Unit 1: Sources of Supply and Conditions

Key differences between the use of contracts and scheduling agreement

1. The volume of documents a. Contract: create a new purchase order in the system each time you release goods or services against the contract b. Scheduling agreement: there is a second document in addition to the contract document, this document is the scheduling agreement delivery schedule line, to which the new requirement quantities and dates are added 2. Use in automatic materials a. Contract: requirements planning can be set up so that the contract item is automatically assigned to a requisition item as the source of supply. However, this requisition must subsequently be converted into a purchase order or a contract release order b. Scheduling agreement: can directly generate scheduling agreement delivery schedules from the planning run, thereby removing the need for any further processing time in the purchasing department

What does release documentation enable?

1. You can find out when you sent which information to the vendor 2. vendor can see which deliveries have already been taken into account

Aggregation with the Release Creation Profile

1. You can use the release creation profile to determine how frequently, and under which circumstances, you can generate releases against a scheduling agreement and send the release to the vendor 2. You can define different time intervals for forecast delivery schedules and JIT schedule 3. The creation profile also controls, starting from the current date of release creation, how quantities are aggregates. 4. A greater degree of aggregation is possible for schedule line quantities for forecast delivery schedules than for JIT delivery schedules 5. You can also define the release horizon in the release creation profile

Scheduling Agreements

1. always plant specific 2. cannot use item categories M (material unknown) and W (material group) 3. If you use a document type that permits time-dependent conditions, you can also enter conditions for multiple validity periods 4. price control indicator: conditions are always calculated at the time of the goods receipt 5. Can create without material master records 6. Cannot use account assignment category U (unknown)

If the vendor master record includes the release create profile what can occur?

1. if the plant-specific data of a vendor master record includes the release creation profile, it automatically adopted in the additional data of a scheduling agreement item with the vendor and the relevant plant 2. If the vendor master record does not include the creation profile, you can manually enter the creation profile in the additional data of a scheduling agreement item

What is the data needed for contracts for different types of materials?

1. stock material: purchasing and accounting data in material master 2. consumable material: the account assignment data may already be stored in the contract. Alternatively, you can use the account assignment category U, which indicated that the account assignment data is specified for the first time in the contract release order

What does a purchasing info record contain?

The current prices and delivery costs for a particular purchasing organization (w or w/o plant reference), The vendor material number, Delivery options, Source data, The last purchase order number, The quotation number if the info record was generated automatically from a quotation, Price control indicator, Tolerance limits for over-deliveries or under-deliveries, The vendor's planned delivery time for the material

Advantage of Scheduling Agreement

reduce processing times and the amount of paperwork

Special info records: Consignment and pipeline

Consignment: purchase orders do not contain a price, the condition from the info record is first applied when the withdrawal is made from the consignment stock for the calculation of the liability

Purchasing Info Record as a source of supply

Contains data concerning the relationship between a material and a vendor or a material group and a vendor. Can also contain quotation and purchase order data

How is data transmitted to vendors for outline agreements?

Contract: contract release order (PO) Scheduling Agreement: Delivery schedule

Scheduling agreement without release documentation

1. The delivery schedule lines are transmitted to the vendor as they are saved in the system 2. Use type LP

Output of a Buyers Negotiation Sheet

1. By material: receive an overview of the conditions and ordering activities of all vendors who have supplied the material and for whom purchasing info records exist 2. By vendor: display and evaluate the order data of all purchasing info records for the selected vendor for one or more materials

Prerequisites to allow MRP to automatically generate schedule lines

1. Clearly designate the scheduling agreement as a source of supply for MRP in the source list (MRP indicator 2) 2. Set the procurement indicator F (external procurement) in the MRP data of the material master record. The exception is when you are working with quota arrangement 3. Permit automatic scheduling agreement delivery schedules in the planning run. The SA Deliv. Sched. Lines indicator sets the timeframe for which the scheduling agreement delivery schedule is to be generated (marking schedule agreement as MRP relevant) Hint: In the planning run, schedule lines can only be generated on a daily basis, Schedule lines on an hourly basis are only possible manually.

Purchasing info record data levels

1. Client level 2. Purchasing organizations or purchasing organization and plant 3. Must assign atleast to a purchasing organization

Buyer Negotiation Sheet Information

1. Current price and vendor conditions 2. Internal consumption statistics for the material 3. Total value of pervious orders to the vendor 4. Vendor evaluations

Why is a release creation profile created?

