SECTION ONE OVERVIEW

Transcription

1 SECTION ONE OVERVIEW This section pertains to all types of shipments Import, LDP, Market Buy, Fabric Shipments, Supply Shipments TABLE OF CONTENTS: Page 1 COVER PAGE Page 2 Introduction to DMC Page 3 C-TPAT Page 4 DMC Hotline Page 5-6 World Wide On Time Delivery System Page 7 Cancellations by DMC Page 8 - Cancellations by Vendor Page 9-11 DMC/Vendor/Fabric Suppliers Responsibilities Page 12 Mail Packages to DMC

2 Destination Maternity Corporation Destination Maternity Corporation (DMC) is the world s leading designer, manufacturer, and retailer of maternity fashion in the U.S., with over 700 stores, predominantly under the trade names Motherhood Maternity, A Pea in the Pod, and Destination Maternity, and sells on the web through its DestinationMaternity.com and brand-specific websites. The business operates under specialty apparel concepts nationwide offering a full range of great fashions including career, casual, active, lingerie and special occasion maternity fashion, along with nursing fashions, as well as via direct mail and internet e-commerce. The three different store concepts are A Pea in the Pod Collection (exclusive designer boutiques), A Pea in the Pod (upscale contemporary fashion) Motherhood Maternity (everyday low price). The company philosophy of Giving the customer the fashion she wants, when she wants it is delivered by utilizing proprietary systems to respond to consumer demand quickly to leverage our vertical integration, world wide sourcing and proprietary Real Time Retailer computer systems. The Real Time Retailing TM system tracks the specification of items sold and immediately ships the same item to the store in which it was purchased. In contrast to most retail stores, this system enables stores to replenish stock within two days while reducing the need for inventory space in each location. DMC formerly Mothers Work Inc, was founded by former President and COO, Rebecca Matthias in 1982 in the front closet of her Philadelphia home, with an investment of $10,000 of her own savings. Rebecca, a civil engineer and pregnant with her first child was unable to find clothing appropriate for her role in the business world. DMC is a $595+ million publicly traded (NASDAQ: DEST) retailer of maternity apparel. Section 1-Overview Page. 2

3 Part 1: C-TPAT DMC is participating in the U.S. Customs and Border Protection C-TPAT (Customs-Trade Partnership Against Terrorism). This is a government-business security initiative to build relationships to strengthen supply chain and border security. The requirements needed to comply with C-TPAT are not difficult or unreasonable and will be required by most American importers. Our lead will make it easier for our sources to comply with other importers future requirements and your facilities will also benefit as this makes your plant safer, increases shipment accuracy and will potentially reduce outside audits. As a DMC supplier, we need your assistance. DMC encourages all of our Business Partners to join the program or integrate C-TPAT security criteria into your supply chain. As a source selling to DMC on a FCA. basis, supply chain security during manufacturing is the responsibility of both your organization and ours. As the purchaser of imported product, DMC has the responsibility of being sure that our suppliers are taking steps to secure our merchandise from tampering. We request that you complete a security questionnaire regarding facilities that directly or indirectly produce and/or export merchandise to DMC. This questionnaire may need to be updated at various times per DMC s request. All facilities exporting to the U.S.A. are subject to U.S. government security verification. Any facility producing merchandise or raw materials for DMC orders are subject to inspection by DMC employees or an independent inspection service nominated by DMC. In order to protect against illegal transshipping, when an order is placed by DMC with your company, the buyer must be informed in writing of the country of origin for the order. If the origin is a country identified by the U.S. Government as high risk for transshipping, we may elect to have the facility audited by a service to certify the presence of the products in the factory. If the origin country is suspected of Human Rights violations, we may elect to have the factory audited by an independent inspection service or DMC may choose to conduct the inspection ourselves. If facilities are not made available for inspection or are found to be in violation of our TERMS OF ENGAGEMENT, DMC orders will be removed from the factory unless violations are corrected in a timely manner. DMC does not want to interfere with the operations of our supply chain partners. We do diligently discharge our responsibilities under U.S.A. laws and the guidelines set forth by the U.S. Customs and Border Protection Agency. If unable to comply with our policies, please immediately advise your DMC contact person or the Director of Custom Compliance. We encourage everyone in our supply chain to consider participating in this very important security initiative. If you are an LDP supplier (meaning that it is your company s responsibility to clear U.S. customs and deliver the merchandise to DMC) we do not allow any LDP agent to sell us anything that they themselves have bought LDP. We will only purchase from the actual importer, unless we know who the importer is and have the chance to decide if we want to make the purchase. We do not allow any hidden third party purchases. Section 1-Overview Page. 3

