Scheduling Agreement in SAP MM LP and LPA: An Overview
Scheduling agreements are an important aspect of procurement in SAP MM (Materials Management) module. They are especially useful for companies that regularly purchase large quantities of materials from a specific supplier over a certain period of time. In this article, we will discuss scheduling agreements in SAP MM and their two types – LP and LPA.
What is a Scheduling Agreement?
A scheduling agreement is a type of purchasing agreement between a company and a supplier that outlines the delivery schedule of materials. By creating an agreement upfront, both parties can avoid the need for frequent purchase orders and the associated administrative burden. The agreement specifies the delivery schedule, quantities, pricing, and other terms and conditions relevant to the procurement.
Types of Scheduling Agreements
There are two types of scheduling agreements in SAP MM – LP and LPA.
1. LP (Delivery Schedule)
An LP scheduling agreement is based on a delivery schedule. It specifies the delivery dates, quantities, and prices for the materials. The delivery schedule can be fixed or flexible, depending on the agreement between the buyer and the supplier. If the delivery dates are flexible, the buyer can schedule the delivery based on the production schedule or inventory levels.
2. LPA (Delivery Schedule and Quantity)
An LPA scheduling agreement is similar to an LP agreement, but with an additional quantity schedule. It specifies the delivery dates, quantities, and prices for the materials, as well as the specific quantities to be delivered on each date. This type of agreement is useful when the buyer needs a specific quantity of materials at a specific time, such as for a production order.
How to Create a Scheduling Agreement?
To create a scheduling agreement in SAP MM, follow these steps:
1. Navigate to the SAP MM module and select Purchasing > Scheduling Agreement > Create
2. In the Create Scheduling Agreement screen, enter the necessary details such as the supplier, material, and delivery schedule.
3. Select the appropriate scheduling agreement type – LP or LPA.
4. Enter the pricing conditions for the materials.
5. Save the scheduling agreement.
Benefits of Scheduling Agreements
Scheduling agreements offer several benefits for both buyers and suppliers, including:
1. Reduced administrative burden – By creating an agreement upfront, buyers can avoid the need for frequent purchase orders and associated paperwork.
2. Improved forecasting – Suppliers can plan their production and inventory based on the delivery schedule specified in the agreement.
3. Better pricing – By agreeing on the pricing upfront, both parties can avoid price fluctuations and negotiate better prices.
Conclusion
Scheduling agreements are an important aspect of procurement in SAP MM. They can help streamline the purchasing process, reduce administrative burden, and provide better pricing and forecasting for both buyers and suppliers. By understanding the different types of scheduling agreements available in SAP MM – LP and LPA – companies can choose the best option for their specific procurement needs.