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agrremnts

iam confusing between agreements , sch agree, contracts?

give brief details of different types of agreemetns?

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    Former Member
    Dec 06, 2007 at 12:40 PM

    hi,

    there are different types of scheduling agreements in SD:

    - scheduling agreements without delivery schedules (like DS, or LP in German). This kind of scheduling agreements is similar to the standard order, but has a target quantity and multiple schedule lines to each item, which should be created manually.

    - scheduling agreements with delivery schedules, here there are:

    a) 'normal' scheduling agreements with delivery schedules (like LZ in the standard), the flow here: scheduling agreement => delivery

    b) scheduling agreements with delivery orders (like LZM in the standard), the flow here: scheduling agreement LZM => delivery order TAM (is the order) => delivery

    c) scheduling agreements with external agent service (like LK in the standard), the flow here: scheduling agreement LK => delivery to the consigment storage location => external agent delivery order ED (is the order) => delivery

    d) scheduling agreements for self-billing process (like LZS in the standard), they are similar to LZ, but can be invoiced via self-billing IDOC only.

    e) in Automotive system there are also specual scheduling agreements for JIT process.

    All scheduling agreements can be created in transaction VA31, changed in VA32, displayed in VA33.

    For sceduling agreement with delivery schedules you can use both forecast and JIT (Just-in-Time) delivery schedules. And you can indicate "MRP for DS type" (VBAK-ABDIS) from which schedule and when the requirements and deliveries could be created.

    The first steps in VA31: give the sales area and scheduling agreement type, ENTER, give the sold-to party, PO number, material number, ENTER. Save.

    The scheduling agreement is created.

    To create the forecast schedule: VA32, mark the item, press the button "Forecast DS" below and then you can indicate the delivery schedule number, delivery schedule date and create the schedule lines. Save.

    Similarly you can create the JIt schedule, but then you have to indicate JIT horizon, until the schedule is valid.

    Deliveries can be created by a normal way.

    If you create a new delivery schedule, you have to use the buttons "New DS w/o proposal" or "New DS with proposal". Lease take into account that creation of a new delivery schedule means that the old delivery schedule will be completely overwritten.

    1. An outline agreement that is created for one or more materials and outlines the overall expected quantity of the material(s) to be delivered to the customer over a specific period of time. The scheduling agreement is used as a basis for delivering a material. The customer sends in scheduling agreement releases, referred to as delivery schedules, at regular intervals to release a quantity of the material.

    2. The basic difference between contract and scheduling agreements is that - goods are delivered on specified dates and in specified quantities as per the agreement in case of scheduling agreements on the other hand contracts is just an agreement to supply either a certain quantity or certain value of items over certain period of time (validity period) to the customer. It doesn’t fix and delivery dates as in the case of scheduling agreements.

    3. Data in scheduling agreements comes from three sources: (a) the customer sends in requested quantities and dates, normally by Electronic Data Interchange (EDI). (b) The component supplier enters data manually. (c) The system automatically copies data into the scheduling agreement from master records.

    4. If there are still outstanding items in the agreement but you nevertheless want to close it, you can assign a reason for rejection to these items. The system then sets the status of the agreement as complete and the outstanding items no longer appear in the delivery due list.

    5. To configure scheduling agreements IMG – sales and distribution – sales – sales documents – scheduling agreements with delivery schedules – define schedule line types (and) maintain planning delivery schedule. Instructions/splitting rules.

    6. Option - define schedule line types - is nothing to do with schedule line categories. They are used for information purposes only. We will be focusing on JIT (Just In Time) delivery scheduling. Proceed to planning delivery schedule which is an internal delivery schedule used to plan requirements more efficiently.

    7. Maintain planning delivery schedule instructions – these instructions determine the characteristics of the planning delivery schedule. RULES – these define “the split of schedule line quantities” between different days in planning delivery schedule and forecast delivery schedule.

    Scheduling Agreement is an agreement between company and customer.

