GM Suppliers Changing the way we work 7th January 2010

GM Suppliers Changing the way we work 7th January 2010

Contents Overview Summary of changes Timelines
Detailed change information Please ensure that you have circulated this information to the relevant personnel within your organisation

1. Overview

Phase 1: Getting the Basics Right
We will deliver changes to the way we work through a number of phases. Phase 1 will include; Changes to the way we Plan Changes to the way we Buy Changes to the way we Move Changes to the way we Pay These will all be delivered through; Our processes and procedures Our ways of working Our policies Details of future phases will be communicated at a later date. Phase 1: Getting the Basics Right

Changes to our processes and procedures
Plan Buy Move Pay EDI Implementation Implementation of industry-standard EDI Electronic communication of contracts, orders and Supplier invoices Solutions for large and small Suppliers Greater use of electronic communications Having accurate information about our Suppliers – address, contact details, etc. Ensure that all product information is accurate and up to date - some additional product data may be required Improving the quality of our data

Changes to our process and procedures (contd.)
Plan Buy Move Pay Improved planning to drive accurate orders Focus on PO accuracy and fulfilment. Simplifying our buying processes for UK and International, to support our International growth aspirations Clearer rules around quantity and date changes to orders. Improved information to reduce the number of changes by M&S All changes submitted electronically Greater control around order amendments

Changes to our ways of working and policies
Plan Buy Move Pay Clarity of accountabilities Increased use of Regional Offices Single point of contact for all order and invoice- related issues Clear KPIs Accuracy and timeliness of Supplier invoices Accuracy and timeliness in PO management Aligning policies to new processes

2. Summary of Changes

2. Summary of changes 2.1 Summary 2.2 Implementation of EDI
2.3 Supplier Impact Policies Process and Procedures Ways of working 2.4 Supplier actions

2.1 Summary of the changes Plan Buy Move Pay EDI Implementation The changes we are making affect all areas of our value chain: Supplier information Order quantities and EDI for Contracts Plan PO Management processes EDI for POs Buy Extending the use of Editrack Receiving at line level Move EDI for invoicing Single point of query resolution Pay

2.2 Implementation of EDI (Electronic Data Interchange)
EDI is critical to the changes we are making M&S will offer two formats of the solution: Business to Business (B2B) solution - where documents can be sent directly between M&S and supplier systems Web EDI solution for those without full EDI capability – where documents can be sent and received via an external web portal Suppliers with a significant volume of transactions (greater than 10 invoices per week) are strongly advised to implement the B2B solution, as the IWF solution requires Suppliers to manually enter all invoices To deliver EDI M&S have partnered with GXS who will manage the on boarding process on behalf of M&S and guide our Suppliers through the set up process. M&S will require a minimum of web EDI in place with each supplier as we go live with the new systems and processes. Failure to do so may result in suppliers being unable to receive orders or to be paid

Implementation of EDI (Electronic Data Interchange)
Next Steps: GXS will contact all Suppliers to complete an on boarding questionnaire which will determine the type of solution for the Supplier Web EDI Suppliers will then need to register themselves for the system and complete the online tutorial and set up process B2B EDI Suppliers will be given full details of the specification of interfaces required, in order that they can be developed by the supplier More detail regarding the EDI solution can be found in the detailed changes section of this document

2.3.1 Processes and Procedures
Plan Planned quantity information is currently available in Contracts.com. This information will be sent to suppliers as a contract message electronically (via EDI) The contract message will contain the cost price The contract contains an indication of quantity – it will not be a commitment to buy; For Direct, the commitment to buy will be via the purchase order For Full Service Vendors, the contract will be updated with authorisation to cut, which in combination with the approved flow, will be our commitment to buy You will receive separate contracts for product delivered via the UK and product delivered direct to international hubs We want to improve the quality of our supplier data We are establishing new processes for capturing and changing information about our suppliers, which will also affect you. This is key to ensuring we have consistent communication between M&S and it’s suppliers. We need to get better at housekeeping our data Plan Buy Move Pay

Ways of Working Plan Regional Offices will become your key point of contact for all Agreement on quantities and flows (Direct purchases only) New supplier and factory set-up (Home suppliers will continue to be managed by the team in the UK) Changes to supplier details (e.g. names, contact details, addresses, factory details, etc.) Plan Buy Move Pay

Policies Plan All direct bought merchandise must be received with a valid purchase order Our new systems will not allow product to be received or paid for without a valid PO. This includes additional sizes added to orders not on the original PO Suppliers must not commence production until they have a signed contract seal Plan Buy Move Pay

Buy Product bought by purchase order only Suppliers will receive all purchase orders and purchase order amendments via EDI Purchase orders will continue to be visible on Contracts.com, with the exception of International direct deliveries and Outlet orders You will no longer be required to approve purchase orders in Contracts.com from the 24th January By 24th January Suppliers must have accepted or rejected all purchase orders. You will receive separate orders for; product delivered to the UK product delivered direct to international hubs Outlets All direct orders will be bought by Marks & Spencer plc (M&S plc), not through Supply Chain Management (SCM Ltd). Invoices should be made out to M&S plc, not SCM Ltd Contracts.com will continue to be used for style file information Plan Buy Move Pay

Ways of Working Buy The Regional Office will be the key point of contact for all Purchase orders Purchase order amendments Purchase order enquiries You must ensure all changes to purchase orders are submitted as exception reports via Editrack Suppliers will raise exception reports on behalf of M&S for M&S requested changes Plan Buy Move Pay

Policies Buy The Purchase Order is our authorisation to buy the product For full service vendors, the authorisation to cut and the approved flow are our authorisation to buy the product Orders will be deemed accepted unless highlighted by the Supplier within 48 hours There will be one status ‘approved’ when a Purchase Orders is sent to you No amendments maybe made to the purchase order within 7 days prior to M&S taking ownership Plan Buy Move Pay

Move Product bought by purchase order only All order tracking will be managed through the Editrack system All stock will be checked and measured at line (UPC) level Ways of Working Move The Regional Office will be the point of contact for all shipping amendments Plan Buy Move Pay

Policies Move All despatched stock must have an electronic packing list All direct bought merchandise must be received with a valid purchase order Our new systems will not allow product to be received or paid for without a valid PO. This includes additional sizes added to orders not on the original PO Plan Buy Move Pay

Pay We require one invoice per PO We will not be able to process invoices with multiple POs All invoices should be made out to M&S plc and not SCM Ltd Letters of Credit – All relevant paperwork should also be made out to M&S plc and not SCM Ltd There are strict rules as to what must appear on the invoice (these are shown in the detailed change information) Debit / Credit adjustments will be sent via EDI An invoice acknowledgement will be sent via EDI. This will also detail invoice submission errors All remittance advises will be ed to the supplier Plan Buy Move Pay

Ways of Working Pay The Regional Offices will act as the point of contact for all invoice related queries Escalation to Supply Chain, Buying or Financial Services will be managed by this team All queries will be resolved within a timely manner to defined SLAs Plan Buy Move Pay

Policies Pay Payment terms will commence from the date of the invoice being receipted onto the M&S system and not the invoice date Suppliers submitting compliant invoices via EDI on the date M&S take ownership for the goods will ensure that they are paid to the current payment cycle. Any delay in invoice submission will delay the payment process Invoices submitted prior to the date M&S take ownership for the goods will be rejected All invoices must be received via EDI – invoices received manually or via will be returned to the supplier unpaid Stock received without a PO will not be paid for Invoice to PO to Goods Receipt matching will be completed at line (UPC) level. Match failures may result in delayed payment Plan Buy Move Pay

