The document proposes hardware and software improvements for Manchu Times Fashion. It recommends updating the company website, showroom, sample library, and standard operating procedures. It suggests improving the organization chart, sample room capacity, and production planning across offices in New York, Hong Kong, and Dalian. It also proposes enhancing core tracking systems and departments like sourcing, quality assurance, and innovation to better serve customers.

1. Manchu Times Fashion Performance Enhancement Proposal ( New York / Hong Kong / Dalian ) Raymond Chong October 30 2010

2. Hardware Improvement Company Website Organization Chart Show Room Library Standard Operation Procedure ( SOP ) Core System Tracking Chart ( Style from NYO ) Sample Room Capacity Current Factory / Production Base Production Planning

3. Software Improvement ( Ext. / Int. ) SOP Department Factory Sourcing / Evaluation Department Quality Assurance Department Human Resource Department Administration Department Operation / Compliance Department Innovation / RND Department Purchasing Department HK Merchandising Dalian Merchandising ( APC ) Laboratory / Color / Wet Processing Department Design & Technical Department Pattern Department Internal Sample Room

4. HARDWARE IMPROVEMENT

5. Company Website Company Introduction The Company The Offices The Product and Customers The Factories The Vision Increase B2B business PS : Link with customers and supplier directly E.g. ( William E. Connor ) www.weconnor.com ( Li&Fung ) www.lifung.com ( Mast ) www.mast.com ( CFL ) www.cflhk.com ( EPIC ) www.epichk.com

6. Organization Chart Structure of Organization – Update Frequently New York Office Staffs for which brand / customer Responsibility Hong Kong Office Staffs for which brand / customer Responsibility Dalian Office Staffs for which brand / customer Responsibility

7. Show Room Display the samples and products of Manchu Capability and Strength. Customer also can develop something new from the sample library to get more business Current Situation :-- NYO – Show Room setup is traditional and no fashion attitude HKO – Show Room is too small and no current sample can be displayed Dalian Office – Too old fashion

8. Library Library – NYO / HKO / Dalian office Fabric Library – Running Current Fabric Potential Fabric Washing Panel Library – Wet Processing Dry Processing Denim Washes Trims / Accessory Library – Embellishment / Beading / Rhine Stone Interlining / Shoulder Pad / Button

9. Standard Operation Procedure (SOP) Internal – Established from top management Rule and Regulation – Current Colleagues Guideline – New Colleagues Procedure ( Manchu ) – Operation / Compliance department should conduct training / seminar Team leader should publish the document and coach the team to follow External – Announced from Customers Best Practice ( factory ) – Monitor PS : Suggest to setup a SOP team

10. Core System (1) Record Tracking / Data Analysis Sampling – Sample Requested Date ( from customer ) SID creation date Fabric / Trims ( Last received date ) Pattern Finished Date Sample Package Ready Date Sample Finished Date Sample Delivery Date Parcel Tracking Number

11. Core System (2) Record Tracking / Data Analysis Production :-- GAC / Hand-off / Ex-Factory Date Fit / PPS / TOP Sample Wall Date Fit / PPS / TOP Sample Approval Date Fabric Inspection Date Plan Cut Date / Actual Cut Date Plan Sew Date / Actual Sew Date In-line / Pre-Final / Final Inspection Date Ship Date / Forwarder Information

12. Tracking Chart ( Style from NYO ) Developing from NY designer Project number of style for each season and each customer before season starting Update timeline of tech pack flowing out Update sourcing place and timeline of fabric and trims status ( from NYO, Innovation / RND, or Local Source in Dalian ) Target Sample Due Date ( ETA ) Tracking Chart should be updated on multiple sides ( NYO, HKO and Dalian office ) weekly

13. Sample Room Capacity (1) Monthly Sample Capacity ( 2010 ) Maximum Output = Sample Room A+B ( 780 pcs ), Sample Room C ( 300 pcs ), Outsourced 14 Sample Rooms ( 1508 pcs ) = 2588 pcs 11 Current Customers = 235 pcs/cust/mnth Average Monthly Actual Output 1085 pcs ( based on Jan to Sep analysis ) Average 150 orders around 800 samples ( current pending in Core System ) Outside Sample Rooms can only make the Quantity Sample ( Color-run, Salesman, Coordination Sample )

