Smart Modular Technologies

Recommendations and ROI Projection for Smart Modular Technologies Anthony Finelli, Autodesk Michael Vesperman, Autodesk Greg Cunningham, ASI Katelyn Wilson, ASI John Kuta, Autodesk © 2018 Autodesk, Inc.

Agenda for Smart Modular Technologies Why Autodesk / ASI ? Recommendations for SMT ▪ Why PLM ? ▪ Implementation Roadmap ▪ Why Fusion Lifecycle: ▪ Discussion of Benefits for SMT Cloud Innovation Platform ROI Projection for SMT ▪ Customer Success ▪ Approach / Methodology Fusion Lifecycle Demonstration ▪ ROI Model Assumptions ▪ Pricing ▪ System Overview ▪ ROI Results ▪ PLM Use Cases © 2018 Autodesk, Inc.

Industry Challenges

Typical Practice: “Throw it Over the Wall” No feedback on early development decisions from downstream functions CONCEPT DESIGN PROTOTYPE MFG PRODUCTION PRODUCTION SUPPORT HAND-OFF RAMP Engineering High Lifecycle Change Costs! Supply Chain Manufacturing Quality Service

Best Practice: Early Cross-Functional Collaboration Improve decisions with early involvement, improved access to information CONCEPT DESIGN PROTOTYPE MFG PRODUCTION PRODUCTION SUPPORT HAND-OFF RAMP Design for ”X” Reduced … Lower Design for Launch Delays Cum ul a ti v e Change Costs Cost & Supply Product Cost Scrap & Rework Design for Repair & Warranty Manufacturing Design for Quality Design for Service

Typical Practice: Disconnected Quality Management Quality improvement efforts not tied to product development and change PRODUCT DEVELOPMENT DETAIL FEASIBILITY DESIGN DESIGN & LAUNCH REQMTS & RISK SPEC VALIDATE Customer Customer Need Solution Issue / Compliant COACRCRATEPICOATNIVE FMEA NON- RMA ROOT CAUSE CONFORMANCE AUTHORIZED QUALITY MANAGEMENT

Best Practice: Closed-Loop Quality Management Connect Quality Management with Product Development PRODUCT DEVELOPMENT DETAIL FEASIBILITY DESIGN DESIGN & LAUNCH REQMTS & RISK SPEC VALIDATE Customer Customer Need Solution CHANGE Single Source REQUEST of Praoduct I n f or m ati on Issue / Compliant COACRCRATEPICOATNIVE FMEA NON- RMA ROOT CAUSE CONFORMANCE AUTHORIZED QUALITY MANAGEMENT

Importance of Process Improvement

Typical Operating Environment … Look Familiar? Chaos … Mista kes … Delays … Product Product Change Manageme n t Development Manageme n t Sales & ? Marketing ? Service & ? ?? Warranty Manufac t ur i ng ? ?? ?? Supply Chain Quality & Compliance

Process Performance Determines Results Process Inputs: + Process = Process Outputs: Costs Per f or m a n ce Financial Results Employees ? ?? Revenue Suppliers ? ? Overhead Sa l es ? Customers ?? Profitability ?? COGS OpEx I nventor y

Product Lifecycle Management (PLM) Critically Important Process Inputs: + PLM Process = Process Outputs: Costs Pe r f o r m anc e Financial Results …… Revenue Employees Market New Product Doc / CAD Data Sa l es Suppliers Requirements Customers Overhead Dev & Intro Management Profitability … … €$ ¥ COGS OpEx Parts & Supplier Item, BOM & Product Cost I nventor y Management Change Mgmt Management …… Quality Service Other Management & Repair Processes

Autodesk Improves PLM Process Performance Process Inputs: + PLM Process = ProIcmespsrOouvtepduts: Costs Pe r f o r m anc e Financial Results Employees Revenue Hi gShaelreSsal es C u sCt oums teormSeurcsces s Suppliers €$ Overhead ¥ Profitability LowCeOr GCOS GS LowOepr EOxpEx LowInevr eInvtoenr ytor y

Autodesk Solutions Organize Large, Cross-Functional, Geographically-Dispersed Product Teams Manufacturing Manufacturing Engineering ?? ? Supply Chain Engineering Supply Chain Marketing ? Sales ?? Suppliers Marketing Suppliers ? ? Quality ERP Service ?? Sales Quality CRM Service CHAOS … VISIBILITY MISTAKES … COLL AB ORAT ION DEL AYS … CONTROL

Fusion Lifecycle: Cloud Innovation Platform

Autodesk Solution Benefits Cost Revenue $$ REDUCE SCRAP, REWORK, WARRANTY ACCELERATE INNOVATION REDUCE MATERIAL COST / RISK REDUCE DELAYS / TIME-TO-MARKET Productivity INCREASE “VALUE-ADDED” ACTIVITY REDUCE WASTE & DUPLICATION © 2018 Autodesk, Inc.

