Using Contracts for Material Groups

You can use the contract-specific item categories M (Material unknown) and W (Material group) to map outline agreements for groups of materials. These item categories are intended for the entry of contract items without specification of the material number.

The following are the details of each item category:​

​M item category:​

You can use this category in quantity and value contracts. This item category is recommended for similar materials of the same price. These can be materials with or without a material master record. For example, you have set up a contract with your supplier covering various types of writing paper, such as lined, squared, blank, and pre-punched. ​

​The different types of paper have the same weight and quality and can be bought at the same price. When creating this contract item of the M category, you enter the short description, material group, target quantity, unit of measure, and price, but no material number. You must then enter the short description, such as lined or blank, in the contract release order. ​

You can also release materials with a material master record against this contract item in the release order, provided that the material group and purchase order unit of measure match.

W item category: ​

​You can only use this category in value contracts. This item category is recommended for materials belonging to the same material group but with different prices. For example, you have set up a contract with your supplier for various types of electrical equipment. The contract is to cover all articles included in the supplier’s price list. The precise article is specified upon ordering. Instead of creating one contract item for each article in the supplier’s list, you can use the W item category and the appropriate material group, for example, electrical equipment. The short text makes it clear that the contract item covers all electrical equipment supplied by the specific supplier. In the release order for this contract, you enter the exact information for the article, for example, a package of cable ties or an electrical socket. ​

​The price, the quantity, and the material number are not specified until you create a release order. If an info record exists, the conditions maintained in the info record are proposed. The item, with or without material number, must be assigned to the same material group as the contract item referenced. Items without material numbers must have a valid account assignment, such as a cost center. ​

You can enter additional conditions. For example, you can enter a discount in the header conditions if the supplier grants a discount on all purchase orders referencing the contract. The discount is calculated automatically when a contract release order is created.