14. Sample Room Capacity (2) Predict Monthly Sample Capacity ( 2011 ) WHBM requested to have 25% sample order increased Express requested Sample Turn Around time with 10 days Guess will place more Suit and try Jean item Guess – International style will have 64 pcs/style for Salesman Sample New Balance requests Salesman Sample (1085+800) + 25% = 2356 pcs

15. Current Factory/Production Base (1) Current Problems with 6 Main Factory Orders allocated to all 6 factories Production Capacity is limited Factory locate the orders in sub-contractors Sub-contractor have not been reviewed and approved by MTF before production Order go to other vendor due to Product and Construction can be done is limited Poor Quality final goods caused Charge Back or RTV ( return to vendor ) CM cost is rising up every year crazily

16. Current Factory/Production Base (2) Suggestion Create a Factory Sourcing / Evaluation team to aim for wider factory base and product Look for “ Factory “ which can be approvable by different customer to increase the order quantity Look for “ Factory “ which is capable to do different product ( E.g. Jean, Shirt, Blouse and Soft Dress ) Look for “ Factory “ in continental of China which can lower down the CM cost Work with Factory Evaluation team ( or 3 rd party ) from customer side Record Keeper for Factory Evaluation and Approval

17. Production Planning Production Planning is NOT equal to Order Allocation When the Factory and Production Base is increased which can be aligned with the order quantity and category need Production Planning really can be established by monthly basis Production Planning has to be done based on the factory monthly capacity and capability In-charge Production Planning, who should well known the factory communicate well with factory and merchandising department

18. SOFTWARE IMPROVEMENT ( EXTERNAL )

19. SOP Department ( DLN – Ext. ) Define the Responsibility Implement MQM / TQM to all factories Coach and Train factory the requirements of the need of MQM / TQM ( seminar if need ) Control and Monitor if factory did not follow Discuss with factory management for improvement Raise up to MTF senior management if factory management is not listening Recommend to merchandising team to stop order if factory did not follow

20. Factory Sourcing/Evaluation Dept Define the Responsibility Coordinate with merchandising team for what product as customer looking for Coordinate with technical team what capability and facility as factory should have for different product Look for “ Factory “ which can be approvable by different customer to increase the order quantity Look for “ Factory “ which is capable to do different product ( E.g. Jean, Shirt, Blouse and Soft Dress ) Look for “ Factory “ in continental of China which can lower down the CM cost Work with Factory Evaluation from customer side Record Keeper for Factory Evaluation and Approval

21. Quality Assurance Department Need a Proactive and Aggressive leader in team Coordinate with merchandising and technical department Follow up MQM / TQM procedure as established Quality should be controlled at the front end, pay attention at in-line and interim Take proper corrective action for mistake and error in production Raise up issue to senior management and stop production if necessary Work with QA team ( or 3 rd party ) from customer side Case Study with QA staffs and factory for any Charge Back and RTV ( return to vendor ) to learn from lesson ( seminar if need )

22. SOFTWARE IMPROVEMENT ( INTERNAL )

23. Human Resources Department The one oversee Human Resource of the whole organization should be well understood the company vision and direction to align the company strategy . Recruitment – Organization – Restructuring – Offices & Staff Alignment – In-house Training – English, Mandarin etc. External Training – Excel, Management Skill PS : Fu should not get involved this tasking

24. Administration Dept ( DLN ) Fu should oversee whole picture of below Fu needs assistant to help him Sample Scheduling Sample Arrangement Sample Tracking Data ( from Core ) External Sample Room Outsourcing Clerical Purchasing Company Car Arrangement Petty Cash

25. Operation / Compliance Dept ( DLN – Internal ) Hardware :-- Manchu Established Internal SOP Software :-- Conduct Training and Seminar regularly Implement Established SOP Monitor if the internal colleagues has complied established SOP Control and Record if someone did not follow which will be affected to the annual result

26. Innovation / RND Department Define the Responsibility Update Core System by daily basis Coordinate with merchandising and purchasing department Source the fabric and trims aggressively to hit customer target price and time manner Negotiate Costing and Delivery with fabric mills and trims suppliers Discuss with customer in advance for potential issue during product development Make sure all suppliers to adhere the Testing Requirements and aware all Test Protocols Make sure to get Test Reports for fabric and trims before delivery

