Central Purchase Contracts (2ME)

Central Purchase Contracts (2ME)

Central contracts are global long-term agreements negotiated between an organization and a supplier. This helps in getting the best rates and conditions while bundling purchasing volume across multiple subsidiaries. These contracts are typically negotiated by the central purchasing organization, mostly at the headquarters, and used for globally driving operational efficiency, reduced cost while complying with regulations across multiple subsidiaries.

The central contract, created at the headquarters, can be distributed to subsidiaries to generate local contracts or scheduling agreements. Subsidiaries can then continue with the operational procurement in a seamless manner by leveraging this local contract or Scheduling agreement. Central monitoring of contract consumption across subsidiaries and renewal of expiring contracts is easily managed by the headquarters.

Key Process Steps Covered

  • Create central purchase contract and distribution
  • Release central purchase contract (optional)
  • Check distributed purchase contracts or scheduling agreements in the back-end system
  • Create purchase order or schedule lines in the back-end system
  • Import release orders
  • Post goods receipt in the back-end system
  • Create supplier invoice in the back-end system
  • Create credit memo (optional) in the back-end system
  • Perform mass changes to central purchase contracts
  • Monitor central purchase contract items (optional)
  • Create hierarchy central contracts
  • Display version history in central purchase contracts
  • Maintain formula and rate for commodity pricing

Benefits

  • Lower your costs for contract negotiation
  • Lower your costs based on scaled purchasing

Where is Central Purchase Contracts(2ME) being used?

This Scope item is used in the following way:

  • As a core function of Central Procurement within Sourcing and Procurement Scope Item Group

Process flow of Central Purchase Contracts (2ME)

Find below the process flow of the scope item Central Purchase Contracts as it is defined for release s4h-2021.


Download Process Flow of Best Practice scenario Central Purchase Contracts (2ME) - S/4HANA OP
Ref: Sourcing and Procurement of SAP S4H-2021
Best Practices related to S/4HANA*1) Yearly Updates are released per September of each year
*2) The Quarterly updates are released per Februari, May, August and November
Details of future releases can be found in the SAP Roadmap section of each product. Go to SAP Roadmap Product Finder.
Knowledge Center Scheer Nederland | The Process Experts Visit also the SAP Cloud ERP knowledge center of Scheer Netherlands. The following topics are covered:
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