Difference between Contract and Scheduling Agreement

In the MM purchasing component, a contract is a type of outline purchase agreement against which release orders (releases) can be issued for agreed materials or services as and when required during a certain overall time frame.

Contacts:
Contracts are 2 types:
1. Quantity contracts – use this type of contract if the total quantity to be ordered during the validity period of the contract is known in advance.
2. Value contracts – use this type of contract if the total value of all release orders issued against the contract is not exceed a certain predefined value.
Schedule Agreement:
Scheduling agreement is a form of outline purchase agreement under which materials are procured on predetermined dates within a certain time period. A scheduling agreement consists of a number of items, for each of which a procurement type is defined.
The following are the procurement types:
1. Standard 
2. Subcontracting
3. Consignment 
4. Stock Transfer
Delivery of the total quantity of material specified in a scheduling agreement item is spread over a certain period in a delivery schedule, consisting of lines indicating the individual quantities with their corresponding planned delivery dates.

Main difference between a contract and a scheduling agreement:

A contract is a pre-determined long term agreement to supply material or service for a certain period of time. Specific delivery dates are not mentioned in the contracts. Contracts can be of two types: Value Contract or Quantity contract

When we require we will release the purchase order against contract i.e. we will create a PO with reference to the contract.

 In Scheduling agreements, we can enter scheduling lines which gives details of quantity that should be delivered on specific date. Plant must be entered in SA so that materials can be delivered at plant. These are generally used for materials whose requirements are predictable..

Where as in Schedule agreements we can enter the schedule lines i.e delivery schedules for a scheduling agreement.