27. Purchasing Department Define the Responsibility Coordinate with merchandising team in both HK and Dalian Reflect to merchandising team in both HK and Dalian if any delayed of fabric or trims Make sure the prices of bulk as negotiated by Innovation / RND department to be remained Obtain Test Report for bulk fabric and bulk trims from mills and supplier before shipping Fabric and Trims Tracking and Monitor Keep Partnership with fabric mills and trims suppliers

28. HK Merchandising Define the Responsibility Update Core System by daily basis Approach Customer Aggressively Provide Costing Competitively ( options ) Provide Product Development Service Coordination with all departments Fabric and Trims Tracking and Monitor Sample Tracking and Monitor Update Costing Reaction ( from development to production )

29. Dalian Merchandising ( APC ) Define the Responsibility Update Core System by daily basis Approach Customer if necessary Provide sufficient information to HK team Coordination with all departments Follow up production status ( Sample Approval, Testing etc. ) Fabric and Trims Tracking and Monitor Sample Tracking and Monitor Update HK team for Costing Reaction ( from development to production )

30. Lab/Color/Wet Processing Dept (1) Define the Responsibility Coordinate with merchandising, technical and inspection center The only department can conduct testing ( Fabric Shrinkage, Button Pull Strength, Tensile Strength, Seam Slippage, Seam Strength etc. ) The only department can comment and make decision for Color No One can override the decision from this department, unless decision from senior management of MTF

31. Lab/Color/Wet Processing Dept (2) Need a well experienced and understanding Leader for Wet & Dry Processing from Product Development to Production Coordinate and Communicate with customer, Dalian merchandising and local laundry for correct interpretation and execution Create Washing Library ( Hanger ) by different washing method The only department can comment and make decision for Washing No One can override the decision from this department, unless decision from senior management of MTF

32. Design & Technical Department (1) Define the Responsibility Provide Design Service to customer to adopt for production Provide Creative idea to simplify the style to be production friendly if possible Communicate with customer design and tech design for more on aesthetic and construction Coordinate and Communicate with merchandising, technical and pattern department for any need Provide on site product development service when customer visit Work with design visit and attend fit session if need

33. Design & Technical Department (2) Promote the experienced and potential pattern makers to be Tech Merchant ( TM ) to relieve Senior TM workload Give training for the promoted TM / TM assistant for how to write comment when sending sample together, and how to write e-mail regarding technical issue In the future, the TM assistant can be hired with good background of English only, so that they can learn knowledge during duty everyday When Tech department has enough manpower, TM should work with QA team closely means going to factory more to upgrade the quality of goods.

34. Pattern Department (1) Define the Responsibility Coordinate with merchandising and technical department Provide / Estimate the Best efficient consumption use for fabric and trims at the Right 1 st Time Follow customer requirements for pattern and block use Provide suggestion to customer to make better fit if possible Try to maximize the output of pattern to achieve the company goal

35. Pattern Department (2) Efficiency ( 3D Fit Solution ) – Investment : Software – USD 12,000 per module ( Category - Bottom, Shirt, Blazer etc. ) for 1st year Upgrade / Maintenance – 15% for following each year Visual Dress Form – USD 2,500 per form Benefit / Advantage – Reduce Time, Number of Sample and Cost Allows immediate result without making physical sample or muslin Offers an excellent communication tool between customers and pattern makers By deploy to 3D Fit Solution, the headcount and Pattern Maker can be reduced comparing to using by CAD Market User : JC Penny, Newway ( Mother Works ), TAL and Giordiano

36. Internal Sample Room (1) Quality Right 1st Time ( Sample Order Form ) – Information is very important how Quality Sample to be made at Right 1st Time To avoid information error – APC must submit the CSP form together when submit sample package Sample Package is not ready – Cannot be allowed to send into Cutting Room Sample Order Training – Refresh regular training for all new and existing merchandising

37. Internal Sample Room (2) Accuracy / Productivity ( Award Scheme ) – Accuracy Award Scheme – Concept of Quality Right 1st Time has to be adopted for all and tie-in with award scheme Any mistake should be recorded accurately Award criteria should be changed based on accurate record Productivity Award Scheme – Productivity Award has to matched with Quality Right 1 st Time concept to be adopted

38. Thank You