More “Doing” Be more proactive Avoid hiring new resources Spend more time on the Anticipate & prevent problems “value-added” activities that drive More design concepts … find “best” More team collaboration … better ideas new, better, more profitable More innovation … more “Wow!” products products & services Less Waste … “Profit Leaks” REVIEW SEARCHING CLERICAL Time wasted finding Time wasted checking product data & docs Time wasted on for mistakes outdated manual tasks MEETINGS REWORK Time wasted attending REPORTING DATA ENTRY routine status meetings Time wasted Time wasted creating Time wasted fixing mistakes status reports re-keying stored data © 2018 Autodesk, Inc.

How Much “Waste” at Your Company? The average “knowledge worker” spends 50% time performing product-related processes, 70% of which is non-value-added activity.1 40 7% “Doing” Searching 30 8% Review Meeting 20 30% Rework Repor ting 20 hours 9% 70% Clerical 10 per week* Data Entry Non-Val ue 0 10% Added * Average time 11% 14% spent on PLM 11% processes. 1. Based on survey results from Autodesk customers prior to implementing Fusion Lifecycle. © 2018 Autodesk, Inc.

Fusion Lifecycle: Complete Cloud PLM Solution Easiest to Anytime Use Anywhere Most F u sio n Flexible Lifecycle $$ On-Premise Software time Upgrade Fastest Time-To-Va lue © 2018 Autodesk, Inc.

Flexible Applications Built on Common Platform Fusion Lifecycle includes a complete set of ready-to-use applications & templates WHAT IT DOES … Item & BOM New Product Change Quality ▪ Asset Management Management Introduction Management Management ▪ CE Marking / Compliance ▪ Customer Management Document Supplier / AML Cost Configurable ▪ Deviation / Waiver Request Management Management Analysis Templates ▪ Engineering Order Mgmt. ▪ Engineering Product Mgmt. ▪ Field FMEA Failure Analysis ▪ Material Review Board ▪ Return Merchandise Auth. ▪ Supplier Audits ▪ and more … HOW IT DOES IT … Built on a modern, secure cloud platform designed for configurability & scale ▪ Configurable Workflow Builder ▪ Project Management & Execution ▪ iOS & Android Mobile Apps ▪ Drag & Drop Forms Builder ▪ Lifecycle & Revision Management ▪ Fast Search / Performance @ Scale ▪ Configurable, Role-Based User Interface ▪ Complete Edit History Tracking ▪ Universal 2D/3D File Viewer ▪ Role-Based Access Control, Approvals ▪ 3rd Party Users / Collaboration ▪ System Integrations / Complete APIs ▪ Classification & Data Standardization ▪ Dashboards and Reporting ▪ Contextual Messaging © 2018 Autodesk, Inc.

Fusion Lifecycle: Built for Integration Integrate BUI LD commercial application, corporate PLM Connect effectively integrates IT systems, databases. Cloud and both cloud and on-premise systems on-premise. Migrate data from existing tools and systems Consolidate and organize disparate data from multiple locations and systems © 2018 Autodesk, Inc.

Beware the Hidden Costs of On-Premise Software Fusion Lifecycle On-Premise PLM Subscription Software Licenses Impl e me n tation Impl e me n tation ! Ongoing Costs Database Licenses IT Staff “Hidden • Subscription Fee Costs” Si gni fi ca ntl y Hardware Lower Total Cost of Ongoing Costs Ownership • Maintenance and Support • Major upgrades • Fixes and patch releases • Performance tuning • Maintain customizations • Database maintenance • Network optimization • Security • Global replication • Disaster recovery © 2018 Autodesk, Inc.

Fusion Lifecycle Customers – Sample by Industry Electronics & Building Automotive Consumer Industrial Medical High-Tech Products © 2018 Autodesk, Inc.

