Scheduling Agreement

Process Overview

A scheduling agreement is a long-term arrangement with a vendor regarding the supply of materials or services according to predetermined terms and conditions. Delivery schedules can be released with reference to the scheduling agreements whenever required. MRP can generate delivery schedules with reference to a scheduling agreement automatically. Use scheduling agreements wherever there is a need to generate delivery schedules automatically from MRP.

This document covers:Creation of a Scheduling AgreementError: Reference source not foundError: Reference source not foundChanging a Scheduling Agreement (Amendment)Deletion of a Scheduling AgreementMRP Created Delivery Schedules

Change of Delivery Schedules

Creation of a Scheduling Agreement

The menu path to create a Scheduling Agreement:

Menu path LogisticsMaterials management Purchasing Outline Agreement Scheduling Agreement Create

Transaction ME31L

Step 1: Enter data in the initial screen as shown below. Press <Enter> key to move to Header Data screen.

Step 2: Header Data (Applicable for all the items in the contract).

Field Description RemarksPayment Term Choose the payment term starting with A (A002, A003 etc.) from the list of

payment terms provided (press F4 to see the list)Target Val. Enter the value of total purchases that can be made with reference to the scheduling

agreement. Currency Enter the currency code. All the purchases will made in this currency.Exchange Rate If the currency is other than “INR”, then an exchange rate can be entered here. Ex.rate fx. Exchange Rate fixed. If you want the exchange rate to be fixed and should not

change with time, set this indicator.Inco Terms Enter the key of the inco terms in the first field and additional info. related to the

inco term key in second field. (Example: EXW, Baroda)Ref. Data These are information fields only. Use them as required.

Press <Enter> key to move to Item Overview screen.

Step 3: Item Overview Screen. Enter the items to be purchased here. Note: Only 4-5 items are shown on a screen. If you want to add more items follow the menu path “Edit Enter Lines”. If you want to scroll down and scroll up, use scroll buttons on the menu bar.

Field Description RemarksItem Category Leave it blank for normal purchases. If the item is for subcontracting (i.e. you

supply components to process the item), enter “L” here. Account Assignment Category

Leave it blank for stock purchases. If you want the costs to be assigned to a cost center (say, for admin. Purchases) instead of stock, enter “K” here. If you want the costs to be assigned to a project instead of stock, enter “P” here.

Material Enter material number here. (Material number may not exist for administrative items and assets which are not modvatable. Material number need not be entered in such cases)

Short Text (Material Desc.)

Material description from the material master will be displayed. (If material number is not entered, this should be entered).

Material Group Material group (to which the material belongs) will be defaulted by the system from material master. ((If material number is not entered, this should be entered. Press F4 and select appropriate material group)

Target Quantity Enter the quantity to be orderedOrdering Unit Defaulted, if material number is entered. (If material number is not entered, enter

the Unit of measure in which materials are purchased.) Unit Price Unit price of the materialPlant Plant for which materials are being purchased. Press <F4> and choose the

appropriate plant. (Example: Plant code 0610 for DMS, Nashik) Storage Location Enter the relevant storage locationDeletion Indicator “L” in this field indicates that item is deleted. Explained in Deletion of Contract.

Step 4: If account assignment category is entered, then account assignment screen will appear. The account assignment screen can also be accessed by selecting items in the item overview screen and following the menu path “Item Account Assignment”. Otherwise move to step 5.

Field Description RemarksG/L account G/L account will be defaulted, if material number is given. If material number is

not entered in item overview screen, this should be entered. Obtain a list of G/L accounts to be used from finance department.

Cost Center

WBS Element

OrderAsset

If the account assignment category given in the item details screen is “K”, then cost center appears here. Enter the cost center to which the costs should be assigned. If you don’t know the cost center, obtain cost center code from finance department.

If the account assignment category given in the item details screen is “P”, then WBS Element appears here. Enter the WBS element to which the costs should be assigned.

If the account assignment category given in the item details screen is “A”, then “Order” & “Asset” fields appears here. Enter the “Order” & “Asset” to which the costs should be assigned. If you don’t know the order & asset number, obtain the codes from finance department.

