Pure Jade by Taylor Allen

Pure Jade

GLOBAL SOURCING STRATEGY

AMANDA NG | TAYLOR ALLEN | CHELSEA STAMBOULY

abstract

Pure Jade is an eco-friendly apparel company with a focus on woven tops. Pure Jade targets young, professional women who are about to or have recently entered the work field. We focus on quality, value, the environment, and transparency with consumers and within the company. It is vital for Pure Jade to source with countries that can uphold the standards of the company while still producing trendy and well-made clothing. We have chosen to out source in order to save costs for the company and the consumer and so our products can be produced in a quick and efficient manner by a country that has the expertise. This report is based on sourcing sustainable, woven, cotton tops out of India, Malaysia, and the Philippines. India is one of the world’s largest distributors of cotton while both Malaysia and the Philippines are prided on their garment quality. The Philippines is the largest manufacturer in the world containing emerging economies. Pure Jade is sourcing to the Philippines is due to our research on past U.S. companies who have chosen to source to the Philippines. They’ve proven to have many factories that follow the company’s sourcing guidelines in a cooperative manner. Malaysia is a great source of sustainable woven tops because their culture, social expectations and geographical make up are compatible with the needs of Pure Jade. Through advanced research Malaysia has been found to acquire Pure Jades Values through sustainability, quality, and transparency. Malaysia has the best quality of garment production in Southeast Asia. India is going to be an important asset to this company. The textiles and apparel will guarantee a quality product. At first, conducting business in India was not easy, but Pure Jade was able to find transparent and qualified suppliers. At Pure Jade, we strive to provide quality, transparency, and sustainability to our consumer. With our determination to abide by our values set these three countries and their suppliers will meet our company’s standards. The mission of Pure Jade is to provide young professional women with trendy eco- friendly clothing that are not only affordable but also versatile. India, Malaysia, and the Philippines create the most opportunity to succeed in completing our mission.

Amanda Ng Taylor Allen Vice President, Product Development

Chief Executive Officer

Chelsea Stambouly Vice President, Global Sales Operations

table of contents Introduction

page 7

Strategy Development Process

page 15

Country Analysis

page 21

Supplier Analysis

page 29

Costing

page 39

Evaluation

page 45

Final Sourcing Strategy

page 53

Conclusion

page 57

Appendix

page 61

Sources

page 121

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introduction

The purpose of this document is to develop the Pure Jade products. This document goes into the details of where the products will be sourced, the research that led to the selection of the countries and manufacturers, the costing and negotiations of each product, and the development of the overall strategy. Each step for developing the global sourcing strategy for Pure Jade is described in this document.

Mission, Vision, and Values Product Offering and Price Point Mood Inspiration Target Market Customer Profiles

Mission, Vision, and Values

Pure Jade is a women’s eco-friendly clothing brand. As a company, Pure Jade values transparency, sustainability, and quality. Pure Jade is committed to being an eco- friendly and socially responsible company. Our mission is to provide young professional women with trendy, environmentally friendly clothing that is not only affordable but also versatile. Pure Jade’s vision is to become a multichannel distributor. Currently Pure Jade is exclusively sold wholesale to department stores like Saks Fifth Ave, Nordstrom, Barney’s New York, and Neiman Marcus. We plan to expand and allow our customers the ability to purchase our merchandise directly from us via an online store. This will increase our brand’s overall accessibility to our loyal customers. Within the next five years we expect to become a fully developed and functional e-commerce retailer. All Pure Jade products are made from organic, recycled, or eco-friendly fabrics and materials. Pure Jade strives to provide fashionable clothing that’s production does not harm the earth.

Product Offering and PRICE POINT Pure Jadeâ&#x20AC;&#x2122;s main product category is woven tops. The most popular selling products are the following:

- Sleeveless peplum tank $36 - Short sleeve tunic $39 - 3/4 sleeve half button down tunic $42

The clothing is well worth the price not only because of its sustainability, but also because a Pure Jade top can be worn again and again. It will retain its shape and color for multiple seasons because of the quality invested into each garment.

INSPIRATION

MOOD

Target Market While Pure Jade is a company that could be appealing to a variety of different consumers, our target demographic is female between the ages of 23-35. This woman is a young professional, most likely in her first or second job. She has an average annual income of $40,000 - $60,000. She resides in a metropolitan area and has an active lifestyle. She is environmentally friendly and finds value in companies that are socially responsible.

Customer Profiles Sara Jones Age: 32 Location: Austin, Texas Marital Status: Engaged Occupation: Vegan Café Owner Income: $62,000 Monthly Spending: $600 Car: Nissan Leaf Hobbies: Her vegetable garden, playing with her two nieces and nephews, and going dancing with her fiancé after a long day of work.

Kylie Stevens Age: 26 Location: Washington, DC Marital Status: Single Occupation: Non-Profit Organization Income: $45,000 Monthly Spending: $350 Car: Toyota Prius Hobbies: Shopping at the local farmer’’s market, going to see live indie bands perform, painting, and running with her dog.

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strategy development process

Rather than going into the world of global sourcing blindly, we at Pure Jade have decided to develop a strategy on how we will conduct our business. This will ensure we have chosen the right countries and manufacturers to produce our products as well as ensuring us the best prices possible. By conducting the proper research we can narrow it down to the best location for our products and we will be fully prepared for negotiating to the best price.

Values Sourcing Guidelines Product Breakdown

Values

Pure Jadeâ&#x20AC;&#x2122;s main values are transparency, sustainability, and quality. Transparency is important for us and anyone that we do business with, so as a company we are aware of what is going on in each aspect of the company: from factories to corporate headquarters to stores. We value an open environment so that our customers can be well informed on how we conduct business. Pure Jade also values sustainability, considering the brand is based around the environment. Since we are a transparent company, it will be easy for our consumers to see how environmentally conscious we are. Quality is our third main value. The clothing at Pure Jade is targeted towards young professionals, so while the products are trendy, we also have many basics that can be worn for multiple seasons. We must maintain high quality in our products so they will continue to look neat and luxurious after many wears.

Sourcing Guidelines

Pure Jadeâ&#x20AC;&#x2122;s sourcing guidelines reflect the company values. Our sourcing guidelines require that the materials used for production be good for the earth. Not only do we value the earth, but also we value the people we work with. Any factory that does business with Pure Jade must treat their employees with fairness and respect. Employees will be paid fair wages and will not be forced to work overtime. Child labor is strictly prohibited: no exceptions. Minors must have schooling opportunities provided for them. Work facilities must be maintained in a safe and clean manner at all times. An on-site Pure Jade representative will monitor each factory in order to ensure standards are being upheld and people are being treated with fairness. Pure Jade reserves the right to terminate business with any manufacturer that violates Pure Jadeâ&#x20AC;&#x2122;s sourcing guidelines.

Product Breakdown The tank is a seasonal item that will be primarily produced for spring and summer. It starts out in January with a smaller amount produced because people are mostly still shopping for winter clothes. Production picks up in February and even more in March and April. May, June, and July have the most tanks produced because that is prime time for summer shopping. The production will gradually slow down August and September and that will be the last time it is produced for the year. The button-down tunic is also a seasonal item. It will mostly be produced fall and winter. It starts with a high amount manufactured in August and gets higher in September for back to school season. Production remains pretty steady through December as it gets cooler and holiday shopping approaches. January sees a drop in production as the season slowly moves into spring. By April there are much less produced to close the winter season.

