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Former Member

contract or scheduling agreement

Hi friends,

Given a scenario,

how can i decide , whether to use contract or scheduling Agreement.

after reading sap help, i am confused, it gave little difference between both.

Can some one please tell me on what factor or basis , i should decide on Contract or SA.

Thanks.

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5 Answers

  • Best Answer
    Sep 04, 2008 at 03:48 AM

    Hi Vinay,

    There are few differences which shd be taken into mind while you for one among outline agreements:

    1. Whether the schedule is fixed or not ...or may extend...if gonna extend then its better to use schedule agreement because here the period will be qixed...but not qty and schedule....

    While in Contract, there are two options value as well as qty contract....while can be made more precise by using the doc. type like, m and w...

    2. As compared to contract in schedule agreement, there is no need to make new del. schedule for each new req. you can add your new req. in the available del schedule...

    While in contract, for each new requirement you need to create new release order every time....which is time consuming alongs with n number of doc. generated in your system for the same req.

    Hope it helps

    Regards

    Priyanka.P

    AWARD IF HELPFULL

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    Former Member
    Sep 04, 2008 at 03:36 AM

    With regard to Outline Agreement:

    1. You can create the centrally contract (cross-plant) where you can maintain different pricing conditions for each and every plant

    2. You have to create the Release Order with reference to Outline Agreement.

    3. No detailed delivery schedule can be made in the Release Order.

    4. No Release documentation is created.

    5. Only time-dependent conditions can be created.

    6. Some Item Category 'M' and 'W' can be used.

    With regard to Scheduling Agreement:

    1. The Plant Location must be entered in the Scheduling Agreement.

    2. We do not have to create any other purchasing document except for delivery schedule line via Transaction ME38 or MRP running (with the appropriate setting of Source List).

    3. Delivery Schedule line items are created subject to your specific requirement.

    4. Can create both Scheduling Agreement with and without Release Documentation (subject to the Document Type LP or LPA) with the selection of either FRC or JIT delivery schedule.

    5. Either time-dependent or time-independent conditions can be created subject to the customizing in the Document Type of the Scheduling Agreement.

    6. Item Category 'M' and 'W' can not be used.

    In Other Words Scheduling Agreement is Purely Time Framed. For Eg : Take Automobile Industry. Suppose there is a Requirement of 1000 Auto parts on Every month 1 day based on the Production. Then Using SA they can solve their Problem. A SA Should be created first and Later Delivery Schedule should be maintained in ME38. Based on the Schedule Lines Vendor will send the parts every Month. No Need to give any Release Order etc. It will Reduce the Paper work & Procurement Length.

    Regards,

    Ashok

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    Former Member
    Sep 04, 2008 at 03:42 AM

    Hi Vinay,

    Main differnce is that Sch agreement is created just as to ensure that vendor will supply the required quantity in a particular time frame but if u can not forecast your requirement for the material in question then u will be going for contract otherwise u have to go for schedule agreement.

    Tx

    Uts

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    Former Member
    Sep 03, 2008 at 09:04 PM

    I'll try to be as simple as possible.

    Contracts are based on value or quantity, the period does not matter much.. I.e. If you mention that a qty of 5000 Boxes should be procured by the end of 2010.. you can procure all of that quantity now or at any point beofre the end of 2010.

    time makes a big difference in Scheduling agreement i.e. considering the same example above you can have teh 5000 boxes split up in to an estimated number of deliveries each month or a quarter or an year.. etc, so you have a definite amount that you initially predicted by the end of that estimated period.

    Thus you have planned deliveries and planned dates in SA, while you do not in a contract

    Over all time is considered for contracts, while periods are considered for SA.

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    Former Member
    Sep 03, 2008 at 09:58 PM

    Hi,

    When you know the exact requirement dates and quantities, you can use scheduling agreement, which will reduce the ordering cost, as you need not create a PO separetely for each requirement. Also the prices here in scheduling agreements are time dependent.

    When you dont know the exact requirements in terms of dates and quantities, you can use contracts to negotiate better prices. You need to create the PO with reference to contract every time you got the requirement.

    Regards,

    Ramakrishna

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