4 Part 2: DMC HOTLINE DMC has established an international HOTLINE phone number as: or HONOR Destination Maternity Hotline is a toll-free international phone number that is available to all agents, service providers, vendors, and employees. The telephone line and is available 24 hours a day, 365 days a year. This is an effective line of communication to receive complaints or questions. This ANONYMOUS communication system is also available on the web at our World Wide On Time web-site and there is a HOTLINE button at the top of each screen for ANONYMOUS communication to DMC. This is a core element of Best Practices for our Cargo and Conveyance Supply Chain Security Program. Please report to DMC all perceived problems without fear of retribution. All information will remain confidential and anonymous. Topics can include: Violations of Local or Foreign Regulations or Laws Fraud Theft and Embezzlement Discrimination and Abusive Practices Safety/Health Violations Bribery/Kickbacks Improper Billing Packing Concerns Cargo Security Collaboration or Collusion Documentation Non-Compliance A written report of each call is documented and forwarded to the appropriate department for review. Section 1-Overview Page. 4

5 Part 3: World Wide On Time Delivery System DMC is continually striving to improve our systems to get product to our customer when she needs it, while keeping our product competitively priced. Delays in delivery can cause poor consolidation, higher freight costs, reduced inventories and loss of sales. The following covers our expectations from our overseas partners. Most important among these is that the Buyer s representative or direct vendors must advise us, as early on in the production process as possible, of any delivery changes. The Buyer s representative must be in the factory checking the timely availability of raw materials that changes on a regular basis for every purchase order, production scheduling and in-line quality to ensure there are no last minute delivery changes. If our required delivery cannot be achieved, the earlier we know this the better our chances of adjusting delivery on another order (which could be from another source) to fill that inventory slot. The later we find out, the less chance we have of compensating and possibly mitigating our damages. Our intention is not to cancel orders due to late delivery, but to partner with factories and better manage Destination Maternity s inventory needs. In order to maintain our delivery schedules, DMC places heavy emphasis on the date the order is due to be turned over to the freight forwarder for FOB purchases and in warehouse date for LDP Purchases. If the FOB vendor is late to the freight forwarder for FOB purchases and in warehouse date for LDP purchases but the in warehouse date is still met by original shipping mode, the factory is charged back 1% of the FOB cost of the order for each day late to the freight forwarder. The original ship date will not be changed. FOB Vendors will be charged back 1% of the FOB cost for each day late to FF. The original shipment made will not be changed as long as the original warehouse date can be met. If the vendor cannot meet the freight forwarder date and in warehouse date, buyer may cancel order with no liability or reduce/accept original quantity. If buyer keeps the order in any form, the terms are then air shipment, at vendor s expense & consigned to DMC. There is a 2% chargeback on the FOB for each day the expedited freight forwarder date is missed. Buyer may request a price reduction if the late delivery reduces sell through potential or necessitates a markdown. The 2% a day is applicable to all LDP vendors or market buy vendors who miss the original warehouse date. Purchase Orders may be issued in advance to block production space or allow for fabric preparation. No Purchase Order should be cut more than 60 days prior to the factory ship date without contacting the appropriate Buyer for acknowledgement. This will allow the buyer to adjust the size scale accordingly to current sales trends. UNDER NO CIRCUMSTANCES DO WE ALLOW SPLIT SHIPMENTS. IF A VENDOR IS LATE, WE WILL NOT ACCEPT PART OF SHIPMENT ON THE Section 1-Overview Page. 5

