Manage Purchase Contracts
Using the Manage Purchase Contracts app, you can create purchase contracts with a specific validity time frame and a target quantity or a target value. The system issues a warning when the consumed quantity or value specified in the contracts exceeds the target quantity or value. Then, from the list of available contracts, you can directly renew a contract and check the validity status of each contract. You must have authorization for the respective purchasing group to access the contracts.
You can create a contract template, enabling you to reuse data copied from the template whenever you create a new contract. This reduces the time and effort you spend filling out the data.
In addition, you can check the contract value consumed so far in all the release orders issued against this contract, along with the release order details. You can display the contract leakage percentage. Contract leakage is a KPI that returns the spend of purchase orders that do not have a contract reference, although an existing contract could have been used.
You can add items in either the flat or hierarchy lists.
A flat list is a linear view of items in a purchase contract. A flat list can only consist of functional items that need not be arranged in any structured order. It cannot contain groups of items; therefore, item sets cannot be added to flat lists.
A hierarchy list is a hierarchical view of items in a purchase contract. A hierarchy list can contain item sets and functional items arranged in a structured order.
You can create items for a purchase contract using the following item categories:
- Standard
- Consignment (K)
- Material Group (W)
- Subcontracting (L)
You can assign one or more account assignments to a contract item. Multiple account assignments allow you to define how the quantity and value of the contract items are distributed to individual account assignment items.
You can view other potential sources of supply for the items in a purchase contract
. You can add attachments of external (SL1) and internal (SL9) types by activating Harmonized Document Management (HDM). You can also assign attachments to purchase contracts from other business objects and edit existing attachments.
You can withdraw a purchase contract sent for approval. Then, make the required changes and submit it again for approval.
You can add conditions to an existing or new date range. While editing a contract, you can only add conditions to a new date range. In addition, you can copy existing conditions and modify them to suit your requirements.
Note
You can modify the price unit of a contract item only on the conditions level when creating a contract.Pricing User interface in Purchase Contracts for Time-dependent Conditions
One of the main activities a purchaser performs in a purchase contract is the maintenance of price information negotiated with the suppliers. When purchase contracts are used as a source of supply for follow-on processes like purchase orders, the price information of the purchase contract is used.
The purchasers can use the pricing user interface at the item level to maintain the price of purchase contracts.
- Maintain price information for different periods
- In addition to maintenance of plant-independent conditions, it is also possible to maintain plant-specific conditions
- Support of scale prices in the new user interface
- Ability to perform real-time price simulation for an item and understand the effective value
Purchase Contracts Based on Purchasing Documents
You can create purchase contracts based on other existing purchasing documents.
You can create purchase contracts using the corresponding apps based on the following documents.
Create Purchase Contracts Based On Purchasing Documents
| Purchasing Document | App |
|---|---|
| purchase requisitions | Process Purchase Requisitions (V2) |
| supplier quotations for RFQs | Manage Supplier Quotations |
| model product specifications | Manage Model Product Specifications |
You can also use the Create Purchase Contract app to create purchase contracts referenced to a purchase requisition or an RFQ.
Manage Purchase Requisitions - Professional
Using the Manage Purchase Requisitions - Professional app, you can create purchase requisitions to order the items in your purchase contracts. You can add items in either the flat list or the hierarchy list and assign the purchase contract as a source of supply.
When creating a purchase requisition, you can use the automatic source determination. If there is no other source of supply other than the purchase contract available for the item, then the purchase contract is automatically assigned as a source of supply. If multiple sources of supply exist and the system cannot determine a single default source of supply, then all sources of supply will be shown. Then, you can assign the purchase contract using the Assign Source of Supply.
Once the purchase requisition is released either by automatic approval or approved by the responsible, you can convert it using the Process Purchase Requisitions (V2) app. You have to assign the source of supply if it is not assigned during the purchase requisition creation. Otherwise, you cannot create the follow-on document purchase order. You can also create the purchase order automatically using a job. You can use the job template Automatic Creation of Purchase Orders from Requisitions to schedule the job.
The purchase order changes the purchase contract's consumption since it is used as the source of supply.
Purchase orders ignoring existing contracts, namely contract leakage, can be monitored using the Contract Leakage app. As a purchaser, you can determine the spend (net value) of purchase orders that do not have a contract reference, although an existing contract could have been used using this app. You can also view the consumption and leakage of a purchase contract using the Manage Purchase Contracts app.