Supplier Agreements

In this post we will look explore the Supplier Agreement functionality in Oracle Fusion Cloud Procurement.

We will look into and differentiate between different types of supplier agreements. Identify the use case for each type of supplier agreement and finally create different types of supplier agreements.

Supplier Agreement

Supplier agreement is nothing but a long term agreement for the purchase of goods and services between buyer and supplier. In Oracle Fusion Cloud Procurement supplier agreements are of two types:

  1. Blanket Purchase Agreement, commonly known as BPA
  2. Contract Purchase Agreement, commonly known as CPA

Blanket Purchase Agreement

Blanket Purchase Agreement (BPA) includes:

  • terms and conditions
  • details of the goods or services to be purchased from the supplier, and
  • negotiated amounts
  • Can specify standard or consigned goods or services

Though Blanket Purchase Agreement (BPA) includes all the above components, it does not contain delivery dates or individual delivery quantities or amounts.

Contract Purchase Agreement

Contract Purchase Agreement includes:

  • terms and conditions
  • A total negotiated amount
  • Can be created for standard or punchout orders

Though Contract Purchase Agreement (CPA) includes all the above components, it does not include:

  • details of the goods or services to be purchased from the supplier
  • delivery dates or individual delivery quantities or amounts.

Looking on the above description of Blanket Purchase Agreement (BPA) and Contract Purchase Agreement (CPA), if we try to conclude difference between Blanket Purchase Agreement (BPA) and Contract Purchase Agreement (CPA), then the main or major functionality or feature that differentiate the two is- the details of the goods or services to be purchased from the supplier.

Blanket Purchase Agreement (BPA) includes the details of the goods or services to be purchased from the supplier while Contract Purchase Agreement (CPA) did not. Besides this there is no other major difference between Blanket Purchase Agreement (BPA) and Contract Purchase Agreement (CPA).

Roles for Purchasing Agreements

Following job roles needs to be assigned to the user who is supposed to crate and manage purchase agreements for an organization.

  • Buyer
  • Procurement Manager
  • Category Manager
  • Procurement Contracts Administrator

Once the above roles are assigned, obviously, you need to assign data roles that will provide the access to the user.

Purchasing Task and Overview: Agreements

To create or manage agreements, navigate to: Procurement > Purchase Agreements

2

Blanket Purchase Agreement

To create blanket purchase agreement (BPA), use Create Agreement. A popup window will open to allow you to select agreement style. To create blanket purchase agreement (BPA) select Style as Blanket Purchase Agreement

1

Blanket Purchase Agreement: Main Tab

Following are the main attributes that buyer has to consider when entering a blanket purchase agreement (BPA).

  • Document Style
  • Business Unit: The Business unit appear here is Procurement BU and not the Requisitioning business unit
  • Supplier, Supplier Site, and Supplier Contact
  • Currency
  • Communication Method
  • Agreement Amount
  • Minimum Release Amount

3

Blanket Purchase Agreement: Lines

Once header details are captured, buyer has to capture the items and negotiated price as part of blanket purchase agreement (BPA) with supplier.

4

Blanket Purchase Agreement: Controls Tab

Organization can leverage the attributes available under Controls to create Purchase Order directly against the item requisition using supplier blanket purchase agreement (BPA). Organizations can set up supplier blanket purchase agreement (BPA) so that once the requisitions are approved, it automatically create purchase orders with requisition reference and ready to sent to suppliers.

Controls Tab: Business Unit Access

Being responsible for procurement for an organization, a procurement agent have to mention or add all the requisitioning business units that can procure/purchase using a supplier blanket purchase agreement. Procurement manager can achieve this using the blanket purchase agreement Business Unit Access region, on the Control tab.

Procurement manager should allow all requisitioning business units of the procurement business unit to purchase using the blanket purchase agreement.

In addition to requisitioning business units, organization can also specify the bill-to business unit for purchase orders created for these requisitioning business units.

Also, each requisitioning business unit can retain the authority or responsibility of creating their own purchase orders for the goods and services they are procuring against the blanket purchase agreement. To retain the responsibility of creating their own purchase orders, procurement agent should need to check Order Locally for respective requisitioning business unit.

5

 Controls Tab: Enabling Order Automation

Organization can create and make supplier blanket purchase agreements to automatically create purchase orders, for approved requisitions, that are sent to suppliers. Oracle fusion has provided the flexibility to control the order creation automation based on organization requirement.

Procurement agent need to enable the option for automatically generate orders, in order creation options. Additionally, organization can enable the auto submission of order approval workflow. Oracle fusion also provides the capability to group multiple requisitions and create common purchase order to achieve the economic benefits from large volume.

6

Contract Purchase Agreement

To create contract purchase agreement (CPA), use Create Agreement. A popup window will open to allow you to select agreement style. To create contract purchase agreement (CPA) select Style as Contract Purchase Agreement

7

Contract Purchase Agreement: Main Tab

Following are the main attributes that buyer has to consider when entering a contract purchase agreement (CPA).

  • Document Style
  • Business Unit: The Business unit appear here is Procurement BU and not the Requisitioning business unit
  • Supplier, Supplier Site, and Supplier Contact
  • Currency
  • Communication Method
  • Agreement Amount
  • Minimum Release Amount

8

Contract Purchase Agreement: Controls Tab

As described under BPA section above, you can leverage the attributes available under Controls to create Purchase Order directly against the item requisition using supplier contract purchase agreement (CPA).

Controls Tab: Business Unit Access

9

Controls Tab: Enabling Order Automation

10

 

Leave a Reply

Your email address will not be published. Required fields are marked *