Central Purchase Contract

The Central Purchase Contracts (2ME) scope item describes the central contract created in
the central purchasing organization and distributed to other subsidiaries. It belongs to the
Central Procurement business area, which is part of the Sourcing and Procurement line of
business.

1. Central Contract are Global and Long term agreement between Org and supplier,
Adv: Best rate and condition across multiple subsidiaries
2. Central contract created in hub system and distributed to connected systems as local
contract or SA
3. Local contract created in the connected system which will also be used as Source of
supply in connected system.
E2E Flow diagram
 Benefits:
 Lower your cost for contract negotiation
 Lower your cost based on scaled Purchasing

Process

 Create Central Contract and distribution

 Release Central contract
 Check distributed contact or SA in the backend/connected system
 Create Schedule lines in the backend system
 Import release order
 PGR
 Created Supplier Invoice
 Perform mass change of central contract
 Monitor Central Contract line item
 Create hierarchy central contract
 Maintain formula and rate of Commodity pricing

MASS CHANGE TO CENTRAL PURCHASE CONTRACT

App : Mass Central Purchase Contract

  Can Perform mass change by download and upload option through Excel

 Select the header of Item for which change has to be carried

 Select specific central contract number that needs to be downloaded to excel file
 Purchaser can add the new header distribution or the item distribution record
using excel file
 System creates new version when version related fields where changed- Have to
Analyze the how to check version related field

 Update value of the field Central Purchasing Group for multiple central purchase
contracts headers and central purchase contracts hierarchy headers.

MANAGE CENTRAL PURCHASE CONTRACT

App : Manage Central Purchase Contract

Features:

 Define price change reasons for conditions, can also maintain Pricing
scale,simulate a price or create a default condition in Central purchase contract
item
 Transfer Header and item notes, scales and pricing to the distributed outline
agreements in connected system
 Output control facet to differentiate between various versions
 Create distribution lines at the header level of Central purchase contract
hierarchy. Can enable partners in central purchase contract hierarchy to view the
consumption percentage and GR consumption percentage at item level
 Document status and distribution status can be viewed, can also view additional
information related to subordinate and the time stamp. Can also use retrigger
update to retrigger a contract that runs into error.
 Copy the PC hierarchy, Can also copy individual distribution lines CPC hierarchy
and delete items and distribution lines in CPC
 Can manage versioning in CPC
 Assign Item category to item in CPC
i) Standard
ii) Material Unknown(M) – Similar Material with same Price but different
material number , Purchasing document can have short text, Material
Group, quantity and UoM and no Material number . Material number
cant be specified until the release order of such material created against
the Purchasing document
iii) Material Group(W) – Material belongs to same Material group but with
different prices, When you create an Purchasing document you can enter
the short text, Material group, cant mention the price. The price and
Material number cant be specified until the release order is created
against the Purchasing document
*This is valid only for the Value Contract
iv) Subcontracting (L) – Product is manufactured by supplier where you
provide certain components, the stock can be provided from plant
directly or indirectly from any of the supplier. Once manufactured the
product would be delivered by supplier to ordering party
*Subcontracting order can be delivered to Plant,Supplier to connected
system or user defined address
 Material and Material group filter can be used to search the CPC & Hierarchy
 Update the target at header level, which should be equal to all item level. Also
unassign legal transaction- What was the use of Legal Transaction?
 Adding the validity period to CPC and based on that scale pricing can be
maintained. Condition can be transferred to the connected system.
 Output can be sent to the suppliers
 Maintain the payment terms and incoterms at header,item and distribution level
of CPC hierarchy and shipping instruction at item and distribution level of CPC
 Compare two versions of a central purchase contract. You can also configure the
settings to enable version management for conditions and commodities in
central purchase contracts. Additionally, a change request document is now
automatically deleted after the completion of its lifecycle.
  Add conditions with a validity period for a central purchase contract hierarchy in
the hub system. You can also define the constituent commodities for a material
in a central purchase contract hierarchy in the hub system.
 Define price change reasons for conditions of a central purchase contract
hierarchy at an item level. You can also maintain a pricing scale for a central
purchase contract hierarchy, simulate a price for a central purchase contract
hierarchy, and create default conditions for a central purchase contract
hierarchy.
 Transfer scales and plant conditions of a central purchase contract hierarchy to
distributed outline agreements in connected systems.
 View the total consumption (in percentage) at the header level of the central
purchase contract.
 Access delivery address for all item category
 Distribute central purchase contracts to connected systems based on the Unified
Key Mapping Service (UKMS) defined for materials in the hub system.
 Modify payment terms of the distributed purchase outline agreement in the
section Distributed Outline Agreement and release the central purchase contract.
 You can simulate the distribution of a central purchase contract and check if the
distributed purchase outline agreements would be successfully created in the
connected system or if it would result in errors. You can use the button Simulate
to run these checks even before you release the central purchase contract.