Line Plan SP/SU

FALL

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

Quan%%es

STYLE #

NAME

Style #1

Tunic

34,000

32,000

33,000

35,000

34,000

35,000

32,000

40,00

Style #2

Tank

10,000

28,000

30,000

35,000

42,000

40,000

35,000

28,00

Style #3

Half BuFon

32,000

30,000

28,000

10,000

32,000

40,00

76,000

90,000

78,000

99,000

108,00

TOTAL

SUMMER

77,000

76,000

75,000

We will be producing 1,000,000 total products for the year. This chart shows the break-up of how many of each garment will be produced per month. The tunic is Pure Jade’s version of a t-shirt; a little more professional. It is produced year round because it is a basic garment and the most popular seller. It will be manufactured pretty steadily from month to month with a few exceptions. January will be slightly higher since many people shop after receiving gift cards from the holidays. Production is raised slightly again in April and May for the start of summer shopping. Production picks up again in September for back to school shopping and once again in November and December for holiday shopping.

WINTER

HOLIDAY

AUG

SEP

OCT

NOV

DEC

TOTAL

Wholesale

Cost

Per Unit

Total

Per Unit

Total

Margin

Quan%%es

32,000

40,000

35,000

38,000

40,000

35,000

28,000

32,000

40,000

38,000

40,000

99,000

108,000

75,000

76,000

80,000 1,000,000 $ 29.25 $ 9,750,000 $ 6.94 $ 2,312,428 $ 22.31

420,000 $ 39.00 $ 16,380,000 $ 9.22 $ 3,872,820 $ 29.78 290,000 $ 36.00 $ 10,440,000 $ 8.76 $ 2,541,560 $ 27.24 290,000 $ 42.00 $ 12,180,000 $ 9.78 $ 2,835,330 $ 32.22

Average

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country analysis

We decided to manufacture the Pure Jade products in Asia, because many of the countries not only specialize in woven tops, but Asia is one of the primary locations for organic fibers. Asia is also one of the most inexpensive areas in the world to outsource to and their garment industry just keeps growing. Once we decided to go with Asia, we were able to narrow it down to three countries that we felt represented our company values as well as fell into our price points: the Philippines, India, and Malaysia.

Malaysia India The Philippines Country Ranking

MALAYSIA Malaysia is an excellent location to manufacture Pure Jade’s woven tops. The country as a whole focuses heavily on manufacturing high quality products. This is due to the higher minimum wage than most surrounding countries and its well-educated work force. Because Pure Jade’s mission is to provide high quality, fashionable, and sustainable clothing to young professional woman, it is extremely important that the locations in which we produce our merchandise uphold the same value. Malaysia, as a whole, is fairly stable. However, its current income level is extremely unbalanced. The more urbanized areas and cityscapes are much more developed than the rural areas. For this reason, the income level varies dramatically. Currently, the country of Malaysia has many government initiatives in place in order to create more of an equilibrium between classes. There is a focus on providing higher education for those that are less fortunate and under educated. This is beneficial to our strategy because the government is focused on creating a better environment for its inhabitants, which will in turn create more work within the industry, progress manufacturing capabilities, and create more options for Pure Jades to maximize its margins. Malaysia’s textile and textile product industry is made up of four sub-sectors. These sub-sectors include, polymerization, spinning, weaving, knitting and wet processing; made-up garments; madeup textiles; and textile accessories. In order for Malaysia to compete with the intensified global competition, Malaysia’s textile manufactures are moving up in the value chain by diversifying into

the production of higher quality and valued textiles. They are implementing automation and computerized manufacturing, seeking business collaboration with foreign companies in order to acquire new technologies, and undertaking research and development activities in hopes to develop new processes and garment/textile applications. Currently the textile industry employs more than 68,000 workers. In 2011, Malaysiaâ&#x20AC;&#x2122;s textile industry was the 10th largest export earner and contributed to approximately 2.3 percent of Malaysiaâ&#x20AC;&#x2122;s total exports of manufactured goods. This was equivalent to approximately RM10.8 billion while imports were approximately valued at RM6.6 billion. The main items that were exported were yarn, woven fabrics and apparel. The main imported items were yarn and woven fabrics. As previously mentioned, Malaysia has increased its focus on developing high-end and more valuable textiles. Some of the international brands that manufacture its product in Malaysia include, Nike, Adidas, DKNY, Ann Taylor, Armani, Talbots and Tommy Hilfiger.

INDIA India is one of the United States largest goods trading partner as of 2011 ranking number 13th in imports and 17th in exports with $21.6 billion in total. The United States traded $93 billion in cotton alone. The relationship between the U.S and India is stimulated from common values. The values consist of the rule of law, respect for diversity, and democratic government. Both India and the U.S promote global security, stability, and economic prosperity through trade, investment, and connectivity. Both countries also value the free flow of global trade and commerce, including through the vital sea-lanes of the Indian Ocean. The U.S. to India bilateral merchandise trade in 2008 topped $50 billion. Principal U.S. exports are lab reagents, aircraft and parts, advanced machinery, cotton, fertilizers, scrap metal, and computer hardware. Imports from India are textiles and ready-to-wear garments; International services, agricultural products, gems, jewelry, leather products, and chemicals. The U.S. is Indiaâ&#x20AC;&#x2122;s largest investment partner; the U.S. holds a 13% share. Indiaâ&#x20AC;&#x2122;s inflow from U.S. was over $16 billion during 2008. Indiaâ&#x20AC;&#x2122;s biggest flaw is their lack of transparency but there has been measures taken to improve. In 2005, the Ministry of Textiles administered the Right To Information Act. This act intends to promote openness, transparency, and administrative accountability through providing access to every citizen. This is a new beginning for the Indian Ministry of Textiles. In this act openness is a rule, but

still secrecy is accepted. Secrecy is still accepted because it has been a dominant part of India’s economy. The Ministry of Textiles designated the Central Public Information Officers to be in charge of distributed information. Citizens are able to obtain the necessary information by paying a minimal fee and an application charge. India exports 50% of the world’s organic cotton. India is a top supplier of organic cotton with 200 producers in 8 different states. India’s textile and clothing industry is crucial to the progression in the economy, being one of the most valuable sectors in exports. It is predicted in the 12th 5 year plan that the exports of Textiles and Clothing will account for 14% of industrial production and a 4% GDP, with $64.11 billion by the end of March 2017. The textile exports employ about 45 million people and are responsible for 11% of the countries exports. The textiles financial year of 2011- 2012 grew 20.05% reaching $33.31 billion. Along with India’s becoming a strong competitor in the Textile Market, many reputable houses have begun sourcing offices there such as: Marks and Spencer, Hagger Clothing, Kellwood, Little Label, Boules Trading Company, Castle, Alster International, and Quest Apparel Inc. The popularity in India’s Apparel market is only continuing to grow. According to the latest WTO data India is the sixth largest exporter of apparel globally. Through their support, the government has continued to make provisions of the Foreign Trade Policy to enable growth. These polices now contain eleven Textile Export Promotion councils. These councils represent numerous sections of the textile and clothing industry to promote exports and enhance global trade. The councils include: Apparel, carpet, cotton, handicrafts, handlooms, Indian Silk, power looms development, synthetic and rayon, wool and woolen, wool industry, and Jute Products Development & Export Promotion Councils. India’s textile industry efficiently contributes to the countries industrial output. The textile sector is India’s 2nd largest supplier of employment behind agriculture. Textiles supply about 14% to the industrial production, 4% to the GDP, and 11% to the countries export earnings. What makes India’s textiles so desirable is the variety it presents. India contains hand-spun and hand woven sectors, along with power looms, and knitting divisions.