Repeat acc. Ass. On Click on this button to repeat the given account assignment to the other items for which account assignment has not yet been entered.

Press <enter> key to return to the item overview screen.

Step 5: Select the items by clicking on the selection box (see the screen displayed in step 3), and click on item details button. The item details have to be entered for all items.

Field Description RemarksReminder 1Reminder 2Reminder 3

Use these fields, if you need to send delivery reminders to vendors. Dunning letters can be generated, if these fields are used. Maximum three reminders can be given. When a delivery schedule is created with reference to the scheduling agreement, these reminder settings will be used. Example:10- means first reminder letter can be sent 10 days before delivery date1 means second reminder can be sent one day after delivery date, if goods are not received.5 means third reminder can be sent 5 days after delivery date, if goods are not received.

ConfContK Confirmation Control key. This will be defaulted for delivery schedules. Use this field only when you want despatch intimation of the vendor to be recorded in the system.1) Use the key “0001”, if you want despatch intimation (shipping notification in SAP) before GR. If this key is selected, then GR cannot be done without recording shipping notification.

Tracking No Enter Project & Package identifier (Example: GVK/CT indicating GVK project and Cooling Tower).

Vend. Mat. Leave this field blank.Ackn. Reqd. Acknowledgement required indicator. If this indicator is set, system assumes that

PO acknowledgement is required. The indicator will be defaulted in PO. Set this indicator, if you want PO acknowledgement for this item.

Underdel tol. Under Delivery Tolerance. Percentage (based on the order quantity) upto which an under delivery of this item will be accepted. This percentage will be defaulted used in delivery schedules.

Overdeliv. Tol. Over Delivery Tolerance. Percentage (based on the order quantity) upto which an

over delivery of this item will be accepted. This percentage will be used in delivery schedules.

Tax Code This is the sales tax code to be used. A tax code should be given for all materials for which modvat can be availed or where 57-F4 should be given. Press F4 and select appropriate tax code. The tax codes selected should start with a number (Eg:0a, 3c etc). 0a : Use this tax code, if sales tax is zero percent, but excise duties exist for the material and modvat can be availed.0i : Use this tax code, in case of foreign vendors.0S: Use this tax code for all info records of category subcontracting.All other tax codes are self explanatory.

GR based IV GR based Invoice verification. Always set this indicator for all items for which modvat can be availed. It will be defaulted in PO.

IR Invoice Required indicator. It should be ticked always except for deliveries free of charge. [If you receive any items free of charge, then this indicator should not be ticked. System gives a message asking the user to change the unit price to zero. Change the price to zero.]

Step 6: If tax code is entered in item details screen, then tax jurisdiction code screen will appear. Enter the tax jurisdiction code and press <enter> to return to item details screen.

Note: Subsequent to VAT implementation, Tax Jurisdiction Code field is no more relevant and this entry will not be required.

Step 7: Enter the pricing conditions and press <F3>. The conditions available are explained in detail in user manual MM conditions.

Field DescriptionNew Entries If you want to enter additional pricing conditions (discount, freight etc.), click this button.Delete line If you want to delete any pricing condition specified here, position the cursor on that condition,

click this button.Con. Type Press <F4> and select the condition type you want to add to the pricing conditions.Rate Enter the value of the condition here. If the condition type is a percentage condition, the value

entered here is percentage. If the condition type is value condition, the value entered here is absolute value. If the condition type is a Unit rate condition, the value entered here is value per unit quantity.

Currency This is defaulted from the currency entered in header details. Change it for the condition type “P000”(gross price), if you want to enter a different currency for the item. Ensure that you give the same currency for all conditions of an item.

Step 8: If you want to enter a delivery address which is different from the plant address, then select the items in item overview screen and follow the menu path “Item More functions Delivery Address”. Otherwise move to step 9.

Click on “Repeat address on” to repeat the address given here for all the other selected items. Press <Enter> to return to item overview screen.

Step 9: If you want to enter different partner roles (Ordering Address, Goods Supplier) to be defaulted in purchase orders which refer the contract then follow the menu path “Header Partners”. Otherwise move to step 10. Press <F3> again to return to item overview screen.

Note : Partner functions can be defined only at header level i.e. applicable for all the items in the contract.

