Difference B/w Framework & Outline Agreement

Question

Hi Gurus
I am new to SAP MM, can anyone please tell me the difference b/w framework orders and outline orders/ agreement.
General examples of this regard will be very helpful.
Regards
Imran

Answer 1

Dear,
A Frame work order is :
Purchasing document used for the procurement of materials or external services. Instead of stipulating a specific delivery date, this type of purchase order has an extended validity period. Goods or services can be supplied or performed against it over this period without the need for any further written instruction to be issued by the buying entity.
Framework orders are defined with document type FO. They are used in accelerated procurement processes in connection with preventive maintenance (servicing) plans or invoicing plans, and for blanket purchase orders (purchase orders with specified limits).
A framework order covers multiple procurement transactions over a longer period in cases where the administrative costs of processing discrete POs would be disproportionately high.
An Outline agreement is :
Outline agreement also referred as Contract in SAP.
Outline Agreement can be of 2 types:- Contract and SA. 
Contract is where you have a contract with the vendor,may be a for a predetermined quantity or predefined value. So everytime you need the material,  you need to make PO ref the contract asking for the delivery of the material. In such instance when PO is ref with contract its called contract release orders or call off orders. 
Scheduling agreement is a long term purchase agreement, where you will keep issuing the delivery schedules whenever there is a change in requirement or at predetermined time intervals. The delivery schedule can be on hour/daily/weekly/monthly basis. But it will contain different zones viz. firm/tradeoff/Forecast.  Firm zone schedules are confirmed requirement and need to be taken by ordered party. Tradeoff zone requirement is to purchase the raw materails and ordering party is liable to pay raw material cost, in case of requirement cancellation. Forecast zone requirement is to help the vendor to plan his requirements.
SA is also an agreement with the vendor for the supply of matl, may be a quanity or value. The delivery dates will be maintained in ME38 ref the SA which are called delivery schedules.So you can maintain the delivery schedule and communicate the vendor on Forecase basis or JIT basis. And when you need some more matl then will only create SA deliveries using ME38. SA could be of 2 types:- without release documentation-system will transmit the delivery info to the vendor once you save the document. 
With release documentation- after creating the delivery schedules you need to create SA release using ME84.
The main difference between contract and SA is volume of docs generated would be higher in contract since everytime you need to make a PO ref the contract and its time consuming, whereas SA can be integrated with MRP such that it automatically creates delivery schedules during MRP run provided if there is a requirement to the matl. 
Regards,
Syed Hussain.