The Philippines The Philippines seemed like an excellent nation to outsource to for several reasons. While the location of Asia is far, the Philippines are a straight shot through the northern Pacific Ocean to Pure Jade headquarters in California. The Philippines also have a great relationship with the United States so trade would not be difficult. The Filipino government is a republic modeled after the United States; therefore it is stable, easy to work with, and simple to understand. Most people in the Philippines speak English and are very friendly, which makes it easy to conduct business. The textile industry in the Philippines is fairly large. In 2012, apparel exports reached $2 billion for the country. The industry employs around 120,000 people. There are two sectors that people can be employed in the Filipino apparel industry: the primary processing sector and the secondary processing sector. The primary sector focuses on spinning, twisting, weaving, knitting, dyeing, finishing, and basically anything that has to do with creating the textile. The secondary processing sector is compromised of the manufacturing of the products. The Philippines looks attractive to manufacture products because of the quality they are known for putting into their garments. Another positive factor is that Pure Jade is producing organic, natural, and eco-friendly products and the Philippines have a large surplus of natural fibers: particularly their plentiful abaca, pina, silk, and ramie which are all made from local plants and fruits.

COUNTRY RANKINGS Malaysia

India

Philippines

Rank

Explana)on

Rank

Explana)on

Rank

Explana)on

Business Climate

Malaysia's business climate is good due to its ability to produce quality merchandise. However, It is s=ll behind in terms of sustainability. It is also inconveniently located, in rela=on to the United States.

India has a good business climate because it is constantly developing. They are also very involved with U.S trade.

The Philippines is a great place to do business because it is the second largest emerging economy in Asia. The Philippines already trades with the U.S. and both na=ons have a great rela=onship.

Costs

Malaysia's costs land between those of India and the Philippines. Due to its new minimum wage, the labor costs are higher in Malaysia. However, the quality of produc=on is reﬂected in this increase.

India has low costs, and good quality. They are known for their labor intensive employers. The employers are skilled, but receive a very low minimum wage.

The prices in the Philippines are a liGle higher than other Asian countries but s=ll reasonable. The produc=on cost is $.11 per minute and the tex=les are primarily natural so they are a liGle higher in price.

Government

Malaysia has a very stable government. Its structure is not the most organized, however it has been working to create more of a balance between the urban and rural communi=es of Malaysia.

The Government is good because they are always looking for new ways to improve the tex=le industry. Although they aspire to improve, improvement tends to take a long =me.

The Filipino government is a republic modeled aNer the U.S. The government has their ﬂaws with suppor=ng the economy and the work force, but they have passed laws to help increase the tex=le industry such as the Save Our Industries Act.

Loca)on

6.5

Malaysia is tucked in Southeast Asia. It is surrounded by many other islands and countries. Even with its easy access to the ocean via its mul=ple ports, it is a diﬃcult place to transport merchandise out of.

India is located in the Southern End of Asia, it is surrounded by water enabling a lot of water freight opportunity.

The Philippines is far, but one of the closest Asian countries to the states. It is surrounded by water so there are many easily accessible ports that are a straight shot through the North Paciﬁc Ocean to CA.

6.5

Because Malaysia is an island in Southeast Asia and located almost directly on the equator, its climate is a risk for doing business. Floods and monsoons are common.

India has preGy high risks due to their lack of free-‐ trade agreements and transparency. India's laws applying to trade are complicated and hard for foreigners to understand. There is a lot of risks due to the lack of transparency.

6.5

One major risk of the Philippines is the weather, because it is a group of islands there are tropical storms. Although the country has laws against child labor and other worker's rights, there have been reports that they don't always follow them.

Social Stability

There is a disconnect between the urban and rural areas of Malaysia, causing dras=c diﬀerences in income level. Currently approximately 3.8% of Malaysia's popula=on is living below the poverty line and is only growing at approximately 1.5%, while its unemployment rate is approximately 3.2%.

India suﬀers from over popula=on with 1/3 of the country living below the poverty line. The unemployment rate in India has reached 9.8%.

A fourth of the Filipino popula=on is living in poverty and the unemployment rate is 7%, but they are the second largest growing economy in Asia.

Sourcing Guidelines

Malaysia's sourcing guidelines match with the guidelines developed for Pure Jade. However, there have been =mes where these laws have been broken in Malaysia.

Since India is one of the top suppliers of organic coGon globally they really apply to our sourcing guidelines. They implement many organic cer=ﬁca=on organiza=ons such as: OCAB, APEDA, and Oeko Tex.

The labor laws in the Philippines match up with the standards of Pure Jade's sourcing guidelines.

Tex)le Industry

Malaysia does not have access to all of the raw materials necessary to manufacture all goods ver=cally. However, because it is centrally located, it is easy to import goods from other countries. It is currently in the process of implemen=ng new strategies in order to stay compe==ve within the tex=le industry.

The tex=le industry in India is their 2nd largest industry behind agriculture. Tex=les supply about 14% to the industrial produc=on, 4% to the GDP, and 11% to the countries export earnings.

The tex=le industry in the Philippines employs 120,000 workers. Apparel accounts for 4.4% of the Philippines' exports.

Trade Agreements

Malaysia does not have a Free Trade Agreement with the United States. Malaysia does have six FTAs with other surrounding coun=es and is part of the ASEAN, AFTA, and TTP.

Regardless of the Indian governments constant economic transforma=on efforts, the U.S. exporters con=nue to struggle against the tariff and nontariff barriers that hinder the importa=on of U.S products.

The Philippines do not have any trade agreements yet, but they are a member of ASEAN. The Associa=on of South Eastern Asian Na=ons is working to form trade agreements with several na=ons by 2015.

Malaysia's workforce comes from more than 150 universi=es, college or training ins=tu=ons. Its government has created mul=ple incen=ves in hopes to keep its highly-‐trained workforce in Malaysia. One of these incen=ves being the Talent Corp. Malaysia Bhd.

The Tex=le Workers’ Rehabilita=on Fund Scheme came into eﬀect. This scheme greatly improved the circumstances of any tex=le unit. There are many training facili=es implemented from European and American countries to improve the skilled laborers.

The Dual Training System Program is a training program that teaches youth the skills they need to enter the work force. Workers are able to work heir way up to higher posi=ons.

Malaysia inhabits approximatly 29,180,000 individual, 3.8% of which are below the poverty level. Its GDP(ppp) is at $207.8 billion and its GDP per Capita is approximately $9,000. There is a imblance between the income level of Malaysia's urban and rural areas.

India suﬀers from overpopula=on with a popula=on of 1.2 billion, ranking 2nd in popula=on and 33rd in popula=on density. About 700 million people in India receive $2 a day or less. The middle class in India is growing with 50 million people receiving an income ranging from 200,000 to 1,000,000 rupees per year

There are 105 million people in the Philippines and the popula=on is growing by 1.8%. The GDP growth rate is 6.6%. Agriculture makes up 11.9% of the GDP, industries make up 31.1%, and services are 57%. There are 46.36 million people in the work force.