Step 10: This step explains the entry of texts in a scheduling agreement. Two types of texts can be entered:

Header Texts: These are applicable to the entire document. Follow the menu path “Header Texts Texts overview” to access the header texts.Item Texts: These are applicable at item level. Select the item in the item overview screen and follow the menu path “Item Texts Texts overview” to access the Item texts.

The process of entry of texts is explained in user manual “MM Purchasing texts”.

The following Header texts are available.

Header Text: This text is reserved for printing during enquiry printing. This can be used for entering the general information to the vendor on contract. The contents in this text will be copied on to PO also.

Header Note: General internal comments can be entered here. The text entered here will not be printed.

Texts entered in all the following text types will be copied in the follow-on documents that refer the quotation.

Your reference: References of the vendor can be recorded here.

Our reference: References of the organization (Example: Reference keys of all correspondence with the vendor) can be recorded here.

Terms of payment: Payment terms can be described here.

Mode of Payment: Payment mode (ex: By cheque etc.) can be entered here.

Pricing Types: Texts like “Prices as applicable in the beginning of the month of delivery will be considered”.

Taxes & Duties: Texts on taxes and duties (Ex: Taxes extra as applicable) can be entered here.

Insurance: Texts related to insurance can be entered here (ex: insurance borne by us).

Freight/Mode of Transport: Texts related to freight and mode of transport can be entered here. (Ex: Freight to be paid).

Packing/Shipping instructions: Packing & shipping instructions can be entered here. (Ex: packing as per insurance company norms).

Inspection/Goods Marked/Origin: Texts related to the inspection, marking on goods and origin of goods can be entered here.

Ex: Inspection shall be done at your works. Goods should be marked with the identification “Videocon/0002”.

Dead Lines: dead lines related to the procurement can be entered here.

Ex: All relevant drawings should be submitted by 21/06/2013. All deliveries should be completed by 21/06/2013.

Warranties: Texts related to the conditions of warranty can be entered here.

Guarantees: Texts related to the guarantee conditions can be entered here.

Liquidated Damages: Texts indicating the terms & conditions related to Liquidity damages/penalties can be entered here.

Terms & Conditions of Contract: General terms & conditions other than the terms & conditions mentioned in texts described above can be entered here.

Vendor memo: General text on vendor. Will not be printed.

Vendor memo (Pur.Org.): Comments specific to a purchasing organization on vendor. Will not be printed.The following texts are provided specially for amendments.Amendment Number: This should be used only while amending a contract. Do not enter anything in this text while creating a contract and before the contract is printed. If you make any changes to the contract after it has been printed, enter the amendment number here. Whenever you make a new amendment, change the amendment number. This will be printed on PO.Amendment Change Note: A brief note on each amendment can be recorded here for internal reference. It will not be printed.

The following Item texts are available.

Item Text: Text on item. Check the texts in info record PO text, material PO text and decide if you need to enter any additional text. This will be printed.

Info Record PO Text: PO texts entered in info record master will be defaulted here. This will be printed on contract. Modify as required.

Material PO Text: PO texts entered in material master will be defaulted here. This will be printed on contract. Modify as required.

Delivery Text: If you want any special delivery instructions for the item to vendor, the same can be entered here. This is printed.

Info record Note: Note entered in info record master will be defaulted here. This is not printed.

After entering the texts press <F3> to return to item overview screen. Press <F11> or click on “Save” button to save the scheduling agreement and return to initial screen. A scheduling agreement will be created and system gives a message indicating that the scheduling agreement has been created.

Changing a Scheduling Agreement (Amendment)

Changes made to a Scheduling Agreement before taking a printout is considered as simple changes. But, changes made after taking a printout are considered as amendments to a Scheduling Agreement. In this section, changing a Scheduling Agreement, entering different pricing conditions for different validity periods is discussed. Acknowledgement of vendor also can be recorded in change mode.

The menu path to change a Scheduling Agreement:

Menu path LogisticsMaterials management Purchasing Outline Agreement Scheduling Agreement Change

Transaction ME32L

The process of changing a Scheduling Agreement is similar to the one explained in creation of Scheduling Agreement with a difference that data already exists in the Scheduling Agreement and you want to change only some terms or add an item or delete an item.

