Scheduling Agreement

A scheduling agreement is a longer-term arrangement with the vendor covering the supply of materials subject to predetermined conditions. The conditions are valid for a predefined period and predefined total purchase quantity.

Scheduling agreements have several advantages:

• Using scheduling agreements enables you to reduce processing times and the amount of paperwork within the enterprise. A delivery schedule issued against a scheduling agreement can replace a large number of standard purchase orders or contract release orders.
  Scheduling agreement delivery schedule lines do not constitute an independent document but are part of the scheduling agreement. Procurement via scheduling agreements thus enables to reduce the volume of document used.
• Volumes of stock on hand can be reduced to a minimum through application of the Just-in-Time (JIT) principle, involving the specification of exact delivery time-spots.
• The vendors’ lead times are reduced. It is not necessary to deliver the entire quantity covered by the scheduling agreement at once; instead, a series of smaller quantities can be delivered in accordance with the delivery schedule lines. In this case, the vendors can receive due notification of such required quantities and delivery dates and times well in advance.

Understand more about scheduling agreements in this training manual.

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