Risks

Trained Workforce

Socio-‐eco-‐ poli)cal

TOTAL

79.5

AVERAGE

7.27

6.91

7.23

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supplier analysis

Once selecting the three potential countries, the next step was to search the suppliers with the best match for Pure Jade. Some major things we focused on when doing initial research were their capacity and flexibility, quality, sourcing guidelines, organic materials and processes, and their relationship with trading with the United States.

Malaysia India The Philippines Supplier Ranking

malaysia ESQUEL MALAYSIA SDN BHD Esquel Malaysia SDN BHD is located in Penang, Malaysia. It is one of the worldâ&#x20AC;&#x2122;s leading producers of premium cotton shirts. It currently manufactures a wide variety of apparel for both high-end luxury brands but also mass-market retailers. With facilities in China, Vietnam, Mauritius, and Sri Lanka, some of the brands that they work with include, Ralph Lauren, Tommy Hilfiger, Nike, J. Crew, Brooks Brothers, Hugo Boss, and Lacoste. Esquelâ&#x20AC;&#x2122;s vertically integrated operations ensure its apparel manufacturing process produces the highest possible quality. Esquel promotes ethical business practices and is continuously working to improve its facilities and its overall reputation.

PEN APPAREL SDN BHD Pen Apparel SDN is located in Penang, Malaysia. It has built a reputation for being an innovative apparel manufacture. It has a highly integrated supply chain and continuously works to maintain its leading production capabilities. It is a subsidiary of TAL Apparel Limited, who is one of the largest garment manufacturers in the world. Some of its customers include Brooks Brothers Group, Inc., The apparel Group, Limited, and Retail Brand Alliance, Inc. Since 2007, it has completed close to 1,300 totally shipments to the United States.

VICMARK HOLDINGS SDN BHD Vicmark Holdings SDN BHD is located in Johor Baru, Malaysia. It is a privately owned manufacturing facility that is known for its ability to produce high-quality apparel. The majority of its goods are cotton based, however it has the ability to work with all fabrications. Unlike the other two Malaysian suppliers, it is a small facility and does not have the same capacity capabilities. Some of the apparel brands that they have built a strong relationship with include, Retail Brand Alliance, Inc., Facconable USA Corporation, and Nordstrom, Inc.

India Bombay Rayon Fashions Limited Bombay Rayon Fashions Limited is located in Mumbai India. They are the largest shirt manufacturer in India. It makes sense for Pure Jade to do business with them because they exceed all of our guidelines. They are a vertically integrated textile company. They specialize in organic cotton and are certified by: Oeko Tex, Fair Trade Certified, SA-8000, and ISO 14001. These certifications ensure their organic status of textiles from raw materials to production, processing, manufacturing, packaging, labeling, exportation, importation, and distribution of all natural fibers through environmentally and socially responsible work standards. They value transparency and abide by the needs and guidelines of the buyer.

Apparel Concept Ltd. Apparel Concept Ltd also has many strong qualities that make it appealing to Pure Jade. They are also Oeko Tex certified, assuring the organic and sustainable process of all their apparel from manufacturing to packaging. Apparel Concept Ltd, works with many American consumers and is proficient in the exportation process. While this is a fantastic company, Bombay Rayon has more certifications and experience which made them rank above Apparel Concept Ltd.

LG Fashions LG Fashions is one of Indiaâ&#x20AC;&#x2122;s leading garment exporting firms. They work with many internationally recognized brands. They produce both woven & knitted garments and specialize in all variety of dresses like shirts, blouses, tops, skirts. This company has also received the SA 8000 certification showing their responsible and sustainable business practices. While this company appeals to Pure Jade and meets many of our requirements, finding information on them was not easy. This shows their transparency is not as good as Bombay Rayon Fashions, ultimately why Bombay Rayon Fashions is our leading supplier in India.

The Philippines Suzette Manufacturing & Trading Co. Suzette Manufacturing & Trading Corporation produce clothing for women, men, and children in knit and woven fabrication. The company has been around since the 70â&#x20AC;&#x2122;s and primarily exports to clients in the United States, Canada, and Europe. Their mission is to focus on excellence and quality management to strengthen their foothold in the globally competitive apparel industry. They are committed to: productivity, enhancement, expansion, modernization, and quality standards that satisfy both clients and business partners. Suzette Manufacturing is constantly improving employee capability and team spirit. They hire 400 employees, 300 of them being sewers, and they can accommodate 240,000 sets per month. They work with all different fabrics and materials, so ecofriendly fibers are a possibility.

Eastko Apparel Inc. Eastko Apparel Inc. has made 1,596 imports to the United States from the Philippines in the last five years. They are the largest clothing manufacturer in the Philippines that trades with the U.S. The company primarily manufactures apparel, dress, wearing, and wearing apparel. They produce all different types of apparel, natural and synthetic fibers. They have a large selection of woven tops, womenâ&#x20AC;&#x2122;s clothing, cotton, woven cotton, and organic materials, which is exactly the kind of materials that Pure Jade is looking to use for production.

C.S. Garment Inc. CS Garment, Inc. has been around for over two decades. They specialize in manufacturing highend professional and quality shirts. They primarily cater to the luxury European market, but they also produce some for the United States. They hold high standards for quality and delivery. The company only hires employees that have passed screenings, interviews, and trial testing. They are set on having employees with the highest skills in shirt production, quality control, pattern making, and technical matter. They have implemented a Dual Training System Program, which helps develop skills and competencies that youth need. When youth graduate the program, they have the opportunity for local and international employment. The company works hard to make sure their employees are prepared for responsibilities so that if the opportunity arises they are ready to take on a better position and work their way up. They treat their employees fairly and with respect. This shows that CS Garment is really invested in producing high quality pieces, which is something very valuable to Pure Jade. They also seem to really care about their employees and treat them with respect, which is another valuable asset to Pure Jade.

Pen Apparel SDN BHD

8 9 7 8 9 8 6 8 10 8 9 8 98 8.17

Esquel Malaysia SDN BHD

8.08

Abili%es

Capacity

Costs

Customer Service

Customers

Flexibility

Lead-‐%me

Management

Quality

Services Oﬀered

Strategic Outlook

Sourcing Guidelines

TOTAL

Average

Malaysia

7.92

8.17

7.25

Vicmark Holdings SDN Bombay Rayon Fashions Apparel Concept Ltd. Ltd. BHD

India

6.75

L G Fashions

SUPPLIER RANKINGS

Pure Jade

7.92

SuzeGe Manufacturing and Trading Corp

7.75

Eastko Apparel Inc.

Philippines

7.58

CS Garment Inc.

