Skip to Content
Personal Insights

Agricultural Contract Management – DPQS

I am working as logistic consultant in SAP Agriculture Contract Management. I would like to share with the community some insights on SAP ACM. I will start this with DPQS and would like to post few more blogs on different other topics of ACM. I hope this will help the consultants who are working in this area.

A discount premium quality schedule (DPQS) contains the quality parameters which need to be measured for an agricultural product, the acceptable values for those parameters, and any discounts or premiums to be applied based on the quality. The DPQS specifies volume adjustments to be applied based on quality characteristics such as moisture content, foreign material content etc. in food grain.

What is DPQS:

SAP uses the DPQS to evaluate the quality of a load (i.e. and incoming quantity from a farmer or a trader and an outgoing quantity when delivering it to food processing company or to another trader), determines whether the load is of an acceptable quality. It also calculates the relevant discounts or premiums based on the quality parameters register. The results of the evaluation are used in further contract application processes and in the contract settlement process.

DPQS Components :

DPQS has two components: 1) Volume Schedule (Determines Effective Volume based on quality parameters), 2) Value Schedule (Determines Effective Value of the commodity based on Effective Volume).

A Volume Schedule or a Value Schedule can have multiple versions but they will always have  only one active version.You can manage these versions with different statuses.However, a Volume Schedule or a Value Schedule can be used in Contract Applications only it is released.

A Volume Schedule or a Value Schedule is applicable to one single Company Code which means it is a company wide policy .It is also associated to a regulatory authority ( ex: European Food Safety Authority -EFSA) which means in the case of dispute during load data capture or during settlement regulations of this authority would be referred.

Let’s illustrate it with example of a commodity WHEAT

Material Number: WHEAT (You can set the number range according to your own choice)

Material Type: Finished Product or Raw Material

In this example I have used 4 characteristics: Moisture, Foreign Matters , Broken Grains , GDC_002 . While Moisture , Foreign Matters , Broken Grains  are regular characteristics,  GDC_002  is a derived characteristic based on formula ( based on other 3 characteristics).You can write  your own formula using ABAP code.  Each of these indicate the percentage shrink in volume due to percentage increase in each of these parameters.

Pic.- Volume Schedule

Pic.- Characteristic Moisture Content

Pic.- Characteristic Damaged Grain

Pic.- Characteristic Foreign Matter

                                            Pic.- Global Derived Characteristic GDC_02

Value Schedule

Value Schedule also has 4 characteristics: Moisture, Foreign Matters , Broken Grains , GDC_002( a derived characteristic based on formula ).Each of these indicate the threshold for acceptance and the amount of reduction in price due to percentage increase in each of these characteristics.

                                                              Pic.- Volume Schedule

Before using a Volume Schedule or a Value Schedule in a Contract the calculations can be simulated .This can even be done when these are not released.

One important note here, DPQS does not support sampling, inspection lot management etc. like SAP Quality Management since it is typically meant for volume and price calculation purposes based on the quality parameters. However, through enhancement, SAP QM can be integrated with DPQS where first sampling, result recording etc. can be done and after that the data can be fed to DPQS with a decision of acceptance or rejection. I will explain it in more detail when I talk about Load Data Capture.

In next blog I will explain DPQS simulation and how it is used in ACM.

Be the first to leave a comment
You must be Logged on to comment or reply to a post.