Johnson Controls Advances Just-in-Time Sequencing with QAD; QAD JIT Sequencing Solution Helps Leading Automotive Supplier Meet OEM Demand for Customized Components Delivered in Sequence

CARPINTERIA, Calif.--May 1, 20050, 2005--QAD Inc. , a leading provider of enterprise applications for global manufacturers, today announced that Johnson Controls Inc. is deploying QAD JIT Sequencing software in Europe to support its just-in-time (JIT) sequencing production initiative. A QAD customer since 1991, Johnson Controls' planned implementation of QAD JIT Sequencing technology in 50 sites across Europe builds on its commitment to the QAD platform as one of its corporate enterprise resource planning (ERP) standards. The automotive supplier anticipates that the solution will drive better inventory velocity and supply chain collaboration, improve responsiveness to customers and reduce the cost of operations.

With 2004 sales totaling $26.5 billion, Johnson Controls is the world's largest supplier of integrated seating and interior systems for the automotive industry. The company's Automotive Group has more than 275 locations in 35 countries worldwide. Automotive original equipment manufacturers (OEMs) face ever-increasing consumer demand for customization, which puts pressure on Johnson Controls to respond quickly to OEMs without carrying high levels of inventory safety stock. The supplier's strategies for addressing this challenge include sequenced production, an advanced manufacturing technique for production and delivery of vehicle components in exact sequence corresponding to vehicles' progress on the OEM assembly line. Johnson Controls sought seamless integration between JIT sequencing software and planning and execution applications, and turned to QAD to develop a solution combining the automotive supplier's experience with QAD's expertise in cost-effective software.

"Low total cost of ownership and extensive automotive industry-specific functionality prompted Johnson Controls to standardize core ERP functions on QAD MFG/PRO, so QAD was a logical partner for development of software capabilities for JIT production," said Susan Kampe, vice president and general manager of IT, Johnson Controls Automotive Group.

As a vehicle travels down the OEM's assembly line, demand signals are triggered at specific points and the QAD JIT Sequencing module receives and processes message data, including sequence number, vehicle identification number and product configuration information about the vehicle, directly to the supplier's planning and execution systems. This data allows Johnson Controls to produce parts and deliver assemblies in sequence for each car. The QAD JIT Sequencing online planning engine integrates OEM demand with the company's suppliers' schedules and shows stock activity in near real time. The module also helps JCI anticipate material shortages and notifies suppliers of demand changes, enabling JCI to align inventory with demand, reduce expediting costs for rush orders and prevent overstocking of raw materials.

"QAD JIT Sequencing reflects Johnson Controls' expertise in JIT sequencing initiatives, and QAD's 25-year legacy of combining the best thinking in manufacturing theory with leading technology, for solutions that the entire supply chain can embrace," said Pamela Lopker, QAD president and founder. "Deployed in concert with our flagship ERP solution, the module brings the benefits of advanced production principles to even the lower tiers of the supply chain, and delivers on our vision for reducing typical supply chain response time from six weeks to six hours."

QAD and Johnson Controls announced their partnership to develop a JIT sequencing module for QAD MFG/PRO in 2003, including incorporation of the automotive supplier's software components comprising more than 10 years of focus on this particular manufacturing principle.

About QAD

QAD is a leading provider of enterprise applications for global manufacturing companies. 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. Manufacturers of automotive, consumer products, electronics, food and beverage, industrial and medical products use QAD applications at approximately 5,300 licensed sites in more than 90 countries and in as many as 27 languages. For more information about QAD, telephone 805-684-6614, 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.

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