Factory Education Manual English

Target Factory Education Manual 2008

© 2008 Target. This document and the contents within are the property of Target and its subsidiaries (collectively “Target”). They are for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

Understanding the Factory Education Manual The Factory Education Manual you have been provided is a guide to help Vendors educate their Factories on Target’s processes, procedures and requirements. As a vendor you will be responsible to ensure your factories receive the appropriate information they need in order to successfully meet Target’s expectations. •

The “V/F” logo has been placed throughout the Factory Education Manual. It is important to understand that this symbol represents key information that should be shared between the Vendor and the Factory.

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Factories should partner with their Vendors to ensure you have received and understood the information documented. Factory questions about content should be reviewed with their Vendor partner for follow-up. Note: Many factories work with multiple Target vendors and therefore may receive multiple copies of this manual if you work with multiple Target Vendors. Please notify your Vendor partners if you have already received a copy of this manual and do not want to receive additional copies.

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The Master Table of Contents lists each chapter included in the manual. Located within each chapter is an introduction to that topic which includes: o Overview – Explains the main topic to be covered and what it is important to learn and understand o Table of Contents – Details the sub-topics contained within the main topic o Objectives – What each Factory should expect to learn from this information o Resources – Locations of where to find additional information on a topic or a contact where questions can be answered

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Partners Online (POL) refers to the information that the Vendor has access to through Target’s external website. Reference to this site will be shown throughout the document as: o POL: Product Development > Requirements & Procedures > Softlines Product > Development > Sloper Pattern Library Note: If procedures and policies change, updates will be posted to POL. POL content updates override existing Factory Education materials until updates are made to the Factory Education Manual within the next update cycle.

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Common Terms and Acronyms are located in the Factory Education Manual. This is a listing of commonly used terms and acronyms and can be referred to if you do not understand the meaning. Key reference terms to understand are: o HG or HL refers to Hardgoods or Hardlines area of Target o SH refers to Soft Home area of Target o SL refers to Softlines area of Target o TSS refers to Target Sourcing Services (Target’s Internal Sourcing Team) o Target Headquarters (HQ) refers to Target’s Offices in Minneapolis, Minnesota USA o Business Partner refers to Vendor o Target Guest refers to Target Customer

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© 2008 Target. This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

Printing the Manual It is recommended to print the entire manual. If you need to print only a chapter, you must select the pages you want to print.

Master Table of Contents Introduction, Common Terms and Acronyms ……………..........

2-11

Global Compliance …………………………………………………..

1-41

C-TPAT - International Supply Chain ………………………………

1-36

Product Design & Development – Color ……………………………

1-8

Product Design & Development – Sample Requirements and Fit Process - SL Only …………………………………… Product Design & Development – Fabric……………………………

1-29

Product Design & Development – Trims ……………………………

1-6

Product Design & Development – Sample Management HG/SH Only …………………………… Product Design & Development – Technical HL/SH Only …………………………… Product Design & Development – Packaging……………………

1-8 1-23

Factory Evaluation……………………………………………………

1-12

Production Planning ………………………………………………….

1-7

Product Testing

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1-22

Product Inspections …………………………………………………..

1-50

Targets Needle and Metal Contamination Policy and Procedure ……………….. Floor Ready Requirements ……………………………………..

1-11 1-10

Standard Inspection Packet (SIP)……………………………..

1-20

Packing & Carton Markings …………………………………………

1-20

International Transportation / Shipping …………………………….

1-15

Product Safety, Recall and Product Regulatory References ……

1-4

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© 2008 Target. This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

Introduction The Factory Education Introduction gives a brief overview about Target as a company in addition to explaining how we want the Vendor and Factory to partner in utilizing the information in the Factory Education Manual. Factory Education Initiative The purpose for these education materials is to ensure that factories producing merchandise for Target: • Are aware of and follow Target’s expectations • Know and understand Target’s processes and procedures • Know your role as a Target vendor and understand how that differs from your factories roles and responsibilities • Know who to contact with questions Roles and Responsibilities Vendor • Two Options to Locate and Print Factory Education Manual: 1. Partners Online > Guidelines & Info > Training > Use the “Search” Function and type Factory Education 2. Partners Online > Guidelines & Info > Training > LMS > Learn > Catalog > Vendors > Domestic or Import (based on vendor type) > Source Product > Factory Education • Provide comprehensive and consistent education and training to all of your factories utilizing the Target Factory Education Manual • Ensure your factory receives all appropriate Important Updates available on POL.

Important Note: This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target. Factory • Understand training procedures and requirements before beginning Target production. • Ensure Factory Education Manual is in a secure location that is easily accessible within each factory. • Share Factory Education Manual with all new factory management. • Each factory should demonstrate pride in manufacturing and quality. • Be a Solution-Based Partner and proactively problem solve by: o Analyze the problem o Find ways to correct problems as they arise o Partner with vendor and appropriate TCPS team Target Compliance & Production Services (TCPS) • Global Compliance deals with ensuring the factory meets Target expectations of social compliance (child labor, safety and health requirements, etc). • Quality Assurance handles factory evaluations, production planning and product inspections to ensure the factory meets Target’s expectations.

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© 2008 Target. This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

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Product Safety Recall and Regulatory works with the vendor, factory and all areas of the company to manage safety and quality related issues for any product that is recalled.

Recommendation for Presenting Factory Education Materials • Invite appropriate Factory Managers or Personnel to one common location to share factory education materials. • Designate an appropriate Presenter(s) within your Organization. o It is recommended that more than one Presenter be assigned due to the large number of topics to be trained. o Vendor Presenter(s) should closely review, ensure understanding and practice materials before educating the assigned factory personnel. If questions: ƒ Refer to Partners Online for additional topic information ƒ Refer to the Resource section located within each chapter that gives e-mail contact addresses to help answer specific questions • Considerations for scheduling training: o Review the total time needed, in relation to the number of factories that require training. o Develop a Timing and Action Plan to ensure training is completed by the scheduled due date. o Options may include: ƒ Train all topics over 2-3 day time frame. ƒ Train only specific topics each day, such as International Supply Chain Security and Global Compliance. ƒ Train specific topics each week or month

Factory Education Completion Date • Due date to have all current factories trained and educated is September 01, 2008 • New factories need to be trained and educated 60 days after registration into Target’s Business Partner Management (BPM) system.

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© 2008 Target. This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

Target Stores Target and Super Target Stores

Merchandise within a Target Store

Target Store Facts: • Target is the second largest general merchandise retailer in America and the third largest in the world. • As Target continues to grow, our plan is to have approximately 2010 stores by the year 2011. • Target works with our vendor partners to strategize on your growth plan. • Target Merchant and Internal teams, along with the stores, work together to create assortments and merchandising displays that are interesting and unique. • Target works hard to ensure their shelves are well stocked for their guests. Being the Best Factory Ever! • Importance of having better informed and trained factories could provide: o Increased productivity o Improve product quality o On time deliveries o Increased profits

Remember this document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

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© 2008 Target. This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

COMMON TERMS AND ACRONYMS

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© 2008 Target. This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

COMMON TERMS AND ACRONYMS AN Ticket – Ticket with zero retail and no UPC used with garments that have multiple pieces. Anchoring – Process of securing product on hangers within the shipping carton to minimize movement during transit. Approved/Authorized Supplier – Suppliers on the Owned Brand Approved Supplier matrix. All owned brand trims must be purchased from an Approved/Authorized Supplier. AQL –Acceptable Quality Level Assortment Item – A master item that represents a group of items for ordering and shipping purposes. BOL or B/L – Bill of Lading BPM – Business Partner Management is a system that is used to build a Business Partner Profile that will gather information with respect to the vendors trading partner relationship with Target. Braiform – Target’s designated hanger and size cap supplier for hanging garments Breakpack – A method of distribution where product is brought into the Regional Distribution in a master carton and the innerpacks are distributed to the stores; sometimes referred to as Split Case. Minimum ratio is 3:1; maximum ratio is 10:1. BV – Bureau Veritas testing lab CAP – Corrective Action Plan Casepack – The number of selling units per carton. CBP – Customs and Border Control Consolidator – An overseas business partner that manages the movement of Target freight from overseas vendors. COO – Country of Origin; country of manufacture or production. Copyright – Original work fixed in a tangible medium (books, movies, sound, recordings, fabric design, photos, etc.) Commit – Refers to a document vendors may receive from merchandising teams via POL where items and preliminary quantities are estimated so that the vendor may start with pre-production planning.

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© 2008 Target. This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

Country of Export – The country from which the product was shipped. CPSC – Consumer Products Safety Commission Customs Trademark Release letter – Letter issued by Target Brands, Inc., allowing a manufacturer to import merchandise bearing its owned brands or exclusive license brands into the US. This letter will only be issued to vendors who have signed a Target Brands, Inc. Manufacturer’s Trademark Agreement. DC – Distribution Center Deconsolidator - A business partner in US that unloads the freight once cleared by customs and allocates the freight to Target Distribution Centers. DI – Direct Import DPCI – Target Department, Class, and Item Number that comprise Target’s identification of an item that is 9 digits long (e.g. 123-45-6789) DQA – Dedicated Quality Assurance personnel at vendor level DuPro – During production Inspection EDI – Electronic Data Interchange EPA – Environmental Protection Agency ETA – Estimated Time of Arrival ETD – Estimated Time of Departure EBP – External Business Partner FE – Factory Evaluation FDA – US Food and Drug Administration Floor Ready - Requirements for product presentation and sale Forwarder – Also referred to as Freight Forwarder or Consolidator. FRI – Final Random Inspection Grovesite – External FTP site for product objectives HG –Hardgoods HL – Hardlines Innerpack - Grouping of selling units within a casepack/carton

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© 2008 Target. This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

Integrated – refers to all SL and some HL vendors who are using Target’s new business model of strategic sourcing IW – Import Warehouse Keyline – An electronic digital file, or the print out of the file, containing all graphic and typographic components arranged on the dieline to produce the desired package. KPOM – Key Points of Measure LTL – Less Than Truckload MAWB – Master Air Waybill MST – Multistage Testing MT – Manufacturing Technician (TCPS) MTA – Manufacturer’s Trademark Agreement OGR - On Going Random (testing) OTM – Overseas Transportation Management OTS – On Time Ship Owned Brand – Brand that is found exclusively at Target stores. This product includes such labels as Cherokee, Merona, Shabby Chic, Restore & Restyle, and many others. Patent – A government-granted property right that imparts a monopoly for a limited period of time on the use and development of qualified invention. PD&D – Product Design & Development PID – Product Identification Number PLM – Product Lifecycle Management PO – Purchase Order POL – Partners Online: Target’s website to communicate business critical information to our partners, requiring a login and password. POM – Points of Measure PPR – Pre-production Planning Requirements Preferred Supplier – Non-owned brand trims should be purchased from a Preferred Supplier. QA – Quality Assurance

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© 2008 Target. This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

QAI – Quality Assurance Initiative RDC – Regional Distribution Center – A location where product is received and then distributed out to the stores. RN – Registration Number RTA – Ready to Assemble (mainly applies to furniture) RTS – Ready to Ship RTW – Ready-To-Wear SH – Softhome SL – Softlines SIP – Standard Inspection Package SOVE – Standards of Vendor Engagement = Target’s code of conduct for all suppliers and business partners. Sustainable Target Spec - Product Specification provided by Target TCPS – Target Corporation Production Services TOP - Top Of Production (testing) Trademark – Word, phrase, design or logo used to identify one party’s products and services from another. TSS – Target Sourcing Services UCC – Uniform Code Council (www.uc-council.org) UPC – Universal Product Code USDA – United States Department of Agriculture VGS – Vendor Generated Spec; product specification provided by Vendor VIRF– Vendor Inspection Request Form VTA – Vendor Timing and Action

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© 2008 Target. This document is for the sole use of authorized Business Partners and their Factories and shall not be reproduced or disclosed in any form to any party whatsoever without the express written consent of Target.

GLOBAL COMPLIANCE

© 2008 Target Corporation

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GLOBAL COMPLIANCE Overview of Global Compliance The role of Global Compliance is to protect the Target brand by ensuring our products are produced ethically and in accordance with our Standards of Vendor Engagement (SOVE), the Vendor Conduct Guide, & local laws. Who participates in the Global Compliance program? Vendors and factories: • Which manufacture products with Target’s owned brand labels. • Which manufacture products with labels licensed exclusively to Target. • Which manufacture products distributed by or manufactured for Target. • Which manufacture products for Target’s “See Spot Save” department. See Spot Save products will be labeled distributed by or manufactured for the vendor. • Which source through Target Sourcing Services (TSS), including National or Market label products. Global Compliance requires that vendors register all applicable factories with Target prior to the start of production. Global Compliance conducts unannounced audits of registered factories to review working conditions. Factories partner with their vendor business partners to address any issues identified. Target expects compliance to be sustained over time in order for vendors and factories to continue receiving Target orders.

Table of Contents 1. Local Laws & Applying Target’s Standards of Vendor Engagement (SOVE) 2. Best Practices for a Factory Compliance Program 3. Internal Audit Process 4. Taking Corrective Actions 5. Target’s Unannounced Audit Process 6. Sustaining Compliance

Objectives • Establish & sustain internal Factory Compliance Program • Provide clear documentation of Factory Compliance Program • Demonstrate success through “Acceptable” Target audit results

Resources • Applying Target’s Standards of Vendor Engagement (SOVE) in Factories • Local labor authority in your country • Useful website: U.S. Customs & Border Protection (www.cbp.gov)

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1. Local Laws & Applying Target’s Standards of Vendor Engagement (SOVE) Global Compliance has three primary expectations of factories producing our products: 1) Know and adhere to national, regional, and local laws and regulations that apply to your factory and its workers. 2) Know and adhere to all U.S. laws and regulations that apply to the merchandise you are producing, including U.S. Customs rules and regulations regarding Country of Origin. 3) Conduct your business ethically and in accordance with Target’s Standards of Vendor Engagement (SOVE).

When local law conflicts with Target’s SOVE, we expect compliance with the stricter standard. Examples: • In China the legal minimum working age is 16. Target defines child labor as below the local minimum working age, or the age of 14, whichever is greater. Our expectation is that all factories in China hire workers who are 16 years of age or older. •

In Thailand, local law permits employees to work a total of 84 hours a week. Target requires that workers do not work more than 60 hours a week. We expect that all factories producing Target products, including those in Thailand, comply with this requirement.

2. Best Practices for a Factory Compliance Program The best practice for a factory to effectively meet our expectations is to establish and maintain a strong internal factory compliance program. Strong compliance programs generally include the following elements: • • • • • • •

Health & Safety Management System Reasonable Working Hours & Fair Wages Monitoring Human Resources Management (HRM) System Worker Education & Training Worker Communication Opportunities Legal Information Management Record-Keeping System

Let us review each program element in detail.

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Health & Safety Management System This system ensures that both the factory and dormitory (if applicable) provide a healthy and safe environment that is in compliance with local laws. What makes a Health & Safety Management System successful? • • • • • •

Regular review of all legal and client requirements using an organized tool such as a checklist. Immediately addressing any issues identified and looking for ways to prevent reoccurrence. A testing schedule for all emergency systems and equipment. Be sure to test functionality during a power failure. Health & safety trainings for all workers. Health & safety training should be a component of new hire orientation. Specialized trainings for those who work in high-risk functions, such as with chemicals. Maintain records of all related trainings, tests, etc.

EXAMPLE: Health & Safety Checklist

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Reasonable Working Hours & Fair Wages Monitoring Develop systems to ensure that all workers are paid at the legal wage rate for all hours worked, work no more than 60 hours per week total, and receive at least one rest day in seven. What makes Working Hours & Fair Wages Monitoring successful? •

Time-Keeping & Payroll Documentation o A punch time clock system OR an electronic system (scan card or finger scan) which accurately tracks all hours worked within the same system. Accurate time records will help factory management correctly assess potential working hours risks and address them immediately. o All workers – whether regular, piece-rate, contract, migrant/guest, casual, or temporary – have a time card and complete it themselves for all hours worked. o Time cards that reflect only the exact hours that are worked for any given day. o Workers are able to verify hours worked each day. o All workers are paid for all hours worked at or above the pay rates stated by local law. o Itemized pay stubs are available to all workers in the local language. EXAMPLE: Itemized Paystub in Local Language

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Capacity & Resource Planning o Analyzing production capacity based on the number of workers available and a maximum work week of 60 hours. Develop a production plan in advance to ensure workers do not work more than 60 hours in a week and work no more than six days in a row. o Partnering with the sales department to only accept orders based on capacity. o Partnering with the Human Resources department to hire more workers during peak seasons to avoid exceeding working hours laws and/or Target’s Standards. o Reviewing the capacity of each major work area of the factory. The work areas which are critical to product shipment but have the smallest capacity could create a bottleneck and lead to excessive working hours in the future.

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Providing Training o Educating workers on their pay structure, including the type and amount of all deductions taken from their pay, wage rates, bonuses, and incentive systems. o Providing training on the time-keeping system for new workers and on an ongoing basis. o Ensuring managers and line supervisors receive specialized training and understand the importance of managing all time-tracking within the time-keeping system.

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Internal Reviews o Watching for product build up at the end of the line during busy season. If this occurs, consider how to plan production to avoid excessive hours for any individual employee. o Reviewing production records in comparison to time records for each department to ensure that all hours have been recorded in the time-keeping system. o Randomly reviewing payroll records of different workers to verify that they match time cards and wages meet local laws.

Human Resources Management (HRM) System An HRM System prevents issues such as child labor, discriminatory hiring or employment practices, and inadequate benefits provision. What makes an HRM System successful? • •

A standardized hiring system that enforces no hiring outside of the designated personnel department – No exceptions. Age documentation required for hiring and a copy of an original identity document kept on file. Examples of age documentation are: o Government identification card o Birth certificate o Passport o Driver’s license

Note: If none of the above forms of identification are available, a substitute form of identification and age documentation must be provided, such as a Doctor’s or School’s Certificate. Appropriate documentation should include a photograph. If a photograph is

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not available as part of the standard identification, the factory should take a photograph of the employee and keep it on file for future reference. •

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Critically examining authenticity of age documentation. o Ask: ƒ Does the potential new hire closely resemble the EXAMPLE: Personnel File photograph? Could this identification belong to a with Age Documentation close relative? ƒ Could this identification be forged? o When possible: ƒ Authenticate using specialized technology. ƒ Contact the local authority which issued the identification to verify authenticity. Decisions concerning hiring, advancement, disciplinary action, or dismissal made based on ability, not personal characteristics. Educating new hires on contract terms and factory policies & procedures. Obtaining signed contracts from new hires and providing them with a copy. Creating organized personnel files using standard format. Files should include at least name, address, date of birth, start date, copy of original identity document, and contract. Holding management & supervisors accountable for violating local laws or factory policies. Ensuring employees are educated about all benefits available to them, especially legally required benefits. Partnering with payroll department to administer benefits. Creating worker handbook and/or rules detailing all rules and policies, in the language(s) of workers. Ensure distribution to all workers.

Worker Education & Training Provide new hire orientation, ongoing education, and advanced training as needed on key topics such as factory rules, health & safety emergency procedures and prevention, and benefits. What makes Worker Education & Training successful? • • • • •

Coordination of training content and schedule by an individual or team. Evaluation following training to assess if workers understood and retained information. Consideration of the needs of new hires, typical workers, and workers in specialized positions. New hire orientation should train new workers on all major topics, as well as their individual job responsibilities. Reviewing methodology to determine which presentation options are most effective for the audience for given topics. Be sure to take into account literacy, language(s) typically spoken and understood by workers, and other key factors. Scheduling to ensure workers on all shifts are trained and that trainings are coordinated throughout the year to produce the best results.

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Worker Communication Opportunities Worker communication opportunities enable workers to provide feedback to management about issues at the factory as well as ask any questions they have about topics such as accessing benefits, pay rates, factory rules, or disciplinary procedures. What makes Worker Communication opportunities successful? •

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Demonstrating a strong interest in hearing from workers and providing assistance. Options include establishing open office hours during lunch or break time when employees can ask Human Resources questions or establishing an elected employee representative committee which has access to factory management. Options for confidentiality, such as a locked box where workers can leave feedback or questions that are answered via the factory board. Providing a confidential channel for communication other than a worker’s supervisor. Remember, a worker could experience challenges with his/her supervisor. Ensuring that workers who do not speak the local language or who speak a different language than management have a means of communicating with management, and vice versa. Most of all, being responsive when a pattern of worker concerns or challenges emerges.

Legal Information Management Legal Information Management is a method for staying informed about changes to local and international laws and regulations and ensuring compliance. What makes Legal Information Management successful? • • • • •

Knowing which regional and/or national authorities determine laws and regulations that affect the factory. Knowing how changes in laws and regulations are communicated. Monitoring all local trade, industrial, and/or export regulations. Monitoring U.S. laws and regulations that are applicable to merchandise being transported into the country. Designating a person responsible for staying informed and up to date with all laws and regulations and ensuring factory implementation.

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Record-Keeping System A record-keeping system is an organized method for maintaining all legally required records as well as those needed to meet client requirements. What makes a Record-Keeping System successful? • • •

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Example: Training Attendance Record

Coordinating record-keeping throughout the factory. Consider what records are required to demonstrate compliance in all areas. Keeping production documents by client, order and style on site for at least one year from the date of importation. Maintaining commercial records for all orders, whether single-country or multi-country production. Commercial records include production orders, invoices, payment records, and transportation records. Ensuring proper country of origin is accurately reflected on all product manufactured.

More specifically, documents kept at the factory for one year must include, but are not limited to: • Target’s Purchase Order to the vendor, the vendor’s purchase order to the factory, and records of the vendor’s payment(s) to the factory. • Purchase and receipt records, bills of lading, and other transportation records for bulk materials. • Purchase and receipt records, bills of lading, and other transportation records for accessories such as zippers, trimmings, hang tags, or buttons. • Export documents such as transportation to port records, forwarder’s cargo receipt, bills of lading, commercial invoices to Target, proof of payment and customs export declarations. • Daily production records (including piece-rate data) for each worker. Production records include timecards, timecard reports, knitting or sewing tickets, daily production reports, and payroll records. Note: Vendor business partners must keep the production and commercial records described above for five years from the date of importation. If a factory is uncertain of how to determine the proper country of origin, it is the responsibility of the vendor/factory to obtain additional resources to help. These resources could include an International Trade Attorney, a Customs Broker, or conducting additional research. If you have questions about Country of Origin or customs record-keeping requirements, please visit the U.S. Customs & Border Protection web site at www.cbp.gov or contact your vendor business partner. Vendor Business Partners can review additional information about these topics in the Customs Compliance section of Partners Online (www.partnersonline.com).

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3. Internal Audit Process Once a factory has established a compliance program, regular internal audits are a useful tool for identifying any remaining issues. Following the internal audit, factory management and workers use the corrective action process to address outstanding issues and prevent them in the future. By proactively identifying and resolving issues, the factory is best able to ensure success during a future vendor or brand audit. An internal audit can either be completed by a factory’s own staff or by an independent auditing firm hired by the factory. If the audit is conducted by the factory, it is a good idea for staff members to review areas outside of their day-to-day responsibilities so that they can provide a fresh perspective. If the audit is conducted by an independent auditing firm, the factory should provide information about what standards it is trying to meet. It may be useful to provide the auditing firm with Applying Target’s Standards of Vendor Engagement in Factories. If you don’t have access to this document, please contact your Vendor. At minimum, your internal audit process should include the following steps:

1. Factory Tour • • • •

Walk through all factory facilities, including production area, warehouse, canteen, and dormitory. Examine health and safety conditions. Review time-keeping system and ensure that it meets requirements and is fully functional. Test the system to see if it will function during a power failure. Select up to 10 workers to interview. Select a diverse group representing a variety of work stations, ages, races (if applicable), workers types (regular, piece-rate, migrant, temporary, etc), and roles (floor worker, line supervisor).

2. Worker Interviews • • • •

Conduct in private and keep individual responses confidential – There should be no consequences to the worker for sharing information. Conduct in the language(s) of workers. Address working conditions and primary compliance issues. Provide an opportunity for workers to voice concerns.

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3. Personnel Records Review •

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Determine if: o There is a policy for personnel records management, including in regards to new hires. o All workers (contract workers, piece-rate workers, migrant/guest workers, casual workers, and temporary workers, etc) have a personnel file. o All personnel files include: ƒ Employment date. ƒ Proof of age at the time of hire. ƒ A copy of the signed employment contract for each worker. ƒ Any other documentation the factory has developed as part of its personnel record system. o The personnel files are being maintained in the same way. Select a large number of personnel records at random to ensure that personnel files are standardized and include all key elements. Review personnel files of the workers interviewed to cross-check information they provided and ensure files are being kept accurately. Review files being created for newly hired workers. Determine if the files are being created in a timely manner and if the files of the new workers the same as those of existing workers.

4. Time, Production, & Payroll Records Review •

•

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Review working hours and production records. Determine if: o All hours are recorded within the same time-keeping system, for all workers. In particular, look for any hours that might be recorded manually by either workers or supervisors. o All workers use their time cards to punch in and out for shifts and breaks. o All production hours are accounted for in the time-keeping records. Review payroll records, including pay rates and times paid. Determine if: o There is enough information provided on paystubs and in payroll records to be able to determine if workers were paid on time at the correct rates. o Workers were paid on time, at the correct rates, for all hours worked. Cross-check all information.

Note: Be sure to review records for all types of workers (piece-rate, temporary, regular, etc). All piece-rate workers must have time cards and be paid at least the minimum legal wage rate for all hours worked. Complete time and wage records for piece rate workers must be kept. The factory must calculate the total legal hourly wages for each worker for every pay period and confirm that his/her total piece-rate wages are higher. If they are not, the factory must pay the difference.

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Example: Piece-Rate Wage Review Scenario #1

Scenario #2

Hours Worked

2 Regular Hours

4 Overtime Hours

Wage

10 per Regular Hour

15 per Overtime Hour

Piece-Rate Items Made Amount worker should be paid according to local law: Amount paid to worker by factory for these hours: Is this acceptable?

5 per Item 20 Items 2 Regular Hours x 10 per Regular Hour = 20

5 per Item 10 Items 4 Overtime Hours x 15 per Overtime Hour = 60

20 Items Made x 5 Piece-Rate = 100

10 Items Made x 5 PieceRate = 50

100 > 20 Æ This is acceptable!

50 < 60 Æ This is not acceptable. The factory must pay the worker an additional 10 to ensure that the worker receives the minimum legal rate for all hours worked.

5. Country of Origin Review •

Review production and commercial records to determine that: o Required records are available on site for a minimum of one year. o The process for working with vendor business partners to maintain records for a minimum of five years and ensure they are readily available upon request is in place. o Country of Origin is accurately reflected on the product. o The factory is not participating in any illegal transshipment practices. Examples of illegally transshipping include: ▪ Falsely claiming a country as the Country of Origin to avoid paying antidumping duties. ▪ Claiming Country of Origin on a product to benefit from preferential trade privileges provided by policies or trade agreements such as the North American Free Trade Agreement (NAFTA), Generalized Systems of Preferences (GSP), or Singapore Free Trade Agreement (SFTA). ▪ Claiming a false Country of Origin because the quota for the item has expired in the correct country. ▪ Claiming a false Country of Origin for a designer item because the country is more desirable to the consumer.

Throughout the internal audit, record any issues identified.

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4. Taking Corrective Actions Following the audit, factory management should meet to review the results and develop a detailed corrective action plan (CAP). A CAP is a written plan which documents specific details about how and when the factory will resolve the issues identified during the audit and prevent them from re-occurring. An effective CAP: • • • • • •

Clearly defines the issues identified during the audit. Specifically states how the factory will resolve each issue. Identifies a person at the factory responsible for implementing the plan. Specifies an internal deadline. Includes information about both the short-term resolution of the issues as well as a system for preventing the problem from re-occurring in the future. Provides a method for tracking progress.

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Example: Factory CAP Format

Note: The CAP should be reviewed regularly until all issues identified during the audit have been addressed in full. Once the first draft of the CAP has been completed, it is useful for the factory to share it with Vendor business partner to communicate what compliance issues have been identified and how they will be addressed. In addition, factory management can use information from the CAP to determine when the next internal audit should be conducted, or if a regular schedule should be established.

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5. Global Compliance Unannounced Audit Process •

Vendors participating in the Global Compliance program register all applicable factories prior to the start of production. As part of the registration process, factory management signs the Authorization for Unannounced Compliance Audit (AUCA) form. Factory management’s signature indicates that the factory will: o Allow Target or its representatives to conduct unannounced social compliance audits. o Comply with local labor & wage laws, Target’s SOVE, and U.S. Bureau of Customs & Border Protection laws. Example: Completing the AUCA Form

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Audits are conducted either by a Target Global Compliance auditor or a third party auditor and focus specifically on working conditions. Most auditors are from the local area and the audit is conducted in the local language. Upon arrival, the auditor will provide a copy of the signed AUCA form and identification such as a Target employee badge or letter provided by Target to authorized third parties.

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It is important to make sure that other managers besides the factory general manager or owner are aware of the AUCA and the possibility that an unannounced audit could take place. This can help avoid a “Denied” audit that results in a penalty for the vendor.

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Target’s audit is similar to the Internal Audit Process we described in Part 3. In addition to the steps shown, we also include: o An Open Meeting. During the opening meeting, the auditor reviews the audit process and requests any documents required to complete the audit. o Management Interviews. During these private interviews with factory management, the auditor reviews the hiring process and working conditions during both peak and off-peak seasons. o A Closing Meeting. During the closing meeting, the auditor will provide factory management with a copy of the audit results, review any compliance issues

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identified during the audit, and discuss how to correct them. Factory management and the auditor will agree on a date when each issue must be corrected. •

Following the audit, factory management should immediately contact its vendor business partner to discuss the audit results and begin work on its corrective action plan (CAP).

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A Global Compliance Analyst at Target headquarters will review the audit findings and send an official copy of the results to the vendor shortly after the audit. Vendors are required to submit a CAP within 7 days after receiving the audit results from Target. Following the audit, all questions concerning audit results or evidence of corrective actions should be directed to the Global Compliance Analysts at Target headquarters, via the factory’s vendor business partner. Questions and other followup information should not be directed to the auditors and/or the Target local offices.

7. Sustaining Compliance •

Factory management’s commitment to ethical business practices is the most important element of sustaining compliance. Target is seeking business partners who share our ethical concerns.

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In addition to its standard Factory Compliance Program, factory management should seek to continuously improve compliance performance by: o Focusing on opportunities to achieve best practices, not just minimum expectations in program development. Can the factory become a leader in social compliance? Is there an opportunity to distinguish itself from the competition? o Focusing on issue prevention instead of reacting to issues identified through client audits. To do so, carefully analyze information coming from the factory’s internal compliance program. For example: ƒ Are there patterns in issues identified through worker feedback, the health & safety checklist, or regular internal audits? If so, there may be a larger issue at the factory that requires a new approach. ƒ Are external resources required? ƒ Should the factory seek client support or hire a consultant to address the problem in a different way? o Communicating compliance issues and successes to clients. Never let any potential challenges come as a surprise. Proactive communication and demonstrating improvement over time helps business partners manage risks and build trust. o Seeking to look beyond social compliance to explore environmentally sustainable business practices. o Developing ways to measure compliance program effectiveness and continuously improve over time.

Note: Improved compliance performance could result in decreased worker turnover, increased productivity, and decreased overtime payroll expenses.

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Applying Target’s Standards of Vendor Engagement (SOVE) in Factories

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“Since its founding, Target Corporation has been guided by the highest ethical and legal standards – a commitment that has provided us with a reputation for excellence.” –Target Vendor Conduct Guide Target and its affiliated companies conduct our business in an ethical manner. We are concerned about human rights. We expect our business partners to share our ethical concerns. We use our Standards of Vendor Engagement (SOVE) in selecting our business partners and expect compliance with these standards by our business partners, including all manufacturers, contractors, subcontractors and suppliers utilized in the manufacture and finishing of products that are ordered by Target or any of its affiliated companies. As a facility that produces Target owned brand product (“factory”), it is your responsibility to comply with local laws, as well as with our Standards. Target’s expectation is that factories develop processes and procedures for sustaining compliance on an ongoing basis. Target’s expectation is that all owned brand vendors establish an internal compliance program to ensure that factories and subcontractors are in compliance with our Standards and applicable local laws. Target Global Compliance recommends that your program include: A manager responsible for compliance programming such as training, factory monitoring, corrective action planning, and verification. An education and training program for factories to prevent issues from occurring. Be sure to share our Standards with the factory and obtain factory management’s commitment to meet them. “Self-Audits” conducted by your staff or a reliable third party before you request registration of a new factory. A self-audit is a detailed review to ensure a factory meets Target’s Standards and is compliant with local laws. Ongoing compliance monitoring of factory and sub-contracted business partners. Proactive communication of issues to Target Global Compliance. Strong corrective action plans to address any issues identified. Corrective action plans should include both a plan for addressing issues in the short-term and preventing their re-occurrence in the long-term. Vendors should verify that factories have fully implemented corrective actions and maintain appropriate documentation. Continuous improvement mechanisms for hiring and personnel record management, payroll systems, and time-keeping systems within your factories. This guidebook reviews our eight Standards of Vendor Engagement—Safe & Healthy Workplace, No Forced or Compulsory Labor, Fair Disciplinary Practices, No Discrimination, Reasonable Working Hours & Overtime, Fair Wages, No Child Labor, and Country of Origin— and provides detailed information to vendors about requirements and best practices for meeting our expectations. We encourage you to use this as a reference tool when working with factories and subcontractors to achieve compliance.

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Table of Contents Safe & Healthy Workplace................................................................................20 No Forced or Compulsory Labor.....................................................................26 Fair Disciplinary Practices ...............................................................................28 No Discrimination .............................................................................................29 Reasonable Working Hours & Overtime .........................................................31 Fair Wages.........................................................................................................33 No Child Labor ..................................................................................................36 Country of Origin ..............................................................................................38 Additional Expectations ...................................................................................39 Appendix A: Use of Personal Protective Equipment (PPE) ..........................40 Appendix B: Resources ...................................................................................41

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Edited by Foxit Reader Copyright(C) by Foxit Software Company,2005-2008 For Evaluation Only.

Safe & Healthy Workplace “We seek business partners who provide a safe and healthy workplace that complies with local laws. Business partners who provide residential facilities for their workers must also provide safe and healthy residential facilities in compliance with local standards.” The factory and dormitory should be in compliance with all local health and safety laws and regulations regarding the workplace. Unless otherwise noted, all information pertains to both factory and dormitory conditions. All workers have access to functional fire safety equipment. Requirements All fire safety equipment must be placed in locations accessible to all workers. Pathways to emergency equipment must be kept free from obstruction. Fire extinguishers should be placed on the walls at an appropriate height to be used by all workers. Extinguishers should not placed low enough that they are blocked by work stations or so high that workers cannot reach them. Fire extinguishers should not be on the floor where they may be blocked easily or may be damaged if they fall over. Fire extinguishers/hoses, hydrants, and/or the sprinkler system should be available throughout the factory and dormitory in accordance with local laws and regulations. If there are no local laws and regulations, have enough equipment located throughout the factory to successfully fight a fire. An approximate reference is 1 set of safety equipment per 100 square meters. Written instructions in the workers' language should be on or near the fire extinguishers. All fire safety equipment must be functional and serviced regularly. Fire extinguishers must be fully charged. Fire extinguishers must be an appropriate size for workers to operate easily.

Best Practices Have a distinct-sounding fire alarm that is fully functional, audible in all areas of the factory, and supported with a battery back-up. The fire alarm must sound automatically but also have an emergency activation device. Workers should be familiar with its purpose. In areas where workers wear ear plugs, the fire alarm must have a visual component, such as a flashing light. Paint a yellow or red box on the floor around fire safety equipment, extending approximately 1 meter. Educate workers that no equipment or other obstructions can be placed within the box. Factories should research and select the appropriate Fire Extinguisher Class for their production/product types. Fire extinguishers typically come in four classes which are designed to put out different types of fires—ordinary combustibles (Class A), flammable liquids (Class B), electrical equipment (Class C), and flammable metals (Class D). Fire extinguishers should be labeled with the appropriate picture and letter class. Many now come with a multi-class rating.

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Provide clean, sanitary, and neat work and living areas. Requirements The factory and dormitory must be clean and well-maintained. The factory and dormitory must have an appropriate number of toilets according to local law. If there is no local law, an appropriate ratio is one toilet for every 25 workers. Toilets should be cleaned, well-maintained, and functional. Toilets should offer privacy for workers, including doors and gender markings. Provide sufficient clean, fresh drinking water, free of charge. Provide canteen or eating area for the workers away from the production floor. Do not allow eating on the production floor. The dormitory and factory need to be separate facilities. The dormitory should be in compliance with all local housing laws and regulations, including providing adequate protection against weather conditions (e.g. Includes walls, a floor, and roof). The number of occupants in the dormitory rooms must be in compliance with all local housing laws and regulations. Male and female workers must have separate accommodations for sleeping, with proper privacy. Provide running water and functional shower or bathing facilities for dormitory residents. Provide cooking or canteen areas for dormitory residents. Cooking needs to be done in a canteen/kitchen (not in the dormitory) for fire safety purposes. Cooking and/or canteen areas should be cleaned and well maintained.

Ensure all workers are prepared for an emergency and educated on how to prevent health and safety issues. Requirements Educate workers on all fire emergency procedures, including how to operate fire extinguishers, call the fire brigade, and evacuate. Review training at least annually. Train at least one worker in first aid procedures and to administer first aid treatment in case of a medical emergency. Keep training documentation on file. Best practice: Train at least one worker per shift. Consider training more than one worker in case of absence. Conduct emergency and fire drills, managed by qualified fire safety officers, for all workers in accordance with local law. If there is no applicable local law, conduct emergency and fire drills at least once a year. Ensure fire drills are run on every shift and include a power shutdown to test all safety equipment. Keep records of all trainings, including photographs of the training, the date, time, topics, and number of worker participants. Records should include the signature of participants’ supervisors. Maintain a fire drill log with key information such as the time and date of the drill, if the drill was managed by the fire brigade, if it was announced or unannounced, how many workers were involved in the drill, any issues that occurred, etc.

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Best Practices Provide Health & Safety education or training to all workers during initial orientation and on an ongoing basis. All workers, including night shift workers, must be included. Provide specific education on: ⎯ Fire safety ⎯ Safe operation of factory machinery & equipment ⎯ Chemical safety (if applicable) ⎯ Benefits of using Personal Protective Equipment (PPE) and health risks associated with not using PPE Following trainings or safety drills, conduct a de-brief to discuss successes and failures with management.

Ensure workers have easy access to unobstructed emergency exits. Requirements All emergency exits must be clearly marked (painted or lighted on each floor). An adequate number of emergency exits must be available on each floor. Each worker must have access to at least two exits. Emergency exits must be unlocked from the inside and doors must push out to open. Ensure that all aisles and exits are cleared and not crowded so workers can move easily in case of an emergency in the factory. The factory must have an accurate, easy-tounderstand evacuation plan posted on each floor/area.

Best Practices Emergency escapes, such as staircases and ladders should be clear and lead safely to the ground. Clearly delineate emergency aisles with yellow or red lines and teach workers that red or yellow areas must be completely free from obstruction. Remove excess product and production waste on a regular basis. Materials or boxed goods should be stored or stacked safely on pallets and shelves in stacks that are not too high or unstable. Workers should use appropriate safety equipment to retrieve items from high locations. Consider assigning someone to monitor storage practices regularly to ensure safety. Label doors that could be mistaken for exits but lead elsewhere – For example, “Bathroom” or “Not an Exit.”

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Factory is well-lit day-to-day and during an emergency.

Requirements Emergency lighting must be installed throughout the entire factory and dormitory, function properly, and have a back-up power supply. Emergency lighting should clearly light aisles and exits during a power outage. Adequate lighting should be provided for all workers to perform their jobs safely and comfortably, without damaging their vision.

Best Practices Test emergency lighting regularly in a full power outage drill.

Basic first aid supplies are available at all times. Requirements First aid kits should be properly supplied and placed on each floor/area in the factory, even if a medical facility is also available on site. First aid kits should be continuously complete and include basic supplies such as bandages and ointment. Best practice is to include pain relievers, anti-bacterial ointment, eyewash, tourniquets, tape, etc. Note: As applicable, Eyewash should be in addition, not instead of, an eyewash station.

Best Practices Review first aid kit inventory daily or weekly as well as after any first aid incident and refill accordingly to ensure there are never any shortages. First aid kits should be unlocked and/or readily accessible to all workers at all times.

Machines are operated safely. Requirements All machinery should have functioning safety features. Examples: ⎯ Machinery with hazardous parts such as conveyor belts, gears, and abrasive wheels, must be equipped with protective devices. ⎯ All stamping, punching, or cutting machines must be equipped with safety devices. ⎯ Sewing machines must have needle guards. ⎯ Machinery that has automatic feeds should have automatic shut-offs. Appropriate and functioning personal protective equipment (PPE) should be made available to all workers, free of charge, based on job function. PPE examples include: metallic cutting gloves, facemasks, goggles, earplugs, ventilators, reinforced footwear, etc. Please see Appendix A for additional details concerning the appropriate use of PPE. 8

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Best Practices Train all workers to operate machinery in a safe and effective manner. Educate all workers on the benefits of using PPE.

Electrical systems are properly configured and protected with the appropriate safety equipment. Requirements All electric systems in the factory and dormitory should be in compliance with local health & safety regulations in order to prevent fire: ⎯ Electrical cables/wires should be covered properly with tubing, electrical tape, or proper covers. ⎯ Electrical outlet/switch box should be properly installed and covered. ⎯ Warning signs should be posted as applicable.

Minimize the risk of hazardous materials through appropriate chemical safety measures. Requirements Provide an eye wash station for workers in a location that is accessible from anywhere that hazardous chemicals are being used. Chemicals must be marked with the proper chemical names and hazard symbols in the language of workers, and stored in a safe designated location with proper instructions. Wherever chemicals are used, factories must maintain a current list of Material Safety Data Sheets (MSDS) in the language of workers. Workers handling chemicals should be trained to understand MSDS. Provide adequate ventilation in the factory, such as windows, fans, air conditioning, or heating to promote air circulation and comfortability. Tools or flammable materials must be stored in a safe location.

Best Practices Eliminate hazardous materials when possible by using non-toxic alternatives. Have written procedures for all handling of chemicals and hazardous materials. Document all related procedures.

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Provide workers handling chemicals or exposed to chemicals special training to ensure safe usage. Training should include both orientation and ongoing components, and cover day-today responsibilities, systems and emergency management, and clean-up. Factories emitting hazardous material into the air should provide proper ventilation or purification systems. Exhaust fans must be properly covered and not in a position that could harm workers. Minimize hazardous waste materials through a waste management system, best practices in work flow design, and worker training. Poisonous, hazardous, and/or flammable materials should be stored in a safe location with proper controls and appropriate warning signs. Have a secondary containment system in place in case of chemical spills. Ensure that there is no ability for leakage directly into the sewer system, such as through a drain in the chemical storage area. Label all storage tanks and containers clearly. Store chemicals in an appropriate area away from the dormitory and production areas. This area should be cool and dry and equipped with a fire prevention system. Post “No Smoking” signs and avoid all possible fire hazards, including improper chemical mixing or the accidental storage of combustible chemicals in close proximity. Post emergency procedures in chemical mixing and storage areas. Keep paths used to transport chemicals and the path to the eye wash station free. Workers transporting chemicals should wear or carry distinctive markers to alert others to clear the way. Dispose of chemicals and hazardous materials in accordance with local laws. Instruct workers fully in the use and purpose of specialized PPE and exhaust systems for the purpose of chemical and air quality safety. Provide specialized PPE as applicable, if indicated by the MSDS (e.g. Respirators, gloves of certain material). Post mandatory PPE signs where needed. Please see Appendix A for additional information concerning PPE. Research the most appropriate chemical safety and air quality systems for your particular industry in order to best protect worker health. Workers must not place their faces between sources of hazardous material and ventilation systems. Limit access to chemicals to those who require access for their jobs.

Safe & Healthy Workplace Best Practices Designate a qualified person to manage health and safety issues. Develop a system for reviewing all health and safety requirements regularly to ensure compliance. Maintain thorough health and safety records on site for one year. Records should document training programs (prevention), any incidents that occur, and how incidents were addressed. Investigate any incidents that occur, determine cause, develop and implement a plan for prevention, and keep records on file. 8

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No Forced or Compulsory Labor “We will not knowingly work with business partners who use forced labor in the manufacture of products for our stores.” Workers should not be forced to work or be bound to employment in order to fulfill a debt to a factory or a third party. Requirements Ensure that all workers are working on a voluntary basis and that they are receiving compensation in accordance with local law, in the form of cash or equivalent. Ensure that no prisoners work in the factory and/or that no production is subcontracted to prison laborers. Please note that prison labor is a zero tolerance compliance violation for Target. Workers should not be required to pay a deposit or fee, or purchase uniforms, tools, or other items required for work, in order to begin, continue, or terminate employment. All recruitment fees should be paid by the factory. Factory cannot withhold payment to workers in order to prevent them from leaving their jobs. Do not take deductions from wages unless they are either mandatory under local law or voluntary, reasonable, and clearly understood by workers. Factories should provide pay slips or payment receipts that are itemized and available in workers’ local language(s). Workers cannot be disciplined or receive a penalty for refusing to work overtime.

Best Practices Develop a written set of instructions for all labor agents establishing the prohibition of forced and compulsory labor. Require labor agents to disclose their labor sources. Ensure workers do not have large amounts of debt to a factory that may cause excessive deductions and/or penalties. Ensure workers that submit resignations with proper notice receive their last pay without penalty. Develop an internal procedure to confirm voluntary acceptance of overtime work.

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Ensure all workers are aware of the factory rules and have an employment contract. Requirements Each worker (including contract workers, piece-rate workers, migrant/guest workers casual workers, and temporary workers) must have an employment contract. Provide a copy of the employment contract to each worker in his/her local language and ensure there is a copy in his/her personnel folder. The contract must by signed by both the worker and factory management. The factory should create a written document that details the factory rules in the language(s) understood by local and migrant/guest workers. Factory rules should provide information about disciplinary practices in the workplace and be consistent with local law. Post the factory rules in a visible area and/or distribute them to the workers.

Best Practice Provide training on factory rules to all workers on a regular schedule (i.e. quarterly, annually). Ensure training is done in format that takes into account different learning styles of workers.

Eliminate all unreasonable restriction on the movement of workers. Requirements Do not withhold personal identification to guarantee that workers, particularly migrant/guest workers, will not leave. Workers must retain possession or control of their passports, travel documents, identification papers and any other legal document. Workers should be free to leave the factory and/or dormitory at all times, unless a curfew has been put into place for their own safety. If such a curfew is in place: ⎯ Curfew hours should be reasonable, and based on legitimate security concerns. ⎯ A protocol should be put in place for times when workers are unable to meet curfew restrictions and require exceptions. ⎯ All policies regarding curfew must be clearly communicated to workers both verbally and in writing.

Best Practices Do not lock dormitory or workplace for the purpose of restricting worker movement. Verify that security guards are used to protect the factory and not to restrict the movement of workers. Provide lockers for workers where they can store their personal identification and valuables safely.

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Fair Disciplinary Practices “We will not knowingly work with business partners who utilize physical or mental punishment against their workers”

Ensure factory management does not condone, create or contribute to an intimidating, hostile, or offensive work environment. Requirements Factories must ensure that workers are not subject to corporal punishment, harassed, physically, and/or mentally abused. Please note that corporal punishment is a zero tolerance compliance violation for Target. Create a written policy that outlines that the above practices are prohibited and details appropriate disciplinary procedures. Factory rules should provide information about disciplinary practices in the workplace and be consistent with local law and Target’s Standards of Vendor Engagement. Factory rules may not include fines or fees for the following, or similar: ⎯ Damaged goods ⎯ Drinking water ⎯ Minor disciplinary infractions such as smoking or tardiness ⎯ Freedom of movement violation (For example: Limitations on bathroom privileges) All workers, including management, should receive education on factory policy.

