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Food Suppliers Implementation of EDI &PAV March 2010

Food Suppliers Implementation of EDI &PAV March 2010. 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.

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Food Suppliers Implementation of EDI &PAV March 2010

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  1. Food SuppliersImplementation of EDI &PAVMarch 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 emailed) invoices going forward

  3. When it’s Going to Happen • 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 Phase 1 Phase 2 Mar Apr May July June Aug Feb Oct Sept Nov

  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 B2B (Business to business) EDI Web EDI or IWF (Intelligent Web Forms) EDI Messages EDI Messages IWF Solution TradingGrid Web connection EDI Messages SupplierSystems Suppliers Suppliers log onto a web site to view and submit messages Messages are sent directly to and from systems

  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 food2020change@marks-and-spencer.com

  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 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. Hardware software installs On boarding training and trials Mar Apr May July June Aug Feb Oct Sept Nov 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 - alistair.hill@marks-and-spencer.com 10

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