Apparel Industry Trends, Challenges, Observations and Solutions Presented by Fred Isenberg, VP Sales New Generation Com

1. New Generation Computing Apparel Industry Trends, Challenges, Observations and Solutions Presented by Fred Isenberg, VP Sales New Generation Computing, Inc. Leading Product Lifecycle Management, Global Sourcing and ERP Solutions for Fashion, Apparel and Lifestyle Products

2. The Company • Incorporated 1982 • 1998 – division of American Software (AMSWA) • Apparel, Footwear and Accessory Specific Software • 350+ Customers Worldwide • Active Member NRF, AAFA, AAPN • Microsoft Certified Partner Specialists at PLM and Global Sourcing

3. Product Suites • e-SPS – Internet Sourcing & Production System • e-PLM – Internet Product Lifecycle Management • RED HORSE – Enterprise Management System (ERP) • DMI – Forecasting / Replenishment • TPM – The Production Manager (Shop Floor Control) • DCCS – Warehouse Management System Specialists in PLM & Global Sourcing

4. Customers: Customers

5. Trends • Blurring of Retailers and Brands • Rapidly changing supply chains and methods • Compressing Product Life Cycle (Speed to Market) • Globalization of Everything (A Flatter World) • Margin Challenges • Need for Brand Differentiation Specialists in PLM & Global Sourcing

6. Challenges • Effectively dealing with Speed, Distance, Complexity and SKU Proliferation • Deploying and Integrating IT systems to meet new requirements • Eliminating old silos, streamlining business processes, realignment to today’s world • Collaborating effectively in a 24/7 world Specialists in PLM & Global Sourcing

7. Observations Have most companies achieved Speed to Market? Specialists in PLM & Global Sourcing

8. Phase I. Product Development Phase IV. Order Placement Phase II. Costing Phase III. Capacity Plan, Projections Phase V. Order Fulfillment Design, sketch, review samples Maker receives SR, style list, and patterns Maker creates samples for costing meetings Technical Designer conducts fit session and updates SR Prototype SR created PDM transmits SR to WHK - WHK converts to pdf file Technical Designer follows up with designers on any open SR issues Product Received at DC Email of needs, ETAs, clarifications WHK faxes new SR to maker Technical Designer reviews prenote to identify new SRs. Sets SR production due date WHK compares new SR to old SR to understand changes Email final style list to WHK; PDM sends ptype SR; WHK converts SR to pdf file; fax info to maker & sample factory Email final style list to sample factory. Sample factory creates patterns - net consumption data Work to resolve customs issues and LC issues. PO tracking begins (if ocean) MPS creates PO s in Endeavor by keying off prenote. PO s released by Planning Director Download PO data into RPM database MPS compares assortment plan to cap plan - updating cap plan to match assortment plan. Sample factory receives leather and creates samples Product line reviewed, refined, finalized(styleout) Costing meetings held with makers, final FOBs, commitments established Assortment Plan is finalized, unit projections by month - updated for Mall, Outlet, Ecomm, Holiday Assortment Plan is finalized, unit projections by month - completed for Mall, Outlet, Ecomm, Holiday Maker begins production - order leather from leather source, order submaterials Maker packs and ships product MPS hides all columns other than those for the month the prenote is for…. Saves spreadsheet as prenote Allocator generates size split and provides print outs to MPS - size split by style Wilsons meets with maker and reviews ordering timelines MPS for mall, create cap plan spreadsheet by cut/paste style information Wilsons meets with maker and reviews product - works with maker QA WHK sorts sheets by maker, breakout capacity by week, share with maker qrtly Setup/Update Leather Production Spreadsheet by cut/paste style data MPS creates costing spreadsheet by cut/paste style information WHK creates costing spreadsheet by cut/paste style information, talking with vendors, net consumption data Tannery ships leather to Sample Factory Confirm leather, lining, label by PO WHK, hubs - email PO s to makers Leather production matches production spreadsheet to prenote spreadsheet Email spreadsheet to MP S - MPS provides paper copy to Allocator Email spreadsheet to WHK MPS rolls up unit projections by style for all channels Maker receives leather and submaterials Maker cuts at five weeks from consolidation - sews product Merchants generate cost targets - MPS enters into costing spreadsheet Email PO files to WHK (daily) and to Hubs (weekly) Review samples with merchants refine or approve Wilsons meets with maker and reviews leather and submaterials - reviews production timelines WHK generates cost targets - updates spreadsheet Update cap plan spreadsheet with leather detail (skin type, #, price, etc) WHK confirms with maker - units, FOBs, skin source - updates prenote spreadsheet with FOB, skin source Add data from leather development spreadsheet to leather production spreadsheet by cut/paste - set leather production needs Update leather production spreadsheet with revised/ new needs and ETAs based on prenote Email/phone on status and issues around leather development Update Leather Production Spreadsheet by cut/paste style data Email, phone status’ begin - tanneries, hubs, WHK, home office Meet on Leather Development, Sample and Sqft Needs, ETAs,etc PO balance data is keyed from RPM report into excel spreadsheet Email/phone is mechanism to resolve issues: - Ship early, late - FOB changes - Supplier issues - Ticket issues Set up Development Spreadsheet: skin,tannery, skin#, ETAs,etc set leather production needs Email updated leather production spreadsheet to WHK, hubs. Hubs communicate changes/ needs to Tanneries MPS emails prenote spreadsheet to WHK, sort sheet by maker, breakout capacity by week Tanneries create leather samples, sqft, status with Hubs Set leather production needs/ timing Tanneries begin creating leather Letter of credit needs analyzed. LCs opened or adjusted Email spreadsheet to WHK/Hubs: Hubs communicate to Tanneries High level capacity review by maker, by tannery. Negotiate w/merchants Email production spreadsheet to hubs, hubs communicate needs, timing to tanneries, submaterial suppliers Typical Business Process Specialists in PLM & Global Sourcing