Best Practices Security guards are not authorized to impose disciplinary actions against workers. Encourage management to take classes on harassment, awareness, sensitivity to other cultures, corporal punishment, and mental abuse. Create a system in which workers can raise issues of concern, including treatment by their supervisor, without repercussions. Maintain written records of disciplinary measures taken.

Workers should be aware of factory rules and Target’s Standards of Vendor Engagement. Requirements Post factory rules in a public area. Factory rules may also be distributed in the form of a handbook and included in a detailed employment contract. Keep posted and/or distributed factory rules up to date. Ensure factory rules are written in the language of workers. Educate all workers on all factory rules, and ensure that workers are made aware of any new rules or changes. Make sure Target’s Standards of Vendor Engagement (SOVE) is posted in a visible location and that it is in the language of workers.

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No Discrimination “While we respect cultural differences, we believe workers should be employed based on their abilities rather than their race, gender, personal characteristics or beliefs, and encourage our business partners to eliminate discrimination in their workplaces.” Hire, compensate, promote, discipline, & terminate workers based on qualifications, abilities, and performance – regardless of race, gender, personal characteristics, or beliefs. Requirements Create and distribute job titles and descriptions for all positions. Make all employment and compensation decisions based on requirements for job performance. Establish objective criteria for hiring decisions and job assignments. Do not make assignments based on gender.

Best Practices Allow all eligible job applicants to apply and/or take related exams. Do not collect information that is not related to job performance and not required by law during the application process. Do not include criteria that are not directly related to job tasks in employment advertising – for example: gender or age characteristics. Establish clear non-discrimination policies documented in the factory rule book and/or worker handbook, including: ⎯ Confidential grievance procedure in which workers can report discrimination to someone other than a direct supervisor. Review policy frequently to ensure effectiveness. ⎯ Appropriate consequences for violations. Have a system that effectively implements non-discrimination policies. Establish and communicate objective measurements for performance (including bonuses) and promotions. Establish and apply objective criteria for dismissal. Develop and provide non-discrimination and cultural sensitivity trainings for all workers which address the importance of treating all races, gender, and religious groups equally. Provide specific topics for Managers, Supervisors, and Security Guards. Document employment practices over time to establish credibility.

Do not use pregnancy testing to prevent or result in the termination of employment. Requirements Do not require pregnancy testing as a condition of employment. Do not use marriage or pregnancy as a reason for prohibition of or termination of employment. 8

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Knowledge of pregnancy should only be used in order to provide reasonable accommodation for pregnant women, such as avoiding work that may put them at risk, and ensuring they are provided proper benefits under local law. If pregnancy testing is legal and in use, clearly communicate its purpose within the factory rule book.

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Reasonable Working Hours & Overtime “We seek business partners that do not require a work week which exceeds local laws or business customs, and encourage our business partners not to require more then a 60-hour work week on a regularly scheduled basis, except for compensated overtime in compliance with local laws.” Maintain a work schedule that complies with both Target’s Standards of Vendor Engagement and local law. Requirements Ensure workers are not working more than 60 hours a week, whether or not the local law allows for more hours. Follow local working hours laws that apply to adolescent and female workers. Provide a minimum of one full rest day in seven days to all workers. Workers should receive vacation/time off in accordance with local law. Female workers should receive maternity leave in accordance with local law. Provide reasonable meal and rest breaks in accordance with local law. Detail working schedule, normal working hours, rest days, and holiday policy in the factory rules and/or in worker handbook, in a language understood by local and migrant workers.

Best Practices Accept order quantities and deadlines that are in keeping with resource constraints such as number of workers and a maximum work week of 60 hours. Develop a production plan in advance to ensure workers do not work more than 60 hours in a week. Hire additional workers during peak season to avoid exceeding working hours laws and/or Target’s Standards. Provide training to workers about how to access vacation benefits.

Ensure working overtime is optional and voluntary. Requirements Overtime hours worked should comply with the local law, both in terms of hours worked per day and hours worked per week. Total working hours per week may not exceed 60. Workers should be able to decline working overtime without any repercussions or penalties, including the loss of future ability to work overtime.

Best Practice Develop an internal procedure to confirm voluntary acceptance of overtime work.

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In order to ensure accurate working hours, factories must use a fully functioning punch time clock or scan card time-keeping system (as you may have read in the Fair Wages section).

Requirements The time-keeping system must be either a punch time clock system or a scan card system which accurately tracks all hours worked. It cannot be a manual time-keeping system, or supplemented by a manual time-keeping system. The time-keeping system must have a battery back-up which starts immediately in the case of power loss. All workers (including regular workers, piece-rate workers, contract workers, migrant/guest workers, casual workers, and temporary workers) must have a time card. All workers (including regular workers, piece-rate workers, contract workers, migrant/guest workers, casual workers, and temporary workers) must accurately complete their own time card for all hours worked, including overtime. Management should ensure that workers are not punching time cards earlier than work start time or later than work finish time. Time cards should only reflect actual hours worked. Time cards must be properly completed and easy to read. All hours, including overtime, must be recorded within the same time-keeping system. Workers should be able to verify regular and overtime hours worked each day.

Best Practices Provide training on the time-keeping system for new workers and on an ongoing basis. Ensure managers and line supervisors receive specialized training and understand the importance of managing all time-tracking within the time-keeping system. Conduct regular internal audits to ensure that the time-keeping system is being used properly and that it ties back to the payroll systems properly.

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Fair Wages “We seek business partners that provide wages and benefits in compliance with local laws, and encourage our business partners to commit to the betterment of wage and benefit levels that address the basic needs of workers and their families.” Pay workers for all hours worked at the pay rates stated by local law. Requirements Worker wage for regular hours worked must meet or exceed the minimum wage according to local law. Worker wage for overtime hours worked must meet or exceed the overtime wage rate according to local law. If there is no local law regarding overtime compensation, workers must be compensated at a higher rate than for regular hours. Workers should be properly compensated for working on holidays in accordance with local law. If the wages of workers calculated by piece-rate fall below the applicable legal wage rates (minimum, overtime, holiday, etc) then the factory must calculate the difference between the piece-rate wage and the correct legal wage and pay the difference to the workers in order to meet the legal minimum rates.

Implement payroll deductions in order to provide legal benefits or voluntary services only. Requirements Implement benefits such as medical insurance, social security/retirement, etc, in accordance with local law. Ensure that deductions are used specifically for the purpose stated and that employees receive appropriate benefits documentation, such as an itemized paystub showing specific deductions. Do not take deductions from wages unless they are either mandatory under local law or voluntary, reasonable, and clearly understood by workers. ⎯ Examples of reasonable deductions might include the cost of meals or dormitory accommodations. ⎯ Examples of unreasonable deductions might include deductions for drinking water, uniforms, work-related tools, or safety equipment. Recruitment agency fees may not be deducted from worker wages.

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Best Practices Maintain supporting documentation to prove mandatory deductions are being taken and applied in accordance with local laws. Do not use short-term, renewable contracts or apprenticeships which are not substantively different from full-time employment opportunities in order to avoid payment of benefits or higher wages to workers under local law. Employers should not deduct amounts for dormitory, meal, or similar expenses which exceed actual cost. Employers should keep records available which demonstrate the actual cost of these expenses if they are deducted from worker wages. Properly recognize the length of service of all workers in order to determine benefits to which they are entitled, as applicable.

Ensure workers fully understand their wage structure and can verify the accuracy of payments they receive. Requirements Educate workers on their pay structure, including the type and amount of all deductions taken from their pay, wage rates, bonuses, and incentive systems. Pay stubs or receipts of payment should be itemized and available to all workers in the local language. Workers should be able to verify regular and overtime hours worked each day.

Best Practices Education provided should be both verbal and in writing. Education program should include an orientation component for new workers and a plan for regular refresher training of existing workers. Provide access to a contact in the human resources department (or other applicable department) in case a worker has a related question. Include details of wage structure, compensation, benefits, and pay schedule in the employment contract to be signed by factory management and individual worker.

Provide access to complete and accurate payroll and production records. Requirements Payroll must include: ⎯ Complete pay period date ⎯ Worker name 8

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⎯ Total hours worked & break-down by type of hours (regular, overtime, etc) ⎯ Worker wage rates (normal, overtime, etc) Payroll and/or production records should reflect all hours worked by the workers. Factories should maintain a single authentic set of payroll and production records which clearly and accurately provides information for all workers. Factory must provide auditors access to review the payroll records. Keep all wage records for five years.

Document the timely distribution of wages. Requirements Pay workers in a timely manner, in accordance with local law. Ensure workers sign a log documenting receipt of payment. Provide workers with an itemized pay stub or receipt for payment.

In order to ensure accurate working hours, factories must use a fully functioning punch time clock or scan card time-keeping system (as you may have read in the Reasonable Working Hours & Overtime section).

Requirements The time-keeping system must be either a punch time clock system or a scan card system which accurately tracks all hours worked. It cannot be a manual time-keeping system, or supplemented by a manual time-keeping system. The time-keeping system must have a battery back-up which starts immediately in the case of power loss. All workers (including regular workers, piece-rate workers, contract workers, migrant/guest workers, casual workers, and temporary workers) must have a time card. All workers (including regular workers, piece-rate workers, contract workers, migrant/guest workers, casual workers, and temporary workers) must accurately complete their own time card for all hours worked, including overtime. Management should ensure that workers are not punching time cards earlier than work start time or later than work finish time. Time cards should only reflect actual hours worked. Time cards must be properly completed and easy to read. All hours, including overtime, must be recorded within the same time-keeping system. Workers should be able to verify regular and overtime hours worked each day.

Best Practices Provide training on the time-keeping system for new workers and on an ongoing basis. Ensure managers and line supervisors receive specialized training and understand the importance of managing all time-tracking within the time-keeping system. Conduct regular internal audits to ensure that the time-keeping system is being used properly and that it ties back to the payroll systems properly.

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No Child Labor “We will not knowingly work with business partners who utilize child labor. We define child labor as either being below the local minimum working age, or the age of 14, whichever is greater. We do make an exception for legitimate apprenticeship programs.” Ensure all workers meet the minimum age at the time of hire according to local law, or the age of 14, whichever is greater. Requirements Establish and enforce a comprehensive human resources system to prevent child labor. Ensure policies include a clause that no department can hire anyone outside of the established hiring channels. Do not allow any exceptions, whether for permanent workers, contract workers, piece-rate workers, migrant/guest workers, casual workers, or temporary workers. Define consequences if managers or supervisors violate local laws and/or Target’s Standards. Hold managers or supervisors accountable. Vendors: Understand the definition of child labor for all countries where you source product, and whether it meets Target’s Standards. Factories: understand the legal working age and adolescent working age, and how the laws compare to Target’s Standards. Verify proof of age and identity for each applicant prior to hiring. Documentation should include an authenticated original identity document with a photograph, such as ID Card, Birth Certificate, Passport, Driver’s License, Doctor’s Certificate, etc. Never hire anyone without this information. Confirm that all production work is performed in the factory or a controlled environment in order to prevent risk of participation by child or adolescent laborers. Please note that child labor is a zero tolerance compliance violation for Target.

Best Practices Critically examine the authenticity of age and identity documentation. In regions where falsification is widespread, substantiate age through other information sources, such as: ⎯ Contact source of original document, such as local government authority, for authentication. ⎯ Ask for multiple original document sources for cross comparison. ⎯ Utilize specialized document authentication machinery to rule out falsification. ⎯ In depth interview using advanced interview techniques to cross-check information. Track type and occurrences of falsified documents identified over time and train human resources staff to recognize common practices. Interview prospective workers to ensure appearance matches identity documents. Create a corporate “No Child Labor” policy and include it in the company manual. Vendors: Ensure factory suppliers have a hiring policy that specifies a minimum age in keeping with Target’s Standards. Share age requirements with hiring agencies, if applicable. Control access to production areas. Do not allow any individual below the legal working age or the age of 14 (whichever is greater) access to the production floor, unless on a guided tour in the company of an authorized worker. 8

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Keep organized personnel records with proof of identity & age for all workers. Requirements Each worker (including contract workers, piece-rate workers, migrant/guest workers, casual workers, and temporary workers) must have a personnel record. The personnel record must contain employment date and proof of age at the time of hire. Personnel records for each worker (including contract workers, piece-rate workers, migrant/guest workers, casual workers, and temporary workers) need to be available for review. Provide Target Global Compliance and/or our designated third party auditors with complete access to personnel records for all workers.

Best Practices Personnel records should be standardized and created at the time of hire. Each personnel records should include the following, at minimum: ⎯ Name ⎯ Address ⎯ Date of Birth ⎯ Start Date ⎯ Copy of Original Identity Document, such as ID Card, Birth Certificate, Passport, Driver’s License, Doctor’s Certificate, etc.

Comply with all local laws concerning adolescent workers. Requirements Factories must understand and be in compliance with local laws for adolescent workers including, but not limited to, types of work, working conditions, working days, working hours, and overtime hours. Follow local laws concerning legitimate apprenticeship programs. Do not allow informal apprenticeship programs.

Best Practices Take extra care in verifying and documenting the age of adolescent workers. Have a system in place to track the age of all workers between the minimum legal adolescent working age and the adult legal working age. Have a system in place for clearly identifying and monitoring adolescent workers and their work stations, as well as identifying stations that are inappropriate for adolescent workers for legal and safety reasons. Verify that all workers engaged in high-risk activities such as working with hazardous substances, lifting heavy loads, working at high levels, etc. are above the legal age required for such work. Train adolescent workers to ensure that they fully understand factory rules and, in particular, legal restrictions concerning adolescent workers.

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Country of Origin “We will not knowingly work with business partners who use deceptive practices to deliberately misrepresent country of origin in order to evade quota or other import restrictions or duties on any products that will be sold in our stores.” Maintain production records and follow U.S Customs regulations regarding country of origin. Requirements Vendors: Verify factories are not involved in illegal transshipment practices. Illegal transshipment is defined as claiming a false country of origin to circumvent quota and/or other restrictions applicable to the shipment. Please note that illegal transshipment is a zero tolerance compliance violation for Target. Maintain production documents by client, by order, and by style for 5 years from the date of importation. Records for the last year should be kept on site at the factory. The documents kept on site must include, but are not limited to, the following: ⎯ Purchase and receipt records for bulk materials. ⎯ Purchase and receipt records for accessories. ⎯ Daily production records (including piece rate data) for each worker. If requested, provide documentation in a timely manner. Keep commercial records for all orders, whether single-country or multi-country production. Vendors: Make certain that all sub-contracted factories producing Target owned brand are registered with Target Global Compliance. Keep up to date on all local trade, industrial, and/or export regulations. Understand U.S. Customs rules and regulations regarding Country of Origin. For additional information, vendors can visit the Customs Compliance section of Partners Online (www.partnersonline.com).

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Additional Expectations Provide Target Global Compliance with full, unimpeded access to the factory, workers, and records, on an unannounced basis. Requirements Display the name of the factory visibly on the outside of the factory building. Allow Target Global Compliance or our designated third party auditors to conduct worker and management interviews. Allow Target Global Compliance or our designated third party auditors full access to payroll records, production records, and other documentation required to conduct the audit, upon request. Allow Target Global Compliance or our designated third party auditors full access to all areas of the Registered factory premises and dormitory (if applicable), regardless of whether or not Target production is taking place or if only certain areas are typically used for Target production. Treat all Target Global Compliance auditors or our designated third party auditors with respect. Following an audit, please feel free to ask clarifying questions about audit findings. However, ensure that factory staff do not engage in any of the following behaviors: ⎯ Raise voices in an inappropriate manner. ⎯ Threaten or cause physical or other type of harm to Target’s Team Members or representatives. ⎯ Prevent Target’s Team Members or our representatives from leaving the factory. ⎯ Attempt to alter the audit findings in any way. A “Factory Comments” document is provided at the close of an audit. Any concerns can be noted in this document. ⎯ Attempt to bribe Target’s Team Members or our representatives. Please note that engaging in the behaviors described above may result in termination of Target’s business relationship with the factory. Vendors: Train all factory management personnel on the terms of the Target Authorization for Unannounced Compliance Audits (AUCA) agreement and Standards of Vendor Engagement (SOVE) to ensure that there will be no barriers to an unannounced audit, even if senior management is not present. Specify a back-up person to serve as the contact for compliance audits in case the primary contact is not available at the time of the audit.

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Appendix A: Use of Personal Protective Equipment (PPE) Note: This list includes examples and is not all-inclusive. compliance with local health & safety regulations.

Work Process or Station

Additional research required to ensure

Possible Health & Safety Hazard(s)

Brass Ingot Making

Casting

Scraping unit

Welding Units / Electroplating, Engraving, & Coloring / Lacquering, Blasting, & Power coating Polishing Units Fabric Cutting Sewing Pressing/Ironing Laundry/Wet Processing

PPE Features Required

• •

High temperature exposure Smoke & metal fume inhalation

•

• •

High temperature exposure Smoke, metal fume, & particle inhalation

•

• •

•

• • • •

Eye strain Potential eye and hand damage from scrap metal Dust inhalation Bodily harm from fire sparks Eye damage Non-ionizing radiation

• • • • • •

Dust & metal particle inhalation Eye damage Cuts to hands Respiratory damage from lint & fluff Respiratory damage from fabric lint & dust Electrocution

•

Burns from handling hot materials

Chemical Handling

•

Damage to skin, eyes, body, and respiratory systems

Spot Cleaning

•

Respiratory & skin damage

Computerized embroidery Sandblasting

• •

Hearing damage Eye & respiratory damage

Knitting Handling glue, solvents, primers

• •

Respiratory damage Respiratory damage

Kitchen/Canteen

•

Hygiene

•

•

Heat-resistant respiratory head gear Heat-resistant gloves Heat-resistant respiratory head gear Heat-resistant gloves

• • • • • • • • • • • • • • • • • • • • • • • •

Protective eye gear & appropriate lighting Protective gloves Respiratory head gear Welding helmets (heat-resistant) Welding handshields (heatresistant) Goggles (heat-resistant) Welding spectacles (heat-resistant) Respiratory mask Goggles Steel wire mesh gloves Dust mask Dust mask Rubber shoes Rubber mats Rubber shoes Water & heat-resistant gloves Water & heat-resistant apron Rubber boots Acid-resistant aprons Chemical-resistant gloves Goggles Chemical cartridge mask Chemical cartridge mask Chemical-resistant gloves Ear plugs Goggles Chemical cartridge mask Dust mask Chemical cartridge mask

• •

Gloves Hair net

• • • •

Noise levels at 85 decibels or higher require the use of ear plugs.

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Appendix B: Resources Better Factories Cambodia (www.betterfactories.org) Business for Social Responsibility (www.bsr.org) International Labour Organization (www.ilo.org) U.S. Customs & Border Protection (http://www.cbp.gov/) U.S. Department of Labor: Occupational Safety & Health Adminstration (www.osha.gov) U.S Departmentof State: Bureau of Democracy, Human Rights, & Labor (http://www.state.gov/g/drl/rls/hrrpt/) World Bank Links to Organizations Working on Corporate Social Responsibility (http://web.worldbank.org/WBSITE/EXTERNAL/WBI/WBIPROGRAMS/CGCSRL P/0,,contentMDK:20481228~pagePK:64156158~piPK:64152884~theSitePK:4608 61,00.html)

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INTERNATIONAL SUPPLY CHAIN SECURITY – C-TPAT

International Supply Chain Security/C-TPAT 1 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

INTERNATIONAL SUPPLY CHAIN SECURITY / C-TPAT

Overview To better ensure the security of goods entering our supply chain, the Customs-Trade Partnership Against Terrorism (or C-TPAT) was developed by the U.S. Bureau of Customs and Border Protection, which is a division of the Department of Homeland Security. All members of the international supply chain are involved with C-TPAT, including: importers, ocean carriers, customs brokers, warehouse operators and manufacturers. C-TPAT is important to Target and our factories because: o Compliant companies have lower container exam rates than non-compliant companies. o Offers businesses an opportunity to play an active role in enhancing the security of global trade. o Allows Target to protect our Brand and Assets and supports Target’s goal of speedto-market.

Table of Contents 1. C-TPAT Audit and Compliance Program 2. C-TPAT Factory Security Requirements

Objectives • Understand the Customs-Trade Partnership Against Terrorism (C-TPAT) Program • Understand Target’s C-TPAT Audit and Compliance Program • Understand the factory security requirements for Target’s C-TPAT Program

Resources Security Training and Threat Awareness Program Security Questionnaire Best Methods Container Load Plan Seven Point Inspection Checklist Glossary Toll Free Hotline Frequently Asked Questions (FAQs) Contact: [email protected]

• • • • • • • •

International Supply Chain Security/C-TPAT 2 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Edited by Foxit Reader Copyright(C) by Foxit Software Company,2005-2008 For Evaluation Only. 1. Target’s C-TPAT Audit and Compliance Process •

The International Supply Chain Security Team has partnered with our TCPS Team to implement a C-TPAT security audit program to measure factory compliance with our CTPAT program. o The short audit was incorporated into the DUPRO/FRI. The TCPS QA Inspectors will be responsible for completing the audits during the DUPRO/FRI inspections. The short audit reviews 6 basic security questions that allow the International Supply Chain Security team to identify a facility and evaluate some very basic security questions. o The medium audit was incorporated into the Factory Evaluation process. The Manufacturing Technician (MT) or other assigned TCPS team member will be responsible for completing the audits during the new or annual Factory Evaluation. The Global Compliance team is also completing the medium audit during their Global Compliance factory audits. The medium audit reviews 23 security questions that allow the International Supply Chain Security team to gather enough information to determine if the facility is meeting our C-TPAT program requirements.

Note: The C-TPAT security audit program is a completely separate audit program from Global Compliance that is managed by the International Supply Chain Security team. o

•

The long audit is being completed by the International Supply Chain Security team. The long audit reviews 56 questions and will be used for facilities that are in countries that are deemed higher risk and for facilities that provide inaccurate information on their facility security evaluations.

Compliance Program One of the main requirements of the US Customs C-TPAT program is for Target to have visibility to all points of the international supply chain. Effective January 15, 2008 the International Supply Chain Security team will be implementing a compliance program for C-TPAT. This will ensure all vendor partners are meeting the visibility requirements necessary in order for Target to be C-TPAT compliant. ▪ Two ways to be non-compliant: o Producing in a factory without factory information in Business Partner Management (BPM) o Incorrect Importer of Record information in Business Partner Management (BPM)

o

Note: Non-compliant chargebacks will be processed by the Claims Dept. 2. C-TPAT Factory Security Requirements Physical Security - Cargo handling and storage facilities must have physical barriers and deterrents that guard against unauthorized access. Facilities should incorporate the following C-TPAT physical security standards throughout their facility: • Fencing o A perimeter fence of barrier must enclose the areas around cargo handling and storage facilities. All fences and barriers must be at least 7-8 feet tall. o All fencing must be inspected on a regular basis for integrity and damage. An inspection log must be kept for all daily inspections that include, but is not limited to the following: International Supply Chain Security/C-TPAT 3 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

▪ ▪ ▪ ▪ ▪

Time and date of fence/barrier inspection Individual’s full name that completed the inspection Individual inspection check points that were inspected Documentation of any damage Document damage repair date Example: Showing adequate perimeter fencing

•

Gates and Gate Houses o Gates through which vehicles and/or personnel enter or exit must be manned and/or monitored 24 hours a day by security or management. o The number of gates should be kept to the minimum necessary for proper access and safety. Example: Showing proper gate and gate house

International Supply Chain Security/C-TPAT 4 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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Parking o Private passenger vehicles must be prohibited from parking in or adjacent to cargo handling and storage areas. o All private passenger vehicles should be parked outside of the fence or barrier when possible. If private passenger vehicles need to be parked inside the facility, they must have some type of identifying sticker, park in a designated parking area and be logged into a personal vehicle log book at the gate. o The log book should contain the following information: ▪ Name ▪ Employee Number ▪ Car Make/License Plate Number ▪ In/Out Time Example: Showing proper employee parking procedure

•

Building Structure o Buildings must be constructed of materials that resist unlawful entry. o The facility must be inspected on a regular basis for integrity and damage. All issues that are found during the inspection must be reported to management and fixed immediately. o The facility must keep a log of these daily inspections that includes: ▪ Name of individual performing the inspection ▪ Date and time of inspection ▪ Documentation of any damage found to the structure ▪ Document damage repair date Example: Showing proper building structure

International Supply Chain Security/C-TPAT 5 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Locking Devices and Key Controls o All external and internal windows, gates and fences must be secured with locking devices. o Management or security personnel must control the issuance of all locks and keys. o A key log is required to document keys/locks within the facility and should contain the following information: ▪ Lock number and area assigned to ▪ Key number assigned to each individual lock ▪ Individual name(s) assigned with the key(s) ▪ Date and time the individual received the key(s) ▪ Date and time the individual returned the key(s) o All extra keys and locks must be stored in a locked cabinet or drawer. Example: Showing proper locking of gates

International Supply Chain Security/C-TPAT 6 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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Lighting o Adequate lighting must be provided inside and outside the facility including the following areas: entrances and exits, cargo handling and storage areas, fence lines and parking areas. o We want all of our facilities to have adequate lighting for the protection and safety of your facilities, employees and Target’s product. Example: Showing adequate outside lighting

International Supply Chain Security/C-TPAT 7 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Alarm Systems and Video Surveillance Camera o Alarm systems and Closed Circuit Television (CCTV) should be utilized to monitor premises and prevent unauthorized access to cargo handling and storage areas. o CCTV and alarm systems are not mandatory for any facilities at this time. Target would like all vendors/facilities to consider installing CCTV at the entrance/exit gate (s) and the container loading area. If you already have CCTV or are planning to add CCTV to your factory, it will improve your overall facility security status in the eyes of Target. Target will be able to use this information to inform US Customs that our facilities are going above and beyond the call of duty, when it comes to security. Example: Showing CCTV and alarm systems

Camera System, CCTV

Motion Detector

Physical Access Controls - Access controls prevent unauthorized entry to facilities, maintain control of employees and visitors, and protect company assets. Access controls must include the positive identification of employees, visitors and vendors at all points of entry. • Employees o An employee identification system must be in place for positive identification and access control purposes. o All employees must use their employee identification to gain access to the facility. The identification must also be displayed at all times, while the employee is working in the facility. o Company management or security personnel must adequately control the issuance and removal of employee, visitor and vendor identification badges. Written procedures for the issuance, removal and changing of access devices (e.g. keys, key cards, etc.) must be documented. o Employees should only be given access to those areas needed for the performance of their duties.

International Supply Chain Security/C-TPAT 8 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example: Employees gaining access to facility with proper ID badge / ID badge

•

Visitors o Visitors must present photo identification for documentation purposes upon arrival. o All visitors must be escorted and visibly display temporary identification. o The visitor will be required to sign into a log that contains the following information: ▪ Date/Time of arrival ▪ Full Name ▪ Company representing ▪ Identification number ▪ Individual they are visiting/Reason for visit ▪ Make, color and license of vehicle

Note: All Target team members that visit your factories, must present identification and display temporary identification while they are in your factories. Example: Visitor identification / Visitor correctly showing visitor identification upon arrival to factory

International Supply Chain Security/C-TPAT 9 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Deliveries (including mail) o Proper vendor identification and/or photo identification must be presented for documentation purposes upon arrival by all vendors. Arriving packages and mail should be periodically screened before being delivered. o Security personnel, management or receptionist should document all deliveries in a delivery log, to include the following information: ▪ Individual’s full name ▪ Date/Time of arrival ▪ Identification number ▪ Company representing ▪ Vehicle license number ▪ Purpose of visit

•

Challenging and Removing Unauthorized Persons o Written procedures must be in place to identify, challenge and address unauthorized/unidentified persons. o Challenging Unauthorized Individuals Procedure ▪ All employees will be responsible for challenging unauthorized individuals found in the facility. ▪ The unauthorized individual should be asked if they have proper identification/visitor’s badge, and what their business is in the facility, e.g. who are they there to see, etc. ▪ The unauthorized individual should be removed form the area by escort to the guard/reception desk where the situations can be resolved. ▪ If the facility employee feels that there is a threat, they should notify security personnel or management and monitor where the individual is within the facility, so security personnel or management can apprehend the unauthorized individual ▪ Security personnel or management should fill out an incident report including the following information: o Who was the individual? o Where did the incident take place? o What was the individual doing in the unauthorized area? o When did the incident take place? o How was the incident resolved?

Note: A copy of all incident reports must be sent to Vendor and Target’s International supply Chain Security team via email to: [email protected] Container Security - Container integrity must be maintained to protect against the introduction of unauthorized material and/or persons. At point of container stuffing, written procedures must be in place to properly seal and maintain the integrity of the shipping containers. • Container Inspection o Written procedures must be in place to verify the physical integrity of the container structure prior to stuffing, to include the reliability of the locking mechanisms of the doors. o A seven point-inspection must be implemented in all facilities to verify the integrity of all shipping containers. All facilities should utilize a seven point-inspection checklist for all containers. Target has developed a checklist that facilities can utilize. (see resource) International Supply Chain Security/C-TPAT 10 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1.

Front Wall – Ensure all corner block and vents are visible. Use a string or measuring tape to determine the length of the container.

2/3. Left/Right Side – Look for unusual repairs to structural beams. Use a tool to tap the side walls. There should be a hollow sound.

4.

Floor – Ensure the floor of the container is flat and look for unusual repairs in the floor.

International Supply Chain Security/C-TPAT 11 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

5. Ceiling/Roof – Ensure ventilation holes are visible, not covered or absent. Use a tool to tap the ceiling/roof, there should be a hollow sound.

6. Inside/Outside Doors – Ensure container has secure and reliable locking mechanisms. Look for loose bolts and different color bonding material on or around the bolts.

7. Outside/Undercarriage – The undercarriage should be inspected prior to entering your facility. Make sure all support beams are visible underneath the container.

International Supply Chain Security/C-TPAT 12 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Container Storage o All facilities should store full and empty containers within the fence or barrier of their facility. If containers must be stored outside of the fence/barrier, they must be secured with a seal and be monitored by security personnel at all times.

•

Container Seals o A high security seal must be affixed to all loaded containers bound for the U.S. o Written procedures must stipulate how seals are to be controlled and affixed to loaded containers o This must include written procedures for recognizing and reporting compromised seals and/or containers to Target’s overseas consolidator or the appropriate foreign authority o Only designated employees should distribute container seals for integrity purposes o All seals should be kept in a locked closet or drawer until they are ready to be used to seal the container o All seals should be recorded in a log book, which allows them to be checked in and out of the facility. The Container Load Plan can be utilized as a seal log (see resource) or a seal log must be maintained with the following components: ▪ Date/Time container is sealed ▪ Seal number ▪ Container number ▪ Employee name and identification that completed the container sealing process Example: Steamship Line Seal

International Supply Chain Security/C-TPAT 13 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example: High Security Seals

Personnel Security • Pre-Employment Verification and Background Checks/Investigations o Consistent with foreign, federal, state, and local regulations, pre-employment verifications, background checks and investigations should be conducted for prospective employees. ▪ Application verifications should include: education, prior employment and personal reference checks ▪ Background check information should include: criminal and drug checks ▪ Once employed, periodic checks and reinvestigations should be performed based on cause, and/or the sensitivity of the employee’s position. o Personnel Termination Procedures ▪ Companies must have written procedures in place to remove identification, facility, and system access for terminated employees. ▪ Management must collect all employee identification, including keys, access badges, and ensure that all systems access has been removed for terminated employees. All of this information should be documented in a log that is kept in the employees personnel file.

International Supply Chain Security/C-TPAT 14 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Procedural Security • Documentation Processing o Written procedures must be in place to ensure that all information used in the clearing of merchandise/cargo, is legible, complete, accurate, and protected against the exchange, loss or introduction of incorrect information. Documentation control must include safeguarding computer access and information. o All documentation should be stored in a secure area for a minimum of five years. • Manifesting Procedures o To help ensure the integrity of cargo received from abroad, vendors/factories must put written procedures in place to ensure that the information provided to the overseas consolidator for the 24 hour manifest requirements is reported accurately and timely. • Shipping and Receiving o Factories must ensure that their cargo is accurately described and the weights, labels, marks and piece count are correct. o Cargo that is departing from their facilities must be verified against the purchase order or packing list, prior to departure from the factory. o Drivers delivering or receiving cargo must be positively identified before cargo is received or delivered. ▪ Driver Identification Process o Security personnel should check and validate all truck/container drivers’ identification, prior to allowing entrance to their facilities. o A truck / container check in/checkout log should be kept for all trailers or containers that enter or exit the facility. This should contain the following information: ▪ Individual’s full name ▪ Identification number ▪ Vehicle license number ▪ Container/Trailer number ▪ Seal number • Cargo Discrepancies o All shortages, overages, and other significant discrepancies must be resolved and/or investigated appropriately. o All discrepancies should be reported to the overseas consolidator. o If illegal or suspicious activities are detected it is the facility’s responsibility to contact the overseas consolidator and the appropriate law enforcement agency for resolution. Information Technology Security • Password Protection o Automated systems must use individually assigned accounts that require a periodic change of password. ▪ Passwords must be changed every 90 days at a minimum and cannot be reused. o Information Technology security policies, procedures and standards must be documented and provided to employees in the form of training. • Accountability o A system must be in place to identify the abuse of information technology, including improper access, tampering or the altering of business data. o This system must identify internet abuse, virus attacks, and inappropriate systems access. o All system violators must be subject to appropriate disciplinary actions for abuse. International Supply Chain Security/C-TPAT 15 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Security Training and Threat Awareness • Threat awareness program should be established in all facilities (see resource) • A threat awareness program must be established, documented and maintained by security personnel and/or management to recognize and foster awareness of the threat posed by terrorists at each point in the supply chain. • Employees must be made aware of the procedures the company has in place to address a situation and how to report it. • Additional training should be provided to employees in the shipping and receiving areas, as well as those receiving and opening mail. • Additionally, specific training should be offered to assist employees in maintaining cargo integrity, recognizing internal conspiracies, and protecting access controls.

International Supply Chain Security/C-TPAT 16 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Security Training and Threat Awareness • • • •

A threat awareness program should be documented, established and maintained by security personnel and/or management to recognize and foster awareness of the threat posed by terrorists at each point in the supply chain. Employees must be made aware of the procedures the company has in place to address a situation and how to report it. Additional training should be provided to employees in the shipping and receiving areas, as well as those receiving and opening mail. Additionally, specific training should be offered to assist employees in maintaining cargo integrity, recognizing internal conspiracies, and protecting access controls.

Security Training and Threat Awareness Program Procedure • • •

All companies should have a documented and established Threat Awareness Program that is maintained by security personnel and/or management. This program should be designed to foster awareness of the potential threat posed by terrorists at each point of the supply chain. This program should include, but not be limited to the following: o Access Control – The checking of all employees, visitors, vendors, truck/container driver’s identification or badges upon entering and exiting the facility. Seal verification on all containers entering and exiting the facility. o Physical Security – Periodic checks of the perimeter fencing to insure integrity, all lights are working and coverage is adequate enough to eliminate shadows, CCTV cameras are working and coverage is adequate on all access points and high value areas, all alarms are in working order, all communication devices, e.g. radios, telephones, etc, are in working order. o Personnel Security – Ensuring all employees possess and display a valid identification badge, all visitors and vendors are properly signed in and out of the facility, and are properly escorted when in the facility. All employers will have a background check conducted on their employees, in accordance to local, State and Federal laws, prior to hiring. o Shipping and Receiving - Ensure that the proper process of signing in and out of containers is being implemented and followed, that all front gate security personnel are aware of what is an acceptable seal, and how to respond/report all discrepancies, tamper evident, issues found, know how to identify and respond to shipping documents that are not correct, and recognize and challenge unauthorized individuals. o All companies will make sure all employees are aware of the policy and procedures the company has in place to address the response to a situation and how to report it, including the notification to Target by calling the Integrity Hotline at 011- 704-5567046. o Additional training will be given to employees working in the shipping and receiving areas, and employees that receive and open incoming mail, to include the identification and recognition of properly marked cartons, documentation, identifying suspicious packages, etc, and procedures in place on how to respond and report these situation. o Specific training should be given to all employees assisting them in maintaining cargo integrity, recognizing internal conspiracies, and protecting the integrity of access controls.

International Supply Chain Security/C-TPAT 17 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Security Questionnaire Best Methods The following best methods (bolded) can be used at a guideline when filling out the Facility Security Evaluation in the Business Partner Management (BPM) too. If you have answered yes to the all of the questions in bold, the answer to the evaluation question is yes. If you answered no to any part of bold questions the answer to the evaluation question is no. Please send questions or concerns about C-TPAT to [email protected]. Container/Trailer # 1.

Question Do you have Target merchandise that is factory loaded?

Answer Yes / No

Is the ocean liner container loaded at your facility? 2.

Do you have Target merchandise that is CFS (Container Freight Station)?

Yes / No

Is the Target merchandise trucked to a consolidator or Container Freight Station before being loaded into the ocean liner container? 3.

(If yes for CFS) Do you ship all Target merchandise in an enclosed mode of transportation?

4.

Is a high security seal affixed to each container/trailer that meets ISO/PAS (17712) standards?

Yes / No

Is the merchandise enclosed and locked while being transported to the Container Freight Station? Yes / No

Is a bolt seal, a cable seal or a bar seals attached to each container that is loaded with cargo at your facility? (For more information you can reference ISO/PAS 17712 standard at www.iso.org.)

5.

Do you have written procedures in place on how seals are controlled and affixed to containers/trailers?

Yes / No

Do you have written procedures in place that includes at a minimum: • How to view the seal and container locking mechanisms for tampering? • How to verify seal number against shipping documentation? • How to test the seal to make sure that it is attached properly to the container • Twist seal to make sure that the seal does not unscrew? Do you currently have a seal log that includes at a minimum: (Please reference the container load plan on Partners Online.) • Date/Time container is sealed? • Seal number? • Container number? • Employee name and identification that completed the container sealing process? 6.

Do you have written procedures in place for recognizing and reporting compromised seals to Target?

Yes / No

Do you have a written procedure in place to recognize and report compromised seals to Target’s overseas consolidator that includes: • Who reported the compromised seal? • Where was the container located when the compromised seal was identified? • Who reported the compromised seal to Target’s overseas consolidator? • How the situation was resolved? 7.

Is the container/trailer sealed at the factory immediately after loading?

Yes / No

Does the facility seal all containers/trailers immediately after loading? 8.

Do you have written procedures in place for designated employees to distribute container/trailer seals? International Supply Chain Security/C-TPAT 18 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Yes / No

Is a manager, supervisor, team lead or security personnel designated to distribute seals? 9.

Do you have a container/trailer seal log?

Yes / No

Do you have a seal log procedure that includes at a minimum: ƒ Date/Time container is sealed? • Seal number? • Container number? • Employee name and identification that completed the container sealing process? The container load plan, found on Partners Online, can be used as a log.

10.

Are containers/trailers stored in a secure area to prevent unauthorized access?

Yes / No

Are all full and empty containers stored within the fence or barrier of the facility? If the containers must be stored outside of the fence or barrier, are they secured with a seal and monitored by security personnel at all times? Are containers stored door to door/end to end, or by another meaningful method (e.g., backed against structure high enough to keep doors from opening) to prevent tampering/pilferage? 11.

Do you have written procedures in place to report unauthorized entry into containers/trailers and storage areas?

Yes / No

Are there written procedures in place for reporting and neutralizing unauthorized entry into container or container storage area? Do the procedures include: • An explanation of how the subject should be asked if they have proper identification to be in the container storage area and what their business is in the container storage area?

12.

•

How the subject should be removed from the area by escort to the guard/reception desk where the situation can be handled?

•

What to do if the employee feels that there is a threat, how to notify security and monitor where the individual is so security can apprehend them?

•

How the guard, or manager, should fill out an incident report recording including: o Who was the individual? o Where did the incident take place? o What was the individual doing in the unauthorized area? o When did the incident take place? o How was the situation resolved?

•

How to send a copy of all incident reports to the International Supply Chain Security Team via email to [email protected].

Do you have written procedures in place to verify physical integrity of the container/trailer by using the seven point inspection prior to stuffing? Do you have a written procedure in place to verify the physical integrity of the container/trailer by using the seven point inspection prior to stuffing? Does the procedure include at a minimum: • Date/Time container is inspected? • Container number? • Employee name and identification that completed the container inspection process? • Does the inspection include – reliability of the locking mechanisms of the doors? • The seven point inspection checklist includes front wall, left side, right side, floor, ceiling/roof, inside/outside doors, and outside/undercarriage. It can be found on Partners Online.

Physical Security International Supply Chain Security/C-TPAT 19 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Yes / No

# 13.

Question Does a security fence or physical barrier surround your facility?

Answer Yes / No

Does the facility have a fence or barrier of at least 8 feet high (2.43 meters) surrounding the facility? 14.

Are written procedures in place to regularly inspect the fence/physical barrier for integrity and damage?

Yes / No

Does the facility perform the fence/physical barrier for integrity and damage on a daily basis? Does the facility have a written procedure and log to include at a minimum: • Name of individual performing inspection? • Date and time of inspection? • Document the damage? • Have damage fixed immediately? • Document completion date? 15.

Does interior fencing segregating domestic, international, high value, and hazardous cargo?

Yes / No

Is there a separate, secured area for the storage of domestic, international, high value, and hazardous cargo? 16.

Are all gates through which vehicles and personnel enter/exit manned and/or monitored by security personnel?

Yes / No

Does the facility have security personnel or management that man or monitor all entry/exits gates 24 hours a day? Do all security guards receive the specific training for their position within the facility? Is all security guard training documented in their personnel file? Do the security guards wear uniforms at all times? Are there post orders in each gate house that instruct the security personnel how to do their jobs and handle threat situations? 17.

Do you have employee/visitor parking areas segregated from all cargo handling and storage areas? Are employee/visitor parking areas segregated from cargo handling and storage areas, so there is limited access to tamper with cargo handling and storage areas?

Yes / No •

Do all employees/visitors park outside of the fence or physical barrier? If vehicles must part inside the facility: • Do they park in an area that is segregated • Do they have some type of identifying sticker? • Are all vehicles logged into a log book with the following information at a minimum: • Name? • Employee Number? • Car Make/License? • In/Out Time? 18.

Are buildings constructed of materials that resist unlawful entry?

Yes / No

Are all buildings constructed materials to resist unlawful entry such as bricks, cement, and/or steel? 19.

(If yes) Is the structure integrity maintained by periodic inspection and repair?

Yes / No

Is there a written procedure documenting how to perform the building inspection? Are the inspections performed daily? Is there a log to track the inspections that includes: • Name of individual performing inspection? • Date and time of inspection? • Document the damage? • Have damage fixed immediately? • Document completion date? 20.

Do you have external and internal windows, gates, and fences secured with locking devices?

International Supply Chain Security/C-TPAT 20 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Yes / No

Do all windows, gates and fences have locking devices? 21.

Does a management or security personnel control issuance of all locks and keys?

Yes / No

Does management or security personnel control issuance of all locks and keys? Is there a log to track the issuance of all locks and keys that includes the following information: • Lock number and area assigned to • Key number assigned with the lock • Individual name(s) assigned with the key(s) • Date and time the individual received the key • Date and time the individual returned the key Are all extra keys and locks stored in a locked cabinet or drawer? When a key is lost or stolen, is it reported to management or security immediately? Are the locks re-keyed or replaced immediately when a key is lost or stolen? 22.

Does lighting illuminate the building entrances and exits areas?

Yes / No

Does the facility have lighting that illuminates and eliminates all shadows for the buildings entrances and exits areas? Is the lighting inspected on a daily basis? Are lights that are burnt out replaced immediately? 23.

Does lighting illuminate the cargo handling and storage areas?

Yes / No

Does the facility have lighting that illuminates and eliminates all shadows for the cargo handling and storage areas? Is the lighting inspected on a daily basis? Are lights that are burnt out replaced immediately? 24.

Does outside lighting illuminate the fence line?

Yes / No

Does the facility have outside lighting that illuminates and eliminates all shadows for the fence line? Is the lighting inspected on a daily basis? Are lights that are burnt out replaced immediately? 25.

Does lighting illuminate the parking area?

Yes / No

Does the facility have lighting that illuminates and eliminates all shadows for the parking areas? Is the lighting inspected on a daily basis? Are lights that are burnt out replaced immediately? 26.

Is an alarm used to monitor premises and prevent unauthorized access to cargo handling facilities and storage areas? Does the facility have an alarm system to monitor the premises and prevent unauthorized access to cargo handling facilities and storage areas? Examples: motion detector or contact alarms

International Supply Chain Security/C-TPAT 21 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Yes / No

27.

Is video surveillance or a closed circuit camera system used to monitor premises and prevent unauthorized access to cargo handling facilities and storage areas?

Yes / No

Does the facility have video surveillance or a closed circuit camera system to monitor the premises, cargo handling and storage areas? If yes, are all videos kept for a minimum of 30 days? Physical Access Controls # 28.

Question Is a system in place to identify employees?

Answer Yes / No

Is there an employee access control system in place? Are all employees required to wear a company issued form of photo identification when in the facility? Does this identification display a clear picture of the employee’s face? This identification could include employee’s hair and eye color, height, and any other description to help verify the identity of the employee. Does the identification have a distinctive employee number that will be associated to the employee while they are working for the company? Is the identification be used to gain entry into the facility, and authorization into designated working areas, e.g. shipping, receiving, high value, etc? 29.

Does management or security personnel control issuance and removal of employee, visitor and vendor identification badges?

Yes / No

Are all employee, visitor and vendor identification badges issued and removed by Human Recourses, management or security personnel?

30.

Are procedures in place and documented for issuance, removal and change of access devices (key, key cards, etc.)?

Yes / No

Does the facility have written procedures for the issuance, removal and change of access devices (keys, key cards etc.)? Is a log of employee badges kept that includes the following at a minimum: • Date/Time of issuance, removal and/or change? • The person for issuance, removal and/or change? • Employee name and identification that completed the issuance, removal and/or change? Once a person ends their employment with the company, does management or security personnel should collect all access devices, including keys, access badges/company identification, etc? Is this procedure documented to include documentation showing that the former employee did return these items, verified with their signature and the person that collected the items? 31.

Are employees only given access to those secure areas needed for the performance of their duties?

Yes / No

When giving employees access to different areas of the facility, is access only given to the areas that are absolutely necessary for the employee to perform their job? 32.

Do visitors present photo identification for documentation purposes prior to entry? Do all visitors present photo identification to security, management or a receptionist upon arrival at the facility? Does the facility have a visitors’ log that includes the following information: • Date and Time of Arrival? • Name/Phone Number? • Company Representing? • Individual they are visiting? • Reason for Visit? International Supply Chain Security/C-TPAT 22 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Yes / No

• •

Picture ID Number? Make, color and license of car?

Once the visitor is ready to leave the facility, are they required to sign out with the time they are leaving, and return their visitor’s badge? Do all Target team members that visit your facility present identification and display temporary identification while they are in your facility? 33.

Are all visitors escorted and visibly display temporary identification?

Yes / No

Are visitors escorted by the employee, security or management the entire time they are in the facility? Are visitors given a temporary identification badge that is issued by security, management or a receptionist? Do visitors visibly display the temporary badge? 34.

Is proper vendor identification and/or photo identification presented for documentation purposes prior to entry by all vendors?

Yes / No

Does security personnel, management or a receptionist ensure all vendors delivery persons show proper vendor identification and/or photo identification? Does security personnel, management or a receptionist put the following information into a visitor log book? • Date and Time of Arrival? • Name/Phone Number? • Company Representing? • Vehicle license number? • Purpose of visit? 35.

Are arriving packages and mail periodically screened before being distributed?