2.4 Actions GXS have a plan for on-boarding suppliers to the new EDI solution. Respond quickly to requests from GXS for implementation of EDI By 24th January Suppliers must have accepted or rejected all existing purchase orders Send changes to contact details through to the appropriate team in a timely manner. We will implement service level agreements (SLAs) to ensure details are maintained promptly Reducing our PO amendments is our key priority. Review current processes and procedures to drive a reduction in purchase order amendments Focus on PO and despatch accuracy – all goods will be checked and reconciled at line level Keep Editrack up to date with the latest position regarding purchase order despatch Stock must only being shipped against a valid purchase order You will need to ensure you are regularly checking your systems for new or updated purchase orders Review invoice processes to ensure that they adhere to the new requirements and that invoices are submitted in a timely manner

3. Timelines

When it’s Going to Happen
We will deliver Phase 1 in six adoptions from January to July 2010 Phase 1 1 2 3 4 5 6 Future phases Jan Feb Mar Apr May June July Aug Sept Oct Nov Adoption Trading Area Food Only Menswear – 1 department only (T28) Menswear Lingerie; Kidswear, Beauty Womenswear (5 depts); Home Womenswear (18 depts); Per Una; Furniture 1 2 When it’s Going to Happen 2020 will be delivered across our Supplier base between January and July 2010 in six adoptions. As each adoption rolls out Marks and Spencer will continue to take a step closer to achieving its 2020 goal. 3 4 5 6

Phase 1: Getting the Basics Right
Phase 1 Timings: All of the changes mentioned above will take effect in line with each departments transition to the new ways of working This will mean that some suppliers are working in both the current way (for departments that have not transitioned) and the new ways at the same time Information regarding detailed transition processes for your products will be sent one month prior to go-live for each adoption Phase 1: Getting the Basics Right

Contacts If you have any questions relating the any of the content of this presentation then please contact one of the following for further information Region/ Office Contact address Turkey Ayse Aksogan Yalniz India Rituraj Sharma Bangladesh Deepika Diwan Sri Lanka Thushara Wickremanayake Hong Kong Roberta Kwan Dongguan Richard Wong Shanghai Shane Foster Head Office Catherine Clark & Gary Gordon Pip Solanki 04/12/09 – New Slide added

4. Detailed Change Information

4. Detailed Change Information
4.1 EDI The remaining content has then been split into three sub sections tailored for the appropriate supply base; 4.2 Direct 4.3 FSV 4.4 Home

4.1 EDI (Electronic Data Interchange)

Electronic Communication
Aim / Objective 100% of Suppliers operate via EDI (Electronic Data Interchange) for all transactional messages / documents Change or New New Affecting Supplier Type All Suppliers To help improve communication with our Supplier base M&S will introduce industry standard EDI communication which Suppliers will need to migrate to, prior to the transition of their product department onto SAP. The move to EDI will streamline the flow of communication to our Suppliers and provide Suppliers with more accurate and efficient information from M&S. M&S will offer two formats of the solution: Business to Business (B2B) solution - where documents can be sent directly between business systems. Web EDI solution for those without full EDI capability – where documents can be sent and received via an external web portal. Suppliers with a significant volume of transactions (greater than 10 invoices per week) are strongly advised to implement the B2B solution, as the IWF solution requires Suppliers to manually enter all invoices To deliver EDI M&S have partnered up with GXS who will manage the on boarding process on behalf of M&S and guide it’s Suppliers through the set up process. Next Steps: GXS will contact all Suppliers to complete an on boarding questionnaire which will determine the type of solution for the Supplier. Web EDI Suppliers will then need to register themselves for the system and complete the online tutorial and set up process B2B EDI Suppliers GXS will contact Suppliers to guide them through the set up process 08/12/09- Slide Change

The Two EDI Solutions Suppliers B2B (Business to business) EDI
Web EDI or IWF (Intelligent Web Forms) EDI Messages EDI Messages IWF Web connection EDI Messages Supplier Systems Suppliers Messages are sent directly to and from systems Suppliers log onto a web site to view and submit messages

Electronic Communication
M&S will be using EDI in order to communicate a number of different business messages to its Suppliers. Messages Suppliers can expect to receive include; Contracts: The contract is only an indication of quantity from M&S for a given period and not a commitment to buy Direct Suppliers commitment to buy will be via the purchase order FSV Suppliers commitment to buy will be in the form of an updated contract with authorisation to cut along with an approved flow Purchase Orders: Purchase Order represents an agreed quantity, cost price, delivery date and site of manufacture, between the Supplier and M&S, and hence an official commitment to purchase by M&S. Any subsequent Purchase Order Amendments will be sent via EDI to the Supplier. Invoices and Self Bill Invoices: Suppliers must submit all invoices via EDI. For Suppliers on self bill invoices, M&S will continue send the invoice to the Supplier via EDI. Invoice Acknowledgement: For all submitted invoices, M&S will return an Invoice Acknowledgement message, which will either be confirmation of successful receipt of the invoice, or notification of any errors. Credit/Debit and Self Bill Credit/Debit: notes: For all adjustments raised resulting from differences between the invoiced quantity and the goods receipt quantity these will now be communicated via the EDI process. For Suppliers on self bill, credit/debit notes will also be sent to suppliers via EDI. (Note: Self Bill options are currently only available to Suppliers providing FSV Outlet product and only available via the business to business EDI format)

EDI Solution Matrix The level of information via EDI will depend on the solution a Supplier uses. Each EDI solution will contain the following fields: Business Document Supported by Web EDI Supported by B2B EDI Contracts P POs PO Amendments Invoices Invoice Acknowledgements Credit / Debit Note Self-Bill Invoice O Self Bill Credit Notes Determining factors to a Suppliers EDI solution will include amongst others and by no means exhaustive: Volumes of orders and invoices Current EDI capability Supplier type Does the Supplier currently work with GXS

EDI Matrix By Vendor Type
Based on the Supplier type the following table provides a summary of the M&S EDI business documents that they can expect to use: Business Documents Direct Suppliers Full Service Vendor Product via MAS call-off Full Service Vendors (Int’l Direct Deliveries) FSV Outlet Product Contracts P POs PO Amendments Invoices Invoice Acknowledgement Credit/Debit notes Self Bill Invoices P* Self-Bill Credit Notes * These business documents are not available using the web EDI solution. All Suppliers are expected to have a minimum of Web EDI in place by go live. Failure to do so may affect the receipt of future contracts and orders.

