LOGISTICS TRANSITION RICKARD HEISS - AVP, GLOBAL LOGISTICS

2

Now more than ever, there is a need for Logistics expertise

Why are we here today?

3

Project objective

Transition of logistics services from Mast Global Logistics (MGL) to MGF Sourcing

Definition of project success

Achieve complete transition of all key people, processes, and technology, to MGF within 2015

Desired outcomes

Our goal is to build a best-in-class logistics organization that is capable of providing great service, anchored by more flexible options, and improved visibility to in-transit

orders

Our strategic objectives are centered around 5 key areas of focus

4

Network

Technology

Customer Intimacy

Logistics expertise

Financial

• Operate more efficiently - the ability to deliver with greater speed, flexibility, and reliability, to any International market, across all channels and customers

• Make better decisions - the ability to enable real time, end-to-end inventory visibility, reporting, and proactive exception management

• Value creation - elevate logistics and supply chain management as a core part of our customer value proposition and as a source of competitive advantage

• Best-in-class organization - delivering a high level of sustained performance management, vendor logistics compliance and operational execution

• Positive contribution - deliver a cost competitive model which meets our customer expectations, and contributes positively to the company bottom line

The ability to deliver with greater speed, flexibility, and reliability, to any market, across all channels and customers

5

Key stakeholders Customers Brand Management Merchandising Finance Vendors Regional control tower Planning & execution Suppliers performance Exception management Carrier management Customer Support

Single point of contact Single interface for day-to-

day ops End-to-end supply chain

management Visibility & Reporting Forecasting Carrier space allocation KPI & SOP management

6

Providing a network with full coverage from all key origins

7

Using multiple gateways into North America to offer our customers the more direct delivery routings

What does this all mean for you?

8

MGF has appointed Century Distribution Systems, Inc. (CDS) to act as our logistics service provider and supply chain management partner.

Century’s role includes:

• Handle all information and cargo from origin to destination in accordance with MGF’s instructions and procedures.

• Act as primary contact for vendors at each origin

• Working closely with MGF providing daily updates for bookings, shipments, and resolving any operational issues that may arise.

When do we go-live?

9

What training can you expect?

10

Century will provide training through a combination of online tools and local office-based training. Training will focus on ensuring a smooth transition to the Century processes and online tools available to support vendor operations.

Training will focus on:

• On-going support will also be available through the Century local offices, and the MGF Logistics Hong Kong control tower.

Wave 1 Wave 2

Origins Vietnam, Indonesia, Sri Lanka, Peru, Honduras

Hong Kong, China, Manila, Bangladesh, Korea, Taiwan, Cambodia, Thailand, Singapore, Malaysia

GAC Go-live dates 3 Oct 13 Nov

Booking starts 16 Sep 3 Nov

Vendor training 1 Sept – 15 Sept 19 Oct – 2 Nov

• Key milestone events • Bookings • Cargo delivery and loading

• Documentation • Local charges • Local contact details

What are the key shipping milestones?

11

The following is an overview of the key milestone events for all MGF freight types - CY/CY, CFS/CY, CFS/CFS, Air, and Parcel:

Key milestones include: • Booking submission and booking confirmation timeline • Cargo delivery and loading expectations • Documentation submission timeline • Century FCR availability and release

What is the new booking process?

12

VMS® will be the booking platform for all vendor bookings, and will be the primary location for all shipping details and information.

VMS® serves as the main channel of communication throughout the origin booking and delivery process. MGF vendors will be using the following two VMS® modules:

• Vendor Online Booking (VOB) • Electronic Shipment Notice (ESN) – CY/CY shipments only

What is booking exception management?

13

For all bookings made to Century, validations will run through our exception rules – Validation Integrated By Events (VIBE)

• For bookings with exceptions that require MGF approval, MGF will have to approve before CDS can confirm the booking.

Validation Exception Definition Severity & Impact

Ship Mode Booking should match PO ship mode (air v. ocean) If booking does not match PO, MGF must approve

Item Quantity Booked units should be within

+/- 5% of ordered quantity Warning message will appear

FOB Point Booking FOB should match PO FOB If booking does not match PO, MGF must approve

Ship Method Courrier Booking is flagged as Courier MGF must approve

CY/CY Factory Load All factory loads require approval MGF must approve

CY/CY CBM Minimum All factory loads must meet MGF’s minimum load requirements If booked volume does not meet MGF’s minimums by

container size, MGF must approve. CFS recovery and Dead Freight charges will apply.

PO/Item Early Estimated Delivery Date should be no more than 5 days before

PO GAC If Estimated Delivery Date is more than 5 days before PO

GAC, MGF must approve.

PO/Item Late CFS/CY – Estimated Delivery Date no later than GAC+0 CY/CY – Estimated Delivery Date no later than GAC+3

If booked PO/item will be late by MGF’s criteria, MGF must approve

What about cargo delivery and documentation?

14

MGF will continue to focus on improving both load accuracy and supply chain security in line with C-TPAT requirements.

Documentation requirements will become more streamlined, though submission requirement will need to be more timely.

Wow… That was a lot of information to digest!

15

MGF Logistics and CDS will be providing vendors with a number of documents to help and guide you through this transition:

• VMS® Guides will be provided for

• Vendor Online Booking (VOB)

• Electronic Shipment Notice (ESN) – CY/CY

• MGF Logistics is developing new standardized shipping guidelines which apply to all orders in our supply chain

How can you help?

16

MGF and CDS will be reaching out to yourselves in the coming weeks to coordinate participation for the training sessions, please be patient

• Manage the change communication within your factories and offices • Provide timely fact-based feedback if there are implementation issues • Engage with your local Century offices and the MGF Logistics team

17