SAP MM Enterprise Structure

SAP MM Enterprise Structure

SAP Material Management contains its own organizational structures that gel into the enterprise structure. This article describes the different organizational units used in SAP MM and their corresponding configuration.

Defining The organizational units of MM

Company – Company is the highest and independent organizational unit that represents the corporate group. Look at the examples given in SAP SD Enterprise structure to learn more.

Company Code – Company code is the legal entity that is registered with the government that is responsible for providing the Balance sheets, Profit and Loss statement that are required by law. Overall the company code is responsible for taking care of the statutory requirements of the law. An organization ( Company ) could have multiple company codes. And a company code can be divided into multiple business areas which can be used for internal reporting. The menu path to configure the company code is

[SPRO -> IMG -> Enterprise Structure -> Definition -> Financial Accounting -> Edit,Copy, Delete, Check company code ]

All finance related ( company ) enterprise structure related elements are configured under the Financial Accounting section.

Click on “Edit.copy,delete company code” and select “copy,check company code” option and then select the copy button

and then select the source company code ( normally defaulted from 0001 ) and enter the target company code. And then SAP takes you through a couple of options – if G/L Accounts can be copied, change of company code currency if required etc. Your SAP FICO consultant would be able to understand those requirements and fulfill them.

The company, company code, controlling area, business areas are defined by SAP FICO Consultants.

Purchase Organization – Purchase organization is an independent, physical organizational unit which is responsible to purchase materials, goods and services from external vendors/plants. The purchasing organization is also responsible for establishing agreements with vendors. There can be multiple types of purchase organizations in SAP.

  • Centralized Purchase Organization – This is an umbrella organizational unit responsible to purchase goods/services for all the plants under all the company codes.
  • Company specific purchase organization – This purchase organization is responsible to purchase goods/services for the plants assigned to one company code only.
  • Decentralized Purchase Organization – This is responsible to purchase goods/services for a specific plant under one company code only.
  • Reference Purchase Organization – This organizational unit is used to share certain master data ( Vendor master, pricing data ) and transactional data ( outline agreements, contracts etc ). Many purchase organizations can be assigned to a single reference purchase organization.

The path to configure Purchase Organization can be found under

[SPRO->IMG -> Enterprise Structure -> Definition -> Materials Management-> Maintain Purchasing Organization]

Plant – This organizational unit can represent the actually factory or  a virtual address or a physical address where goods can be stored or a warehouse or a production facility or none of the above. There are a couple of things to remember though –

  • MRP is planned for each Plant
  • Material valuation can happen at the Plant level or the Company code level only. Normally if production planning is not in use, then valuation is done at the company code level. Otherwise valuation is done at the plant level.
  • A plant has a physical location and an address  and can belong to one company code/country only.
  • Several Storage Locations ( Physical storate locations or virtual ) can be assigned to a single plant.
  • Each  plant is assigned to one company code only.

The menu path to configure the plant is [SPRO->IMG->Enterprise Structure->Definition->Logistics General->Define/Copy/Check plant ]

Storage Location – This organizational unit represents a location where stock is physically kept. Multiple such storage locations can belong to one plant. However as described in the Plant section, only quantity can be calculated at the storage location level and not value.             The next level below storage location is the Warehouse. However, each warehouse can be assigned to multiple storage locations.

The menu path to configure the storage location is [SPRO->IMG-Enterprise Structure->Definition->Material Management->Maintain Storage Location]

Learn more at SAP Training and SAP MM Training

Assign the Organizational Units of MM

Company code to Company – This is done by the SAP FICO consultants, but nevertheless the SAP MM consultant also needs to understand this.

Plant to Company Code – The plant has to be assigned to the company code. Once again your SAP FICO consultant will give you the company code and you assign the plant to the company code. This step is done in the Logistics general section [SPRO->IMG->Enterprise Structure->Assignment->Logistics General-> Assign plant to company code]

Purchase Organization to Company Code – Each purchase organization is assigned to a company code. The menu path to do the same is [SPRO-IMG->Enterprise Structure-> Assignment-> Material Management->Assign Purchase Organization to Company Code ]

Purchase Organization to Plant – Many plants can be assigned to a Purchasing organization. The menu path again is [SPRO-IMG->Enterprise Structure->Assignment->Materials Management-> Assign Purchasing Organization to company code ]

As discussed in the definition section, the standard purchasing organization and reference purchasing organization can also be assigned here. The assignment of the standard purchasing organization to the plant is fairly straight forward. However, assigning the purchasing organization to the reference purchasing organization has 2 possible variations – Allowed Transactions and Conditions. This way you have much fine grained control over the data sharing between the reference purchasing organization and the standard purchasing organization.

0 thoughts on “SAP MM Enterprise Structure

    • kalyan says:

      Storage location are assigned to Plants in Organizational Structure.

      T.Code: OX09 for configuring New Storage Location

      Now, System asks you Plant [Enter under which Plant u need to maintain the Storage Location]

      Enter the S.Loc Code [4 Characters] and its Description [Max 16 Character]



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