4.2 Direct and Indirect Suppliers

Plan Buy Move Pay Supplier / Factory Set Up M&S Head Office Supplier
1 Request for new vendor Request for new vendor 1 Validated vendor information 4 1 Request for new vendor 2 Request for vendor information (form) 3 Completed vendor information Supplier M&S Regional Office

Plan Buy Move Pay Contract Flow M&S Head Office Supplier
2 1 Contract changes requested Automatic Contract via EDI Confirmed contract changes Updates to Contract via EDI 5 6 3 Negotiate change to contract 4 Confirm acceptance of change Supplier M&S Regional Office

Negotiate drops / across multiple BUs
Plan Buy Move Pay M&S Head Office Production Plan Flow 1 Required order drops Confirmed drops 4 2 Negotiate drops / across multiple BUs Confirm production Supplier M&S Regional Office 3

Managing Supplier Data
Aim / Objective Improve the quality of information held about our Suppliers Change or New Change Affecting Supplier Type All Suppliers M&S Regional Offices will continue to be the key point of contact for all Supplier information including: New factories New Supplier set up process Managing all audit information received as part of any new Supplier/ factory process Any amendments or changes to current contact details .i.e. names, and telephone details. A new electronic form will be used to manage this process going forward. All Suppliers are responsible for communicating any changes to their details in a timely manner. Details of the process will be provided closer to your go live date. 4/12/09 – Amendment to point 1 Plan Buy Move Pay

Changes To Contracts.com
Aim / Objective We are migrating to SAP and replacing our old and out of date systems. As a result, some changes are being made to Contracts.com Change or New Change Affecting Supplier Type All Suppliers From 24th January, all cutting limits will be removed from Contracts.com. The contracting screen will no longer show 'Uncut Commitment' but prior to a department going 'live' on SAP all uncut commitment will be added to 'Auth to cut' and the uncut commitment column removed from view. The total actual commitment will remain the same but will all show under the 1 column 'Auth to Cut' Planned quantity information is currently available in Contracts.com. This information will be sent to suppliers as a contract message electronically (via EDI) All new EDI contracts are raised as an intent to purchase by M&S for a given period. Any intent becomes legally binding when and only when an official M&S PO has been submitted and agreed with Supplier. Contracts (and POs) will no longer be raised at Supplier country level but instead at factory level. For all factory groups, Contracts.com will continue to assign a lead factory. Suppliers must ensure they notify M&S as early as possible as to where their product will be manufactured, this is to meet our Plan A objectives. Suppliers will no longer be required to approve POs in Contracts.com, POs will subsequently appear in Contracts.com automatically approved. This will take effect from 24th January 2010 and will impact ALL Suppliers. Suppliers will not receive notification of any new POs and hence will be responsible for regularly checking their systems. Style files will continue to be maintained in CMS 04/12/09 – Slide changed edited point number 2. Plan Buy Move Pay

UK & International Orders
Aim / Objective Aligning our buying processes across UK and International. Ensuring each area of the business has a guaranteed supply by providing separate contracts for UK and International Change or New New process Affecting Supplier Type All Suppliers Suppliers should expect to see separate contracts raised for each of the following areas; Contracts for the UK inclusive of stock for the Republic of Ireland and International stock travelling via the UK network Contracts for any of the International M&S Hub’s All contracts will be EDI only, more details can be found under section 4.1 EDI. Contracts.com will show three quantity fields, these will be; A UK total inclusive of stock for the Republic of Ireland and any international stock travelling via the UK network An aggregated total of all hub level quantities (i.e. no split will be visible at hub level in Contracts.com) A total order quantity 08/12/09 slide change Plan Buy Move Pay

Plan Buy Move Pay PO Flow M&S Head Office Supplier M&S Regional Office
1 2 M&S initiated Change request Automatic PO via EDI 5 PO updates (electronic) 2 PO change request via Editrack For both Supplier & M&S initiated changes 3 Negotiate PO changes 08/12/09 – Slide change. 4 Confirm changes 5 Supplier Updated PO via EDI M&S Regional Office

GM Direct Orders From M&S
Aim / Objective Moving all orders from Supply Chain Management SCM Ltd (SCM Ltd) to Marks & Spencer plc (M&S plc) Change or New Change Affecting Supplier Type All product bought via POs All direct POs are currently raised under SCM Ltd who is a subsidiary of M&S. In line with departmental transitions all direct POs will be raised under M&S plc and no longer by SCM Ltd. Once the transition by individual department has taken place all invoices for M&S POs must be addressed to M&S plc and not SCM Ltd. Suppliers who supply multiple departments maybe required to submit both EDI and manual invoices for an interim period. Example: A Supplier who provides both menswear (adoption 2) and womenswear (adoption 6) product would be required to submit EDI invoices for the menswear product once department has gone live and continue to submit manual invoices for the womenswear up to the point it also goes live. Invoices received after the departmental transition addressed to SCM Ltd will be rejected and may cause delay in payment for goods. The PO header will state either SCM Ltd or M&S plc Suppliers should refer to this during the rollout process. Any debts owed will automatically be transferred from SCM Ltd to M&S plc. All details of this transition and how it will work will be provided closer to your go live date. NOTE: The processes for Per Una for phase 1 will remain unchanged, i.e. those people trading with Per Una will continue to do so. 04/12/09 – Points 1-3 have changed on the slide. Plan Buy Move Pay

Splitting GM Direct POs
Aim / Objective Automated POs for all Direct purchases Change or New Change Affecting Supplier Type All product bought via POs Once a department has transitioned onto SAP and EDI, Suppliers will receive separate POs for each of the following areas of the business: UK (including Republic of Ireland and product for our International business travelling via the UK) Hub level POs to support our international business Outlets Only POs destined for the UK (excl Outlets) will be visible to Suppliers on Contracts.com. All POs will be available via EDI (more details can be found under section 4.1 EDI) POs will not require approval by the Supplier, and will be deemed accepted by the Supplier if we have not heard otherwise within 48 hours.. Any intent to purchase stock by M&S only becomes legally binding when an official M&S PO has been submitted and agreed with the Supplier. 04/12/09 – Slide changed extra point at the bottom Plan Buy Move Pay

Clarifying Accountabilities
Aim / Objective All PO amendments will be managed by the Regional Office teams Change or New Change Affecting Supplier Type All product bought via POs The Regional Office Production Merchandiser will be the first point of contact for all PO queries. Both Supplier and M&S initiated changes to a PO will continue to be submitted via Editrack, using the exception report process. Suppliers will be able to submit exception reports at UPC level rather than at PO level. No changes will be allowed 7 or less days prior to shipment. Only one PO exception request can be raised at any one time. Any attempt to raise a further exception request against a PO, whilst one is still pending will be rejected by the system. Once an exception request has been accepted it will be considered final and the PO updated. An exception request can only be raised prior to the PO being authorised to ship. If the PO has been authorised to ship and a further exception request submitted, then it will be rejected. Freight forwarders will continue to receive updates in their normal way. 08/12/09 – Slide change Plan Buy Move Pay

Changes to Editrack Aim / Objective All PO amendments will be at line (UPC) level Change or New Change Affecting Supplier Type All product bought via POs From the 18th January, all exception reports in Editrack must be entered at line level, not total PO level For launch packs orders (order type L in Editrack) Suppliers can only report changes to the pack quantities, and not single UPC quantities. Once submitted Suppliers will receive a reply to any request within 24hrs. If the Merchandising team rejects a Suppliers request, then a further 24hrs is permitted for any amendment to be sent, and accepted by the Supplier (48hrs in total) Suppliers must ensure that when submitting an exception report they are using the correct reason code for the change. These reason codes are used to review Suppliers performance All M&S initiated changes to POs will be communicated to Suppliers via the Regional Office Production Merchandiser and an updated PO sent once agreed. Electronic packing lists will be required to be submitted via Editrack for all goods despatched 08/12/09 – Slide change Plan Buy Move Pay

Editrack Exception Report Screen Changes
Current Editrack exception report screen New Editrack exception report screen New field to enter qty change at line level Plan Buy Move Pay

