As a professional, I am writing an informative article on SAP Open Outline Agreements. SAP is a widely-used enterprise resource planning software that offers various modules for different business operations. One of these modules is the SAP MM (Materials Management) module that deals with sourcing, procurement, and inventory management.
In the SAP MM module, open outline agreements are a common feature. They allow businesses to establish a long-term relationship with their suppliers by creating a framework agreement for the purchase of goods or services over a period of time. The outline agreement is not a legally binding contract. Instead, it serves as a reference for future purchases and establishes the terms and conditions for those purchases.
An open outline agreement in SAP MM is created through transaction code ME21N. The agreement includes information such as the supplier`s details, the description of goods or services, the delivery date, the pricing terms, and the payment terms. Once the outline agreement is created, it can be referenced in purchase orders, which are the actual documents for purchasing goods or services.
There are two types of open outline agreements in SAP MM: the quantity-based agreement and the value-based agreement. The quantity-based agreement refers to the purchase of a certain quantity of goods or services over a period of time. The value-based agreement refers to the purchase of goods or services up to a certain value over a period of time.
The use of open outline agreements in SAP MM comes with numerous advantages. Firstly, it simplifies the procurement process by reducing the time and effort involved in creating individual purchase orders for each transaction. Secondly, it enables businesses to negotiate better prices and terms with their suppliers, as they are committing to a long-term relationship. Thirdly, it provides greater visibility and control over the purchasing process, as it establishes clear guidelines for purchasing goods or services.
In conclusion, open outline agreements are a useful feature in the SAP MM module that allows businesses to establish long-term relationships with their suppliers for the purchase of goods or services. By creating a framework agreement, businesses can reduce the time and effort involved in individual purchase orders, negotiate better prices and terms, and gain greater visibility and control over the purchasing process.