Lecture: 01

Milestones:
Organizational Structure in SAP

Materials Management Organizational

Elements
Group

Compan
y

Client

Company

Purchasing
Organization

Purchasing
Org.

Plant
Storag
e
locatio
n

Plant
Storag
Storag
e
e
locatio
locatio
Purchasing n
n
Group

Company Code

Plant
Storag
e
locatio
n

Storage
Location
Purchasing
Group

Organizational Levels in the Procurement Process

Organizational Elements in MM
In the SAP R/3

Client

System,
organizational levels
are structures that

Company Code
Plant

represent the legal or

organizational views
of a company.

Storage Location
Purchasing Organization/
Purchasing Group

SAP AG 1999

 Balance sheet & Profit-loss statements are

generated at Company Code level
We can setup several Company Codes in one
Client with their own financial balance sheet.

A plant can be following types of

locations:
Central Delivery Warehouse
Regional Sales Office
Manufacturing Facility
Corporate Headquarters
Maintenance Plant

Storage Location:
Allows different materials stock
Inventory management for Quality is carried at
storage location level in a plant
Physical Inventory is carried out at Storage
location 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

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. It is internally responsible for the purchase of a
material or a class of materials.

Q&A

Thank You