Simplifying Our Processes
Aim / Objective International Direct Deliveries will use the same processes as Direct Buying to the UK Change or New Change Affecting Supplier Type International Direct Deliveries to Overseas Hubs In order to be able to streamline our working practices across Supplier types we will be making the following changes: POs will be transmitted via EDI and not through Editrack Order tracking will continue to be managed via Editrack Regional Offices will be accountable for PO management activities Regional Offices will manage invoice and payment queries Plan Buy Move Pay

Plan Buy Move Pay Shipment Tracking Flow M&S Head Office Supplier
PO status tracking via Editrack 5 PO updates (electronic) 5 1 PO change request via Editrack For both Supplier & M&S initiated changes 2 Negotiate PO changes 3 Confirm changes 4 Supplier Updated PO via EDI M&S Regional Office

Plan Buy Move Pay Invoice Management Flow M&S Head Office Supplier
5 Query resolution 1 Submit invoice via EDI Invoice / Payment query escalation Payment (remittance via ) 4 2 3 Invoice / Payment Query Query resolution 6 Supplier M&S Regional Office

Automated Invoices Aim / Objective Automate the administration of invoices through electronic submission via EDI Change or New New Affecting Supplier Type All product bought via POs M&S will be moving from manual invoices to EDI transmitted invoices. EDI invoices will only go live once a department has transitioned. Suppliers who supply multiple departments maybe required to submit both EDI and manual invoices for an interim period. Example: A Supplier who provides both menswear (adoption 2) and womenswear (adoption 6) would be required to submit EDI invoices for the menswear product once that department has gone live and continue to submit manual invoices for the womenswear up to the point it also goes live. Any manual invoices submitted after a department has gone live will be returned to the Supplier and will be requested to resubmit the invoice in EDI format. Once a department has transitioned then M&S will no longer have the facility to process manual invoices. More details of the EDI on boarding process can be found under section 4.1 EDI. Invoices must only be submitted on or after the date of M&S taking ownership of the goods: Invoices submitted early will be rejected by the system Payment will be based on invoice receipt date into the M&S system NOT date of invoice Invoices must be submitted as one PO one invoice – suppliers must cease to consolidate purchase orders on the same invoice Invoices for all Direct shipments must be submitted M&S plc and NOT SCM Ltd after the department has transitioned. 04/12/09 – Point three (example) been added. - Need to update comment on invoice submission date with new statement once signed off. Plan Buy Move Pay

Automated Invoice Requirements
Aim / Objective Automate the administration of invoices through electronic submission via EDI Change or New New Affecting Supplier Type All product bought via POs (excludes FSV Outlet product) Suppliers must ensure that when submitting invoices key data fields are completed and are accurate to the delivered product in question. All invoices must include the following information; Currency data M&S Vat Registration Vendor details M&S Company Code Invoice reference PO Number Tax Amount Quantity Net amount Invoice tax amount UPC details Gross Amount Taxable Amount Net Invoice Gross Invoice Failure to submit the correct information will result in the invoice being rejected. All of the above will be covered as part of EDI on boarding process by GXS. Plan Buy Move Pay

Automated Invoices Requirements
Aim / Objective Automate the administration of invoices through electronic submission via EDI Change or New New Affecting Supplier Type All product bought via POs (excluding FSV Outlet product) When submitting an invoice Suppliers must ensure that; All dates are in a UK format DD/MM/YY No invalid character are entered into any numeric fields i.e. a £ in the value field All line numbers are in the correct format No cancelled lines are submitted No part of the invoice has yet been submitted to M&S for payment. In the event of this a credit will be taken for those lines that have been submitted. Submit the correct articles against the correct PO The Invoice value does not exceed order value The Invoice is not submitted prior to M&S taking ownership of the stock Any incorrect invoices will be rejected and an EDI acknowledgement sent to the Supplier notifying them of the failure. Invoices for samples will be made via the non merchandise procurement process. 08/12/09 – slide change Plan Buy Move Pay

Managing Invoice Queries
Aim / Objective To ensure Suppliers have a single point of contact for invoice and payment queries Change or New New Affecting Supplier Type All product bought via POs To help resolve any Supplier queries in a timely manner M&S will be creating new roles in each of its regional offices to handle any invoice and payment queries. These roles will offer our Suppliers the benefit of having a local contact available to help resolve their issue quickly and efficiently without any time zone issues. This new team will be the single point of contact for all invoice and payment queries. They will track queries and seek resolution, involving and escalating to other teams within M&S as appropriate. Details of your contact will be provided closer to your go live date. 08/12/09 – slide change Plan Buy Move Pay

Supplier Payment Aim / Objective
Simplify our Supplier payments processes Change or New Change Affecting Supplier Type All product bought via POs (excludes FSV Outlet product) Payment terms will always commence from the receipt date of a compliant invoice not the invoice date. All invoices must be submitted for the value of the PO, any invoice received where the value is greater than the PO then the lower of the two values will paid. All remittance advices will be ed to Suppliers. It’s vital we have the right address for this information and that we are notified at the earliest possible opportunity of any changes. Suppliers who currently use Letters of Credit must ensure that all invoices and required documentation are made out to the right company (M&S plc and not SCM Ltd) This change will happen in line with the transition of departments 08/12/09 slide change Plan Buy Move Pay

Automated Debit Adjustments
Aim / Objective Ensure M&S only pay for the goods ordered or, where the delivery is short, the items received Change or New New Affecting Supplier Type All product bought via POs (excludes FSV Outlet product) In line with the introduction of EDI and EDI invoicing M&S will also be moving to the use of automated debit adjustments. Automated adjustments will be raised when the actual goods receipt is matched against the invoice and PO. Suppliers will only receive an automatic debit adjustment when at line level, either: The invoice quantity is greater than the goods receipt quantity or The invoice price is greater than the purchase order price In line with the matching process, all adjustments will be raised at line level i.e. at UPC level not total PO level. EDI vendors will receive notification of any automated debit adjustments via an EDI message. All other adjustments will be communicated to the Vendor by . Example 1: The Vendor invoice is in line with the PO and is for 100 size small and 100 size large. The vendor delivers 90 small and 110 large. An automated debit note will be raised for the 10 small that were not delivered. The 10 large that were not requested will not be paid for. Example 2: The PO price for UPC 1 is £10 and UPC 2 is £12. The invoice has both UPC 1 and 2 as £12. An automated debit note will be raised for the £2 over price on UPC 1. 08/12/09 – Slide change Plan Buy Move Pay

Direct Supplier Checklist
Topic Action Supplier Data All new factory and Supplier set up managed through the Regional Office Contracts Will be raised and sent by M&S Head Office (via EDI) Contract amendments to be negotiated via the Regional Office PO PO will be received automatically from M&S Head Office (via EDI) No PO amendments within 7 days of handover date to Freight Forwarder PO amendments via Regional Office Any changes submitted through Editrack Shipping Goods Amendments to shipping instructions negotiated via Regional Office Amendments submitted via Editrack by Supplier Invoice management Invoices raised through EDI Invoice queries raised and handled via Regional Office EDI messages Contracts, POs, PO amendments, Debit/Credit adjustments, Invoice, Invoice acknowledgement

4.3 FSV Suppliers

FSV Buying Processes There are three types of buying that phase 1 impacts: FSV purchasing Contract information in Contracts.com will be provided via EDI Continued use of production plans and MAS FOB International Direct Deliveries (where applicable) POs will no longer be through Editrack, but via EDI All invoicing via EDI Outlets Outlets product will be bought via a PO (DDP into Tesam warehouse) PO and payment via self-bill (separate from current self-bill process) Use of EDI for ordering 08/12/09 – Slide change