CENTRAL PURCHASE CONTRACT HIERARCHY

It’s a variant of CPC, enables large enterprise to consolidate requirement across

various business group. It distributes the elements of the contract, grouping
requirements per business group into one or more subordinate central contracts,
establishing one level of hierarchy. Usage of each subordinate central contract
could be controlled at respective business group(s).

FEATURES:

 Create distribution lines at header level and enable Partner fn of CPCH

 View distribution status and document status also if distributed outline
agreement in error you can use retrigger update option to regenerate the
contract
 Configure setting to manage the version
 Configure approval and enterprise and business group level
 CPCH can be created from Process Purchase Purchasing centrally app by
consolidating PR across connected system

Pricing and Commodity Pricing in Central Purchase Contract

With Commodity Pricing, users can apply complex pricing formulas, commodity weights, and
price conditions in Central Procurement. Price information of the material can be
maintained with different periods. With commodity pricing integration it is possible to
mention commodity used and price of items including commodities

 Maintenance of conditions common to all plants or specific to certain plant

 Maintenance of price variance for different quantity in the form of scales
 Update change reason for any changes introduced in price master data
 Distribution of only relevant price information to local purchase contracts in
connected systems
 Flexibility to maintain commodity information against supplier and materials across
time periods
 Commodity pricing enhances pricing with complex rules to calculate a condition rate
and a condition value
 Real-time price simulation to see the final/effective value for the item

Enterprise Search support for business objects in Central Contracting

 Gaining fast access to and having high transparency over the main business
documents is key for a central purchaser of a multi-ERP procurement landscape.

Enterprise search within the s4 in order to search for PR and PO across connected system as
well as centrally negotiated contracts
 Search for central purchase contracts and centrally managed purchase requisitions
and purchase orders directly via the integrated Enterprise Search of the SAP Fiori
launchpad
 Display the main data of the found business objects in the search result section along
with filter options and navigation links into the object page and corresponding Fiori
apps
Customer will be able to control which fields in distributed outline agreement can be edited
in local Purchase contract or scheduling in connected system by respective purchaser.
Especially those fields which are not directly part of Central contract and specific to
particular backend system as like Accounting details, GR.
Fiori apps and its role used in CPC
Process step Role Apps
Create Central Purchase
Contracts and Distribution Purchaser - Central Procurement Manage Central Purchase Contracts (F31
Release Central Purchase
Contract (Optional) Purchasing Manager My Inbox - All Items (F0862)
Display Central Purchase
Contracts Purchaser - Central Procurement Manage Central Purchase Contracts (F31
Check Source List - In Connected
System Purchaser This step takes place in the ECC system
Create Follow-on Documents - In
Connected System Purchaser This step takes place in the ECC system
Configuration Expert - Business
Import Release Orders Process Configuration Schedule Import of Release Orders
Display Central Purchase
Contracts Purchaser - Central Procurement Manage Central Purchase Contracts (F31
Post Goods Receipt – In
Connected System Warehouse Clerk This step takes place in the ECC system
Create Supply Invoice – In
Connected System Accounts Payable Accountant This step takes place in the ECC system
Mass Changes to Central
Purchase Contracts Purchaser - Central Procurement Mass Changes to Central Purchase Contra
Monitor Central Purchase
Contract Items (Optional) Purchaser - Central Procurement Monitor Central Purchase Contract Items

Configuration:
In Sourcing and Procurement, several Self-Service Configuration UIs (SSCUIs), also referred to as
configuration steps, are available in the Manage Your Solution app. The following SSCUIs affect the
area of Central Purchase Contracts:
Integration
Define Company Code, Plant,
Purchasing Organization for Activate SAP S/4HANA Procurement Maintain Condition Type Mapping for Pu
Connected System Hub and Scenarios Documents
To activate Version Management
Define Reasons for Version-
Relevant Changes for Purchasing Set Up Version Management for
Documents Purchasing Documents