Yes / No

Is the arriving mail and packages periodically screened when they are received before distributing? Is additional training given to employees working in the shipping and receiving areas? Is additional training given to employees that receive and open incoming mail? • • • • • 36.

Does this training include: The identification and recognition of properly marked cartons? Proper documentation? Identifying suspicious packages, etc? Procedures in place on how to respond and report these situations?

Are procedures in place to identify, challenge, and address unauthorized or unidentified persons?

Yes / No

Are there written procedures in place to identify, challenge, and address unauthorized or unidentified persons? Are these procedures trained to all employees? Are employees trained on Target’s incident response plan? Do the procedures include the following information: • How to identify an unauthorized individual? • What do I do if I identify and unauthorized individual? • Who do I call if I feel threatened? • How do I fill out an incident report? • When do I call the local authorities? Personnel Security # 37.

Question Is application information, such as employment history and references verified prior to employment? International Supply Chain Security/C-TPAT 23 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Answer Yes / No

Does the facility verify application information, such as education, employment history, and references prior to employment? Is the pre-employment information documented in the employee’s personnel file? 38.

Once employed, are periodic checks performed based on cause, or sensitivity of employees position?

39.

Consistent with local law, does the factory have background checks conducted on prospective employees?

Yes / No

Does the facility perform periodic checks based on suspicions or cause once the employee is hired? Yes / No

Is a background check performed on prospective employees? Is a criminal background check performed on all prospective employees? Is a drug screening performed on all prospective employees? 40.

Are procedures in place to remove identification, facility and system access for terminated employees?

Yes / No

Do you have a written procedure in place for the removal of identification, facility and security access for terminated employees? Does this written and documented procedure include a log book that documents that all employee identification and system access was removed? Does this log include the following information: • • • • • • • •

Date/Time of removal? Terminated employees name? Record identification of terminated employee’s and/or system access device? Escort terminated employee away from facility? Employee name and identification that completed the termination? Former employee’s signature/date? List of what access was removed and what actual physical items were obtained from the employee? Signature of the management or security personnel that colleted and removed the employee identification and system access?

Are these log records maintained in the terminated employees personnel file for a minimum of five years?

Procedural Security # 41.

Question Do you have procedures in place to ensure all documents used in customs clearing of United States cargo is legible, complete, accurate, and protected against exchange, loss or introduction of wrong information? Does the facilities have written procedures in place to ensure that all information used in the clearing of merchandise/cargo, is legible, complete, accurate, and protected against the exchange, loss or introduction of incorrect information? Is the documentation stored in a secure storage room or drawer? Is the documentation stored for a minimum of five years? Is the documentation delivered to the overseas providers in a closed, sealed envelope? Is it logged in the delivery log book? Does the delivery log book contain the following information: • Date/Time? • Courier’s Name? • Identification Number? • Company Representing? • Envelope Information or Dept/PO?

International Supply Chain Security/C-TPAT 24 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Answer Yes / No

• 42.

Signature of Courier?

Do you have procedures in place to ensure that the information provided to the overseas consolidator for the 24 hour manifest requirement is reported accurately and timely?

Yes / No

Are there written procedures in place to support the 24 hour manifest requirement? On CY (factory load) activity: •

Is the shipping information provided to Target’s designated consolidator four (4) days prior to the cancel date of the PO?

On CFS (consolidation) activity: •

43.

Is the cargo submitted with the required shipping information to Target Corporation designated consolidator five (5) days prior to the PO cancellation date or earlier where necessary?

Are drivers delivering or receiving cargo positively identified before cargo is received or released?

Yes / No

Does security personnel, management or receptionist insure all vendors/delivery persons present proper vendor identification and photo identification for documentation purposes? Does security personnel, management or receptionist input the following information into a vendor sign in log: • • • • • •

Date and Time of Arrival? Individual’s full name/Phone Number? Identification number? Company Representing? Vehicle license number? Purpose of visit?

Is a visitor’s badge issued (see visitor procedures) if they need to enter the facility? Is the individual escorted at all times while in the facility? 44.

Is cargo accurately described, and weights, labels, marks and piece count indicated and verified against the purchase or delivery orders?

Yes / No

Does the facility validate that each carton is accurately described, and the weights, labels, marks and piece count are correct and verified throughout the packing and loading process? Does the facility use the purchase order/packing list to verify the correct carton count by item prior to the cargo being loaded into the container/trailer? Once completed the loading does a manager/supervisor sign and date the purchase order/packing list to validate that the load was complete and correct? Is the signed purchase order/packing list kept with the documents and saved for a minimum of five years? 45.

Are all shortages, overages and other significant discrepancies resolved and/or investigated? Are all shortages, overages, and other significant discrepancies or anomalies resolved and/or investigated appropriately by the facility? If a discrepancy is found during the loading process and can not be determined as a paperwork error, is the whole container unloaded to verify the carton counts and quantity to resolve the discrepancy?

International Supply Chain Security/C-TPAT 25 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Yes / No

Does the facility keep a log of who was loading and unloading the container during the time of the discrepancy? Are all discrepancies or anomalies reported to the overseas consolidator? IT Security #

Question

46.

Do you have an IT system? (If no, go to Security Training & Threat Awareness Section) (If yes, answer the following questions)

47.

Does documentation control include safeguarding of computer access information?

Answer Yes / No

Does the facility have a computer system in place? Yes / No

Does the facility have a system in place to identify the abuse of information technology, including improper access, tampering or the altering of business data? If yes, does the system identify internet abuse, virus attacks, and inappropriate systems access? Is this system monitored on a daily basis by IT personnel? 48.

Do automated systems use individually assigned accounts that require periodic change of password?

Yes / No

Do all automated systems use individually assigned passwords that require a periodic change of password at a minimum of every 90 days? 49.

Are IT security policies, procedures and standards in place and provided to employees in the form of training?

Yes / No

Are all employees trained on the documented information technology security policies, procedures and standards? Does this training include the following issues at a minimum: • Virus Threats? • Data Integrity? • Web Access? • Password Protection? Is this training documented and kept in each employees personnel file? 50.

Is a system in place to ID abuse of IT including improper access, tampering, or altering of business data?

Yes / No

Does the facility have a system in place to identify the abuse of information technology, including improper access, tampering or the altering of business data? Is this system monitored on a daily basis by the information technology department or management? Does this system identify internet abuse, virus attacks, and inappropriate systems access? 51.

Are all system violators subject to appropriate disciplinary actions?

Yes / No

Is the appropriate disciplinary action taken with system violators? Is the appropriate disciplinary action documented for each type of violation in the employees personnel file?

Security Training & Threat Awareness # 52.

Question Is a threat awareness program established and maintained by security personnel to recognize and foster awareness of the threat posed by terrorists at each point in the supply chain? Does the facility have a documented and established Threat Awareness Program that is maintained by security personnel and/or management? Is this program designed to foster awareness of the potential threat posed by terrorists at each point of International Supply Chain Security/C-TPAT 26 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Answer Yes / No

the supply chain? Does this program include at a minimum: Access Control • Does the facility check all employees, visitors, vendors, truck/container driver’s identification or badges upon entering and exiting the facility? • Are seals verified on all containers entering and exiting the facility? Physical Security • Are periodic checks performed to ensure: • The integrity of perimeter fencing? • All lights are working and coverage is adequate enough to eliminate shadows? • All CCTV cameras are working and coverage is adequate on all access points and high value areas? • All alarms are in working order, • All communication devices, e.g. radios, telephones, etc, are in working order? Personnel Security • Does the facility ensure all employees possess and display a valid identification badge? • Do all visitors and vendors properly sign in and out of the facility? • Are all visitors and vendors properly escorted when in the facility? • Do all employees have a background check conducted prior to employment, in accordance to local, State and Federal laws, prior to hiring? Shipping and Receiving • Does the facility ensure: • The proper process of signing in and out of containers is being implemented and followed? • The proper process of signing in and out of containers is being implemented and followed? • That all front gate security personnel are aware of: • What is an acceptable seal? and • How to respond/report all discrepancies? • How to respond/report all tamper evident issues found? • Know how to identify and respond to shipping documents that are not correct? • Recognize and challenge unauthorized individuals?

53.

Is Target notified if illegal or suspicious activity is detected?

Yes / No

Is Target notified by using the Target Corporation’s Integrity Hotline, (001) 704-556-7046, if illegal or suspicious activity is detected? 54.

Does the facility have Target Corporation’s Integrity Hotline information displayed throughout?

Yes / No

Is Target’s toll-free Integrity Hotline telephone number, (001) 704-556-7046, posted throughout the facility? Is the number used to report suspicious activity such as terrorist threats, attempted infiltration of a person/weapon into the supply chain, and any media requests regarding our security measures or the Target Corporation? 55.

Is additional training provided to employees in shipping and receiving areas, as well as those receiving and opening mail? Is additional training given to employees working in the shipping and receiving areas? Is additional training given to employees that receive and open incoming mail? • •

Does this training include: The identification and recognition of properly marked cartons?

International Supply Chain Security/C-TPAT 27 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Yes / No

• • • 56.

Proper documentation? Identifying suspicious packages, etc? Procedures in place on how to respond and report these situations?

Is specific training offered to assist employees in maintaining cargo integrity, recognizing internal conspiracies, and protecting access controls? Is specific training given to all employees assisting them in: • Maintaining cargo integrity? • Recognizing internal conspiracies? • Protecting the integrity of access controls?

International Supply Chain Security/C-TPAT 28 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Yes / No

Container Load Plan

CONTAINER LOAD PLAN Factory/Vendor:

Container No.

Seal Number(s)

Consignee:

Container Delivery Date:

CY or CFS?

Carrier:

Port of Loading:

Port of Discharge:

Initial Inspection of container

Remarks/Comments:

External condition of the container/externo Roof condition of the container/techo: Wall condition of the container/paderes: Floor condition of the container/piso: Door condition of the container/puerta: Other/otros:

OK/Bien OK/Bien OK/Bien OK/Bien OK/Bien OK/Bien

ROW:

CTNS

DPCI

PO#

Style #

VCP

Total

Total

Total

Pcs/Items

Kilos/Item

Cbms/Item

Grand Total Shipment Release/Inspection Certification (TSS Vendors Only) Date of Inspection and Inspector: Employee Who Sealed Container

Date Container Sealed

Employee ID Time Container Sealed

International Supply Chain Security/C-TPAT 29 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Seven Point Inspection Checklist

Container Seven Point Inspection ***Must complete at least two checks in each section*** Front Wall

• •

• •

Left Side

• • •

• • • • • • • • • • • • • • • •

Checks Completed

Look for unusual repairs to structural beams Look for repairs on the walls that are visible on the inside and outside of the container. Use tool to tap on the sides, there should be a hollow sound. Right Side

• •

Checks Completed

Ensure interior corner blocks are visible and not false, and front wall is made of corrugated material. Use a 40’ chain with a marker in the middle to take an interior measurement from the front wall to the rear door of both 40foot and 20-foot containers. The 40-foot container should measure 39’5” or 12.01 meters. The 20-foot container should measure 19’4”or 5.89 meters. Ensure ventilation holes are visible, not covered or absent. Use a tool to tap the front wall, there should be a hollow sound.

Checks Completed

Look for unusual repairs to structural beams Look for repairs on the walls that are visible on the inside and outside of the container. Use tool to tap on the sides, there should be a hollow sound. Floor Checks Completed Measure the height of the container from floor to ceiling. A 40-foot and 20-foot container should measure7’10” or 2.38 meters. Ensure that the floor of the container is flat. There should not be different floor heights in the container. Look for unusual repairs in the floor. Ceiling/Roof Checks Completed The construction of false ceilings/roofs can be either internal or external. Observe the distance between the top of the corner block and the top of the roof, e.g., normally the roof is slightly below or flush with the top of the corner blocks. Ensure that the ventilation holes are visible, not covered or absent. Look for repairs on the ceiling/roof that are visible on the inside and outside of the container. Use a tool to tap on the ceiling/roof, there should be a hollow sound. Inside/Outside Doors Ensure that the container door has secure and reliable locking mechanisms. Observe the rivet type and color, they should not be different colors or have colored putty surrounding the rivets. Ensure that there are not solid plates, where there are usually cavities.

Checks Completed

Outside/Undercarriage Checks Completed The outside/undercarriage of a container should be inspected before it enters the facility. Inspect the underneath of the containers visually or with a mirror to make sure that all support beams are visible and no foreign objects are mounted to the container. Look for repairs on the outside that are visible on the inside of the container. Use a tool to tap on the outside/undercarriage, there should be a hollow sound.

International Supply Chain Security/C-TPAT 30 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Glossary WORD Business Partner Management (BPM)

CBP

CCTV CFS CSD CSI

Customs Trade Partnership Against Terrorism (C-TPAT)

DHS

Direct Import

International Supply Chain Security Team High Priority Countries Importer of Record

Indirect Import/Domestic Importer Letter of Agreement (LOA) Security Factory Evaluation Status: Factory Security Evaluation Status (Factory Level)

DEFINITION BPM is the tool utilized as the direct source for information regarding Target’s Business Partners. Organizational structure, product and material capabilities for sourcing decisions and compliance to Target Corporations regulatory standards. • Business Partners own the accuracy of the information and are responsible for maintaining the information. U.S. Customs and Border Protection (CBP) is the unified border agency within the Department of Homeland Security (DHS). CBP's priority mission is preventing terrorists and terrorist weapons from entering the United States, while also facilitating the flow of legitimate trade and travel. The primary tool to facilitate this mission is the Customs-Trade Partnership Against Terrorism. Closed Circuit Television is video surveillance equipment. Container Freight Station – This is the where less than container load cargo is delivered for consolidation. Container Security Device Container Security Initiative is the extension of the U.S. zone of security outward so the U.S. borders are the last line of defense, not the first line of defense. Through CSI, the U.S. will identify and screen high-risk cargo containers at foreign ports before they set sail for the U.S. to prevent terrorist threats before they become a reality. U.S. Bureau of Customs and Border Protection (CBP) and key importers developed C-TPAT in 2002 to secure the supply chain from the threat of terrorism. C-TPAT is a voluntary public-private partnership between the government and the trade industry. Department of Homeland Security is the Federal Government department established to provide the unifying core for the vast national network of organizations and institutions involved in efforts to secure the U.S. Business Partners produce product overseas and Target takes possession of the product overseas. Target is responsible for the movement and clearance of the product once it reaches the United States. Assets Protection team with the responsibility for Target’s Supply Chain Security Initiatives. Sourcing countries with a particular security risk. This list changes throughout the year and is business confidential information. Name of company responsible for making Customs entry of merchandise. Customs considers this party responsible for payment of duties and the truthfulness of all information submitted. Product is produced overseas and Target takes possession of the product on a domestic basis within the U.S. Agreement with vendor to participate in TGT C-TPAT program A set of questions to help Target and CBP assess the level of security at each factory. • Open – The factory importer of record question is answered “yes”, or not a single question on the Factory Security Evaluation has been answered. • Not Applicable – The factory importer of record question was answered “no” and therefore Target’s C-TPAT program does not apply to this factory. • Incomplete – The factory importer of record question is answered “yes”, but as not provided responses to all questions on the Factory Security Evaluation. • Satisfactory- The factory has completed the Factory Security Evaluation and received a satisfactory or passing score.

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Status: C-TPAT Status (Business Partner Level)

Supply Chain Target Merchandise Target Factory Audit Program Target Factory Compliance Program Terms of Sale

TSS (Target Sourcing Services)

Non-satisfactory – The factory has completed the Factory Security Evaluation and received a non-satisfactory or failing score. • Pending Audit Review – The factory/vendor modified the nonsatisfactory Factory Security Evaluation in order to become satisfactory. This status will remain until Target verifies that the security modifications are fully functional, at which time the factory will be considered satisfactory. • Non-Compliant – The factory has failed the C-TPAT Security Audit Review Process. • Not Required - BP-Certified – This status is achieved when the Business Partner that uses this factory is C-TPAT certified in their own C-TPAT program with the U.S. Customs and Border Protection and enters the certification information into the Business Partner Management System. • Inactive – The business partner has not been invited to start the Target C-TPAT process • Incomplete – The business partner has started the Target C-TPAT process, but has not completed all of the security requirements. • Satisfactory – The business partner is compliant with all Target CTPAT security requirements • Non-satisfactory – The business partner does not comply with all Target C-TPAT security requirements. • Pending Audit Review – The business partner has completed their C-TPAT security requirements and at least one or more of their factories are pending audit review. • C-TPAT Certified – This status refers to a vendor who has been CTPAT certified by U.S. Bureau of Customs and Border Protection and has entered their information into the BPM system. Movement of product from the factory floor to store door. Merchandise produced for Target Validation process for Target to determine the level of security at each factory Program to ensure all vendor partners are meeting the visibility requirements necessary in order for Target to remain C-TPAT compliant. Terms of sale for the factory. Terms of sale determine the state of the goods upon delivery (location, loading, export paperwork, etc.). Terms of Sale include: - Ex-Works (EXW) - Free Carrier (FCA) - Freight On Board (FOB) Retail service organization owned by Target Corporation that provides operating services, trend/sales information and assists with Product Development, Sourcing and Program Management on imported products from AMC vendors; also known as Product Managers.

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Toll Free Hotline Number We have established a toll-free telephone number that is available for you 24 hours a day, 7 days a week. This is to be used to report suspicious activity such as terrorist threats, attempted infiltration of a person/weapon into the supply chain, and any media requests regarding our security measures or the Target Corporation. To reach this toll-free number, dial (011)704-556-7046

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Frequently Asked Questions for C-TPAT What is the Customs Trade Partnership Against Terrorism (C-TPAT)? How does C-TPAT affect Target and our Business Partners? My facility does not load containers, de we need to meet the container security section? My facility is not able to store containers within the fence or what is the proper way to secure unused containers? Where do I locate the container 7 Point Inspection check list form? Where do I locate the container Load Plan? What does CFS mean? My facility is on a floor other than the first floor of the building, do we need to surround the building with a fence/physical barrier? We received results from a Target security audit but we do not know when the audit took place or what is our next step? Will my facility be re-audited to see that the corrective actions have taken place? My facility has made corrections to its security standards, what is our next step? My facility has undergone a C-PTAT audit conducted by a third party resulting in our facility meeting C-TPAT standards and we have received a certification number. Where do we enter this certification number or how does Target capture this 3rd party C-TPAT audit? Where do I locate the Facility Security Evaluation? What do I do with my Facility Security Evaluations? What do I do if I have been C-TPAT Certified and Validated by the U.S. government? Do I still need to complete the C-TPAT information in BPM if I’m in the process of being CTPAT Certified and Validated by the U.S. Government? Who do I contact for more information? What is the Customs Trade Partnership Against Terrorism (C-TPAT)? • U.S. Bureau of Customs and Border Protection (CBP) and key importers developed CTPAT in 2002 to secure the supply chain from the threat of terrorism. • C-TPAT is a voluntary public-private partnership between the government and the trade industry. • In exchange for implementing greater supply chain security processes, companies receive benefits in the form of fewer container security exams. • The goal is to have all business partners participate in the C-TPAT initiative, implementing improved security practices within the supply chain from facility floor to store floor. How does C-TPAT affect Target and our Business Partners? • Target must work together with our business partners to ensure the continued strengthening of our supply chain reducing the possibility of terrorist infiltration. • Target must also maintain a high level of compliance with the CBP and C-TPAT requirements. My facility does not load containers, de we need to meet the container security section? • Yes, the facility must have procedures on how to handle loading containers/trailers. Product must be secured with a locking device prior to transit, therefore requiring the mode of transportation to be enclosed. My facility is not able to store containers within the fence or what is the proper way to secure unused containers? International Supply Chain Security/C-TPAT 34 of 36 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• Containers/trailers not in use must be secured with a locking device until loading occurs. Where do I locate the container 7 Point Inspection check list form? • Log on to www.partnersonline.com o Navigate to Guidelines & Info o Select Requirements & Procedures o Under the Legal/Compliance heading o Select Customs-Trade Partnership Against Terrorism (C-TPAT) o Select Container Security o Select ctpat_seven_point_inspection Where do I locate the container Load Plan? • Log on to www.partnersonline.com o Navigate to Guidelines & Info o Select Requirements & Procedures o Under the Legal/Compliance heading o Select Customs-Trade Partnership Against Terrorism (C-TPAT) o Select Container Security o Select Load_Plan What does CFS mean? • A Container Freight Station, or CFS, is a consolidator where multiple facilities send their finished products. The products are then placed into a container and prepared for export. My facility is on a floor other than the first floor of the building, do we need to surround the building with a fence/physical barrier? • All facilities are to have a physical barrier surrounding the cargo and handling area. If this is not physically possible or not possible due to property ownership, you must have heightened access controls in place. Examples are video surveillance, extra guard service, and access badges. Feel free to contact us to make recommendations, since there are many different options to take. We received results from a Target security audit but we do not know when the audit took place or what is our next step? • Our short security audit is completed by TCPS QA Inspectors during production (DUPRO/FRI) audits. • Our medium security audit is incorporated into the Factory Evaluation and is completed by Manufacturing Technicians. Global Compliance auditors are also completing during their Global Compliance factory audits. • Next step, send a corrective action plan to [email protected]. • If you feel the facility is meeting our security standards, send the actual procedure or take pictures of the thing corrected. The International Supply Chain Security team will review and decide whether the facility is meeting our security standards. Will my facility be re-audited to see that the corrective actions have taken place? • We do not schedule re-audits, but this does not mean the facility will not receive another security audit since our security audits are attached with other types of audits. • If you feel the facility is meeting our security standards, send the actual procedure or take pictures of the thing corrected to [email protected]. The International Supply Chain Security team will review and decide whether the facility is meeting our security standards.

My facility has made corrections to its security standards, what is our next step?

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If you feel the facility is meeting our security standards, send the actual procedure or take pictures of the thing corrected to [email protected]. The International Supply Chain Security team will review and decide whether the facility is meeting our security standards. My facility has undergone a C-PTAT audit conducted by a third party resulting in our facility meeting C-TPAT standards and we have received a certification number. Where do we enter this certification number or how does Target capture this 3rd party C-TPAT audit? • Target does not recognize 3rd party C-TPAT audits. Please do not enter the certification number into our system since it is not a valid U.S. Customs and Border Protection certification number. • You are required to complete the Facility Security Evaluation for Target’s C-TPAT program. Where do I locate the Facility Security Evaluation? • Log on to www.partnersonline.com o Select ‘My Account’ o Select ‘Business Partner Management’ o Select ‘Profile Assessment’ ▪ Select ‘Facility’ ▪ Select ‘Add Facility’ ▪ Fill out the facility information and answer the questions that proceed ▪ Answer questions on the factory security evaluation if applicable (a few pages in) ▪ Review the Corrective Action Plan if applicable ▪ Proceed to the end to complete all updates. ▪ Repeat if necessary o C-TPAT – Review Letter from Senior Management and the Letter of Agreement What do I do with my Facility Security Evaluations? • All facilities will need to complete an online (electronic) Facility Security Evaluation in BPM. The electronic Facility Security Evaluation will automatically be part of the facility’s Profile Assessment. What do I do if I have been C-TPAT Certified and Validated by the U.S. government? • If you are participating in the U.S. Customs and Border Protection’s C-TPAT program and have received an SVI, you will enter your SVI as part of the Profile Assessment’s General Business Information. Note: You can also find a link to enter this number on the My Company Profile’s C-TPAT tab. Do I still need to complete the C-TPAT information in BPM if I’m in the process of being CTPAT Certified and Validated by the U.S. Government? • Yes. If you have not yet received your SVI, then you need to complete the C-TPAT information in BPM. You must enter this information so that your facilities can produce, store and/or transit products for Target while you are waiting for your U.S. government SVI. • Once you receive your SVI, go to the My Company Profile’s C-TPAT tab and use the link there to enter your SVI. Who do I contact for more information? • Please contact International Supply Chain Security at [email protected].

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COLOR

Color

1 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

COLOR

Overview Color accuracy and consistency in our stores is important to Target’s overall success as a retailer. If you are a factory that is managing the Color process on behalf of the vendor, this document will explain why it is important to understand Target color specifications and requirements, in order to deliver consistently color-accurate product. Proper color execution from our mills/factories is crucial to our Target Guest Experience because our guests base many of their purchase decisions on color: • • •

What color palette is used The quality of the coloring Overall product color coordination in the assortment

Proper color execution in these areas conveys Product Quality!

Table of Contents 1. Understanding and Matching color to Archroma Standard (s) 2. Color Submit Process 3. Lighting Requirements 4. Understanding Color Results

Objectives • Understand the Color Approval Process. • Know which color standard to match. • Know the color matching criteria.

Resources • Archroma Website: www.myarchroma.com • Target Color Office in Minneapolis: [email protected] • POL Color Approval Process: Product Development > Requirements & Procedures > Hardlines or Softlines Product Development > Color Approval Process • POL Multicolor Submit Requirements: Product Development > Requirements & Procedures > Hardlines or Softlines Product Development > Color Approval Process > Submit Requirements for Multicolor Submit Note: If you do not have access to Partners Online, ensure your vendor has provided you with the information on POL regarding the Color Approval Process. Note: Mill/Factory staff and other facility making any color decision must know and comprehend this information. Color

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1. Understanding and Matching Color to Archroma Standard •

The Archroma Standard is provided by the vendor to the factory o The Archroma Standard is a set of digital color data that represents the exact color we want the product to be. o Archroma makes a physical dyeing that is helpful for visual reference. (It may not be an exact match to the digital data) o The data printed on the back of the standard is the same data that is in the “Finger Print” of the color computer file. If you are using a spectrophotometer to evaluate color, DO NOT use info that is different than this. Example: Archroma Textile Standard and Data File (fingerprint)

• •

All color submits (labdips) and bulk production must match the Archroma standard. Making the Final Production Color: o Approved labdip represents one, not all, acceptable production lots o Approved labdip must not be used as the production standard

Note: Only the Archroma Color Standard should be used as the color production standard. If Archroma standard cannot be matched during pre-production color approval, a “Best Can Do” (BCD) color approval may be granted by the Target Global Color Office. This exception then becomes the color production standard. •

Dyehouse/Factory should receive One ENTIRE Archroma Color Standard for each color from the vendor.

Note: DO NOT CUT THE ARCHROMA STANDARD - The whole standard is required because it includes the digital data and contact info for Archroma. The size of the swatch is optimized for visual evaluation. Archroma has cotton dye formulas for all standards and most other fibers also.

Color

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2. Color Submit Processes Single Best Color Submit Process for Solid colored textiles • • • • • •

Vendor/Factory is responsible to match Target’s digital color specification Vendor/Factory and mill may produce as many labdips as necessary until an acceptable production match is created. Vendor/Factory is responsible to only submit one single color that would meet Target’s color approval specifications. Vendor/Factory will pre-screen all their mills’/factories labdips, and reject all unacceptable lab dips. Attach only one sample to a Target Solid Color Submit Form and send to proper Target Regional Color Office. Add the word “Best” followed with labdip name in “Labdip ID” field o Example: Best – B13805.

o Put temperature, and relative humidity of submit if vendor or dyemill made its own color measurements in “Comments Field” o

Example: Daeshin – 22C/50% RH

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Single Best Submit Color Process applies to: o Solid colored textile products using Archroma standards o Softlines and Soft Home Solid Colors o Only flat surface or lightly textured textiles ƒ Some examples include: Interlock, Jersey, Rib, Pointelle, Ottoman, Pique, Drop Needle, French Terry, Flatback Rib, Woven Plainweave, Twill

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Single Best Submit Color Process does NOT apply to: o Raised surfaces, highly textured, transparent or shiny fabrics. ƒ Some examples include: Thermal, Velour, Terry, Microfleece, Polar Fleece, Chenille, Corduroy, Satin Fabric, Transparent Mesh, Shiny Fabric (ex. Dazzle)

Note: These fabrics cannot be approved digitally by Regional Color Offices (RCO). Please send 4 color submits/labdips to Target Global Color Office (GCO) for approval. Color Submit Process for Solid Color Plastic • • • •

Vendor/Factory contacts National Plastic Color, Inc. (NPC) to request a color match with resin type, color name, and timing information. If resin is usable with a preapproved color, NPC gives vendor/factory a valid “color number” Vendor/Factory submits an email of the Solid Color Submit Form to Target Global Color Office using that NPC color number as the submit ID. No chip is required. Vendor/Factory emails NPC a copy of the same completed Target solid color submit form. Target Global Color Office issues a digital approval by email to vendor.

Note: Vendor/Factory must have a Target specified light box and match under Target specified light sources to ensure good visual matches. Please register your light box on www.targetcompliance.com. Color

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To evaluate the color submit, all required information required on the form: o Vendor type and name o Dyehouse ID o PID or DPCI o Material type o Labdip ID o Brand o Set Date o Division o Department # o Fabric construction o Fiber content o Dyestuffs in use, etc. o Correct e-mail address for results

Multi-Color Submit Process Vendor will notify mill/factory of requirements • The entire strike-off is reviewed for print lay-out, registration, and color •

placement by the designer Each separate color in the product is listed and receives its own comments from Color Analyst Example Multi Color Evaluation Submit Form

• • •

There are specific instructions to complete this form. Please make sure you refer to them and complete the form properly. For prints, please include drawdowns or strikeoffs on page 2 of Multicolor Submit form For yarn dyed multicolors, please be sure to submit individual yarn skeins on page 2 of Multicolor Submit form

Color

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Note: If you need to submit for a print or plaids, then you would use the multi color submit form as shown above. This form is also available on POL: Product Development > Requirements & Procedures > Hardlines or Softlines Product Development > Color Approval Process > Submit Requirements for Multicolor Submit

3. Lighting Requirements Requirements for Light Boxes • • •

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Target approved light sources are: o Primary light (Ultralume 3000) o Secondary light (D65 Daylight) All Vendors/Factories directly involved in either color matching or color match evaluation must use an approved Light Box that is current in calibration. Target recommends the GretagMacbeth Spectralight III Light Box. o Target and GretagMacbeth have created a website: (www.targetcompliance.com – password: gretagmacbeth) o The website allows Target Vendors/Factories to purchase this Light Box, (or a bundled Light Box/service agreement), at a significant discount. o Vendors and factories are encouraged to purchase maintenance services with the Light Box manufacturer. This provides annual certification by manufacturer for proper operation. o Lamp replacements are included and managed annually by manufacturer. o All parties must register themselves and their Light Boxes at the compliance website (www.targetcompliance.com – pwd gretagmacbeth). ƒ Complete registration process in the link entitled “Register Your Products.” ƒ At the bottom left of the main page or targetcompliace.com website is a link titled “Register your Products”, located under the registration header. This is where you will complete the registration process. ƒ Registration will be monitored to ensure fulfillment of this Vendor/factory obligation. Factories may use their existing Light Box only if it is adjusted to meet the Target standards. This is checked for in the TCPS Factory Evaluations.

Evaluating Colors Under the Light Box • • • •

Select the approved light source according to the Target’s requirements. Work with our Color Specialists if you have questions. The sample and the color standard must be placed inside the Light Box and: o Aligned side by side touching each other. o Be in the same direction, with regard to weave, knit and textile, if applicable. This will allow for the best visual review of the colors in both the daylight and store light. Factories should report the color difference between production sample and color standard. o Terms used to describe the hue (color) difference are: Too Yellow, Too Blue, Too Green, Too Red o Terms used to describe the lightness difference are: Too Light or Too Dark

Color

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o Terms used to describe the chromatic difference are: Too Bright or Too Dull Observe the color difference under primary light and report the difference. Change the light source to secondary light, observe the color difference and report the difference. Target uses the following Illuminants for Instrumental evaluation of color submits. o Primary – UL3000-10 PHL (NIST-defined file available from Datacolor International). o Secondary – CIE D65/10 Degree (Internationally recognized illuminant/observer file defined by the CIE). o Third – Incan A/10 Degree (This 3rd illuminant should always be considered when matching Target color).

Note: Target strongly recommends each vendor/factory purchase a light box with both UL3000 (store lighting) and D65 (daylight) Target recommends XRite Spectralight III light box with the above lights to preview the submits before sending to the Target color office. •

The following conditions should be standard for Target color approval process to ensure consistency in color approvals: o Opaque Materials ƒ Angle of Illumination - 45° ƒ Angle of view - 0° ƒ Color of Surround – Munsell N7 Grey o Translucent/Transparent ƒ Angle of Illumination - 45° ƒ Angle of view - 0° ƒ Color of Backing – White or the same backing as specified by design ƒ Color of Surround – Munsell N7 Grey o Instrumental Measurement ƒ Color Space – CIE L*a*b* ƒ Color Difference Equation – CMC (l:c 2:1) o Color Approval Tolerances ƒ For labdips, the following numbers determine a color Pass or Rejection:

Illuminant UL3000 D65

o

Lab-Dip Submit ≤ 0.8∆ECMC ≤ 0.5∆H Submit ≤ 1.2∆ECMC ≤ 0.8∆H

Instrument Set Up ƒ Specular Component Included ƒ UV Excluded – 400nm cut-off ƒ Large/Medium Area View

Note: Target currently uses X-Rite i7 spectrophotometers for color measurement and only applies the tolerances stated above when reading same surfaces. Target will accept benchtop spectrophotometers from Datacolor, Minolta, and X-Rite as instruments with which to evaluate color difference and formulate color match recipes.

Color

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4. Understanding Color Results •

There are 3 components of color: Lightness, Chroma and Hue. o Lightness: The differences from light to dark. How light or dark a color is, is based on how close it is to white. o Chroma: The intensity of color. How dull or bright a color will appear. Chroma refers to how pure a hue is. High means there is no white or black. o Hue: Classifications of Red, Yellow, Green, and Blue. Different hues are caused by different wavelengths. Variations in hue from standard to sample are expected to be very slight.

Note: Target Color Analysts make comments based on these three components of color. • • •

Color submissions are analyzed by Target and feedback is given: o All results are pdf files that are e-mailed to the Vendor and copied to mill/factory • Level of service is 24-48 hrs upon receipt of color submits When color submit is APPROVED: o Labdip color approval process is complete. o File the approval in your Standard Inspection Package (SIP). If color submit FAILS: o Determine why it failed by reviewing Analyst’s comments. o Mill/factory must follow Analyst’s correction comments and re-submit As Soon As Possible.

Note: Do not re-submit before comments are received. o o

If Color Analyst requests additional information, mill/factory must provide it. Analyst may recommend that mill/factory work directly with regional third-party color technical representative (Clariant, Huntsman, Dyestar).

Color

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SAMPLE REQUIREMENTS AND FIT PROCESS SOFTLINES

Sample Requirements and Fit Process – Softlines 1 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

SAMPLE REQUIREMENTS AND FIT PROCESS - SOFTLINES

Overview This training document includes an overview of the product development stages and contents of a packet for easy identification. The purpose and function of important sections of the packet, like materials & finishes, artwork and specification measurement is explained. The document also outlines the purpose and function of the vendor packet tool and lists the various requirements for sample submissions.

Table of Contents 1. Sample Request Packet Contents – related to fit 2. Sample Stages 3. Sample Requirements 4. Vendor Packet

Objectives • Understand the Target Sample Request Information • Understand Target’s Fit Process, Standards, and Requirements

Resources • Sample Requirements and Fit Process Softlines – Vendor Training • Measurement manual - This is a manual which outlines the method of measure for each point of measurement. POL: Product Development > Requirements & Procedures > Softlines Product Development > Method of Measure

Sample Requirements and Fit Process – Softlines 2 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Sample Request Packet Contents Target must review samples as part of our development and sourcing process. • •

Sample information is located in Target’s Product Lifecycle Management (PLM) system on Partners Online > POL: Product Development>Product Lifecycle Management (PLM) To access new PLM packets, click ‘New Packets’ under ‘My Work’ in PLM. o New packets will show up on everyone’s list until someone ‘accepts’ the packet. Once the packet is accepted, it disappears from this list and can only be found through a search. ƒ The person accepting the packet should also be the person to receive evaluations, as evaluation notices are only located within the ‘My Work list’ of that person. Example of PLM Worklist Page

• • •

Target expects business partners to review all details in the Sample Request Packet. Business Partner is responsible to communicate all relevant details in a packet to the sample making factory to ensure an approvable sample. Sample Request Packet includes: 1. Sketch 2. Materials and Finishes 3. Trim 4. Artwork 5. Impressions 6. Specification Measurements 7. Construction 8. Sloper & Grade

Sample Requirements and Fit Process – Softlines 3 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Sketch - Detailed sketches illustrating Target’s vision for a garment Note: Proportion and construction details

Sample Requirements and Fit Process – Softlines 4 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

2. Materials and Finishes - Information includes yarn for sweaters and more Note: Fabrication details and finishing requirements

Sample Requirements and Fit Process – Softlines 5 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

3. Trim - Information includes supplier codes and more Note – Trim details and supplier information

Sample Requirements and Fit Process – Softlines 6 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

4. Artwork – Information includes dimensions/pattern, placement directions, etc Note: Artwork designs that are part of a garment

5. Impressions – include color placement for each component, along with set date listed for each.

Sample Requirements and Fit Process – Softlines 7 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

6. Specification Measurements – Includes key measurements for core sample size.

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7. Construction - Includes construction information can be located in the ‘Sketch Assets’ as a technical sketch Note: Visual communication of construction details

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Construction information also located in ‘Assembly and Construction’ (technical construction, expression of fit, and more) Note: Written communication of construction details

Sample Requirements and Fit Process – Softlines 9 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Note: If Expression of fit (look and feel of garment) is not located within the ‘Assembly and Construction’ tab, it will be located within the ‘Technical Assets’ tab

Sample Requirements and Fit Process – Softlines 10 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

8. Sloper & Grade – Includes graded sloper pattern which can be downloaded from POL to properly execute the sample. Note: Grading rules for all sizes are included on each sloper

Sample Requirements and Fit Process – Softlines 11 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Note: Sloper pages can be downloaded directly from POL. A visual guide of the sloper including critical measurements of the sloper sample, sketch, photos, mini marker, x/y grade coordinates, and grade notes is located on POL: POL: Product Development > Requirements & Procedures > Softlines Product > Development > Sloper Pattern Library

Sample Requirements and Fit Process – Softlines 12 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

2. Sample Stages There are three stages in the Sample Process: • Development • Prototype • Production Development • A Development Sample is the first opportunity for the designer to see their idea expressed/created in physical garment form. o It is often not the final version. o All samples submitted must be approvable for fit. o The packet can be accessed in PLM under ‘New Packets’ Example of Development Packet

•

One of the following decisions is made regarding the Development Sample: o Sample is dropped from consideration. o The Designer’s original idea is modified (fabrication, trim, styling), and changes are built into the Prototype packet. o Sample moves directly to Prototype Stage.

Sample Requirements and Fit Process – Softlines 13 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Prototype •

The Prototype Sample allows the Business Partner to demonstrate their ability to make the garment as requested, at the cost the Business Partner provided. o When the Development Sample moves into Prototype stage, PLM is updated to reflect the new stage. o All samples submitted must be approvable for fit. o The packet can be accessed in PLM under ‘New Packets’ o During the prototype stage a fit evaluation is performed on the Prototype Sample. Example of Prototype Packet

•

Comments and/or attachments for Business Partner lists changes from development, located in the Technical tab. Example of Comment Section located in the technical tab

Sample Requirements and Fit Process – Softlines 14 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• The Prototype Sample Evaluation determines if the fit, balance, construction, and ‘Garment Vendor Sourced TD’ trims of the sample are approvable according to Target Standards. o To access PLM evaluations, click on ‘My Work list’ under ‘My Work’ in PLM (an email notification will not be sent) ƒ The person who accepted the original development or prototype packet is the person who will receive the evaluation notification in their ‘My Work list’. Example of PLM Worklist Page

•

Click on link to view status of evaluation: o Approved o Approved Pending Change (approved with updates per prototype evaluation in PLM). o Failed (sample does not meet Target requirements and must be resubmitted). Example of Approved Pending Changes Evaluation Overview

Sample Requirements and Fit Process – Softlines 15 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Fit Evaluations from Target include: o Digital images o Measurement evaluation o Construction evaluation o Written comments (on digital images and comments). Digital images

Measurement evaluation

Sample Requirements and Fit Process – Softlines 16 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Construction evaluation

Written Comments

Sample Requirements and Fit Process – Softlines 17 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

o

Review the measurements and deviations. Based on requested changes and deviations, make necessary corrections: Business Partner: Submitted Garment measurements (measured by Business Partner)

Update core: Revised spec measurement Core: Requested Size spec

Eval: Submitted Garment measurements (measured by Target)

Requested Size: if evaluating a non-core size

o o

Target expects that all submitted samples are approvable for fit. If a Prototype Sample fails for fit, extra measures are taken which include any of the following: ƒ Business Partner travels to Target Headquarters or to Regional Fitting Approval Location for training. ƒ Conduct Sample process evaluation. ƒ Conduct Web meeting. ƒ Target Technical Designer, Regional Approving Fit Engineer, or accredited Business Partner Fit Engineer will perform the required 2nd Prototype evaluation. o Re-submit Prototype samples must be created from the 1st prototype sample pattern, incorporating all corrections noted from the sample evaluation. Note: Sample failures may jeopardize meeting the product timing and action which may negatively impact your future business!

Sample Requirements and Fit Process – Softlines 18 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Production • When the Core Size(s) Prototype Sample is Approved or Approved Pending Change (APC), the Target Technical Designer, Regional Approving Fit Engineer, or accredited Business Partner Fit Engineer issues a Production Packet. •

The packet can be accessed in PLM under ‘New Packets’

•

The Business Partner must grade the approved core size sample pattern to all remaining sizes for Production. Use the Target approved grade rules and Grading Best Methods provided with the sloper pattern on POL.

Example of Production Packet

Note: The Business Partner is responsible to communicate all relevant details in a packet to the sample making factory to ensure an approvable sample.

Sample Requirements and Fit Process – Softlines 19 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

3. Sample Requirements Due Date • Samples must be received at Target by due date (timing varies by calendar). The due date for your samples can be found in your PLM packet. Example of Due Date for Garment Request in a Prototype Packet

o

Construction Standards ƒ All samples must meet or exceed Minimum Construction Standards. ƒ Safety, Minimum construction standards, Stripe-Plaid Match Guidelines, and Interlining Procedures are located on POL:

POL: Product Development > Requirements and Procedures > Softlines Product Development > Construction Standards

Sample Requirements and Fit Process – Softlines 20 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Sample Tag • All samples must have a fully completed Target sample tag attached to the sample. • List the location where the sample was made, sample room name and country of origin. Sample tag placement, instructions and a downloadable PDF file are located on POL: Product Development > Requirements & Procedures > Softlines Product Development > Owned Brand Process > Sample Tag Information

Sample Requirements and Fit Process – Softlines 21 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example of downloadable Sample Tag

NOTE: List the location where the sample was made, (Sample room name, Country of Origin).

Sample Requirements and Fit Process – Softlines 22 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• •

Development samples are to be made of actual or similar fabric. Prototype samples must be made of production quality fabric and wash/finish. Example of Back Side of Sample Tag

NOTE: If Development sample is made of similar fabric or wash/finish: • Mark the sample tag with the fabric or wash/finish of the submitted sample. • Attach a production quality swatch and information to the sample tag.

Sample Requirements and Fit Process – Softlines 23 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

If, due to timing, you must submit a sample that is not approvable for fit, mark the sample tag clearly “Not for Fit.” It is the Business Partner’s responsibility to quickly follow-up with a fittable sample. This should only happen in exception cases.

Sample Requirements and Fit Process – Softlines 24 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Mannequin • It is a Target requirement that all Business Partners purchase the approved Target mannequins for all necessary core size(s). Information on How to order Approved Target Mannequins is located on POL: Product Development > Requirements & Procedures > Softlines Product Development > Certified Mannequins/Core Body Charts •

Samples submitted must: o Be pre-fit on the approved Target mannequin and be approvable o Execute the desired Proportion/Expression of Fit o Be within tolerance of the spec requested o Execute the requested construction o Include requested ‘Garment Vendor Sourced TD’ trims o Have digital photos taken by Business Partner

Examples of samples pre-fit on Target Approved Mannequins

PID 213620, Development Sample

Reviewed by xxxxxx (BP name) (May add comments, if necessary)

Sample Requirements and Fit Process – Softlines 25 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Key attribute of fit that will be evaluated: Balance – Tops

Key attribute of fit that will be evaluated: Balance – Bottoms

Sample Requirements and Fit Process – Softlines 26 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Key attribute of fit that will be evaluated: Correct Pattern Shapes

Key attribute of fit that will be evaluated: Indications of Restricted Body Movement

•

Pre-fit your sample checking for: Garment cut off grain

Sample Requirements and Fit Process – Softlines 27 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Key attribute of fit that will be evaluated: Garment cut off grain

o

Evaluation from Business Partner includes: ƒ Measurement/Construction evaluation entered in PLM o Digital photos of submitted sample of front/side/back view taken, saved as a Power Point, and uploaded into PLM

4. Vendor Packet •

Vendor Packet is a tool used for programs in which the Business Partners design all or parts of the garment for Target. Detailed instructions for vendor packet process are located on POL: Product Development > Requirements and Procedures > Softlines Product Development > Vendor Packet > Helpful Hints > Vendor Packet PLM Process

Sample Evaluation • The Target fit evaluation and production specification will also be recorded in the Vendor Packet format. • To access Vendor Packet Evaluations, click on ‘New Packets’ under ‘My Worklist’ in PLM. The New Packet includes the Evaluation.

Sample Requirements and Fit Process – Softlines 28 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example of PLM Worklist Page

Global Resources •

Assistance with Samples o Target has dedicated Trainers worldwide who are there to demonstrate and instruct the Business Partner on the fit process and sample requirements. ƒ Hong Kong (also covers Taiwan and Shanghai) ƒ Korea (also covers Thailand, Bangladesh, India, Singapore, and Indonesia) ƒ Guatemala (also covers Central America) ƒ United States

•

Target has Approving Fit Engineers worldwide who provide assistance to business partners.

•

Regional Approving Fit Engineers (can pre-screen garments, approve garments and assist vendors): o Korea o Hong Kong o Taiwan o India-New Delhi o Thailand o Singapore o Guatemala o China-Shanghai

Partners Online contains contact information for Target Offices worldwide, POL: Product Development > Requirements and Procedures > Softlines Product Development > Communication Contacts

Sample Requirements and Fit Process – Softlines 29 of 29 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

FABRIC DEVELOPMENT

Fabric 1 of 5 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

FABRIC Cut and Sew Factories Only (Not Mills)

Overview Fit, Shrinkage and Durability are the key attributes that influence the buying decision of a Target guest/customer. In order to ensure that you are consistently meeting Target’s expectations on quality, it is important to understand Target’s Fabric Standards and Testing Process. Additionally, you are responsible for the washing process applied to the product and it is important to understand the performance and testing standards for garment wet and dry processing.

Table of Contents 1. Fabric Standards 2. Fabric Testing Requirements 3. Fabric Development Testing Requirements 4. Garment Wet & Dry Processes a. Expectations b. Testing

Objectives • Review Target’s fabric testing expectations for cut and sew factories • Understand Target’s fabric standards and requirements for cut and sew factories • Understand Target’s garment wet and dry processing expectations for cut and sew factories

Resources • Question Contacts o TSS Vendors/Factories - Fabric Sourcing Regional Team o Non-TSS Vendors/Factories - [email protected] o General Inquiries - [email protected] Wash Development Process found on POL: Product Development > Wash Development Process Fabric Standards are available on POL: Product Development > Requirements and Procedures > Softlines Quality Assurance > Adult or Children’s Apparel > Product Testing > Fabric Performance Standards for Mills & Garment Performance Standards. Requirements for wash development samples available on POL: Product Development > Wash Development Process > Simple Silhouettes

Fabric 2 of 5 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Fabric Standards •

•

Target’s Fabric Standards for fabric quality and performance are important because: o Fit, Durability, and Appearance are the key parameters Target’s guests look for when they buy garments from a Target store. o It is essential that its suppliers meet Target’s fabric quality standards consistently in order to meet and exceed guest expectations. The key fabric performance criteria are provided on POL by fiber content and construction and are very important standards to meet: o Fabric Dimensional Stability (Shrinkage) – All fabric types o Strength (Tensile/Tear) – Woven fabrics o Strength (Burst) – Knit fabrics o Skewing (or Torque) of the fabric after wash – Mainly Knit fabric types o Visual appearance (Pilling) of the fabric after wash – All fabric types

Fabric Standards are available on POL: Product Development > Requirements and Procedures > Softlines Quality Assurance > Adult or Children’s Apparel > Product Testing > Fabric Performance Standards for Mills & Garment Performance Standards. Note: Target expects all its Vendors/Factories and their Raw Material Suppliers to be aware of Target’s Fabric Standards and quality expectations while developing/sourcing fabric and to begin testing during development with their internal labs. o Refer to the Softlines Manual online to verify the standard for the fabric being developed. o Include all testing information in PLM when submitting their fabrics.

