To prevent certain materials from being ordered under a contract item, what action should be taken?

Establishing material-specific source lists with an exclusion indicator is a strategic method to control procurement processes in SAP S/4HANA. By using this approach, you can explicitly identify which materials should not be ordered under a particular contract item. The exclusion indicator allows users to mark certain materials as not valid for specific contracts, ensuring that procurement teams do not mistakenly place orders for those materials against contracts where they are not authorized.

This method is particularly effective because it provides clarity and prevents errors during the order creation process, thereby reinforcing compliance with procurement policies. In environments where contracts must be tightly controlled and material specifications are critical, having the ability to exclude items can significantly reduce the risk of non-compliance and financial discrepancies.

Alternative strategies like creating contract-specific pricing procedures, setting procurement types, or disabling automatic sourcing may not provide the same level of precision in managing which materials can or cannot be ordered under a contract.