Plan Buy Move Pay Supplier / Factory Set Up M&S Head Office Supplier
2 Request for new vendor 1 Request set up for new factory Validated vendor information 5 3 Request for vendor information (form) Completed vendor information Supplier M&S Regional Office 4

Plan Buy Move Pay Contract Flow - For International Direct Deliveries
M&S Head Office Contract Flow - For International Direct Deliveries 2 1 Contract changes requested Automatic Contract via EDI Confirmed contract changes Updates to Contract via EDI 5 6 3 Negotiate change to contract 4 Confirm acceptance of change Supplier M&S Regional Office

Plan Buy Move Pay Contracts Flow FSV product via MAS call-off & Outlets 1 Automatic Contract via EDI 2 Contract changes requested 3 Negotiate change to contract 4 Confirm acceptance of change Supplier M&S Head Office 5 Updates to Contract via EDI, including authorisation to cut

Aim / Objective Improve the quality of information held about our Suppliers Change or New Change Affecting Supplier Type All Suppliers M&S Head Office will continue to be the first point of contact for all Supplier information including : New factories New Supplier set up process Managing all audit information received as part of any new Supplier/ factory process Any amendments or changes to current contact details .i.e. names, and telephone details. A new electronic form will be used to manage this process going forward. All Suppliers are responsible for communicating any changes to their details in a timely manner. Details of the process will be provided closer to your go live date. 4/12/09 – Amendment to point 1 Plan Buy Move Pay

Aim / Objective We are migrating to SAP and replacing our old and out of date systems. As a result, some changes are being made to Contracts.com Change or New Change Affecting Supplier Type All Suppliers From 24th January, all cutting limits will be removed from Contracts.com. The contracting screen will no longer show 'Uncut Commitment' but prior to a department going 'live' on SAP all uncut commitment will be added to 'Auth to cut' and the uncut commitment column removed from view. The total actual commitment will remain the same but will all show under the 1 column 'Auth to Cut' Planned quantity information is currently available in Contracts.com. This information will be sent to suppliers as a contract message electronically (via EDI) The contract contains an indication of quantity – it will not be a commitment to buy; For Full Service Vendors, the contract will be updated with authorisation to cut, which in combination with the approved flow, will be our commitment to buy For FOB International Direct Deliveries, the commitment to buy will be via the purchase order Contracts (and POs) will no longer be raised at Supplier country level but instead at factory level. For all factory groups, Contracts.com will continue to assign a lead factory. Suppliers must ensure they notify M&S as early as possible as to where their product will be manufactured, this is to meet our Plan A objectives. Suppliers will not receive notification of any new POs and hence will be responsible for regularly checking their systems. Style files will continue to be maintained in CMS 04/12/09 – Slide changed edited point number 2. Plan Buy Move Pay

Plan Buy Move Pay PO Flow - For International
M&S Head Office PO Flow - For International Direct Deliveries & Outlets 1 2 M&S initiated Change request Automatic PO via EDI 5 PO updates (electronic) 2 PO change request via Editrack For both Supplier & M&S initiated changes 3 Negotiate PO changes 08/12/09 – Slide change. 4 Confirm changes 5 Supplier Updated PO via EDI M&S Regional Office

Splitting GM Direct POs
Aim / Objective Automated POs for all Direct purchases Change or New Change Affecting Supplier Type International Direct Deliveries to Hubs and Outlets Once a department has transitioned onto SAP and EDI, Suppliers will receive separate POs for each of the following areas of the business; Hub level POs to support our international business Outlets The PO will become the authorisation to cut quantity in Contracts.com. All POs will be available via EDI (more details can be found under section 4.1 EDI) POs will not require approval by the Supplier, and will be deemed accepted by the Supplier if we have not heard otherwise within 48 hours. Any intent to purchase stock by M&S only becomes legally binding when an official M&S PO has been submitted and agreed with the Supplier. We will use a single vendor/series number to support both UK and International Direct Deliveries. 04/12/09 – New point added – Point 6 Plan Buy Move Pay

Aim / Objective All PO amendments will be managed by the Regional Office teams Change or New Change Affecting Supplier Type International Direct Deliveries to Hubs and Outlet product The Regional Office Production Merchandiser will be the first point of contact for all PO queries for International Direct deliveries and Outlet products only. For all product not bought via a purchase order, Suppliers will continue with their current processes and contacts, via the UK Buying Departments. Both Supplier and M&S initiated changes to a PO will continue to be submitted via Editrack, using the exception report process. Where a change is approved, a PO Amendment will be sent via EDI to the supplier. All M&S initiated changes to POs will be communicated to Suppliers via the Regional Office Production Merchandiser. Suppliers will be asked to submit an exception report via Editrack to support these changes. Electronic packing lists will be required to be submitted via Editrack for all direct bought goods despatched. 08/12/09 slide change. Plan Buy Move Pay

Aim / Objective International Direct Deliveries will use the same processes as Direct Buying to the UK Change or New Change Affecting Supplier Type Direct Deliveries to International Hubs In order to be able to streamline our working practices across Supplier types we will be making the following changes: POs will be transmitted via EDI and not through Editrack Order tracking will continue to be managed via Editrack Regional Offices will be accountable for PO management activities Regional Offices will manage invoice and payment queries Plan Buy Move Pay

Plan Buy Move Pay M&S Head Office Shipment Tracking Flow - For International Direct Deliveries & Outlets PO status tracking via Editrack 5 5 PO updates (electronic) 1 PO change request via Editrack For both Supplier & M&S initiated changes 2 Negotiate change to PO 3 Confirm change 4 Updated PO via EDI Supplier M&S Regional Office

Plan Buy Move Pay Invoice Management Flow - For
M&S Head Office Invoice Management Flow - For International Direct Deliveries 5 1 Query resolution Submit invoice via EDI 4 2 Invoice / Payment query escalation Payment (Remittance via ) 3 Invoice / Payment Query 6 Query resolution Supplier M&S Regional Office

Plan Buy Move Pay Invoice Management Flow – FSV Outlet product
1 Self billing invoice sent to Supplier 2 Payment in line with payment terms 3 Invoice / Payment Query M&S Head Office Supplier 4 Query resolution

Automated Invoices Aim / Objective
Automate the administration of invoices through electronic submission via EDI Change or New New Affecting Supplier Type FOB International Direct Deliveries Suppliers must submit invoices for FOB International Direct Deliveries via EDI. M&S will be moving from manual invoices to EDI transmitted invoices. EDI invoices will only go live once a department has transitioned. Suppliers who supply multiple departments maybe required to submit both EDI and manual invoices for an interim period. Example: A Supplier who provides both menswear (adoption 2) and womenswear (adoption 6) would be required to submit EDI invoices for the menswear product once that department has gone live and continue to submit manual invoices for the womenswear up to the point it also goes live. Any manual invoices submitted after a department has gone live will be returned to the Supplier and will be requested to resubmit the invoice in EDI format. Once a department has transitioned then M&S will no longer have the facility to process manual invoices. More details of the EDI on boarding process can be found under section 4.1 EDI. Invoices must only be submitted on or after the date of M&S taking ownership of the goods: Invoices submitted early will be rejected by the system Payment will be based on invoice receipt date into the M&S system NOT date of invoice Invoices must be submitted as one PO one invoice – suppliers must cease to consolidate purchase orders on the same invoice 04/12/09 – Point three (example) been added. - Need to update comment on invoice submission date with new statement once signed off. Plan Buy Move Pay

