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Organization Structure

Organization Structure Significance & Impacts


Standard SAP Organization Structure
Proposed Organization Structure FI/CO
Proposed Organization Structure Logistics (MM,SD & MM)

Agenda
Significance of Defining Organization Structure
Definition of organizational Structure is a fundamental & Mandatory
step

Mapping the current Organizational. structure to ERP Organization
levels.
Structure definition is backbone of Implementation.

Once defined Changes in Structure is a very difficult process.

It is a Critical factor from Change Management perspective.
Impact of defining Organization Structure
Levels of Legal and Managerial Reporting

Levels of Data Management (Transactional Data)

Levels of Authorization Control

Defines route of Information flow (top - down / bottom up)

Defines rules for Automatic Account Posting

Levels of Inventory valuation / Product Costing
ERP Organization Structure
Operating Concern
Controlling Area
Chart of Accounts
Company
Company Code
Profit Center Hierarchy
Cost Center Hierarchy
Credit Control Area
Plant
Storage Location
Purchasing Organization
Purchasing Groups
Sales Organization
Distribution Channel
Division
Sales Area
Sales Office
Sales Group

Sales Area
Client
Company
Operating
Concern
Credit
Control Area
Chart of
Accounts
Controlling
Area
Company Code
Cost Center
Profit Center
Sales
Organization
Distribution
Channel
Division
Sales Office
Sales Group
Plant
Storage
Location
Purchasing
Organization
Purchasing
Group
Organization Finance & Controlling
Operating concern Organization Object to analyze the
profitability market segment wise.
The Characteristics and Value Fields will be defined and assigned to
this Operating Concern. The Profitability Segments will be defined,
at which the profitability can be seen.

Controlling AreaHierarchical structure to represent the
organization according to the cost incurrence.
The Cost Center Standard Hierarchy and Profit Center Standard
Hierarchy will be defined and assigned to this Controlling Area.
Chart of Accounts - It is a list of G/L accounts used by one or more
company codes. Can be attached to many company codes.
Company Code - is the organizational unit that allows you to structure
your enterprise from a financial accounting perspective.

Segments Definition
Segments are used for reporting from external market viewpoint. As
such, segment does not have any relationship with normal
Org. Structure
Segments are defined with a concept of product category level.
Common Segment is defined to book expenses which cannot directly be
assigned to a particular segment.
7
Chips IN POY IN FDY IN
Trading Power Lease
Common PTY
INDIA KOREA
Chips KR POY KR
FDY KR
ITY KR
Common Trading
Mauritius
Common
Singapore
Common
Power
Rent
Common
SSYPL
Profit Centre Hierarchy
Each segment will have one to many relationship with profit Center.
Profit centers are grouped under Profit Center Group.
Profit center hierarchy is created, which represents organization in
accordance to revenue and cost incurrence.
Profit center is a basic object were cost and revenue are collected and
reported.

Cost Centre Hierarchy
Cost center hierarchy is created, which represents organization in
accordance to cost incurrence.
Cost center are basic objects where cost is collected and reported.
Cost Centers can be grouped under cost center group.

Cost Center (Concept)
ORG(1000)
Corporate
Office
Finance and
Accounts
HR & Admin
Sales &
Distribution
Purchase
Common
ORG(2000)
Corporate
Office
Finance and
Accounts
HR & Admin
Sales &
Distribution
Purchase
Common
Logistics
Organization Structure
Org. Business Overview
Inventory valuation of Materials may be different at different Plant (Units)
Each Manufacturing Plant (Unit) has
General Raw Material Stores
Production Staging Area (Stores)
Finished Goods Stores
Consumables Stores
Packaging Stores
Spare stores
Inventory Management (Goods Movement such as Receipt , Issue, Delivery
etc) takes place at all above Stores
Physical Inventory is carried out at all above Stores
Purchasing and Inventory Reporting and Analysis is based Unit wise/Location
wise/Material wise/Purchasing Dept wise
Slide 12
Org.Business Overview
Slide 13
Planning of Materials is/will be done
By Production Dept of each Unit based on Made-to-Stock concept.
Planning of Trading Material is based on Customers/Market requirement.
Maintenance Activity is done in each Manufacturing Unit.
Procurement for Materials required for In-house Manufacturing /Services is done
by Purchase dept at
At Mumbai/Delhi Domestic and Import
Local Common Purchase Dept for all Units
Purchase Dept at
Procurement for Trading Materials is done from Mumbai office.
Currently distinct Purchase groups within ach Purchase dept is not operational.
Proposed Purchasing Groups will be Dept Specific and/or Material Specific.


