Supply Chain Enabling - Subcommittee AAFA/ISC Fall 2008 Committee Meeting Members: Brion Carroll/PTC

Industry Update Topics  VICS/CMSS Initiative  Topic 2  Topic 3

VICS/CMSS Initiative “ Background Overview”  CMSS – Collaborative Material Specification Standard  Material Specification Standard - based on GS1/HK AppTex Standard  Committee has been in operation since 2005  Members include PTC, Fountain Set, eBizPrise, Nike, KSA, Dillards, Liz Claiborne  Proof of Concept in development (Starts Dec/08 for 6-8 months) Nike (Retailer), Fountain Set (Fabric Supplier) PTC (PLM-Retailer), eBizPrise (Supply Mgmt – Supplier) Validate fitness of AppTex standard Validate the Use Case applicability Validate Multi-system integration Additional Retailers/Suppliers to be added in months 4-6

VICS/CMSS Initiative “ AppTex Standard ”

Standardize the specification for 7 Raw Materials: 1. Button 2. Interlining 3. Knitted fabrics 4. Labels & tags 5. Thread 6. Woven fabrics 7. Yarn VICS/CMSS Initiative “AppTex Standard”

Retailer’s Product Development System Fabric Supplier System The systems are able to exchange the detailed Material Specification using the CMSS (AppTex) format, ensuring clarity of the material’s definition without requiring either system to “know” the other system’s detailed data model definition. The systems are able to exchange the detailed Material Specification using the CMSS (AppTex) format, ensuring clarity of the material’s definition without requiring either system to “know” the other system’s detailed data model definition. VICS/CMSS Initiative “Collaborative Environment”

 50% of the Material identification process not value added > back and forth textual/phone communications  50-60% of daily work hours on phone calls, s….  Average cycle time – 37 days** (max-60 days)  Potential missing information – 18%  Potential Errors – 20%  Restrict capabilities in global sourcing VICS/CMSS Initiative “Current Problems”

 Reduce phone/ communications to 10%  Reduce cycle time to approx 7 days  Increase material (product) offering-e.g. from 20 materials to materials.  Eliminate missing info and errors  Re-align staff to other value added jobs – e.g. innovative material development  Increase operation efficiency  Facilitate Global Material sourcing  Enhance material source traceability VICS/CMSS Initiative “Perceived Operational Benefits”

 Reduce operating cost by approx 50%  Reduce Material cost by approx 30%  Increase sales by approx- 30%  Reduce Markdown by approx 60-80% VICS/CMSS Initiative “Perceived Cost Benefits”