Aim / Objective Automate the administration of invoices through electronic submission via EDI Change or New New Affecting Supplier Type FOB International Direct Deliveries When submitting an invoice Suppliers must ensure that; All dates are in a UK format DD/MM/YY No invalid character are entered into any numeric fields i.e. a £ in the value field All line numbers are in the correct format No cancelled lines are submitted None of the items on the invoice have previously been submitted for payment. In the event of this a credit will be taken for those lines that have previously been submitted. Submit the correct articles against the correct PO The Invoice value does not exceed order value The Invoice is not submitted prior to M&S taking ownership of the stock Any incorrect invoices will be rejected and an EDI acknowledgement sent to the Supplier notifying them of the reason for failure. 08/12/09 – slide change Plan Buy Move Pay

Aim / Objective To ensure Suppliers have a single point of contact for invoice and payment queries Change or New New Affecting Supplier Type FOB International Direct Deliveries To help resolve any Supplier queries in a timely manner M&S will be creating new roles in each of its regional offices to handle any invoice and payment queries. These roles will offer our Suppliers the benefit of having a local contact available to help resolve their issue quickly and efficiently without any time zone issues. This new team will be the single point of contact for all invoice and payment queries. The new team will track queries and seek resolution, involving and escalating to other teams with in M&S as appropriate. Details of your contact will be provided closer to your go live date. Plan Buy Move Pay

Supplier Payment Aim / Objective Simplify our Supplier payments processes Change or New Change Affecting Supplier Type FOB International Direct Deliveries Payment terms will always commence from the receipt date of a compliant invoice not the invoice date. All invoices must be submitted for the value of the PO, any invoice received where the value is greater than the PO then the lower of the two values will paid. All remittance advices will be ed to Suppliers. It’s vital we have the right address for this information and that we are notified at the earliest possible opportunity of any changes. Suppliers who currently use Letters of Credit must ensure that all invoices and required documentation are made out to the right company (M&S plc and not SCM Ltd) This change will happen in line with the transition of departments. 08/12/09 slide change Plan Buy Move Pay

Self Billing Requirements
Aim / Objective Simplify our Supplier payments processes Change or New Change Affecting Supplier Type Full Service Vendor Supplying Outlet Product Product bought for Outlet’s will be bought via a purchase order and a separate self-bill solution. Self billing allows for the creation of the invoice as soon as the stock has been received by M&S and the goods receipt note has been created. All goods receipt notes will be matched against the PO, and from that an invoice created and sent to the Supplier via EDI. This will be in addition to the current self-bill process for main chain product. Once the invoice has been generated and sent, M&S will then pay the invoice in line with the current payment terms – there is no change to when suppliers are paid for Outlets product. For Outlet Suppliers already on self billing, they will move to the new format as the departments transition. Moving from the old format to the new will mean: Self billing adjustments will no longer be sent through as single statement but separately (Outlet’s and main chain product) Suppliers providing multiple departments will have to support both formats for an interim period. Plan Buy Move Pay

Aim / Objective Ensure M&S only pay for the goods ordered or, where the delivery is short, the items received Change or New New Affecting Supplier Type Direct Deliveries to International Hubs In line with the introduction of EDI, and EDI invoicing, M&S will also be moving to the use of automated debit adjustments. Automated adjustments will be raised when the actual goods receipt is matched against the invoice and PO. Suppliers will only receive an automatic debit adjustment when at line (UPC) level either: The invoice quantity is greater than the goods receipt quantity or The invoice price is greater than the purchase order price In line with the matching process all adjustments will be raised at line level i.e. at UPC level not total PO level. EDI vendors will receive notification of any automated debit adjustments via an EDI message. All other adjustments will be communicated to the Vendor by . Example 1: The Vendor invoice is in line with the PO and is for 100 size small and 100 size large. The vendor delivers 90 small and 110 large. An automated debit note will be raised for the 10 small that were not delivered. The 10 large that were not requested will not be paid for. Example 2: The PO price for UPC 1 is £10 and UPC 2 is £12. The invoice has both UPC 1 and 2 as £12. An automated debit note will be raised for the £2 over price on UPC 1. 08/12/09 – slide change Plan Buy Move Pay

FSV Supplier Checklist
Topic Full Service Vendor Product via MAS call- off Full Service Vendors Int’l Direct Deliveries Full Service Vendors Outlet Product Supplier Data All new factory and Supplier set up managed through the Regional Office All new factory and Supplier set up managed through the Regional Office Contracts Raised via M&S Head Office Raised via M&S Head Office PO n/a Raised via International team PO amendments via Regional Office Raised via Outlet team PO amendments via Outlet Team Ship Goods Shipped to Suppliers warehouse, Call off via MAS Shipped to M&S warehouse, in country Shipped direct to either Global park, Turkey or Tesam Invoice management Current Self billing Query Resolution continues via Business Services (Salford Quays) EDI invoice Query Resolution via the Regional Office New self billing Query Resolution via the Regional Offices EDI messages Contracts, POs, PO amendments, Debit,/Credit adjustments, Invoice, Invoice acknowledgement Contracts, POs, PO amendments, Self bill invoice, Self bill credit / debit note 08/12/09 – Slide change

4.4 Home suppliers detailed changes

Plan Buy Move Pay Supplier / Factory Set Up – Home Supplier
1 Request for new vendor set up 2 Request for vendor information (form) 3 Completed vendor information M&S Head Office Supplier

Plan Buy Move Pay Contract flow - Home Supplier (excl Direct in Turkey Region) 1 Automatic Contract via EDI 2 Contract changes requested 3 Negotiate change to contract 4 Confirm acceptance of change NORMAL FULL SERVICE SUPPLIER Supplier M&S Head Office 5 Updates to Contract via EDI, including authorisation to cut

Plan Buy Move Pay M&S Head Office Contract Flow For Home Direct Supplier (Turkey Region Only) 2 1 Contract changes requested Automatic Contract via EDI Confirmed contract changes Updates to Contract via EDI 5 6 3 Negotiate change to contract Confirm acceptance of change Supplier M&S Regional Office 4

Production Plan Flow – Home Supplier
Buy Move Pay Production Plan Flow – Home Supplier 1 Negotiate drops 2 Confirm production M&S Head Office Supplier

Aim / Objective Improve the quality of information held about our Suppliers Change or New Change Affecting Supplier Type All Suppliers M&S Head Office will continue to be the first point of contact for all Supplier information including : New factories New Supplier set up process Managing all audit information received as part of any new Supplier/ factory process Any amendments or changes to current contact details .i.e. names, and telephone details. A new electronic form will be used to manage this process going forward. All Suppliers are responsible for communicating any changes to their details in a timely manner. Details of the process will be provided closer to your go live date. 4/12/09 – Amendment to point 1 Plan Buy Move Pay