2. Fabric Testing Requirements •

Testing Criteria being used for Target Programs: o Dimensional Stability (Fabric Shrinkage and/or Growth) (LxW) (AATCC135) o Appearance After Care (CPSD-SL-31055 Mod) o Pilling ( ASTM D3512 Visual after 3 Home Launderings) o Skewness ( AATCC 179) o Bursting Strength ( ASTM D3786) o Tensile & Tear Strength o Stretch and Recovery (ASTM D2594 Fabrics with Spandex Only) o Flammability for Light Weight fabric (Title 16 CFR 1610) o Flammability for Children’s sleepwear fabric (Title 16 CFR 1615) o Colorfastness Properties ( All tests that apply) o Formaldehyde (CPSD-AN-00018) o PH Value ( AATCC 81) o Fiber Content ( AATCC 20/20A) o Fabric Construction ( ASTM 3887) o Weight (ASTM 3776)

Note: Additional testing will be required for fabrics with performance attributes/finishes (e.g. Stain Repellency, Wrinkle Resistance, Moisture Management etc.). Fabric 3 of 5 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Examples of why it is important that fabrics are tested before cutting begins: Shrinkage Size 8 – Before washing

Shrinkage Size 8 – After washing

Skew (caused by improper knitting/finishing process)

Fabric 4 of 5 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

3. Fabric Development Testing Requirements • Fabric Development Testing: o A pre-requisite for fabric approval at Target. o Needs to be conducted for all new fabrics submitted to Target for consideration. All information regarding the physical performance properties should be included in PLM development packet received from vendor. o Requires that a third party testing lab verifies the construction and performance characteristics of all fabric samples submitted to Target. o A way to collect important information regarding the fabric counter sample. o Ensures that all products being presented to design will perform to Target’s fabric performance standards.

4. Garment Wet & Dry Process • Wash development requests are communicated via PLM development packet in the form of: o Generic Wash Recipe – request based on standardized wash recipe applied to a fabric requirement. o Target Reference Formula - a request for wash & finish development applied to a fabric specification; this can be based on a Digital Photo, Inspiration Sample or a Design Concept. Target Reference Formula is a recommended reference recipe to achieve the effect as close as possible to the design vision. • Requirements for wash development samples: o If the request is received without a garment packet, Vendor/Factory prepares 4 sets of Simple Silhouettes / Leg panels per wash for the wash trials. o If the request is received in a garment packet, Vendor/Factory prepares 4 sets of garments for the primary wash. o Additional wash options received in a garment packet are prepared in the form of Simple Silhouettes. ( 4 sets) Information found on POL: Product Development > Wash Development Process > Simple Silhouettes •

Key steps that a vendor/factory performs upon receipt of a wash development request o Vendor/Factory conducts wash trials with Target Generic Wash Recipe or Target Reference Formula o Vendor/Factory submits one set of wash submits to the Regional Office and two sets to the Target Headquarters. o Vendor/Factory receives wash approval or reject notification from Target. o Vendor/Factory performs internal testing on approved washes (Wash Development Test Form is available on POL) o If the wash development does not meet Target Standards, TSS vendors are expected to consult with the Regional Office and Non-TSS Vendors should consult with Target Headquarters to ensure that the wash can be modified to pass testing without compromising the aesthetic.

Fabric 5 of 5 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

TRIMS SOFTLINES

Trims

1 of 6 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

TRIMS - SOFTLINES

Overview This information will help explain the difference between Target Sourced Trims and Garment Vendor Sourced Trims and what the process is for both procedures. It will also explain the differences between labels and Department/Class/Item (DPCI) labels.

Table of Contents 1. Trim Definitions 2. Target Sourced Trim Process 3. Garment Vendor Sourced Trim Process 4. Label Requirements

Objectives • Understand Target’s definition of a Trim • Understand the differences between Target Sourced Trim and Garment Vendor Sourced Trim processes • Understand where to find Trims label placement information

Resources • Question Contacts: o Trim Development and General Trim Questions - [email protected] o Trim Quality issues or Trim Matrix Questions - [email protected]

Trims

2 of 6 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Trim Definition • • • •

Trim includes any item permanently affixed to a garment. Trims are “sewn” into garments and are not removed after point of sale. Permanently affixed trims include trims that are “sewn onto” the garment such as main brand labels, care labels, zippers, zipper pulls, hardware and buttons. These could also include appliqués, embroideries, laces, ribbons, or patches. Execution of a trim is completed through only one of two options, Target Sourced trims or Garment Vendor Sourced trims. What are branded trims? o Branded trims are any trim items that contain a copyright brand on the trim item. All branded trims receive a Target code. Branded trims are always Target Sourced and would include main brand labels, zippers, zipper pulls, and logo buttons.

2. Target Sourced Trim Processes •

Target Sourced Branded Trim Process Target’s design team or marketing/creative team will initiate the creation of a trim in order to meet specific garment needs. Target Sourced will be noted on the Trim Asset page located within the PLM Packet. 1. The trim items are assigned a Target code. ƒ Branded trim development is put into work by the Softlines Trim team and is developed with an approved matrix supplier. ƒ The Vendor/Factory does not have the option of sourcing from their own supplier and could result in a trim non-compliance chargeback. 2. The Trim Development team will develop the color, quality and initial pricing standards for all branded trims. 3. The Trim Development team will release branded trim items to approved supplier matrix. ƒ Trim Development must be coordinated with the Softlines calendar. ƒ If trim timing is an issue, the trim development team, along with Target Standards team may give initial development and first production order to an approved matrix supplier. ƒ After the initial timing issue is resolved, the branded trim item will then be released to the balance of the approved matrix suppliers. ƒ When developing a trim, the cost for the trim item is “price tested” with the approved trim suppliers. ƒ The Vendor/Factory is responsible for negotiation of the trim costs with the approved trim supplier upon ordering their trims.

Trims

3 of 6 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example of Target Sourced Trim Asset Found in PLM Packet

•

•

Target Sourced Non-Branded Trim Process The Trim Development team will research and develop non-branded trim items that have limited availability, limited supplier base, non - branded original development, or is the same trim across multiple garment vendors-dual sourced. 1. Preferred non-branded items will be developed based on color, quality and initial price testing. ƒ These items must be purchased from the original matrix supplier in order to maintain the same quality. ƒ The Vendor/Factory does not have the option of sourcing from their own supplier and could result in a trim non-compliance chargeback. 2. Trim Development must be coordinated with the Softlines calendar. 3. When developing a trim, the cost for the trim item is “price tested” with the approved trim suppliers. ƒ The Vendor/Factory is responsible for negotiation of the trim costs with the approved trim supplier upon ordering their trims. ƒ If after trim price has been negotiated directly with the supplier and a pricing challenge still exists, the Vendor/Factory is responsible to alert either Target Headquarters Trim Team (DI) or Hong Kong Fabric and Trim Team (TSS) of the pricing challenge. Target’s Sourced Softlines Trim Responsibilities o Vendor/Factory is responsible for working directly with the authorized matrix supplier and for managing all requirements for ordering trims including: ƒ Purchase of all Target sourced trims-both branded and “select” non branded ƒ Estimates ƒ Meeting schedules for delivery dates ƒ Negotiating trim price for bulk production ƒ Trim color approval

Trims

4 of 6 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Target’s Sourced Softlines Trim Supplier Matrix Information o An authorized matrix (list) of suppliers that have been approved by Target to produce trims for Target Sourced trims. For Softlines, these are the ONLY suppliers that trims will be accepted from. o Vendors are required to supply the factory with Target Sourced trims-both branded and non branded “select” trims that are purchased from the authorized matrix suppliers. ƒ Use any one of the suppliers on the appropriate, authorized supplier matrix.

List of suppliers is found on POL: Guidelines & Info > Requirements & Procedures > Product Packaging > Packaging and Trim requirements > Packaging Quality Assurance > Softlines Matrix Suppliers

3. Garment Vendor Sourced Trim Process Vendor/Factory has the ability to source trims through their own suppliers when it states “Garment Vendor Sourced” on the Trim Asset page located within the PLM Packet. • Garment Vendor Sourced suppliers must meet trim quality standards. These requirements are posted on POL under the trim standards section. • Approvals are required when no supplier options are given or Garment Vendor chooses to not use one of the listed suppliers. o Trim is approved through Target Development Manager/Development coordinator in pre-commit stage. o Trim is approved through TSS BA post pre-commit stage. o For Garment Vendor Sourced TD Asset only, Trims must be approved in garment form by the Target Technical Designer Example of Garment Vendor Sourced Trim Asset Found in PLM Packet

Trims

5 of 6 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

4. Label Requirements • Label Placement and DPCI Label

o The PLM packet will include a visual image that shows correct label placement. • Trim Labels

Care labels, size labels, and country of origin labels will be assigned a Target code. Vendor will receive this code information with the costing packet. o These labels must be purchased from the approved Branded Main Label Matrix supplier that supplies the main label. o All label information will be provided in the PLM packet, which should be provided to the factory by the vendor. This includes the main label, care label and/or country of origin label information. • DPCI Label Requirements: o The DPCI is vendor managed and does not have to be ordered from an approved matrix main label supplier. o The DPCI is required for all Target Softlines owned brand products. o The DPCI is a white ground with black letters. o The DPCI must be smaller than the label it goes underneath (label cannot show from underneath the other labels). o The layout is four rows listing out the DPCI as follows: ƒ Dept number: # # # ƒ Class number: # # ƒ Item number: # # # # ƒ Factory ID number: # # # # # # # # o Factory identification number ƒ Factory ID needs to be included on the DPCI label. ƒ Factory ID is not the same as the vendor ID. ƒ Factory ID is found within the BPM system (If you do have access to POL, ask your vendor to provide this information). o

This factory ID information can be found on POL: My Account > Business Partner Management > Click the next button on the confidentiality page > Click the yes button if the initial validation page is displaying the correct GMS vendor information > My Company Profile > Brand and Compliance > Factory Group ID (is where you will find the factory number)

Trims

6 of 6 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

SAMPLE REQUIREMENTS HARDLINES/ SOFT HOME

Sample Requirements- Hardline/ Soft Home 1 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

SAMPLE REQUIREMENTS – HARDLINES/SOFTHOME

Overview This information will help you understand your role when submitting samples per Target’s Sample Requirement process. Included are examples of the required sample attachments and where to locate the templates on Partners Online (POL). The Quick Reference Guide is an overview that can be posted within your factory to help you easily understand the differences between the Red, Yellow and Green Seal processes. The guide will also help Vendor/Factory understand the critical timing and the sample retention (length of time required to keep each sample) requirements.

Table of Contents 1. Sample Submission and Approval Process 2. Sample Attachment Examples 3. Sample Seal Quick Reference Guide Objectives • Understand the Target sample submission process for red, yellow and green seal approval(s) • Know which sample attachment (e.g. hangtags, stickers, etc.) to use and where to find template information

Resources • POL: Product Development > Hardlines Product Development > Material Development Process > Forms Index • POL: Product Development > Hardlines Product Development > Sample Submission Process Hardlines > Hardlines Sample Management Process Training Presentation • POL: Product Development > Hardlines Product Development > Sample Submission Process Hardlines > Sample Seal Quick Reference Guide

Sample Requirements- Hardline/ Soft Home 2 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Sample Submission and Approval Process HQ Request Sample from Business Partner HQ Request revised sample from Business Partner, if needed

HQ Review Sample in CFTM

HQ Send Feedback to Business Partner

Business Partner Award HQ approves RED SEAL sample or components for Pre-Production

TCPS (During PPR) or Non-TSS Business Partner approves yellow seal sample

HQ receives YELLOW SEAL Sample approved for Production, Exception Only HQ requests & Receives GREEN SEAL Production Sample, Exception Only

2. Sample Attachment Examples Vendor completes appropriate sample attachment from POL as required for any samples being sent to HQ and overseas. This includes: Hangtag, Sticker or Mini Sticker. • POL: Product Development > Hardlines Product Development > Material Development Process > Forms Index • POL: Product Development / Requirements & Procedures / Hardliners Product Development / Sample Submission Process

Sample Requirements- Hardline/ Soft Home 3 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Hangtags • Download the template and copies must be printed on card stock. • You can not use basic paper. • Use the preferred supplier, SML, to print the sample tags • Use appropriate sized hangtag for product Example: Hangtag used for textiles, furniture, luggage

Stickers • Use appropriate sized sticker for product Example: Sticker used for Hard Goods (lamps, dinnerware)

Example: Mini Sticker used on extremely small items (ornaments)

Sample Requirements- Hardline/ Soft Home 4 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Forms • Must be attached to the product • All samples require an attached Materials Development Form (MDF) or Fabric Development Form (FDF) Example FDF: Used for Fabric Development

Example MDF: Used for Material Development

Sample Requirements- Hardline/ Soft Home 5 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

4. Sample Seal Quick Reference Guide

Sample Seal Quick Reference Sample Seal

Red Seal Approval

Definition

Sample Requirements

● Approval needs to be given for all components of the product ● Approval can be given in sample form or by component ● Approval only needs to be given on one colorway ● Elements that need to be approved (when applicable): ● Aesthetics ● Technical Specifications Sample or all ● Materials components approved ● Trims for pre-production with ● Print/Pattern awarded Business ● Finish Partner. ● Shade Bands

Approval Timing

Signature/ Responsible for Seal Approval Reviewing on Sample TSS: • Buyer • Designer • Technical • Fabric • DDT

Approved no later than 3 Non-TSS: weeks after Program • Buyer Award • Designer • Technical Exceptions: The CFT • Fabric needs to verify due dates • DDT against production timing

TSS: • Buyer

Yellow Seal Sample

Green Seal Sample

If the Red Seal Approval is a sample Other minimum requirements of with all production the product at this stage: components, that ● Color: Lab Dip/Color Submit sample can become Approved the Yellow Seal ● Packaging: Mock-Up Sample

Production Sample: If requested, TCPS ● All sample requirements are pulls sample at Dupro met or exceeded as ** compared to Red and Yellow Seal Samples When to request: ● All sample requirements 1) New Business meet Technical Specification Partner 2) New Product Other minimum requirements for Category the product at this stage: 3) Quality Concerns ● Color: Correct with Red/Yellow ● Packaging: Final 4) Multi-Sourced Program

HQ: For the life of the program * All Business Partners: 2 years after last ship date

External Design Programs: ● 1 additional sample is sent to HQ ● HQ sends sample to External Designer

Other minimum requirements of the product at this stage: ● Color: Visually Correct ● Packaging: Mock-Up

● All sample requirements are met or exceeded as compared to the Red Seal ● All sample requirements meet Technical Specification

Retention

TSS: Total of 2 samples: ● 1 submitted to HQ for approval ● 1 submitted simultaneously to Local MR with side-by-side photos ● MR responsible for indicating approval on Business Partner sample and returning to Business Partner

Non-TSS: Non-TSS: Total of 2 samples: ● 2 submitted to HQ and signed • Buyer for approval ● 1 approved sample returned to Business Partner

Note: No changes can be requested after Red Seal Approval without consequence

Pre-Production Sample with production components. Sample approved for Production.

Sample Submission Process

TSS: • TCPS (Field)

TSS: • TCPS (Field)

TSS: Total of 2 samples: ● 1 approved sample submitted to HQ for reference ● 1 retained in SIP by Business Partner

Non-TSS: At Pre-Production Meeting • Business (3-10 days prior to Partner production start)

Non-TSS: • N/A

Non-TSS: Total of 2 samples: ● 1 sample submitted to HQ for reference ● 1 sample retained by Business Partner

TSS/QAI: ● TCPS pulls samples at Dupro ● Green Seal Sample must be requested before production start

TSS/QAI: • TCPS (Field) • Buyer • Designer • Technical • Fabric • DDT

TSS/QAI: Total of 2 samples: TSS/QAI: • TCPS (Field) ● 1 approved sample submitted to HQ for reference ● 1 retained by Business Partner from Dupro or Final Inspection

Non-TSS: • N/A

Non-TSS: • N/A

Non-TSS: ● N/A

Refers to the reference sample sent to HQ. Non-TSS External Design Programs: Business ● 1 additional sample is sent to Partners will HQ not apply a ● HQ sends sample to External yellow seal to Designer the Pre-

Non-TSS: ● N/A

HQ: For the life of the program * All Business Partners: 2 years after last ship date

HQ: For the life of the program *

TSS/QAI Business Partners: 2 years after last ship date

* Once samples have been approved at multiple stages (Red, Yellow and Green), Target has the discretion to only retain the most recently sealed sample. ** Green Seal Approval occurs in TCPS inspected factories when the Buyer or PM requests TCPS to approve the Production Sample. Headquarters may request final Production Samples to be pulled by TSS or Non-TSS Business Partners for reference. Production Samples that are not pulled by TCPS are referred to as Production Samples, not Green Seal Samples. If product is multi-sourced, each factory of production must submit a Red, Yellow and Green Seal Sample.

Note: See next page for exceptions for Towels POL: Product Development > Hardlines Product Development > Sample Submission Process Hardlines > Sample Seal Quick Reference Guide Sample Requirements- Hardline/ Soft Home 6 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Sample Seal Quick Reference Sample Seal

Definition

Sample Requirements

Approval Timing

Responsible for Reviewing TSS: • Buyer • Designer • Technical • Fabric • Print Designer

Red Seal Approval

● Approval needs to be given for all components of the product ● Approval can be given in sample form or by component ● Approval needs to be given in light, medium, and dark colorway ● Elements that need to be approved (when applicable): ● Aesthetics HL - Approved no later Sample or all components ● HL - Technical than 3 weeks after approved for pre-production with Specifications Program Award awarded Business Partner. ● Materials This process has been ● Trims Exceptions: The CFT established for replenished towel ● Print/Pattern needs to verify due dates programs that have multiple ● Finish against production timing colorways of the same ● Shade Bands construction.

Non-TSS: • Buyer • Designer • Technical • Fabric • Print Designer

Signature/Seal Approval on Sample

Sample Submission Process

Retention

• Responsible for revewing & providing feedback: Buyer, Designer, Tech Designer and Fabric Engineer

TSS: Total of 3 samples: • 3 sets of samples submitted to HQ for approval (Bath, Hand, Wash, Mat) in a light, medium, and dark color from each factory. • Red Seal will be applied to all 3 sets using a red zip tie with serial number. All pieces of the set will be tied together with • Final Arbiter zip seal. There will be three full sets of and Signature: product of each color when completed. Buyer, TSS: Total of 3 samples: Reivewed by: • Red Seal approval and approved serial Tech Designer or numbers will be logged through Fabric Engineer Grovesite by Technical Designer in Grovesite discussion threads. • 2 sets of samples that have been Red Sealed and recorded in Grovesite will be sent by TSS PC to TSS local office • MR will retain 1 set of samples for record in TSS local office and sent 1 set of samples to vendor factory for reference. • The Red Seal sample is valid for one factory only.

HQ: Life of program HL - Technical Retains

All Business Partners: Retained in SIP

Note: No changes can be requested after Red Seal Approval without consequence

Non-TSS: Total of 2 samples: • 2 Samples of each piece (Bath, Hand, Wash, Mat) in a light, medium, and dark color for each factory of production • The red seal will be applied to both sets using a red zip tie with a serial number. All pieces of the set will be tied together. There will be two full sets when completed. • The red seal approval will be communicated and serial numbers will be logged through Grovesite by Technical Designer. • One set of samples will be returned to the Business Partner by Technical team. • Red seal sample is valid for one factory only.

Other minimum requirements of the product at this stage: ● Color: Visually Correct ● Packaging: Mock-Up

External Design Programs (TOB, Shabby, Waverly, Sammy): ● 1 additional sample is sent to HQ ● HQ sends sample to External Designer

Towels ONLY Mini Bulk

● Approval needs to be given for all components of the product ● Approval needs to be given in light, medium, and dark colorway ● Elements that need to be approved (when applicable): Before pre-production can begin, Reviewed in Minneapolis ● Aesthetics vendor must complete colorprior to Pre-Production ● HL - Technical correct 'mini-bulk' run in light, meeting. Specifications medium, and dark colorway ● Materials ● Print/Pattern

TSS • Buyer • Designer • Technical • Fabric No signature needed or retained. TSS HQ: TSS retains one Product Manager Vendor submits one casepack of each full set of program in will communicate light, medium, and dark color of program light, medium, and feedback of mini- and sends to TSS Minneapolis team to dark color for life of bulk review to review with CFT group. program TSS local office, TSS regional office, and TCPS

Other minimum requirements of the product at this stage: ● Color: Correct color ● Packaging: Mock up

TSS: • TCPS (Field) • MR

TSS: • TCPS (Field)

EXCEPTION ONLY

Yellow Seal Sample

Non-TSS: ● All sample requirements are • Business met or exceeded as compared to the Red Seal Partner Pre-Production Sample with and Mini Bulk production components. ● All sample requirements At Pre-Production Meeting Sample approved for Production meet Technical Specification (3-10 days prior to with comments submitted by production start) TSS Minneapolis. Other minimum requirements of If the Red Seal Approval is a the product at this stage: sample with all production ● Color: Lab Dip/Color Submit components, that sample can Approved become the Yellow Seal Sample ● Packaging: Mock-Up

Non-TSS: • N/A

EXCEPTION ONLY TSS: Total of 3 sets of samples: ● 1 full sets of light, medium, and dark approved sample submitted to HQ for reference and comment through Grovesite discussion threads ● 1 retained in SIP by Business Partner and 1 full set retained at TSS overseas office

Refers to the Non-TSS: Total of 2 samples: reference ● 1 sample submitted sample sent to to HQ for reference HQ. Non-TSS ● 1 sample retained by Business Business Partner Partners will not apply a yellow seal to the PreExternal Design Programs: Production ● 1 additional sample is sent to sample at the HQ factory. ● HQ sends sample to External Designer

HQ: TSS retains one full set of program in light, medium, and dark color for the life of the program * All Business Partners: Retained in SIP

* Once samples have been approved at multiple stages (Red, Yellow and Green), Target has the discretion to only retain the most recently sealed sample. ** Green Seal Approval occurs in TCPS inspected factories when the Buyer or PM requests TCPS to approve the Production Sample. Headquarters may request final Production Samples to be pulled by TSS or Non-TSS Business Partners for reference. Production Samples that are not pulled by TCPS are referred to as Production Samples, not Green Seal Samples. If product is multi-sourced, each factory of production must submit a Red, Yellow and Green Seal Sample.

Sample Requirements- Hardline/ Soft Home 7 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Sample Seal Quick Reference Sample Seal

Shipment Sample

Definition

Sample Requirements

● Inspection Sample - A sample TCPS pulls from production to approve for shipment ● Shipment Sample - Represent items selected from actual production to be refered in the event of claims or issues that may arise at a later date ● Final Production Sample - A sample requested by headquarters to be sent from final production

● All sample requirements are met or exceeded as compared to Red and Yellow Seal Samples ● All sample requirements meet Technical Specification

Production Sample: If requested, TCPS pulls sample at Dupro **

Green Seal Sample

When to request: 1) New Business Partner 2) New Product Category 3) Quality Concerns with Red/Yellow 4) Multi-Sourced Program

Approval Timing

Other minimum requirements for the product at this stage: ● Color: Correct ● Packaging: Final

Signature/Seal Approval on Sample

Sample Submission Process

Retention

TSS/QAI: • TCPS (Field)

N/A

Other minimum requirements for the product at this stage: ● Color: Correct ● Packaging: Final

● All sample requirements are met or exceeded as compared to Red and Yellow Seal Samples ● All sample requirements meet Technical Specification

Responsible for Reviewing

TSS/QAI: ● TCPS pulls samples at Dupro ● Green Seal Sample must be requested before production start

Non-TSS: ● N/A

Non-TSS: • Business Partner

All Business Partners: One shipment sample retained for 2 years after the last ship date

N/A

TSS/QAI: • TCPS (Field)

TSS/QAI: • TCPS (Field)

Non-TSS: • N/A

Non-TSS: • N/A

TSS/QAI: Total of 2 samples: ● 1 approved sample submitted to HQ for reference ● 1 retained by Business Partner from Dupro or Final Inspection

HQ: For the life of the program *

Non-TSS: ● N/A

* Once samples have been approved at multiple stages (Red, Yellow and Green), Target has the discretion to only retain the most recently sealed sample. ** Green Seal Approval occurs in TCPS inspected factories when the Buyer or PM requests TCPS to approve the Production Sample. Headquarters may request final Production Samples to be pulled by TSS or Non-TSS Business Partners for reference. Production Samples that are not pulled by TCPS are referred to as Production Samples, not Green Seal Samples. If product is multi-sourced, each factory of production must submit a Red, Yellow and Green Seal Sample.

Exceptions for Towels Only Red Seal Approval • TSS Vendors o Three sets of samples of each piece (Bath, Hand, Wash, Mat) are submitted to HQ for approval in a light, medium, and dark color from each factory o Red Seal will be applied to all 3 sets using a red zip tie with serial number o All pieces of the set will be tied together with zip seal o Two sets of samples that have been Red Sealed and recorded in Grovesite will be sent by TSS HQ to TSS Local Office o TSS Local Office MR will retain 1 set of samples for record in TSS Local Office and send 1 set of samples to the Vendor o A Red Seal sample must be kept by each factory of production in the SIP • Non-TSS Vendors o Two sets of samples of each piece (Bath, Hand, Wash, Mat) are submitted to HQ for approval in a light, medium, and dark color from each factory o Red seal will be applied to both sets using a red zip tie with a serial number o All pieces of the set will be tied together o Red seal approval will be communicated and serial numbers will be logged through Grovesite by the Technical Designer o One set of samples will be returned to the vendor by Technical team o A Red Seal sample must be kept by each factory of production in the SIP Note: If an external designer is involved, an extra set of samples must be sent to HQ (e.g. Waverly, Thomas O’Brian, etc). Yellow Seal Approval • TSS Vendors - One full set of light, medium, and dark approved samples submitted to TSS HQ for reference and comment through Grovesite discussion threads. One set retained in SIP by Factory and 1 full set retained at TSS Local Office • Non-TSS Vendors - One sample submitted to HQ for reference and 1 sample retained by the Vendor/Factory in the SIP • Mini Bulk - Vendor submits one casepack of each light, medium, and dark color of the program and sends to TSS HQ for review Sample Requirements- Hardline/ Soft Home 8 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

PRODUCT DESIGN AND DEVELOPMENT TECHNICAL – HARDLINES/SOFT HOME

PD&D Technical Hardgoods/Soft Home 1 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

TECHNICAL – HARDLINES/SOFT HOME

Overview This information will provide you with the tools needed to read and understand the technical (specification) information provided by your vendor in order to execute quality product for Target.

Table of Contents 1. Vendor and Factory Roles and Responsibilities 2. Target Design Strategies (Product Objectives) 3. How to Read and Understand an Objective – Hardlines and Soft Home 4. Vendor Generated Specification 5. Product Standards - Hardlines and Soft Home 6. Manufacturing Tolerances - Hardlines 7. Measurement Tolerances – SoftHome only 8. Multiple Components - SoftHome only 9. Sample Evaluation - SoftHome only

Objectives • How to read and understand an objective packet • Understanding Target’s product expectations • Being responsible for producing quality product for Target

Resources • Vendor Generated Spec found on POL: Product Development > Requirements and Procedures > Hardlines Product Development > Vendor Generated Specifications > Templates by category will follow • www.Grovesite.com • [email protected] – email assistance •

Question Contacts o Utilize information in Key Contact List as found in each online objective o [email protected] for questions on process or for Technical Designer information o [email protected] for questions on process or for Trim Information o [email protected] for question on fabric process or for Fabric information

PD&D Technical Hardgoods/Soft Home 2 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Vendor and Factory Roles and Responsibilities Vendor to Factory • • •

Understand Target specifications and standards Communicate with your Factory Provide specification information along with deadlines and other details

Factory • •

Understand Target objectives, specifications and standards Provide open communication to Vendor and Target.

Note: You are the manufacturing expert. If you have recommendations on how to improve the design or manufacturing techniques or have other options that do not change the quality provide your ideas. •

Factory will supply sample to vendor o Should communicate to the Vendor any ideas for improving the design idea or other options that may be considered. o Should communicate to Vendor any concerns with the product’s functionality or potential mass-production issues. o The development sample does not need to be color correct, but should be as close to color correct as possible during initial and final sample reviews.

2. Target Design Strategies •

Vendor is responsible to share product objectives with their factories as appropriate

•

Product Objectives vary based on Target’s Design Strategy: o Internal Design – Target designs product and writes specifications. o Design Assist – Vendor assists Target with design ideas and concepts for product. o Vendor Design – Vendor designs product entirely.

Note: The timing of the objective (when it would be sent) and level of information will vary based on the type of objective required and routed. The type of product objective received depends on the Vendor’s Design capabilities. Internal Design Objectives • • •

Used when the product is fully designed by Target or is a repeat product. Used when Target is writing the specification and has a clearly defined product. Target objective packet may include: o Design o Color o Artwork (if applicable) o Print weave (if applicable) o Materials

PD&D Technical Hardgoods/Soft Home 3 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

o o o o o o o •

Color Separated File (if applicable) Trims Measurements Assembly and Construction Label placement Recommended Care Protocol information

Make sure a sample tag is attached and filled out completely before submitting. You can get sample tags from your vendor which are available on POL: Product Development > Requirements & Procedures > Hardlines Product Development > Sample Submission Process – Hardlines > Sample Label Templates

Note: The information available in each objective should enable the vendor to execute sample/samples and advise vendor of Target’s business needs for the program. •

Vendor to provide factory with business needs of the program.

Design Assist Objectives • • •

•

May include Trend Boards, Brand Concept Boards, images of products that we feel relate to the brand, color direction, print direction, and appropriate product standard to be following (if established) Purpose is to communicate mood and inspiration. Objective Packet will include: o Design page o Color o Materials (if specified) o Reference to specific product standard on POL Factory may be asked to submit material/fabric samples, print strike-offs, product samples. o Send raw material information, sample, and photo-quotes based on direction from Buyers or TSS Product Managers. o Submit a Material Development Form and two 20”x20” (50cm x 50cm) material swatches with the product objectives.

Vendor Design • •

Vendor designs product entirely Mood boards may be provided

PD&D Technical Hardgoods/Soft Home 4 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

3. How to Read and Understand an Objective – Hardlines and Soft Home Objective Filename •

Target understands communication must be clear to ensure the vendor and Target are referring to the same products, so Target has a numbering system used for all objectives. This is the filename used within Grovesite. Season/year Brand Department Hardlines Area Product Number

Objective pages •

The objectives are made up of a series of detail pages that are used by the Designers to communicate inspiration or design information. o The single Objective Packet may contain one or many pages depending on the level of detail required to convey the sampling needs. o Refer to your table of contents for exactly which detail pages will be in your objective.

Design Pages •

Design Detail Page (also called coded D) may include: o Photos for Design Inspiration o Line Art Sketches o Product Feature Callouts o Style Variation Options for Costing

PD&D Technical Hardgoods/Soft Home 5 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Design & Product Objectives Pages •

Every page of the Objective Packet contains high-level information relevant to the program. The level of detail will vary depending on the type and timing of the Objective. Each objective will be labeled as follows: 1. Status of the packet: ƒ Preliminary: identifies when packet is first issued. ƒ Revision number: identifies a revision has been done and revision # of this packet. ƒ Final Revised number: identifies a revision has been done to the Final packet and the revision # of this final packet. 2. Product ID (as reviewed above). 3. Target Department number, Brand, and Collection (if this is applicable). 4. Set Date 5. Product Description 6. Product Category: internally used information in Target to group products. 7. Target Copyright: states that packet is property of Target and cannot be shared. 8. Template Owner: identifies appropriate person to contact for questions on a specific page. 9. Template Page Information o Title of the page o Template Code o Page number

1

2

3

4 5

7

6

8

9

PD&D Technical Hardgoods/Soft Home 6 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Overview page (also coded page O) may include: •

•

•

Colors represented for the objective. o All relevant colors for the program represented in the objectives packet. This will not typically be the entire palette for the program as we are only providing color reference on an as-need basis. Please understand that the color represented in the packet is not accurate to standard and should NOT be used to match. Please contact Archroma to order color standards for accurate representation of color. Key materials desired for the objective. o May be communicated as a listing of all desired materials, specific photo images of like materials or actual technical detail specific to a desired material. The representation will depend on the type of packet you are receiving. Where actual materials are known, you will get detail and specific information. Visual depiction of the product, if available. If not, then mood or trend inspiration will be included. o Internally Designed - There will be a full-color rendering of the product or products represented by the packet if issued as a fully designed product. o Design Assist - If the objective is being used to communicate the mood and inspiration for a given collection, this spot may contain copies of trend boards or design photos. If that packet is used for inspiration it is important to know that we are not requesting direct interpretation of the items shown, but are showing them for the purposes of idea generation. Our expectation would be that the vendors design team would draw on the inspiration to design new and unique items for Target. Example of Internally Designed Objective Page

PD&D Technical Hardgoods/Soft Home 7 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Design page (also coded page D) may include: •

Provides inspiration and design inspiration Example of a Design Assist Objective Page

PD&D Technical Hardgoods/Soft Home 8 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

General Information page (also coded G) may include: • Table of contents identifies all pages and number of pages in the packet. • Key contacts identify all Target team members associated with the program for the objective packet. • Change log identifies what page was revised, when it was revised, and who made the revision. Example of a General Information Page

Note: It is the vendor’s responsibility to check for any updates or changes upon receipt of the email notification of a change.

PD&D Technical Hardgoods/Soft Home 9 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Artwork Page (also coded page A) may include: • • • •

Icon and Font Information Color Variations: Target could request a vendor to sample different colorways of a style. Graphic Information Embellishment or Special Design Treatment Information Example of an Artwork Page

PD&D Technical Hardgoods/Soft Home 10 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Patterns and Weaves Page (also coded page PW) may include: • •

Details about a print including color or scale information. Woven fabrications for pattern weave information.

Note: Full-scale Computer Aided Design (CAD) color separation or weave simulation information will be available on Grovesite. Example of a Patterns and Weaves Page

PD&D Technical Hardgoods/Soft Home 11 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Technical Detail Page (coded as page M) may include: • • •

Some objectives may include various technical detail pages that will outline specific technical information about the product. Details on materials or substrates used in the design of the item. Various finishes to the product for sampling options. Example of a Technical Detail Page

PD&D Technical Hardgoods/Soft Home 12 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Trim Information Page (also coded page T) may include: •

Details on materials or materials used in the trim and/or embellishment of an item. Example of a Trim Information Page

PD&D Technical Hardgoods/Soft Home 13 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Measurements and Technical Drawing Page (also coded page MS) may include: • • • •

Key measurements, details and placements for the item Detailed drawings from multiple angles to show 3-dimensional measurements Tolerance information for production Product Component information (if applicable) Example of a Measurements and Technical Drawing Page

PD&D Technical Hardgoods/Soft Home 14 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Construction Diagrams Page (also coded page C) may include: •

Specific detail that will aide in the assembly of the item. Example of a Construction Diagrams Page

PD&D Technical Hardgoods/Soft Home 15 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Label Information Page (also coded page L) may include: • • •

Placement for label or brand marking Recommend care instructions, if applicable Visual drawing or photograph of the label or brand marking Example of a Label Information Page

•

Target Owned Brand Labels must be ordered through one of Target Hardlines Authorized Label Suppliers: o Avery Dennison o R-Pac o Shore to Shore o SML

POL: Additional information can be located on POL: Product Development/requirements & procedures > Hardlines Product Development > HL Label Information > Hardlines Branded Trim Suppliers

PD&D Technical Hardgoods/Soft Home 16 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

4. Vendor Generated Specification - applies only to the following categories: • Grills, Outdoor furniture • Table top, Furniture • Luggage, Backpacks • Bedding, Towels, Pillows, Soft Window, Table Linens • Airbeds If the objective is Design Assist or Vendor Design, the vendor needs to provide a Vendor Generated Specification •

What is a Vendor Generated Specification? o A Vendor Generated Specification is a specification that the vendor completes on a Target provided template. Enables Target and business partners to have clear quality expectations of the product. o Templates are created by the Technical Development Team o A Vendor Generated Specification can be used for Design Assist High, Design Assist Low and Vendor Designed products o Technical Design will validate the VGS in categories that have technical support o If VGS is sent to the factory by the vendor it should be included in the SIP

•

Why are we implementing Vendor Generated Specifications? o Ensures the product that ships to Target is exactly the intended quality and design o Ensures TCPS has a specification to audit against and audit is completed based on Target/Vendor agreement o Allows merchants to compare apples to apples in a negotiation event, or understand quality differences that are driving cost differences o Centralized location of templates on POL

5. Product Standards - Hardlines and Soft Home The Technical Development Team has created Product Standards to be utilized by Business Partners to communicate our quality expectations for Target owned brand product. We are implementing these standards to ensure that you understand our quality expectations throughout the lifecycle of the product. These guidelines will ensure that Target owned brand products will deliver the quality and value our guests expect. Note: Vendors are responsible to send the appropriate Product Standards to factories. •

Product Standards currently posted to POL: o Soft Home- All categories o HardGoods ƒ Tabletop ƒ Stationery ƒ Lighting ƒ Domestics/ Bath Furniture ƒ Toys ƒ Luggage ƒ Pets

PD&D Technical Hardgoods/Soft Home 17 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

ƒ ƒ

Patio Automotive

This information is located on POL: Product Development > Hardlines Product Development > Product Standards Example of a Soft Home Product Standard

PD&D Technical Hardgoods/Soft Home 18 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example of a Hardgoods Product Standard Created: 3/30/07

Hardlines-Product Standards-Tabletop Any deviations to the requirements listed must be approved by the Target Technical Designer

Lacquered Foil Polypropylene Tabletop Accessories ● All products must pass lab testing for appropriate testing protocols, and follow Quality assurance audit processes ● Vendors should request advance copies of test protocols from BV. It is the vendor's responsibility to ensure that the products they sell to Target Corporation comply with all United States federal, state and local laws, regulations and ordinances. A satisfactory lab test result does not constitute a certification that a vendor's products meets all legal requirements. It is the vendor's responsibility to manufacture their items to comply with all applicable laws and industry standards, and in conformance with the requirements found on Partners Online. Target reserves the right to amend its protocols at any time. ● All products must meet or exceed all applicable rules and regulations. General Requirement This Product Standard applies to all tabletop accessories using the Lacquered-Foil Polypropylene material/technique. The lacquer coating and substrate must be constructed to withstand general ‘Tabletop Decorative Use’ and 'Hand Washing’ Only.

Good Body Glue Paint Foil Lacquer

Material Quality

Better Polypropylene with Calcium Carbonate Water-based (Lead Free) Lead Free Paint Copper, Aluminum, Zinc, or Composite Water-based PU (Polyurethane)

· ‘LEAD FREE’ is defined as meeting FDA regulation & passing Cal Prop 65 requirement for lead content.

Craftsmanship

· Minimum 4 Coats of Lacquer · Minimum 3 Coats of Lacquer · Body Strength must pass a minimum 8 lb. force of ASTM Flex Test. · Body Strength must pass a minimum 13 lb. force of ASTM Flex Test. · Surface Hardness must pass a minimum rating of 73 on the ASTM Rockwell · Surface Hardness must pass a minimum rating of 67 on the ASTM Rockwell ‘Shore D’ Scale. ‘Shore D’ Scale. · Surface Scratch Resistance must pass a minimum 150 grams of weight in · Surface Scratch Resistance must pass a minimum 60 grams of the BV Scribe Test. weight in the BV Scribe Test. · Body substrate should be injection molded. Injection mark must be sanded to a smooth finish. Rim edge should be rounded to allow adequate foil and lacquer coverage. · All Foil must adhere to and cover the body surface as designed. · There should not be any chipping or flaking of Lacquer or foil where the body substrate is exposed. Type Charger

Measurements

Small Bowl Large Bowl Tray

Size 12.5” Dia - Round 11.5” x11.5” - Square 5” Dia. 8.5” Dia Per Design

Minimum Weight 327g Per Design Per Design Per Design

Type Charger Small Bowl Large Bowl Tray

Size 13” Dia - Round 12” x12” - Square 5.25” Dia. 9” Dia Per Design

Minimum Weight 400g Per Design Per Design Per Design

· Size specifications represent 'MINIMUM' requirements. Actual capacity or weight are based on design direction and/or existing mold shapes. · Use charger weight as a bench mark. (The rest of the pieces should be porportional.) Copyright 2007 Target Corporation. This document and the contents within are the property of Target Corporation and its subsidiaries (collectively "Target"). They are for the sole use of designated employees of Target as well as certain authorized business partners and shall not be reproduced, disseminated, or disclosed in any form to any party whatsoever without the express written consent of Target.

6. Measurement Tolerances (Soft Home) Below is an example of the Measurement Tolerances that have been established for Target’s Soft Home products. The products you produce must measure within the tolerance of the given measurements provided on the spec in order to ship to Target. Note: Tolerances are found on the measurement page(s) (coded page MS) of a Target objective or On a separate tab in the Vendor Generated Spec Template document

PD&D Technical Hardgoods/Soft Home 19 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Measurement Protocol

TARGET CORP TEST PROTOCOL FOR

Product Description

Measurement Point

Tolerance

Tolerance for Product Washed Styles

Pillow Case Woven or Knit Pillowcase Set

Length/Width

+/- 1”

Sham- Woven, Quilted or Knit

Length/Width

+/- 1”

+1” /- 1 1/2”

Overlap

+1 1/2”/ -1/2”

+1 1/2”/ -1/2”

Flange

+/- 3/8”

+/- 1/2”

Tolerance for Crib/Children

Multiple Set Component Variations

BEDDING

Pillow Pockets on Sham Sets

+3/4”/- ½”

Length/Width

**½”

Length/Width

**½”

Flat Sheet- Twin or Full-Woven or Knit

Length

+4”/ -2”

+4”/ -2”

Width

+3”/ -2”

+3”/ -2”

Flat Sheet- Queen or King-Woven or Knit Fitted SheetWoven or Knit

Length/Width

+4”/ -2”

+4”/ -2”

Length- corner to corner

+2”/ -1”

+2”/ -1”

+1”/- 1/2”

Width- corner to corner

+2”/ -1”

+2”/ -1”

+1”/- 1/2”

Pocket Depth

+1”/ -1/2”

+1”/ -1/2”

+1/2”/ -0

Comforter

Length/ Width

+/- 2”

Duvet CoverWoven or Knit

Length/ Width

+/- 2”

Opening Point

+2” / -1”

Note: Component Variation – all items within the set must measure within the listed measurement variation of one another. This keeps the item within a set close in measurement. 7. Manufacturing Tolerances (Hardgoods) Due to the wide variety of hardgoods products and the materials used manufacturing tolerances for hardgoods are established by the factory, however it is expected that you provide Target visibility to them upon request and when creating your Vendor Generated Spec.

PD&D Technical Hardgoods/Soft Home 20 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

8. Multiple Components (Soft Home only) The grid below clarifies what the components are that make up the appropriate size sets.

9. Sample Evaluation (Soft Home) • • •

•

Target’s expectation is that before any sample is submitted to Target HQ for review, it is evaluated against the specification or product standards (if no spec provided). Sample Evaluation must be attached to sample tag in order to be evaluated for soft home product. Benefits of Sample Evaluation: o Improves accuracy of first round samples o Allows for communication of any deviations or options o If providing options, include representative samples Vendor/Factory to evaluate sample prior to submission to Target. Samples should not be sent to Target for evaluation if they are out of tolerance.

PD&D Technical Hardgoods/Soft Home 21 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Enter product measurements and deviation from spec

Enter construction deviations or options next to the technique

Methods of Measure Found on POL: Product Development >Requirements and Procedures >Hardlines Product Development >Methods of Measure The Methods of Measurement Manual In order to accurately and consistently evaluate the product, Target has established Methods of Measure. It is expected that you follow these methods no matter if the product is designed internally or through the assistance of the vendors.

PD&D Technical Hardgoods/Soft Home 22 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

This manual specifies the Target Corporation standard method of measurement used by Target Corporation for all size ranges and categories of Softhome products. These methods provide a tool for both Target and the Vendor/Factory to understand how we measure in order to evaluate product consistently. Exact descriptions for each point may not always work for every situation. In these cases, the Technical Designer adds information to comment boxes for a particular point for which they require additional description or clarification. Information in comment boxes overrides descriptions of the measurement listed. • •

Internally design products we will provide the measurement code on the measurement table found on the MS page. Design Assist product provide the measurement code on the Vendor Generated specification. Example:

PD&D Technical Hardgoods/Soft Home 23 of 23 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

PACKAGING

Packaging 1 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

PACKAGING

Overview Target packaging requirements are globally managed by the International Packaging Management Group (IPMG) process and matrix of printers. If you are a factory that is managing the packaging process on behalf of the vendor, this will provide information about utilizing an IPMG and what your responsibility will be in the packaging development process.

Table of Contents 1. International Packaging Management Group (IPMG) Overview 2. Packaging Development Process

Objectives • Understand the importance of working closely with IPMG Resources • Understand the packaging process needs at a factory level

Resources • Question Contacts: o Target Packaging Operations (TPO) at [email protected] o IPMG Representatives POL: Guidelines & Information > Requirements & Procedures > Product Packaging > Target Packaging Process

Packaging 2 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. International Packaging Management Group (IPMG) Overview •

IPMG’s are a select group of Target approved globally integrated Packaging Producers and Project managers.

•

IPMG’s provide the following services: o Global packaging development and production o Expertise of Target specification guidelines for paper, ink and process o Press checks o Shipping logistics o Inventory control o Package engineering o Material expertise o Rapid prototyping o Development of specifications o Dielines o Style guides o Materials IPMG Representatives - Hardlines

Packaging 3 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

IPMG Representatives – Softlines

IPMG Representatives - Vinyl Bags

Packaging 4 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

2. Packaging Development Process Contact local IPMG Representatives •

IPMG’s are a valuable resource as you move through the Target Packaging process. Contact the IPMG as early as possible.

Negotiate initial costs •

Listed below are suggestions for successfully working with and managing the IPMG’s: o Bid your packaging program with more than one IPMG provider. ƒ Do not be satisfied with only one or two IPMG bids. o

Provide the IPMG with the completed Target Packaging Assortment Grid (PAG). ƒ This will enable them to quickly create accurate packaging bids.

Utilize your entire annual packaging volume to negotiate lower packaging prices. ƒ IPMG’s are much more cost competitive when bidding on your entire packaging volume. Note: You may choose to include packaging for your other customers. o

o

Negotiate IPMG’s against each other to achieve your packaging goals. ƒ If one IPMG provides better service and another provides better costs, drive each IPMG to provide you with both service and price.

o

Organize your packaging deliveries into reasonable and maximized order quantities. ƒ Packaging costs can be lowered when frequency of delivery is driven through larger orders and fewer packaging production runs.

o

Clearly define your factory fulfillment requirements and delivery locations.

o

Clearly define and negotiate your goals for payment terms.

o

Clearly define the period of time you expect the IPMG to guarantee packaging costs. ƒ Ensure they are tied to the length of time Target is asking you to guarantee your product costs.

