This chapter contains the following topics:
Many companies use actual written legal documents that include all the terms and stipulations for each contract. Different kinds of agreements are used in the purchasing and sales cycles.
With the JD Edwards EnterpriseOne Agreement Management system, you can readily monitor many types of contracts. You can identify the volume or currency amount on each transaction that has been assigned a specific contract number and identify any out-of-balance contracts.
An exchange agreement allows products to be traded between companies. The partners often agree to exchange specific quantities of product for a given time period. Exchanges involve different products or multiple products and often include a differential that one party pays per unit of product exchanged. Financial differentials are not currently managed by Agreement Management, but are supported with the integrated systems.
If the agreement is for an extended period (one year, for example), the parties normally agree on monthly quantities to exchange. Partners generally expect exchanges of physical product to remain approximately in balance. However, imbalances do occur and are usually monitored on a monthly basis. Partners often review their contracts annually to bring the contracts in balance with adjustments, monetary payment, or product repayment.
A loan or borrow agreement is the simplest type of product exchange and often is used in response to a potential stock shortage. It is usually for the same product and does not involve product or price differentials. In a shared facility, a simple loan or borrow agreement can occur when a company depletes its stock. If another company at the depot has stock available, it might agree to loan the stock against a planned replenishment. Or a company might pick up product from a partner at another depot and replace it with product at a later date. Normally, loans and borrows are informal agreements that are settled in product.
A tonne per tonne (transport) agreement involves moving product for a partner. Partner A transports its product along with Partner B's product and then unloads, stores, and delivers the product to Partner B. Partner B does the same for Partner A at another location. These agreements are limited to one physical product, but can involve one or more depots per partner.
Imbalance settlements usually involve throughput fees and transport charge differentials and are settled with a financial transaction instead of physical product.
A throughput agreement is essentially a service agreement in which Partner A agrees to store and manage product for Partner B for a specified time period. Partner B actually owns the stock that is stored in Partner A's depot, but Partner A monitors the stock level, suggests replenishments, and unloads, stores, and delivers product to the partner or its customers. Partner A might process customer sales for Partner B, or Partner B might simply pick up product for distribution to its customers. Partner A charges Partner B a service fee for managing, transporting, storing, and delivering product.
In a consignment agreement, the retailer acts as agent for the company. The product that is sold from the retail site is owned by the company. The company agrees to supply a specific volume of product to the retailer, based upon expected demand. The agent does not pay for the product upon delivery, but only upon sale of the product (at the agreed-upon price).
In a storage agreement, one company provides storage facilities for another and charges a fee based on the quantity that is stored (cost per unit volume) and for the time that the product is stored or the storage space is held. The volume is monitored through Agreement Management and the associated fees are managed through supporting systems.
The JD Edwards EnterpriseOne Agreement Management system contains master maintenance and transaction processing tables.
This table describes the master maintenance tables:
| Table Name | Description |
|---|---|
| F38010 | Contains information about the partner, contract effective dates, and other information that the system uses to process the contract. |
| F38011 | Contains information about products and quantities/amounts, which partner is receiving or shipping the product, and the unit of measure for the product. |
| F38012 | Contains information about all sources from which product can be moved. |
| F38013 | Contains information about the forecasted schedule for shipment and receipt of product between you and your business partner. |
| F38014 | Contains the information to balance unlike products on an agreement. |
This table describes the transaction processing tables:
| Table Name | Description |
|---|---|
| F38111 | Contains quantity and amount information for all agreement transactions and adjustments. |
| F38112 | Temporarily holds the quantities that are committed on transactions until the processing moves them to actual quantities. |
| F4211 | Contains detailed information for each sales order line. |
| F4311 | Contains detailed information for each purchase order line. |
| IF4111 | Contains history information for all inventory transactions. The system records any changes to the inventory in this table. |
| F41500 | Contains supplemental information that pertains to bulk transactions only. |