SAP MM stand for Material Management, it is one of the important modules of SAP logistics that deals

with procurement, vendor master data and material resources of a company. In SAP, MM module
records all the transactions that related to goods or materials on a regular basis.

SAP MM module helps to implement the supply chain management (SCM) in an organization and enables
to control the inventory management, forecast customer demand and updated on all the transactions of
supply chain.

MM module can be integrated with various modules of SAP such as Production planning (SAP PP),
Financial Accounting and controlling (SAP FICO), Quality Management (SAP QM), Warehouse
Management (SAP WM), sales and distribution (SAP SD), etc. The integration of SAP MM with other
modules enables the replication of transactions that are processed in other SAP modules to MM modules

Organizational Structure of SAP MM

The important organizational elements of

material management are

• Client – Highest level

• Company code
• Plant
• Purchase organization
• Storage location – Least level
• Purchasing group

CLIENT: It is a highest level of organizational unit that contains set of tables, master data, etc. In real-time
SAP basis consultant creates new SAP clients other than existing clients.

COMPANY CODE: It is a separate legal entity or separate accounting department of an organization. All
the financial statements like profit and loss account, business Balance sheets, etc. are prepared at company
code level.
PLANT: It is a location where logistics activities such as production, services and maintenance, facilities
are performed

PURCHASE ORGANIZATION: it is a physical organization unit which responsible for procurement of

goods and service for an organization from the vendors

STORAGE LOCATION: it is the sub division of the plant where materials are maintained and stored

PURCHASING GROUP: It is a group of persons or employees who are responsible with the materials
that are being purchased in the organization. Purchase groups are assigned to a respective material master.
 How to Define Company in SAP (Group Company)
How to Define Company in SAP

The definition of company in SAP systems is optional. Company is an independent organizational element
which is required to consolidate two are more company codes data at country level or segment level or
continental level. Under group company, you generate consolidated financial statements as per requirements of
an organization.

Example: – Reliance Group, Wipro group, etc.

How to create company in SAP

You can define company in SAP by using:-

Transaction code: – “OX15“

Navigation: – SPRO – SAP Reference IMG – Enterprise Structure – Definition – Financial Accounting – Define Company.

Step 1 : Enter Transaction code “OX15” in the SAP commend field as shown below image and enter to
continue.

Step 2: On change view “Internal trading partners”: overview screen, click on “New Entries” button to define
company in SAP

Step 3 : On “New Entries screen, update the following details.

Company: – Enter a key that identifies company group in SAP. In our case we have updated “TKART” for creation of new
company.
Company Name: – In this field you need to updated full descriptive name of company.
Name of company 2:- If second name of company available, update here or keep it as blank.

Detailed Information

Street: – Enter street name of company located

Postal code: – Enter postal pin code
City: – Update city name, in our case we have updated “Bangalore”
 Country: – Here you need to updated country key. e.g. for India – IN, For United State – US, etc.
Language key: – By default our language is English, so language key is “EN”
Currency: – Enter currency key in which transactions are being maintained for the group company. It is called as home
currency or local currency.

Note:- You can choose keys from the list for City, Language and Currency by pressing F4 key from your
keyboard.

Step 4: After updating all the required details, click on save button to save the company details. Now you are
prompted for customizing request, click on new entries button to create new customizing request.

Now update description of customizing request and press enter to continue. Here we have updated description
as SAP FICO configuration.

Successfully we have created company in SAP FICO.

SAP FICO Training

 How to Create or Define Company Code in SAP
How to Define Company Code in SAP

In this SAP tutorials we will learn how to define company code “TK01″(TK Software limited) in SAP system.

What is Company Code?

Company code is an independent organizational unit which is registered under companies act 1956. Under
company code you can generate individual financial statements like profit & loss account and balance sheets.

The definition of company code in SAP is mandatory.

It is mandatory to create at least one company code for implementing the SAP financial accounting module.

You can define company code in SAP by using navigation method or transaction code.

Navigation: – SPRO – IMG – Enterprise Structure – Definition – Financial Accounting – Edit Copy, Delete, Check company
code
Transaction code: – OX02
Database Table: – T880

Step 1) Enter transaction code “OX02” in the SAP commend field and enter to continue.

