SAP Agriculture Contract Management

SAP Agriculture Contract Management

Business Scenarios of SAP Agricultural Contract Management

1. Third Party Purchase

OverviewYou use this business scenario for commodity contract involving the SAP AgriculturalContract Management implementer (the firm) and counterparty, such as a farmer, in a situation where the firm purchases a commodity from the farmer.

2. Third Party Sale

OverviewYou use this business scenario for a commodity contract involving the firm and counterparty, such as a food processor, in which the firm sells a commodity to the food processor.

3. Intercompany or Intracompany Trade

Overview

You use the business scenario intercompany trade when entities within the firm purchase and sell commodities to one another.You use the business scenario intracompany trade when entities within in the same organizational structure purchase and sell commodities to one another with the requirement that their commodity positions are managed and valued separately.

4. Back-to-Back Trade

Overview

You use this business scenario when the firm sells a commodity that is not yet in its physical possession. This scenario requires the ability to relate the movements of the purchase portion of the transaction to the sale portion of the transaction.

5. Spot Purchase

Overview

You use this business scenario when the firm receives a commodity from counterparty, but does not have a relevant existing purchase contract with the counterparty to which to apply the receipt. This scenario requires a commodity contract to be generated that matches the conditions of the received goods.

6. Commingled Stock Management

OverviewYou use this business scenario when the firm receives a commodity from counterparty for storage at the firms location for a fee. This obligated quantity is stored in the same location as the firms own inventory, where it gets commingled with the firms commodities. Therefore, counterpartys quantitys grade and quality characteristics can become indistinguishable. To ensure that the obligated quantity can be restored to the counterparty in the same orbetter condition, or be valued for purchase, its quality characteristics must be measured prior to being stored.

7. Processing Washouts and Circles

Overview

You use this business scenario when the firm is engaged in both purchase and sale contractwith the same counterparty for the same commodity. Therefore, the firm can settle a portion of the contracted quantity financially, without moving goods. The scenario also enables you to handle variations, such as, circles and strings.1