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costing

Margin Comparisons Initial vs. Preliminary vs. Final Costs

40 Tunic

Half-‐Bu5on Down

Tank

Pilippines

Tunic

Half-‐Bu5on Down

SuzeHe Manufacturing and Trading Corp

Avg Wholesale Avg Purchase Avg Margins Avg Margins %

Total Wholesale Total Purchase Total Margins

$ 39.00 $ 13.24 $ 25.76 66.06%

Avg Cost/Unit Avg Tank Cost Avg Tunic Cost Avg BuHon Cost

$ 25.76 $ 12.68 $ 13.17 $ 13.43

64.67% 66.72% 68.74% 60.33% 61.74% 64.05% 69.31% 70.21% 71.31% $ 1,620,000 $ 2,730,000 $ 8,400,000 $ 1,620,000 $ 11,700,000 $ 1,890,000 $ 7,200,000 $ 1,950,000 $ 1,890,000 39,000,000 $ 908,600 $ 2,626,000 $ 642,600 $ 4,476,000 $ 679,500 $ 2,210,000 $ 581,000 $ 542,250 13,238,350 $ 572,400 $ 7,224,000 $ 1,210,500 $ 4,990,000 $ 1,369,000 $ 1,347,750 25,761,650 $ 1,047,600 $ 1,821,400 $ 5,774,000 $ 977,400

$ 36.00 $ 39.00 $ 42.00 $ 36.00 $ 39.00 $ 42.00 $ 36.00 $ 39.00 $ 42.00 $ 12.72 $ 12.98 $ 13.13 $ 14.28 $ 14.92 $ 15.10 $ 11.05 $ 11.62 $ 12.05 $ 23.28 $ 26.02 $ 28.87 $ 21.72 $ 24.08 $ 26.90 $ 24.95 $ 27.38 $ 29.95

Tank

Bombay Rayon Fashions Ltd.

Wholesale Purchase Margin %

Half-‐Bu5on Down

India

1,000,000 45,000 70,000 200,000 45,000 300,000 45,000 200,000 50,000 45,000

Tunic

Esquel Malaysia SDN BHD

Total Units

Tank

Malaysia

INITIAL MARGINS

Pure Jade

$ 649,110

$ 9,013,400 $ 403,290

$ 29,986,600 $

Total Wholesale

Total Purchase

Total Margins

$ 9,351,200 $ 443,700

$ 29,648,800 $

Total Margins

$ 11.28

Avg BuHon Cost

76.02%

$ 8.00

Avg Margins Avg Margins %

$ 9.72

Avg Tunic Cost

$ 29.65

Avg Purchase

$ 29.99

Avg Cost/Unit Avg Tank Cost

$ 39.00

$ 9.35

Avg Wholesale

Tank

Pilippines

$ 39.00

$ 42.00

Half-‐Bu5on Down

1,383,750

$ 521,550

$ 1,890,000

73.21%

$ 30.75

$ 11.59

$ 42.00

1,517,500 $

$ 432,500

$ 1,950,000

77.82%

$ 30.35

$ 8.65

$ 39.00

50,000 45,000

Tunic

SuzeHe Manufacturing and Trading Corp

1,383,750

$ 506,250

$ 1,890,000

73.21%

$ 30.75

$ 11.25

1,402,500 $

$ 547,500

$ 1,950,000

71.92%

$ 28.05

$ 10.95

5,206,000 $

$ 1,994,000

$ 7,200,000

72.31%

$ 26.03

$ 9.97

$ 36.00

1,393,650 $

$ 496,350

$ 1,890,000

73.74%

$ 30.97

$ 11.03

$ 42.00

Half-‐Bu5on Down

50,000 45,000

Tunic

SuzeHe Manufacturing and Trading Corp

5,160,000 $

$ 2,040,000

$ 7,200,000

71.67%

$ 25.80

45,000 200,000

Half-‐Bu5on Down

9,450,000 $

$ 2,250,000

$ 11,700,000

80.77%

$ 31.50

1,199,700 $

$ 420,300

$ 1,620,000

74.06%

$ 26.66

6,156,000 $

$ 2,244,000

$ 8,400,000

73.29%

$ 30.78

2,181,200 $

$ 548,800

$ 2,730,000

79.90%

$ 31.16

1,176,300 $

$ 39,000,000 $ 1,620,000

Total Purchase

72.61%

Total Wholesale

$ 26.14

$ 7.50

$ 39.00

Margin

$ 11.22

$ 9.34

$ 36.00

$ 7.84

$ 42.00

$ 9.86

$ 39.00

$ 36.00

Tunic

$ 36.00 $ 10.20

1,512,000 $

$ 378,000

$ 1,890,000

80.00%

$ 33.60

Bombay Rayon Fashions Ltd.

Wholesale

Tank

$ 42.00 $ 8.40

FINAL MARGINS

Cost per Unit

Half-‐Bu5on Down

India

Tank

Pilippines

45,000 200,000

Half-‐Bu5on Down

9,468,000 $

$ 2,232,000

$ 11,700,000

80.92%

$ 31.56

45,000 300,000

1,000,000

Tunic

Esquel Malaysia SDN BHD

$ 9.78

$ 9.22

$ 8.76

$ 29.99

$ 39.00 $ 7.44

1,299,150 $

$ 320,850

$ 1,620,000

80.19%

$ 28.87

6,463,600 $

$ 1,936,400

$ 8,400,000

76.95%

$ 32.32

$ 7.13

45,000 70,000 200,000

Total Units

Avg Margins Avg Margins %

Tank

Avg Tunic Cost

$ 29.99

Malaysia

Avg Tank Cost

Avg Purchase Avg BuHon Cost

Avg Cost/Unit

$ 39.00

$ 9.01

Avg Wholesale

76.89%

$ 42.00 $ 9.682

2,080,890 $

$ 2,730,000

$ 39,000,000 $ 1,620,000 1,216,710 $

76.22%

$ 29.73

$ 27.04

Margin 75.11%

$ 39.00 $ 9.273

$ 36.00

$ 8.962

Tunic

$ 36.00

Tank

Bombay Rayon Fashions Ltd.

45,000 300,000

Half-‐Bu5on Down

India

45,000 70,000 200,000

Wholesale

1,000,000

Tunic

Esquel Malaysia SDN BHD

Cost per Unit

Total Units

Tank

Malaysia

PRELIMINARY MARGINS

INITIAL vs. PRELIMINARY vs. FINAL Costs

Name Tank Tunic Bu7on

Style #

Wholesale

IniCal Cost Margin%

64.67% $ 8.96 66.72% $ 9.27 68.74% $ 9.68

75.11% $ 9.86 76.22% $ 9.34 76.95% $ 9.97

Average Price $ 39.00 $ 12.94 Average Cost

$ 9.31

$ 9.72

Name Tank Tunic Bu7on

Style #

Wholesale

66.71%

IniCal Cost Margin%

76.09%

INDIA Prelim Cost Margin%

60.33% $ 7.13 61.74% $ 7.44 64.05% $ 8.40

80.19% $ 7.84 80.92% $ 7.50 80.00% $ 8.65

Average Price $ 39.00 Average Cost $ 14.77

$ 7.66

$ 8.00

Name

Style #

Wholesale

62.04%

IniCal Cost Margin%

80.37%

PHILIPPINES Prelim Cost Margin%

69.31% $ 10.20 70.21% $ 10.95 71.31% $ 11.25

71.67% $ 11.22 71.92% $ 11.03 73.21% $ 11.59

Average Price $ 39.00 Average Cost $ 11.57

$ 10.80

$ 11.28

70.27%

72.27%

74.97%

78.22% 80.77% 79.40%

79.47%

Final Cost Margin%

123 $ 36.00 $ 11.05 456 $ 39.00 $ 11.62 789 $ 42.00 $ 12.05

Average Margin

72.61% 76.05% 76.26%

Final Cost Margin%

123 $ 36.00 $ 14.28 456 $ 39.00 $ 14.92 789 $ 42.00 $ 15.10

Average Margin

Final Cost Margin%

123 $ 36.00 $ 12.72 456 $ 39.00 $ 12.98 789 $ 42.00 $ 13.13

Average Margin

Tank Tunic Bu7on

MALAYSIA Prelim Cost Margin%

69% 72% 72%

70.99%

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evaluation

Products, Volumes and Requirements Country Ricks and Benefits Manufacturers, Requirements, Value Services Maximized Margins

