delivery of the package by the chosen carrier.

3.5.5 Notify Customer of Shipment Logistics notifies the customer of the delivery destination, expected time of arrival, and any special equipment or environmental constraint needed to receive the package.

- 12 -

Standard Business Process Document

Sales Process

Revised: July 8, 2004

- 13 -

4.1 Market scanning

Objective is to generate sales leads. Market scanning is continuous effort led by sales and marketing.

4.1.1 Leads generation Sales generate leads via marketing information, cold call, account contact information, etc. 4.1.2 Opportunity assessment reporting Sales manager reports sales opportunity weekly to management staff and marketing department.

4.2 Identify the customer

Objective is to create a sales funnel.

4.2.1 Contacting the customer Account manager identifies the customers who have interest in the products and solutions. 4.2.2 Understanding the customer needs Account manager explores and analyze the customer’s needs (with help of application engineers, if necessary). The analysis of this information is used to formulate sales strategy for that customer.

4.2.3 Propose our solution Account manager (with collaboration of marketing and application) to formulate sales strategy and presents the sales proposal. 4.2.4 Sales funnel reporting Sales manager reports the weekly sales funnel to marketing, manufacturing and management staff. 4.2.5 Customer visit reporting Account manager documents and report customer visit results his/her Sales manager.

4.3 Qualify the opportunity

Objective is to increase accuracy of sales forecast. Manufacturing department uses this information for production planning purpose.

4.3.1 Verify sales probability Account manager evaluates customer’s funding situation, competitor’s move, the product fits and purchase timing to analyze the probability of the customer to place the order.

- 14 -

4.3.2 Generate quotation Account manager oversee that quotation is delivered on-time and accuracy of the quotation to meet customer’s needs. 4.3.3 Sales forecast reporting Sales manager reports sales forecast on weekly basis. The sales forecast is used by manufacturing for production planning and scheduling.

4.4 Closing the deal

Objective is to get purchase order that we can accommodate.

4.4.1 Receive customer’s purchase order Account manager verifies the purchase order is received and oversee that information is properly communicate to manufacturing. The purchase order can be in any form, as long as the entity can send invoice to the customer against that purchase order. 4.4.2 Acknowledging the purchase order Scheduler incorporates the customer order in the plan. Account manager “thank” customer for the purchase order and verify that customer is informed of scheduled ship date. 4.4.3 Order cancellation Account manager communicates to the customer that in the event of order cancellation, restocking charge and cancellation penalty will be invoiced to customer based on purchase agreement.

4.5 Tracking the delivery

Objective is to verify that customer receive what he expects. Account manager is responsible that his/her customer is well informed of situation.

4.5.1 Notify ship date Logistics receives instructions from the Scheduler to ship. Logistics notifies the customer (ship to) with the delivery destination, expected time of arrival. 4.5.2 Invoicing Logistics prepares commercial invoices and packing lists for the shipment.

4.6 User support

Objective is to ensure that customer is happy with the purchase and customer receives full value of the product, service and solutions.

4.6.1 User training Account manager verifies that customer is equipped to utilize the products and solutions to full extend. Technical support provides the training for fee (or free) if necessary.

- 15 -

4.6.2 Escalation management Any unsatisfied customer events, such as a problem with the product or an unsatisfactory user experience should be escalated to management staff in timely. Escalation can be managed by Account manager, technical support and/or application engineer, whoever is most familiar with the situation. 4.6.3 Voice of customer reporting Sales manager reports the voice of customer to management team at monthly meeting. The intent is to accommodate customer’s voice in future planning to create loyal customer base.

- 16 -

Appendix 1-1