Aim / Objective We are migrating to SAP and replacing our old and out of date systems. As a result, some changes are being made to Contracts.com Change or New Change Affecting Supplier Type All Suppliers From 24th January, all cutting limits will be removed from Contracts.com. The contracting screen will no longer show 'Uncut Commitment' but prior to a department going 'live' on SAP all uncut commitment will be added to 'Auth to cut' and the uncut commitment column removed from view. The total actual commitment will remain the same but will all show under the 1 column 'Auth to Cut' Planned quantity information is currently available in Contracts.com. This information will be sent to suppliers as a contract message electronically (via EDI) The contract contains an indication of quantity – it will not be a commitment to buy; For Direct, the commitment to buy will be via the purchase order For Full Service Vendors, the contract will be updated with authorisation to cut, which in combination with the approved flow, will be our commitment to buy For FOB International Direct Deliveries, the commitment to buy will be via the purchase order Contracts (and POs) will no longer be raised at Supplier country level but instead at factory level. For all factory groups, Contracts.com will continue to assign a lead factory. Suppliers must ensure they notify M&S as early as possible as to where their product will be manufactured, this is to meet our Plan A objectives. For Direct product, Suppliers will no longer be required to approve POs in Contracts.com, POs will subsequently appear in Contracts.com automatically approved. This will take effect from 24th January and will impact ALL Suppliers. Suppliers will not receive notification of any new POs and hence will be responsible for regularly checking their systems. Style files will continue to be maintained in CMS 04/12/09 – Slide changed edited point number 2. Plan Buy Move Pay

Plan Buy Move Pay PO Flow - Home Direct (excl Turkey Region)
1 Automatic PO via EDI 2 PO change request via Editrack For both Supplier & M&S initiated changes 3 Negotiate PO changes 4 Confirm changes (Supplier submits exception report Supplier M&S Head Office 5 Updated PO via EDI 6 Supplier ships goods

Plan Buy Move Pay PO Flow - Direct Deliveries (Turkey Region only)
M&S Head Office PO Flow - Direct Deliveries (Turkey Region only) 1 2 M&S initiated Change request Automatic PO via EDI 5 PO updates (electronic) 2 PO change request via Editrack For both Supplier & M&S initiated changes 3 Negotiate PO changes 08/12/09 – Slide change. 4 Confirm changes 5 Supplier Updated PO via EDI M&S Regional Office

Home Direct Orders From M&S
Aim / Objective Moving all orders from Supply Chain Management SCM Ltd (SCM Ltd) to Marks & Spencer plc (M&S plc) Change or New Change Affecting Supplier Type All product bought via a PO All direct POs are currently raised under SCM Ltd who is a subsidiary of M&S. In line with departmental transitions all direct POs will be raised under M&S plc and no longer by SCM Ltd. Once the transition by individual department has taken place all invoices for M&S POs must be addressed to M&S plc and not SCM Ltd. Suppliers who supply multiple departments maybe required to submit both EDI and manual invoices for an interim period. Example: A Supplier who provides both menswear (adoption 2) and womenswear (adoption 6) product would be required to submit EDI invoices for the menswear product once department has gone live and continue to submit manual invoices for the womenswear up to the point it also goes live. Any invoices received after the departmental transition, addressed to SCM Ltd will be rejected and may cause delay in payment for goods. All POs carry the ordering company in the header of the PO and Suppliers should refer to this during the rollout process. Once the department transition has taken place any debts owed through SCM Ltd will be offset against payments by M&S plc. All details of this transition and how it will work will be communicated closer to your go live date. 04/12/09 – Points 1-3 are new on the slide or have been edited Plan Buy Move Pay

Splitting Home Direct POs
Aim / Objective Automated POs for all Direct purchases Change or New Change Affecting Supplier Type Direct, Direct via International Hubs, Outlets Once a department has transitioned onto SAP and EDI, Suppliers will receive separate POs for each of the following areas of the business: Hub level POs to support our international business Outlets None of these POs will be visible on Contracts.com. All POs will be available via EDI (more details can be found under section 4.1 EDI) POs will not require approval by the Supplier, and will be deemed accepted by the Supplier if we have not heard otherwise within 48 hours – This takes effect from the 24th January Any intent to purchase stock by M&S only becomes legally binding when and only when an official M&S PO has been submitted to the Supplier. We will use a single vendor/series number to support both UK and International Direct Deliveries. 04/12/09 – New point added in about PO being legally binding Plan Buy Move Pay

Aim / Objective Clarity of accountabilities for PO amendments Change or New Change Affecting Supplier Type All product bought via a PO For Suppliers based in the Turkey region only, changes to accountabilities will mean that the Regional Office Production Merchandiser will be the first point of contact for all PO queries. For all other Suppliers they will continue with their current processes and contacts. Both Supplier and M&S initiated changes to a PO will continue to be submitted via Editrack, using the exception report process. Where a change is approved, a PO Amendment will be sent via EDI. For Suppliers in the Turkey Region all changes will be communicated via the Regional Office Production Merchandiser. For all other regions changes will be communicated via the Head Office team. Electronic packing lists will be required to be submitted via Editrack for all direct bought goods despatched. Plan Buy Move Pay

Changes to Editrack Aim / Objective All PO amendments will be at line (UPC) level Change or New Change Affecting Supplier Type All product bought via POs From the 18th January, all exception reports in Editrack must be entered at line level, not total PO level For launch packs orders (order type L in Editrack) Suppliers can only report changes to the pack quantities, and not single UPC quantities. Once submitted Suppliers will receive a reply to any request within 24hrs. If the Merchandising team rejects a Suppliers request, then a further 24hrs is permitted for any amendment to be sent, and accepted by the Supplier (48hrs in total) Suppliers must ensure that when submitting an exception report they are using the correct reason code for the change. These reason codes are used to review Suppliers performance All M&S initiated changes to POs will be communicated to Suppliers via the Regional Office Production Merchandiser and an updated PO sent once agreed. Electronic packing lists will be required to be submitted via Editrack for all goods despatched 08/12/09 – Slide change Plan Buy Move Pay

Editrack Exception Report Screen Changes
Current Editrack exception report screen New Editrack exception report screen New field to enter qty change at line level Plan Buy Move Pay

Changes To PO Management
Aim / Objective Efficient management of POs Change or New Change Affecting Supplier Type See table below – All product bought via PO M&S have introduced a number of changes in the way it will handle its POs for our Home Suppliers. The changes will be dependant of the Supplier type and also the region in which the Supplier is located. The following table highlights the changes and whom the Supplier can expect POs and PO amendments from. Topic Full Service Vendors (Int’l Direct Deliveries) FSV Outlet Product Direct (Suppliers in Turkey Region) Direct (all other regions) PO Raised via UK International team PO amendments via UK International Team (except Turkey Region) Raised via Outlet team PO amendments via Outlets team Raised via Home team Outlets POs raised by RO team PO amendments via Turkey Regional Office Raised via Home team PO amendments via Home Team Plan Buy Move Pay

Aim / Objective International Direct Deliveries will use the same processes as Direct Buying to the UK Change or New Change Affecting Supplier Type Direct Deliveries via International Hubs In order to be able to streamline our working practices across Supplier types we will be making the following changes: POs will be transmitted via EDI and not through Editrack Order tracking will continue to be managed via Editrack Regional Offices will be accountable for PO management activities Regional Offices will manage invoice and payment queries Plan Buy Move Pay

Plan Buy Move Pay Shipment Tracking Flow - All Suppliers
M&S Head Office Shipment Tracking Flow - All Suppliers Head Office authorise change PO updates (electronic) 6 7 PO status tracking via Editrack 3 2 Request submitted to Head Office 1 PO change request via Editrack For both Supplier & M&S initiated changes 4 Negotiate PO changes 5 Confirm changes 6 Updated PO via EDI M&S Regional Office Supplier