Products, Volumes and Requirements Since Pure Jade is primarily focused on women’s woven tops, we have come up with three products that fall under this category: the tunic, tank top, and half button down. There will be 1,000,000 million items total produced throughout the year. We plan on producing the tunic all year long because it is such a staple item. It is an essential for every woman to have in her wardrobe, so we have very high hopes that it will quickly become our best seller. There will be 500,000 tunics produced for the year. The volume will stay fairly consistent from month to month, with a little more being manufactured in September (back to school) and November – December (holiday shopping. The tank top will be produced during spring and summer with the highest volume of production May – July. While the tank is not a basic like the tunic, we still have a very high expectancy of sales for it. The tank is very structured, urban looking piece with a peplum attached. This design is currently trending on the runway and all over the streets, so this is a perfect item for our fashionsavvy consumer. There will be 250,000 tanks produced for the year. The half button down tunic is also a seasonal item, with the focus time being fall and winter. The majority of them will be manufactured for the last four months of the year: September – December (back to school and holiday shopping). There will be 250,000 of the button down produced for the year. This item will be successful because of the design’s versatility. It is a trendy top, but it is also sophisticated. It can be worn casually, with a pair of jeans, or dressed up with a skirt and heels. It is essential that each of our three products be produced with the utmost quality. Quality is one of Pure Jade’s major values, therefore our consumer expects it. We require the highest quality possible from each of our manufacturers. We will ensure it by having each manufacturer produce samples of the garments for inspection before further production can take place. We will also require our manufacturers to have random fittings and inspections of garments to make sure the quality is consistent. We also require that each product be produced with organic and ecofriendly materials. Pure Jade will have an on-site representative in each factory in order to ensure quality is being produced and that the products are being made from the required materials.

Country Risks and Benefits The Philippines, India, and Malaysia all specialize in the production of woven tops, they each have fair price points, and there is a surplus of organic fibers available. These are the main reasons that led us to choosing these Asian nations, but after further research on each country we discovered so much more. According to World Wise, India, the Philippines, and Malaysia each fall under the category of being a collectivist society. This means personal opinions are not appropriate, the group establishes belief for all, and speaking out on your own displays bad character. They are also time plentiful, which means they are polychromic. In these countries they focus on people, relationships, and are known for multitasking. All three countries are particularistic countries. This means they believe that rather than generalizing everyone, they believe that it is in the details of the situation that count.

Malaysia The government in Malaysia recognizes economic issues and is working towards a better change. There are obvious classes in Malaysia and the government is taking initiatives to close the gap by providing more learning opportunities for the underprivileged. The apparel industry in Malaysia is growing. It currently employs around 68,000 people. They primarily specialize in woven fabrics, which is extremely beneficial to Pure Jade. The people in Malaysia are very family oriented and are personable. They enjoy creating new relationships and meeting people through business. By doing business in Malaysia, Pure Jade hopes to not only create new business partners but also hopes to make new friends. Like any other country, there are still risks to producing in Malaysia. Household income is very unbalanced, which could be a threat to their economy. The country is also very far in distance from Pure Jade headquarters and are also prone to tropical storms. The average lead-time is 8-10 weeks with the threat of tropical storms on top of that. Malaysia also costs more than countries like India because they have a much higher minimum wage. While that is a disadvantage to our price points, it also ensures higher quality, which can be a benefit. There are many other benefits to doing business in Malaysia. The country is known for importing and exporting large sums of woven fabric, so they are experts in the department that Pure Jade needs. There are also already big name brands being produced in Malaysia, like Pure Jade competitors Ann Taylor and DKNY. Another advantage is that Malaysia prides themselves on educating people in the work force, which means better products.

india India has one of the largest apparel industries in the world. The president of India is very supportive of encouraging the government to help their apparel and trade industry to grow even further by making provisions to their Foreign Trade Policy and Textile Export Promotion. Indians are very happy people and value friendship. Most people in the country are very influenced by religion and their beliefs. Yoga is something used to find an inner spirituality, and it is often practiced in India. Most people speak English in India, which makes it much easier to conduct business. While India is one of the top choices for outsourcing, there are several risks. The country struggles with transparency. This is not something Pure Jade can succumb to, considering transparency is one of the companyâ&#x20AC;&#x2122;s highest values. India is also very far away from Pure Jade company headquarters in California. The average lead-time in India is 8-10 weeks, which will mean products will need to be ordered sooner than expected. The economy in India struggles and the nation is becoming very overcrowded. On the one hand, this is negative because when there are problems in a country it can affect the products being produced there. This can also be a benefit to Pure Jade, as prices will be cheaper and there will always be plenty of employees. Another major benefit to doing business in India is they have the largest surplus of organic cotton, which is what all Pure Jade woven tops are made out of. The textile industry in India reached $33.31 billion last year, which shows the strength and stability their industry has.

the philippines Like the United States, the Philippines have a republic government. Their president, Benigno Aquino, has been able to lower their poverty level since taking office in 2010. He also has passed laws that require the Philippines garment industry to increase their use of local fibers in order to help their nationâ&#x20AC;&#x2122;s economy and support the Filipino apparel industry. The Philippines is now considered to have the second most emerging economy in Asia, just after China. The people in the Philippines are known for being extremely friendly and very family oriented. They are a hardworking people and are known for producing high quality in their production industries. There are risks to producing in the Philippines. While it is illegal, child labor is still an occurrence in this nation. The weather is also a risk, considering the Philippines are made up of over 700 islands; they are very prone to tropical storms. The average lead-time in the Philippines is a bit long: 8-10 weeks, and with bad weather it could take even longer. The location of the Philippines is very far, but that is something Pure Jade has agreed to work with by choosing to outsource to Asia. The Philippines also has one of the highest minimum wages in Asia, which makes it a little more expensive to do business. There are also many benefits to outsourcing to the Philippines. The apparel industry in the Philippines made $2 billion in exports last year and is hoping to grow that further this year. The country is known for producing quality products, which is most likely due to their high minimum wage. This makes it so they are able to ensure quality. The Philippines also has a large surplus of natural fibers that they manufacture, which is exactly what Pure Jade needs.