Step 1: The menu path given above leads to the screen shown below. Enter the Scheduling Agreement number to be changed and press <Enter> key.

Step 2: The item overview screen appears. Follow the navigation of different screens as explained in Navigation section of this document. If you need any clarifications on any field in these screens, please refer the relevant step in creation of Scheduling Agreement section.

Step 3: Enter Amendment number in header text type “Amendment No.” See the previous amendment number and replace it with the new amendment number.

Entering acknowledgement of vendor

SAP maintains acknowledgement of vendor at item level of the Scheduling Agreement. If you want one acknowledgement for the entire Scheduling Agreement, the same acknowledgement reference has to be entered for all the items. To save data entry time a fast entry screen is provided. Follow the menu path “Edit Fast Change”. The fast change screen appears.

On pressing <Enter>, the “Acknowl.no.” field in item details screen will be filled with the value from fast change screen for all the items. Once the acknowledgement field has some value, acknowledgement reminders cannot be generated anymore.

Deletion of a Scheduling Agreement

A Scheduling Agreement cannot be deleted in SAP. Only items in a Scheduling Agreement can be deleted. Deletion of items can be done in change mode. Select the items to be deleted in item overview screen and follow the menu path “Edit Delete”. The selected items are still shown in the Scheduling Agreement but will be suppressed. The deletion indicator field for selected items will be filled with “L” indicating that item is deleted.

If you want to undelete an item, select the item and follow the menu path “Edit reset deletion ind.”. The deletion indicator will be removed from the selected items.

MRP Created Delivery Schedules

For MRP to create delivery schedules automatically, the following needs to be done:

Create a Scheduling Agreement (Explained in this document)Maintain Source List (Explained in user manual “MM Source List”)

Creation of Delivery SchedulesDelivery quantities and delivery dates are specified in delivery schedules. Delivery schedules can be created with reference to scheduling agreement. Delivery schedules can also be created/updated automatically by MRP run. Creation/change of delivery schedules manually is explained in this document.

Menu path LogisticsMaterials management Purchasing Outline Agreement Scheduling Agreement Follow-on functions sch.agmt.schedule

Transaction ME38

Step 1: Enter scheduling agreement number and press <Enter> key to move to item overview screen for Manual Schedule lines.

Step 2: Item Overview screen

The item overview screen displays all the materials in the scheduling agreement, Target Quantity ordered in scheduling agreement, and open target quantity.

Open target quantity = Target Quantity – Total delivery schedules released till date

Select the items for which delivery schedules have to be created and click on “Deliv. Schedule” button on menu bar.

Step 2: Delivery Schedule for item screen

Field Description RemarksQuantity This field indicates the total quantity of all delivery schedules till date. System

calculates and displays.StatDelD Statistical Delivery Date. This date will be considered for vendor evaluation to

calculate on time delivery performance. System defaults the delivery date into this field.

After entering a delivery schedule line press <Enter> key. If the delivery date given is less than (current date + Lead time), system give a warning message suggesting the Realistic delivery date based on the lead time. It is recommended that, you enter the system suggested realistic date in statistical delivery date field.

If the item category of the item is “L” (Subcontracting) and there is no BOM for the item, system displays “Processing Components” screen (explained in step 3).

If you want to enter more schedules, enter the schedules.

After entering the schedules, click on “Next” button on the menu bar. If you have selected more than one item in the item overview screen, the delivery schedule for item screen remains and delivery schedules for the next item can be entered. When delivery schedules for the last selected item are entered, item overview screen appears.

Step 3: Processing Components screen (Only in case of Sub-contracting items which do not have BOM). This screen can also be accessed by the menu path “Item Components Overview”. Components that need to be supplied to the subcontractor to process a material should be entered in this screen.

Field Description RemarksMaterial Enter the material number to be supplied here. In DC11 cases, the material to be

supplied is the same as the material being ordered. In such cases, system gives a warning message cautioning the user of recursive ness, which can be ignored by pressing <Enter> key.

Required Quantity Enter the quantity to be supplied to vendor. Reqmts. Date This will be calculated by the system based on the lead time for processing and

delivery date.

