SUMARY INITIAL SOP AUDIT REPORT

September 14th 2015

I. Business Overview

Not check

II. Product Development & Sampling

Not check

III. Pre-Production Controls

Follow to check point No. 19, 20, 21, 23,1 the other point No. 22, 24, 252 will not check because belong in team belong office.

- n the general, almost factory follow procedure in section 12 from Chicos RFT manual. But not yet build the procedure as the actual practice like PP-meeting plan, Plan for pilot run…. It should have procedure (ex timeline) and record.

- Almost factory have done well the point No. 20 with translate buyer’s specs.- PP meeting done and have minutes- In Pilot run we have section 12A from Chicos RFT manual. But in actual practice we not really follow the

recommend from recommend in Pilot run size as a minimum of one unit per size and color

Recommend for CAP

PI #5 PI #3 PI #2 PI #119 Done well with post and

translate, need include the time line in PP meeting and Pilot run procedure.

Need to post in working area Need include the time line in PP meeting and Pilot run procedure

Need to post in working area Need include the time line in PP meeting and Pilot run procedure

Need to post in working area Need include the time line in PP meeting and Pilot run procedure

23 Need to record the pilot run follow recommend in section 12A

Need to record the pilot run follow recommend in section 12A

Need to record the pilot run follow recommend in section 12A

Need to record the pilot run follow recommend in section 12A

IV. QA Systems & Support

- We have clear organization structure for QA report for managing Director- In general SOPs factory activity have - Inline inspection have follow procedure and have record- Certificate auditor: almost the factory told that don’t have, some factory have for other buyer.- Audit procedure have follow but only factory #5 have post with translation, other factory don’t have post

or post place difficult to found. - All factory we have audit room for difference customer. Some we combine but have separate room for

inspection

1 19. Written procedure for pre-production process available and used by relevant associates.[MANUAL]20. Internal spec package- done by translating buyer’s specs to local language for easy communication. [RECORDS]21. Pre-Production meeting- for all styles attended by senior representatives of all involved departments. Minutes & documentation are distributed to all relevant areas. [RECORDS]23. Pre-Production Pilot Lot (Size Set) - evaluated, approved prior to cutting bulk production. [RECORDS]2 22. Approved Sample- issued to production with a colored tag for Pilot Run Reference.[PROCEDURE]24. Sample evaluation- evaluated by trained technician. [RECORDS] 25. Mannequins- CHS approved mannequins used for fit evaluation during pre-production and production stages. [PROCEDURE]

- The information full set receive from Merchandise - We don’t practice with Final sealed bag sample- Barcode scanner done by self audit team. Not done by factory team

Recommend for CAP

PI #5 PI #3 PI #2 PI #127 - Should prepare SOPs for

all production activity and post in working area with translate in area missing

- Should prepare SOPs for all production activity and post in working area with translate in area missing

- Should prepare SOPs for all production activity and post in working area with translate in area missing

28 Post SOP in line inspection with translate and active follow procedure

Post SOP in line inspection with translate and active follow procedure

Post SOP in line inspection with translate and active follow procedure

29 Please re-confirm is it correct current we don’t have person was trained & responsible to brand for Quality & SOP implementation

30 Post audit procedure with translate in inspection room with active follow procedure

Post audit procedure with translate in inspection room with active follow procedure

Post audit procedure with translate in inspection room with active follow procedure

37 Better using the same format for internal using (self audit) and report form send for Buyer38 Should post the result of performance quality for all follow upWith point No. 393, I still not clear instruction, I will check and update later.

V. Training program

- The actual in all Poongin Factory we don’t have training separate with production.- Training program we just have for QC only. Don’t have sewer- Cross training don’t have- Career advancement program don’t have

This area need will feedback later

VI. Raw material management – Primary (fabric warehouse management)

- In general all Poongin factory done proper way with procedure and follow the require from section 3B from Chios RFT manual

- For shade variation we have done better than requirement from CHICOS for side center side checking, we apply rule 2413 (only PI #5 apply with 6 piece cut), but for end to end roll checking we not follow according the request from CHICOS RFT Manual, some factory just check with 5 yard, and PI #3 not follow all fabric test, just check end to end when found shading when check 4213 only.

- Shade group4 have factory #1 is the best one done in proper way, the follow is Factory #1 and #5 but missing the group report, and Factory #3 is not follow according proper.

- Lab room, only in PI #1&2 we have separate lab room. In factory only have light box and darkroom but for fabric inspection only.

- For point No. 565 and No. 576 current all PI factory have difference practice and not yet build as SOP, in PI #3 have material handling procedure we can reference.

Recommend for CAP

3 39. Reporting System- Used to update management & initiate corrective action4 48. Shade variation- checked per dye lot at side, center, side and end to end. [RECORDS]5 56. Raw Material Storage- Raw materials are stored in an appropriate manner, indoors, packaged, and by lot [PROCEDURE]6 57. Raw Material Handling- Raw materials are handled in a manner that ensures purchased quality is maintained. [PROCEDURE]

PI #5 PI #3 PI #2 PI #15055

- Practice with the standard form for fabric shade test (PI/LAB1-2015-08), fabric weight test report (PI/LAB2-2015-08) - Using standard form for fabric in rack (PI/WH1-2015-08), relax fabric in rack (PI/WH1-2015-08) - all should practice with traffic light system for indentify fabric already pass inspection or relax meet time require can be use (green sticker)

52 Coordinate with factory #1, practice with shade group record and group info.

Practice the shade group.Coordinate with factory #1, practice with shade group record and group info.

Coordinate with factory #1, practice with shade group record and group info.