6 ORIGINAL DATE AND WE WILL NOT CREATE AN ADDITIONAL PURCHASE ORDER TO ACCOMMODATE THE BALANCE OF THE SHIPMENT. THIS PRACTICE CREATES ADDITIONAL WORK FOR OUR MERCHANTS, PLANNERS AND WAREHOUSE DISTRIBUTION TEAMS. Part 3A: Definition of terms used in World Wide On Time Delivery System Freight forwarder date The final day all conforming goods must be at the freight forwarder. Freight may be delivered up to 5 days in advance of this date during business day. Revised freight forwarder date Amended freight forwarder date initiated by the vendor. Shipping mode may or may not be expedited at vendor s expense by sea/air difference, 50/50 air, or air vendor expense. Freight is consigned to DMC if shipped by air at anyone s expense. Last approved freight forwarder date Buyer initiates to extend the delivery. Actual freight forwarder date the date the order arrives at the freight forwarder during business day. In warehouse date Order date designated as the expected date order will arrive at the DMC distribution center during Monday Friday business day. Revised in warehouse date Vendor initiated by late freight forwarder delivery causing late in warehouse date. Last approved in warehouse date Buyer initiates to change the in warehouse date. Air pre-paid/air vendor expense Vendor pays total air shipping cost. Cargo is consigned to DMC and forwarder is determined by DMC. Sea/Air difference Cargo is aired due to late delivery to freight forwarder. DMC pays for sea portion and vendor pre-pays for the balance of the freight costs. Cargo is consigned to DMC. Example of Time and Action Dates: REALISTIC UNREALISTIC Target Due Target Due Date Date Lab Dips 2/19 2/5 Fit Sample 2/26 2/20 Pre Production 4/16 2/28 Bulk Fabric 4/2 2/20 Testing 4/26 3/30 TOP Sample 5/16 5/23 up to Fall 2 FF for FOB Vendors 5/26 5/26 * for LDP & Market Vendors the TOP should be submitted at least 10 days prior to the schedule day the goods need to leave the forwarder in order to maintain In house date. Section 1-Overview Page. 6

7 Part 4: Cancellations by DMC DMC may cancel any Purchase Order without liability, including but not limited to, the following reasons: Time & Action violations the inability of the vendor to complete product development activities on a timetable supporting on-time deliveries. Sampling failures inability of the vendor to furnish DMC with samples meeting specifications, garment appearance requirements, construction requirements, testing standards or aesthetic criteria provided. Delivery inability of the vendor to deliver raw materials or finished products on the date required by the Purchase Order. Quality inability of the vendor to deliver product that meets DMC standards for quality in regards to conformity to color standard, defects of material, defects of workmanship or fit. Purchase Order Terms inability of the vendor to comply with the terms of the DMC PO as it relates to FOB point, Country of Origin, delivery, and size distribution. This also includes order quantity (within the 5% tolerance allowed for all orders and in the case of yarn/fiber dyed products 10%) The OB and International divisions accept NO SHORTAGES and up to 3% in overages. Terms of Engagement-- failure of the vendor to comply fully with the DMC T.O.E governing treatment of workers, safety of facilities conduct of the vendor and compliance with all prevailing laws and regulations. Cancellation of a Purchase Order may be necessitated by the failure of the vendor to perform on a previous order for the same style. For example: An initial order that is late by 15 days, although not cancelled, may cause reduction or cancellation of a backup or flow order. Quality rejection of an initial order may cause reduction of later purchase of the same style. Any cancellation by DMC pursuant to this section ( Cancellations by DMC ) shall subject vendor to a 50% charge back of the FOB/LDP value as stated in the purchase order. DMC will not be responsible for recouping duty on any damages or RTV s (Return to Vendor) for import vendors. This will be the vendors responsibility to reimburse DMC. Section 1-Overview Page. 7