Plan Buy Move Pay M&S Head Office Invoice Management Flow - Home Direct Suppliers (all Regions) 5 1 Query resolution Submit invoice via EDI 4 2 Invoice / Payment query escalation Payment (Remittance via ) 3 Invoice / Payment Query 6 Query resolution Supplier M&S Regional Office

Automated Invoices Aim / Objective Automate the administration of invoices through electronic submission via EDI Change or New New Affecting Supplier Type All product bought via POs (excluding Outlet product bought from our Full Service Vendors) M&S will be moving from manual invoices to EDI transmitted invoices. EDI invoices will only go live once a department has transitioned. Suppliers who supply multiple departments maybe required to submit both EDI and manual invoices for an interim period. Example: A Supplier who provides both menswear (adoption 2) and womenswear (adoption 6) would be required to submit EDI invoices for the menswear product once that department has gone live and continue to submit manual invoices for the womenswear up to the point it also goes live. Any manual invoices submitted after a department has gone live will be returned to the Supplier and will be requested to resubmit the invoice in EDI format. Once a department has transitioned then M&S will no longer have the facility to process manual invoices. More details of the EDI on boarding process can be found under section 4.1 EDI. Invoices must only be submitted on or after the date of M&S taking ownership of the goods: Invoices submitted early will be rejected by the system Payment will be based on invoice receipt date into the M&S system NOT date of invoice Invoices must be submitted as one PO one invoice – suppliers must cease to consolidate purchase orders on the same invoice Invoices for all Direct shipments must be submitted M&S plc and NOT SCM Ltd after the department has transitioned. 04/12/09 – Point three (example) been added. - Need to update comment on invoice submission date with new statement once signed off. Plan Buy Move Pay

Aim / Objective Automate the administration of invoices through electronic submission via EDI Change or New New Affecting Supplier Type All product bought via POs (excluding FSV Outlet product) When submitting an invoice Suppliers must ensure that; All dates are in a UK format DD/MM/YY No invalid character are entered into any numeric fields i.e. a £ in the value field All line numbers are in the correct format No cancelled lines are submitted No part of the invoice has yet been submitted to M&S for payment. In the event of this a credit will be taken for those lines that have been submitted. Submit the correct articles against the correct PO The Invoice value does not exceed order value The Invoice is not submitted prior to M&S taking ownership of the stock Any incorrect invoices will be rejected and an EDI acknowledgement sent to the Supplier notifying them of the failure. Invoices for samples will be made via the non merchandise procurement process. 08/12/09 – slide change Plan Buy Move Pay

Self Billing Requirements
Aim / Objective Simplify our Supplier payments processes Change or New Change Affecting Supplier Type Full Service Vendor Supplying Outlet Product Product bought for Outlet’s will be bought via a purchase order and a separate self-bill solution. Self billing allows for the creation of the invoice as soon as the stock has been received by M&S and the goods receipt note has been created. All goods receipt notes will be matched against the PO, and from that an invoice created and sent to the Supplier via EDI. This will be in addition to the current self-bill process for main chain product. Once the invoice has been generated and sent, M&S will then pay the invoice in line with the current payment terms – there is no change to when suppliers are paid for Outlets product. For Outlet Suppliers already on self billing, they will move to the new format as the departments transition. Moving from the old format to the new will mean: Self billing adjustments will no longer be sent through as single statement but separately (Outlet’s and main chain product) Suppliers providing multiple departments will have to support both formats for an interim period. Plan Buy Move Pay

Aim / Objective To ensure Suppliers have a single point of contact for invoice and payment queries Change or New New Affecting Supplier Type Direct, Direct via International Hubs, Outlets To help resolve any Supplier queries in a timely manner M&S will be creating new roles in each of its regional offices to handle any invoice and payment queries. These roles will offer our Suppliers the benefit of having a local contact available to help resolve their issue quickly and efficiently without any time zone issues. This new team will be the single point of contact for all invoice and payment queries The new team will track queries and seek resolution, involving and escalating to other teams within M&S as appropriate. Details of your contact will be provided closer to your go live date. Plan Buy Move Pay

Supplier Payment Aim / Objective Simplify our Supplier payments processes Change or New Change Affecting Supplier Type All product bought via POs (excludes FSV Outlet product) Payment terms will always commence from the receipt date of a compliant invoice not the invoice date. All invoices must be submitted for the value of the PO, any invoice received where the value is greater than the PO then the lower of the two values will paid. All remittance advices will be ed to Suppliers. It’s vital we have the right address for this information and that we are notified at the earliest possible opportunity of any changes. Suppliers who currently use Letters of Credit must ensure that all invoices and required documentation are made out to the right company (M&S plc and not SCM Ltd) This change will happen in line with the transition of departments 08/12/09 slide change Plan Buy Move Pay

Aim / Objective Ensure M&S only pay for the goods ordered or, where the delivery is short, the items received Change or New New Affecting Supplier Type Direct Deliveries to International Hubs In line with the introduction of EDI, and EDI invoicing, M&S will also be moving to the use of automated debit adjustments. Automated adjustments will be raised when the actual goods receipt is matched against the invoice and PO. Suppliers will only receive an automatic debit adjustment when at line (UPC) level either: The invoice quantity is greater than the goods receipt quantity or The invoice price is greater than the purchase order price In line with the matching process all adjustments will be raised at line level i.e. at UPC level not total PO level. EDI vendors will receive notification of any automated debit adjustments via an EDI message. All other adjustments will be communicated to the Vendor by . Example 1: The Vendor invoice is in line with the PO and is for 100 size small and 100 size large. The vendor delivers 90 small and 110 large. An automated debit note will be raised for the 10 small that were not delivered. The 10 large that were not requested will not be paid for. Example 2: The PO price for UPC 1 is £10 and UPC 2 is £12. The invoice has both UPC 1 and 2 as £12. An automated debit note will be raised for the £2 over price on UPC 1. 08/12/09 – slide change Plan Buy Move Pay

Home Supplier Checklist
Topic Full Service Vendor Product via MAS call-off Full Service Vendors Int’l Direct Deliveries FSV Outlet Product Direct (Suppliers in Turkey Region) Direct (all other regions) Supplier Data Via Pip Solanki Contracts Raised via M&S Head Office PO n/a Raised via International team PO amendments via International Team (except Turkey Region) Raised via Outlet team PO amendments via Outlets team Raised via Home team PO amendments via Turkey Regional Office PO amendments via Home Team Ship Goods Shipped to Suppliers warehouse, Call off via MAS Shipped to M&S warehouse, in country Shipped direct to either Global park, Turkey or Tesam Delivered as per inco term on PO Invoice management Self billing Query resolution via Business Services EDI invoice Query resolution via Regional Office New self billing Query resolution via Regional Office EDI messages Contracts, POs, PO amendments, Debit,/Credit adjustments, Invoice, Invoice acknowledgement Contracts, POs,, Debit/Credit adjustments, PO amendments, Self bill invoice, Self bill credit note Contracts, POs, PO amendments, Debit,/Credit adjustments, Invoice, Invoice acknowledgement

GM Suppliers Changing the way we work 7th January 2010

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GM Suppliers Changing the way we work 7th January 2010

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Presentation on theme: "GM Suppliers Changing the way we work 7th January 2010"— Presentation transcript:

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