If you are working in the procurement or supply chain department of a company and are using SAP software, you may have come across the term “schedule agreement.” But what exactly does it mean, and how does it work? In this article, we will explore the concept of a schedule agreement in SAP and its importance in managing the procurement process efficiently.
A schedule agreement in SAP is a long-term purchasing agreement between a buyer and a supplier. It contains details of the goods or services that the supplier will provide to the buyer, along with the quantity, price, and delivery schedule. The agreement is created as a framework agreement in SAP and is valid for a specific period, usually one year. It is used for goods or services that are required on a recurring or ongoing basis, such as raw materials, spare parts, or maintenance services.
There are three types of schedule agreements in SAP:
1. Quantity-based or release-based: In this type of agreement, the buyer agrees to purchase a certain quantity of goods or services from the supplier over a specified period. The delivery schedule is defined in advance, but the buyer can release the order for a specific quantity as and when required.
2. Value-based or delivery-based: Here, the agreement is based on the total value of goods or services to be provided by the supplier over a given period. The buyer can place orders as per the delivery schedule in the agreement, but the total value should not exceed the agreed-upon amount.
3. Contract: This type of agreement is used for long-term contracts with a fixed price or rate. The delivery schedule is flexible, and the buyer can place orders as and when required.
The schedule agreement in SAP streamlines the procurement process by reducing the time and effort required to create individual purchase orders for every delivery. It enables the buyer to plan their requirements and schedule deliveries accordingly, while the supplier can plan their production and inventory based on the agreed-upon delivery schedule. The agreement also provides transparency and stability to the procurement process, allowing both parties to have a clear understanding of their obligations and expectations.
To create a schedule agreement in SAP, the buyer and supplier first need to agree on the terms and conditions, quantity, price, and delivery schedule. The buyer then creates a purchase requisition in SAP, which is converted into a purchase order for the supplier. The purchase order contains the reference to the schedule agreement, along with the details of the specific delivery, such as the quantity and date. Once the supplier delivers the goods or services, they submit an invoice to the buyer, which is verified against the purchase order and schedule agreement.
In conclusion, a schedule agreement in SAP is a valuable tool for managing the procurement process efficiently. It enables buyers and suppliers to plan their requirements and deliveries in advance, reduces the administrative burden of creating individual purchase orders, and provides transparency and stability to the procurement process. By using schedule agreements, organizations can optimize their procurement process, reduce costs, and improve their overall supply chain performance.