9. Phase I. Product Development Phase IV. Order Placement Phase II. Costing Phase III. Capacity Plan, Projections Phase V. Order Fulfillment Raw Material Development Design, sketch, review samples Maker receives SR, style list, and patterns Maker creates samples for costing meetings Technical Designer conducts fit session and updates SR Prototype SR created PDM transmits SR to WHK - WHK converts to pdf file Technical Designer follows up with designers on any open SR issues Product Received at DC Email of needs, ETAs, clarifications WHK faxes new SR to maker Technical Designer reviews prenote to identify new SRs. Sets SR production due date WHK compares new SR to old SR to understand changes Email final style list to WHK; PDM sends ptype SR; WHK converts SR to pdf file; fax info to maker & sample factory Email final style list to sample factory. Sample factory creates patterns - net consumption data Work to resolve customs issues and LC issues. PO tracking begins (if ocean) MPS creates PO s in Endeavor by keying off prenote. PO s released by Planning Director Pre-production Download PO data into RPM database MPS compares assortment plan to cap plan - updating cap plan to match assortment plan. Sample factory receives leather and creates samples Product line reviewed, refined, finalized(styleout) Costing meetings held with makers, final FOBs, commitments established Assortment Plan is finalized, unit projections by month - updated for Mall, Outlet, Ecomm, Holiday Assortment Plan is finalized, unit projections by month - completed for Mall, Outlet, Ecomm, Holiday Maker begins production - order leather from leather source, order submaterials Maker packs and ships product Shipping Production MPS hides all columns other than those for the month the prenote is for…. Saves spreadsheet as prenote Allocator generates size split and provides print outs to MPS - size split by style Wilsons meets with maker and reviews ordering timelines MPS for mall, create cap plan spreadsheet by cut/paste style information Wilsons meets with maker and reviews product - works with maker QA WHK sorts sheets by maker, breakout capacity by week, share with maker qrtly Setup/Update Leather Production Spreadsheet by cut/paste style data MPS creates costing spreadsheet by cut/paste style information WHK creates costing spreadsheet by cut/paste style information, talking with vendors, net consumption data Tannery ships leather to Sample Factory Confirm leather, lining, label by PO WHK, hubs - email PO s to makers Leather production matches production spreadsheet to prenote spreadsheet Email spreadsheet to MP S - MPS provides paper copy to Allocator Email spreadsheet to WHK MPS rolls up unit projections by style for all channels Maker receives leather and submaterials Maker cuts at five weeks from consolidation - sews product Merchants generate cost targets - MPS enters into costing spreadsheet Email PO files to WHK (daily) and to Hubs (weekly) Review samples with merchants refine or approve Wilsons meets with maker and reviews leather and submaterials - reviews production timelines WHK generates cost targets - updates spreadsheet Update cap plan spreadsheet with leather detail (skin type, #, price, etc) WHK confirms with maker - units, FOBs, skin source - updates prenote spreadsheet with FOB, skin source Add data from leather development spreadsheet to leather production spreadsheet by cut/paste - set leather production needs Update leather production spreadsheet with revised/ new needs and ETAs based on prenote Email/phone on status and issues around leather development Update Leather Production Spreadsheet by cut/paste style data Email, phone status’ begin - tanneries, hubs, WHK, home office Meet on Leather Development, Sample and Sqft Needs, ETAs,etc PO balance data is keyed from RPM report into excel spreadsheet Email/phone is mechanism to resolve issues: - Ship early, late - FOB changes - Supplier issues - Ticket issues Set up Development Spreadsheet: skin,tannery, skin#, ETAs,etc Style Development set leather production needs Email updated leather production spreadsheet to WHK, hubs. Hubs communicate changes/ needs to Tanneries MPS emails prenote spreadsheet to WHK, sort sheet by maker, breakout capacity by week Tanneries create leather samples, sqft, status with Hubs Set leather production needs/ timing Tanneries begin creating leather Letter of credit needs analyzed. LCs opened or adjusted Email spreadsheet to WHK/Hubs: Hubs communicate to Tanneries High level capacity review by maker, by tannery. Negotiate w/merchants Email production spreadsheet to hubs, hubs communicate needs, timing to tanneries, submaterial suppliers Typical Business Process Specialists in PLM & Global Sourcing

