Use of Scheduling Agreement (Outline agreement)

As we maintain a schedule in scheduling agreement of diff dates delivery.....
we can maintain it in delivery schedule tab in purchase order too...

is there any difference in both of the case...

if not then what is the use of SA( outline agreement)

1) Scheduling Agreement is a long term agreement and PO is normally a one-off. When you have long term relation with supplier you will go with SA.

2) SA need not have delivery schedules at the time of ordering. It's like a contract with vendor for all basic prices, quantities & terms. You will release schedules as & when required. This method is very popular with manufacturing ind (e.g. automotive) where they negotiate prices but delivery schedules are given periodically based on their actual production/sales demands.

3) In a PO, you must give schedules in PO itself.

4) If you know contract & release order (or call-off) concept, then SA is like contract and SA schedule is like release order. PO is release order.

or

While using schedule agreement, you will create delivery schedule, when ever you require materials.

Firm and trade off zone in delivery schedule details will be forwarded to your vendor. you can create daily , weekly , monthly schedule lines

Example : if you have created a schedule agreement for product " A " for quantity 1000, and you require material of 100 nos in the first month, you can create schedule line for this 100 only and this will be transmitted to vendor( if you are using LPA you have to release schedule line). when ever you require further qty based on your requirement you will create another delivery schedule line, then it will be transmited to vendor.

In case of PO if you are ordering 1000 qty , you need to specify the delivery date in Purchase order it self, and all the dates are immediately transmited to vendor along with Purchase order.