The Decision Playbook exists to give buyers, planners, and MM config teams a fast, shared way to choose between Contracts and Scheduling Agreements—and run each the right way. It turns policy into simple rules, key config touchpoints, and step-by-step flows so teams standardize decisions, cut PO noise, calm “nervous” schedules, and improve KPIs like contract consumption, OTIF, and MD04 exception closure.

Pick the right instrument (decision rules)

Choose a Contract when:

• Demand is sporadic/variable, project-based, or service-heavy.
• You want commercial terms locked but timing via POs.
• Multi-plant consumption or flexible delivery patterns.

Choose a Scheduling Agreement (SA) when:

• Demand is repetitive/stable (components, packaging, C-parts).
• You want time-phased schedule lines and fewer POs.
• You’ll use MRP and often EDI to send forecast/JIT releases.

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Master data checklist (both paths)

• Material master: Purchasing + MRP views complete (lot-sizing, lead times, rounding, planned delivery).
• Vendor master / BP: Purchasing org + plant data set; partner functions; EDI eligibility if applicable.
• Purchasing Info Record: Price/conditions; delivery tolerances; GR-based IV preference.
• Source List (if used): Validity maintained; Fixed source tick for the chosen outline agreement.
• Quota (optional): If multiple sources.

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Configuration touchpoints (SPRO paths)

A. Outline agreements — general

• Doc types & number ranges
  • SPRO → MM → Purchasing → Purchasing Documents → Contracts / Scheduling Agreements → Define Document Types & Number Ranges
• Field selection & allowed item categories
  • SPRO → MM → Purchasing → Purchasing Documents → Define Document Types → … (field sel., item cat. allow-list)
• Release strategy (approvals)
  • SPRO → MM → Purchasing → Purchase Requisition / Purchase Order → Release Procedure with Classification
    (Use CEKKO fields for OA approvals if required.)

B. Contracts (ME31K/ME32K/ME33K)

• Standard types: MK (Quantity Contract), WK (Value Contract).
• Pricing: Allow item-level conditions; align with your pricing procedure (SPRO → MM → Purchasing → Conditions).
• Consumption reporting: Ensure doc type updates target value/qty for reporting (ME3*).
• Services: Enable item category D (service) if you’ll use service contracts.

C. Scheduling Agreements (ME31L/ME32L/ME33L, ME38, ME84/ME9E)

• Standard types: LP (without release documentation) and LPA (with release documentation).
• Release Creation Profile (required for LPA)
  • SPRO → MM → Purchasing → Scheduling Agreement → Define Release Creation Profile
    Configure:
  • Horizons: Forecast horizon (e.g., 13 weeks); firm zone (e.g., 2 weeks).
  • Aggregation: Daily for short horizon (e.g., 2 weeks), weekly thereafter.
  • Change tolerances: % thresholds to limit “nervousness.”
  • Backward/forward consumption and cumulative quantities behavior.
• Output/EDI for Releases
  • SPRO → Sales & Distribution → Basic Functions → Output Control (or NACE: Application EF)
    Define output types for Forecast and JIT releases; assign access sequences/condition tables and forms/IDocs.
  • Partner profiles (WE20): Map vendor to outbound DELFOR (forecast) and DELJIT (JIT) IDocs (EDIFACT), or appropriate ANSI/X12 equivalents.
• Plant specificity: Enforce plant at header/item; SA is plant-specific by design.
• Delivery tolerances & confirmations
  • SPRO → MM → Purchasing → Confirmations → Set Tolerances / Confirmation Control Keys
    (e.g., allow +5% overdelivery; set ASN requirement if used.)
• GR-based IV default
  • SPRO → MM → Logistics Invoice Verification → GR-Based IV (and field defaults via field selection).

