Agreement Type in SAP MM: Understanding the Basics
SAP MM (Materials Management) is a module of the SAP ERP system that deals with procurement management. One of the crucial aspects of procurement management is the creation and management of various agreements between the buyer and the supplier. In SAP MM, these agreements are categorized as agreement types. In this article, we’ll take a closer look at the agreement type in SAP MM and its significance in procurement management.
What is an Agreement Type in SAP MM?
An agreement type in SAP MM is a categorization of procurement agreements between the buyer and the supplier. It helps in creating a standard for the type of agreement, the goods or services, and the duration of the agreement. SAP MM offers several types of agreement types, such as contracts, scheduling agreements, and outline agreements. Each of these agreement types has a specific purpose and use case.
Why is Agreement Type Important in SAP MM?
The agreement type in SAP MM is essential because it helps the procurement manager to define and manage the procurement process effectively. By specifying the type of agreement, it becomes easier to maintain a standard for the procurement process. It also helps in maintaining the consistency of procurement transactions and reduces the chances of inaccuracies.
Different Types of Agreement Types in SAP MM
1. Contracts – A contract is a long-term agreement between the buyer and the supplier that outlines the terms and conditions of the procurement process. It specifies the delivery schedules, prices, and quantities for the duration of the contract.
2. Scheduling Agreements – A scheduling agreement is a type of agreement that specifies the delivery schedules for a predefined period. It allows the buyer to plan its procurement process and reduces the chances of stock-outs.
3. Outline Agreements – An outline agreement is a type of agreement that defines the terms and conditions of the procurement process for a predefined period. It helps in streamlining the procurement process and reduces the chances of errors.
Conclusion
Agreement type is an essential aspect of procurement management in SAP MM. It helps in defining and managing the procurement process effectively and efficiently. SAP MM offers several types of agreement types that cater to different procurement scenarios. By choosing the right agreement type, the procurement manager can maintain consistency, streamline the process, and reduce the chances of errors.