1. Exists for a delivery schedule with release documentation 2. The release creation profile is plant-specific, therefore, the account group of the affected vendors must allow plant-specific purchasing data 3. You can use release creation profiles to define the criteria when creating scheduling agreement releases to influence when and how often you send JIT and forecast schedules, also has tolerance for how much of change must occur before you notify vendor

Types of scheduling agreement releases for scheduling agreements with release documentation

1. Forecast delivery schedules: use it to give the vendor a medium-term to long-term overview of your material requirements 2. Just-in-time delivery schedules: use it to inform your vendor of your short-term requirements, must have indicator turned on in schedule agreement 3. You can specify that only forecast delivery schedules are possible for the schedule lines of your scheduling agreement with release documentation. You do this by not entering any value in the JIT indicator field in the item details of the scheduling agreement. 4. The JIT indicator field must be set in the material master record before the scheduling agreement is created. The JIT indicator field cannot be set in the delivery scheduling agreement if it is not set in the material master record

Price changes in info records

1. Gross price: the price change is calculated directly into the gross price 2. Condition type: the price change only applies to a particular condition type

Types of Info Records:

1. Info records with material master record, such as stock material, you specify the relationship between a material with a material master record and a vendor 2. Info records without material master record, such as consumable material, you specify the relationship between a material group and a vendor

Schedule lines incorporate firm zone and trade-off zone

1. MRP can be set up in such a way that either only the delivery schedule lines within the firm zone or the lines within both zones are fixed automatically. 2. All schedule lines for scheduling agreements that are after the trade-off zone fall within the planning zone and can be changed by the planning run. 3. Both the production as well as the material go-ahead period are printed in the schedule lines and transmitted with them. 4. The firm and trade-off zones are both calculated in calendar days

What data does the system provide for contract release orders? What else does the release documentation include?

1. PO number and relevant item number, order date, order quantity, order value 2. Quantity or value already released, target quantity in comparison with the still open quantity or the target value in comparison with the still open value

What types of contracts are there?

1. Quantity contract: fulfilled when a stipulated target quantity per contract item is reached, type MK, specification of the total value in the header data is optional, accumulated values are updated at the item level. 2. Value contract: fulfilled when a stipulated overall target value is reached, type WK, target value must therefore be specified in the header data of the value contract in addition to the validity period, accumulated values are updated at the header level for value contracts 3. Centrally Agreed Contracts: The enterprise has the option of creating contracts that relate not to just one particular plant, but to the purchase organization. The plant is not specified until the contract release order is created. All plants assigned to the purchasing organization can release against a centrally agreed contract. In a centrally agreed contract, however, you can store different conditions or partners for individual plants. If you do not want certain plants to release against the centrally agreed contract, block the centrally agreed contract as a source in the source list for the materials of these plants. If want multiple plants from different purchasing organizations to be able to release against use reference purchasing organization (customizing: conditions and release)

Scheduling Agreement with release documentation

1. The delivery schedule lines are not transmitted directly to the vendor. Initially, these lines are for internal use only. A message informing the vendor of your material requirements cannot be transmitted to the vendor until you create a scheduling agreement release. 2. use type LPA, the release documentation indicator is preset in Customizing

Contracts can be created with reference to what?

A purchase requisition, an outline agreement requisition, an RFQ, another contract

Outline agreement item as a source of supply

An outline agreement is a long-term agreement between a purchasing organization and a vendor covering the supply of materials or the provision of services subject to predetermined conditions. These apply for a predefined period and a predefined total purchase quantity or certain total purchase value. Two types: contracts and scheduling agreements

Purchase info record texts

For an info record with reference to a material master record, you can specify the following for each purchasing organization with or without plant reference 1. Whether only the info record purchase order text is to be displayed and printed in purchasing documents. To do this, select the No Mtext indicator in the purchasing organization data of the info record 2. Whether the info record purchase order text and the purchase order text from the material master record will be display and printed in purchasing documents. Both texts are displayed and printed if the No Mtext indicator is not selected.

Scheduling agreement options

How binding is a delivery schedule line? 1. Firm zone (production go-ahead period): the firm zone defines the point in time at which the production go-ahead period ends. If order changes within this time frame, you must still take the order 2. Trade-off zone (material go-ahead period): after production go-ahead, defines the point in time at which the material go-ahead period ends, can change order in this time 3. This is set in the scheduling agreement

Material Groups and Info Records

Info records can be suggested by the system as a source of supply for material groups when you manually create a requisition item without a material master record. The order unit and the material group are considered as check criteria

Does an outline agreement contain data on specific delivery dates or quantities to be delivered?

No

Sources of Supply

Purchasing Info Record, Outline agreement, plant

PIR types

Standard, Subcontracting, Consignment, Pipeline

Tolerance Limits for Scheduling Agreement Items

The creation profile also enables you to specify that a tolerance check should be carried out if scheduling agreement releases need to be created after modifications in the overall delivery schedule. Using tolerance limits, you can specify that scheduling agreement releases should be generated only if there are major changes in the overall delivery schedule. The tolerance limits are defined in the release creation profile in customizing. Tolerance limits can be defined for a maximum of three checking periods per scheduling agreement release type

External processing w/o material reference

These frequently have the subcontracting info type and are used in routing

Purchasing info record conditions

You can use the pricing date category to find other conditions. If you use the GR data pricing category, you determine the price again when the goods are received. If there are no conditions maintained in an info record, the system can propose the price from the last purchase order. With user parameter EVO it is possible to control whether to display this or not at individual user level. Purchase order data is automatically updated in the info record if the InfoUpdate indicator has been set in the purchase order. Hint: Conditions are never created or updated on the basis of the InfoUpdate indicator in a purchase order