8 Part 5: Cancellations by Vendor Vendor may not cancel a confirmed purchase order within 60 days of the FOB date or 90 days of the in warehouse date if it is an LDP order. Vendor cancellation within this time period, without the authorization of DMC, will result in a charge to the vendor of 50% of the FOB/LDP (depending on order terms) value of the order. Such charge does not limit DMC other rights or remedies. For all divisions except Oh Baby and International, vendors are allowed to short or over ship an order by 5% unless it is a yarn/fiber dye (10% under or 5% over allowed). If it is outside the allowance, buyer should be notified before goods are cut for instructions. Shipments should be shipped in proportion to original size scale ratio. No shortages or overages permitted in one size. For Oh Baby, Oh Baby Division: NO SHORTAGES ARE ACCEPTED Pre-packaged orders must be shipped complete. No loose garments will be accepted. We can accept up to 3% in overages. If shipment is outside the allowance, buyer must be notified before shipment. Please see Oh Baby Manual for more information Any overages will not be paid. In the case of a short shipment (shipping less than 5%/10% shortage allowance), vendor will be charged back 50% of the FOB/LDP value as stated above. Shortages greater than the allowance are vendor partial cancellations so these penalties apply. If you have an over 5% shipment, contact the buyer. Shipments above the 5% allowance will not be paid unless the purchase order is confirmed. Such charge does not limit DMC other rights or remedies. DMC will not be responsible for recouping duty on any damages or RTV s (Return to Vendor) for import vendors. This will be the vendor s responsibility to reimburse DMC The vendor may cancel unconfirmed purchase orders by informing DMC of vendor s intent not to confirm the order. No orders are given by DMC verbally or by written notice except by an official purchase order. Projections are not orders nor do they constitute any obligation of DMC. Production commitments or raw material requirements are for projection and planning purposes only and in no way form an obligation on the part of DMC. Section 1-Overview Page. 8

9 Part 6: Buyer Representative/ LDP Vendor Responsibility in Garment Samples Each sample will have factory initials next to what they have measured. The agent will measure each sample sent by factory and will initial the multi sample measurement sheet. Samples should be size Medium or if Plus size, a 1X. Agent will open pattern submitted by factory and should be satisfied that all corrections have been made as DMC has requested. The agent should initial at the center of the pattern tracing (Do not initial the outside of the pattern after it is folded). Agent will reject the pattern/sample on behalf of DMC, if corrections have not been made properly. Only after the agent is satisfied that the factory has made pattern corrections, will the garments be sent to DMC. Part 7: Designated Fabric Suppliers From time to time, DMC may designate fabric suppliers for certain programs. DMC will advise the garment vendor at the time of development package if the designated supplier MUST be used or if the fabric may be sourced from an alternative resource that matches the chosen quality. By designating a supplier, DMC is not assuming any responsibility, nor warranting that the supplier will perform in a satisfactory manner. In most cases, we are selecting suppliers who have performed in the past and proven to be reliable. However, in making the purchase, the garment vendor must take the same precautions to protect themselves and DMC against poor supplier performance as they would any other fabric supplier. Part 7A: DMC Responsibilities Research fabric supplier to establish likelihood of satisfactory performance. Design/Merchants must understand lead-time and minimums for the fabric selected. DMC Design supplies a sample of the fabric to DMC Fabric Purchasing Department. If design has sample yardage or is ordering sample yardage, they need to supply DMC Purchasing with 2 yards. DMC Fabric Purchasing Department will give fabric supplier DMC performance standards and approved testing labs. Purchasing will send sample yardage to labs to ensure it tests for minimum fabric requirements. Purchasing will keep a sample on file including all the fabric specifications. DMC Design, after approving a half-yard of bulk fabric, will give a portion of the bulk approval to purchasing. Purchasing will compare to the approval swatch, keep part of bulk on file and will send part of bulk to the agent/factory. Section 1-Overview Page. 9

