In the SAP system of the "Metal Corporation" in Pittsburgh, a contract for 10,000 tons of "steel 1" is created without specification of a plant under the agreement type "VK" (distributed contracts).

The company has a plant in Minneapolis, another one in Atlanta, and a subsidiary, "Southern Metal Co.", in Houston. The latter represents a separate company code. The Metal Corporation is the central system, the Minneapolis plant is local system no. 1, the Atlanta plant is local system no. 2, and the subsidiary (Southern Steel) is local system no. 3

The central SAP system makes the contract available to the local systems, that is to say, it distributes it to enable the latter to procure material "steel 1" by issuing contract release orders. The contract is transmitted to the local systems by means of an intermediate document (IDoc) via ALE, and is imported into each individual system.

The Minneapolis plant (local system 1), issues a release order for 2,000 tons of steel 1 against the contract. After this, the quantity that can still be released against the contract is 8,000 tons.

This information must be passed on to the central system. For this purpose, an IDoc is transmitted to the central system, causing the release order documentation there to be updated. At the same time, the release order documentation is updated in the local system that issued the release order (quantity released: 2,000 tons).

The Atlanta plant creates the next contract release order for 1,000 tons. As a result, the release order documentation is updated both centrally (quantity released according to Pittsburgh documentation: 3,000 tons) and locally (quantity released according to Atlanta documentation: 1,000 tons).

The release order documentation in the local systems is limited to the relevant entity's own release orders. Only in the central system is data on all release orders consolidated in collective release order documentation.

This means that the central system has control over the degree of fulfillment of the contract.

As soon as the complete quantity has been released against the contract, the blocking indicator is set in the central system, thus preventing the creation of any further release orders.

The subsidiary (which represents a separate company code) can issue release orders against the central contract in the same way as the plants, provided that it uses its own purchasing organization with the appropriate company code assignment in doing so.