Manufacturers, Requirements & Value Services The three top manufacturers selected to produce Pure Jade products are Suzette Manufacturing & Trading Company in the Philippines, Bombay Rayon Fashions in India, and Pen Apparel SDN BHD in Malaysia. Each of these suppliers ensure quality and transparency. Their work codes and factory facilities match up with the Pure Jade sourcing guidelines. They are each willing and able to produce large capacities of products and have no issue with producing the 1,000,000 products Pure Jade plans to produce per year. Bombay Rayon Fashions has their own mill and a very large surplus of organic cotton, which is extremely beneficial to Pure Jade production. Suzette Manufacturing and Pen Apparel do not have their own mill, but they have mills they work with and they are willing and able to acquire organic cotton and any other raw materials needed for production. The locations of each of these manufacturers are not the most convenient for Pure Jade and the lead times are high, but the suppliers have vowed to work with the Pure Jade company to build a relationship and to quickly decrease that lead time. Each manufacturer has stated a high lead-time to start out with so that they can get to know the Pure Jade company, products, and to ensure the desired quality. They play to gradually reduce that lead-time down from 13 weeks to 5 weeks. They also require a letter of credit, as Pure Jade is a new company and has not done business with these manufacturers. This is not our preferred form of payment, but each manufacturer requires a year contract and after we have built a strong relationship with them and decide to continue doing business with them, we can look into other forms of payment for the future. Pure Jade will also require each manufacturer to hold random garment checks and fittings to ensure the high quality and proper sizing is being maintained. One added service that is valuable to Pure Jade is that Bombay Rayon Fashions has their own mill with a surplus of organic cotton, like previously stated. Each manufacturer has many special wet and dry processes they offer, but we are only interested in the natural and organic dry processes. The less chemicals used during production, the better. Each manufacturer has agreed to send samples of the products within one week, which will ensure business deals and help to get production started quicker. Each manufacturer has so far been very easy to work with, flexible, and willing to add on any services our brand find necessary to the production of our garments.

Maximized margins By choosing to outsource to the Philippines, India, and Malaysia and meeting and negotiating with suppliers at Suzette Manufacturing, Bombay Rayon Fashions, and Pen Apparel to the lowest price, we have been able to maximize our margins. It is important that we consider every simple thing. By placing each pattern piece as closely together as possible on the fabric, we are able to use less fabric, which helps to maximize margins. By doing out research on the culture of each nation in which we conduct business, knowing what fair price points are, and knowing what our products are worth, we are able to maximize our margins when negotiating with suppliers. As Pure Jade continues to look at the big picture, by understanding and knowing our brand, and by doing the essential research on other countries and suppliers in which we conducts business, we will continue to maximize our margins and maintain the highest profit our company has to offer.

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final sourcing strategy Countries Sources Units and Margins Costs

Countries Malaysia, India, and the Philippines were all selected as countries in which Pure Jade intends to manufacture its sustainable, luxury, woven tops. All countries are familiar with doing international business within the apparel industry, which helps us to feel more comfortable as we are a recently established brand. Because Pure Jade values sustainability and provides only high-quality merchandise to its customers, also helped us decide to outsource to these countries. India has an abundance of sustainable and organic raw materials, which are completely necessary to the production of our garments. While the labor costs in Malaysia and the Philippines are higher than surrounding countries, their social, economic, and political situation is stable. The higher labor costs are also a result of its reputation for their ability to produce high-quality apparel and textiles.

sources After careful consideration, it has been decided that; Esquel Malaysia SDN BHD- located in Malaysia; Bombay Rayon Fashions Limited- located in India; and Suzette Manufacturing and Trading Corporation- located in the Philippines, are the suppliers of choice. Pure Jade looked at many different factors in order to decide which manufacturers to outsource to. It was extremely important that each of the suppliers chosen has multiple established relationships with other luxury apparel brands in the United States. Some of the brands that these suppliers work with include, Hugo Boss, Lacoste, Brooks Brothers, and Nordstrom. This lets us know that they are established and are trusted by other luxury brands. Also, this ensures us that their sourcing guidelines are inline with ours. Each of these suppliers are also transparent and have the capabilities to produce sustainable apparel. These are also extremely important values to Pure Jade.

units and margins Through multiple rounds of negotiation and push back with our chosen manufacturers, we feel confident with where our final margins have landed. In Malaysia, our final margin is 74.97%. In India, our final margin is 79.47%. Finally, in the Philippines, our final margin is 70.99%. Our average margin, as a company, is 75.14%. Prior to all of our negotiation, our initial margin was 66.34%. We felt this was too low and our goal was to reach an average margin of approximately 69% and we significantly surpassed this.

Cost

Name Tank Tunic Bu7on

Style #

Wholesale

IniCal Cost Margin%

Final Cost Margin%

123 $ 36.00 $ 12.72 456 $ 39.00 $ 12.98 789 $ 42.00 $ 13.13

64.67% $ 8.96 66.72% $ 9.27 68.74% $ 9.68

75.11% $ 9.86 76.22% $ 9.34 76.95% $ 9.97

Average Price $ 39.00 Average Cost $ 12.94

$ 9.31

$ 9.72

Average Margin

Name Tank Tunic Bu7on

Style #

Wholesale

66.71%

IniCal Cost Margin%

76.09%

INDIA Prelim Cost Margin%

60.33% $ 7.13 61.74% $ 7.44 64.05% $ 8.40

80.19% $ 7.84 80.92% $ 7.50 80.00% $ 8.65

Average Price $ 39.00 Average Cost $ 14.77

$ 7.66

$ 8.00

Name

Style #

Wholesale

62.04%

IniCal Cost Margin%

80.37%

PHILIPPINES Prelim Cost Margin%

69.31% $ 10.20 70.21% $ 10.95 71.31% $ 11.25

71.67% $ 11.22 71.92% $ 11.03 73.21% $ 11.59

Average Price $ 39.00 $ 11.57 Average Cost

$ 10.80

$ 11.28

70.27%

72.27%

74.97%

78.22% 80.77% 79.40%

79.47%

Final Cost Margin%

123 $ 36.00 $ 11.05 456 $ 39.00 $ 11.62 789 $ 42.00 $ 12.05

Average Margin

72.61% 76.05% 76.26%

Final Cost Margin%

123 $ 36.00 $ 14.28 456 $ 39.00 $ 14.92 789 $ 42.00 $ 15.10

Average Margin

Tank Tunic Bu7on

MALAYSIA Prelim Cost Margin%

69% 72% 72%

70.99%

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conclusion

CONCLUSION The Global Sourcing steps enabled Pure Jade to create a commendable foundation for our company. Through the country selection we were able to identify the pros and cons of the textile industries and their policies. All three countries that Pure Jade will work with, India, Malaysia, and the Philippines, have strong textile industries and will allow the company to acquire the best possible margins for the best quality. Pure Jade values sustainability and quality above all else, and through our research we were able to find manufacturers that share our same values and will help execute a valuable product. Working over seas will always present numerous risks. Some risks Pure Jade faced were: lack of transparency, complicated trade agreements, poor weather conditions, limited capabilities, difficult locations, and socially irresponsible business practices. Through research and analysis Pure Jade was able to find businesses that aligned with our values and sourcing guidelines. Though it was a challenge, each company presented opportunity to fulfill our sourcing needs. India produces 50% of the worldâ&#x20AC;&#x2122;s organic cotton, and the top three suppliers all valued sustainable business practices. The top supplier of India, Bombay Rayon Fashions, valued transparency along with being certified in Oeko Tex, Fair Trade Certified, SA-8000, and ISO 14001. Malaysia offers very high quality along with having numerous trade- agreements with surrounding countries. Malaysiaâ&#x20AC;&#x2122;s suppliers are well known and familiar with high- end American customers. The Philippines has been involved in U.S trade for many years, and their suppliers have the capacity to produce large quantities. With each negative aspect the countries had, they also presented many positive factors. India, Malaysia, and the Philippines are the best three countries Pure Jade could work with.