10 Part 7B: Fabric Supplier Responsibilities (regarding DMC) Acknowledge DMC performance standards. Present to DMC only fabrics meeting or exceeding DMC standards. Any deficiency inherent in the fabric MUST be explained at the time of fabric presentation. An example would be gauze. This fabric will not meet the required tensile strength. The vendor should explain the performance of the fabric to determine suitability. Advise DMC as to the recommended care instructions for the fabric. Accurately present the minimums and fabric lead times at the time of presentation. Part 7C: Fabric Supplier Responsibilities (regarding garment vendor) Comply with all agreements made with the garment vendor as to price, terms, packing, shade lots, penalties for late delivery and remedies for quality problems. Comply with all agreements made with the garment vendor as relates to testing responsibilities by each party. Fabric supplier sends bulk fabric approval/dye lot samples to garment vendor as indicated on the purchase order. Ship as specified on the P.O. or accept penalties as stated on the purchase order. Deliver fabric quality as approved and at or below the defect level stated on the order. Part 8: Garment Vendor Responsibilities (prior to placing an order) Establish purchase details such as: price, terms, packing, and penalties for late delivery and remedies for quality problems. Identify the factory/country that will be manufacturing the garments Specify that the bulk fabric approval and dye lot swatches and information be sent to the garment vendor, who will then forward a portion of everything to DMC. Specify inspection terms and acceptable defect level. Make an agreement with the fabric supplier to each side s responsibility for testing and how that procedure will be followed. Section 1-Overview Page. 10

11 Part 9: Garment Vendor Responsibilities (after placing an order) Specify the correct factory information and Country of Origin to the buyer, confirm that the information is correct after the purchase order is written. Send lab dips to the attention of the appropriate DMC designer for approval marked with the color name, style number and PDM package number. Send bulk colors and dye lots for approval to DMC DESIGN prior to shipment of fabric. Swatches must be half-yard FULL WIDTH and marked with color name, style number and PDM package number. Compare approval swatch received by DMC to the bulk fabric received from mill. When receiving the bulk fabric shipment, send a half-yard FULL WIDTH piece to the attention of DMC FABRIC PURCHASING DEPARTMENT. Package should be marked BULK FABRIC SUBMISSIONS. Submission should be marked with the Destination Maternity Division name, the mill name, and the style number on the garment purchase order. Follow up on delivery of fabric. Follow DMC s testing requirements found at wwot.motherswork.com Click here to view the Destination Maternity Corp. Testing Program Requirements. Correct Country of Origin must be permanently affixed on every garment and trim at the neck and content label. Trims can have COO affixed by sewing a label into the seam or by print impression Follow up on quality, which may include first party inspections (garment vendor personnel) or independent party inspection. Section 1-Overview Page. 11

12 Part 10: Packages The DMC policy is that any packages being sent to us for the following reasons are within the cost being borne by the sender: Fit/Pre-production/TOP samples Fabric submits for color/print/bulk quality Samples to solicit business Quality samples for DMC review Accounting and logistics documents DMC bears the shipping costs for the following: Photography or advertising samples not used for fitting Fabric requested by DMC that is not for approval purposes Any shipping cost that should be borne by DMC must be submitted by invoice with the recipient s name listed, a brief description of the item sent, and a photocopy of the request by DMC. All packages sent to DMC that include samples (development, fit, PP, Production Sample, photo shoot, marketing, etc.) as well as bulk fabric, strike off, lab dip samples, MUST be properly and clearly labeled with the exact persons name to whom it is to be sent. Outer cartons must list all departments that have a bundle inside of that carton. Multiple bundles can be sent in one outer carton however, within each carton there must be a separate bundle clearly marked for each designated area/brand. Tech Design bundle the bundle must be labeled TECH DESIGN. Each sample within this bundle must indicate the correct Tech Designer s name. Motherhood bundle the bundle must be labeled MOTHERHOOD. All samples within this bundle must indicate the correct designer or merchant s name. NOTE: This same rule applies to every other brand APIP, OB. TH s, International, JS. The outside of the bundle must clearly indicate the BRAND. Product Development bundle the bundle must be labeled PRODUCT DEVELOPMENT. All samples within this bundle must indicate the correct PD s name. Failure to clearly identify the outer cartons and inner packages with the correct DMC department/team members name will result in packages not getting delivered to the intended DMC team member. This will in turn result in delays back to the vendor, and ultimately, missed dates. Section 1-Overview Page. 12