    Basically the settings is create new sales document type copied fm LZM

    I.category is LZN, for this we have to determine I.category(u know hw to do),

    before that while creation of material u have to select and fill all MRP fields,

    then only it's useful for MD04 and Availability check, after that create sch.agreements by va31, while creation of sch.agreement have to mentioned dates fm date to end date, based on dates u can create delivery and billing any time as a normal process.

    CONTRACTS

    1. TRANSACTION CODE – VA41 (logistics – sales and distribution – sales – contract)

    2. CONFIGURATION – IMG – sales and distribution – sales – sales documents – sales document header – define sales documents.

    3. An outline agreement (contract or a scheduling agreement) can be closed before the validity period, by entering the rejection reason for the rest of the items in the agreement. The procedure for rejecting items in a contract is identical to the procedure for rejecting items in a sales order.

    4. In a sales order you can enter a reason for rejection for one or more items. These items are then NOT copied into the subsequent documents. If you reject an item in a sales document, the system automatically cancels any materials planning requirements (MRP) previously generated for the item.

    5. You must be in the change mode for a sales document. You can reject either the whole sales document or individual items. If you want to reject all the items, choose Reject document in the change modus for the sales document. The system automatically selects all the items and you can enter a reason for rejection in the following dialog box. Enter the appropriate reason for rejection and choose Copy. The system assigns the same reason for rejection to all the selected items.

    QUANTITY CONTRACTS – KM (or) NMS

    1. Quantity contracts are generally used when the demand for the material is greater than the available supply and the business has to implement measures to limit the supplied quantity evenly between its customers for this material.

    2. The quantity contract takes place after quotation and before an order. An order from a contract is called a “RELEASE ORDER”.

    3. Document type – KM (or) NMS; item category – KMN; schedule lines, delivery and billing doesn’t exist, as this is a preceding document to an order.

    4. Quantity contracts are entitled only for certain quantity of items for a certain period and this quantity decreases each time an order is placed by the customer.

    5. Once the contract validity date expires or the customer has purchased the full quota of stock allocated to him in the contract, the existing contract expires and a new one has to be created on the supplier’s discretion.

    6. The quantity contract does not transfer any requirements; the requirement is placed with warehouse, production and material management only when the order is created.

    7. Quantity contracts have no schedule lines or specific delivery dates but it does have VALIDITY date and cancellation rules and it also enables the customer to have special price per material.

    8. “Update document flow” indicator on the item category has to be set in copy control rules to get the information on the number of items consumed of the available quota at any point of time. If this is not set, the customer can order as much as he would like, without regard to the contract being updated.

    9. completion rule should be set to C. (used in case of quotations and contracts)

    10. It is suggested to configure an order type (ZOR) which could act as a release order for contracts where you can make reference mandatory for quantity contracts.

    Service contract – WV (or) SC

    1. The service contract is a legal agreement between the receiver of the service and the business supplying the service. It is used beneficially by the business for initiating automatic billing of routine services at regular intervals. ( example: machinery maintenance, repairs in a plant etc)

    2. a service contract need not have a call-off or release order, nor does it need to be created with reference to other sales documents, no delivery is necessary as the contract doesn’t deal with any materials (except for periodic billing – F2) and like any other contract it can have a specific pricing procedure as the supply of materials is different from supply of services.

    3. transaction code – VA41; sales doc type – SC; item category – WVN, billing type – F2 (invoice)

    4. The item category used by the service contracts is very important, it has been created to represent an item, which is a service that is carried out and billed periodically.

    5. The item category has a completion rule C, which determines the item to be fully referenced when the target quantity is fully reached.

    6. This particular item category is relevant for order related billing plan and type 2, which indicates periodic billing and it, doesn’t enable any schedule lines.

    7. SAP provides standard material types for services – DIEN and KMAT.

    8. After setting up the relevant document type and item categories for service contracts, copy control rules must be defined.

