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    Facsimile Shanghai Office

Privileged/Confidential Information may be contained in this 19/F, Shui On Plaza facsimile and is intended only for the use of the addressee. 333 Huai Hai Zhong Road If you are not the addressee, or person responsible for delivering Shanghai 200021 it to the person addressed, you may not copy or deliver this to People’s Republic of China anyone else. If you receive this facsimile by mistake, please (8621) 6386 6688 Telephone notify us immediately by telephone. Thank you. (8621) 6386 2288 Facsimile

    To (name) C.Anderatini From (name) Norman Sze cc (name) Edward. Peng Office number 0744 At (company) Merloni TermoSanitari Charge number MER45206


    Facsimile number 0510-5212377 Date October 8,1999 Priority: ? Immediate

    ? Normal No. of pages to follow 2


     ? Send with attached Distribution List (8621) 6386 6688 x 243

    Subject/Special Instructions: MPS/MRP PROJECT IMPLEMENTATION

Dear Mr. Andereatini,

Thank you for your fax dated Sept. 28, '99 and the detailed project schedule prepared by your EDP department .

    We understand that you agreed with us about the approach and the engagement of 2 people in the project. And

    the total project process is 82 working days. However, we still have some concerns which we would like to let you

    be aware:

1. Based on your schedule, the process of MRP implementation is from Sept. 14 to Dec. 24 and AA consultants

    will involve for 32 days (16 * 2 people). From the schedule we only get the information that our consultants

    will provide service at any time you require. Since the schedule does not provide the exact date for AA

    consultants to provide service, it is very difficult for us to arrange the work at this time. We would like to

    know the exact day in which you require our consultants to provide the service in order to facilitate the job


2. As we had specified, we proposed to use the standard BPCS implementation approach which has proved to

    the success of the previous project on Finance and Distribution modules. From your aproach and schedule, we

    still do not understand fully the new approach and it may affect the implementation process. For example,

    without proper involvement and the front end in the prototyping, it is very difficult for A.A. to easily estimate

    the time in advance and to "check and solve problem".

3. If you still insist on this approach, let’s try our best effort to support you. Given that we are not monitoring the

    implemetation progress in the coming phase and Mr. Chenxi requested that we are on a call basis to provide

    the support service. In this regard it is difficult for our staff to stand-by and wait for your call. We would like

    to emphasize beforehand that MTS shall be fully responsible for the project, while A.A. will adopt "loan staff"

    method, i.e. our consultant will carry out tasks as instructed by your project leader.

    In order to speed up the project, we will further discuss with your project team on the arrangement and the detail schedule in Wuxi next Monday.

Best Regards,

Norman Sze

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