Leading Global Automotive Manufacturers Embrace MMOG/LE as a Supply Chain Performance Standard

QAD Enterprise Applications and Automotive Process Maps to Help Suppliers Quickly Achieve Level-A Compliance and Simplify Implementation

SANTA BARBARA, Calif.--(BUSINESS WIRE)-- QAD Inc. (NASDAQ:QADI - News), a leading provider of enterprise software and services for global manufacturers, announced today that its QAD Enterprise Applications software, with the introduction of automotive Process Maps, will help suppliers to more quickly achieve Materials Management Operations Guidelines/Logistics Evaluation (MMOG/LE) Level-A on their assessment and simplify implementation.

MMOG/LE is already embraced globally by Ford, Chrysler, Volvo Car, Volvo Truck, Renault and PSA as part of their supplier requirements. However, with General Motors recently announcing its intention to embrace MMOG/LE and several other global OEMs planning to announce soon, it’s clear to suppliers that this assessment guideline is becoming a defacto standard. Moreover, with cautious economic recovery forecasts, automotive suppliers are under more pressure than ever to improve efficiencies to stay competitive.

“These announcements exemplify a continuing shift in automotive manufacturers’ supplier expectations,” noted Terry Onica, senior director for Automotive at QAD. “MMOG/LE compliance is increasingly becoming a condition of doing business for all suppliers, and a critical criteria for maintaining viability.”

To help proliferate and speed time to MMOG/LE supplier compliance, QAD has introduced its automotive Process Maps, based on MMOG/LE compliance requirements. QAD Automotive Process Maps enable users to navigate through graphical views of a company’s business model before drilling down into specific workflows and processes, including operational metrics, compliance checkpoints, training, work instructions, and direct access to QAD Enterprise Applications software, to facilitate better user performance and the adoption of MMOG/LE best practices.

In an industry where employee turnover has been high due to financial crisis, many auto companies have had to rebuild and retrain their staff. According to Onica, one of the leading reasons manufacturers fall short on their MMOG/LE audit is a lack of proper work instructions. “If an employee lacks the proper training and knowledge on specific work instructions and processes, delivery errors are more likely to occur,” she said. “OEMs and suppliers alike find value in our Process Maps; they provide the necessary process training and documentation needed and guide employees in following industry best practices.”

Additionally, QAD offers an MMOG/LE Review process, globally, enabling suppliers to prepare for the MMOG/LE assessment and identify potential non-compliance issues prior to a formal customer audit. QAD’s MMOG/LE Review includes an in-depth evaluation of plant processes, documentation of responses to assessment points, a gap analysis with an action plan for areas that need improvement, and a formal review of findings with senior management.

MMOG/LE was first introduced in 2002 by the Automotive Industry Action Group (AIAG), the North American automotive standards association, and its European counterpart Odette, to improve global supply chains in the area of materials management and logistics performance. QAD is the only enterprise resource planning (ERP) vendor serving as a member of the MMOG/LE standards committee and is the AIAG and Odette designated training provider in Asia Pacific, Russia, Poland, Slovenia and Czech Republic.

To help suppliers implement the required business systems and prepare for internal reviews and customer MMOG/LE audits, QAD has developed unique tools and targeted services. The QAD MMOG/LE Answer Sheet provides details on exactly how QAD Enterprise Applications can help a supplier meet each of the 206 assessment points.

To learn more about MMOG/LE compliance requirements and opportunities, visit http://www.qad.com/erp/Industries/Automotive/MMOG-LE.

About QAD

QAD is a leading provider of enterprise applications for global manufacturing companies specializing in automotive, consumer products, electronics, food and beverage, industrial and life science products. QAD applications provide critical functionality for managing manufacturing resources and operations within and beyond the enterprise, enabling global manufacturers to collaborate with their customers, suppliers and partners to make and deliver the right product, at the right cost and at the right time. For more information about QAD, telephone +1 805-566-6000, or visit the QAD web site at www.qad.com.

"QAD" is a registered trademark of QAD Inc. All other products or company names herein may be trademarks of their respective owners.

Note to Investors:

This press release contains certain forward-looking statements made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. A number of risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements. These risks include, but are not limited to, evolving demand for the company's software products and products that operate with the company's products; the company's ability to sustain license and service demand; the company's ability to leverage changes in technology; the company's ability to sustain customer renewal rates at current levels; the publication of opinions by industry and financial analysts about the company, its products and technology; the reliability of estimates of transaction and integration costs and benefits; the entry of new competitors or new offerings by existing competitors and the associated announcement of new products and technological advances by them; delays in localizing the company's products for new or existing markets; the ability to recruit and retain key personnel; delays in sales as a result of lengthy sales cycles; changes in operating expenses, pricing, timing of new product releases, the method of product distribution or product mix; timely and effective integration of newly acquired businesses; general economic conditions; exchange rate fluctuations; and, the global political environment. In addition, revenue and earnings in the enterprise resource planning (ERP) software industry are subject to fluctuations. Software license revenue, in particular, is subject to variability with a significant proportion of revenue earned in the last month of each quarter. Given the high margins associated with license revenue, modest fluctuations can have a substantial impact on net income. Investors should not use any one quarter's results as a benchmark for future performance. For a more detailed description of the risk factors associated with the company and the industries in which it operates, please refer to the company's Annual Report on Form 10-K for fiscal 2010 ended January 31, 2010.

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