10. Analysis of Typical Operations 52% of the activities were non-value added, such as non-integrated fax, phone calls, spreadsheets, databases and emails Significant opportunity for improved efficiency Many Activities Require Supply Chain Partner Participation Specialists in PLM & Global Sourcing

11. Observations How well integrated are most companies ERP, Demand Management, PLM & Sourcing Systems? Specialists in PLM & Global Sourcing

12. Observations Specialists at PLM and Global Sourcing

13. Solutions – Integrated End to End Systems Product Lifecycle Management Customer Order Processing Import Management & Sourcing Inventory Control Financial Accounting Forecasting & Planning Warehouse & Shipping EDI Reporting and Analysis Workflow and Event Management Collaboration Exception Management Apparel and Sewn Products Industry Specialists

14. Design to Sourcing - Key Business Needs Visibility Collaboration Timely Information Breaking down organizational and cultural barriers Information gap between departments Managing event milestones Performance metrics Improve responsiveness Factory Compliance Monitoring Specialists in PLM & Global Sourcing

15. Product Development RFQs and Bids Pre- Production P.O. Management Production Tracking Quality Control Shipment Packing Inbound Tracking DC Receipt Merchandising Solutions – Visibility Design to Source Centralized Data Workflow and Event Management Collaboration Exception Management Specialists in PLM & Global Sourcing

16. Solutions: Metrics achieved • Cycle time reduction – 20 -50% • G & A reduction – 5 – 20% • Margin improvement – 5 – 20% • Reduction of Finished Goods air freight – 1 – 3% • Raw Material aggregation and reduction in cost – 3 – 5% Specialists in PLM & Global Sourcing

17. Solutions: Metrics Achieved • Cycle time reduction – 10 -15% • P.O. lead time reduction – 10 – 15% • Efficiency improvement – 20 – 50% • Quality improvement – 5 – 20% • 99.5% Carton Accuracy at Receipt • Shipment lead time reduction of 2 days. • Improved WIP and Inbound (NDC) Accuracy - 35 - 50% Specialists in PLM & Global Sourcing