The purpose of this blog is to demystify SAP MM Scheduling Agreements vs. Contracts so buyers, planners, and MM config teams know exactly when to use which, how each flows (PO call-offs vs. schedule releases), and which config touchpoints matter (doc types, source list, release profiles, EDI, GR-based IV). It gives clear decision rules and quick process snapshots to reduce PO noise, align with MRP, and improve supplier performance and compliance so teams make consistent, faster sourcing decisions.

Both are Outline Agreements in SAP MM (long-term supplier agreements).

Contracts commit to an overall value or quantity; you place POs (call-offs) against them when you actually need goods/services.

Scheduling Agreements (SAs) commit to time-phased deliveries; the agreement itself carries schedule lines (dates/qty) that the supplier ships against—no separate PO per delivery.

Quick comparison

Topic	Contract	Scheduling Agreement
Primary use	Irregular or varied call-offs; materials and services	Repetitive materials with steady consumption (e.g., components)
Commitment type	Target value (WK) or quantity (MK) over a validity period	Time-phased quantities via delivery schedule lines
How you “order”	Create POs referencing the contract	Maintain schedule lines and send releases (forecast/JIT)
Dates/Deliveries	Dates decided on each PO	Dates live inside the SA (weekly/daily buckets)
Typical granularity	Coarse: “up to $X or Y units”	Fine: “Deliver 200 this Fri, 300 next Tue…”
Plant specificity	Can be cross-plant at header; plant usually at item/PO	Plant-specific (needs plant for schedule lines)
Price conditions	In the contract (or via info record)	In the SA (or via info record); stable pricing
MRP integration	PRs can source from a contract; POs created	MRP can build schedule lines; strong source determination
Documents & Tcodes	ME31K/ME32K/ME33K → POs (ME21N) → GR/IV	ME31L/ME32L/ME33L → Sched. lines (ME38) → Releases (ME84/ME9E) → GR/IV
Tracking	Contract consumption vs. target	Open/firm schedule lines and release history
EDI commonality	Less common	Very common (Forecast/JIT releases)

When to use which

Use a Contract when…

• Demand is sporadic or project-based.
• You need commercial terms locked, but want flexible timing via POs.
• You’re buying services or mixed items with variable specs.

Use a Scheduling Agreement when…

• You have repetitive, stable demand and want suppliers to ship to a rolling schedule.
• You want tight MRP integration and fewer POs.
• You use EDI to send forecast/JIT releases.

Process at a glance

Contract flow: Create contract → (MRP creates PRs or you order) → Create PO referencing the contract → GR/IV → Contract consumption updates.

SA flow: Create SA (price/qty/validity) → Maintain or MRP-generate schedule lines → Send forecast/JIT releases → Vendor ships per schedule → GR against SA → Invoices reference deliveries.

Tips & gotchas (real-world)

• Prices: Keep pricing in the info record for reuse; override in the contract/SA only when necessary.
• Source determination: For SAs, maintain Source List and (optionally) Quota so MRP selects the SA and builds schedules.
• Release creation profile (SAs): Set horizons/aggregation (weekly/daily) to avoid “nervous” schedule churn.
• Validity & targets: Contracts need realistic target value/qty for meaningful consumption reporting.
• Services: Prefer contracts; SAs are material-centric.
• Reporting: Use ME3* reports for outline-agreement monitoring; MD04 for SA demand/schedule visibility.

Check out: “SAP MM/P2P: Decision Playbook: Contracts vs. Scheduling Agreements with the Config Touchpoints“

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The author, Ray Hornbrook, has many years of SAP functional and technical experience.  Ray started his career in SAP as a MM/PP Subject Matter Expert (SME) for a SAP implementation and is now a Senior Level SAP Consultant.  Since Ray has worked both sides of SAP, business end user and IT professional, he is able to communicate effectively with both IT and Business team members. Having a background as an SAP business end user has helped Ray greatly in his consulting career.  The business background helps him better communicate with the business members of the team.  As well as helping bridge gaps in communication between the IT and Business team members.

To find out more about Ray Hornbrook please check out his LinkedIn profile by clicking HERE.

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