SAP MM : Organizational Structure in SAP Procurement Process

In SAP system, the Org Levels are structures that represent the Legal or Organizational views of a company.

1. Client
2. Company Code
3. Plant
4. Storage Location
5. Purchasing Organization & Purchasing Group

1) Client : 

• Client is the highest hierarchical level in the SAP system
• The client is a commercial, organizational unit within the R/3 System, with its own data, master records, and independent set of tables.
• From a business perspective, the client forms a corporate group.
• Client is self-contained both in legal and organizational terms

2) Company Code

• The company code is the smallest organizational unit for which you can have an independent Accounting for which a complete, self-contained booking system can be replicated.
• In one Client more than one company code can be maintained.
• A company is defined in the system by 4 character alphanumeric key that is unique in the client.

3) Plant

• A plant is an organizational logistics unit that structures the enterprise from the perspective of production, procurement, plant maintenance, and materials planning.
• A plant may be :-  a manufacturing facility or Distribution Centre or Regional Sales Office or Corporate Head-Quarter or a maintenance Office within a company.
• A plant is defined in the system by 4 character alphanumeric key that is unique in the client.

4) Storage Location

• The storage location is an organizational unit that allows the differentiation of material stocks within a plant.
• Inventory Management on a quantity basis is carried out at storage location level in the plant.
• Physical Inventory is also carried out in the plant at Storage Location Level.
• A Storage Location is defined in the system by 4 character alphanumeric key that is unique in the Plant.

5) Purchase Organization & Purchasing group

• The Purchasing Organization is an Org Unit within Logistics that sub-divides the enterprise according to purchasing activities.
• A purchasing organization procures materials or services, negotiates conditions of purchase with vendors and assumes responsibility for these transactions.
• A purchasing group is the key for a buyer or group of buyers responsible for certain purchasing activities

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