Enterprise Structure - SAP MM

Every organization has some framework or structure according to which the whole business runs. An enterprise structure is the structure that represents an enterprise in the SAP ERP system. It is subdivided into various organizational units which, for legal reasons or business-related reasons, are grouped together.

An enterprise structure defines various levels in an organization. These levels are placed according to some hierarchy. Each level has some specific functionality associated with it, which in a combined way describes the working of an organization. In addition, an enterprise structure defines various organizational units that are present in an enterprise. The organizational structure in MM consists of the following organizational levels −

• Client

• Company Code

• Plant

• Storage Location

• Purchasing Organization

• Purchasing Group

The following diagram depicts one such organizational structure that describes the levels incorporated in an organization. It puts the client at the topmost, followed by multiple company code, followed by multiple plants, plants having multiple storage location with their own or centralized purchasing organizations.

In the following sections, we will look into each of the units that constitute an enterprise structure.

Client

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

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

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

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

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

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.

 

SAP MM - Defining Organizational Structure

An organization structure can be defined as the framework of a company that describes the entire structure and functioning of the company. Organization structures are split into different levels and each level is placed according to a hierarchy. These levels have direct or indirect relationship with one another. The various levels in a standard organization are as follows −

• 

  Company

• 

  Company code

• 

  Plant

• 

  Storage location

• 

  Purchasing organization

• 

  Purchasing group

All the Definitions in SAP are given through the Display IMG screen as shown below −

Path to reach Definition

IMG ⇒ Enterprise Structure ⇒ Definition

Create Company OX15

Company is the topmost organizational unit after client, which incorporates individual financial accounting statements of several company codes. A company can have many company codes. In SAP, it is optional to create a company. The following steps will take you through the procedure of creating company.

Path to Create Company

IMG ⇒ Enterprise Structure ⇒ Definition ⇒ Financial Accounting ⇒ Define Company

TCode: OX15

Step 1 − On the Display IMG screen, select Define Company execute icon by following the above path.

Step 2 − Click the New Entries icon.

Step 3 − Fill in all the necessary details such as name of the company, address of the company with street number, city, country, and postal code.

Step 4 − Click the Save icon after filling the required information. A new company will be created.

Create Company Code

A Company Code is the smallest organizational unit after company, for which the standalone financial accounting's profit and loss statements can be withdrawn. Many company codes can be assigned to one company. The following steps depict how to create a company code.

Path to create Company Code

IMG ⇒ Enterprise Structure ⇒ Definition ⇒ Financial Accounting ⇒ Edit, Copy, Delete, Check Company Code

TCode: OX02

Step 1 − On the Display IMG screen, select Edit, Copy, Delete, Check Company Code execute icon, by following the above path.

Step 2 − Click the New Entries button.

Step 3 − Fill in all the necessary details like Company code, company name along with city, country, currency, language.

Step 4 − Click the Save icon after filling the required information. A new company code will be created.

Create Plant

A Plant is an organizational unit within a company where activities take place. A plant will produce goods and make goods available for the company. The following steps will take you through the procedure of creating a plant −

Path to create Plant

IMG ⇒ Enterprise Structure ⇒ Definition ⇒ Logistic General ⇒ Define, Copy, Delete check plant

TCode: OX10

Step 1 − On the Display IMG screen, select Define, Copy, Delete check plant execute icon, by following the above path.

Select Define Plant icon to create a new plant.

Step 2 − Click the New Entries icon.

Step 3 − Fill in all necessary details like plant name along with detailed information like Language, House no., city, country, region, postal code.

Step 4 − Click the Save icon after filling the required information. A new plant will be created.

Create Storage Location

A Storage Location is an organizational unit, which actually differentiates between the 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 a storage location level for a particular storage location. Follow the steps given below to create a Storage Location −

Path to Create Storage Location

IMG ⇒ Enterprise Structure ⇒ Definition ⇒ Materials Management ⇒ Maintain Storage Location

TCode: OX09

Step 1 − On the Display IMG screen, select Maintain Storage Location execute icon, by following the above path.

Step 2 − Enter the name of the plant for which you want to create the storage location.

Step 3 − Click the New Entries icon.

Step 4 − Enter the name of the storage location along with its description. Click the Save icon after filling the required information. A new Storage Location will be created.

Create Purchasing Organization

A Purchasing Organization is an organizational unit under Company or Plant that is responsible for procurement activities according to requirements. It is responsible for external procurement. A purchasing organization can be specific to a plant or a company. Following the steps given below to create a Purchasing Organization −

Path to Create Purchasing Organization

IMG ⇒ Enterprise Structure ⇒ Definition ⇒ Materials Management ⇒ Maintain Purchasing Organization

TCode: OX08

Step 1 − On the Display IMG screen, select Maintain Purchasing Organization execute icon, by following the above path.

Step 2 − Click the New Entries icon.

Step 3 − Enter the name of the purchasing organization along with its description.

Step 4 − Click the Save icon after filling the required information. A new Purchasing Organization will be created.

Create Purchasing Group

A Purchasing Group is an organizational unit that is responsible for the everyday procurement activities within an organization. The steps given below depict how to create a Purchasing Group −

Path to Create Purchasing Group

IMG ⇒ Materials Management ⇒ Purchasing ⇒ Create Purchasing Group

TCode: OME4

Step 1 − On the Display IMG screen, select Maintain Purchasing Group execute icon, by following the above path.

Step 2 − Click the New Entries icon.

Step 3 − Enter the name of the purchasing group along with its description.

Step 4 − Click the Save icon after filling the required information. A new Purchasing Group will be created.