Although there are risks to sourcing to these countries, Pure Jade plans to do everything possible to work around these risks. As far as overcoming lack of transparency, Pure Jade has stated in their sourcing guidelines their plan to have an on-site representative in every factory in order to maintain transparency between business dealings and also between the brand and consumer. Another risk is that there are no trade agreements between these Asian nations and the United States, but there are many trade agreements between Asian nations in the works. This could work to our advantage in the future. While there are no trade agreements with the US, the price of production in these countries is far cheaper than many others. Therefore this is a risk we are willing to take as a company. Weather conditions are also a risk that cannot be avoided, especially near the coast. This is one reason why we have chosen to outsource to three different countries rather than placing all of our eggs in one basket. That way if poor weather delays one shipment in the Philippines, we still have India and Malaysia to fall back on. Our sourcing strategy offers us a lot of room to grow. Since Pure Jade is a new company weâ&#x20AC;&#x2122;ve had to be selective in which businesses we chose to deal with. In order to grow, the foundation of the company must be strong. This means that we must deal with suppliers that have the same values as us; this will ensure a strong reputation and help us build a solid brand name recognition. Thus far, we have only chosen suppliers and countries that weâ&#x20AC;&#x2122;ve felt could proudly represent us and we could proudly represent them. Pure Jade is proud to work with these countries and suppliers because they offer the best quality under our sourcing guidelines. Each country offers quality and contains the opportunity of sustainability and transparency in the different suppliers. Each supplier specializes in woven tops, and contains the same values as Pure Jade. This global sourcing strategy gives us very high hopes for the future of Pure Jade.

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appendix

Maps Sourcing Guideline Technical Packages Cost Sheets

Sourcing Guidelines I. Compliance with Laws A. Pure Jade operates a legal and ethical business. Suppliers are expected to maintain and follow all local, national, and international laws. B.. Relevant laws, including those relating to labor, worker health, safety, and the environment, must be upheld. II. Environment A. Suppliers must comply with all relevant environmental laws and regulations. B. All Pure Jade products must be made from organic or recycled materials in order to maintain an eco-friendly company and to promote a clean environment. C. Suppliers must keep a record of what materials are used in each product to ensure its environmentally friendly credibility. III. Child Labor A. Child labor is prohibited. Suppliers may only employ workers of 15 years of age or older. If the minimum legal age of the country is higher, the higher age applies. B. The factory must allow time off for minors to attend school or night classes. C. Children may not work more than 20 hours a week. Once they reach the countryâ&#x20AC;&#x2122;s legal adulthood, they may begin working full time. IV. Involuntary Labor A. Forced labor of any kind is prohibited, including, but not limited to, prison labor, debt bondage, or government force. V. Discrimination A. Workers must be employed based of their ability to complete the job. Personal characteristics and beliefs may not be taken into consideration. B. Suppliers must disregard race, gender, religion, disability, sexual status, political affiliation, and marital status when employing workers. C. Suppliers are required to treat all workers fair, equal, courteous, and must refrain from singling out employees.

VI. Work Hours A. Workers may not work more than 60 hours a week, including over time. B. Suppliers must give employees at least one day off for every six-day period. VII. Wages and Benefits A. Workers must be paid at least the countryâ&#x20AC;&#x2122;s minimum wage. Wages must be fair according to the work. B. Overtime work must be compensated at the legal premium rate. Overtime pay must be higher than regular working hours. C. Suppliers must provide workers with paid annual leave and holidays, according to the local law and industry standard. D. Suppliers must provide workers with an understandable wage statement after each pay period. E. Wages must be paid consistently and on time for each pay period. VIII. Health and Safety A. All laws and regulations regarding working conditions must be followed in order to create and safe and healthy working environment. 1. The factory must be well ventilated with anything from windows, fans, air conditioning, and heaters. 2. Work surface lighting must be proficient in production areas. 3. There must be a sufficient amount of well-marked exits and emergency exits. They must be unlocked and accessible during working hours. 4. Aisles, exits, and stairwells must be kept clear at all times. 5. Fire extinguishers must be sufficiently placed, maintained, and charged. Fire alarms must also be placed on each floor. 6. Emergency lights must align exits and stairways. 7. Evacuation drills must be conducted at least annually. 8. Machinery must be equipped with operational safety devices and must be inspected on a regular basis. 9. Protective material, i.e. masks, gloves, goggles, boots, must be provided for workers. 10. Drinking water must be provided and accessible for employees during all working hours. 11. First aid kits must be stocked on every floor. 12. Bathrooms must be clean, sanitary, well stocked, and accessible during all working hours. 13. Minors may not work dangerous equipment of any kind.

14. Employees must be properly trained on safe use of machinery and equipment. IX. Freedom of Association A. Suppliers must respect that workers are free to join associations of their own choosing. Factories may not interfere with workers who wish to lawfully associate or organize. X. Humane Treatment A. Factories must treat all workers with dignity and respect. B. Physical, psychological, corporal, or sexual punishments are absolutely prohibited. C. Abuse in any form, including sexual harassment, screaming, or any other verbal abuse is prohibited. XI. Transparency & Accountability A. Suppliers must provide any documentation relating to the factory, sourcing, or company whenever requested by Pure Jade. B. Suppliers must keep an open and honest relationship with workers, supervisors, and all other departments of the Pure Jade company. C. All sourcing documentation must be available for public access in order to build customer trust, as well as to ensure company accountability. XII. Monitoring and Compliance A. In order to uphold company standards, there will be a Pure Jade on-site representative within all production facilities. B. A strict hiring process will be put in place in order to ensure that all Pure Jade employees exemplify company values and responsibilities so they will continue to help enforce them. C. Suppliers must allow Pure Jade representatives full access to all facilities. They should be prepared for frequent inspections. Pure Jade reserves the right to terminate its business relationship with any Supplier who does not comply with the provisions and guidelines set forth herein.

Pure Jade Technical Packages

Pure Jade WOVEN PEPLUM TANK

Pure Jade

Pure Jade WOVEN TUNIC

Pure Jade

WOVEN HALF BUTTON TUNIC

Pure Jade 789

100% Organic Cotton Poplin

XS, S, M, L, XL Sample: Small

Pure Jade 789

Thread

100% Organic Cotton

5000- Spool, as needed per garment

All seams and hems

Total Eclipse 19 4010TCX

Buttons

Wood

17L/18L - 5 per shirt

Along Front opening of Shirt

Natural

Pure Jade 789

32 “

35 “

37 “

40 “

42 “

18 “

19 “

20 “

21 “

22 “

36 “

38 “

40 “

42 “

44 “

Care Instructions: Machine wash cold on delicate with like colors. Lay flat to dry. Iron or steam on low if needed. Dubarry / Peaches N Cream : 14-1521 TCX / 17-1647 TCX Estate Blue / Total Eclipse : 19-4027 TCX / 19-4010 TCX Bit of Blue / Sunlight : 11-4601 TCX / 13-0622 TCX

Pure Jade MALAYSIA COST SHEETS

100

101

102

103

104

Pure Jade INDIA COST SHEETS

105

106

107

108

109

110

111

112

Pure Jade PHILIPPINES COST SHEET

113

114

115

116

117

118

119

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