Packaging 5 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Target Packaging Vendor/IPMG Production Agreement •

Ask your selected IPMG to provide you with a signed Target Packaging Vendor/IPMG Production Agreement prior to packaging production. o The Production Agreement is a Target form used to document that the IPMG and product Vendor have agreed upon packaging costs, delivery times and delivery quantities. o Target retains visibility to these completed forms, and therefore is your insurance policy to hold the IPMG accountable to your negotiated costs, delivery times and quantities. Example: Target Packaging Vendor/IPMG Production Agreement

Packaging 6 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Create Dielines • • •

Work with IPMG to create the dieline Verify that your product fits properly in the IPMG provided package sample Sign-off on fit & trim package samples

Finalize Production Schedule and Production Agreement Make sure to update and finalize packaging production details on the Vendor/IPMG Production Agreement prior to the IPMG beginning package production. • Often, total number of skus, production quantities, delivery timing, etc. change over the course of developing dielines and package mockups with your selected IPMG. • If problems arise, this is Target’s way of supporting what you’ve agreed to with your selected IPMG.

Pre-Press Process Note: The Pre-Press Process is managed by a separate matrix • • • •

For Target Managed Programs, Target works directly with the designated prepress suppliers to produce the Keyline. For Vendor Managed Programs, the vendor works with designated prepress matrix suppliers to produce the Keyline. The Keyline is a file showing how the dieline will look with artwork applied to it. It is identical to a dieline but includes all of the artwork. This is also referred to as a layout or layout proof. Benefits of having a Keyline/Pre-Press matrix is to support: o Packaging consistency for all items from the vendor o Packaging quality that enhances the product image Example: Final released Keyline to IPMG for printing

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IPMG Representatives – PrePress/Keyline

Writing Purchase Orders to IPMG’s •

You must provide the order to the IPMG with 14 days notice prior to production start. o This enables the IPMG to source raw materials, schedule press time and make sure Keyline files are accurate. o Standard packaging production Level of Service is14 days from receipt of PO, correct dieline and prepress files.

Validate Packaging •

Check delivered packaging for product fit and trim within 48 hours of shipment receipt. o Pull samples randomly and verify dieline and package fit to product. o Notify the IPMG immediately if fit or trim issues are identified.

Packaging 8 of 8 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

FACTORY EVALUATION

Factory Evaluation 1 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

FACTORY EVALUATION

Overview A Factory Evaluation assesses the factory’s ability to meet Target’s requirements and expectations. Annually Target requires that all Target Sourcing Services (TSS) and Quality Assurance Initiative (QAI) factories are evaluated for compliance with Target standards. TCPS may conduct more frequent evaluations, when determined to be necessary. These evaluations are conducted by Target Compliance and Production Services (TCPS) field team. Notes: • Factory Evaluations are conducted per factory location, not Vendor/Factory relationship. • At TCPS discretion, Factory Evaluations may be done by a Target Approved External Business Partner.

Table of Contents 1. Factory Evaluation Purpose 2. Preparing for a Factory Evaluation 3. Factory Evaluation Components 4. Factory Evaluation Process 5. Recommended Factory Testing Equipment, Capabilities and Processes

Objectives • Understand Target’s Factory Evaluation process and why it is important • Know when to do a Factory Self Evaluation • Know expectations of the Factory Evaluation Corrective Action Plan (CAP) • Know the equipment and processes that should be used for testing products

Resources POL: Product Development > Requirements & Procedures > Quality Assurance (Softlines or Hardgoods) > Factory Evaluation/Business Partner Management (BPM)

Factory Evaluation 2 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Purpose of the Factory Evaluation •

Validate quality & manufacturing processes according to Target’s standards and requirements, and if applicable, provide an agenda for improvement action with follow-up by TCPS.

•

Document capabilities and capacities to be used as a tool to determine proper order placement decisions. This includes: o Quality Capabilities – what are the documented quality programs and how are they being used at the factory? o Product Capabilities – what are the product types and materials used? o Production Capabilities – what type of equipment is used to produce the product? o Capacity Capabilities – what percent of the factory including equipment and workers are fully utilized and what percent is available for more production.

•

Factory Evaluation results and corrective action plans will be shared with all Vendors that have the factory listed as a Factory Partner in BPM will be copied.

2. Preparing for a Factory Evaluation The documents listed below need to be gathered by the factory prior to the TCPS Factory Evaluation. The evaluator will review all documents while completing the factory evaluation. Preparing these documents prior to the Factory Evaluation will allow for an efficient Factory Evaluation. Factory Documents for Evaluator Review Purpose Only: • • •

• • • • • • • • • • • • • •

Completed Factory Self-Evaluation Quality Assurance Manual Document Quality Assurance Inspection Reports o Incoming Materials o In-Process Materials o Packing o Final Inspection Reports from last 2 months Major Machine List Machine Maintenance (including Preventive Maintenance) Schedule and Records Product Specification, if applicable Raw Material Incoming and Outgoing Records Employee Training Program and Record Pre-Production Meeting Process and Record Suppliers Approval Process, Record, Material Specification and Purchase Order In-House Lab Test Manual and Report Defect Statistical Report and Shipping Document from last 2 months Factory Organization Chart Factory Business License Observed Quality Level (OQL) measurement Delivery Performance Record Metal Detection Records, for applicable products

Factory Evaluation 3 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

3. Factory Evaluation Components •

Overview Information o Factory General Information o Evaluation Date o Factory Contact Information o Factory Capabilities o Key Factory Personnel

•

Factory Information o Vendor Information o Major Customers o Employee Information and Expertise o Number of Employees

• Capabilities Hardgoods o Product Types Produced o Other Materials Used o Factory Processes o Finishing Processes o Sample Lead Times o Outsourced or Subcontracted Factories o Internal Testing

Softhome / Softlines o Factory Processes o Subcontractors o Product Capacities o Embroidery Equipment o Laundry Equipment o Printing Equipment o Sewing Equipment o Other Specialized Equipment o Product Capabilities o Material Capabilities

•

Document and Process Controls o Process & Quality Controls o Quality System – ensure controls in place to control non-conforming products. o Document Control o Performance Measures

•

Training o Training o Quality Systems o Equipment

• Evaluation Hardgoods o Inspection Area o Materials Management o Laboratory o Sample Development o Sewing/Production Area o Packaging/Finishing o Tools/Maintenance o C-TPAT o Global Compliance

• •

Softhome / Softlines o Inspection Area o Materials Management o Laboratory o Sample Development o Sewing/Production Area o Packaging/Finishing o Tools/Maintenance o C-TPAT o Global Compliance o Metal Detection o Patterns/Markers – Softlines Only o Spreading/Cutting o Screenprint/Embroidery o Laundry and Pressing Score Summary for all section – Driven by TCPS Only Corrective Action Plan Details – Driven by TCPS Only

Factory Evaluation 4 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

4. Factory Evaluation Process •

At least annually, based on the anniversary date of the previous evaluation unless decided otherwise, Target requires that all facilities manufacturing owned brand product are evaluated for compliance with Target standards. These evaluations are conducted by TCPS field team or approved External Business Partners. The evaluation standards are based on existing regulatory standards where applicable and industry best practices. Note: TCPS may conduct more frequent evaluations, when determined to be necessary. • Factory Evaluation Scoring has changed, TCPS will inform the factory of its FE score. Example: Factory Evaluation Scores Grade

Score

Green

90-100

Green

80-89

Yellow

70-79

Yellow

60-69

Red

0-59

•

Certain questions within the Factory Evaluation process will Auto Fail the evaluation. Questions that will auto fail an evaluation drive fundamental quality expectations related to safety and consistent quality execution such as: o Appropriate machinery to produce the products o Adequate needle detection and policy o Specific QA processes o Record keeping o US Safety and Regulatory requirements Note: All auto fail issues will have a Corrective Action Plan (CAP) • TCPS will provide a Corrective Action Plan (CAP), if applicable, to key factory personnel (empowered to make change). The factory must review and act upon the corrective and preventative improvement actions listed in order to reduce the risk of shipping bad product, missing delivery dates, improper record keeping, etc. TCPS will follow-up with factory on assigned due dates to ensure improvements and corrective actions are being completed. • The CAP includes: o Issue – Description of the problem or issue identified for correction o Action - TCPS will list specific corrective action for each issue and include recommendations for prevention Note: When items are corrected, it should be a permanent fix that can be controlled and measured to ensure the same issues do not surface in the future. Example: Factory Evaluation Corrective Action Plan (CAP)

Factory Evaluation 5 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

5. Recommended Factory Testing Equipment, Capabilities and Processes ; = indicates Critical Testing Equipment or Process needed Target recommends that Vendor/Factories should have the ability to monitor product quality through the manufacturing lifecycle. The equipment/capabilities and processes listed below are general directions to enable you to monitor product quality. Other equipment or processes may be required depending on product type. Contact your Field TCPS offices if you need further assistance in determining what equipment would be beneficial to your business. Product Candles

Recommended Testing Equipment, Capabilities and Processes Testing Equipment/Capabilities ; Candle Burning Life Test • Tip Resistance • Light Box with UL 3000 Light Source Processes Demonstrate people have been tested for color vision Drop Test (Packaged Product) ; Procedure to ensure lead free solder (California PROP 65) ; Procedure to ensure product meets US lead content requirement

• •

Ceramics ; • • • • • • • • • • •

Testing Equipment/Capabilities Thermal Expansion Moisture Resistance / Absorption Base Durability Impact Durability Shrinkage (wet / dry) Crazing Chemical Resistance (FDA extractives for lead and cadmium) Chip / Scratch Resistance Extreme Temperature Leak Test Rockwell Hardness Test Light Box with UL 3000 Light Source

Processes ; Procedure to ensure meets US extraction of interior Cadmium & Lead requirement ; Procedure to ensure product meets US lead content requirements ; Procedure to ensure product meets CA Prop 65 requirements ; Demonstrate people have been tested for color vision • Drop Test (Packaged Product)

Factory Evaluation 6 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Product Cosmetics

Electronics

Recommended Testing Equipment, Capabilities and Processes Testing Equipment/Capabilities • Chemical / physical / analytical testing (pH, Solids, actives, viscosity, etc) • Microbiology laboratory Processes • 3rd party GMP Audit and CAPA (less than 1 year old) • GMP Training of staff • Lot control and tracking of raw materials and finished goods • Recall Program Testing Equipment/Capabilities ; Impact Durability ; Tip Resistance ; Strain Relief ; Hi Pot Test ; Voltage Test ; Performance Test ; Drop Test (Packaged Product) ; Multi-meters • Light Box with UL 3000 Light Source • Line Testing • Power Consumption Test • Insulation Test • Operation Testing Processes ; Procedure to ensure product meets US lead content requirements ; Procedure to ensure product meets CA Prop 65 requirements • Demonstrate people have been tested for color vision

Food

Testing Equipment/Capabilities • • • • • • • • • • • • • •

Microbiology (Yeats/mold/salmonella, etc.) Nutrition Analysis/Nutrition Label Verification Chemical/Physical/Analytical Testing pH, Viscosity, % solids, & ash, etc. Finished Product Metal Detection Processes Sensory evaluation (taste, mouth feel, texture, appearance) HACCP Plan & Process Document 3rd party Food Safety Audit (less than 1 year old) with CAPA GMP (Good Manufacturing Practices) Program Sanitation Program Pest Control Program Microbiological environmental monitoring Glass / Brittle Plastic Policy Allergen Control Product traceability & Recall Program

Factory Evaluation 7 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Product Furniture Metal

Recommended Testing Equipment, Capabilities and Processes Testing Equipment/Capabilities ; Corrosion Resistance ; Micron Test – surface coating testing ; Water PH Test – only if plating and anodizing capabilities ; Plating Chemical Depletion Test – only if plating and anodizing capabilities ; Adhesion Test – only if capable of painting ; Tilt Test ; Impact Test ; Moisture Content Test on Wood - only if using wood ; Pull Test on Components / Legs ; Static Loading Test ; Drop Test (Packaged Product) • Light Box with UL 3000 Light Source • Stain Resistance ; ; •

Furniture Wood ; ; ; ; ; ; ; ; ; •

Processes Procedure to ensure product meets US lead content requirements Procedure to ensure product meets CA Prop 65 requirements Demonstrate people have been tested for color vision Testing Equipment/Capabilities Lacquer Build/Thickness/Gloss Tests Glue Joint Test Tilt Test Impact Test Moisture Content Test on Wood Pull Test on Components / Legs Static Loading Test Stain Resistance Drop Test (Packaged Product) Light Box with UL 3000 Light Source

Processes ; Procedure to ensure product meets US lead content requirements ; Drying Room • Demonstrate people have been tested for color vision Glass • • • • •

Testing Equipment/Capabilities Impact Durability Tip Resistance Light Box with UL 3000 Light Source Drop Test (Packaged Product) Thermal Shock Test

; ; • •

Processes Procedure to ensure product meets US lead content requirements Procedure to ensure product meets CA Prop 65 requirements Drop Test (Packaged Product) Demonstrate people have been tested for color vision

Factory Evaluation 8 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Product Luggage

Recommended Testing Equipment, Capabilities and Processes Testing Equipment/Capabilities ; Lifetest on Rollers, Handles, Zippers ; Seam Strength Test ; Metal Detection (Needle Policy) ; Water Proofing • Light Box with UL 3000 Light Source • Colorfastness to Light, Crocking, etc. • Flammability Testing Processes ; Procedure to ensure product meets US lead content requirements ; Procedure to ensure product meets CA Prop 65 requirements • Drop Test (Packaged Product) • Demonstrate people have been tested for color vision

Metal

Other General Hardgoods

; ; ; • • • • • • • •

Testing Equipment/Capabilities Corrosion Resistance (outdoor or food use items) Sharp Edges Sharp Points Plating Thickness Water PH Test Plating Chemical Depletion Test Adhesion Test Tip Resistance Impact Durability Non-Stick Coating Durability Light Box with UL 3000 Light Source

; ; • •

Processes Procedure to ensure product meets US lead content requirements Procedure to ensure product meets CA Prop 65 requirements Drop Test (Packaged Product) Demonstrate people have been tested for color vision

• • • • •

Testing Equipment/Capabilities Moisture Content (wood) Impact Durability Test Tip Resistance Light Box with UL 3000 Light Source Any other equipment listed in other categories

; ; • •

Processes Procedure to ensure product meets US lead content requirements Procedure to ensure product meets CA Prop 65 requirements Drop Test (Packaged Product) Demonstrate people have been tested for color vision

Factory Evaluation 9 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Product Paper

Recommended Testing Equipment, Capabilities and Processes Testing Equipment/Capabilities ; Colorfastness (wet and dry crocking) ; Water Absorption • Sutherland Rub Test • Bursting Strength • GSM Thickness (gram/SQ. MTR) • Edge Crush Test • Color Reflection • Light Box with UL 3000 Light Source ; ; • •

Processes Procedure to ensure product meets US lead content requirements Procedure to ensure product meets CA Prop 65 requirements Drop Test (Packaged Product) Demonstrate people have been tested for color vision

; ; ; ; • • • • • • • • • • • •

Testing Equipment/Capabilities Moisture Content (wood) Metal Detection / Needle Policy (Plush/Textiles) Small Parts Cylinder Torque and Tension Drop Test Chew/Bite Test (if applicable) Impact Test (if applicable) Flexure Test (if applicable) Rattle Gauge Test (if applicable) Sharp Points Sharp Edge Small Ball (if applicable) Compression test Hardness Test (PVC Only) Impact Durability Light Box with UL 3000 Light Source

; ; • •

Processes Procedure to ensure product meets US lead content requirements Procedure to ensure product meets CA Prop 65 requirements Drop Test (Packaged Product) Demonstrate people have been tested for color vision

Toys

Factory Evaluation 10 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Product Wood • • • •

Recommended Testing Equipment, Capabilities and Processes Testing Equipment/Capabilities Moisture Content Impact Durability Tip Resistance Light Box with UL 3000 Light Source

; ; • •

Processes Procedure to ensure product meets US lead content requirements Procedure to ensure product meets CA Prop 65 requirements Drop Test (Packaged Product) Demonstrate people have been tested for color vision

; ; • • • • • • •

Testing Equipment/Capabilities Impact Durability Melt Index Test Tip Resistance Tensile & Elongation Properties (pull test) Flexural Properties Heat Deflection Temperature Test Vicat Softening Point Rockwell Hardness Test Light Box with UL 3000 Light Source

Plastics

Processes ; Procedure to ensure product meets US lead content requirements ; Procedure to ensure product meets CA Prop 65 requirements ; Procedure to obtain proper FSSE (plastic food safety) documentation • Drop Test (Packaged Product) • Demonstrate people have been tested for color vision

Factory Evaluation 11 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Product Softhome and Softlines

Recommended Testing Equipment, Capabilities and Processes Testing Equipment/Capabilities ; Light Box with UL 3000 Light Source - with current calibration and certification plan for both UL3000 and D65 Light sources ; AATCC Crockmeter or substitute used to conduct AATCC 8 ; U.S. Specification Topload Washer ; U.S. Specification Topload Dryer ; Scale accurate to 0.000g ; Circular fabric punch or standard ruler / guide / template for cutting fabrics for weight Woven Products ; Tensile Tester (Instron Type) ; Tear Tester (Elmendorf Type) Knit Products ; Burst Tester (Mullen Type)

; ; ; ; ; ; ;

Processes Demonstrate use for color matching / shade sorting / comparison to shade bands Demonstrate people have been tested for color vision Documented Methods for AATCC 135 / 150 a.k.a. shrinkage Documented Methods for evaluating color loss / color change (AATCC Grey Scale for Color Change) Documented Method for checking fabric weight Needle Detection / Needle Policy Production Control (traceability process) – Bundle Integrity

Woven Products ; Show Test Method and ability to conduct seam strength / seam slippage ; Demonstrate Ability to Count Ends and Picks (Fabric Count) ; AATCC Smoothness Appearance Replicas for Seams and Fabric ; Crease Retention Replicas ; ASTM Photographic Standards for Random Tumble Pilling Knit Products ; ASTM Photographic Standards for Random Tumble Pilling

Factory Evaluation 12 of 12 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

PRODUCTION PLANNING

Production Planning 1 of 7 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

PRODUCTION PLANNING

Overview Pre-Production Planning Requirements (PPR) is the process and document for tracking Timing & Action (T & A) and pre-production activities to prepare and deliver awarded programs according to plan and schedule. A Vendor Timing and Action form is used to verify that the vendor/factory can execute the required timing.

Table of Contents 1. Pre-Production Planning Requirements (PPR) 2. Vendor Timing and Action (VTA) 3. Factory Production

Objectives • Clear understanding of Target’s expectations for Pre-Production Planning. • How to use the Pre-Production Planning Requirements Document (PPR). • Identify potential production issue(s) and prepare solutions prior to production starting. • Understand the VTA and adhering to timing.

Resources POL: Guidelines and Info > Product Development/Quality Assurance > Quality Assurance (Softlines or Hardgoods) > Forms (Pre-Production Planning Requirements)

Production Planning 2 of 7 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Pre-Production Planning Requirements (PPR) PPR is the process and document for tracking pre-production activities to prepare and deliver awarded programs according to plan and schedule. The PPR facilitates and documents Target’s: Note: Non-TSS Vendors/Factories should be holding Production Planning meetings. A different tool may be used, but it is recommended to use the PPR process below. All Factories should be tracking their own Quality Plan to help manage product quality from development to pre-production to full production. This includes factory managed timing and actions from the receipt of raw materials to the actual production, along with documenting internal testing plans and inspection processes. • • • •

Expectations for the Vendor/Factory managing the program awarded Requirements for Quality and Standards for products prior to production Proactive approach to prevention and resolution of issues before production begins Use of the PPR is required for TSS Vendors/Factories to ensure proper execution of pre-production planning according to Target requirements.

Example: Pre-Production Planning Requirements (PPR) Document

• •

The first page of the PPR document is the ‘Process’ tab, that describes the Best Method for conducting these meetings, as well as roles and responsibilities. The second tab on ‘PPR’ document is the actual grid that needs to be filled out as part of the meetings. o The discussion topics guide the discussion that you should have during the meeting. o Any issue or action needed based on the discussion will be recorded in the document indicating expected resolution date and who is responsible for follow up o Required in SIP: Indicates if information is required for the SIP file. (Refer to the Standard Inspection Packet (SIP) Factory Education section)

Production Planning 3 of 7 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Vendor/Factory Pre-Production Responsibilities Note: This applies to all Vendors/Factories • • • • • • •

Open communication between vendor, factory and Target Responsible for preparing documents according to the PPR Requests product testing protocol(s) from Target’s approved 3rd party testing labs and brings to meeting to review Confirms an understanding of all of the information and details needed to accurately manufacture the products according to Target’s expectations and standards including US State and Federal requirements Raise concerns and help find solutions Must review and confirm all elements of the production T&A Understand the required testing performance standards

Note: o o o o

Some examples of why production could be delayed: Pre-Production sample(s) not approved by TCPS Satisfactory testing reports are not available Incomplete SIP File Product and/or production issues

Pre-Production Planning consists of two meetings: Placement and Pre-Production Placement Meeting Note: For non-TSS it is vendor’s responsibility to hold the Placement Meeting • • • • • • •

The objective of the Placement Meeting is to provide an overview and clarity on program placement The meeting is conducted within 7 to 10 days after confirmation or program award This meeting usually takes place in the local TSS Office that is managing the program for Target or at the factory of production Review any special instructions or requirements for the program Confirm that Factory has the capacity and capability to produce the item ordered according to Target’s: standards, product testing requirements and product specifications Understand Standard Inspection Package (SIP) requirements Vendors/Factories should raise key issues and help to develop solutions Example: Placement meeting attendees

TSS Sourcing Market Representative

Vendor Representative

TCPS MT and/or Quality Inspector

Vendor/Factory QA Management

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Pre-Production Meeting Note: For non-TSS it is vendor’s responsibility to hold the Pre-Production Meeting •

• • • • • • • •

•

The objective of the Pre-Production Meeting is to ensure that the Vendor/Factory correctly understands all production, final order fulfillment details, any open issues have been resolved and that the factory producing the product is ready for production. The meeting must take place 3-10 days prior to production start This meeting should take place at the factory of production Vendors/Factories should confirm complete understanding of Target’s expectation of quality and standards including US State and Federal requirements Communicate any concerns, discrepancies, missing or incomplete information that has not be resolved before production starts Confirm complete understanding of order quantity, delivery dates and all required documents Confirm production schedule against the VTA to ensure an on-time shipment TCPS will review Factory’s Pre-Production samples against Red seal samples Each factory producing the product must make pre-production samples (full set size run, if applicable) in the actual bulk fabric/trims and/or raw material. These will be reviewed by TCPS for specification, construction, color and workmanship and if approved, a yellow seal will be attached to the core size sample. Confirm SIP phase 1 completeness (Refer to the Standard Inspection Packet (SIP) Factory Education section)

TSS Sourcing Market Representative

Vendor Representative

TCPS MT and/or Quality Inspector

Vendor/Factory QA Management

Note: Factory should include a cross-section of management or supervisory personnel. Example includes supervisor in charge of the machine or section of production for the product being discussed.

Note: Vendors/Factories should perform their own internal Pre-Production Planning meetings before TSS meetings. This will help you: • Have a clear understanding of Target’s expectations, needed documentation and requirements • Help define questions or concerns that must be raised during the meetings • Identify potential issue(s), prepare solutions or corrective action plans in advance

Production Planning 5 of 7 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Standard Inspection Packet • As you go through the Pre-Production Planning process, you will start to build a Standard Inspection Packet (SIP) to be used during production. • The SIP is required for all Target Vendors/Factories and is a very important tool for both the Factory and TCPS because it contains all the necessary documents and information for production and product inspections. • Many topics discussed during Placement and Pre-Production meetings require documents that will make up the SIP. • The third tab on ‘PPR’ document is the Sip Check list Example: SIP Checklist Document

(Refer to the Standard Inspection Packet (SIP) Factory Education section for full details)

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2. Vendor Timing and Action (VTA) Overview Note: This applies to all Vendors/Factories • • • •

Vendor/Factory should collaborate to manage the VTA throughout the entire lifecycle of the production. Vendors Manage the VTA and may review all extension requests and verify if the Factory can confirm delivery, without issue OR a delivery extension is needed. If you are unable to meet any timing, contact your vendor. A Vendor Timing and Action form is used to verify that the vendor/factory can execute the required timing. The level of detail requested may vary. The VTA will most likely include the following information: o Target Department and Class o The program name o Vendor o Country of Origin o FOB point o Fabric mill o Confirmed FOB and ELC cost o Due dates for color and strike-off approvals o In-store dates for each order (including sets, ads and new-store’s) o Due dates for projections for each delivery, if applicable o Planned delivery flow of the program o Sample due dates o Packaging due dates o Due dates for greige (raw material) confirmations o Due dates for color and size breakdowns o Vendor’s detailed production plan by purchase order, including knit or weave dates, dye dates and cut dates o Due dates for MTL compliance testing o Contact information as applicable

Note: Unique styling or fabrications may vary from the PD&D calendar timing and actions. Factory should ensure that the following dates are accurate: • Testing timeline relevant to the product you are producing and product timeline • Pre-Production Planning meetings • Delivery schedule (DUPRO/FRI timing)

3. Factory Production To ensure continued successful production, you, the factory, need to ensure you have key process controls in place to identify issues and correct them. Refer to the following references for more details: • Factory Evaluations – Refer to the Factory Evaluation Factory Education section • Product Testing – Refer to the Product Testing Factory Education section • Product Inspections - Refer to the Product Inspections Factory Education section • SIP - Refer to the Standard Inspection Packet Factory Education section

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PRODUCT TESTING

Product Testing 1 of 22 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

PRODUCT TESTING Overview Target requires product testing in order to prevent costly product problems for both Target and the factory. All Product Testing is performed to verify Target’s expectations regarding: • Product Safety & Regulatory Requirements • Product labeling & packaging requirements • Product end-use(s) and performance according to the test protocol(s)

Table of Contents 1. Owned Brand Product Testing Requirements 2. Product Safety and Regulatory References 3. Product Labeling, Warnings and Transit Testing 4. Product Test Protocols 5. Product Testing Documents 6. Product Test Submission Process 7. Target Approved Test Labs 8. Multi Stage Testing a. Production Fabric Testing (SH/SL only) b. Pre-Production Product Testing c. Top of Production Testing d. On-Going Random Production Testing

Objectives • Understand Target’s Product Testing Requirements • Understand factory responsibilities to follow Target and U.S. Product Safety and Regulatory References • Understand Vendor/Factory responsibilities to conform to Target Multi-Stage Testing requirements • Know how to perform Target’s Transit/Drop Test for applicable Hardgoods merchandise

Resources • POL: Product Development > Requirements & Procedures > Hardlines Quality Assurance > Hardgoods A, B, C or Softhome > Product Testing • POL: Product Development > Requirements & Procedures > Softlines Quality Assurance > Softlines > Product Testing • POL: Product Development > Requirements & Procedures > Hardlines Quality Assurance > Softhome > Multi Stage Testing > Appendix of Softhome Protocols

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1. Owned Brand Product Testing Requirements •

• •

Product Testing is required for o All See. Spot. Save. Products o Products where Target owns the trademark o The brand is exclusive to Target o The brand licensed product where Target is exclusive retailer o Target has driven the product design o Target driven product standards or technical development o There is no distinguishing brand name used in retail packaging o The Vendor label is without National / Regional recognition Product Testing is required annually (1x per year) per awarded product o Pre-Production Testing is completed before production starts o Annual renewal date is due 1 year from previous test report issue date Product Testing is required per product per factory o Factory name and ID is required on the Testing Documentation

Notes: •

•

It is the Vendor’s responsibility to ensure that the products they sell to Target Corporation comply with all United States federal, state, and local laws, regulations, and ordinances. A satisfactory Lab test result does not constitute a certification that a Vendor’s product meets all legal requirements. It is the Vendor’s/Factory’s responsibility to manufacture their items to comply with all applicable laws and in conformance with the purchase order terms and conditions on Partners Online.

2. Product Safety & Regulatory References The Vendor is responsible to ensure their product complies with all U.S. regulations. Products that do not comply with these requirements are banned from sale in the United States. They cannot enter the country and may be seized by US Customs until compliant. Products that violate any US regulations will be subject to withdrawal from Target stores & supply chain, product recall, US government agency disposition, chargebacks, fees and fine. Product Safety & Regulatory References includes, but not limited to: • Consumer Products Safety Act - This protects consumers from injury and death from unsafe products. • California Proposition 65 - Warn consumers of risks associated with hazardous chemicals contained in consumer products. Although this is a state regulation, Target applies it to all products. • Federal Hazardous Substances Act • Flammability Fabrics Act • Poison Prevention Packaging Act • Federal Food, Drug & Cosmetics Act (Refer to Product Safety Recall and Regulatory Reference section) Product Testing 3 of 22 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

3. Product Labeling, Warnings and Transit Testing •

All Target products are tested for Labeling, Packaging and Warning requirements per Target’s Packaging / Labeling Protocol (9067) and/or Product Specific Protocols.

Product Labeling • Vendors are ultimately responsible for ensuring all factories are in compliance with all applicable labeling requirements for their products. • The labeling protocol is Target's interpretation of the Fair Packaging & Labeling Act (FPLA) and Uniform Packaging & Labeling Regulation (UPLR) as well as Targetspecific labeling requirements. o FPLA is Fair Packaging and Labeling Act. It is that all consumer products must be labeled to disclose contents, identity, name and place of business in order to prevent fraud or deception AND to allow the consumer to make to reasonable comparisons between products. o UPLR is Uniform Packaging and Labeling Regulation. UPLR adds to the FPLA to include appropriate metric labeling. •

In addition to Target’s interpretation of FPLA / UPLR, Target also has specific requirements that may go above and beyond government requirements. Target’s goal to is to ensure consistent and clear labeling that best represents the Target brand for the guest.

•

Verify Claims - Target requires the Vendor/Factory to verify their label claims. The 3rd party test lab will ensure that if the retail packaging makes a claim on performance, that claim can be validated. This includes any marketing copy.

• •

Example: Product Claims and Verification Corrosion Resistant – The product will be tested for corrosion per a salt spray test and results will be assessed. Anti-Bacterial or Anti-Microbial – Must meet EPA Pesticide Regulation requirements.

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•

Instructions that apply to the Target Labeling protocol (9067) o Product Name / Description must be shown on the Principle Display Panel (PDP) including open stock. • Principal Display Panel (PDP) is the side of the packaging that is displayed to the guest when shelved. For hangtags it is the side where both Product Name / Description and Net Quantity/Count appear. Product Name / Description Net Quantity / Count

•

•

• • • • • •

Distribution Statement Country of Origin 200 08 1423 Distributed by Target Corporation Minneapolis, MN 55403 Made in China 2007 Target Brands, Inc.

Declaration of Responsibility, Distribution Statement and Country Of Origin (COO) must be shown on package or hangtag. This includes: o DPCI No. o Distributed by Target Corporation o Minneapolis, MN 55403 o 2007 Target Brands, Inc. o Made in China Net Quantity / Count Weights & Measurements shall be represented in both standard units and metric units. Can be expressed as: o Weight o area (L x W) o volume o piece count o quantity o Piece count and quantity May be abbreviated but do not use symbols. For example you cannot put an apostrophe instead of feet or a period for inches. Metrics have to be in parentheses. "Rule of 1000." Use metric numbers that make sense and are easy to envision. Bookshelf is 48 in, use 48 in = 121.9 cm, NOT 48 in = 1219 mm Examples Garden Hose ‘25 ft’ and ‘300 cm’ describes Length of the hose. Drinking Glass ‘32 fl oz’ and ‘950 ml’ describes Volume. Pencil ‘10 pencils’ describes Quantity or Count. Glassware Set ‘4 - 32 fl oz and ‘950 ml’ both quantity (4) AND Volume (32 fl oz).

Product Testing 5 of 22 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Product Warnings • Proper warnings and instructions on safe use should always be included when necessary. • Work with your Vendor and Testing Lab for any warnings that are applicable to your product. Example: Product Warning

Retail, Casepack & Carton Packaging Test Requirements In addition to testing the actual product, Target also requires analytical and physical testing of the retail and casepack packaging. Analytical testing includes testing for hazardous materials used in the packaging. For example, many states in the US have strict requirements concerning the use of heavy metals in packaging. Vendor should use the same caution when producing product as producing packaging materials to ensure meets all US regulations. Transit Packaging Test Requirements Physical or performance testing of the retail and casepack packaging is referred to as Transit Testing. By testing the carton quality and packaging method, Target is able to reduce breakages of the product. • Fragile items are those items that will break or deform if dropped onto a concrete surface from 30” (76.2cm). • In addition to the above definition of fragile, product will require transit testing if it also meets any one of the material, surface finish, construction or packing criteria listed below: Product is made from one or more of the following MATERIALS

• • • • • • • • • • • • •

Glass Crystal Ceramic Earthenware Stoneware Terra Cotta Soapstone Marble Slate Wax Wood – Solid and Composite Fiberglass Capiz/Shells

• • • • • •

If the SURFACE of the product is

Product is CONSTRUCTED or PACKAGED using one or more of the following methods

Painted Stained Varnished Lacquered Glazed Polished

• • • •

Welds Hinges Joints Packed KD (KnockedDown in multiple parts)

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The Transit testing is divided into two phases, Vibration test and Drop test. • Vibration Test - Simulates physical stresses that could occur to the product during transportation by a repetitive shaking movement.

•

Drop Test - Packaged item is dropped repeatedly on flat sides, corners, and edges of the carton to simulate accidental drops that can occur during handling.

•

Complete internal factory drop test prior to sending packaged product (shipping carton) to the testing lab. o In-house testing allows you to test package (shipping carton) and identify issues prior to sending to approved testing party lab. Instruction for submitting samples to testing lab for Vibration and Drop Test: o Submit one casepack of product – use factory production sample. o Casepack of product should be placed in a larger box with protective packaging so that the contents do not incur damage during shipment to the testing lab. o The protective overpack should be clearly marked with the statement “Test Inner Package”. o Mark the outside of the package that is to be tested with the statement “Test this Carton” and mark the carton with DPCI, product description and style number (if known) o Complete and attach the Target Transit Package Test Request Form, one for each DPCI.

•

POL: Guidelines & Info > Requirements & Procedures > Product Packaging > Hardlines Casepack Testing Requirements

Product Testing 7 of 22 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• • • •

Test results will be completed within 7 working days and either fax or e-mailed the test report to the contact on the Test Request Form. Packages for items that fail testing must be redesigned and submitted to the same lab for testing. Vendor must note the old test report number on the new Test Request Form and note what package improvements were made. Drop Height Guidelines are listed in the tables below for Target Merchandising Departments 002, 055, 065, 070, 072, 074, 083 Ceramic items, 084, 097, 200, 236, 249 and Target.com items: Packaged Product Weight Drop Height 0 to 20.99 lbs (0 to 9.52 kg)

30 in (0.762 m)

21 to 40.99 lbs (9.53 to 18.59 kg)

24 in (0.610 m)

41 to 60.99 lbs (18.60 to 27.66 kg)

18 in (0.457 m)

61 to 100.99 lbs (27.67 to 45.81 kg)

12 in (0.305 m)

101 to 150 lbs (45.82 to 68.04 kg) •

• • • •

•

Drop Height Guidelines for all other departments: Packaged Product Weight

8 in (0.203 m)

Drop Height

0 to 20.99 lbs (0 to 9.52 kg)

18 in (0.457 m)

21 to 40.99 lbs (9.53 to 18.59 kg)

16 in (0.406 m)

41 to 60.99 lbs (18.60 to 27.66 kg)

14 in (0.356 m)

61 to 80.99 lbs (27.67 to 36.73 kg)

12 in (0.305 m)

81 to 100.99 lbs (36.74 to 45.81 kg) 101 to 200.99 lbs (45.81 to 91.17 kg)

10 in (0.254 m) 8 in (0.203 m)

During the Placement Meeting, the Vendor/Factory verifies if the product requires Transit testing and determines the number of tests needed o Approval for grouping can only come from TCPS HQ Factory includes a satisfactory Transit Test report in the SIP packet Factory should perform their internal Drop Tests during their internal inspections Equipment needed to perform the Drop test: o Tape measure (minimum 45 inches long) o Scale to weigh the carton o Concrete floor (minimum 2m x 2m) o Approved Transit Test from the test lab To perform the Drop Test, the factory inspector should: o Pull one carton randomly by DPCI/style from the shipment o Verify the carton is not damaged and packing method is identical to the packing send to the testing lab o Complete the 10 step Drop Test sequence by dropping the packaged product on a flat concrete surface from the height specified.

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10 Step Drop Test Sequence

Drop #9 (Flat on large face)

Drop #8 (Flat on medium face) Drop #5 (Flat on small face)

Drop #6 (Flat on small face)

Drop #3 (Medium Edge)

Drop #2 (Short Edge) Drop #7 (Flat on medium face)

•

Drop #1 (Corner by manufacturer’s joint) Drop #4 (Long Edge)

Drop #10 (Flat on large face)

After each Drop Test sequence, inspect carton for any damage, look for: o Excessive damage, denting breaking of carton o Leaking of liquids or granular product o Damage to the casepack so that it fails to provide protection or containment

Rating the Drop Test In evaluating the appearance of both the carton and the product after the internal Drop test, the factory inspector will assign one of the following ratings: • Pass - No problems were detected. • Fail - As a general rule, the package design will be considered inadequate if any of the following conditions occur after package testing: ƒ Leaking of liquids or granular product ƒ Excessive scuffing or denting of retail package ƒ Damage to the casepack such that it fails to contain the product ƒ Excessive puncture, tearing or breaking of retail package ƒ Failure of the product to perform as originally intended ƒ Damage that negatively impacts the sale of the item (i.e., chipping of bowl, excessive scuffing of paint, dents or scratches in wood, etc.) Detailed Information of the drop test can be found through your Vendor, test protocols and through the testing labs.

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4. Product Test Protocol • • •

A protocol is a list of various tests and test method to evaluate a single product. Target has approximately 2000 individual protocols, each representing a different product. TCPS HQ QA is responsible for the creation, content and revision of protocols. It is the Vendor/Factory responsibility to obtain a copy of the protocol from the testing lab to understand Target’s product requirements before production.

Protocols consist of the following distinct elements: • Supplemental Protocols – E.g. State Regulation, California Proposition 65 • Labeling - Review of product specific Federal and State labeling requirements. Confirms that product complies with all label claims including instructions. Target labeling requirements are reviewed. • Analytical - Test analysis for lead, cadmium, and other hazardous materials. • Physical Characteristics - Confirmation that any physical claims are accurate (capacity, weight, length, width, height, material type, etc.). • Construction Qualities - Review of workmanship (safety concerns, defects, missing parts). • Performance End-Use Testing - Confirms product performs as intended. • Transit Testing (Hardgoods Only) - Must submit appropriate number of casepacks necessary for product testing. • Sample Quantity - Identifies the suggested number of units required for testing. More may be needed depending on the product type, size, etc • Days to Complete – Identifies the average number of business days to complete testing. • Cost - Identifies basic test package price, and the cost for any additional testing beyond basic package. •

Products will be tested to determine if they meet Target standards based on EndUse Performance: o Materials o Construction o Function o Purpose o Application

Example: Hargoods Product End-Use Performance Flashlight with a lighter attached. End-Use Performance Testing Required for Protocoal 4045 Protocol 4045 Flashlight AND ALSO REQUIRED Protocol 4084 Utility Lighter. This pertains to any products that have more than one end use

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Example: Hardgoods Product Testing Protocols

Example: Softhome/Softlines Product Testing Protocols

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5. Product Testing Documents Product Testing documents include: • Group Testing Approval • Test Report • Overrides • Testing Compliance Certificate (TCC) • Notice of Exclusion (NOE) Group Testing Approval • Grouping reduces the number of samples tested while still ensuring the safety and quality of products being supplied to Target. • Grouping requests can only be approved by TCPS Minneapolis and must be submitted and approved PRIOR to submitting for testing. • Vendor must get approval from TCPS HQ QA for grouping BEFORE submitting samples for testing • Grouping is only allowed for similar products meeting the following criteria: o Produced at the same factory o Same materials and components used o Same construction o Same manufacturing processes • Grouping will only be approved for products being tested at the same time and forms MUST be submitted with the product to be tested. • Vendor downloads Grouping Request Form from Partners Online (POL) inserting all requested information. • All grouped items must pass testing before a Testing Compliance Certificate (TCC) will be issued. Products grouped and not tested will be noted on the TCC. Example: Grouping Request Form

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Test Report • After the product has been tested, the Vendor/Factory will receive a Test Report with results from the lab Example: Test Report

Overrides • An override is a determination from TCPS HQ QA confirming that although the testing failed, the product can still be shipped. • Vendor must request override from TCPS QA HQ o If granted, Vendor must request to receive the TCC from lab; report will remain as “Unsatisfactory” with override o If NOT granted, Vendor must fix and retest Vendor is fully responsible for and accepts all liability for any issues that arise due to this consideration. Overrides do not set precedent for future production. This override does not modify your obligations to Target under Partners Online. Notes: • Overrides are not approved for safety or US government regulations. • Overrides are granted on an exception basis and should not replace satisfactory test reports.

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Testing Compliance Certificate (TCC) • Official document that states product passed or was overridden for all required product tests • Issued by Target approved 3rd party test lab • Valid for 1 year from issue date • TCC’s are issued for all HG and for non-TSS SL Vendors Example: Testing Compliance Certificate (TCC)

Notice of Exclusion (NOE) Note: Excluded only if the product is National Brand • Document that states product is excluded from product testing • Issued by TCPS QA – HQ • Valid for 1 year from issue date

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6. Product Test Submission Process Vendor is responsible for managing the entire Target testing process. Factories must be aware of the Target testing process including requirements and timelines. 1. Vendor Obtains the Testing Protocol from 3rd party lab and reviews with the Factory before production and testing. • If TSS, review at Placement Meeting • If Non-TSS, Factory completes review during their internal Pre-Production process 2. If applicable, Vendor applies for Group Test 3. Vendor Completes the Test Request Form (TRF) 4. Vendor/Factory submits: • Product Samples • Test Request Form • Group Test Form • Retail Packaging & Labeling • If applicable, Casepacks for Transit Testing for Hardgoods 5. Test lab will conduct testing per appropriate protocol: • If product results are Pass: o Vendor receives “Satisfactory” Test Report o Vendor receives Testing Compliance Certificate (TCC) • If product test results are Fail: o Vendor receives “Unsatisfactory” Test Report o Vendor must fix failures and re-test o Review failure with Target TCPS QA - HQ. for possible override ƒ If NO override, Vendor must fix & re-test ƒ If YES override, Vendor must request the release of the TCC after the override has been processed. •

Testing will be delayed for the following reasons: o Incomplete or inaccurate forms o Insufficient number of samples o Damaged product due to shipping breakage o Testing will not start if any of the above occur.

Note: TCPS confirms testing documentation is complete before an Inspection Certificate is issued to release the shipment.

7. Target Approved Test Lab The current Target approved test lab is Bureau Veritas (BV). Target plans to approve and use multiple lab companies in the near future. Vendor should advise Factory of the proximate BV lab to their manufacturing location. • Softlines: [email protected] • Hardlines/Toys: [email protected] • Softhome: [email protected] Product Testing 15 of 22 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

8. Multi-Stage Testing (MST) Target’s Multi-Stage Testing Process was created so that products are tested throughout the entire production run. The intent is to identify potential issues earlier in production and continually monitor quality throughout shipments. Target requires product testing BEFORE production and DURING production. Note: Vendors pay for all testing.

Hardgoods Multi-Stage Testing (MST) refers to the following testing stages: 1. Pre-Production Product Testing 2. Top Of Production Testing (TOP) 3. On-Going Random Testing

Softhome - Multi-Stage Testing (MST) refers to the following testing stages: 1. Production Fabric Testing 2. Pre-Production Testing 3. Top Of Production Testing 4. Ongoing Random Testing

Softlines Multi-Stage Testing (MST) refers to the following testing stages: 1. Production Fabric Testing 2. Pre-Production Testing 3. Top Of Production Testing (TOP) 4. Ongoing Random Testing

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Hardgoods Multi-Stage Testing (MST) Not all Hardgoods products require MST, check with your Vendor for products that require testing.

1. • • • • •

Pre-Production Testing Target requires Pre-Production testing for all products. Product grouping is allowed with approval. Vendor/Factory submits the sample to Target’s approved test lab. Vendor must receive satisfactory test results or override before starting production. All satisfactory and unsatisfactory test results with documented override, if applicable, are kept in the SIP and available for review by TCPS Field team.

2. • • •

Top Of Production Testing (TOP) Testing occurs during production. No grouping, wet paint or component testing allowed. TCPS Field team pulls and seals with a black seal, samples from production during the first Target inspection. • It is the Vendor’s/Factory’s responsibility to submit the samples to the lab. • If TOP testing fails - Production must be stopped until the issue is resolved with TCPS HQ and Field team. • All satisfactory and unsatisfactory test results with documented override, if applicable, are kept in the SIP and available for review by TCPS Field team. Note: If safety issues are found, further testing will be required and may result in a product recall. If performance issues are found, further testing will be required and may result in a market withdrawal.

3. • • • •

On-Going Random Testing On-Going Random testing required only by TCPS instruction. Product can be pulled by TCPS at any time during the production lifecycle. Follows the same process as TOP testing. If On-Going Random testing fails - Production must be stopped until the issue is resolved with TCPS HQ and Field team. • All satisfactory and unsatisfactory test results with documented override, if applicable, are kept in the SIP and available for review by TCPS Field team. Note: If safety issues are found, further testing will be required and may result in a product recall. If performance issues are found, further testing will be required and may result in a market withdrawal.

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Softhome - Multi-Stage Testing (MST) Not all Softhome products require MST, check with your Vendor for details. 1. Production Fabric Testing • Fabric stage testing is not required for all Softhome products. Verify with your Vendor which Softhome products require testing. • All colors / prints / patterns should be submitted. • Fabric testing must pass or be overridden in all colors, fabrications, prints, or patterns before proceeding with pre-production testing. Only TCPS HQ can provide overrides ([email protected]). • All satisfactory and unsatisfactory test results with documented override, if applicable, must be kept in the SIP and available for review by TCPS Field team. 2. Pre-Production Testing • Must be completed before production begins • Pre-Production samples are submitted by the Vendor/Factory and must meet the following requirements: o Made in each factory of production (e.g. if 2 factories are producing the product, samples must be submitted from both factories) o Produced with bulk production fabric o Produced in a sample room using similar equipment to that used in production (or) produced using production equipment for a sample run o Produced to all proper specifications o Produced using production materials including all sub-components o All labeling information must be submitted ƒ Mock up labeling and packaging is acceptable for Pre-Production Testing. • Testing is required for all color ways. o Solids – All Colors o Multi-Color Fabrications or Color blocked items – All fabrications o Yarn dyes - All patterns o Prints - All prints • Pre-Production testing must pass or be overridden prior to beginning production for a given color, print or pattern. Only TCPS HQ can provide overrides ([email protected]). • Product may ship after all pre-production testing has either passed or been overridden. • All satisfactory and unsatisfactory test results with documented override, if applicable, must be kept in the SIP and available for review by TCPS Field team. 3. Top Of Production Testing (TOP) • Samples must be from initial bulk production • Submit samples in the core size using the following color guidelines: o Solids - 3 colors (light, medium and dark) o Multi-Color Fabrications or Color blocked items - 3 fabrications representing the most extreme variation of color blocking or fabrication o Yarn dyes - 3 patterns having largest number of individual colors o Prints - 3 prints covering the largest area • For TSS - Samples may be selected by the TCPS team. • For Non-TSS – Vendor/Factory should work with their local TCPS team to determine whether TCPS will select the samples for testing or if the Factory will select the samples. Product Testing 18 of 22 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

If samples are pulled by TCPS: o They will be pulled at the first DUPRO inspection and black-sealed. o Samples will be given to the Vendor/Factory to be submitted for testing. o The Vendor/Factory must record the black seal serial numbers in their test request form when submitting samples to the testing lab. • If TCPS allows the factory to pull samples, no seal is required. • If TOP testing fails, production must be stopped for the color, fabrication, print, or pattern that failed until the issue is resolved with TCPS HQ ([email protected]). Further testing may be required. • All satisfactory and unsatisfactory test results with documented override, if applicable, must be kept in the SIP and available for review by TCPS Field team. • The TCPS team will hold shipments (including shipments already in transit) if TOP testing is UNSATISFACTORY. Notes: • For ongoing programs: Fabric, Pre-production and TOP testing are annual requirements. • If safety issues are found, further testing will be required and may result in a product recall. If performance issues are found, further testing will be required and may result in a market withdrawal. 4. Ongoing Random Testing • Frequency of testing is based on product type and occurs after a set number of units have been produced. To determine the number of units – reference POL: Product Development > Requirements & Procedures > Hardlines Quality Assurance > Softhome > Multi Stage Testing > Appendix of Softhome Protocols • Random testing is not required more than once per month. • Samples selected for Random testing must meet the same criteria and follow the same guidelines outlined for Top of Production. • As with Top of Production testing, Vendor/Factory should work with their local TCPS team to determine whether TCPS will select the samples for testing or if the Factory will select the samples. • It is the Vendor’s/Factory’s responsibility to submit the samples to the lab. • If samples are pulled by TCPS, they will be black-sealed as outlined in TOP • If TCPS allows Factory to pull samples, no seal is required. • If ongoing random production testing fails, production must be stopped for the color, fabrication, print, or pattern that failed until the issue is resolved with TCPS HQ ([email protected]). Further testing may be required. • All satisfactory and unsatisfactory test results with documented override, if applicable, must be kept in the SIP and available for review by TCPS Field team. • The TCPS team will hold shipments (including shipments already in transit) if Random testing is UNSATISFACTORY. Note: If safety issues are found, further testing will be required and may result in a product recall. If performance issues are found, further testing will be required and may result in a market withdrawal.

