1. Food Suppliers Implementation of EDI &PAV March 2010

2. Background - EDI
As part of the changes we are making to our ways of working, systems and process, we want to implement more electronic communication with our suppliers.
Our new system is now live and is managing our supplier, product and pricing data. Later this year the changes will start to impact our buying and payment processes.
Given the volume of transactions with our Food suppliers, electronic communication will help us to implement efficient processes that don’t require additional headcount in either M&S or our supply base.
We will implement industry standard EDI (Electronic Data Interchange) for all suppliers. suppliers must implement EDI to ensure:
They can continue to receive orders
They will be paid for products and services – we will not be able to manage manual (including ed) invoices going forward

3. When it’s Going to Happen
Phase 1
Phase 2
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
As you are aware, the phase 1 changes are going on now and will run until the Summer
Phase 2 will deliver changes to our Buying and Payment processes
Implementation of EDI takes time and we want to give you the maximum notice possible to get ready for the changes
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.

4. What we will communicate via EDI
We will communicate the following documents (messages) electronically;
Contracts (long life only) – an indication of total order quantity
Purchase orders
Purchase Order amendments – changes to orders
Proof of Delivery (POD)
Invoices – must be submitted by all suppliers electronically
Invoice acknowledgements – confirmation of invoice receipt or invoice non-compliance
Debit / Credit adjustments
This will change all existing order and invoicing processes with our food suppliers. (For existing M&S suppliers using Tradacom, this standard will continue to be supported)
We are not in a position to share the detailed specifications of these messages now. As soon as we have this detail we will make it available to you.

5. Implementation of EDI 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
We have developed a comprehensive on-boarding programme to manage the changes that are required by the suppliers. As soon as the final specifications are agreed, we will start this process with you
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

6. The Two EDI Solutions Suppliers B2B (Business to business) EDI
Web EDI or IWF (Intelligent Web Forms)
EDI Messages
EDI Messages
IWF
Solution
Trading Grid
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

7. What you need to do now
Consider the solution that will be most appropriate for your business. Factors you should consider should include;
Number of transactions (orders and invoices) placed with M&S currently – high numbers would indicate a B2B route
Maturity of your current IT infrastructure, i.e. can you integrate the messages into your production planning or payment systems?
Existing EDI capability
If you believe the B2B route is right for your business, commence any internal processes required to implement the required infrastructure and gear up teams ready to start the integration with your own systems
We will contact all Suppliers to complete an on boarding questionnaire which will determine the type of solution for the Supplier. Please respond to the requests promptly as this will start the on-boarding process
The on-boarding process for the IWF solution is quick. If this route is right for you then there is no further action required at this time
We will provide full details of the specification of interfaces required for B2B suppliers as soon as they become available, in order that you can complete any development required in your own systems
If you require more help and support in the short term, please contact us via the change mailbox at

8. Background - PAV
As part of the changes we are making to our ways of working, systems and process, we want to implement more electronic communication with our suppliers.
We know have 65% of our network Tray volume on PAV (Pick Accuracy Verification) and EDN (Electronic Delivery Notes)
We now need to complete this so that 100% of our Tray volume is on RFID, PAV and EDN
We will continue to be class leading on RFID and need to ensure through these changes we maximise both of our b2b efficiencies.
Some suppliers have experienced payback within 6 months and have also integrated the change to support their own in house systems and manufacturing operations. 8

9. When it’s Going to Happen
Hardware software installs
On boarding training and trials
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
As you are aware, we are progressively installing at suppliers and we now need to complete with pace
You can use Intellident for a turn key solution or develop an alternative solution under license to provide PAV and EDN.
Timescales are the same for which ever approach you decide to take
Implementation cost will continue to be our suppliers responsibility.
We have developed many different types of procurement and contract options with Intellident to support different suppliers needs.
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. 9

10. What you need to do now
Consider the solution that will be most appropriate for your business. Factors you should consider include:
Intellident
In house development
Third party to provide solution through consolidation point
You need you to get ready and communicate to us your preferred solution
We will be in touch with you to produce a network implementation plan that fits in with your business and our timescales
For the on-boarding process please contact:
Project Lead - Alistair Hill - 10