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Organizational Structure

  1. Client:

To meet the client requirements SAP allows division of servers in multiple sessions called client. The data stored in one client is invisible to another client. When we log on SAP we will enter the credentials and see the corresponding data.

It is 3 digit number, range from 000-999 and it is only numeric. Eg: 000,0001 --> Master client, 800 --> Training client.

  1. Company:

A Company is business performed by the client and maintained in SAP. it is a 6 digit/ alphabet/alphanumeric

  1. Company code:

A Company code is a separate accounting department or a legal entity, at this level accounts are maintained by FI people, business balance sheet profit or loss statements are carried out at this level. 0-4 characteristics which is numeric/alphabets/ alpha numeric.

  1. Purchasing organization:

A Purchasing Organization is responsible for procurement of a material or service by negotiating terms and conditions with an external vendor/Internal plant.

(i) Client specific/local purchasing organization. (ii) Cross plant purchasing organization (iii) Cross company code purchasing organization (iv) Central purchasing organization (v) Standard purchase organization (vi) Reference purchase organization

5.standard and reference purchasing organizations:

(I) Standard purchase organization:

If a plant is having multiple purchasing organizations then that purchasing organization is under standard purchasing organization, where this purchasing organization involves under procurement of special stocks.

(II) Reference purchasing organization:

A Purchasing organization is linked to several purchasing organization is called reference purchasing organization.

  1. Regular purchasing organization:

A Regular purchasing organization is a purchasing organization responsible for the regular purchasing of the materials and services from vendor.

  1. plant:

A Plant is a manufacturing unit or a sales branch, it might be production facility, distribution center, reasonal office as per the situation. It will be 0-4 /numeric/alphanumeric code/ alphabet code

  1. Storage location:

A It is for to Keep the stock of materials in a place is known as storage location. It will be 0-4 /numeric/alphanumeric code/ alphabet code

  1. Purchasing group:

A purchasing group is an individual (or) group of persons who are responsible for the purchasing activities in a company

Note 1: It is a separate entity which is not assigned to a purchasing organization.

Note 2: Purchasing activities means activates which are mentioned by purchasing organization like subcontracting, consignment, pipeline handling process etc.

  1. Valuation area:

If valuation area is a plant then material prices are unique at plant level, those material prices vary from plant to plant. If valuation area is company code the material prices are maintained at company code level. So material prices are same for all plants under one company code but some prices vary at other company code levels.

  1. Central purchasing organization:

If a material is required for several plants that is in bulk, then central purchasing organization will involve. That advantage of central purchase organization is better prices are possible.

  1. controlling area:

The main function of controlling area is to capture/ control the expenses that takes place in any company, which is defined by controlling consultent people.

  1. What are the levels of organizational structure? a. Top level of the organizational structure is the client. followed by the company code. The next level down is a plant where the procurement activity takes place. A plant will procure goods and makes goods available for the company. The purchasing organization is legally responsable for procurment transactions. This group is further sub divided into purchasing groups.

  2. What is the relation between company code and plant? a. Relationship of plant with company code: Each plant belongs to one and only one company code but a company code can have zero or one plant or many plants

  3. What is the relation between plant and storage location? a. Relationship of storage location with plant: Each storage location belongs to one and only one plant but a plant can have zero or one storage location or many storage locations

  4. Explain the configurations of organization structure?

Configurations of Enterprise structure are comes under SPRO IMG settings.

Under IMG settings a node called Enterprise Structure. Again that node contains two sub nodes. (i) Definitions (ii) Assignments

Under Definition node there are three sub nodes again, those are Financial accounting, logistics general and materials management. We will configure the definitions under these three nodes like company, company code, plant, storage locations etc.

Also under Assignments there are three nodes as same as definitions, those are Financial accounting, logistics general and materials management.

Here under Financial accounting node we will configure the company code to company.

While coming to logistics general, we will assign the plant to company code.

While coming to material management node we will configure plant to purchase organization, and we will assign purchase organization to plant, also standard purchase organization to plant.