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Softlines Multi-Stage Testing (MST) All Softlines products require MST, check with your Vendor for details. 1. Production Fabric Testing • Fabric stage testing must be complete before production begins. NOTE: This stage is not applicable to Sweaters or Seamless production. Garments should be tested at TOP stage in all colors. • Fabric samples should be submitted by the Vendor. o All colors should be submitted o Pull 3 yards per color o All fabric in all colors/ fabrications/ prints/ patterns must pass testing • Fabric testing must pass or be overridden in all colors, fabrications, prints, or patterns before proceeding with pre-production testing. Only TCPS HQ can provide overrides ([email protected]). • All satisfactory and unsatisfactory test results with documented override, if applicable, are kept in the SIP and available for review by TCPS Field team. 2. Pre-Production Testing • Must be completed before production begins • Pre-Production samples are submitted by the Vendor/Factory and must meet the following requirements: o Sample must be made in each factory of production (e.g. if 2 factories are producing the product, both factories must submit samples) o Produced with bulk production fabric o Produced in a sample room using the same production class equipment that will be used in production (or) produced using production equipment for a sample run o Produced to all proper specifications including any trims or embellishment o Produced using production materials including all sub-components o All labeling information must be submitted with pre-production product o Mock up labeling and packaging is acceptable for Pre-Production Testing. • Sample quantity submitted for testing can vary due to the size/size range of the product. Information is available from your Vendor, POL or approved testing lab. o Solid Colors Submit one color of a garment for testing – lightest color; 3 garments of that color o Multi-Fabrication or Color Blocked Submit one color for testing. This color should represent the most extreme variation of color blocking or fabrication in the garments; 3 garments of that fabrication o Yarn Dyed Submit one pattern that has the most colored yarns; 3 garments of that pattern o Printed Garments Submit one print for garment testing. Print should cover the largest surface area of the garment; 3 garments of that print • Vendor/Factory cannot re-test or request overrides for unsatisfactory test results • Vendor/Factory must resolve issues before proceeding in Production (cutting stage) • Any failed parameters will be re-tested during TOP stage of testing • All satisfactory and unsatisfactory test results with documented override, if applicable, are kept in the SIP and available for review by TCPS Field team. NOTE: This stage is not applicable to Sweaters or Seamless production. Garments should be tested at TOP stage in all colors Product Testing 20 of 22 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

3. Top Of Production Testing (TOP) • Samples must be from initial bulk production • All garment colors / fabrications / prints / patterns will be tested. o Sample quantity submitted for testing can vary due to the size/size range of the product. Information is available from your Vendor or Testing Lab o TOP samples in core size should be submitted as soon as possible after production begins (initial production run). o Care instructions must be accurate at TOP testing stage. • For TSS - Samples may be selected by the TCPS team. • For Non-TSS – Vendor/Factory should work with their local TCPS team to determine whether TCPS will select the samples for testing or if the Factory will select the samples. • If samples are pulled by TCPS: o They will be pulled at the first DUPRO inspection and black-sealed. o Black seals (tamper evident product seal) will be attached to samples in such a way that they cannot be easily removed or replaced. o One black seal should be used for each group of sample units: e.g. three units of each color/fabrication/print/pattern. o Black seal serial numbers will be recorded in the Product Inspection Form (PIF) o Samples will be given to the Vendor/Factory to be submitted for testing. o The Vendor/Factory must record the black seal serial numbers in their test request form when submitting samples to the Testing Lab. • If TCPS allows the factory to pull samples, no seal is required. • If TOP testing fails, production must be stopped for the color, fabrication, print, or pattern that failed and you must contact TCPS HQ ([email protected]) Further testing may be required. NOTE: No overrides will be provided for incorrect care or fiber content at TOP. • •

All satisfactory and unsatisfactory test results with documented override, if applicable, are kept in the SIP and available for review by TCPS Field team. The TCPS team will hold shipments (including shipments already in transit) if TOP testing is UNSATISFACTORY.

Notes: • For ongoing programs Fabric, Preproduction and TOP testing is an annual requirement. • If safety issues are found, further testing will be required and may result in a product recall. If performance issues are found, further testing will be required and may result in a market withdrawal.

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4. Ongoing Random Testing • Frequency of testing is based on product type and occurs after a set number of units have been produced. • Random testing is not required more than once per month. • Random Production Samples in core size will be pulled after every 100,000 units of production of each color/ print/ color way of color blocked items • Samples selected for Random testing must meet the same criteria and follow the same guidelines outlined for Top of Production. In addition: o Only three colors are required to be tested in the Random Production Testing stage. o Number of samples required during Random Production testing is indicated on the Testing Protocols. o Sample quantity submitted for testing can vary due to the size/size range of the product. Information is available from your Vendor or Testing Lab • • • • • •

As with Top of Production testing, Vendor/Factory should work with their local TCPS team to determine whether TCPS will select the samples for testing or if the Factory will select the samples. It is the Vendor’s/Factory’s responsibility to submit the samples to the lab. If samples are pulled by TCPS, they will be black-sealed as outlined in the TOP If TCPS allows Factory to pull samples, no seal is required. If ongoing random production testing fails, production must be stopped for the color, fabrication, print, or pattern that failed until the issue is resolved with TCPS HQ ([email protected]). Further testing may be required. The TCPS team will hold shipments (including shipments already in transit) if Random testing is UNSATISFACTORY.

Note: If safety issues are found, further testing will be required and may result in a product recall. If performance issues are found, further testing will be required and may result in a market withdrawal. •

Shipment is denied when: o Any fabric test fails and are not overridden. o Any Pre-Production test fails. o Vendor/Factory must proceed to TOP stage and cannot ship until satisfactory TOP test results are received. o Any TOP or Ongoing Random tests fail and are not overridden.

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PRODUCT INSPECTIONS

Product Inspections 1 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

PRODUCT INSPECTIONS

Overview To ensure your merchandise is meeting Target’s expectations across the entire production lifecycle of the program, Target requires the factory to perform factory internal During Production Inspections (DUPRO) and Final Random Inspections (FRI). These internal inspections do not replace your internal quality control in any phases of production, but will support you in achieving Targets’ and US federal requirements.

Table of Contents 1. Objectives of Product Inspections 2. Frequency of Inspections 3. Factory Inspection Process Overview 4. Tools to Conduct an Inspection 5. Booking an Inspection 6. Product Inspection Example – Hardgoods 7. Product Inspection Example – Softhome 8. Product Inspection Example – Softlines 9. Product Inspection Example – Ready To Assemble

Objectives • Understand why factory internal DUPRO and FRI Inspections are required • Be aware of the necessary tools to perform factory internal inspections • Understand how and when to schedule a TCPS Inspection • Know how to book a TCPS inspection • Be aware of possible non-compliance charges

Resources POL: Guidelines and Info > Product Development/Quality Assurance > Quality Assurance (Softlines or Hardlines) > Forms. o Product Inspection form o Sampling Plans o Defect Classification Lists

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1. Objectives of Product Inspections • • • •

•

Gives the opportunity: o To find any issues during production and fix quickly. o To eliminate defects and maintain high quality product. Ensures Target’s quality product expectations are being met through the entire production lifecycle of the product. To achieve satisfactory results on TCPS inspections without having to re-open cartons or stop production. Improved efficiency for factories and vendors by: o Shipping merchandise according to delivery date. o Eliminating costs of re-work o Preventing production from being placed on hold o Reducing the number of defectives discarded Successful implementation of these inspections will lead to better score ratings for factories and vendors who work with Target

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2. Frequency of Inspections Frequency of Internal Factory inspections and TCPS inspections

FACTORY DUPRO AUDIT DONE BEFORE 10% OF PRODUCTION IS COMPLETE

TCPS DUPRO AUDIT BEFORE 20% OF PRODUCTION IS COMPLETE- TOP SAMPLES ARE PULLED FOR TESTING

FACTORY DUPRO AUDIT DONE BEFORE 50% OF PRODUCTION IS COMPLETE

PRODUCTION BEGINS

2ND TCPS DUPRO AUDIT DONE BEFORE 60% OF PRODUCTION IS COMPLETE –RANDOM SAMPLES ARE PULLED FOR TESTING (when required)

FACTORY FRI WHEN 100% PRODUCTION COMPLETE AND A Y COMPLETE AND READ MINIMUM OF 80% TO SHIP PACKED IN CARTONS

TCPS FRI WHEN 100% OF TCPS FRI WHEN PRODUCTION IS 100% OFAND AT COMPLETED PRODUCTION IS IN LEAST 80% PACKED COMPLETE AND WITH SHIPPING CARTONS (completed APACKED COMPLETE PACKING packing LISTlist)

FACTORY SHIPS GOODS

Factory DUPRO (During Production) Inspections • Factories will conduct their internal DUPRO inspections at 10% and 50% of available finished goods. Goods do not need to be floor ready in shipping cartons. • If internal factory DUPRO inspection fails, a corrective action in production line is to be taken immediately. Once defective units have been either repaired or removed from production, the factory must perform an additional DUPRO inspection when 20% more production completed. • Only submit the Vendor Inspection Request Form (VIRF) to TCPS for TCPS DUPRO inspections if internal factory inspections have a satisfactory result. • SIP phase 1 is to be complete.

Factory FRI (Final Random Inspection) Inspections • Factories will conduct their internal FRI when purchase order(s) are 100% produced and 80% packed in cartons. • If internal factory FRI inspection failed, all cartons must be re opened and 100% reinspected. Corrective Action must be implemented immediately in the case of future orders. Once defective units have been either repaired or removed from the order, the factory must perform a RE-FRI inspection. • Only submit the VIRF to TCPS for TCPS FRI inspection if internal factory inspection has a satisfactory result and 100% of merchandise is complete and ready to ship with complete Packing List. • SIP phase 1 and 2 (including tests results) are complete.

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3. Factory Inspection Process Overview Inspection Flow chart

Inspector determines sample pull quantities

Inspector conducts Carton Audit (if applicable)

Inspector select samples for Measurement and Workmanship Audit

Inspector conducts Measurement Audit (if applicable)

Inspector conduct Workmanship Audit

Using the Sampling Plan the Inspector determines the quantity of units and cartons to pull for the inspection.

This audit is performed during FRI to verify the product is packed as requested (size/color/assortment). Perform Drop test (if applicable) and that the carton markings and measurements are correct.

The Inspectors selects the units for the Measurement (if applicable) and Workmanship Audit.

This audit (Softhome and Softlines products) is performed to verify that the product is compliant to Targets specification, checking all points of measure against Target approved specifications.

This audit is performed to verify the quality of the product is meeting Target’s expectations. All samples pulled are verified against the elements and documentation of the SIP (Red and Yellow samples Color standards, Shade bands, Materials/Fabric, Specification sheet, approved labels, Packaging and Floor ready requirements, 3rd party Testing Reports, etc.) and for defects.

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Ready To Assemble (RTA) - Target has implemented a separate procedure for RTA Furniture due to the characteristics of the product, with a separate Sampling Plan, Defect Classification List and Product Inspection Form. The inspection is divided into three phases: o Carton audit - performed to verify that the product is packed as requested, carton markings are correct and to perform the drop test. o Workmanship audit - performed to verify the quality of each component of the product. o Assembly audit - performed to verify that all components and hardware can be assembled and to test the functionality of the assembled product.

4. Tools needed to perform an Inspection • Product Inspection form • Sampling Plans • Defect Classification Lists • Complete SIP file ( phases 1 & 2) • Measurement Tape • Inspection Station • Calculator

Product Inspection form and Resource document To record the results of the inspection and any defects or deviations found during each audit Targets expects factories to complete the Targets Product Inspection form. The resource document will guide you, step by step, in completing all crucial information needed on the form. Example: Product Inspection Form Softlines

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Measurement Worksheet and Resource document - SL/SH Only Where Product is requested a Measurement Audit inspector must use and record the measurement audit using the Measurement worksheet. Example: Measurement Worksheet

Note: Target recommends using the Target forms for recording your internal inspections but not required – if not using the Target form, must be capturing the same information on a Vendor/Factory form for TCPS to review. Note: Product Inspections forms and worksheets can be downloaded from Partnersonline website or you can contact your local TSS office to submit you them.

Sampling Plans • Target expects factories to use the Target Sampling Plans as a minimum requirement. • The inspector during the workmanship audits should pull the exact number of samples to inspect based upon the sampling plan used • The Sampling Plan determines the number of units that should be inspected based on the quantity of goods available. • The Target Sampling Plan applies to Softlines (AQL 2.5/2.5), Softhome (AQL 2.5/2.5) and Hardgoods (AQL 2.5/4.0) products and is used for all inspections Note: Ready To Assemble (RTA) products have a separate procedure and Sampling plan due to the characteristic’s of the product

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Workmanship Sampling Plan •

•

•

For HG, major defects are calculated using a 2.5 AQL and minor defects are calculated using a 4.0 AQL. Lot Size

Pull Size

Major (Pass On)

AQL (Major)

Minor (Pass On)

AQL (Minor)

<=3,200

50

3

2.5

4

4.0

3,201 – 10,000

80

4

2.5

6

4.0

> 10,000

125

6

2.5

9

4.0

For SH/SL major defects are calculated using a 2.5 AQL and minor defects are calculated using a 2.5 AQL. Lot Size

Pull Size

Major (Pass On)

AQL (Major)

Minor (Pass On)

AQL (Minor)

<=3,200

50

3

2.5

3

2.5

3,201 – 10,000

80

4

2.5

4

2.5

> 10,000

125

6

2.5

6

2.5

All samples are evaluated for critical, major and minor defects. o Each defective sample can have multiple defects, critical, major and minor o Each major and minor defect is measured as one point. o There is a zero tolerance for critical defects (safety and regulatory). ■ A single critical defect will FAIL the inspection. o Each defective unit can be counted for critical, major and minor but only once for each type o All defects found are recorded on the Product Inspection Form. o A workmanship audit FAILS if major and or minor defective items are over the acceptable number and if any critical defects are found.

Measurement Sampling Plan - Used for Softhome and Softlines products only, during the measurement audit. Sample Pull Size 32 50 65 80

• •

• •

•

Accept on AQL 6.5 Major Defects 5 7 8 10

Accept on AQL 6.5 Minor Defects 5 7 8 10

Sample pull size is calculated on size/color (DPCI level) available during the audit. The total minimum pull is 32 pieces, a minimum of one (1) piece per DPCI. When pulling the extra units to reach the appropriate pull size the inspector should use a weighted average and pull samples across all sizes and colors (DPCI). o If there are more than 32 DPCIs, the pull size will be 50. o If there are more than 50 DPCIs, the pull size will be 65. o If there are more than 65 DPCIs, the pull size will be 80. o Maximum pull size is 80 pieces The inspector evaluates samples pulled against Targets product specifications. All points of measure must be recorded on the measurement worksheet. Each item in the sample pull will be evaluated for both major and minor defects

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Major defects will equal one point and are defined as a measure out of tolerance that jumps to the next or prior size. • Minor defects will equal one point and are defined as a measure out of tolerance that does NOT jump to the next or prior size. • Major and minor defects count as one point each. • Major and minor defects will use separate AQLs to calculate pass/fail of the inspection. • All defects must be recorded. o Each defective unit may have multiple defects. o Each defective unit can be counted for both major and minor but only once for each type. • Defective units can only be counted once for major and once for minor. • A measurement audit fails if major or minor defective items are over the acceptable number of defects. Note: Sampling Plans can be downloaded from Partnersonline website or you can contact your local TSS office to submit you them to you. Note: A single unit cannot have more than a 1 point for major and 1 point for minor, even if multiple points of measure out of tolerance are found.

Defect Classification List

• •

Inspections are performed using Target’s Defect Classification List (DCL) based on the product category (Softlines- Softhome – Hardgoods and Ready To Assemble) Defects are classified into three types: o Critical Defects are unacceptable defects that could risk the safety and/or health of Target guest and are in violation of regulatory procedures. o Critical Defects include all performance related defects and any deviation from the product and package specification o A single critical defect (safety and regulatory) found will fail the inspection (Critical Defect = Auto Fail) Example: Critical Defect Code SR003

o

o

Critical

Major Defects are a serious defect that affects appearance, performance, durability or functionality to such a degree that a guest would not buy the product if they saw the defect. Major Defects include all construction related and appearance related defects Example: Major Defect Code V024

o

Any sharp point or edge on children’s product

Chipped

Major

Minor Defects are a deviation from Target construction specifications and quality standards that affects appearance, performance, durability or functionality and reduces its salability at full price. Example: Minor Defect Code R041

Darts Poorly Shaped with large bubbles at the end

Minor

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Note: The Defect Classification List must be downloaded from the POL website or you can contact your Vendor or local TSS office to obtain a copy. It is also highly recommended that you use the Target’s DCL when doing your factory internal inspection to ensure consistency and comparison between your internal and TCPS inspection results.

Complete SIP Packet (phases 1 & 2) •

The Standard Inspection Packet (SIP) is a formal documentation of production activities maintained by Vendor/Factory. It is the factory’s responsibility to formally document results of production data in addition to Target’s requirements and they must be made available to TCPS for review upon request. • The SIP contains all needed information to verify if you are achieving all Target requirements. • To help Vendors/Factories understand and complete the SIP, Target has created an SIP Checklist which drives you step by step on completing the requirement. • It is crucial to have SIP available and on hand during all factory and TCPS inspections. • SIP Checklists can be downloaded from Partnersonline website or you can contact your local TSS office to submit you them. (Refer to the Standard Inspection Packet (SIP) Factory Education section) SH/SL only - Measurement tape • An accurate measurement tape is an essential tool for conducting the measurement audit and to verify Product specifications. • For Softlines, Target recommends the use of a fibreglass measurement tape. • All Target specifications are in inches, the tape should measure in inches. • The measurement tape should be checked (monthly or more frequently) to ensure the tape measure has not stretched and is still precise.

Inspection Station or Room •

The Inspection Station or Room should be: o Clean o In a location with sufficient lighting o Off the production floor and away from foot traffic o Have enough room around the table for the inspector to place the units to be inspected and those units that have not been inspected • The table should be large enough to easily handle the merchandise that is being inspected Note: It is recommended that the table is neutral gray (Munsell N7 Grey) for best review of color consistency. Product Inspections 10 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Calculator - The factory will need a calculator to calculate the percentage of units to pull.

5. Booking a TCPS Inspection • Vendor/Factory needs to plan in advance for booking a TCPS inspection. • Vendor/Factory is requested to use the Vendor Inspection Request Form (VIRF) for booking an inspection.

• • • • • •

This form is available in POL or can be forward to you by your Vendor or your local TSS representative. All required fields must be completed and sent by email or by fax to your Local TSS inspection office. Appointments should be made at least 7 days prior to Inspection date. Inspections take place during business hours. NO Inspection will be conducted on weekends or national holidays. Any cancelled or re-scheduled inspections should be requested at least 3 working days prior by written notice. The Factory must have performed their internal DUPRO and/or FRI with a satisfactory result and records made available for TCPS inspector to review.

Note: If any booked inspection can not take place, the TCPS team should be notified immediately.

Note: Charges will be assessed for: • Being unprepared for a TCPS, Target or 3rd Party inspection. • Failure to provide access to any TCPS, Target or 3rd party representative exhibiting proper identification. • SIP phases not complete according to type of inspection. • Shipping products to Target without a passed TCPS FRI inspection.

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Hardgoods: Example for a Factory FRI Inspection

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Vendor “Tuscany Ceramic” is ready for their internal Final Inspection and has a Purchase Order of 10,000 Dinner Plates (100% packed in shipping cartons with complete packing list) Note: for FRI inspections the minimum requirement is 100% produced and 80% packed in shipping cartons. For DUPRO the available quantity is based on finished goods. Goods do not need to be floor ready in shipping cartons.

•

The inspector needs to determine the quantity of the sample pull size using the Target Sampling Plan Hardgoods grid against the available quantity. Target PO Quantity

•

For this Inspection the 80 plates must be pulled from the purchase order/cartons and inspected.

o o • •

No more than 4 Major defects will be accepted (AQL 2.5) No more than 6 Minor defects will be accepted (AQL 4.0)

The 80 plates must be pulled in proportion to color quantities of the Available PO Quantity The inspector will calculate the percentage of plates ordered per color against the available PO Quantity. Target PO Quantity

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• o o o

Calculating the Percentage of plates ordered by Color Color Green represents 10% of the total quantity available so the inspector will pull 10% of the total Sample pull qty (10% of 80= 8 plates) in this color. Color Blue represents 50% of the total quantity available so the inspector will pull 50% of the total Sample pull qty (50% of 80= 40 plates) in this color. Color Yellow represents 40% of the total available quantity so the inspector will pull 40% of the total sample pull qty (40% of 80=32 plates) in this color.

Total Sample pull 8 (Green) + 40 (Blue) + 32 (Yellow) = 80 pieces • •

The quantity of plates that need to be inspected and the quantity per color, the inspector must calculate the number of cartons to pull the units from. No more than 3 units per carton can be pulled. Inspector must divide the each DPCI pull per 3 to obtain the number of cartons needed.

Pull 3 cartons (Green) + 14 cartons (Blue) + 11 cartons (Yellow) = 28 cartons Note: If each carton contains 1 unit, then pull one carton per DPCI quantity. If each carton contains 2 units, then divide quantity per 2 of the sample pull. Note: Carton Audit is required during FRI inspections and can be only performed at DUPRO if the merchandise is available in cartons.

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• •

The inspector now knows that to perform the inspection 28 cartons must be pulled in order to get the 80 plates (8 plates in Green, 40 plates in Blue and 32 plates in Yellow). Inspector obtains the HG Product Inspection Form and completes it with initial information and sample quantity as indicated in the Resource Document.

•

Inspector pull cartons and verifies, during FRI only, that the total number of cartons available is the same as indicated in the Packing list.

•

Every carton should have an equal opportunity to be pulled during the carton audit. When selecting cartons, it’s important not to ignore those cartons difficult to reach. In the case pictured here, you can see the inspector is placing a sticker on the cartons to be pulled. He is selecting cartons on the bottom and middle, and not just selecting the cartons on the top and on the outside (which are easier to be pulled) After pulling the 28 cartons for the inspection, select one additional carton and perform the Drop Test. Before starting the test the inspector verifies carton selected is not damaged.

• •

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•

Perform the drop test in accordance with weight and height requirements.

Note: Information on Drop test procedure is available in Partnersonline • • •

•

Record on the Product Inspection Form the results of the Drop test (pass or fail) Using the quantity of cartons pulled in the previous step (28 cartons) select one carton at DPCI level. Of these 3 cartons inspect shipping cartons using the information on the PO or packing list as well as the shipping and packing information that is part of the SIP (as applicable). Using this information check or confirm the following: o Check for damaged cartons o Check carton labels and markings o Check carton measurements o Check carton weight for two-man lift cartons (place on scale at factory) o Check case labeling o Confirm colors, sizes, and quantity of assortment in cartons are correct o Confirm country of origin matches product labels o Confirm packing method is according to Floor Ready Requirements or Targets requirements For any defects found during the carton audit must be classified using the DCL and entered in the Product Inspection Form

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Carton inspection results • PASS – If no errors found, continue with inspection • FAIL – If one error is found, the carton audit fails. • When the carton audit fails, the inspection continues but the vendor/factory must reinspect 100% of cartons, correct all issues and re conduct a 2nd carton audit and reperform the carton audit as before. • Complete the carton audit inspection results in the Product Inspection Form

•

Once carton audit is completed the inspector must select the samples (80) for the Workmanship Audit from all cartons previously selected (3 units per carton).

Best Practices • For DUPRO inspection, if merchandise is not in cartons, the inspector should pull samples in a manner to reach a good representation of the entire lot • Spread all units divided per color on a table. This way you will be able to verify the consistency of color.

Currently there is no standardized measurement audit process for Hardgoods defined, but a measurement audit should be conducted for any Hardgoods product that has measurements and tolerances indicated on the Vendor or Target Product Specification or Retail Packaging. Product Inspections 16 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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The workmanship audit reviews all samples (plates) pulled (80) against: spec for construction, color standards, elements of the SIP, functionality and safety requirements. The method of workmanship should be consistent for each product and, if applicable, should cover the entire product both inside and out (if applicable). The inspector must verify:

Check inside and outside of item for: • Any construction technique affecting the performance of the product • Crooked and/or incorrect shape • Soil, oil, dirt marks • Scratches, cracks, chipped parts

Check all working components and functionality of the product: • Leakage • Stability • Warping • Moving Parts • Open and Close • Intended Function • Moisture content

Check • If applicable weight of product against specifications • Volume • Dimensions • Unit of Measurement • Quantity of Units

Check all labels-hang tags for: • Correct position • Missing or incorrect RN# information, Size, Country of Origin against test reports/SIP • Care instructions and warning information against test reports/SIP • Distribution Statements

Product Inspections 17 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Check/verify Samples against: • Components of the SIP • Approved (Red Seal) sample • Pre-Production (Yellow Seal) sample • Target specifications and requirements (Minimum Standards)

Check colors: • Against approved color standards (if applicable) for consistency in the sample pull lot. • Verify finish quality against approved swatches and approved sealed samples

Check approved trim suppliers and packing method. • Artwork • Hang Tags • Price Labels

•

If applicable divide defects per category and keep them in a separate area of the inspection room. Use stickers to identify defects found on an item.

•

All areas of a unit must be evaluated. Don’t stop at the first defect found on a unit. Complete the workmanship audit based on the product category on the unit and record, if applicable, multiple defects on the same unit. Note: This is very important to understand the overall quality level of the product, helps to identify trends and give a clear picture of the correction action need.

•

You must never stop the workmanship audit even if the number of defects exceeds the acceptable level.

•

Once all units are inspected (80), complete the Workmanship Audit section of the form, entering all defects found and the result of the Workmanship Audit.

Product Inspections 18 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Note: All defects found on a component/unit must be noted on the product inspection form, but only one score point per defect category, Major and Minor, per unit is calculated. •

Use the Target Sampling Plan to verify if the Workmanship Audit is accepted or rejected. o The Workmanship Audit is rated acceptable if the score of the Major and Minor defective units is less than or equal to the accept level o The Workmanship Audit is failed if the score of Major or Minor defective units is greater than the accept level.

Example during the Workmanship audit the following Defects were found: Three units chipped - 3 Major defects

Four units with variation in color - 3 Major defects

Two units with Pin holes - 2 Major defects-Principal viewing area

Total Major defects found during the workmanship audit

8

Product Inspections 19 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Workmanship Audit fails • •

Complete the rest of the required information in the Product Inspection Form. Insert test #, Test report date and results of 3rd party testing Lab.

•

Enter the Inspection Result (Carton Audit + Measurement Audit, if applicable and Workmanship Audit)

Note: Inspection is rated acceptable only if Carton, Measurement and Workmanship Audits pass, with satisfactory testing results.

•

Sign and date the Product Inspection Form and insert in the SIP. TCPS will request to verify your internal inspection report before proceeding with their inspection.

If Inspection Passes • Submit the Vendor Inspection Request Form (VIRF) to your local TCPS office and prepare for the TCPS inspection. • If the inspection passed take note of the defects found and implement a corrective action plan for the future orders. Defective units found during our internal inspection should be segregated and replaced with acceptable quality. • Best Practice If the overall inspection passes, the inspectors should recognize a defect trend in the performed inspection that could affect the results of the TCPS inspection and/or overall quality of the merchandise. Any defect code or point of measure found during the inspection that is repetitive, should be considered suspect and may present a risk to the overall quality. In these cases it is highly recommended to perform a detailed investigation.

Product Inspections 20 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

If inspection Fails • The Factory Inspector must review with Factory QA Management all defective units found during the inspection, implement a corrective action Plan and insert in the comment section of the inspection form the corrective action taken. • Factory should determine and understand: o Why the inspection failed o The root causes o If the problems are correctable o What is the overall impact on the order in terms of Quantity and On-time delivery o What can be done to ensure the problem/defects do not re-occur in a future production • All cartons must be re opened and 100% re-inspected. Corrective Action must be implemented immediately in production line in the case of DUPRO and for future orders. Once defective units have been either repaired or removed from the order, the inspector must perform a 2nd inspection before scheduling a TCPS inspection, obtaining a satisfactory result. • All second quality goods should be quarantined, making sure they are isolated and records should be available for TCPS review. • If after having gone through all possible options and solutions, the factory is not able to correct the defect/issue, the production must be stopped. Immediately contact your local TSS office and provide full detailed information (size, color, quantities & impact on delivery dates) on the defect/issue that could not be corrected.

Product Inspections 21 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Softhome: Example for a Towel Factory FRI Inspection

•

Vendor “Happy Towels” is ready for their internal Final Inspection; they have a Purchase Order of 10,000 towel sets (100% packed in shipping cartons with complete packing list). Each set contains one Hand towel (20x30), one Wash towel (13x13) and one Bath towel (30x56) Note: for FRI inspections the minimum requirement is 100% produced and 80% packed in shipping cartons. For DUPRO the available quantity is based on finished goods. Goods do not need to be floor ready in shipping cartons

•

The inspector needs to determine the quantity of the sample pull size using the Target Sampling Plan grid Softhome against the available quantity. Target PO Quantity Towel Set of sets Towels Available Quantity

•

•

Red

Pink

White

Blue

Total

1000

4000

2000

1000

2000

10.000

For this Inspection 80 towel sets must be pulled from the purchase order/cartons and inspected.

o o •

Green

No more than 4 Major defects will be accepted No more than 4 Minor defects will be accepted

The 80 towel sets must be pulled in proportion to colors quantities of the Available PO Quantity The inspector will calculate the percentage of sets ordered per color against the available PO Quantity. Target PO Quantity Towel Set of sets Towels

Green

Red

Pink

White

Blue

Total

Available Quantity

1000

4000

2000

1000

2000

10.000

% of Total Available Quantity

10%

40%

20%

10%

20%

100%

# of pieces to pull

8

32

16

8

16

80

Product Inspections 22 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• o o o • •

Calculating the Percentage of sets ordered by Color Colors Green and White represent 10% of the total quantity available so the inspector will pull 10% of the Sample pull (10% of 80= 8 sets) in these colors. Colors Pink and Blue represent 20% of the total quantity available so the inspector will pull 20% of the Sample pull (20% of 80= 16 sets) in these colors. Color Red represents 40% of the total available quantity so the inspector will pull 40% of the sample pull (40% of 80=32 sets) in this color.

Established the quantity of sets that need to be inspected and the quantity per color, the inspector must calculate the number of cartons to pull the units from. No more than 3 units per carton can be pulled. Inspector must divide the each DPCI pull per 3 to obtain the number of cartons needed. Towel Set sets of Towels

Green

Red

Pink

White

Blue

Total

Available Quantity

1000

4000

2000

1000

2000

10.000

% of Total Available Quantity

10%

40%

20%

10%

20%

100%

# of pieces to pull

8

32

16

8

16

80

Number of cartons to pull

3

11

6

3

6

29

Pull 3 cartons (Green) + 3 cartons (White) + 6 cartons (Pink) + 6 cartons (Blue) + 11 cartons (Red) = 29 cartons Note: If each carton contains 1 unit, then pull one carton per DPCI quantity. If each carton contains 2 units, then divide quantity per 2 of the sample pull. Note: Carton Audit is required during FRI inspections and can be only performed at DUPRO if the merchandise is available in cartons.

Product Inspections 23 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• •

The inspector now knows that to perform the inspection 29 cartons must be pulled and 80 towels sets (8 towel sets in Green and White, 16 towel sets in Blue and Pink and 32 towel sets in Red) will be inspected from those cartons. Inspector obtains the SH Product Inspection Form and completes it with initial information and sample quantity as indicated in the Resource Document.

•

Inspector pull cartons and verifies, during FRI only, that the total number of cartons available is the same as indicated in the Packing list.

•

Every carton should have an equal opportunity to be pulled during the carton audit. When selecting Cartons, it’s important not to ignore those cartons difficult to reach. In the case pictured here, you can see the inspector is placing a sticker on the cartons to be pulled. He is selecting cartons on the bottom and middle, and not just selecting the cartons on the top and on the outside (which are easier to be pulled) Using the quantity of cartons pulled in the previous step (29) select one carton at DPCI level. Of these 5 cartons inspect shipping cartons using the information on the PO or packing list as well as the shipping and packing information that is part of the SIP (as applicable). Using this information check or confirm the following: o Check for damaged cartons o Check carton labels and markings o Check carton measurements o Check carton weight for two-man lift cartons (place on scale at factory) o Check case labeling o Confirm colors, sizes, and quantity of assortment in cartons are correct o Confirm country of origin matches product labels o Confirm packing method is according to Floor Ready Requirements or clients packing method

• • •

Product Inspections 24 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

For any defects found during the carton audit must be classified using the DCL and entered in the inspection form

Carton inspection results • PASS – If no errors found, continue with inspection • FAIL – If one error is found, the carton audit fails. • When the carton audit fails, the inspection continues but the vendor/factory must reinspect 100% of cartons for the DPCI that failed and correct all issues and re conduct a 2nd carton audit on that specific DPCI pulling 10 cartons. • Complete the carton audit inspection results in the inspection form using the Resource document

•

Once carton audit is completed the inspector must select the samples (80) for the Measurement and Workmanship Audit from all cartons previously selected (3 units per carton).

Product Inspections 25 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Best Practices • For DUPRO inspection, if merchandise is not in cartons, the inspector should pull samples in a manner to reach a good representation of the entire lot • Spread all units divided per size and color on a table. This way you will be able to verify the consistency of color

• •

The measurement audit reviews samples against the spec to ensure Points Of Measure (POM) are within tolerance. Use the following Sample Plan for measurement audit to calculate the quantity of towel sets to measure. Target Measurement Sample Plan Sample Pull Size 32 50 65 80

•

• • •

Accept on AQL 6.5 Major Defects 5 7 8 10

Accept on AQL 6.5 Minor Defects 5 7 8 10

The total minimum pull is 32 pieces or a minimum of one (1) piece per DPCI. o If there are more than 32 DPCIs, the pull size will be 50. o If there are more than 50 DPCIs, the pull size will be 65. o If there are more than 65 DPCIs, the pull size will be 80. o Maximum pull size is 80 pieces Set of Towels

Green

Red

Pink

White

Blue

Total

Available Quantity

1000

4000

2000

1000

2000

10.000

The Inspector based on the purchase order quantity, size/color (DPCI level), pulls a minimum of one set per color per size (5) from the units pulled from the cartons. Then to reach the minimum sample pull of 32 the inspector will need to select extra units. When pulling the extra units to reach the appropriate pull size the inspector should use a weighted average and pull samples across all sizes and colors (DPCI). Using the appropriate method of measure, the inspector evaluates all points of measure (POM) of each component of the set against the specification sheet and records the results on the measurement worksheet.

Product Inspections 26 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• • •

For Softhome review www.partnersonline.com>Product Development>Requirements and Procedures>Product Development Quality Assurance>Hardlines Product Development>Method of Measure. For DUPRO – Inspector must evaluate all Points Of Measure (POM) indicated in the specification sheet/sketches. For FRI - The inspector must evaluate the Key Points Of Measure (KPOM) indicated in the specification sheet/sketches and any POM that faced issues during the Dupro inspection.

Note: if no KPOM are indicated measure all POM o If a POM is out of Tolerance this is considered a Minor defect and counts as 1 pt o If a POM is out of Tolerance and jumps into the next size range this is considered a Major defect and counts as 1 pt. • •

One unit cannot have more than a 1 pt score for minor and 1 pt score for major, but all POM must be recorded on the measurement worksheet After all components of each towel set (Bath, Hand and Wash) have been measured and recorded in the measurement worksheet, the inspector must calculate if the measurement audit passes or fails. Use the instructions on the measurement worksheet to make this determination.

Best Practice - At the same time of the measurement audit, the inspector should complete the workmanship audit portion of the inspection for the pieces that are being reviewed. •

Complete the measurement section of the Product Inspection Form with all needed information and insert the result of the measurement audit. Attach to the Product Inspection Form to the Measurement worksheet.

•

Proceed with the workmanship audit.

Note: Even if the Measurement audit fails, you must to proceed and complete the Workmanship audit

•

The workmanship audit reviews all samples (sets) pulled (80) against: spec for construction, color standards, elements of the SIP file, functionality and safety requirements. The method of workmanship should be consistent for each product and, if applicable, should cover the entire product both inside and out.

Product Inspections 27 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• The inspector must verify: Check inside and outside of item for: • Any construction technique affecting the performance of the product • Broken and/or skipped stitches • Crooked and/or incorrect stitch type • SPI (stitch per inch) • Drill holes, needle holes • Soil, oil, dirt marks Check all working components: • Zippers work properly to ensure they are in proper working condition: • Buttons fit into button holes • Snaps open and close correctly

Check all labels-hang tags for: • Correct position • Missing or incorrect RN# information, Size, Country of Origin, Fiber Content, (against test reports) • Care instructions (against test reports) • DCPI/Factory ID # label (if applicable). Check/verify against: • Components of the SIP • Approved (Red Seal) sample • Pre-Production (Yellow Seal) sample • Target specifications and requirements (Minimum Standards) • Weight

Check security of all attachments if applicable: • All accessories must be exercised/tested to ensure secure attachment Note: Target has a zero tolerance policy towards safety issues (even if acceptable testing results are available)

Product Inspections 28 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Check colors: • Against approved color standards (if applicable), Shade bands, first dye lots approvals for consistency in the sample pull lot. • verify hand feel-fabric quality against approved swatches and approved sealed samples • • •

Check approved trim suppliers and packing method. Hang Tags Price labels

•

If product is required to be needle detected during production (Children’s and all Softhome products) all units of the sample pull must pass thru the needle detector. Note: Target has a zero tolerance policy towards safety issues. With one unit found contaminated the inspection fails Best Practice - If applicable divide defects per category and keep them in a separate area of the inspection room. Use stickers to identify defects found on an item. •

• •

All areas of a unit must be evaluated. Don’t stop at the first defect found on a unit. Complete all steps of the workmanship audit on the unit and record, if applicable, multiple defects on the same unit. This is very important to understand the overall quality level of the product, helps to identify trends and gives a clear picture of the correction action need. You must never stop the inspection/audit even if the number of points/defects exceeds the acceptable level. Once inspected all units (80), complete the Workmanship Audit section of the Product Inspection Form, entering all defects found and the result of the Workmanship Audit.

Note: All defects found on a component/unit must be noted on the inspection form, but only one score point per defect category per unit is calculated. Product Inspections 29 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Use the Target Sampling Plan to verify if the Workmanship Audit is accepted or rejected. o The Workmanship Audit is rated acceptable if the score of defective units adds up to a number less than or equal to the accept level o The Workmanship Audit is failed if the score of defective units is greater than the accept level.

Example during the Workmanship audit the following Defects were found: One unit with irregular shape - 1 Major defect

Three units with holes - 3 Major defects

Two units with shading issues - 2 Major defects

Two units with soil (oil) marks - 2 Major defects

Total Major defects found during the workmanship audit

8

Product Inspections 30 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Workmanship Audit fails • •

Complete the rest of the required information in the Product Inspection Form. Insert test #, Test report date and results of 3rd party testing Lab.

•

Enter the Inspection Result (Carton Audit + Measurement Audit & Workmanship Audit)

Note: Inspection is rated acceptable only if Carton, Measurement and Workmanship Audits pass, with satisfactory testing results.

•

Sign and date the Product Inspection Form and insert in the SIP. TCPS will request to verify your internal inspection report before proceeding with their inspection.

If Inspection Passes • Submit the Vendor Request Inspection Form (VIRF) to your local TCPS office and prepare for the TCPS inspection. • Even if the inspection passed take note of the defects found and implement a corrective action plan for the future orders. Defective units found during our internal inspection should be segregated and replaced with acceptable quality. • Best Practice If the overall inspection passes, the inspectors should recognize a defect trend in the performed inspection that could affect the results of the TCPS inspection and/or overall quality of the merchandise. Any defect code or point of measure found during the inspection that is repetitive, should be considered suspect and may present a risk to the overall quality. In these cases it is highly recommended to perform a detailed investigation.

Product Inspections 31 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

If inspection Fails • The Factory Inspector must review with Factory QA Management all defective units found during the inspection, implement a corrective action Plan and insert in the comment section of the inspection form the corrective action taken. • Factory should determine and understand: o Why the inspection failed o The root causes o If the problems are correctable o What is the overall impact on the order in terms of Quantity and On-time delivery o What can be done to ensure the problem/defects do not re-occur in a future production • All cartons must be re opened and 100% re-inspected. Corrective Action must be implemented immediately in production line in the case of Dupro and for future orders. Once defective units have been either repaired or removed from the order, the inspector must perform a 2nd inspection before scheduling a TCPS inspection, obtaining a satisfactory result. • All second quality goods should be quarantine, making sure they are isolated and records should be available for TCPS review. • If after having gone through all possible options and solutions, the factory is not able to correct the defect/issue, the production must be stopped. Immediately contact your local TSS office and provide full detailed information (size, color, quantities & impact on delivery dates) on the defect/issue that could not be corrected.

Product Inspections 32 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Softlines: Example for a Factory internal FRI Inspection

•

Factory “Smart Garment” is ready for their internal Final Inspection; they have a Purchase Order of 10,000 Men’s Jackets (100% packed in shipping cartons with complete packing list) Note: for FRI inspections the minimum requirement is100% produced and 80% packed in shipping cartons. For DUPRO the available quantity is based on finished goods. Goods do not need to be floor ready in shipping cartons.

•

The inspector needs to determine the quantity of the sample pull size using the Target Sampling Plan grid Softlines against the available quantity. Target PO Quantity Size

•

L

XL

Total

1000 2000 2000 1000

6000

Navy Quantity

1000 1000 1000 1000

4000

2000 3000 3000 2000 10,000

For this Inspection 80 pieces must be pulled from the purchase order/cartons and inspected.

o o •

M

Military Green Quantity

PO Quantity

•

S

No more than 4 Major defects will be accepted No more than 4 Minor defects will be accepted

The 80 pieces must be pulled in proportion to Size and Color Quantities from the Available PO Quantity The inspector will calculate the percentage of each size and color against the total Available PO Quantity (10,000 pieces)

Product Inspections 33 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

NAVY Size

S

Navy Available PO Quantity

• o

o

M

L

XL

Total

1000 1000 1000 1000 4000

% of Total Available PO Quantity

10%

10%

10%

10%

40%

Navy # of pieces to pull

8

8

8

8

32

Calculating the Percentage by Size and Color, Navy against PO qty by size Sizes S, M, L & XL represent 10% in each size of the total quantity available so the inspector will pull 10% of the Sample pull (10% of 80= 8 pieces for each size). Total Navy pulled is 32 pieces Military Green Size Military Green Available PO Quantity

• o o o

•

M

L

XL

Total

1000 2000 2000 1000 6000

% of Total Available PO Quantity

10%

20%

20%

10%

40%

Military Green # of pieces to pull

8

16

16

8

48

Calculating the Percentage by Size and Color – Military Green against PO qty Sizes S & XL represent 10% in each size of the total quantity available so the inspector will pull 10% of the Sample pull (10% of 80= 8 pieces for sizes S & XL) Sizes M & L represent 20% in each size of the total quantity available so the inspector will pull 20% of the Sample pull (20% of 80= 16 piece for sizes M & L) Total Military Green pulled is 48 pieces

Total Sample Pull

•

S

32 (Navy) + 48 (Military Green) = 80 pieces

After the quantity of pieces that need to be inspected per color/size, the inspector must calculate the number of cartons to pull the units from. No more than 3 units per carton can be pulled. Inspector must divide each DPCI (size/color) pull qty by 3 to obtain the number of cartons needed.

Product Inspections 34 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Size

S

M

L

XL

Navy # of pieces to pull

8

8

8

8

Number of Cartons to pull

3

3

3

3

Size

S

M

L

XL

Military Green # of pieces to pull

8

16

16

8

Number of cartons to pull

3

6

6

3

Pull 30 cartons (3 cartons each for sizes S, M, L & XL in Navy, 3 cartons each for sizes S & XL and 6 cartons each for sizes M & L in Military Green) Note: If each carton contains 1 unit, then pull one carton per DPCI quantity. If each carton contains 2 units, then divide quantity per 2 of the sample pull. Note: Carton Audit is required during FRI inspections and can be only performed at DUPRO if the merchandise is available in cartons. • •

The inspector now knows that to perform the inspection 30 cartons must be pulled and 80 units (8 per size in Navy and S & XL in Military Green and 16 per size M & L) will be inspected from those cartons. Inspector obtains the SL Product Inspection Form and completes it with initial information and sample quantity as indicated in the Resource Document.

Product Inspections 35 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Inspector pull cartons and verifies, during FRI only, that the total number of cartons available is the same as indicated in the Packing list.

•

Every carton should have an equal opportunity to be pulled during the carton audit. When selecting Cartons, it’s important not to ignore those cartons difficult to reach. In the case pictured here, you can see the inspector is placing a sticker on the cartons to be pulled. He is selecting cartons on the bottom and middle, and not just selecting the cartons on the top and on the outside (which are easier to be pulled) Using the quantity of cartons pulled in the previous step (30) select one carton at DPCI (size/color) level. Of these 8 cartons inspect shipping cartons using the information on the PO or packing list as well as the shipping and packing information that is part of the SIP (as applicable). Using this information check or confirm the following: o Check for damaged cartons o Check carton labels and markings o Check carton measurements o Check carton weight for two-man lift cartons (place on scale at factory) o Check case labeling o Confirm colors, sizes, and quantity of assortment in cartons are correct o Confirm country of origin matches product labels o Confirm packing method is according to Floor Ready Requirements or clients packing method For any defects found during the carton audit must be classified using the SL DCL and entered in the inspection form

• • •

•

Product Inspections 36 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Carton inspection results • PASS – If no errors found, continue with inspection • FAIL – If one error is found, the carton audit fails. • When the carton audit fails, the inspection continues but the vendor/factory must reinspect 100% of cartons for the DPCI that failed and correct all issues and re conduct a carton 2nd audit on that specific DPCI pulling 10 cartons. • Complete the carton audit inspection results in the Product Inspection Form using the Resource document

•

Once carton audit is completed the inspector must select the samples (80) for the Measurement and Workmanship Audit from all cartons previously selected (3 units per carton).