Fusion Lifecycle Customers – Sample by Industry “Fusion Lifecycle was hands down the best software investment we made in 2015. On a scale of 1 to 10, it’s a 13! Fusion Lifecycle is a strategic tool for key company decisions. It has blown away all expectations.” - Gary Alcala, Senior Director Procurement “ Fusion Lifecycle brings all of our departments together with product development, quality, and manufacturing information linked together. This gets our products to production faster.” - Avi Robbins, Director Global Product Development “Before Fusion Lifecycle, each division had a different approach to Change Management causing confusion and mistakes. Fusion Lifecycle standardized and streamlined the process company-wide.” - Matt Wegmann, Sr. Business Process Analyst © 2018 Autodesk, Inc.

Why Autodesk Fusion Lifecycle? ▪ Cloud (vs. On-Premise) – lower TCO, automatic upgrades prevent “rev-locking”, scalable for global expansion. ▪ Configurable – Flexible architecture enables SMT to expand beyond Items, BOMs, NPI and Change … at your pace. ▪ Flexible Licensing – One price includes all modules, licenses are transferable and external users are free. ▪ Fast Implementation – Get up-and-running in a few months, not years. ▪ Support – Fast, predicable response to issues & enhancement requests. © 2018 Autodesk, Inc.

Roadmap

SMT Process “Maturity” “As-Is” Level 3 Managed Level 4 Optimized Level 1 Manual Level 2 Fragmented ▪ Many PLM processes are effectively ▪ Closed-loop PLM processes automated; good performance and automated and optimized connecting ▪ PLM processes (and projects) are ▪ Product data is managed in multiple adoption. the flow of product information end- manual, labor-intensive, and error- disconnected point systems. to-end in a single intelligent system. prone. ▪ Product & project information is ▪ Some PLM processes are automated, managed in single enterprise ▪ Correct product data/docs quickly ▪ Product data/BOMs created and but not efficiently, poor adoption. repository; good search used to easily found, accessed & understood. stored in multiple locations, usually find correct product information. Extensive re-use/re-purposing ▪ Correct product information is hard minimizes delays and duplication. Zdesktop hard drives or network drives. to find causing errors. Poor system ▪ Supplier collaboration with systematic performance / response. notification of product changes. ▪ Process and product performance is monitored & continuously improved. Z▪ Product data not integrated with Z▪ Product data is integrated and shared Z▪ Part and supplier analytics used to other enterprise systems such as ERP. among enterprise IT systems (CAD, optimize selection and decisions. ERP, etc.) ▪ Strategic suppliers/partners collaborate on new products and changes. © 2018 Autodesk, Inc.

Business Challenges What we heard … Profitability ▪ Informal, ad-hoc ECO process incomplete, error-prone. & Cost ▪ Ad-hoc document control causing errors and risk. ▪ Hard to find correct, up-to-date product information. New ▪ Poor visibility to NPD status impacting time-to-market. Products ▪ Poor cross-functional coordination and communication. ▪ Poor design re-use causing costly part duplication. Quality ▪ Weak Engineering visibility to quality information. & Risk ▪ Top quality issues / failure modes are not widely known.

Current Environment Changes Local Local Local Drive Drive Drive Local Service Engineering Drive Customers SFDC Docs New Products Local Drive Local Changes Items Changes Drive Sales Complaints Shared Document Local Items Drive Control Drive BOMs Custom BOMs Ideas Share Docs FMEAs point Shared RMAs Share Drive point Ch an ges Local Drive Quality NCs CAPAs Items Docs Docs Program Share Management SAP Shared point Drive NCs ASLs Docs Changes BOMs Complaints Docs Supply Chain Manufacturing Local Local Drive Supplier s Drive

Vision of “To-Be” Environment Single, integrated system for managing product data, documents, quality, etc. Service Engineering Customers SFDC New Product RMAs Projects Items & Document Control Sales Ideas BOMs Program Complaints Changes Management CAPAs Docs/Dwgs Suppliers NCs ASLs Quality SAP Manufacturing Supply Chain Cloud Integration

PLM Roadmap for Smart Modular Technologies PHASE 1A PHASE 1B PHASE 2 P H A S E 3+ Ma la ysia /US Bra zil All Loca tions All Loca tions ENGINEERING • Item & BOM Management • Enterprise Doc Repository • Return Authorization (RMA) • Change Mgmt (ECR / ECO) • AML/AVL DOCUMENT e.g. Marketing Presentations, Datasheets, • Supplier Corrective Action CONTROL • Document Management Troubleshooting Guides, etc. • Supplier Audits • CRM Integration (?) NEW Revision-controlled files (Drawings, • New Product Introduction PRODUCTS TBD Documents, etc.) associated with Items New Product Stage, Milestone and Task Tracking & Approval AREA QUALITY • Non-Conformance (NCR) • Corrective Action (CAPA) • Failure Analysis / FMEA SUPPLIERS SYSTEMS • SAP ERP Integration INTEGRATION Items & BOMs 3 months 3 months 6 months © 2018 Autodesk, Inc.