Enter the required components and press <F3> or click on “Back” button on the menu bar to return to the “Delivery Schedule for item” screen.

Step 4: Enter delivery schedules for all selected items as explained in step 2 and press <F11> or click on “Save” button.

Delivery schedules will be updated.

Change of Delivery Schedules

The process is similar to the one explained in Creation of delivery schedules.

Maintain Source List

Definition:-

Source list is used to find the vendor automatically during auto vendor assignment process. It is a plant specific master data.

Through configuration, it can be made as mandatory or an optional.

Source list controls

Validity period for each vendor Indicates vendor as preferred vendor Blocking vendor from raising POSource relevancy to MRPSupplying plant in case of STO

Prerequisite:-

Material Master in the Plant where the source list it to be created

Menu Path:-

Logistics Materials Management Purchasing Master Data Source List ME01 Maintain

Double Click ME01

Maintain Material code number

Maintain Plant

Click

Maintain valid from date

Maintain Valid to date

Maintain vendor code

Maintain Purchase organization

Note: - field is used incase of STO. Supplying plant can be mentioned here.

Tick the check box to indicate the vendor as preferred vendor.

Note: - Only one vendor can be indicated as preferred vendor in the same validity period.

Check box is used to block the vendor

If this source is to be used by MRP, fill the column. Following are the allowed entries

Click

Click

Menu Path:-

Logistics Materials Management Purchasing Master Data Source List ME03 Display

Double Click ME03

Maintain Material code number

Maintain Plant

Click

Select the required line item

Click to view detail screen

More display are possible with the menu path from top of the screen as shown below.

Maintain Quota arrangement

Definition:-

Quota arrangements are used to automatically split / distribute the total requirements to more than

One vendor One plant One version

Quota arrangements can be defined for Minimum quantity

Let us create quota arrangements to distribute between two vendors 20272 and 20268

Quota base qty + quota-allocated qtyQuota rating = --------------------------------------------

QuotaNext vendor will be allocated based on the lower quota rating.

Prerequisite:-

Material Master in the Plant where the source list it to be created

Vendor master in the purchase organization where it is to be created

Note: - material master must specify the requirement of quota arrangement in the purchasing view.

Menu Path:-

Logistics Materials Management Purchasing Master Data Quota Arrangement MEQ1 Maintain

Double Click MEQ1

Maintain Material code number

Maintain Plant

Click

Maintain the following fields according to the business needs

Field name Field descriptionValidity period up to which the quota arrangement is valid.Minimum quantity to trigger the quota arrangement process by the system.

Click

Select the required validity period by clicking the grey box in the left side.

Click

Maintain the following fields

Field name Field description and value

Procurement type Procurement type. E.g. F to indicate external procurement. E to indicate internal procurement.

Special procurement type Key identifying the special procurement.

Vendor code Key indicating the vendor. E.g. 20272

Supplying Plant. Key identifying plant. Used in case of STO

Version Key identifying the production version. Used in internal manufacturing distribution.

Quota Number indicating the quota. E.g. Enter 1 to split equally.Maximum Qty Maximum allowed quantity for quota arrangement.Quota base qty It is used to regulate the quota arrangement without

adjusting the quota percentage.Maximum Lot size Maximum PO quantity that may be ordered per vendor

during planning.Minimum lot size Minimum PO quantity that may be ordered per vendor

during planning.Maximum release quantity It is used during MRP run to automatically split the

quantity. It is the maximum quantity that will be allocated to a vendor for each requirement. E.g. 3000

Number of period Number of period the release quantity is valid. E.g. 1Period indictor Period indicator for maximum release quantity. E.g. M to

indicate month. Maximum release qty, with number of period and period indicator, E.g. 3000 1 M indicates, maximum release quantity 3000 units in a month from this vendor.Priority for determination of sequence Priority indicator. Vendor with priority indicator will be

taken first.

First portion of the screen

Click

Message appear at the bottom

Menu Path:-

Logistics Materials Management Purchasing Master Data Quota Arrangement MEQ3 Display

Double Click MEQ3

Maintain Material code number

Maintain Plant

Click

Select the line by clicking the grey box in the left

Click

Click to exit