QAD Introduces Just-In-Time Sequencing Solution; QAD JIT Sequencing Helps Manufacturers Synchronize Production with Customer Demand

CARPINTERIA, Calif.--May 1, 20050, 2005--QAD Inc. , a leading provider of enterprise applications for global manufacturers, today announced the availability of its new QAD JIT Sequencing solution, designed to address the sequenced production requirements of the automotive industry. In collaboration with Johnson Controls Inc., a leading automotive supplier, QAD has developed software to reflect real-world best practices for automotive parts suppliers working just-in-time (JIT) to supply product to the original equipment manufacturer's (OEM) production line. QAD JIT Sequencing works with existing enterprise resource planning (ERP) systems and provides flexible, user-defined, rules-based functions to accommodate changes in broadcast formats and business processes quickly and easily. As part of the solution for sequenced production, QAD Global Services can help companies design and optimize their QAD JIT Sequencing deployment for immediate benefits and improved supplier performance, including shorter lead times, reduced inventory levels and increased profitability.

In sequenced production, a supplier manufactures, assembles or delivers components in the exact sequence required by the OEM's assembly line. QAD JIT Sequencing allows global manufacturers to synchronize plant operations with the OEM's line sequenced demand, and receive, process and schedule activities in real time. Through dynamic processing of broadcast messages from the OEM, attributes such as sequence number, vehicle identification number (VIN) and engineering revision level are identified and directly linked to production. Suppliers can react to line sequence changes in real time, make necessary production changes and communicate them down the supply chain immediately.

"QAD JIT Sequencing gives global manufacturers the immediate benefit of visibility of demand, and the ability to align both the sequence of production and the customer's use of it, without need for extra inventory -- for a clear operational advantage," said Jim Kirkley, chief technology officer, QAD. "Because QAD JIT Sequencing is built on standard, Web-service-compliant XML interfaces, the module is ready to support a variety of applications and devices. Suppliers have the flexibility to integrate their sequenced production or delivery function by incorporating JIT with ERP, manufacturing execution systems and assembly-line control systems, and can provide access to JIT function through programmable logic controllers, bar code scanners, shop-floor displays and other devices."

Automation of Production and Shipping to Line Sequence

QAD JIT Sequencing addresses a range of supplier and production models and methods of process control, giving automotive manufacturers a comprehensive solution for in-line sequenced production. The module automates support for a range of functions crucial to manufacturing and shipping to sequence, providing immediate benefit. When integrated with QAD MFG/PRO, the JIT software affords global manufacturers even greater control over manufacturing processes and inventory, as well as providing real-time insight necessary to analyze and manage costs and profit margins. In addition to solution architecture designed to support integration with real-time systems, QAD Global Services can help customers develop application programming interfaces (APIs) and install, deploy and configure the QAD JIT Sequencing solution for immediate impact.

QAD JIT Sequencing capabilities include:

-- Rules-based processes: Order, production, packaging and shipping methods can be configured and controlled using procedures called Rule Groups, which are an assembly of individually pre-determined logical steps called rules. This provides the flexibility to meet unique plant requirements while maintaining application consistency through the use of commonly defined processes.

-- Key performance indicator (KPI) monitoring: The Factory Dashboard feature provides plant management with real-time monitoring of broadcasts, production scheduling, replenishment, staging and shipping activities.

-- Sequenced production and operations: QAD JIT Sequencing can schedule production of intermediate and final assemblies and support sequenced production as well as hot builds or insertions. At the same time, it has the flexibility to support make-to-order, assemble-to-order and make-to-replace production models. The module accommodates make-in-line sequence, supply-in-line sequence and assemble-in-line sequence methods.

-- Inventory picking and replenishment: Real-time processing for make- or assemble-to-line sequence pulls inventory into production, with support for the direct staging of configured components as line-side inventory.

-- Packaging for sequenced delivery: Support for sequenced packaging and user-defined packing configuration can be pre-assigned to streamline shipping, and are validated in error-proofing procedures to ensure correct sequencing.

-- Sequenced shipping and execution: Multiple broadcasts from a single OEM assembly line can be processed and used to trigger pre-assembly production and/or shipping activities as needed.

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. Now, Johnson Controls will standardize European operations on QAD JIT Sequencing to reduce the cost of operations and improve responsiveness to customers.

With the introduction of QAD JIT Sequencing, QAD continues to build on the industry-leading solutions it offers the automotive sector. In addition to industry-specific functionality built into QAD MFG/PRO, the company provides solutions designed to help manufacturers adopt advanced manufacturing initiatives: QAD Lean Manufacturing supports production techniques such as continuous flow, pull replenishment and kanban visualization, and QAD Supply Visualization facilitates vendor-managed inventory (VMI). QAD plays an instrumental role in industry efforts to streamline the supply chain, as well, through technology initiatives such as the Automotive Industry Action Group's (AIAG) Inventory Visibility and Interoperability (IV&I) standard for exchanging inventory data regardless of the application of origin.

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.

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 improvements in the IT and economic environment; the company's ability to sustain customer renewal rates at current levels; the publication of opinions by industry analysts about the company, its products and technology; the reliability of estimates of transaction and integration costs and benefits; the entry of new competitors and their technological advances; delays in localizing the company's products for new markets; 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; and general economic conditions, exchange rate fluctuations and the global political environment. In addition, revenue and earnings in the enterprise resource planning (ERP), e-business and distributed order management software industries 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 growth. 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 2005 ended January 31, 2005.