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Riya Cao, Director Life Sciences, QAD Bob Herdoiza, CEO, CEBOS QAD Explore 2012 Life Sciences Compliance and Quality

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2 The following is intended to outline QADs 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 QADs products remains at the sole discretion of QAD. Safe Harbor Statement

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3 Adverse Events Compliance Overview Customer Case Studies Compliance Solutions Wrap up Q&A Agenda Compliance and Quality

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Recalls 4 Mixing of different products in the same bottle could result in consumers taking the incorrect product and receiving a higher or lower strength than intended or receiving an unintended ingredient. Recall -- Firm Press Release 1/9/2012 Compliance and Quality

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Recalls 5 Johnson & Johnson issued a massive recall Friday of over-the- counter drugs including Tylenol, Motrin and St. Joseph's aspirin because of a moldy smell that has made people sick. Jan 15, 2010 Compliance and Quality

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6 FDA Recalls Trending Up Compliance and Quality

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7 Mislabeled Inaccurate & unreadable product labels Packaging torn Capsule leakage Abnormal oder or taste Types of Quality Problems Compliance and Quality

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Industry Issues and Challenges New product development Demanding customer requirements Continuing pricing and margin pressures Global consolidation and alliances Intense shareholder pressures Compliance and Quality 8 Manufacturers Customer compliance Regulatory compliance Product quality concerns Product safety concerns

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9 Regulatory -cGMP: FDA 21 CFR Part 210 & 211 -QSR: FDA 21 CFR Part 820 -QSIT: FDAs Quality System Inspection Technique Industry standards -TS 16949 -ISO 9000 -ISO 13485 Complex Regulatory Compliance Compliance and Quality

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10 Federal Food, Drug and Cosmetic Act -"Every establishment in any state registered with the Secretary pursuant to this section shall be subject to inspection at least once in every successive two-year period thereafter." Factory Inspection Compliance and Quality

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Warning letters Recalls Seize products Cease manufacturing Cease distribution Civil penalties ($fine) Criminal Prosecution Non-Compliance Compliance and Quality

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Warning Letters Trending Up Compliance and Quality

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Adverse Events Trending up Life Sciences Compliance and Quality 13

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Production & Process Controls Equipment Cleaning Laboratory controls Testing and Releasing QC responsibility Pharma CAPA Complaint Handling Design Controls Production & Process Controls Management Responsibility Medical Device 2011 Top Inspection Observations Compliance and Quality

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Medical Device QSR Compliance and Quality 15 http://www.fda.gov/MedicalDevices/ResourcesforYou/Industry/ucm126252.htm Corrective and preventative actions Records, documents, change controls Equipment and facility controls Production and process controls Material controls Design controls Management

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Quality SystemFacilities & EquipmentMaterials ControlsProduction ControlsPackaging & LabelingLaboratory Controls Pharmaceutical cGMP Compliance and Quality

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Includes Quality Policy Quality Systems Manual Standard & Dept. Operating Procedures Work Instructions Quality Records (plans, checklists, forms) Primary Road Map to Quality System Evidence Details what and how 17 Inspection Focus Life Sciences Compliance and Quality

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18 Software company Seventeenth year Hundreds of deployments - thousands of users Currently supporting 12 languages Serve vertical markets of QAD Registered to ISO 9001:2008 CEBOS Overview Compliance and Quality

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19 Comply with quality standards (ISO, TS, AS, FDA, etc.) Automate required business processes Integrate related quality processes and QAD CEBOS Overview Compliance and Quality

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CEBOS MQ1 Compliance and Quality 20

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21 As manufacturers start to manage the quality of the product across the value chain, enterprise-wide adoption of QMS will provide a common platform to interoperate with other enterprise applications, share best practices, and increase responsiveness in case of an adverse event. --Aberdeen June 2011 Closed Loop Quality Management Best in class manufacturers consistently demonstrate: -Solid visibility and control across the organization -Minimal scrap, rework, and returned materials -Good communication across the organization -Standardized processes -Operational metrics tied to financial metrics Why Important ? Compliance and Quality

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22 Document management Statistical process control Dashboards Corrective/preventive actions/non- conformances Advanced product quality planning including FMEA Enabling Solutions Compliance and Quality

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23 Enables higher customer satisfaction Reduces product planning time Reduces time to market Reduces non-conformances Driving Results Compliance and Quality

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24 Manufacturer of plastic films International company with over 4,000 employees spanning 30 manufacturing and sales locations globally Los Angeles site is one of the facilities that manufactures film for the medical industry Some applications of our film go into blood bags, IV, dialysis, nutritional, cardiovascular, biotech, collection and urological drain bags Customer Case Study - American RENOLIT Compliance and Quality

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25 Stand alone non-integrated systems Excel spreadsheets primary automation tool Unable to view trends across the organization Correct information was often difficult to locate User and IT management high Inconsistent processes / not standardized Customer Case Study - Business Problem Compliance and Quality

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26 Document control Corrective/preventive action (CAPA) management Employee training tracking Audit management Project management Shop floor inspection management APQP documentation management Customer Case Study - Specific Areas Targeted Compliance and Quality

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27 CEBOS MQ1 software Modules -Documents -Problem solver -Audits -Human resources -Data collection -Work manager -APQP -E-sync Integration from QAD to MQ1 Customer Case Study - Solution Compliance and Quality

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28 Central data repository for all locations Improved data for business decisions Analysis capabilities across the organization Consistent / standardized processes Streamlined processes Flexible reporting and process configuration Customer Case Study - Results Compliance and Quality

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29 QAD & QMS Integration Framework Compliance and Quality Best-in-Class manufacturers are creating closed loop quality management by implementing QMS at an enterprise-wide level and establishing realtime interoperability with PLM, MOM, and SCM technology. - Aberdeen June 2011 Closed Loop Quality Management

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30 ALT -QAD MQ1 Customers Suppliers Products -Controlled Documents Part Master (e.g., Dwgs, SOPs, OI, etc.) Endologix (Awaiting approval) -Standard -Receiving Incoming Inspection CAPA -Build In-process Inspection CAPA QAD / Quality Management Integration Compliance and Quality

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31 Why QMS? Compliance and Quality

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Corrective and Preventative Actions Records, Documents, Change Controls Equipment and Facility Controls Production and Process Controls Material Controls Design Controls Meeting FDA QS Requirements Compliance and Quality 32 http://www.fda.gov/MedicalDevices/ResourcesforYou/Industry/ucm126252.htm EAMQAD EA QMS PLM QAD EA QMS QAD EA Management

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Quality SystemFacilities & EquipmentMaterials ControlsProduction ControlsPackaging & LabelingLaboratory Controls Pharmaceutical cGMP Compliance and Quality QMS QAD EA QMS

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34 Ask your account manager to arrange an Integration QScan Stop by the CEBOS booth in the EXPO center for a demo Review and download information on the QAD Life Sciences website http://www.qad.com/erp/Life-Sciences/ http://www.qad.com/erp/Life-Sciences/ Next Steps Compliance and Quality

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35 Questions & Answers Compliance and Quality

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36 Riya Cao: zrc@qad.comzrc@qad.com Bob Herdoiza: bob@cebos.combob@cebos.com Questions & Answers Compliance and Quality

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37 Compliance and Quality www.qad.com QAD Inc 2012