Share your practice to other factory practice as good as your done

5657

Build SOP for fabric storage and material handling as your current practice and we will benchmark

VII. Raw material management – Trim, sundries & Packing (accessories warehouse)

- Factory #3 and #5 have procedure built by own format, I will collect and provide later for all have same manual.

- Trim information, we not yet have procedure for trim information. Still have case warehouse inspection accessories without approve sample.

- Trim inspection in actual practice in Poongin factory we have apply better than the requirement. We apply AQL 1.0 for accessories inspection, the requirement is AQL 2.5

- Only in factory 1&2 have barcode scanner checking. Factory #3 and #5 don’t have this process- Pre-shrinking elastic and tape only factory #1 practice, the rest none.- We are not apply color fastness test for accessories - Trim card, in each factory have difference number trim card provide for relative department. Need to make

SOP and benchmark

Recommend for CAP

PI #5 PI #3 PI #2 PI #163 Make SOP for trim information646569

Follow checking procedure for accessories in inspection report.

70 Make SOP for trim card with lead time, number copies, provide relative department

VIII. Patterns, maker making & molding

- Factory has separate pattern room for patterns and maker making.- In Poongin factory software using is Gerber Accumark, only PI #5 using Lectra- Calibration & preventive maintenance of plotters, only factory #5 have period maintenance, and the rest is

none. In this issue I suggest all Poongin factory sign the maintenance plotter contract with 01 company and ask them maintenance for all in period time, so we can save money than one by one. In the requirement do monthly7. In addition, the current when I check the plotter in factory #3 have problem, cannot work.

- No. 76 and 77, for maker signoff and maker shrinkage signoff in actual practice have, but not yet have standard procedure

Recommend for CAP

7 75. Calibration & preventive maintenance of plotters- on a routine basis at least monthly. [RECORDS]

PI #5 PI #3 PI #2 PI #175 Continues with

calibration with record and keep file the maintenance report

7677

Make SOP for maker signoff and make shrinkage signoff

IX. Cutting production

- In factory #5 is the good practice with post CHICOS SOP with translate and detail process in cutting. Factory #3 with limited only post a book, but not in visual place (everybody can read), in factory #1&2 have very good banner but put not in proper (behind the shell or SOP over SOP)

- For point No. 858 the actual we have practice but not yet build SOP- For cutting inspection only factory #5 follow proper inspection procedure as require in cutting procedure in

section 13 from CHICOS RFT manual, the rest still missing some step from No. 86 to No. 939

- Do not have preventive maintenance in cutting equipment. Only breakdown maintenance- No. 94, Bulk part only factory #2 have, the rest done in subcontract.

Recommend for CAP

PI #5 PI #3 PI #2 PI #178 Visualize the SOP Arrange the current

procedure banner in cutting and proper way

Arrange the current procedure banner in cutting and proper way

86 Preventive maintenance for cutting equipment. 89 QC should record

immediately after spreading, don’t wait after cut finish.

90 Share your practice with other factory

Should have bundle/cut report

92 Built procedure for numbering of part. Maximize using color sticker for identify purpose

93 Follow practice as section 13 in Chicos Manual 10

X. Fusing

- We have fusing procedure. But in the actual practice we have something need highlight: in factory #1, fusing test the bond strength only do 01 piece, and no preventive or cleaning belt for fussing machine. Factory #2, the record in the test not update according in machine to report, it look ok but if check where in machine setting is not look as the record. In Factory #3, done for 02 times/day, when change the new fabric they did not check fusing.

- All factory do not have AQL checking for fusing. As the factory explain that they have at least 02 worker/machine already check 100%, no do AQL checking.

-

885. Equipment- correct equipment & appropriate for use [PROCEDURE]

9 Reference cutting inspection in page 3 section 1310 No. 4 Bundling & piece control from page 2 and 3 section 13

Recommend for CAP

PI #5 PI #3 PI #2 PI #196 Post fusing procedure

from PI #1 or #2 in fusing area.

98 Build Preventive maintenance & routine cleaning and record101 Bonding strength 02

times/day

XI. Assembly area (sewing line)

- Only factory #2 have show first step the progress TPM, factory #1 have follow up with machine check list, the rest machine maintenance is poor

- Needle control in the general look well. But we don’t have hand needle detector only using magnet. In factory #2 have this equipment but not charge to use.

- Operator contract (example), Factory #5 practice with small piece in machine but cut from finish garment from pilot run. Factory #3, have small piece for normal operation and for critical have sign and approve from FQA. Factory #1, the mockup full piece for critical operation and the rest don’t have. Factory #1, mockup with small piece and some line don’t have.

- We have using template for some operation, but the setting in machine not look in maximize utilize machine, for example the worker still using hand to press re-back stitch while we can set up automatic re-back stitch in single needle.

- Skill inventory we just stop in grade A,B,C and not really using as a tool for line balancing. And no post in the line.

- In factory #5 have good practice with show the picture and technical skill staff in the line- We don’t have progress control WIP in the line- In line control we have done and do 100% for end line inspection

Recommend for CAP

PI #5 PI #3 PI #2 PI #1105 Practice TPM Practice TPM Practice TPM110 Got procedure for

bundle/piece control from factory #3 or #1

117 Post line staff and technical in each line same as factory #5 have done

XII. Finishing, pressing & packing

- We have procedure but in factory #3 not post in work place, factory #1&2 have post but not in proper place.

- No preventive for suction table and iron- Only factory #5 have approve pressing standard post in pressing area, other factory don’t have pressing

standard or old style- For security tape apply for some buyer only, not all.

Recommend for CAP

PI #5 PI #3 PI #2 PI #1

184 Should have pressing standard, can understand that is operator contract for pressing

185 Build SOP for trim distribution & usage