Enterprise Structure

Enterprise Structure

Company MM Organization Level:

Purchase Organization,
Storage Location

Controlling Company Code The client is the top level of the

Area organizational level. Several
company codes can be assigned to
one client. In turn, several plants
can be assigned to a company
Purchase code, and several storage
Plant locations assigned to a plant.
Organization

Storage Location Storage Location

Plants must always be consecutively numbered for all company codes. Consequently, plants assigned to
different company codes cannot have the same number. However, the numbers of storage locations can
be repeated, as long as they are assigned to different plants
Definition:
Organizational Levels:

The structure of an enterprise is represented in the SAP R/3 System by the following
organizational levels:

Client
A grouping or combination of legal, organizational, business and/or administrative units with a
common purpose.
Example: a corporate group.
General material data applicable to the entire company is stored at client level. This includes, for
example, the material group, base unit of measure, material descriptions, and conversion
factors for alternative units of measure.

Company code
This level represents an independent accounting unit within a client. Each company code has its
own balance sheet and its own profit and loss statement.
Example: a subsidiary company, member of a corporate group.
All data that is valid for a particular company code, as well as for the plants and storage
locations assigned to it, is stored at company code level. This includes, for example, accounting
data and costing data if valuation is at company code level.
During Goods Movement , the system automatically updates the following data each time,
Quantity and value for Inventory Management, Account assignment for cost accounting and
G/L accounts for financial accounting via automatic account assignment
The valuation area is the organizational level at which a material's stock value is managed. The
valuation area can be plant level or company code level.
 Plant

 Operational unit within a company code. An organizational unit serving to subdivide an

enterprise according to production, procurement, maintenance, and materials planning
aspects. It is a place where either materials are produced or goods and services provided.

 Example: Manufacturing Plant, Planning Plant, Export Plant, Depot.

 All data that is valid for a particular plant, as well as for the storage locations belonging to
it, is stored at plant level. This includes, for example, MRP data and forecast data.
 We can run MRP at Plant level. The quantity will update at plant level as well as company
code level

 Purchasing organization
 An organizational unit responsible for procuring materials or services for one or
more plants and for negotiating general conditions of purchase with vendors.
The purchasing organization assumes legal responsibility for all external
purchase transactions.

 Purchasing group
 The purchasing organization is further subdivided into purchasing groups (buyer
groups), which are responsible for day-to-day buying activities.
A purchasing group can also act for several purchasing organizations.
Plant
IMG-Enterprise Structure-Definition-Logistic General-define copy delete Check Plant(OX10)
Copy delete check Plant
Click on “copy”
Copy from plant “****”
To plant “ ****”
Define Plant

Select Plant and click on “address” icon and enter address details. + save.
Purchase Organization
Definition:
An organizational unit responsible for procuring materials or services for one or more
plants and for negotiating general conditions of purchase with vendors. The purchasing
organization assumes legal responsibility for all external purchase transactions
The following forms of purchasing exist:

A: Corporate-group-wide
A purchasing organization procures for all the company codes belonging to a client.

B: Company-specific
A purchasing organization procures for just one company code.

C: Plant-specific
A purchasing organization procures for a plant.
 Centralized Purchasing
Corporate wide Group
Purchasing

Purchase Organization

One Purchase
Organization is
Responsible for
number of
Different
Plant-A Plant-B Plant-C Plant-D
Company
Code
Company Code-X Company Code-Y
Purchasing organization – company code
A purchasing organization can (but need not) be assigned to a company
code.
If you do not assign a company code to a purchasing organization, the
latter can engage in procurement operations for every company code. A
prerequisite for this is that the plant for which procurement is carried out
is assigned to the purchasing organization.
 Company Code Specific
Purchase Organization

Plant - purchasing
Purchase Organization Purchase Organization organization/company code

In the SAP system, a plant

must be assigned to one or
more purchasing
organizations.
Furthermore, a plant must
always be assigned to a
company code.
Plant-A Plant-B Plant-C Plant-D

Company Code-X Company Code-Y

One Purchase Organization Responsible for one Company Code

 Plant Specific
Purchase Organization

Purchase Organization

Plant-B

One Purchase Organization Responsible for one Plant

The form of procurement is defined by the assignment of purchasing organizations to company codes
and plants.
 New entry

Enter Purchase Organization-Code and Description of Purchase Organization + save.

Storage Location
 Enter Plant

An organizational unit allowing the differentiation of material stocks within a plant. All data referring to a
particular storage location is stored at storage location level. This applies mainly to storage location
stocks
New Entry
Enter Storage Location and Description + save.

Storage Location is the Level at which a plant’s actual stocks of material are kept.

Stocks are managed at storage location on quantity basis-not on value basis.

A storage location is always defined as belonging to certain a plants

To transfer data between the individual components, you have to assign the organizational units to each
other. You only need to make these assignments once in the system. Whenever you enter data
subsequently, it is automatically transferred.

Assign Plant to Company

Code.
IMG-Enterprise Structure-
Assignment-Logistic General-
assign Plant to Company
code(OX18)

Select company code,

Click on “ assign”,
Select “ Plant”
Press enter
Save.
Select “company code” , click on “assign” and select purchase organization.
Press enter and Save.
 The form of procurement is defined by the assignment of
purchasing organizations to company codes and plants.

Select Purchase Organization, click on “assign”, select “Plant”, press enter and save.