MM Organization
Structure
Org. 1
Raw Material for
PTY
Packaging
Consumables
Spares
General
Scrap
Finished Goods PTY
SFG -PTY
Prod.Storage for
RM-PTY
Org 2
Raw Material
for PTY
Packaging
Consumables
Spare
General
Scrap
Finished Goods
PTY
SFG - PTY
Prod. Storage for
RM - PTY
Slide 15
Org
Raw Material for POY/FDY
Raw Material for Chips
Raw Material for Dyed Yarn
Raw Material for PTY
Raw Material for ITY
Packaging
Consumables
Spares
General
Scrap
Finished Goods - POY
Finished Goods - FDY
Finished Goods - CHIPS
Finished Goods - PTY
Finished Goods - ITY
Finished Goods - Dyed
SFG-Chips
SFG-FDY
SFG-Poy
SFG-PTY
SFG-ITY
SFG-Dyed
Production Storage for RM/Packing-FDY
Production Storage for RM/Packing-POY
Production Storage for RM/Packing-Chips
Production Storage for RM/Packing-PTY
Production Storage for RM/Packing-ITY
Production Storage for RM/Packing-Dyed
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Storage Location (Stock Monitoring & PI) as per
category wise
Raw Material for POY/FDY
Raw Material for Chips
Raw Material for Dyed Yarn
Raw Material for PTY
Raw Material for ITY
Packaging
Consumables
Spares
General
Scrap
Finished Goods - POY
Finished Goods - FDY
Finished Goods - CHIPS
Finished Goods - PTY
Finished Goods - ITY
Finished Goods - Dyed




SFG-Chips
SFG-FDY
SFG-POY
SFG-PTY
SFG-ITY
SFG-Dyed
Production Storage for RM/Packing-FDY
Production Storage for RM/Packing-POY
Production Storage for RM/Packing-Chips
Production Storage for RM/Packing-PTY
Production Storage for RM/Packing-ITY
Production Storage for RM/Packing-Dyed
Purchasing Organization Specification

Organizational Unit within Logistics that sub divides an
enterprise according to purchasing requirement.
Purchasing Organization negotiates Terms and Conditions with
Vendors and Assumes responsibility for such Business with
Vendors.
Responsibility and Master Data
1. Each Purchasing Organization has its own Vendor Master
Data (Purchasing Data)

Purchasing Organization Specification
Responsibility and Master Data
1. Each Purchasing Organization has its separate Vendor
Evaluation
2. Purchasing Organization is highest Summarization level for
Purchasing Statistics after Client
3. All items of Purchasing Document (RFQ,PO Contract) are
assigned to respective (only one) Purchasing Organization
4. Approval strategy can be defined based on Purchasing Org.
5. Purchasing Organization serves selection criteria for list of all
purchasing document


Sales & Distribution
Organization Structure
Sales Organization:
An organizational unit that sells and distribute products, negotiates term
of sales and is responsible for all sales related transactions.

Sales organization is assigned to only one company code.

All Reports, Authorizations, products, pricing, Master data and
transactions will be separated at the level of Sales Organization.

Distribution Channel:
The channel through which the products reach customers.
Can be assigned to one or more sales organizations.
In case of Some organization , Distribution channels have been divided in to
Domestic, Exports Sales and Stock transfer within the org Plants.

Division
Represents the range of products.
Can be assigned to one or more sales organizations.
Each time a new range of product is introduced a division will have to be
created.



Sales Area:
A combination of Sales Organization, Distribution Channel and Division. It is
mainly used for reporting purposes. All data relevant for sales can defined per
sales area.
Sales Office:
Sales Office represents the various sales teams locations or office
branches.
It can be assigned to more than one sales area.
It is an optional organizational unit in ERP .


Organization
Domestic Sales
Domestic-Dealer
Domestic-Broker
Export Sales
Export-Dealer
Intercompany
Stock Transfer
Domestic Trading
Export Trading
Plant Maintenance maps the maintenance activities in the
Plants.
Organization Structure developed on the FI-CO, PP and MM.
Maintenance Plant plant where technical objects exist and
where maintenance activity can be done.
Maintenance Planning Plant plant where Maintenance
Planning is done for the technical objects of the maintenance
plant(s).

Thank You