Lower Implementation Time and Cost Become Self-Sufficient / Add New Functionality Quickly Approach Phase 1 & 2 Phase 3 Phase 3+ Typical Tra in Guide Support Resource ASI does “the work”. SMT does “the work”. SMT does “the work”. Split SMT learns. ASI PM & support. ASI support as needed. 32 ASI SMT dASI SMT ASI SMT © 2018 Autodesk, Inc.

ROI Methodology

Process for Estimating ROI for SMT 1 Data Collected from 1,000+ 2 Detailed Customer Studies / 3 SMT ROI Estimate Based Users at 18 Companies to Benchmarks Used to Estimate on “Typical” User Profiles and Characterize “Typical” User “Typical” Benefits Benefits ▪ How much does it cost to perform ▪ How much non-value-added ▪ Discounted Benefits target processes? activity and other “waste” can & Cash Flow you expect to eliminate? ▪ How much of that cost is 3▪ % ROI non-value-added activity? 2% Waste ▪ Payback Period ▪ What are people saying about Reduction 1their current environment? How much time? $$ How much waste? © 2018 Autodesk, Inc.

Average PLM Process Participation Average FLC customer user spends 22 hours / week on PLM processes 15 21 20 16.8 hours / week 10 spent on processes in SMT’s PLM scope 5 6.7 2.4 3.0 1.2 0.7 4.2 3.6 Supplier 0 Mgmt NPD / NPI Item, BOM Document Quality ETO Quoting Other & Change Mgmt Mgmt & Dev

SMT PLM Process Participation Assumption Time spent by average SMT user on PLM processes in scope 40 30 20 20% or 3.4 10 16.8 hours/week hours/week 300 Participant Users 0 To be conservative, we will assume “view-only” users 200 Enterprise Users only spend 1/5 as much time on PLM processes as 16.8 hours/week is the weighted average of time spent Enterprise (power) users on PLM processes in scope for SMT based on surveys of over FLC users prior to implementation.

Average PLM Process Activity Profile 15 (of the 22) hours / week or 68% is non-value-added activity 40% 68% Waste 35% 13% 8% 12% 8% 9% 6% 30% 32% Reviewing Rework Meetings Reporting Clerical Work Redundant 25% Data Entry 20% 15% 10% 13% 5% 0% \"Value-Add\" Searching Activity

ROI Assumptions

Return on Investment (ROI) Model The “R” Return (Benefit) depends on level of process performance improvements. Level 1 Level 2 Level 3 Level 4 Manual Fragmented Managed Optimized The “I” AS-IS Process Improvement TO-BE Increasing Process Maturity Investment depends on deployment scope and approach. © 2018 Autodesk, Inc.

Estimated Benefits for SMT Fusions Lifecycle Benefit SMT FLC 1 Weighted average. Projections Benefit Range Productivity / Released Capacity 23.3% 1 10 → 25% • Improved “value-added” efficiency (“Doing”) 25 → 75% • Reduced time searching for product information 15% 10 → 30% • Reduced time reviewing for errors 50% 10 → 30% • Reduced time rework / fixing errors (“Re-doing”) 15% 10 → 30% • Reduced time in status / update meetings 20% 10 → 30% • Reduced time reporting 15% 25 → 75% • Reduced time doing clerical tasks 10% • Reduced time on duplicate data entry 35% 0 → 95% 50% Product and Operating Costs Not included 10 → 20% 2 Significant benefits 15% 10 → 20% for cost reduction • Reduced warranty and field repair cost 5 → 20% and time-to-market • Reduced manufacturing rework and scrap cost Not included 10 → 30% • Reduced tooling cost Not included 15 → 35% were not included in • Reduced Engineering outsourcing Not included ROI analysis. • Reduced inventory E&O cost Not included Profits from Reduced Time-to-Market 2 © 2018 Autodesk, Inc.