Best Practices • For DUPRO inspection, if merchandise is not in cartons, the inspector should pull samples in a manner to reach a good representation of the entire lot • Spread all units divided per size and color on a table. If units are on a hanger place on a rack. This way you will be able to verify the consistency of color

Product Inspections 37 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• •

The measurement audit reviews samples against the spec to ensure Points Of Measure (POM) are within tolerance. The inspector uses the following Sample Plan for the measurement audit to calculate the quantity of units to pull to measure. Target Measurement Sample Plan Sample Pull Size

Accept on AQL 6.5 Major Defects 5 7 8 10

32 50 65 80

•

The total minimum pull is 32 pieces or a minimum of one (1) piece per DPCI. o If there are more than 32 DPCIs, the pull size will be 50. o If there are more than 50 DPCIs, the pull size will be 65. o If there are more than 65 DPCIs, the pull size will be 80. o Maximum pull size is 80 pieces Size

• •

S

M

L

XL

Total

Military Green Quantity

1000 2000 2000 1000

6000

Navy Quantity

1000 1000 1000 1000

4000

PO Quantity

•

Accept on AQL 6.5 Minor Defects 5 7 8 10

2000 3000 3000 2000 10,000

Inspector based on the purchase order quantity, size/color, pulls a minimum of one piece per color per size (8pcs) from the units pulled from the cartons. To reach the minimum sample pull of 32 the inspector will need to select extra pieces. When pulling the extra units to reach the appropriate pull size the inspector should use a weighted average and pull samples across all sizes and colors (DPCI). Using the appropriate method of measure, the inspector evaluates all points of measure (POM) against the specification sheet and records the audit on the measurement worksheet.

Product Inspections 38 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• • •

• •

For Targets Softlines Method of Measure review www.partnersonline.com>Product Development>Requirements and Procedures>Softlines Product Development>Method of Measure. For DUPRO – Inspector must evaluate all Points Of Measure (POM) indicated in the specification sheet/sketches. For FRI - The inspector must evaluate the all Key Point Of Measure (KPOM) indicated in the specification sheet/sketches/measurement Worksheet information and any POM that were issues from DUPRO. o If a POM is out of Tolerance this is considered a Minor defect and counts as 1 pt o If a POM is out of Tolerance and jumps into the next size range this is considered a Major defect and counts as 1 pt. One unit cannot have more than a 1 pt score for minor and 1 pt score for major, but all POM must be recorded on the measurement worksheet After all pieces have been measured and recorded in the measurement worksheet, the inspector must calculate if the measurement audit passes or fails. Use the instructions on the measurement worksheet to make this determination.

Best Practice - At the same time of the measurement audit, the inspector should complete the workmanship audit portion of the inspection for the pieces that are being reviewed. •

Complete the measurement section of the Product Inspection Form with all needed information and add the result of the measurement audit

Note: Even if the Measurement audit fails, you must to proceed and complete the Workmanship audit

•

The workmanship audit reviews all samples pulled (80) against: spec for construction, color standards, elements of the SIP, assembly, functionality and safety requirements. The method of workmanship should be consistent for each product and, if applicable, should cover the entire product both inside and out.

Product Inspections 39 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

The inspector must verify: Check inside and outside of item for: • Any construction technique affecting the performance of the product • Broken and/or skipped stitches • Crooked and/or incorrect stitch type • SPI (stitch per inch) requirements • Drill or dart holes • Needle holes and/or needle chew • Soil, oil, dirt marks Check all working components: • Zippers work properly to ensure they are in proper working condition: • Buttons fit into button holes • Snaps open and close correctly Note: If the product is on a hanger, it should be removed from the hanger during inspection. Check all labels-hang tags for: • Correct position • Missing or incorrect RN# information, Size, Country of Origin, Fiber Content, (against test reports) • Care instructions (against test reports) • DCPI/Factory ID # label. Check/verify against: • Components of the SIP • Approved (Red Seal) sample • Pre-Production (Yellow Seal) sample • Target specifications and requirements (Minimum Standards)

Check security of all attachments: • All accessories must be exercised/tested to ensure secure attachment Note: Target has a zero tolerance policy towards safety issues (even if acceptable testing results are available)

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Check colors: • Against approved color standards (if applicable), first dye lots approvals for consistency in the sample pull lot and (if applicable) approved shade band. • Verify hand feel-fabric quality against approved swatches and approved sealed samples • • •

Check approved trim suppliers and packing method (floor ready requirements) Hang Tags Price Labels

•

If product is required to be needle detected during production (Children’s products) all units of the sample pull must pass thru the needle detector. Note: Target has a zero tolerance policy towards safety issues. With one unit found contaminated the inspection fails

Best Practice - If applicable divide defects per category and keep them in a separate area of the inspection room. Use stickers to identify defects found on an item. • All areas of a unit must be evaluated. Don’t stop at the first defect found on a unit. Complete all steps of the workmanship audit on the unit and record, if applicable, multiple defects on the same unit. This is very important to understand the overall quality level of the product, helps to identify trends and gives a clear picture of the correction action need. • You must never stop the inspection/audit even if the number of points/defects exceeds the acceptable level. • Once inspected all units (80), complete the Workmanship section of the Product Inspection Form, entering all defects found and the result of the Workmanship Audit.

Note: All defects found on a garment/unit must be noted on the product inspection form, but only one score point per defect category, Major & Minor, per unit is calculated.

Product Inspections 41 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example 1: one unit is found with two minor defects. Inspector will record both defects but will score the unit 1.pt in the major R303/R502

1

1

Uneven cuffs/Pocket size

Example 2: one unit is found with one major defect and one minor defect. Inspector will score 1.0 in each defect category F001/R502

•

1

1

1

Hole in yarn/Pocket size

Use the Target Sampling Plan to verify if the Workmanship Audit is accepted or rejected o The Workmanship Audit is rated acceptable if the score of defective units adds up to a number less than or equal to the accept level o The Workmanship Audit is failed if the score of defective units is greater than the accept level.

Example during the Workmanship audit the following Defects were found: Three garments with Non uniform shaped pockets - 3 Major defects

Three garments with broken stitches – 3 Major defects

One garment with puckering – 1 Major defect

Product Inspections 42 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Total Major defects found during the Workmanship Audit

7

Workmanship Audit fails • Complete the rest of the required information in the Product Inspection Form. • Insert test #, Test report date and results of 3rd party testing Lab.

•

Enter the Inspection Result (Carton Audit + Measurement Audit & Workmanship Audit)

Note: Inspection is rated acceptable only if Carton, Measurement and Workmanship Audits pass, with satisfactory testing results.

•

Sign and date the Product Inspection Form and insert in the SIP. TCPS will request to verify your internal inspection report before proceeding with their inspection.

If Inspection Passes • Submit the Vendor Inspection Request Form (VIRF) to your local TCPS office and prepare for the TCPS inspection. • Even if the inspection passed take note of the defects found and implement a corrective action plan for the future orders. Defective units found during the inspection should be segregated and replaced with acceptable quality. • Best Practice If the overall inspection passes, the inspectors should recognize a defect trend in the performed inspection that could affect the results of the TCPS inspection and/or overall quality of the merchandise. Any defect code or point of measure found during the inspection that is repetitive, should be considered suspect and may present a risk to the overall quality. In these cases it is highly recommended to perform a detailed investigation. Product Inspections 43 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

If inspection Fails • The Factory Inspector must review with Factory QA Management all defective units found during the inspection, implement a corrective action Plan and insert in the comment section of the inspection form the corrective action taken. • Factory should determine and understand: o Why the inspection failed o The root causes o If the problems are correctable o What is the overall impact on the order in terms of Quantity and On-time delivery o What can be done to ensure the problem/defects do not re-occur in a future production • All cartons must be re opened and 100% re-inspected. Corrective Action must be implemented immediately in production line in the case of Dupro and for future orders. Once defective units have been either repaired or removed from the order, the inspector must perform a 2nd inspection before scheduling a TCPS inspection, obtaining a satisfactory result. • All second quality goods should be quarantine, making sure they are isolated and records should be available for TCPS review. • If after having gone through all possible options and solutions, the factory is not able to correct the defect/issue, the production must be stopped. Immediately contact you’re your Local TSS office and provide full detailed information (size, color, quantities & impact on delivery dates) on the defect/issue that could not be corrected.

Product Inspections 44 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Ready To Assemble (RTA): Example for a Factory FRI Inspection

•

Vendor “Nice Table “has a Purchase Order of 9.000 Console Tables ready for their internal FINAL inspection (100% packed in shipping cartons with complete packing list) Note: for FRI inspections the minimum requirement is 100% produced and 80% packed in shipping cartons. For DUPRO the available quantity is based on finished goods. Goods do not need to be floor ready in shipping cartons.

•

The inspector needs to determine the quantity of units to inspect using the RTA Target Sampling Plan RTA grid against the available quantity. Target PO Quantity

Available Quantity

• • •

•

Console Table

Total

9000

9.000

For this Inspection 32 units (Console tables) must be pulled from the purchase order/cartons and inspected. Due to the unique packing method of RTA products the inspector must pull 32 Cartons Inspector pull cartons and verifies, during FRI only, that the total number of cartons available is the same as indicated in the Packing list.

Every carton should have an equal opportunity to be pulled during the carton audit. When selecting Cartons, it’s important not to ignore those cartons difficult to reach. In the case pictured here, you can see the inspector is placing a sticker on the cartons to be pulled. He is selecting cartons on the bottom and middle, and not just selecting the cartons on the top and on the outside (which are easier to be pulled)

Product Inspections 45 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• •

• • •

Once pulled all needed cartons (32) for the inspection, select one Carton and perform the Drop Test Drop Test - before starting the test the inspector verifies carton selected is not damaged

Perform the drop test in accordance with weight and height requirements. Note information on Drop test procedure is available in Partnersonline Record on the inspection report the results of the Drop test (pass or fail) Once performed the Drop test Inspect all shipping cartons left (31) using the information on the PO or packing list as well as the shipping and packing information that is part of the SIP (as applicable). Using this information check or confirm the following: o Check for damaged cartons o Check carton labels and markings o Check carton measurements o Check carton weight for two-man lift cartons (place on scale at factory) o Check case labeling o Confirm country of origin matches product labels o Confirm packing method is according to transit test report

Product Inspections 46 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

For any defects found during the carton audit must be classified using the RTA DCL and entered in the inspection form

Currently there is no standardized measurement audit process for Hardgoods defined, but a measurement audit should be conducted for any Hardgoods product that has measurements and tolerances indicated on the Vendor or Target product specification.

•

The inspector conducts the workmanship audit on all components/units from the selected cartons. Open one carton at a time and inspect the components of that unit/product.

Check components against SIP approved elements (if applicable): • Approved material (hardware) • Item set up form or Vendors generated Specifications • Labels (country of origin, warning label, ect) • Approved samples (Red and Yellow) Check: • Number of components, parts, hardware, etc against the assembly instructions • Component information stickers against assembly instructions • Measurements and Shape of components (if applicable)

Product Inspections 47 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Check components for: • Workmanship defects; scratches, dents, cracks etc • Shading between components and approved shade band • Poor finish of surface, for sanding or bubbling defects etc • Sharp and rough edges etc Check: • Moister content. Tolerance based of product category and testing protocols (indoor or outdoor)

•

• •

All areas of a single component must be evaluated. Don’t stop at the first defect found. Complete all steps of the workmanship audit on each component of the product and record, if applicable, multiple defects on the same component/product. This is very important to understand the overall quality level of the product. Helps to identify trends and gives a clear picture of the correction action needed. You must never stop the workmanship audit even if the number of points/defects exceeds the acceptable level. Once inspected all units (32) of the workmanship audit, complete the Workmanship section of the Product Inspection Form, entering all defects found using the RTA DCL.

Assembly Audit • Based the on the assemble sampling plan the inspectors pulls, from the workmanship audit, the indicated quantity to perform the assembling audit

• • •

Eight tables need to be assembled. Using the assembly instructions the inspector assembles one unit at the time. Once assembled the unit the inspector checks for: o Cracks formed during assembling phase. o Screws pointing out. o Uneven or gaps between assembled components. o Uneven surfaces or sharp/rough edges. etc

Product Inspections 48 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

•

The inspector must verify: o Measurements of the assemble unit against assembled measurements indicate on the packaging or if applicable Vendors Generate Specifications. o All function and/or operational areas should be tested. ƒ Draws should open smoothly and close properly, Locks and key should function as intended, etc o Unit should be place on top of a glass surface to verify its stability (if applicable due to size) o Once assembled all units these should be lined up side by side for comparison of color, height and construction against the approved samples (Red and Yellow). Using the RTA DCL the inspector records all the defects found in the Product Inspection Form.

Note: The maximum points a ‘unit’ can receive is 1.0 i.e. unit inspected receives two major (1.0) points and one minor (0.5) point; the total given to that unit is 1.0 not 2.5. But two or more minors on each unit is counted as 1.0 point, which is determined by severity of the defects. •

Using the Sampling Plans the inspector determines if the inspection (Carton, Workmanship and Assemble Audit) has passed or fails.

Note: there is a zero tolerance during the assemble audit for Mal function, not operational as intended and/or assembling defects (unit cannot be assembled). Workmanship Audit – Maximum Major Defects Points Tolerance

•

The workmanship audit fails if the total major defects exceed the acceptable level. Workmanship Audit – Maximum Total Defects Points Tolerance

•

The workmanship Audit fails if the total defects points (minor plus major or only major) exceed the acceptable level. Note: Inspection is rated acceptable only if Carton, Workmanship and assembly Audit pass, with satisfactory testing results. • Enter inspection results in the inspection form.

Product Inspections 49 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

• •

Complete the rest of the required information in the Product Inspection Form. Insert test #, Test report date and results of 3rd party testing Lab (as applicable).

•

Sign and date the Product Inspection Form and insert in the SIP. TCPS will request to verify your internal inspection report before proceeding with their inspection.

If Inspection Passes • Submit the Vendor Inspection Request Form (VIRF) to your local TCPS office and prepare for the TCPS inspection. • Even if the inspection passed take note of the defects found and implement a corrective action plan for the future orders/production. Defective units found should be segregated and replaced with acceptable quality. • Best Practice If the overall inspection passes, the inspectors should recognize a defect trend in the performed inspection that could affect the results of the TCPS inspection and/or overall quality of the merchandise. Any defect code or point of measure found during the inspection that is repetitive, should be considered suspect and may present a risk to the overall quality. In these cases it is highly recommended to perform a detailed investigation. If inspection Fails • The Factory Inspector must review with Factory QA Management all defective units found during the inspection, implement a corrective action Plan and insert in the comment section of the inspection form the corrective action taken. • Factory should determine and understand: o Why the inspection failed o The root causes o If the problems are correctable o what is the overall impact on the order in terms of Quantity and On-time delivery o What can be done to ensure the problem/defects do not re-occur in a future production. • All cartons must be re opened and 100% re-inspected. Corrective Action must be implemented immediately in production line (in the case of Dupro and for future orders. Once defective units have been either repaired or removed from the order, the inspector must perform a 2nd inspection before scheduling a TCPS inspection obtaining a satisfactory result. • All second quality goods should be quarantine, making sure they are isolated and records should be available for TCPS review. • If after having gone through all possible options and solutions, the factory is not able to correct the defect/issue, the production must be stopped. Immediately contact your local TSS office and provide full detailed information (size, color, quantities & impact on delivery dates) on the defect/issue that could not be corrected. Product Inspections 50 of 50 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

TARGET’S NEEDLE & METAL CONTAMINATION POLICY AND PROCEDURE

Target’s Needle and Metal Contamination Policy and Procedure 1 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

TARGET’S NEEDLE AND METAL CONTAMINATION POLICY AND PROCEDURE

Overview Target’s policy and procedure is as follows: Needle and Metal Contamination Policy: The regulation put in place to ensure products which are manufactured and sold in the US market are free of any broken needle or metal parts which could cause an injury to a Target guest. Broken Needle Control Log and Metal Detection Procedure: Is the implementation of guidelines and rules to be followed to ensure the Policy is achieved. This is backed up with documentation and regular checks at the factory level.

Table of Contents 1. Needle and Metal Contamination Policy 2. Prevention 3. Detection 4. 9 Point Calibration Process

Objective • Understand Target’s Needle and Metal Contamination Policy and Procedure

Target’s Needle and Metal Contamination Policy and Procedure 2 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Needle and Metal Contamination Policy •

Target’s Needle and Metal Contamination Policy ensures that products sold in the US market are free of any broken needle or unwanted sharp metal parts. Target will only work with Vendors/Factories compliant with our policy.

•

Target’s Needle and Metal Contamination Policy is divided into two phases: o Prevention- Broken Needle Control Log procedure. Applies to all factories producing Target products where needle operations are involved. o Detection - Needle/Metal Detector in all factories producing Children’s and Softhome products without metal trims. Target recommends all factories use Metal detection equipment, where applicable.

•

If products are discovered contaminated after they have been sold this could cause an injury to a Target guest and would result in the following for both Vendor and Target: o Bad publicity o Legal action o Product Recall o Financial loss

•

Due to the manufacturing techniques and equipment used the following items are a risk factor for our Target guests: o Broken Sewing Needles o Broken Knitting Needles o Pins o Staples o Wires o Scissors (Scissor tips) o Other Stray Metals o Razor blades

Target’s Needle and Metal Contamination Policy and Procedure 3 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

2. Prevention Broken Needle Log Control Procedure Every factory that uses any type of needle operation, regardless of product, is required to comply with the Broken Needle Control Log procedure. The Broken Needle Control Log should include: o Date/Time of Incident o Production Line o Operation o Operator o Machine Type/Machine ID o Mount Broken Needle o Panel/Garment Destroyed – Yes or No o Mechanic’s signature and Date

Example: Sample Broken Needle Control Log

Example: Completed Broken Needle Control Log

• •

Maintain a controlled needle inventory system and a broken needle control log. This log should include all broken parts or damaged needles along with any corrective action taken.

Target’s Needle and Metal Contamination Policy and Procedure 4 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Each sewing machine should have an ID (identification number).

•

Needle replacement should be done only by designated factory personnel (e.g. inline supervisor, mechanic, needle log supervisor, etc.) to provide a log recording all parts of a broken needle have been accounted for.

Note: Sewing operator should not have free access to spare needles.

• • •

Production work areas are to be kept clear of unnecessary sharps (e.g. scissors, razor blades, staples, pins and loose metal parts). Machines and/or operators which continue to have broken needle issues should be reviewed and appropriate corrective action taken. Machines and their surrounding areas should be checked daily for needle and/or metal contamination.

For products where a needle/metal detector is mandatory • In the event of a needle breaking during any sewing operation, the panel or product piece being sewn should be retrieved from the production line and checked for broken parts. • Broken parts should be sealed on the broken needle log control sheet indicating all details listed above. • If all broken parts are not accounted for, contaminated panels or product pieces should be passed through the needle detector. If the needle detector still detects metal parts and if after further investigation, the pieces cannot be found, the panel or product pieces should be destroyed and recorded on the log.

Target’s Needle and Metal Contamination Policy and Procedure 5 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

For products where a needle/metal detector is not mandatory • In the event of a needle breaking during any sewing operation, the panel or product piece being sewn should be retrieved from the production line and checked for broken parts. • Broken parts should be sealed on the broken needle log control sheet indicating all details listed above. • If all broken parts are not accounted for, contaminated panels or product pieces should be destroyed and recorded on the log. •

During Factory Evaluations, TCPS MT’s will check the following to ensure factory is compliant with the Target’s Needle and Metal Contamination Policy: o Needle Inventory System o Broken Needle control log for accuracy and integrity of the records. o Sewing machines have ID number and are verified against the Needle Inventory System and Broken Needle control log. o Check machine oil sump for any broken parts and surroundings for loose metal parts. o Check that sewing operator does not have access to needles and unnecessary sharps by verifying machine surrounding and drawers.

Note: Factories found to be non-compliant with Target’s Needle and Metal Contamination Policy will be placed on hold for corrective action.

3. Detection Needle/Metal Detector • All factories producing Children’s and Softhome products MUST have an appropriate number of Needle/Metal Detectors, so as not to cause bottle necks at the point of needle detection and to ensure all productions passes through the needle detector. • The Needle Detector should be placed in a controlled area to ensure there is a clear delineation of the product that has passed through the needle detector, and those which have not. o The controlled needle detection area should be established so that no finished product can move to the packing/finishing area with out being passed thru the needle detector in advance. Note: Do not permit any metallic tools or fixtures in this area or on the person operating the machine. Keep all unnecessary metal away from this area.

Target’s Needle and Metal Contamination Policy and Procedure 6 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

o

All applicable units must pass thru the Metal Detector before the Packing phase (in other words – sales ready)

•

The Needle Detector must work at a minimum sensitivity level of 1.2mm diameter. o A 9 point calibration procedure must take place a minimum of two times a day. Target recommends higher frequency of checks with higher production levels. o Target recommends Enclosed-Head Detection which ensures that this sensitivity is guaranteed at every point. o Tunnel or plate detectors do not guarantee total coverage due to blind spots

•

It is factory’s responsibility to contact their detector supplier and obtain the appropriate equipment to be compliant to Target requirements.

•

Vendors are recommended to use trim/components that are non-ferrous and nickel free or with finish suitable for needle/metal detectors. o Examples of Compatible (non-ferrous) Metals are Brass, Bronze Copper and Aluminium. o Examples of Non-Compatible (ferrous) Metals are: Steel, iron, cobalt and nickelplated.

o

•

Vendor/Factory should state, at time of purchase, that items need to be suitable to pass through needle/metal detection equipment.

Units should be placed on the automated conveyor belt allowing it to pass through the detector head without manipulation. o Detector should be calibrated by supervisor only o Never force the product through the detector head o Product must pass through detector without operator assistance o Records of production detected must be kept available for TCPS to review (stylequantity/date/hour-operator-supervisor-contamination)

Target’s Needle and Metal Contamination Policy and Procedure 7 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Best Practice: Product passed through the detection equipment should be held in a separate holding area, until it has been established that the next calibration test has passed (should there be an issue between calibration tests, allows for easy rechecking of product) •

Contaminated goods (rejected) should be kept in a separate area, making sure potentially contaminated products do not get mixed with the accepted items.

•

When any form of metal has been detected: o Check for metal part using the hand held detector, if available, to identify location of metal part within product. o If found: ■ Remove Metal and re-detect product to make sure all contamination has been removed. ■ Log and advise supervisor for decision to keep for records or return to department/owner. ■ Identify Root Cause and take corrective action. Document the process implemented. o If NOT found: ■ Call supervisor ■ Destroy product ■ Identify root cause and take corrective action ■ Document and implement the process

Exception for Softhome • Items such as area rugs or carpets that cannot be passed through the metal detector tunnel due to width or height are to be scanned with hand held equipment with a planned and documented sequence to ensure full coverage of item

Note: Target recommends the use of a bulk detector for large items instead of hand equipment.

Target’s Needle and Metal Contamination Policy and Procedure 8 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

4. 9 Point Calibration Process • • •

The 9 Point calibration ensures that the equipment is functioning correctly and operating at the correct sensitivity (1.2mm). The 9 Point calibration must be done a minimum of 2 times per shift by supervisor. Reports must be available for TCPS to review at anytime

Best Practice: Target recommends doing the 9 Point Calibration test every hour. Process 1. The 9 Point Calibration check on the detector is done by dividing the metal detector conveyor belt in 3 zones. Example: Zones A, B, C

A

B

C

2. The Calibration Card, supplied by machine vendor, is passed through each of these zones at three different height levels. • Factories must have an approved ferrous Calibration Card from equipment manufacturer • Hand made calibration cards are NOT acceptable 3. The Detector sensitivity must be set at a level which is less than 1.2mm sphere to detect the Calibration Card. 4. The Calibration Card is placed on the conveyor belt and passed through each zone – A, B and C. Readings are recorded on a 9 Point Calibration Report.

Target’s Needle and Metal Contamination Policy and Procedure 9 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

The 9 Point Calibration Report should be marked as follows o Y- if the needle detection activates (alarm sounds, light activates and machine stops) when the 1.2mm Ferrous Calibration Card is passed through the search head.

A B C

o • •

N - if the needle detector has no reaction (no alarm sound/light) when the 1.2mm Ferrous Calibration Card is passed through the search head.

If there is no reaction during the 9 point Calibration procedure the operator must stop the machine and call the supervisor. All production must be placed on hold since last acceptable 9 Point Calibration Report record. If repairs are needed, call for a qualified technician responsible for the Needle/Mechanical detection equipment and after repair do a new 9 point Calibration test for verification. Example: 9 Point Calibration Report 9 PIONT CALIBRATION REPORT

SUPERVISIOR

DATE

TIME

CLIENT/STYLE

SIZE/COLOR

A1

A2

A3

B1

B2

B3

C1

C2

C3

NAME

01.01.08

07.30 AM

TARGET/12345

RED-2-3-4

Y

Y

Y

Y

Y

Y

Y

Y

Y

Mario Rossi

01.01.08

08.30 AM

TARGET/12345

BLUE-2-3-4

Y

Y

Y

Y

Y

Y

Y

Y

Y

Mario Rossi

01.01.08

09.30 AM

TARGET/12345

GREY-2-3-4

Y

Y

Y

Y

Y

Y

Y

Y

Y

Mario Rossi

01.01.08

10.30 AM

TARGET/12345

GREY-5-6-7

Y

Y

Y

Y

Y

Y

Y

Y

Y

Mario Rossi

SIGNATURE

Note: When conducting the calibration test you must use only the calibration card and card holder, no paper or products are allowed to be put through the metal detector. 5. The card is to be placed in the center slot of the holder (1 1/2” in height) and passed through each zone – A, B and C. Readings are recorded on a 9 Point Calibration Report.

6. The card is then placed at the top slot of the holder (3” in height) and passed through each zone – A, B and C. Readings are recorded on a 9 Point Calibration Report.

Target’s Needle and Metal Contamination Policy and Procedure 10 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

During the Factory Evaluation Process, it is the TCPS Manufacturing Technicians (MT) responsibility to ensure that factories producing Children’s and Softhome products have: • Appropriate number of Metal/Needle Detectors for Target’s production. • Metal/needle detectors are installed before packing area and there is a clear delineation from detected and non detected goods. • A 9 point calibration procedure is in place with daily records showing that calibration procedure is in use. • Records of production lots that have passed through the machine. Note: Factories non-compliant with Target’s Needle and Metal Contamination Policy will be placed on hold for corrective action

During Placement and Pre Production Meetings • TCPS must determine if product with trims and embellishments can be passed through the needle/metal detector equipment without detection. • In the event of non-compatible trims, TCPS will immediately alert their supervisor and Local MR that product is exempt from needle detection screening. • TCPS (MT or Inspector) will test approved red/yellow seal samples through factories metal/needle detector. After completing a Product Inspection TCPS may decide to pass products inspected through the Needle/Metal detector and record results. • There is a Zero tolerance when finding product with metal contamination during inspections. Inspections will automatically FAIL if: o 1 contaminated unit is found o If missing detection records • During Inspections, TCPS will check the 9 Point Calibration records and that Target’s requirements have been followed. Note: Failure to comply with Target’s requirements will result in shipments being put on hold until all products can be processed through a detector.

Target’s Needle and Metal Contamination Policy and Procedure 11 of 11 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

FLOOR READY REQUIREMENTS

Floor Ready Requirements 1 of 10 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

FLOOR READY REQUIREMENTS Overview Provides Floor Ready specifications by product category and presentation type for apparel, intimates, shoes, handbags and soft home (towels/rugs). Floor Ready Requirements, particularly for softlines apparel and shoes, should be addressed during the product design and development stage due to their potential impact on cost (e.g. hanger/caps, carton dimensions, packing materials, etc). The vendor must provide communication to the factory on the requirements and a copy of the Floor Ready Specifications for the specific product category and presentation.

Table of Contents 1. Floor Ready Product General Guidelines 2. Ticketing 3. Products on Hangers 4. Folded Product 5. Minimal Trash and Proper Packing 6. Delicate/Specialty Packing Requirements 7. Shoes

Objectives • Understand Target’s Floor Ready Specifications • Understand Floor Ready Requirements for product categories and presentation types

Resources POL: Guidelines and Info > Requirements and Procedures > Product Packaging > Floor Ready Requirements and Hangers

Floor Ready Requirements 2 of 10 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Floor Ready Product General Guidelines Program Requirements and Objectives • Program requirements apply to Softlines (apparel and intimates), Softhome (towels and rugs) and shoes. •

Floor Ready Requirements o Pre-Ticketed with a scannable UPC o Pre-Hung on Target approved hangers with size caps o Pre-Folded to Target’s store presentation requirements o Shipped with minimal trash (tissue, clips, pins, tape, etc.)

•

Target determines the store presentation, if item is to be hanging or folded.

Floor Ready Expectations •

Floor Ready Specifications have been developed by product category and presentation type to enable factories to successfully provide floor ready products to Target.

Note: Floor Ready Specifications should be included within the SIP POL: Guidelines and Info > Requirements and Procedures > Product Packaging > Floor Ready Requirements and Hangers

Floor Ready Requirements 3 of 10 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

The following is an example of the Floor Ready Specifications available on Partners Online for a specific product category. The specifications will include the product description, ticketing requirements and presentation requirements. Example: Tops

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1. Description of product category is located in upper left corner. 2. Ticketing requirements are contained in the first column. 3. Presentation requirements are in the second column.

Floor Ready Requirements 4 of 10 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

2. Ticketing Ticketing Requirements • All items (selling units) must have a scannable UPC. • Ticket placement is dependent on the type of garment and presentation type. Examples of presentation types include: o Hanging Tops o Folded Tops o Hanging Bottoms o Folded Bottoms o Garments with Multiple Pieces

Hanging Tops • With sleeves: place tickets at end of wearer’s left sleeve. • Sleeveless: place tickets at the seam beneath the wearers’ left armhole. Note: In either case, if the placement would damage the garment, place the ticket through the main label.

Folded Tops • Tickets should be applied through the main label. o If an item has a heat transfer label, the ticket should be applied through the wearers’ left shoulder seam. Longer attachment may be required.

Hanging Bottoms • Buyer will determine hanging direction for hanging bottoms. Options include open/forward, closed/side, open/reverse, folded/hanging. • Ticket placement will be dependent on the hanging direction.

Folded Bottoms • The ticket should be attached on the wearer’s right side at the waistband.

Floor Ready Requirements 5 of 10 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Garments with Multiple Pieces •

Garments with multiple pieces require an “AN” ticket on the secondary item, which is a ticket with zero retail and no UPC.

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To determine which item is the secondary item, refer to the specifications. AN Ticket Example

Example of a 2 piece toddler outfit requiring an AN ticket

Main ticket on garment top

“AN” ticket on garment bottom (secondary item)

Note: Factories should have a current printout of the guidelines from POL for the products they are producing.

3. Products on Hangers How to Order Hangers •

Braiform (incorporating Plasti-form and Braitrim) is Target’s only designated hanger and size cap supplier. Hangers and size caps must be ordered from Braiform. No other supplier may be used. o Product received on counterfeit hangers/size caps are subject to penalty charges. o A list of Braiform worldwide locations can be found on Partners Online.

Floor Ready Requirements 6 of 10 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Types of Hangers • Hangers have a smooth face to reduce potential hanger marks. • There are 2 versions of top hangers: o Padded – Most common version used

o

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Notched – Used for items with narrow shoulder straps

Bottom hangers have padded pinch grip closures.

Hanger Presentation Requirements • Information on the required hanger style and length by product category and presentation direction is provided in the Floor Ready Specifications located on Partners Online. • Hanger and size cap style numbers are provided under Presentation with each Floor Ready Specification.

Floor Ready Requirements 7 of 10 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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Hanger hook should open to the left when garment is viewed from front. Size caps are required on all hangers.

4. Folded Product • • •

Folding dimensions are specified by product category and/or size to ensure a consistent presentation in all Target Stores. It is important to refer to instructions from Partners Online for the correct size dimensions by product category. Vendor should provide factory with a copy of the Floor Ready Specifications. Size Strips are required on all folded products. o Placement of size strips: ƒ Tops: lower right hand corner, along the right folded edge. ƒ Bottoms: Back of wearer’s right leg. Refer to the Floor Ready Requirements for specific placement. ƒ Size strip should be visible around folded edge.

Note: Concerns regarding the use or placement of the size strip should be directed to Target. Example: Floor Ready folded product

Floor Ready Requirements 8 of 10 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

5. • • • •

Minimal Trash and Proper Packing Never include tape, tissue, pins, clips, individual polybags or chipboard boxes without prior approval from Target Floor Ready. o If innerpack of the shipping carton is 1, an individual polybag may be used. Select proper size carton and pack goods securely based on specified case pack quantity. Light weight cardboard sheet is permitted on top and bottom of carton to prevent damage upon opening of carton. Anchoring is permitted to prevent shifting during transit for product on hangers. o The preferred method is to construct the carton to include space at both ends to insert and secure the hook of the hanger in place. Example: Correct Anchor

Example: Incorrect Anchor (Plastic Zip Tie)- safety issue for Target store team members

Proper packing of Assortment Items • If shipping an Assortment item, which is when multiple Target item numbers are placed in a carton, a large master polybag may be used to pack the cartons or the contents may be separated into smaller bundles within the carton by combining like styles, colors or sizes (e.g. all reds together, all size S together). • Individual polybags are never permitted without prior approval from Target.

Floor Ready Requirements 9 of 10 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

6. Delicate/Specialty Packing Requirements This applies to all business-casual apparel including dress slacks, blazers, skirts, dresses, woven tops and shirts. Includes fabrics such as silk, rayon, satin and linen. The packing requirements are • Items must be well steamed or pressed prior to packing • Items must be folded neatly and consistently • Closed/sealed polybags must be used to define innerpacks o Heavier weight polypropylene (minimum thickness .04 mils) and BHT free. • Flat packing is preferred • Reduce potential for shifting within the carton during transit o Alternating inners reduces bulk and maximizes cube. o Select proper size carton in order to pack product tightly. o Anchor hanging garments within the carton. • A “Delicate Item” label must be applied to the shipping carton for cartons which have been packed with a specific quantity per Innerpack (referred to as breakpack). Please refer to the “Carton Marking” document for complete instructions. • Share your ideas and expertise to identify and develop best methods for packing new or difficult fabrics, silhouettes or other product categories Note: Consult with your vendor if you have any questions as to whether you should follow these requirements.

7. Shoes • POL: Guidelines and Info > Requirements and Procedures > Product Packaging > Floor Ready Requirements and Hangers > Floor Ready Specifications > Shoes • Target determines the box code or presentation direction, and communicates this in the commit.

Note: Charges will be assessed if products do not match the required specifications for ticketing, hanging, folding and packing. Floor Ready Requirements 10 of 10 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

STANDARD INSPECTION PACKET

Standard Inspection Packet 1 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

STANDARD INSPECTION PACKET (SIP)

Overview The Standard Inspection Packet (SIP) is a formal documentation of production activities maintained by Vendor/Factory. It is the factory’s responsibility to formally document results of production data in addition to Target’s requirements and they must be furnished to TCPS for review upon request.

Table of Contents 1. Importance of SIP Packet 2. Vendor and Factory Roles and Responsibilities 3. SIP – Phase 1 4. SIP – Phase 2

Objectives • Understand the importance of the SIP packet, its supporting documents and components for phase 1 & 2. • Understand the factory roles and responsibilities.

Resource • SIP Checklist • POL: Guideline & Info > Requirements & Procedures > Product Development / Quality Assurance > Hardlines or Softlines Quality Assurance > Forms > Standard Inspection Packet (SIP) Checklists

Standard Inspection Packet 2 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Importance of SIP Packet The SIP package is a very important tool for both Factory and TCPS because: • Contains all necessary information for production. • The SIP file makes sure that the Factory is always aware of the requirements requested for that product before starting production and supports the Factory during each phase of production. • Avoids mistakes or misinterpretation during production. • Crucial for factories internal and TCPS inspections.

During your Placement and Pre Production Meetings the PPR document will indicate what items and/or documents are needed in the SIP file based on the type of product that you are going to produce for Target. •

These documents are available and downloadable from POL.

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Vendors are responsible to handover these forms to each factory before Placement and Pre Production meetings.

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It is TSS Vendors/Factories responsibility to communicate to TSS if there are missing components and work with TSS to complete the SIP file in a timely manner for each phase.

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SIP checklist is divided into Phase 1 and Phase 2. Phase 1 must be completed at Pre-Production Meeting before production begins. Phases 1 & 2 before TCPS Final inspection.

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The Factory obtains all required components of the SIP and brings the Sip file to be checked by TSS merchant during the Placement and Pre Production Meetings for TSS Vendors. The TSS local Merchant will check all items required in the sip file and will approve them.

Note: for Non-TSS Vendors Target recommends Vendor/Factory to use these documents during their internal Placement and Pre Production Meetings and inspections

Standard Inspection Packet 3 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Standard Inspection Packet (SIP) checklist •

The SIP is located within the Pre-Production Planning Requirements (PPR) document. The SIP Checklist helps you to verify during your meetings that all requested elements and documentation is within the SIP file.

Example: SIP Checklist

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Reference Code - Letter codes on the PPR indicate specific items or documents that are needed in the SIP file. Helps you with any needed communication between Vendor, Factory and TSS.

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Check as Added - Vendor/Factory Checks as item is added to SIP

Standard Inspection Packet 4 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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Item / Item Description - Detail description of item to included in SIP. Helps you understand why you and/or TCPS need the Item in the SIP.

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SIP Phase - Phase 1 or 2 indicates when item or documentation is needed. o SIP Phase 1 Items - To Be Completed Prior To Production Start o SIP Phase 2 Items - To Be Completed Prior To The Final Random Inspection (FRI)

2. • • • • •

Vendor and Factory Roles and Responsibilities Complete the SIP packet according to each phase. Insert documentation of in-line quality control. Ensure that SIP files are available in each factory producing the merchandise. Factories must not start the production unless phase 1 has been completed. If missing components exits Vendor/Factory must communicate with TSS for timing of completion for those missing Items. • SIP file documentation must be kept for 2 years after last shipment • Contact TCPS or local TSS office if help is needed. Note: All forms and information are available for Vendors in POL. Vendors will share the available forms and information with their factories. POL: Guidelines and Info > Product Development/Quality Assurance > Quality Assurance (Softlines or Hardlines) > Forms.

Standard Inspection Packet 5 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

3. SIP – Phase 1 Items to be completed prior to production start A. Pre-Production Planning Requirements (PPR) document B. Red Seal sample C. Technical Spec and Construction D. Final Item Set-up Form E. Total Program Quantity and Deliverables (Commit & Purchase Order) F. Color Standards G. Color Swatches/Shade Bands/Fabric Swatches H. Finish Quality I. Artwork J. Trims, Accessories and Labeling K. Yellow Seal Sample L. Product Testing Results M. Grouping Logic Form N. Updated VTA Elements HL only O. BOM (Bill of Materials- refer to UL) P. UL Official Product Report Q. Labeling Verification on Production Products (Rating/Warning) R. Exploded View of Product Drawing

A. PPR Document Latest version of the PPR document, used during Placement and Pre Production Meetings, must be printed and inserted in the SIP. • Vendor/Factory should review the document to ensure pending details or issues that may effect production start date are resolved before proceeding into production. • For Non-TSS Vendors, Target recommends using these forms for the SIP. Example: Pre-Production Planning Requirements (PPR) Document

Standard Inspection Packet 6 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

B. Red Seal Sample • A duplicate copy of the sample submitted to Minneapolis for approval. Once approved, the TSS merchant seals the sample with the red seal and/or puts a signature onto the sample tag in the appropriate field. • For Non TSS Vendors Minneapolis will approve, seal the sample and return back to Vendor. • The Approval Red Sealed Sample is the sample approved for Pre Production. The sample is approved for Measurements (Specification Details), Styling, Workmanship and components (unless specified). • Vendor makes duplicate copies of any samples submitted to Minneapolis. One sample is sent to Minneapolis, the other is vendor’s own sample to keep in the factory.

C. Technical Specification & Construction • Vendor/Factory must obtain copies of the approved Target or Vendor Generated Spec details. These contain material details, Spec and sketches and any additional comments from the Development stage or any other comments about the product from Target Personnel. Example: Softlines Specification Details

Standard Inspection Packet 7 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example: Softhome Specification Details

Example: Hardgoods Specifications Details and Construction Vendor uses own spec or spec issued from PD&D or design team

D. Final Item Set Up (ISU) – HG/SH only • After Item Set Up form has been completed and approved, Factory has to include it in the SIP. This is to ensure that TCPS and US Customs have a clear description of the item. • Approved and completed ISU is provided to Vendor by local MR (TSS) or Minneapolis (Non-TSS) to deliver this information to the Factory. Example: HL Item Set-Up Form

Standard Inspection Packet 8 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

E. Total Program Quantity and Deliveries (Commit & Purchase orders) • Vendors must download the Purchase Order from PartnersOnline (POL) and Approved CMS worksheet, if applicable. • The Vendor must print the last updated version to keep the SIP file updated. • During TCPS Final inspection, the best practice for the Vendor is to download the Purchase Order three days before inspection and forward it to the Factory for them to include it into the SIP packet. Note: Any important special instructions, memos or emails are to be included in the SIP. Example: Target PO

Example: Target Commitment

Standard Inspection Packet 9 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

F. Color Standards • Vendor must insert in the SIP file all color standards: Archroma standards, Target color Appearance standard or Vendors own Appearance standard according to program requirements. These are used during factory internal and TCPS inspections. • Your lab dip is not your standard for production. All readings and evaluations must be done using the Color standard during production, unless a Best Can Do has been approved by Minneapolis. In this case Lab Dip must be available in the SIP File Note: Where color standards apply to multiple styles, color standards can be shared across multiple SIP's, provided that the products are being produced in the same factory and are of the same fabrication/standard/ finish.

Note: Color standards should be kept clean, away from direct light and should be never cut. This will ensure a clean visual for good color matching G. Color Swatches/Shade Bands/Fabric Swatches • Where product either undergoes additional finishing or is made from natural materials, approved shade band is to be included in SIP. • Vendor must insert the approved shades bands which have been approved/signed by TSS or PM Minneapolis. Note: Shade band may be given in the form of actual samples or swatches/cuttings, depending on the nature of the product. In any case, all must be clearly marked and included in the SIP packet. Example: Softlines and Hardlines approved shade bands

Standard Inspection Packet 10 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

H. Finish Quality • As applicable, Samples/Cuttings/ Swatches of all, as approved by the PM/Buyer, to be attached to a card, which has been chopped/stamped and signed by TSS MR. • For Non-TSS Vendors it is Vendors responsibility to obtain all approvals from PM's in Minneapolis Note: Where submissions were given in the form of a sample (rather than a cutting or swatch), obviously it cannot be attached to a trim card. Sample(s) must be clearly marked and included in the SIP by the Factory. BULK production fabric quality/handfeel must match Target’s approved standard.

I. Artwork • If applicable Vendor inserts a copy of approved Artwork

Example: Approved Artwork

Standard Inspection Packet 11 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

J. Trims, Accessories and Labeling • During the Placement Meeting, for TSS Vendor, TSS MR will check against approved sample and Specification details what components need to be included in the SIP (see below). • Vendor must obtain items and during Pre-Production Meeting TSS MR will verify and approve. • TCPS will verify completeness of the file during Pre-Production Meeting and inspections. Example: Trims/Accessories Checklist

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For Non-TSS Vendors it is Vendors responsibility to obtain all approvals from PM's in Minneapolis All Items, Components and Trims must be approved by a Target representative. A stamp must be on your SIP indicating approval of all items, components and trims. Example: Approved Trims, Accessories and Labeling

Standard Inspection Packet 12 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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Softlines and Softhome product only o All Softlines product and specific Softhome product categories must contain an additional label with DPCI and factory identification information. o The DPCI and Factory Label ID: ƒ Has to be white and the information will print in black. ƒ Label should be made of a paper like material that is 100% nylon composite. ƒ The label is Vendor/Factory managed and must be smaller than the care label. ƒ It can not show from underneath the other labels. ƒ Guidelines are available from your Vendor. Example: DPCI and Factory Label ID

K. Yellow Sealed Sample • Based on Red Seal sample and any feedback from Minneapolis – factory makes Pre-Production sample (if applicable a full size set) in the actual bulk fabric/raw material, trims, accessories, and construction details. • The samples are evaluated for Measurements (Specification Details), Styling, Workmanship and compared against the Red sealed sample by TCPS during the Pre Production meeting for TSS Vendors. For Softlines, you may compare to the Red Seal sample of Approved Pending Changes (APC). • If acceptable, Core size (as defined by client) is selected and a yellow seal attached by TCPS. This sample is part of a full size set reviewed at Pre-Production Meeting. • For Non-TSS Vendors factory approves Pre-Production samples and submits a copy to Minneapolis. Factory should not wait for approval from Target Headquarters to begin production. • The Yellow Seal Samples are being sent for reference only. If Target Headquarters finds an issue with the sample, they will notify the Vendor/Factory to stop production. Example: Yellow Sealed Sample

Standard Inspection Packet 13 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

L. Product Testing Results • Vendors are expected to submit product for testing, in various stages of production, according to Product Testing Protocols and Department. • All test lab reports, passed or over-ride authorization report attached to failed report test, are to be included in the SIP. • Where multiple colors/DPCI's have been submitted for testing at the same time and one or multiple colors/DPCI's fail testing, while others pass, overall test status will read as "failed". • Report should be checked at color/DPCI level to verify which have passed versus failed and reason for failing. Example: Softlines Test Report

Note: Target has created in the SIP Checklist a Table for tracking all testing and approvals during the lifecycle of the program. Example: SIP Color Fabric Checklist

Standard Inspection Packet 14 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

M. Grouping Logic Form • This form is completed during the Pre-Production meeting by TCPS and inserted in the SIP. Example: Grouping Logic Form

N. Updated VTA Elements (Refer to VTA document) • Includes dates committed to during the Placement Meeting (TSS Vendor). VTA will be reviewed by TSS team and TCPS throughout life cycle of the program, to ensure that factory is still committed to dates shown. • Vendor/Factory must review on a daily base this document to make sure that he meets all dates indicated. If you can not met required dates should contact Target and TCPS and work together to ensure on time shipment Example: Vendor Timing and Action (VTA)

Standard Inspection Packet 15 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

These elements/documents of the SIP are related to Hardlines products only: O. BOM (bill of Materials- refer to UL) P. UL Official Product Report Q. Labeling Verification on Production Products (Rating/Warning) R. Exploded View of Product Drawing

These elements/documents of the SIP are related to Target.com products only: MPS computerized SIP Summary • For TSS Vendor for Target.com orders; a summary is printed based on the MPS Purchase Order detail. This summary includes all detail about the style, packing instructions, delivery, and more.

Note: For Target.com orders, if changes are made to the MPS PO after the MPS SIP Summary, Packing List or Vendor Commercial Invoice have been printed, the TSS Local Team will provide updated copies to the Vendor/Factory as applicable.

