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SAP MM - Defining Organizational Structure: Client (T880)

The document discusses the organizational structure in SAP MM. Key elements include: - Purchasing organization is responsible for procurement activities and can be centralized, company-specific, or plant-specific. - Purchasing groups represent buyers who perform activities like procuring items and contacting vendors. - Other organizational units include client, company code, plant, and storage location. - Standard SAP setup assigns purchasing organization to company code and/or plant, and plant to company code.

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425 views3 pages

SAP MM - Defining Organizational Structure: Client (T880)

The document discusses the organizational structure in SAP MM. Key elements include: - Purchasing organization is responsible for procurement activities and can be centralized, company-specific, or plant-specific. - Purchasing groups represent buyers who perform activities like procuring items and contacting vendors. - Other organizational units include client, company code, plant, and storage location. - Standard SAP setup assigns purchasing organization to company code and/or plant, and plant to company code.

Uploaded by

RamaKrishna Erroju
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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SAP MM - Defining Organizational Structure

All information related to Org structure are stored in table HRP1001


 Client
 Company Code
 Plant
 Storage Location
 Purchasing Organization
 Purchasing Group

In the following sections, we will look into each of the units that constitute an enterprise structure.
Client(T880)
A client has the following attributes −
 Client is a commercial organizational unit in R/3 system.
 It has its own set of master data with independent table sets.
 According to hierarchy, a client occupies the highest level in a SAP system.
 Data that is maintained at the client level is valid for all organizational levels.
Company Code (T001)
A company code has the following attributes −
 Within client, a company code is an independent accounting unit.
 It is a legal entity that has its own profit, loss and balance statement.
 It is the smallest unit in an organization for which a complete independent account set can
be replicated.
Plant (T001W)
The basic points to be noted about a plant are as follows −
 Plant is an organizational unit within a company where activities take place. A plant will
produce goods and make goods available for the company.
 It is a unit having manufacturing facility, warehouse distribution center, or a regional sales
office within logistic. It subdivides an enterprise in different aspects.
Storage Location (T001L)
A storage location has the following attributes −
 Storage location is an organizational unit, which actually differentiates between different
material stocks in a plant.
 Storage location is a place where stock is kept physically.
 A plant can consist of multiple storage locations. All data is stored at storage location level
for a particular storage location.
Purchasing Organization(T024E)
The points to be noted about a Purchasing Organization are as follows −
 A purchasing organization is an organizational unit under a company or a plant that is
responsible for the procurement activities according to requirements. It is responsible for
external procurement.
 A purchasing organization can be at the client level, which is known as a centralized
purchasing organization.
 A purchasing organization can also be at the company or plant level, which is known as
company-specific or plant-specific purchasing organization.
Different forms of purchasing can be described as follows −
Centralized Purchasing
Purchasing organization is not assigned to any company code. It procures for all company codes
belonging to different client.
Company Specific Purchasing
Purchasing organization is assigned to a company code only. The plant belonging to the company
code can purchase through this purchasing organization.
Plant Specific Purchasing
Purchasing organization is assigned to a plant. Only this specific plant can purchase through this
purchasing organization.
Purchasing Group(T024)
The attributes of a purchasing group are as follows −
 Purchasing group is an organizational unit responsible for the everyday procurement
activities within an organization.
 It is a buyer or a group of buyers responsible for the procurement activities in a purchasing
organization.
A standard SAP has the following four basic and essential assignments −
 Plant to company code
 Purchasing organization to company code
 Purchasing organization to plant
 Standard purchasing organization to plant

Path to Reach Assignment − IMG ⇒ Enterprise Structure ⇒ Assignment


Purchasing Organization
An organizational unit subdividing an enterprise according to the requirements of Purchasing. It procures
materials and services, negotiates conditions of purchase with vendors, and is responsible for such transactions.
Purchasing Group
A purchasing group corresponds to a buyer or group of buyers who perform the following purchasing activities:
 Procuring certain articles or merchandise categories
 Acting as the contact for vendors

Purchase organisation is used to identify,select vendors and negotiate prices and conditions with vendors.
purchase organsiation will be available at top level with respect to company code and plant level.
where as purchase group is sub level of purchase organisation. purchase group is responsible for monitoring
day to day purchase order tracking and they are responsible to see that goods are available in time.

Purchasing Organization is the Org sturcture of MM purchaisng where Purchasing group is represent the Buyer
which used for daya to day activity of buying and for reporting purpose as well as authorization purpose
From the Materials Management and Purchasing view, the purchasing organization is responsible for all
purchasing activities (including the processing of requests for quotations and purchase orders, for example).

The purchasing organization is integrated within the organizational structure as follows:


o A purchasing organization can be assigned to several company codes.
(= Corporate-group-wide purchasing).
o A purchasing organization can be assigned to one company code.
(= Company-specific purchasing).
o A purchasing organization can also exist without being assigned to a company code.
- Since each plant must be assigned to a company code, the latter can be determined via the plant at the time of
each procurement transaction even if the procuring purchasing organization has not been assigned to a
company code.
o A purchasing organization must be assigned to one or more plants.
(= Plant-specific purchasing).
o A purchasing organization can be linked to one or more other purchasing organizations.
(= reference purchasing organization)
For more on this topic, refer to Assign Purchasing Organization to Reference Purchasing Organization.
o A purchasing organization can be divided into several purchasing groups that are responsible for different
operational areas.
o Each purchasing organization has its own info records and conditions for pricing.
o Each purchasing organization has its own vendor master data.
o Each purchasing organization evaluates its own vendors using MM Vendor Evaluation.
o Authorizations for processing purchasing transactions can be assigned to each purchasing organization.
o All items of an external purchasing document, that is, request for quotation, purchase order, contract, or
scheduling agreement, belong to a purchasing organization.
The purchasing organization is the highest level of aggregation (after the organizational unit "client") for
purchasing statistics.
The purchasing organization serves as the selection criterion for lists of all purchasing documents.

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