Step 2) On change view “Company Code”: Overview screen, displays with the list of company codes with their
names. Click on “New Entries” button to create new company code as per organizational requirements.

Step 3) On new entries company code screen, update the following details.

Company code: – Enter 4 digits alphanumeric code that identifies company in SAP
Company name: – Update the name of the company
City: – Enter the name of city in which the company is located.
Country: – Enter the name of country. Press F4 for possible entries and you can select the code from the list.
Currency: – This currency is also called as home currency or local currency.
Language: – Our default language key: English (EN).
Step 4) After updating all the required details, click on save button to save the configured data.

Now the system prompts the another screen to update the full address of company. Update all the required
address details of company and press enter to save the data.

Step 5) Now you get the transport request number, save the request.

TKO
 How to Assign Company Code to Company in SAP
How to Assign Company Code to Company in SAP

In this SAP tutorial you will learn procedure to assign company code to company in SAP. After successfully
creation of company code and company in SAP, you need to assign company code company in SAP system.

Why Assignment

The link between company and company code in SAP is established through a assignment of company code to
company.

Configuration steps

You can assign by using one of the navigation method or transaction code.

Navigation: – SPRO – IMG – Enterprise Structure – Assignment – Financial Accounting – Assign company code to
company
Transaction code : – OX16

Step 1) Enter Transaction code “OX16” in the SAP command field and press enter to continue.

Step 2) On change view “Assign company code -> Company”:Overview screen, click on position button and
give your company code key. Now your company code displays at the window.
 Step 3) Now update your company key “TKART” in the given field.

Step 4) After assignment of company code to company, click on save button and save the configured data.

Successfully we have assigned company code “TK01” to company code “TKART” in SAP systems.

SAP FICO Training

⊩ SAP FICO Tutorials

SAP FICO - Introduction

⊩ SAP Financial Accounting

⊩ What is SAP FICO

⊩ What is client in SAP

SAP FICO - Enterprise Structure

 How to Define Plant in SAP | What is Plant?
What is Plant in SAP?

Plant is an independent, physical and highest organizational unit in MM module. It can be operational unit or
manufacturing unit or a sales branch of an organization. From material management view, plant can be defined
as a location that holds valued stock.

Plant is responsible for planning, procurement, distribution of goods & services to customers or other
resources of an organization under one company code.

How to Create Plant in SAP

In our previous training tutorials, we have learned how to define valuation level in SAP. In this SAP tutorial you
will learn how to define plant in SAP.

Plant Name

TKBL TKBL – Bangalore Plant

TKUS TKUS – US Plant

You can create plant by using one of the following navigation method.

 Transaction code: – OX10

Menu_Path: – SPRO > IMG > Enterprise Structure > Definition > Logistics – General – Define, copy, delete, check plant.

Step 1) Enter T_Code “OX10” in the command and click on execute.

Step 2) On change view plants overview screen, click on new entries button to define new plant code as per
the organizational requirements.
 Step 3) On new entries screen, update the following details.

1. Plant: – Enter the four digits key that identifies the plant in SAP
2. Name: – Update the descriptive name of a plant.

After updating plant code and description, click on address button to update the address of plant.

Step 4) Now update all the required and mandatory details in the address screen.
 Click on save button, choose customizing request and save the configured plant details.

Now click on next entry button (F8) and similarly create another plant TKUS with required details.

Successfully we have created new plant in SAP.

SAP MM - Home

⊩ SAP MM Tutorial

SAP MM Enterprise Structure

⊩ Define Plant in SAP

⊩ Define Company Code

⊩ Assign Plant to Company Code

⊩ Define Purchasing Organization in SAP

⊩ Maintain Storage Location in SAP

⊩ Define Purchasing Group in SAP

⊩ Assign Company code to Company

⊩ Assign Purchasing Organization to Compan code

⊩ Assing Purchasing Organization to Plant

⊩ Assing Standard Purchasing Organization to Plant

SAP MM - Material Master Data

⊩ What is material master

⊩ Attributes for material type

⊩ Create material types

 SAP MM How to Assign Plant to Company Code
In this SAP MM tutorial, you will learn how to assign plant to company code in SAP step by step using
transaction code “OX18”.

