Organizational Structures of SAP MM

The Organizational Structure in SAP MM consists of following Organizational levels:

• Client
• Company Code
• Plant
• Storage Location
• Purchase Organization
• Purchasing Group

Client - (T. Code - SCC4) - A client is a self contained in the SAP system with separate master records and its own set of tables.

Company Code - (T. Code - OX02) - The smallest organizational unit for which a self-contained set of accounts can be drawn up for the purpose of external reporting. These involves recording all relevant transaction and generating all supporting documents for financial statements such as Balance Sheets and Profit and Loss Accounts

Plant - (T. Code - OX10) - An organizational unit where a material are produced or procured, stores and sales and goods and services are provided. We can divide an enterprise into various plants according to production, procurement, maintenance and material planning.

Storage Location - (T. Code - OX09) - An organizational unit where materials are stored physically inside the plants. It also allowing us to differentiation of material stocks within a plant.

Purchase Organization - (T. Code - OX08) - An organizational unit subdivides an enterprise according to purchasing. It procures material and services, negotiate condition of purchase with vendors and is responsible for purchasing activities taken place in an organization

Purchasing Group - (T. Code - OME4) - An alphanumeric key for a buyer or a group of buyer who are responsible for purchasing of materials and services and deal with vendors. It is a subdivision of a purchase organization, which are responsible for day to day purchasing activities.

More details of Purchasing Organization

Possible forms of Purchase Organization:

• Enterprise Wide - One purchase organization is responsible for whole organization
• Company Specific - One purchase organization is assigned to and procures material and services for one company code in the organization
• Plant Specific - One purchase organization is assigned to and procures material and services for one plant in the organization

Types of Purchase Organization:

• Centralized Purchase Organization (1:n) - Centralized Purchasing with just one purchase organization. It is responsible for all company codes and plants.
• Decentralized Purchase Organization (m:n) - Distributed Purchasing with difference purchasing organization each responsible for each plant.
• Reference Purchase Organization - can be defined as an organization whose condition or contract are linked with other purchase organization. This organization can make conditions or contract that can easily be used in other purchase organization.

Definition:

1. Define Company Code (T. Code - OX02): SPRO Path -> SAP Ref. IMG -> Enterprise Structure -> Definition -> Financial Accounting -> Edit, Copy, Delete, Check Company Code
2. Define Plant (T. Code - OX10): SPRO Path -> SAP Ref. IMG -> Enterprise Structure -> Definition -> Logistics General -> Define, Copy, Delete, Check Plant
3. Define Storage Location (OX09): SPRO Path -> SAP Ref. IMG -> Enterprise Structure -> Definition -> Materials Management -> Maintain Storage Location
4. Define Purchasing Organization (T. Code - OX08): SPRO Path -> SAP Ref. IMG -> Enterprise Structure -> Definition -> Materials Managment -> Maintain Purchasing Organization
5. Define Purchasing Group (T. Code - OME4): SPRO Path -> SAP Ref. IMG -> Materials Management -> Purchasing -> Create Purchasing Groups

Assignments:

1. Assign Plant to Company Code (T. Code - OX18):  SPRO Path --> SAP Reference IMG --> Enterprise Structure --> Assignment --> Logistics-General --> Assign Plant to Company Code
2. Assign Business Area to Plant/Valuation Area and Division (T. Code - OMJ7): SPRO Path --> SAP Reference IMG --> Enterprise Structure --> Assignment --> Logistics-General --> Assign Business Area to Plant/Valuation Area and Division
3. Assign Purchase Organization to Company Code (T. Code - OX01): SPRO Path --> SAP Reference IMG --> Enterprise Structure --> Assignment --> Materials Management --> Assign Purchase Organization to Company Code
4. Assign Purchase Organization to Plant (T. Code - OX17): SPRO Path --> SAP Reference IMG --> Enterprise Structure --> Assignment --> Materials Management -->  Assign Purchase Organization to Plant 
5. Assign Standard Purchase Organization to Plant (T. Code - OMKI): SPRO Path --> SAP Reference IMG --> Enterprise Structure --> Assignment --> Materials Management --> Assign Standard Purchase Organization to Plant
6. Assign Purchase Organization to reference Purch. Organization (T. Code - OMKJ):  SPRO Path --> SAP Reference IMG --> Enterprise Structure --> Assignment --> Materials Management --> Assign Purchase Organization to reference Purch. Organization

Difference between Assign Purchase Organization and Standard Purchase Organization with Plants:
A Purchase Organization is responsible for all purchasing activities taken place in this plant.

If several Purchase Organization procure for a certain plant, you can define one of them as the standard purchasing organization for the transactions "pipeline procurement", "consignment" and "stock transfers"
In source determination for stock transfers and consignment, the system automatically utilizes this standard purchasing organization. In the case of goods issues of pipeline materials, the purchasing info records of the standard purchasing organization are read.