Process Efficiency Benchmark Reported % Time Spent on “Value-Add” vs. “Waste” FLC DEPLOYED1 PLANNED2 100% 100% 68% 76% WASTE WASTE 50% 50% 32% 24% VALUE-ADD VALUE-ADD 0% 0% 1. Process in use for over 1 year. “Waste” is … 2.Process in use for less than 1 year or not deployed. ▪ Searching for Information ▪ Rework & Duplication ▪ Manual Data Entry ▪ Clerical ▪ Reviewing for Errors ▪ Unnecessary Meetings ▪ Manual Reporting Work

Process Efficiency Benchmark Comparison of Reported “Value-Add” vs. “Waste” FLC DEPLOYED1 PLANNED2 100% 23% 68% 100% 76% 50% WASTE 50% WASTE 0% 23% productivity improvement for 32% 24% Fusion Lifecycle VALUE-ADD 0% VALUE-ADD processes 1. Process in use for over 1 year. “Waste” is … 2.Process in use for less than 1 year or not deployed. ▪ Searching for Information ▪ Rework & Duplication ▪ Manual Data Entry ▪ Clerical ▪ Unnecessary Meetings ▪ Manual Reporting Work ▪ Reviewing for Errors

ROI Model Assumptions Productivity Benefits ▪ Enterprise Users: US/MALAYIA: 125; Brazil: 75 ▪ Participant Users: US/MALAYIA: 150; Brazil: 150 ▪ Productivity benefits begin accruing after system “go-live” ▪ Phase 1A : 3 months (US/MALAYIA: Items, BOM, Change, Controlled Documents, SAP Integration) ▪ Phase 1B : 3 months (BRAZIL: Items, BOM, Change, Controlled Documents) ▪ Phase 2 : 6 months (ALL LOCATIONS: Quality, New Product Introduction) ▪ Productivity benefits accrue at 100% of target 90 days after go-live. Other Assumptions ▪ Average blended salary & benefits for Brazil, Malaysia, and US: $50k / year. ▪ Maufacturing Scrap and Rework: $300k / year. ▪ 3% wage inflation. ▪ 5% Income tax rate. 10% NPV discount rate. ▪ 1.0 FTE SMT resource (cumulative, multiple individual SMEs will be involved part-time) required to support implementation. ▪ 0.75 FTE SMT resource (cumulative) required for on-going administration (1/4 FTE per site). © 2018 Autodesk, Inc.

Cost Summary Software SRP Quantity Extended SMT Discount SMT Cost 200 Autodesk Fusion Lifecycle Enterprise $ 1,845.00 300 $ 369,000 $ 258,300 1 Autodesk Fusion Lifecycle Participant $ 310.00 $ 93,000 $ 64,575 Jitterbit Standard with Premium Endpoint $ 15,600.00 $ 15,600.00 $ 15,600 Total Software Costs $ 477,600 29% $ 338,475 Services SMT Rate Quantity Extended SMT Cost 140 $ 35,000 $ 35,000 Phase 1A Fusion Lifecycle PLM Implementation $ 250 60 $ 15,000 $ 15,000 120 $ 30,000 $ 30,000 Phase 1B Fusion Lifecycle PLM Implementation $ 250 100 $ 25,000 $ 25,000 40 $ 10,000 $ 10,000 SAP ERP Systems Integration $ 250 3 $ 2,385 $ 2,385 1 $ 5,625 $ 5,625 Phase 2 Fusion Lifecycle PLM Implementation $ 250 $ 123,010 Fusion Lifecycle Data Migration $ 250 Fusion Lifecycle PLM Administrator Training $ 795 Enterprise Support $ 5,625 Total Services Costs © 2018 Autodesk, Inc.

ROI Estimate

3 Year Investment Summary 3 Year Cash Flow : $ 1.8 M 3 Year Cumulative Cash Flow, After Tax Payback Period : 17 months 3 Year ROI : 126 % Month 17 $1,800,000 $1,600,000 (NPV After Tax Cash Flow / Net Costs) $1,400,000 $1,200,000 Estimated Cost Savings : $ 3.2 M $1,000,000 Revenue Benefits : Not estimated $800,000 $600,000 Software Cost per User : $ 677 / year $400,000 Services Cost per User : $ 246 $200,000 $- $(200,000) $(400,000) 3 Year Productivity Improvement (k$/year) $126 $68k Item$1,5BkOM, Change M$g1m5kt Document Control 12% $298 New Product Introduction Quality Management 29% 34% $157k $356 25% $48k $253 © 2018 Autodesk, Inc.

3 Year Benefit Details ($k) © 2018 Autodesk, Inc.

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