How to assign plant to company code in SAP

The link between plant and company code in SAP is established through the assignment of plant to company
code. A plant can only belong to one company code.

Configuration

Transaction OX18
code

SAP Menu SPRO > IMG > Enterprise Structure > Assignment > Logistics – General > Assign plant
Path – company code.

Step 1 : – Execute t-code “OX18” in command field from SAP easy access screen.

Step 2 : – On change view “Assignment plant – company code” overview screen, choose new entries button
for assignment of company code to plant in SAP.
 Step 3 : – On new entries overview added entries screen, update the following details.

CoCd : – Update the company code “TK01”.

Plnt : – Update the plant key “TKBL” for assigning to company code.

After maintaining all the required details, choose save icon and save the configured assignment details in SAP.
Now you are prompted for customizing request number, choose request and save the configured data.

Successfully we have assigned plant to company code in SAP MM.

SAP MM - Home

SAP MM Enterprise Structure

SAP MM - Material Master Data

 SAP MM- How to Define Purchase Organization in SAP
Purchase Organization is the highest level of organizational unit in SAP MM, it is responsible for procurement
of materials and services from an external vendor or internal plant. The different types of purchasing
organizations in SAP are

Plant specific or local purchase organization

Cross plant purchase organization
Cross company code purchase organization
Central purchase organization at company code level.
Reference Purchase organization
Standard purchase organization

One purchasing organization can be assigned to only one company code, but one company code can have
one or more purchase organizations in SAP.Cross company code purchase organization can be assigned at
plant level only.

How to create purchase organization in SAP

In this SAP MM tutorials, you will learn how to define purchase organizations in SAP step by step.

Purch.Organization Description

TKPO TK Software Purchase Organization

You can maintain purchase organization in sap by using one of the following navigation method.

Transaction code: – OX08

Menu Path: – SPRO -> SAP Customizing Implementation Guide –> Enterprise Structure -> Definition –> Materials
Management -> Maintain Purchase Organization.
 Step 1) Enter T_code “OX08” in command field and enter.

Step 2) On change view purchase organizations overview screen, click on new entries button to define new
purchase organization as per company requirements.

Step 3) On new entries purchasing organization screen, update the following details.

1. Purch.Organization: – Enter the key that identifies the purchase organization in SAP.
2. Purch.Org.Descr: – Update the detailed description of purchase organization.

Step 4) After creating the purchase organization as per the company requirement, click on save button.

Now choose the customizing request and click on continue option to save the configured organization data.

Successfully we have created purchase organization in SAP systems.

SAP MM - Home
 SAP MM – Assign Purchase Organization to Company Code
How to Assign Purchase Organization to Company Code

In this SAP MM tutorial, you will learn how to assign purchase organization to company code in SAP step by
step using transaction code OX01. The purchase organization can be assigned to one company code, this is
company specific purchasing.

Configuration steps

Navigation

SAP R/3 Assign purchase organization to company code

Role Menu

Transaction OX01
code

SAP Menu SPRO > IMG > Enterprise Structure > Assignment > Material Management > Assign
Path purchase organization to company code.

Step 1 : – Execute t-code “SPRO” in command field from SAP easy access screen.

Step 2 : – Choose SAP reference IMG.

Step 3 : – Follow the navigation enterprise structure – Assignment – Material management and choose img
activity Assign purchase organization to company code.
Step 4 : – On change view “Assign Purchasing Organization -> company code” overview screen, choose
position button and enter purchase organization key in given field and press enter. So the purchase
organization key display on top of the screen and you can assign assign company code to it.

Step 5 : – Now enter the company code “TK01” in the given field for assigning to purchasing organization
“TKPO”.
 After assigning company code to purchase organization, choose save icon or press ctrl+s to save the
configured details.

Successfully we have assigned purchase organization to company code in SAP MM.