D. Source Determination (for MRP integration)

• Source list requirement
  • SPRO → MM → Purchasing → Source List → Set Up Source List Requirement (per plant/material type).
• Automatic source assignment
  • Ensure Info Record exists; Source List entry references the Contract or SA with validity; Fixed tick for primary source.
• Quota arrangement (optional)
  • SPRO → MM → Purchasing → Quota Arrangement (if splitting demand across sources).

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Process flows & roles

Contract flow (Buyer-led, flexible dates)

1. Create Contract (ME31K: MK/WK) with conditions & validity.
2. Master data link: Info Record; Source List → reference Contract.
3. MRP/Planner raises PRs (MD01/MD04) → Auto-PO (ME59N) or manual PO (ME21N) referencing contract.
4. GR (MIGO) → LIV (MIRO/MIR7).
5. Monitor: ME3L/ME3M for consumption vs. target; price compliance.

Scheduling Agreement flow (Planner-led, time-phased)

1. Create SA (ME31L: LPA if using releases) with price, validity, Release Creation Profile.
2. Source List: Reference SA; mark Fixed.
3. Schedules:
   • ME84 to generate Forecast/JIT releases (per profile).
   • ME9E to output/send releases (print/EDI).
   • ME38 to review/adjust schedule lines (near-term buckets).
4. Vendor ships to schedule; GR (MIGO) per delivery.
5. Monitor: MD04 (firm/open lines), SA release history, cumulative qty reconciliation, vendor OTIF.

RACI (quick):

• Buyer: Outline agreement terms, pricing, approvals.
• Planner/MRP: Schedule horizons, ME84/ME38 cadence, MD04 exceptions.
• EDI/Tech: Output/IDoc config, partner profiles, error handling (WE02/WE05).
• Warehouse/AP: GR accuracy; GR-based IV; invoice match rate.

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Recommended defaults (sane starting points)

Contracts

• Types: MK for predictable quantities; WK when $ cap is the control.
• Pricing: Keep gross price in Info Record; use contract item conditions only when you must override.
• Reporting: Enforce realistic target to make consumption meaningful.

Scheduling Agreements (LPA)

• Release Creation Profile:
  • Forecast horizon 13 weeks.
  • Firm zone: 2 weeks (no changes transmitted).
  • Aggregation: Daily (weeks 1–2), weekly (weeks 3–8), monthly (>8).
  • Change tolerance: ±10% within firm zone; ±20% outside.
• Delivery tolerances: +5% / −0% (typical for C-parts).
• GR-based IV: Active.
• EDI: DELFOR (forecast) weekly; DELJIT (JIT) daily for high runners.

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Controls & KPIs

Contracts

• Contract consumption % vs. time used.
• POs referencing contract % (leakage).
• Price compliance and lead time to first delivery.

SAs

• Schedule adherence (vendor OTIF vs. firm zone).
• Cumulative qty reconciliation (SAP vs. supplier).
• Change noise (lines changed inside firm zone).
• Exception messages in MD04 cleared within SLA.

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Common pitfalls & remedies

• MRP not picking SA/Contract → Check Source List validity & Fixed flag; Info Record existence; quota precedence.
• Vendors ignore schedule changes → Tighten firm zone; align communication on release cadence; ensure EDI success (monitor WE02).
• Nervous schedules → Increase aggregation, widen change tolerances, review MRP lot-sizing & safety stock.
• Wrong plant on SA → Remember SAs are plant-specific; split by plant.
• Services in SA → Avoid; use Contracts (item cat. D) for services.

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Quick-reference (t-codes)

• Contracts: ME31K / ME32K / ME33K; Reports ME3L/ME3M/ME3C
• Scheduling Agreements: ME31L / ME32L / ME33L; ME38 (schedule lines); ME84 (create releases); ME9E (output releases)
• MRP/Monitoring: MD04 (stock/reqs), MD07 (MRP lists)
• GR/IV: MIGO; MIRO/MIR7
• EDI monitor: WE02/WE05

Check out: SAP MM: Difference between SAP Scheduling Agreements vs. Contracts

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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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