4. SIP Phase 2 Items must be completed prior to Factory internal and TCPS FRI inspections S. Floor Ready Requirements T. Retail Packaging Design and PPG (Product Packaging guide) U. Carton Dimensions and Packing Method V. Carton Marks and Labels W. HL Transit Testing Report (if applicable) X. Factory Performed internal Inspections Y. TCPS Inspection Reports (Once performed) Completed Packing List Green Seal Sample (If applicable)

Standard Inspection Packet 16 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

S. Floor Ready Requirements • Target Orders (not Target.com) – guidelines are available from POL for the Vendor to download and give to factory to insert in the SIP file. It is the vendor’s responsibility to give this information to factory for execution. • It’s important that products for Target are packed correctly to allow efficient execution in Target stores. Example: Softlines Requirements from POL

Note: It is not required that the Floor Ready samples are stamped or signed, but must be available in the SIP file for TCPS to review. T. Retail Packaging Design and PPG (Product Packaging Guide) • A copy of the PPG should be included. U. Carton Dimensions and Packing Method • Guideline showing how merchandise is to be packed/folded/made floor ready based on brand/gender must be included. • A copy of the Approved Packaging Specs must be included. V. Sample Carton Markings • Included in the SIP file so that TCPS can verify that cartons will be marked correctly. Factories should also include a DPCI carton label. Example: Carton Requirements from POL

Standard Inspection Packet 17 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

W. HL Transit Testing Report (if applicable) • Per testing protocols, the Vendor/Factory is expected to submit Product Packaging samples for testing (as applicable) to Targets approved test lab. • These reports must be included in the SIP. Example: Transit Testing Report

X. Factory Performed Inline Inspections • Factories are expected to perform their internal DUPRO (10% & 50%) and FRI inspections (100% produced and 80% packed minimum requirement). If either of these inspections fails, 100% re-inspection is to be done and defective units are to be removed. Thereafter, factory is to perform random audits through to FRI. • All factory performed inspection reports are to be included in the SIP File. Y. TCPS Inspection Reports • All TCPS inspection (DUPRO & FRI) reports should be added to the SIP once they have been performed. Example: TCPS Inspection Report

Standard Inspection Packet 18 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Completed Packing List • Used by TCPS to verify shipping quantity against Purchase order. • Target has not made it mandatory to use their specific layout; however, all information required by Target must be shown in the Vendor/Factory packing list. Note: Quantity Deviation Approval - Where a Factory intends to ship quantities different from ordered quantity, approval must be included as part of the SIP. It can be in the form of written authorization from Target Import Department or email notification from Local TSS Office. Target expects Vendors/Factories to ship 100% of the quantity ordered. However, should there be a discrepancy + or -, the approval obtained from TSS local merchant or Minneapolis is to be included in the SIP packet.

SIP Complete • No DUPRO inspection by TCPS will be done without a complete SIP phase 1. • No FRI inspection can take place by TCPS without a complete SIP file phases 1 & 2. Note: Charges will be assessed incase of missing or incomplete SIP file

Standard Inspection Packet 19 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

The most up-to-date SIP checklist can be located on POL: Guideline & Info > Requirements & Procedures > Product Development / Quality Assurance > Hardlines or Softlines Quality Assurance > Forms > Standard Inspection Packet (SIP) Checklists Standard Inspection Packet 20 of 20 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

PACKING & CARTON MARKINGS

Packing and Carton Markings 1 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

PACKING & CARTON MARKINGS

Overview How the shipping carton will be packed and marked needs to be determined before shipments are due to be delivered to the Target consolidator. The vendor and factory need to work together to determine who is responsible for submitting carton marking samples to Target for approval and who will create or order the carton barcode label. The vendor and factory also need to work together to determine how Purchase Order details such as PO #, DPCI (Department, Class and Item, Target’s item number) and casepack will be communicated to the factory.

Table of Contents 1. Carton and Innerpack Requirements 2. Carton Markings and Barcode Requirements

Objectives • Understand Target’s requirements for packing the shipping carton, including innerpack requirements • Understand Target’s requirements for marking and labeling the shipping carton • Understand Assortment Item and how it impacts the carton packing and carton markings

Resources • Barcode Label Order Form • Barcode Label Approval Form • Target HQ Contact for Carton Markings o Vendor Operations Helpline 612-304-6266 o [email protected]

Packing and Carton Markings 2 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Carton and Innerpack Requirements Target Stores Shipping Carton •

Shipping Carton Specifications o Must use the proper sized shipping carton for product and quantity of units in the carton. o A shipping carton should meet Target conveyable requirements: ƒ Minimum: 22.9cm x 22.9cm x 5.1cm, 1.39 kg. (9”x9”x2”, 3 lbs.) ƒ Maximum: 107cm x 61cm x 76cm, 27.2 kg (42”x24”x30”, 60 lbs.)

Note: If carton does not fall within these dimensions and weight, contact your Vendor. o o

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Items should fit firmly in the shipping carton to minimize damage during transit. Guidelines for carton durability/strength: ƒ Minimum Mullen Burst Test of 175-200 pounds corrugated fiberboard. ƒ Minimum Edge Crush Test factor of 29-32 ƒ Carton may need to be stronger for heavier items or fragile product. Cartons should be sealed with tape or glue. ƒ Ensure carton will remain sealed through changes in climate (temperature, humidity, etc.) and multiple handlings. ƒ Do not use bands or staples on cartons. Exceptions must be approved by Target Vendor Operations.

Transit Test Requirements for Shipping Carton o Transit testing provides an indication of the product’s ability to “survive” the supply chain and arrive safely at our stores. o All fragile items require package transit testing (vibration and drop testing). Nonfragile items do not require transit testing.

Note: Refer to Product Testing Topic for full details. Target Stores Innerpack Requirements •

Innerpack o If the Purchase Order states that you are to create innerpacks (grouping of selling units) within a shipping carton, each innerpack must contain the correct number of selling units as specified on the Purchase Order. o Innerpack example: Shirt with a casepack of 8/2 would have 4 innerpacks inside the shipping carton with 2 shirts in each innerpack. Each carton would contain a total of 8 shirts.

Packing and Carton Markings 3 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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Innerpack dimensions and weight must be under 50.8cm x 33cm x 33cm. 27.2 kg (20” x 13” x 13”, 60 lbs). ƒ If the innerpack exceeds these dimensions, it will not fit into the carton at the Target Regional Distribution Center for processing to the stores. ƒ If the innerpack exceeds these dimensions contact the vendor. The vendor should immediately work with the Target to discuss changes to the casepack. Packaging Options for creating an Innerpack and grouping selling units together. ƒ Cardboard Box (cannot be used for apparel) ƒ Polybags ƒ Bands Box

Polybag

Band

Note: Innerpacks do not require any markings. Target.com Shipping Carton • •

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Must use the proper sized shipping carton for product and quantity of units in the carton. Items should fit firmly in the carton to minimize damage during transit. The maximum shipping carton size for Target.com is 81.3cm (32”) long, 51cm (20”) wide, and 73.7 cm (29”) and 18.14 kg (40 lbs). o The exception to this size requirement would be single items that are larger such as gazebos or furniture items. o If the shipping carton is larger, contact your Vendor. Guidelines for carton durability/strength: o Minimum Mullen Burst Test of 175-200 pounds corrugated fiberboard. o Minimum Edge Crush Test factor of 29-32 o Carton may need to be stronger for heavier items or fragile product.

Packing and Carton Markings 4 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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• •

Cartons should be sealed with tape or glue. o Ensure carton will remain sealed through changes in climate (temperature, humidity, etc.) and multiple handlings. o Do not use bands or staples on cartons. Exceptions must be approved by Target Vendor Operations. Complete Transit Test Requirements for Shipping Carton as outlined for Target Stores. Individual Selling Units in Shipping Carton o Each sellable unit must be individually boxed, poly bagged or shrink-wrapped. Boxed

Poly bagged

Shrinkwrapped

Selling Unit within Single Packaging

•

A scannable UPC is required to be visible on each sellable unit.

• •

One UPC corresponds to one unique product including assortments. No price tags on product. Softlines (apparel items) may have the price on the hangtag.

Packing and Carton Markings 5 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example of incorrect packaging: Items are not individually packaged and do not have a visible UPC code.

2. Carton Markings and Barcode Requirements •

Human readable information is required on the shipping carton. o Information must be written in English. o Required elements can be printed directly on the carton or on a label. o Size of print must be a minimum of 3/16” (6mm), bold. o Display human readable information on two (2) adjacent sides of carton. o Must contain required elements for Target Stores or Target.com. Target Stores Carton Marking Requirements: Consignee Name Purchase Order Number DPC-Item # Style # Color and Size Casepack Country of Origin Carton # -- of --Carton Dimensions in CM

Target Stores 1234567 or 0013-1234567 or 0013-1234567-0581 013050123 PID/Vendor Style # Optional # of selling units in carton Specify country 1 of 200, 2 of 200, etc. At Purchase Order level L x W x H in centimeters

Packing and Carton Markings 6 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example of the Target Stores carton markings

Target.com Carton Marking Requirements: Consignee Name Purchase Order Number TC-Item # Color Size Casepack Country of Origin Carton # -- of -Carton Dimensions in CM

Target.com or Target.com c/o Amazon.com 1234567 5-8 digit # If applicable If applicable # of selling units in carton Specify Country 1 or 200, 2 of 200, etc. L x W x H in centimeters

Example of the Target.com human readable carton markings

Packing and Carton Markings 7 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Carton Barcode Label • • • •

In addition to the human readable information, every shipping carton must have a carton barcode. Carton barcode label includes DPCI number or UPC number and a 14 digit barcode which is scanned by Target. Adhesive label size is 10.2 cm x 5.1 cm (4” x 2”) Barcode label can be created by vendor/factory or purchased from one of our label providers. Contact your Vendor for barcode label supplier information. o Label providers that can create the carton barcode label: ▪ Avery Dennison/RVL ▪ Pax Tag and Label ▪ Paxar ▪ Shore to Shore o Complete and submit Barcode Label Order Form to label provider. Form available in resource section. o Allow a minimum of 7 working days for shipment from label provider to arrive at ordering location. o Carton barcode can be created using one of the following 3 options: 1. Target UPC ▪ Used when selling unit is marked with a Target UPC. ▪ If you are placing a Target UPC code on the selling unit that begins with the numbers 49, you will use the Target UPC to create the carton barcode. ▪ Add “70” to beginning of item UPC and recalculate check digit (last number). For assistance in calculating check digit use check digit calculator on www.uc-council.org or www.gs1us.org website. Example:

2. Manufacturer UPC ▪ Used when selling unit is marked with the manufacturer’s UPC. ▪ If you are placing a Manufacturer UPC code on the selling unit, you will use the Manufacturer UPC to create the carton barcode. Example:

Packing and Carton Markings 8 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

▪

Add “10” to the item UPC and recalculate the check digit (last number). Refer to the Uniform Code Council for other options for the first 2 digits of the carton barcode and assistance in recalculating the check digit. UCC website is www.uc-council.org or www.gs1us.org

3. Item UPC ▪ Used when shipping carton is the selling unit and the carton is marked with the item UPC. You do not need to add another barcode; the UPC can be used as the carton barcode. An example would be a TV. ▪ Barcode height of the UPC code must be at least 2 inches (5.08cm). o Vendor/factory(s) creating their own carton barcode labels are responsible for the barcode quality. •

•

•

A barcode verifier should be used to ensure symbol quality is consistently meeting the minimum grade requirements established by the GS1 organization and are available on their website www.gs1us.org. Technical requirements for 14 digit carton barcode o Format ▪ Barcode Height: 1.25 inches (32mm) ƒ First digit (packaging indicator) must start with a value of 1-8. ƒ Narrow element (X): 0.040 inches (1.016mm) o Print Quality ƒ Symbol color and label must be black on white. ƒ No ink jet symbols accepted. o Quiet Zone – unmarked space located around the carton barcode ƒ Quiet zone: minimum 0.40 inches (10.16mm) Barcode label placement on shipping carton

o

Place barcode label a minimum of 1.5” (3.8cm) away from edge of carton.

Note: Target recommends barcode label is placed in center of carton vertical face. o o

Do not place over seams. Do not cover with tape.

Packing and Carton Markings 9 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

o

Establish a process to ensure correct barcode is placed on carton and that it matches the carton contents.

Note: Charges will be assessed for barcodes which do not scan or cartons which do not have a barcode. •

•

Assortment Item Requirements for Target Stores o Target Merchandising department will assign a DPCI (department/class/item number) to the Assortment Item. o Assortment items are used for seasonal sets, transitions and salesplans when all stores or a group of stores need the same amount of product. o Casepack for an Assortment Item is always one (1), which represents 1 Assortment is contained in the shipping carton. Assortment Item Carton Marking Requirements o Carton barcode label must be created using the Assortment Item DPCI. o Casepack is 1 representing 1 Assortment is contained in the carton o Style # must state “Assortment”.

Target Stores PO# 1234567 DPCI 064030999 Style # Assortment Color: Size Casepack: 1 Country of Origin: Carton# ___ of ___ Carton Dim H /W

Assortment Item DPCI Indicate Assortment as Style Casepack = 1 /L

Note: Selling units should never be ticketed with the assortment DPCI. •

Label Approval o All vendors must submit human readable information to Target for approval prior to their first shipment. Vendor should determine if sample will be submitted by vendor or factory. o Carton barcode labels created by vendor and or factory should also be submitted for approval. o Complete the Label Approval Form and send to Target Vendor Operations prior to first shipment. Form available in resource section. o Barcode labels created by one of the designated label providers do not need to be approved.

•

Additional Labels on Shipping Carton for Target Stores o Additional labels may be required on the shipping carton based on the type of product or specific direction from Target on a specific event. The following are labels you may be required to place on the shipping carton. ▪ Fragile Item Label

Packing and Carton Markings 10 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

o o o o

Cartons containing fragile items such as glass or ceramic items, should be marked with the words “Fragile” and/or “This End Up” Markings may be direct printed on the carton, or may be printed on a label that is applied to the carton. Labels must not cover any pertinent information for product identification (including barcodes). Markings must be applied on 2 adjacent sides of each carton – near the shipping container barcodes. It is permissible to apply markings to all 4 sides of the carton. Placement should be consistent on each carton. Example of the fragile carton markings

•

Delicate Item Label o Delicate Item carton labels identify cartons of hanging apparel items that require gentle handling by Distribution Center team members. o Delicates” include business-casual hanging apparel such as dress slacks, blazers, skirts, dresses, woven tops and shirts. Also included – but not limited to fabrics such as silk, rayon, satin, linen and wool. o Cartons that require these labels are opened by the Regional Distribution Centers in the U.S. and repacked to distribute the contents to more than 1 store. o Minimum label size is length: 5” (12.7cm), height: 3 ½” (8.89cm). o Pre-printed labels may be purchased from Avery Dennison. o Apply 1 label to each carton. The label should be placed on the top of each carton. There is no specific location for the label on the top of the carton. However, the label must not cover any other human readable information or barcodes applied to the carton. Example of the delicate item label

Target Stores PO# 1234567 DPC-Item # 123456789 STYLE #: COLOR: SIZE: CASEPACK: 12 Country of Origin: CARTON # _ of _ Carton Dimensions in CM

Target Stores PO# 1234567 DPC-Item # 123456789 STYLE# COLOR: SIZE: CSPK: COUNTRY OF

Packing and Carton Markings 11 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Event Label o Event labels are used to identify cartons that contain product sold for a short period of time. The color of the label makes these cartons clearly visible to store employees as they walk through the stock rooms. o 3 events require event labels: ƒ Mini Seasonal ƒ Rear Seasonal ƒ Sales Plan (End Caps) o Target Merchandising Department will specify when an event label should be used. Specific events along with the appropriate color label for each event are located on Partners Online.

POL: Guidelines & Info> Requirements & Procedures> Shipping >Import Carton Markings > Target is Importer of Record

Example: Event Label

o

Labels should be applied to two (2) adjacent sides – do not cover human readable information or barcode label. Example of carton with an event label.

Target Stores PO# 1234567 DPC-Item # 123456789 STYLE #: COLOR: SIZE: CASEPACK: 12 Country of Origin: CARTON # _ of _ Carton Dimensions in CM H cm __/ W cm __/ L cm __

o o

Target Stores PO# 1234567 DPC-Item # 123456789 STYLE# COLOR: SIZE: CSPK: Country of Origin: Cart. # Dimensions

Minimum label size for the event label is 5” x 3.5” (1.7cm x 8.89cm). 36 point Bold font for print

Packing and Carton Markings 12 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

o •

Blank label stock in the appropriate color can be purchased from Avery Dennison.

Transition Label o Each individual Target Merchandising department who requires use of transition labels determines the requirements, the information to be contained on the label and the color of the label. This information will be communicated to the vendors directly. o Placement on the shipping carton would be the same as the event label o If an event label is required, a transition label will not be required.

Packing and Carton Markings 13 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Barcode Label Order Form DPCI / U.P.C. IMPORT CARTON BAR CODE LABEL ORDER FORM Target (ICBS Label) ORDER DATE:

DATE REQ.

PO#

Bill To:

Ship To:

Contact:

Contact:

Email:

Email:

Phone:

Fax:

SHIP VIA:

Phone:

Special Instructions:

Note: Check Digits are not included in the form below and will be calculated by the Label Provider.

Prefix 7049 7049 7049 7049 7049 7049 7049 7049 7049 7049 7049 7049 7049 7049 7049 7049

Instructions: Enter 9 digit Target Item number (DPC-Item).

Carton Bar Code Label Quantity

OR

Vendor U.P.C. or EAN-13 Enter a number from 1 through 8

Use for U.P.C Only

DPC-Item Carton Bar Code

Enter first 11 digits of U.P.C. …Or… first 12 digits of EAN-13

Carton Bar Code Label Quantity

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Please note, this generic form may be used to order the Import Carton Bar Code labels ONLY from any Target approved label supplier.

Packing and Carton Markings 14 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Barcode Label Approval

Carton Marking Approval Form (Note: This form is used for all types of labels submitted for Target Corporation Approval.)

To: Vendor Operations – Carton Marking Approval Fax: 612-304-1869 Contact Name:

____________________________________________________

Email:

____________________________________________________

Phone #:

____________________________________________________

Fax #:

____________________________________________________

Date Submitted:

____________________________________________________

Vendor name and #:

____________________________________________________

Dept # and/or description of goods:

____________________________________________________

Type of Shipment:

LTL / TL Small parcel (FedEx, UPS, etc.)

Type of Label: EAN.UCC-14 (SCC-14, Case UPC or ITF-14) & Human Readable Markings (Must submit UCC-128 Pallet Label for approval also.) Direct-to-Store Import Human Readable Carton Markings (submit illustration) Import Carton Barcode – (Only needed when barcodes are not created by Target Barcode Suppliers. Include illustration of Human Readable Markings for approval also.) UCC/EAN-128 Carton Label (Full Case Flow/Breakpack or Predistro) UCC/EAN-128 Pallet Label (Must submit carton barcode label & human readable markings also.) UCC/EAN-128 Assortment Item Label UCC/EAN-128 PIPO Label Target.com

Packing and Carton Markings 15 of 15 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

INTERNATIONAL TRANSPORTATIO N / SHIPPING

International Transportation / Shipping 1 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

INTERNATIONAL TRANSPORTATION / SHIPPING

Overview Import Transportation provides information and requirements for preparing an Import shipment for Target from your facility. Import Transportation includes booking a purchase order, proper loading of the merchandise, delivery of less then container freight as well as delivery of full containers, document delivery and the time requirements.

Table of Contents 1. Factory Booking Requirements 2. Loading and Delivery of Freight 3. Documentation Requirements

Objectives • Understand Target’s shipping requirements • Understand factory’s responsibility of cargo handling and consolidation

Resources • Container Load Plan • Air Freight Agreement letter • Vendor Air Freight Agreement letter • Air Freight Worksheet • Local Consolidator

International Transportation / Shipping 2 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

1. Factory Booking Requirements • •

After Purchase Order is designated to Factory o The vendor will determine who will be responsible for booking, delivery of cargo and documentation After Purchase Order is designated to Factory o Vendor/Factory will provide consolidator information for booking or Target systems OTM (Overseas Transportation Management)

Booking Cargo •

Vendor/Factory is responsible for: o One booking per PO o Items needed to place a booking: ƒ Purchase Order # ƒ # of cartons ƒ Total weight of cartons ƒ Dimensions of cartons ƒ Total CBMs (cubic meters) and kilos ƒ Ready Cargo date ƒ Identify hazardous materials o Book with designated Consolidator a minimum of 10 and a maximum of 17 calendar days in advance from first day of ship window (Market conditions may dictate variances to this standard) o Book cargo using the consolidator’s web-based booking tool or OTM (will be available throughout 2008 as origins are approved for OTM)

Note: Target.com POs are not available on the web-site •

Consolidator is responsible for: o Verify PO details o Book cargo with Ocean Carrier o Communicate any exceptions or discrepancies to Target for resolution o Confirm CBM’s (cubic meters) of each purchase order o Determine if PO is Full Container Load or Less than Container Load

Note: Vendor and factory will work together to determine if the goods that are being shipped are hazardous or dangerous goods

International Transportation / Shipping 3 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Shipping Hazardous Materials (Dangerous Goods) •

• •

Hazardous materials are reviewed as any solid, liquid or gas that has the potential to harm people, other living organisms, property or the environment. A hazardous material may be radioactive, flammable, explosive, toxic, corrosive, biohazardous, an oxidizer, an asphyxiant, an allergen, or may have other characteristics that make it hazardous in specific circumstances. Risks associated with hazardous materials may require the removal of these materials from products or packaging or may require safety precautions during their transport, use, storage and disposal. Target requires all vendors to research and obey all U.S. laws as they relate to hazardous materials Examples of hazardous materials (dangerous goods) includes, but is not limited to: o o o o o o

Fragrances, nail polish and its remover Matchboxes, matches and butane lighters Oil diffusers Kerosene or mercury based thermometers Touch up paint or glue included with furniture. (Carton must be properly marked) If clarification is needed on Hazardous Material, e-mail [email protected]

2. Loading and Delivery of Freight •

Consolidator will determine freight type and communicate to vendor/factory: o Container Yard (CY) factory load is also referred to as FCL-Full Container Load o Consolidated Freight Station (CFS) consolidator load with other Target freight o Less than Container Load (LCL) at consolidator with non-Target freight (used at smaller origins) o Air Freight

CY (Container Yard) Factory Loading Requirements • • •

Target’s import carton marking instructions must be followed. o The consolidator cannot inspect the accuracy of the carton markings on factory loads, but our U.S. Deconsolidators will note all exceptions. The consolidator will advise the vendor/factory of the ocean carrier container release number. The vendor/factory is responsible to arrange pick up of the container from the ocean carrier.

International Transportation / Shipping 4 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

•

Procedures for loading correctly are as follows: o Inspect containers for potential water damage due to holes and cracks in the roof and walls, or defective door seals. The inspection must be completed prior to vendor/factory acceptance and loading of the ocean container. o Utilize container capacity to the maximum to avoid payment of additional ocean freight cost. o Minimum Container Capacities:

o o

o

40’

56 CBM’s

40 HC’

64 CBM’s

45’

73 CBM’s

20’

28 CBM’s (Weight restricted freight only)

Anything less than 56 CBM’s per 40’ container must be delivered to Target’s consolidator for consolidation in PO# / Item # integrity. Containers loaded must not exceed the following weight restrictions: ▪ 45’ container – 44,000 pounds / 19,732 kilograms ▪ 40’ container - 44,000 pounds / 19,732 kilograms ▪ 20’ container - 36,000 pounds / 16,330 kilograms Containers loading sequence: Left to Right Bottom to Top Nose to Tail of Container, by Company: o Target Stores in the nose of the container o Then, Target.com o Finally, Target Advertising/Non-Retail in the tail of the container ▪ PO #’s and Item #’s must face tail of container ▪ All loads Must be Stabilized ▪ Do not mix PO’s and items throughout the container. ▪ View from Rear of Container ▪ When the carton weight or dimensions will not allow for the “Standard Load Requirements”, container MUST still be loaded with consistency appropriate to the product. ▪ ANY exceptions in loading the container must be indicated on the Container Load Plan (CLP). ▪ ▪ ▪

POL: Guidelines and Information>requirements>shipping>transportation imports>standard loading requirements Note: Non-compliance of these requirements will result in a claim filed against the Vendor.

International Transportation / Shipping 5 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Example: Container Load Plan (also see resources) CONTAINER LOAD PLAN Factory/Vendor:

Container No.

Seal Number(s)

Consignee:

Container Delivery Date:

CY or CFS?

Carrier:

Port of Loading:

Port of Discharge:

Initial Inspection of container External condition of the container/externo Roof condition of the container/techo: Wall condition of the container/paderes: Floor condition of the container/piso: Door condition of the container/puerta: Other/otros:

OK/Bien OK/Bien OK/Bien OK/Bien OK/Bien OK/Bien

ROW:

CTNS

DPCI

PO#

Style #

Remarks/Comments:

VCP

Total Pcs/Items

Total Total Kilos/Item Cbms/Item

Grand Total Shipment Release/Inspection Certification (TSS Vendors Only) Date of Inspection and Inspector: Employee Who Sealed Container Time Container Date Container Sealed Sealed

o o o

Employee ID

The container load plan must be fully completed, including the name of the employee who sealed the container, the employee ID#, the time the container was sealed and the seal numbers applied to the container. The container load plan must be attached onto the last row of cartons prior to the closure of the container. The CLP should be sent to the consolidator within 48 hours of container delivery.

Note: No container load plan is necessary for CFS shipments. Note: Central America container load plans are required to be sent to the consolidator the same day as the container is delivered/picked up. o o o

Multiple POs may be loaded into a single container along with Target.com POs to utilize all space available in a container Target’s vendors should ship orders ‘complete’ (without overages or shortages). Stabilize the load to avoid in-transit shifting and damage. ƒ Stabilization Requirement:

International Transportation / Shipping 6 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

Stair Loading Stabilize the load to prevent transit shifting All CFS cargo must be delivered to the Consolidator in PO/ITEM integrity. Load stabilization or blocking and bracing charges are the responsibility of the vendor o o

o o o

All Cargo must be floor loaded to maximize container space. Pallets/Skids are NOT permitted. All exceptions to the purchase order MUST BE communicated to the consolidator. If an order is factory loaded in one or more containers but has an overflow of cartons, it must be handled as follows: ƒ The Consolidator must receive vendor Container Load Plan within 2 calendar days of FCR receipt (this allows consolidator to transmit timely Advanced Ship Notice to Target). Non-Compliance will result in penalty to vendor imposed by consolidator. ƒ Overflow cartons must be delivered to Target's designated consolidator. ƒ Two separate sets of documents must be provided; one for the factory loaded container(s) and one for the overflow cartons. (This is required due to U.S. Customs processing methods for full containers vs. less than container P.O. shipments). Deliver the container to the designated port within the ship window assigned to Purchase Order Prepare required shipping information (SI) per US Customs 24-hour manifest cutoff requirements to the designated consolidator four (4) days prior to the chancel date for CY (factory load) Port terminal Issues a non-negotiable receipt

International Transportation / Shipping 7 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

CFS (Consolidated Freight Station) Delivery Requirements •

CFS freight must be delivered to consolidator on first day of PO ship window with required shipping information for the 24-hour Manifest. Example: Ship window of July 1-July 6 Freight must be delivered on July 1st o o o

• •

Consolidator conducts shipment audit Consolidator issues non-negotiable warehouse receipt Consolidator books containers with steamship line

All CFS cargo must be delivered to the Consolidator in PO/ITEM integrity. LCL (Less than Container Load) & MCC (Multiple Country Consolidation) requires authorization on ALL shipments

Forwarders Cargo Receipt (FCR) • •

Issued after requirements are completed. Requirements include: o Containers and overflow are delivered. o Cargo is received at appropriate time. o Carton markings are acceptable o Cargo received in good order o Full and accurate set of documents are delivered. o Origin charges are paid by the vendor/factory.

Seal Management •

•

Seal Management Letter for low-medium risk countries is located on POL: Guidelines & Info>Requirement & Procedure>Shipping>Shipping Tab>Transportation Import>Seal Management Seal Management Letter for high risk countries is located on POL: Guidelines & Info>Requirement & Procedure>Shipping>Shipping Tab>Transportation Import>Seal Management

Note: Contact your local consolidator to determine if your factory is low, medium or high risk

International Transportation / Shipping 8 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

CY Seal Process for Low-Medium Risk Countries Vendor/Factory Consolidator Steamship Deconsolidator Trucking Appointment

x

Pick-up Container

x

Pick-up Steamship Seal

x

Load Container

x

Apply Customs Seal

x

Apply Target Seal

x

Apply Steamship Seal

x

Record Seals

x

x

Validate Seals at Export

x

x

Validate Seals at Import

x

x

x

1. Vendor/Factory will set up trucking appointment to pick-up empty containers from the steamship line designated by Target’s nominated consolidator. Trucking will be the responsibility of the vendor unless terms of the sale are FCA. 2. Target’s vendor/factory will control the trucking and pick up of container and steamship line seal from the container yard and position the container to the factory. If the steamship line releases the seals in groups, the vendor should maintain inventories. Seals must be logged in a book and signed out as described in the CTPAT regulations. 3. The vendor/factory will maintain a container seal log with the following information: date/time of sealing, seal number, container number, employee name and identification that completed the container sealing process. (This includes full inventory visibility. When the seal arrived in factory and from which SSL). The Steamship Line Seal must be maintained in the container seal log at the factory. 4. The vendor/factory will load the container and attach any origin customs agency seal and steamship line issued seal. Steamship line seals must be attached to the right door (looking at the container) of the container or the portal hole if available. 5. The vendor/factory must follow the below steps when attaching a seal: o o o o

V – View seal and container locking mechanisms for tampering V – Verify seal number against documents T – Tug on the seal to make sure that it is affixed properly to the container T – Twist and turn the seal to make sure that does not unscrew

6. The steamship line seal will be noted on the truck bill of lading and/or Container Load Plan and signed by the vendor along with a date stamp and time. A copy of this truck bill will be included in the document pouch submitted to the consolidator and maintained by the origin consolidator.

International Transportation / Shipping 9 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

7. The steamship line seal number will be noted on the documentation submitted to the consolidator in compliance with the C-TPAT 24-hour manifest requirements. 8. In compliance with CTPAT regulations, vendor/factory should be doing regular audits and keeping a log of findings for Target’s review.

CY Low-Medium Risk Countries Seal Discrepancy • • •

If at any time a seal discrepancy is brought to the consolidator attention a Seal Discrepancy Form must be completed and sent to: [email protected] with an explanation. If seal discrepancy is due to origin customs inspection, maintain copy of inspection certificate and update container load plan with accurate seal number. If a steamship line issued seal is found to be missing at the time of processing through the port terminal gates or the original seal issued by the SSL is different from the seal number issued by the SSL and recorded by the consolidator, the following actions should be taken:

1. If the container has not been loaded onto the departing vessel, the consolidator will report the discrepancy to the SSL if found prior to the port. If found after the container arrives at the port, the SSL will report to the consolidator. Then, request to hold the container until research can be done with the vendor to determine the location of the original seal issued by the carrier. If seal discrepancy is found after container is loaded on a vessel the SSL will report to the consolidator. 2. The consolidator will notify the vendor, International Supply Chain Security and Target Overseas Operations of the seal discrepancy and request local origin customs to authorize a physical inspection of the container. 3. All charges related to inspection of the container will be the responsibility of Target, unless it can be determined that the vendor was in error when attaching the seal and the correct seal can be accounted for. If the vendor is in error, all inspection charges will be the responsibility of the vendor. Overseas Operations will notify Target buying departments of possible shipment delays and any additional costs. 4. The consolidator and/or a vendor representation, when legally applicable, should be present for the inspection. The full contents of the container should be removed and the container inspected as per CTPAT guidelines. Contents of the cartons should be randomly inspected to ensure that the integrity of the cartons have not been compromised. 5. A copy of the inspection report and clearance authorization will be forwarded to Target Global Assets protection. 6. Once the inspection report has been received and approved by Target Asset Protection, the container will be rebooked and sealed with new Steamship Line issued Seal. 7. Low/Medium risk origin seal management begins again.

International Transportation / Shipping 10 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

CY Seal Process for High Risk Countries Vendor/Factory Trucking

x

Pick-up

x

Pick-up

x

Load

x

Apply

x

Apply

x

Apply

x

Record

x

Consolidator

Steamship

Deconsolidator

x

Validate

x

x

Validate

x

x

x

1. Vendors will set up trucking appointments to pick-up empty containers from the steamship line designated by Target’s nominated consolidator. Trucking will be the responsibility of the vendor unless terms of the sale are FCA. 2. Target’s vendor will control the trucking and pick up of container and steamship line seal from the container yard and position the container to the factory. If the steamship line issues the seals in groups, the vendor should maintain a record of the seal inventories. Steamship line seals must be logged in a book and signed out as described in the C-TPAT regulations. 3. In addition to the seal issued by the steamship line, a Target authorized seal will be provided to each factory by the consolidator as a secondary seal. It is the vendor’s responsibility to request the Target issued seal. This seal is either a cable seal or a bar seal that will be managed by the consolidator on behalf of Target. The seals will be purchased at Target’s expense. . 4. The vendor will maintain a log of the container seal numbers issued by the steamship line and the Target’s authorized seal numbers. The following information should be included: o o o o o o o

Date both seals arrived in factory Issuing party of the seal(s): Steamship Line or Target (via consolidator) Factory employee name and identification that completed the container sealing process Date/time of sealing at the factory (record for each seal number) Seal number Container number Both the Steamship Line Seal and the Target Issued Seal must be maintained in the container seal log at the factory.

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5. The vendor will load the container and apply Target’s authorized seal in addition to any origin customs agency seal and steamship line issued seal. Steamship line seals must be attached to the right door (looking at the container) of the container or the portal hole if available. 6. The vendor must follow the below steps when attaching a seal: V – View seal and container locking mechanisms for tampering: o o o

V – Verify seal number against documents T – Tug on the seal to make sure that it is affixed properly to the container T – Twist and turn the seal to make sure that does not unscrew

7. The Target Seal and the steamship line seal will be noted on the truck bill of lading and/or Container Load Plan and signed by the vendor along with a date stamp and time. A copy of this truck bill will be faxed to the origin consolidator within 1 hour of departure from the factory and maintained by the origin consolidator. 8. In compliance with CTPAT regulations, vendors should perform regular audits and maintain a log of findings for Target’s review.

CY High Risk Countries Seal Discrepancy • •

If seal discrepancy can be explained due to origin customs inspection, maintain copy of inspection certificate and update container load plan with accurate seal number. If a steamship line issued seal is found to be missing at the time of processing through the port terminal gates or the original seal issued by the SSL is different from the seal number issued by the SSL and recorded by the consolidator, the following actions should be taken:

1. If the container has not been loaded onto the departing vessel, the consolidator will report the discrepancy to the SSL if found prior gating into the port. If found after the container has gated into the port, the SSL will report to the consolidator. Then, request to hold the container until research can be done with the vendor to determine the location of the original seal issued by the carrier. 2. The consolidator will notify the vendor, International Supply Chain Security and Target Overseas Operations of the seal discrepancy and request local origin customs to authorize a physical inspection of the container. 3. All charges related to inspection of the container will be the responsibility of Target, unless it can be determined that the vendor was in error when attaching the seal and the correct seal can be accounted for. If the vendor is in error, all inspection charges will be the responsibility of the vendor. Overseas Operations will notify Target buying departments of possible shipment delays and any additional costs. 4. The consolidator and/or a vendor representation should be present for the inspection. The full contents of the container should be removed and the container inspected as per CTPAT guidelines. Contents of the cartons should be randomly inspected to ensure that the integrity of the cartons have not been compromised. 5. A copy of the inspection report and clearance authorization will be forwarded to Target Global Assets protection. International Transportation / Shipping 12 of 21 © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

6. Once the inspection report has been received and approved by Target Asset Protection, the container will be rebooked and sealed with new Steamship Line issued Seal and Target issued Seal. 7. High risk origin seal management process begins again.

Import Air Freight •

When is Air Freight used? o Air Freight is used to meet in-store date deadlines for merchandise that is not able to ship with the original ship window. o Vendor and Target Merchandising Department jointly agree product must be airlifted to meet the in-store date, and decide who will pay for air freight charges. o Vendors are required to use a Target designated Air Freight Forwarder.

•

International Air Freight Procedures o All air shipments move on a freight collect basis. o POs with FOB Terms - Vendors are responsible for all origin charges. o POs with FCA Terms - Origin charges will be part of the Target Air Freight Discount Worksheet. o If the vendor/factory is responsible for any portion of the airfreight charge (i.e.: sea/air difference) this is accomplished by providing a Late Shipment Discount on the Commercial Invoice. o Airfreight Forwarder Grid (see resources) o Airfreight forwarders will receive an Import Air Authorization Form from Target Import Transportation. If the request indicates the vendor is responsible for any portion of the airfreight charges then the forwarder will be responsible for completing the Discount Worksheet.

Discount Worksheet Procedures •

•

The Air Freight forwarder is responsible for: o Calculating the air freight charges for the shipment. ƒ Completing a Target Air Freight Discount Worksheet ƒ Providing a copy of the worksheet to the vendor The Vendor is responsible for: o Applying late shipment discount to the commercial invoice.

Note: The discount must be titled “Late Shipment Discount.” Note: It is imperative that this letter is received, and dated, prior to the aircraft departure date. ƒ ƒ ƒ o

Preparing Air Freight Agreement letter Moving the shipment on a Freight Collect basis All documents in addition to the Target Air Freight Discount Worksheet and the Vendor Air Freight Agreement letter. If the vendor does not produce the Vendor Air Freight Agreement letter and/or show a “Late Shipment Discount” on their commercial invoice the forwarder will

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o

accept the commercial documents, as presented, and forward the shipment on a collect basis. Vendors must continue to coordinate all aspects of air shipments with our air forwarders. This covers: ƒ Cargo booking ƒ Cargo delivery ƒ Commercial documents preparation

Note: Documents for Air Shipments need to be shipped with the goods. Until documents are received in good order, the goods cannot be shipped. •

Late Shipment Discount Procedure o If the vendor is responsible for part or all of the air freight charges, the following documents need to be completed and received. Until documents are received in good order, the goods cannot be shipped.

Note: The documents are acceptable as email attachments o

Air Freight Discount Worksheet o Vendors will receive the Air Freight Discount Worksheet from the Air Freight Forwarder. ƒ Air Freight Agreement letter below (also see resources) Example: Vendor Air Freight Agreement Letter

ABC Vendor Inc. April 26, 20## To: (Appropriate Company Name) Re: Dept 83, PO 1234567 The merchandise covered under your order number (insert PO number) will not be available for shipment by the Cancel Date on the order. As an inducement to persuade (insert Target Stores or Target.com) not to reject the merchandise outright, we are offering to reduce the price of the merchandise by (insert amount calculated on the Worksheet under Vendor Portion). Sincerely, Note: This letter must be on the vendor’s letterhead stationary and must be dated prior to the aircraft departure date. o o

The vendor will prepare the letter on signed vendor letterhead. It is imperative that this letter is received and dated prior to the aircraft departure date. Commercial Invoice ▪ Please ensure the “Late Shipment Discount” amount matches the ▪ Calculated amount on the Air Freight Discount Worksheet. The discount must be titled “Late Shipment Discount”.

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Example of the late shipment discount deduction on a Commercial Invoice: Item

Description

Quantity

Price

Total

041081234

Women’s knit sweater – Blue

5000 pcs

$10.00

$50,000.00

041091235

Women’s knit sweater – Red

4000 pcs

$10.00

$40,000.00

Total first cost

$90,000.00

Late Shipment discount

($3,000.00)

Net Invoice Total

$87,000.00

Note: In this example, the total invoice cost is $90,000 and the late shipment discount is $3,000. The net invoice total should be $87,000. The Broker will present to US Customs at the reduced net total of $87,000.00. Should a net invoice total fall bellow the cost of the goods – no discount should be taken as Target can not present a negative invoice to US Customs. The Air Freight forwarder will complete the Discount Worksheet and request the vendor to complete the Target Air Freight Agreement letter which will be forwarded to Target with the documents. These totals will provide the correct dollar amount for Target Import Claim Dept to file a claim with the vendor for the air freight. No Discount is deducted from the invoice. ƒ

Visas: o If there is sufficient time for the vendor to obtain a visa in the discounted amount he must do so. If there is not sufficient time, the vendor should proceed with the original visa so as not to delay the shipment.

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Letters of Credit: o Our Letters of Credit are being amended to incorporate this procedure. For all air shipments where the vendor is responsible for some of the airfreight charges the air waybill, Vendor Air Freight Agreement letter and Target Corporation Air Freight Discount Worksheet must be presented to our bank. And, of course, the commercial invoice must indicate a Late Shipment Discount equaling the amount on the worksheet. Letters of Credit will continue to allow Target Corporation to reduce any draft payments when an air waybill is presented.

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Customs Brokers: o If airfreight documents are received and include a commercial invoice with a “Late Shipment Discount” and a Vendor Air Freight Agreement letter then the discount is to be treated as a non-dutiable charge. If all of these documents are not received in proper order then Entry is to be made at the full invoice value, before any discount, and an inquiry must be sent to the appropriate Commodity Specialist. o If the shipment is subject to quota restrictions, and the Visa does not include a Late Shipment Discount corresponding to a discount on the commercial invoice, the discount is still treated as a non-dutiable charge. In the event that Customs requests an explanation for the difference in value between the commercial invoice and the visa please send an inquiry to the appropriate Commodity Specialist. o Finally, the billing packet must include a copy of the Vendor Air Freight Agreement letter and the Air Freight Worksheet (also see resources) Example: Import Transportation TARGET CORPORATION AIR FREIGHT DISCOUNT WORKSHEET Company (circle one): Target Mervyn’s Target.com Department: Purchase Order: MAWB: HAWB: a) Total Cubic Meters (CBMS) b) x Target Corporation Estimated Ocean Freight per CBM Rate c) = Estimated Ocean Freight Amount (a times b) d) Total Collect Air Freight Amount e) Vendor Portion (d less c) The forwarders name and address must appear on the worksheet.

Note: Vendor Portion may be Sea/Air difference, 50% of the Sea/Air difference, 25% of the Sea/Air Difference, etc. Amend the worksheet to accommodate the various terms, which are communicated via the Import Air Freight Request.

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Example: Import Transportation Example of Vendor Air Freight Agreement ABC VENDOR INC.

April 26, 20## To: Target Stores Re: Dept 83, PO 123456 The merchandise covered under your order number (insert PO number) will not be available for shipment by the Cancel Date on the order. As an inducement to persuade (insert Target Stores or Target.com) not to reject the merchandise outright, we are offering to reduce the price of the merchandise by (insert amount calculated on the Worksheet under Vendor Portion). Sincerely,

Note: This letter must be on the vendor’s letterhead stationary and must be dated prior to the aircraft departure date.

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3. Documentation Requirements •

•

Documents are required by US Customs and Border Protection (CBP) along with other Government Agencies have stringent and detailed requirements for importation of goods into US o Without these documents, the product could be delayed in US customs Each factory should work with their vendor to obtain a list of all required documents. Example of a Container Load Plan

CONTAINER LOAD PLAN Factory/Vendor:

Container No.

Seal Number(s)

Consignee:

Container Delivery Date:

CY or CFS?

Carrier:

Port of Loading:

Port of Discharge:

Initial Inspection of container

Remarks/Comments:

External condition of the container/externo Roof condition of the container/techo: Wall condition of the container/paderes: Floor condition of the container/piso: Door condition of the container/puerta: Other/otros:

OK/Bien OK/Bien OK/Bien OK/Bien OK/Bien OK/Bien

ROW:

CTNS

DPCI

PO#

Style #

VCP

Total Pcs/Items

Total Kilos/Item

Grand Total Shipment Release/Inspection Certification (TSS Vendors Only) Date of Inspection and Inspector: Employee Who Sealed Container Date Container Sealed

Employee ID Time Container Sealed

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Total Cbms/Item

Example of an Air Freight Agreement letter

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Example of a Vendor Air Freight Agreement letter

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Example of an Air Freight Discount Worksheet

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PRODUCT SAFETY, RECALL AND PRODUCT REGULATORY COMPLIANCE REFERENCES

Product Safety Recall and Product Regulatory Compliance References © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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PRODUCT SAFETY RECALL AND PRODUCT REGULATORY COMPLIANCE REFERENCES

Overview Target is bound by law to report safety issues to the appropriate U.S. Government agency. All manufacturers producing merchandise for the U.S. must understand and comply with all U.S. Government Standards and Regulations in addition to the Target Standards for Product Safety. Failure to comply with these standards and regulations may result in a recall or removal of product from sale. Target is committed to buying and selling safe products. We require that all manufacturers whom our vendors do business with are in compliance with the U.S. law. Non-compliance with any product safety laws or regulations may result in monetary penalty, costly administrative actions and/or litigation, as well as negative publicity.

Table of Contents 1. Vendor/Factory Roles and Responsibilities 2. Product Safety and Recall Definitions 3. Target Safety Standards 4. Product Regulatory References

Objectives • Understand the Product Safety and Product recall processes • Understand the factory responsibilities

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1. Vendor/Factory Roles and Responsibilities • •

Produce a safe, quality product which meets Target standards, industry standards and all U.S. State or Federal standards and regulations for safety. If the product fails to comply, and a product recall is initiated, it is the vendor’s responsibility to compensate Target for all costs associated with the product recall.

2. Product Safety and Recall definitions • •

A Recall is the removal of product from sale in conjunction with government agency. Consumer level notification may be required. A Voluntary Market Withdrawal is the removal of product from sale (either vendor initiated or Target initiated). Consumer level notification is not required.

Reasons Recalls are initiated • To protect US consumers from potentially hazardous products. • When a product does not meet State or Federal standards. • When a product does not meet Target standards. • When a product violates Intellectual Property Laws.

How Recalls are initiated • U.S. Government mandated by one of the following agencies: o Consumer Products Safety Commission (CPSC) o US Food and Drug Administration (FDA) o United States Department of Agriculture (USDA) o Customs and Border Patrol (CBP) o Environmental Protection Agency (EPA) • Vendor (manufacturer or distributor) can initiate recalls when a product does not meet product safety standards. • Target can initiate a recall when the product does not meet a Federal or State regulation or standard or a Target Safety Standard. Target can initiate a recall when the product contains a hazard which could create substantial risk of injury to person or property. o In case of a recall, vendor is responsible for costs associated with the recall. These costs, could include, but are not limited to: ƒ Cost of product ƒ Destruction of the product ƒ Transportation/Supply Chain costs ƒ Labor Costs ƒ In-Store Signage ƒ Advertising Disclaimers • Competitor initiated o Copyright infringements o Trademark infringements o Other infringements

Product Safety Recall and Product Regulatory Compliance References © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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3. Target Safety Standards • • • • •

Target’s expectation is that Vendors/Factories comply with Government, Target and Industry Standards and Regulations for their specific products. Safety related standards can be found in the product protocol. POL: Product Development > Requirements & Procedures > Softlines Product Development > Childrens Safety Guide POL: Product Development > Requirements & Procedures > Softlines Quality Assurance > Children’s Apparel > Manufacturing Safe Garments POL: Product Development > Requirements & Procedures > Hardlines Quality Assurance > Softhome > Regulatory and Safety

4. Product Regulatory References Common State and Federal regulations include but are not limited to the following: •

Consumer Products Safety Act – This protects the public against unreasonable risk of injury and death associated with consumer products. Website: www.cpsc.gov

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California Proposition 65. This law is intended to warn consumers of potential risks associated with specific chemicals contained in consumer products. Although this is a state regulation, Target applies it to all products. Website: www.oehha.ca.gov

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Federal Hazardous Substances Act – 15 U.S.C 1261-1278

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Federal Food, Drug, & Cosmetic Act – 21 U.S.C 301-397

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Flammable Fabrics Act – 15 U.S.C 1191-1204

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Poison Prevention Packaging Act – 15 U.S.C 1471-1476

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United States Food & Drug Administration (FDA). Website: www.fda.gov

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United States Department of Agricultural (USDA). Website: www.usda.gov

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United States Environmental Protection Agency (EPA). Website: www.epa.gov

Product Safety Recall and Product Regulatory Compliance References © 2008 Target. These materials are for the sole use of designated employees and business partners of Target. Reproduction, electronic transmission, third party use or other disclosure is strictly forbidden.

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