Sap Outline Agreement Source List

SAP Outline Agreement Source List: Everything You Need to Know

If you work in the procurement or supply chain department of a company, you would be familiar with the term SAP outline agreement source list. In this article, we will take a closer look at what it is, why it is important, and how it works.

What is SAP outline agreement source list?

SAP outline agreement source list is a feature in the SAP system that allows you to define a list of preferred suppliers or sources of supply for a specific material. The outline agreement is a long-term purchasing agreement between a company and a vendor, where the vendor agrees to supply a certain quantity of materials or services at a predetermined price over a specified period.

The source list is a subset of the outline agreement, where the company can specify a list of preferred vendors for a specific material. This ensures that the company can source the material from a preferred vendor, based on predefined criteria such as cost, lead time, quality, and availability.

Why is SAP outline agreement source list important?

The SAP outline agreement source list is important for several reasons:

1. Better supplier management: By defining a preferred list of suppliers, the company can manage its supplier relationships more effectively. It can negotiate better prices, prioritize delivery schedules, and ensure consistent quality.

2. Faster procurement process: The source list ensures that the procurement team can quickly identify the preferred suppliers and initiate the procurement process. This reduces the time taken to source materials and helps the company meet its production timelines.

3. Cost savings: The source list allows the company to negotiate better prices with its preferred suppliers. Additionally, by consolidating its procurement activities with a selected group of suppliers, the company can reduce its procurement costs.

How does SAP outline agreement source list work?

The SAP outline agreement source list works as follows:

1. Define outline agreement: The procurement team creates an outline agreement with a selected vendor, specifying the material, quantity, delivery schedule, and price.

2. Create source list: The procurement team creates a source list for the specific material, specifying the preferred vendors, along with their evaluation criteria.

3. Procurement process: When the procurement team initiates the procurement process, the system checks the source list. If a preferred vendor is available, the system automatically generates a purchase order for the vendor. If a preferred vendor is not available, the system generates a list of alternative vendors, based on their evaluation criteria.

Conclusion

The SAP outline agreement source list is a powerful feature in the SAP system that allows companies to manage their procurement activities more effectively. By defining a preferred list of suppliers for specific materials, companies can ensure consistent quality, faster procurement process, and cost savings. As a procurement professional, it is important to understand the SAP outline agreement source list and its benefits to ensure a seamless procurement process.