SAP MM - Home

⊩ SAP MM Tutorial

SAP MM Enterprise Structure

⊩ Define Plant in SAP

⊩ Define Company Code

⊩ Assign Plant to Company Code

⊩ Define Purchasing Organization in SAP

⊩ Maintain Storage Location in SAP

⊩ Define Purchasing Group in SAP

⊩ Assign Company code to Company

⊩ Assign Purchasing Organization to Company code

⊩ Assing Purchasing Organization to Plant

⊩ Assing Standard Purchasing Organization to Plant

SAP MM - Material Master Data

⊩ What is material master

⊩ Attributes for material type

⊩ Create material types

⊩ Number range interval for material type

⊩ Define material groups

⊩ Company code for material management

⊩ Create material master record

⊩ Purchase Info record

⊩ Maintain Plant parameters

SAP MM - Vendor Material Master Data

⊩ SAP MM - Vendor account groups

 SAP MM – Assign Purchasing Organization to Plant
How to assign purchasing organization to plant in SAP

In this SAP MM Tutorial, you will learn how to assign purchasing organization to plant in SAP step by step
using transaction code OX17. The link between purchasing organization and plant is established through the
assignment of plant to purchasing organization in SAP.

Refer below step by step configuration steps of assignment of purchase organization to plant.

Configuration values

POrg Description Plnt Description

TKPO TK Softwre.Purch.Org TKBL TKBL-Bangalore Plant

TKPO TK Softwre.Purch.Org TKUS TKBL- US Plant

Navigation

Transaction OX17
code

SAP Menu SPRO > IMG > Enterprise Structure > Assignment > Material Management > Assign
Path Purchasing organization to Plant.

Step 1 : – Execute t-code “OX17” in command field from SAP easy access screen.

Step 2 : – On change view “Assign purchase organization to plant” overview screen, choose new entries button
for assignment configuration screen.

Step 3 : – On new entries assignment screen, update the following details.

POrg : – Enter the purchase organization key in the field POrg for assigning to plant.
 Plnt : – Update the required plant key in the field Plnt.

After assigning the required details, press enter to continue and choose save icon and save the configured
details.

Successfully we have assigned purchasing organization to plant in SAP MM.

SAP MM - Home

⊩ SAP MM Tutorial

SAP MM Enterprise Structure

⊩ Define Plant in SAP

⊩ Define Company Code

⊩ Assign Plant to Company Code

⊩ Define Purchasing Organization in SAP

⊩ Maintain Storage Location in SAP

⊩ Define Purchasing Group in SAP

⊩ Assign Company code to Company

⊩ Assign Purchasing Organization to Company code

⊩ Assing Purchasing Organization to Plant

⊩ Assing Standard Purchasing Organization to Plant

SAP MM - Material Master Data

⊩ What is material master

⊩ Attributes for material type

⊩ Create material types

⊩ Number range interval for material type

⊩ Define material groups

⊩ Company code for material management

⊩ Create material master record

⊩ Purchase Info record

 SAP MM – Assign Standard Purchasing Organization to Plant
How to Assign standard purchasing organization to plant in SAP

In this SAP MM tutorials, you will learn step by step configurations of how to assign purchasing organization to
plant in SAP.

If plant is having multiple purchasing organizations, then we can declare one purchasing organization as
standard purchasing organization. Where the standard purchase organization involves in procurement of
special stocks such as consignments, subcontracting, stock transfers, etc.

Standard purchasing organization is mainly used for special procurement process.

Configuration steps

Perform the following configuration steps to assign standard purchasing organization to plant in SAP.

Navigation

SAP Menu SPRO > IMG > Enterprise Structure > Assignment > Material Management > Assign
Path standard purchasing organization to plant

T-Code SPRO

Step 1 : – Execute transaction code “SPRO” in command field from sap easy access screen.

Step 2 : – Choose “SAP reference IMG”

Step 3 : – Follow the navigation path Enterprise Structure – Assignment – Material Management and choose
img activity “Assign standard purchasing organization to plant”.
Step 4 : – On change view default purchasing organization overview screen, choose position option and enter
plant code “TKPO” in the given field plant.

Step 5 : – Now assign the purchase organization to plant as standard purchase organization.

After assignment of purchasing organization as standard purchasing organization in SAP, choose save icon
and save the configured assignment details.