Important terms of Enterprise Structure in SAP S/4 HANA MM Module
This article will help you with understanding some important technical terms used in enterprise structure in SAP S/4 HANA – SAP MM module. Please go through the entire article to get a clear view of the same.
SAP MM
SAP MM functions include materials management, procurement process management, master data management (material and vendor master), inventory management, planning for material requirements, and invoice verification. There are functions in each of these MM submodules that carry out certain business operations for that modules.
What is ERP?
Enterprise resource planning uses an integrated computer system to manage all the information and resources involved in a company’s operations.
What is SAP?
SAP stands for Systems Applications and Products and is an enterprise resource planning software. The most comprehensive ERP system in the world, SAP has hundreds of wholly integrated modules that address almost every facet of corporate management and process.
What is a Client in SAP?
In SAP, it is an organizational level or unit that is independent in terms of law, organizational structure, master data, and transactional data. From a business perspective, a client represents a corporate organization.
What does Company Code mean?
According to commercial law requirements in a particular country, a company is an organizational unit used in accounting to represent a corporate entity. Technical and accounting-based functions are found in the SAP system. Depending on the product’s manufacturing and business needs, a company may have one or multiple company codes.
It is an organizational unit where a separate set of accounting is carried out. It has its profit and loss, account, and balancing statement.
Path: SPRO -> IMG -> Enterprise structure -> Definition -> Financial accounting -> Edit, Copy & Delete -> Copy org. Obj.
T.code: OX15
What does Plant Code mean?
A company’s “Plant” could be one of its operating divisions, branches, or locations. Due to the plants being given to a single company code, the plant is integrated into the organizational structure. Multiple plants may be part of a company code. It is an organizational unit where goods are produced or services are performed.
Path: SPRO -> IMG -> Enterprise structure -> Definition -> Logistic General -> Define copy, delete, check plant.
T.code: OX10
Assignment: The plant is to be assigned to the Company code.
Note: One plant can be assigned to only one Company code, But one company code can have more than one plant.
What is a Storage Location?
An organizational unit differentiates a plant’s material supplies by storage location. Inventory management in SAP is carried out at the storage location level. A plant is given a storage site when the organizational structure is established.
It is an organizational unit where goods are stored. Physical inventory allows carrying out at the Storage location.
Path: SPRO -> IMG -> Enterprise structure -> Definition -> Materials management -> Maintain Storage location -> Click on new entries.
T.code: OX09
What is a Purchase organization?
It denotes the group, location, or facility in charge of choosing the supplier and making payments to the supplier. All purchasing actions inside an organization are the responsibility of the purchasing organization. Additionally, it is used to confirm or pinpoint the profit loss for the entire company or each particular plant.
It is an organizational unit or level. It subdivides an enterprise with procurement activities. It is responsible for purchasing activities and deals with the vendor.
Path: SPRO -> IMG -> Definition -> Materials management -> Maintain Purchase Organization.
T.code: OX08
Types of Purchase Organization:
- Central Purchase Organization /Reference Purchase Organization.
- Organization for Plant-Specific Purchases.
- Purchase Organization for Cross Plant.
1. Reference/Central Purchasing Organization
Central Purchase Organization is an organizational level or entity that handles purchases. It takes all aspects of purchases. Contracts or Agreements typically use Central Purchase Organization. Central Purchase Organization is given responsibility for Plant Specific Purchase Organizations. This copies the terms of the Central Purchase Organization.
2. Plant-Specific Purchase Organization:
It is required to assign a purchase organization to a plant if a purchase is needed for that plant. This purchase organization is known as a plant-specific purchase organization.
3. Cross-Plant Purchase Organization:
A different Purchase Organization must be assigned to each plant when a single Purchase Organization is in charge of two or more plants. It is not required to assign a business code to the purchase organization. One of the purchase organizations must be created as a standard purchase organization if there are two or more for a single plant. Consignment purchases and other unique purchases are made using this.
Coding structure
- Client – > Alphanumeric 3 digit, example – A10, 100
- Company Code -> Alphanumeric 4 digit, example – PEIL, P100
- Controlling Area -> Alphanumeric 4 digit, example – A100, ABCD
- Plant -> Alphanumeric 4 digit, example – XYZ1, ZZZ1
- Purchasing Organization -> Alphanumeric 4 digit, example – PEXZ, XZY0
- Purchasing Group -> Alphanumeric 3 digit, example – AB1, ABC
- Storage Location -> Alphanumeric 4 digit, example – RM01, FG01, SF01
I hope this article was useful.