Question:
Hi,
How to setup "Rate contract" in MM? I will explain the situation -
We have a rate contract with the vendor for an year. The total amount or quantity is not contracted. The vendor needs to supply material for an year with the rate decided. We don't know how much quantity we will require at the start of year. When ever we need that quantity, we tells the vendor to supply as per the rate already decided.
How to setup such contract in MM? We can not use already defined either value contract or quantity contract as both are not decided beforehand.
Please reply
- Kedar
Answer:
Hi Kedar,
Have you looked at the Outline Agreement with Item Category 'M'?. This is exactly what you are looking for.
Cheers,
HT
Answer:
Hi Kedar,
Have you looked at the Outline Agreement with Item Category 'M'?. This is exactly what you are looking for.
Cheers,
HT
Hi HT,
I always thought that item category M is used if the user does not want to enter a specific material number. E.g. If he purchase different bulbs; all ofthem having the same price. Then he creates a contract with item category M and just specifies short text as bulb w/o entering a material number. In release order he then can specify the exact term of the bulb e.g. bulb, white, 25W.
However, you still have to maintain a target value in case of value contarct or target quantity in case of quantity contract. As I understood Kedar is looking for a contract which validity just depends on the contact start and end date. I would just use a normal contarct (WK or MK) and set the target value (for WK) or target quantity (for MK) a sinfinite by entering a very high value.
I have also another question regarding to item category M in contratcts. What is the difference between a contarct of item category M and standard contract with account assignment K. Both don't require a material number to be entered.
Answer:
Hi Bernd,
In fact, the Outline Agreement with Item Category 'M' is purposely used for the case of similar materials of the same price. These can be materials with different material numbers or materials without material master records. Of course, I do agree upon your clarification that with this Item Category 'M', we do not need to maintain material number and that the target quantity and net price shall be maintained. However, once comparing this type of Outline Agreement with the standard Contract with 'K' account assignment category, the main differences are that with 'M' Item Category, we do not need to maintain the specific G/L Account and that once creating the Release Order, you can allocate any materials to this contract as long as they are having the same value rate. These materials can be with or without material IDs.
Cheers,
HT
Answer:
Hi HT,
I am trying to use the contract functionality as you mentioend. It works fine except I get error message when creating the PO telling me that mandatory partner function OA is missing. However, the partner function OA is maintained in the vendor master record.
Creating PO via assignment list from PR with purcasing infor record as source of supply works fine. The OA partner function is copied to the PO. Creating a PO via assignment list (ME58) from a PR who has a contract as source of supply leads to the above error. For some reason the partner function OA is not copied to the PO.
Dis I miss any cistomizing??? Or what is the reason?
Answer:
Hi Ha,
When I am creating a contract with item category 'M', on the initial screen, I have to choose either MK or WK. If I choose any of these, then either I need to enter value or quantity. It is not serving my purpose.
I am doing something wrong here?
Please reply
- Kedar
Answer:
Hi Kedar,
The target quantity is purely on the estimated basis. This is not supposed to be your committed quantity which will be purchased similar to the case of PO. The main feature of this Outline Agreement type is that you can use to purchase various materials with the same rate.
Cheers,
HT
Answer:
Hi Ha,
We want to print the contract and send it to vendor. If we mention quantity, it may be interpreted that we are committed for that qty. Our legal dept may not allow to do so.
Is there other way to avoid giving qty or value at the time of contract creation?
- Kedar
Answer:
Hi Kedar,
I am afraid not since at least either Target Quantity or Target Value shall be maintained in the Outline Agreement. BTW, why do you have to print out the Outline Agreement and send it to your vendor? I thought that this is purely for internal management since the legal contract was concluded before your maintenance in SAP.
Cheers,
HT
Answer:
hello to all,
What Kedar needs is a standard fixed value at which he wishes to procure a particular part from a particular vendor and he is not intrested to go in for any quantity estimation.. Contracts cannot solve his purpose..
What i would have done is go for Inforecord with the condition validity as the Contract period.. here i have the option of setting the rate of material without declaring the quantity commitment...
Can this work for his requirement????
Regarding the contract print he can go for manual procedures..
Regards
Answer:
This could be one possibilities to make inforecord witout material master maintnain the rate for a specific period. Rate can be picked from this inforecord. or maintain as value contract as outline agreement and hold document for short time unless vendor apprve for rate and quantity and then use confirmation control key for shipment wher u can ask from vendor exact rate and quanty.
Hope this can help.....other suugest urs views,
Dil Se
Answer:
Hi Dil Se,
Mind you that the creation of info record with only material group will result in the fact that the system will only suggests this info record as source when you manually create a requisition item without a material master record.
Furthermore, an automatic source of supply determination during creation of purchase order will not be made and in this particular case, you have to manually choose and assign it.
Cheers,
HT
Answer:
we want to send a formal contract from SAP. Info record solution will not support this.
I am wondering, "Rate contracting" is a common thing in materials management. When we sign a rate contract, we don't commit any qty or value to vendors. Then, how so many companies must be doing it in SAP?
Answer:
Hi kedar ,
What you are asking is not in scope of standard SAP & the rate you fix is external to SAP . The contract what you create in SAP is purely internal & only a reference doc while creating PO.
I hope this is clear . If you still want that functionality , new development can be done with help of ABAP'r
Regards,
Krish
SAP MM Consultant
erpmurthy@yahoo.com
Answer:
we want to send a formal contract from SAP. Info record solution will not support this.
I am wondering, "Rate contracting" is a common thing in materials management. When we sign a rate contract, we don't commit any qty or value to vendors. Then, how so many companies must be doing it in SAP?
If you don't commit any quantity and value, it is no contract at least not in SAP terms.
Have a look if the source list can handle your requirement. There you can specify just the vendor and the time of validity. No quantity or price are required. In purchasing info records the purchase order price history is recorded.