    9. VA41 (SC) – VF01 (PERIODIC BILLING)

    10. the following are contract category details for sales document type (SC) -

    1. header pricing procedure: pricing procedure for contract conditions at header level

    2. Item pricing procedure: pricing procedure for contract conditions at item level.

    3. Contract profile: this is a profile defaulting validity dates and cancellation rules in a contract. The contract profile is explained in three categories – contract profiles, validity dates and cancellation procedures. (pls refer p-105 williams for more info). IMG – Sales and distribution – sales – sales documents – contracts – contract data – define contract profiles (and) – control cancellation – define cancellation procedures.

    4. Billing request: debit memo request for contracts

    5. Group ref. procedure: the reference procedure is used by master contracts to determine which data is to be copied or proposed into lower level contracts.

    6. Contract data allowed: this is a very critical field. As contract data, validity periods and cancellation data may be kept at the header as well as the item level of the contract. This field indicates to the system what to do when data differs between the header and the item levels.

    7. Follow up activity type: the follow up activity type speeds up the creation of follow-up activities. For example the follow up sales activity type 0002 (telephone call) is specified for sales document type SC. Follow up activity work list for contracts can be created by choosing outline agreements – contracts – subsequent functions – follow up actions – maintain selection criteria as required.

    8. Subsequent order type: should the follow up activity have been to create an order type such as quotation, you would need to enter a quotation document type in the field subsequent order type.

    9. Check partner authorisation: this field determines which partners are authorised to release a contract. Should no check be performed, you can leave this field blank. The standard checking rule A indicates – the release partner is sold-to-party of the contract or it may be a partner in the contract that has a partner function of AA (authorised release partner). In case of standard checking rule B the system checks if the partner wanting to be released from the contract is a lower level customer in the customer hierarchy.

    10. Update lower level contract: this field is applicable only for master contracts as it is used by the system to update lower level contracts. Any changes made the master contract level are passed on to the lower level via workflow. If this field is not set, the system will only update the lower level contract when it is reprocessed.

    Value contract: WK1 and WK2

    1. The value contract is similar to the quantity contract in that it limits material or services to a customer. However, instead of limiting due to the quantity of stock, the contract and its ceiling is based upon a total value.

    2. the value contract is created and maintained the same way as the other standard contracts and document types (VOV8) or you could also configure value contract through its own configuration menu path in IMG i.e. Sales & Distribution – Sales – Sales Documents – Contracts – value contracts. The sales documents are WK2 for specific material or WK1 for assortment module.

    3. A value contract is a legal agreement with a customer that contains the materials and services that the customer receives within a specified time period, and for a value up to a specified target value. A value contract can contain certain materials or a group of materials (product hierarchy, assortment module).

    4. In addition to the sold-to party, you can specify the other partners who are authorized to release against the contract by assigning the partner function AA to them. You can also define additional ship-to parties for release orders using the partner function AW

    5. In the value contract you can refer to lists of materials that have already been defined. This list could be a product hierarchy or an assortment module. However you also create a value contract for only one material (for example, a configurable material).

    6. An assortment module is an order entry tool that displays a list of materials and services and can be called from a value contract. It is valid for a certain period of time and has a restriction that only the materials and services that belong in the same sales and dist. Channel for which you r release order is being made will be displayed. (logistics – sales and distribution – master data – products – value contract assortment module – create (WSV 2).

    7. To fulfill both these requirements, two types of value contracts are offered in the standard system:

    8. Value contract type WK 1 - You can specify a

    product hierarchy or an assortment module for value contracts with contract type WK 1. The system will always propose this type of contract, if you want to create a contract for several materials or a certain group of materials. All the materials in the relevant assortment, or belonging to the specified product hierarchy are then relevant for release.

    9. Value contract type WK 2 (material-related) You can create contracts for one material (usually configurable) with this type of value contract. A software company is an example of where this kind of contract is often used. There, a contract for the value of $500,000 is made with the customer for one specific software product. You can also agree on the length of the contract for this type. The contract duration can be agreed at item level and can be different from the contract duration specified at header level.

    10. Both the value contracts have a header level and item level. Thus neither of these contracts is responsible for delivering products as each of the contracts has a release order, which is based on the total value.

    11. The standard item category for WK1 contracts is WKN and WK2 contracts is WKC. The item category for release order is WAN.

    12. The release orders are standard order types created with reference to the contracts. The sold to party must correspond to that of the value contract or it must be an authorized release partner.

    13. The customer fulfills a contract by issuing orders against the contract. The contract does not contain any exact dates for deliveries, so you need to create a sales order to release against a value contract. When a release order is created for the contract, the system automatically updates the released values in the contract. The release order value is calculated from the total of the open order and delivery values, plus the value that has already been billed to the value contract. The system also updates the released value for subsequent changes (for example, over delivery of contract release, price changes in the billing document, partial deliveries, returns, rejection of order items, cancellation or reversal of orders, deliveries or billing documents). You can create a release order in any currency. The system automatically converts this currency into the one agreed upon in the value contract on the pricing date for the contract release order.

    14. You can bill the value contract either directly, or per release order. If you want to bill the value contract directly, you have to create a billing plan for the value contract (01 – milestone billing and ord-rel billing type – FV (invoice contract). This enables you to bill the value contract for several dates, and for partial values. If you change the value of an item in the value contract, the system automatically adjusts the open billing dates so that the complete value is billed.

    15. In case of WK1 – value contract data must be maintained at the item category level – that is value contract material that is used to derive taxes and update statistics. Be sure that the material you enter here matches organization levels for materials in assortment module, and release order.

    16. The contract release control at this level is the key to control the customer doesn’t exceed the allocated value contract limit and displays a warning message or an error together with the update document flow that updates the value already used by the customer.

    17. The value contract is deemed as complete once the total value is reached or the validity period has been met or a reason for rejection has been entered for the line items.

    18. You can only have one release order refer to a contract. Thus you cannot have a release order for both a quantity contract as well as a value contract. Quantity and value contract items cannot be processed together in one document.

    Master contracts - GK

    1. A master contract consists of other contracts that are grouped as lower level contracts. Thus master contract has the general data pertaining to all lower level contracts over a specified period.

    2. The documents that can be grouped under a master contract are – (a)quantity contract (b) Value contract (c) Service contract.

    3. Contract grouping is the process whereby several lower level contracts are linked to one master contract to ensure data consistency. When you link a lower level contract to a master contract, the header data of the master contract are passed down into the lower level contract.

    4. The lower level and higher level contracts must be assigned to the same sales area. You can only have one master contract with several lower level contracts assigned to it.

    5. To group contracts, you must first determine the referencing requirements. IMG – sales and distribution – sales – sales documents – contracts – master contracts – define referencing requirements – define reference sales documents. In this activity you can assign the contracts that can be referenced by the main master contract.

    6. define referencing procedures is the most crucial field in configuring master contract – IMG – sales and distribution – sales – sales documents – contracts – master contracts – define referencing requirements – define referencing procedures. There is no need to create a new reference procedure, simply copy the existing if you require one and amend it as per your requirements

    7. the standard sales document for master contracts is GK (VOV8)

    8. No delivery type or billing type is necessary, as the master contract is not relevant for deliveries or billing documents. Also copy control rules should only be set at the header level as the no item and schedule line exists. (i.e. no item category exits for master contracts)

    9. The only remaining data to configure is the workflow, which is issued once a contract is to be updated. Generally workflow is controlled by specialist workflow resource.

    CHAN

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    Former Member
    Dec 06, 2007 at 12:50 PM

    hi,

    Agreements are term used collectively. It can be an agreement with a company and a customer for some material or service for a period of time.

    There are many kind of agreements in SAP. Examples are Contracts, Scehduling agreements ..etc..

    Prase

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    Former Member
    Dec 06, 2007 at 01:29 PM

    A customer scheduling agreement is an outline agreement with the customer containing delivery quantities and dates.

    Contacct is an ouline agreement that contains only delivery quantities

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