SAP : organizational structure

Every Organization Has A Structure That Defines How It Operates To Achieve Specific Tasks. It Is An Operational Framework That How Specific Tasks Are Executed To Achieve A Strategic Objective. This Operational Framework Includes Various Units Like Purchase, Finance, Sales, Human Resource Etc Which Have Specific Functions And Responsibilities To Achieve Specific Tasks. For Example In Any Organization Have Purchase Department Which Is Responsible For Purchase, Finance Department Responsible For Managing The Financial Resources Of The Organization. In Sap Have Following Organizational Structure :

• Client
• company Code
• plant
• storage location
• Purchasing Organization
• Purchasing Group

In Sap Client At The Top. After Client Than Multiple Company Code Than Each Company Code Have Multiple Or Single Plant Than Each Plant Have Single Or Multiple Storage Unit With Different Location Or Different Type Of Storage With Their Centralized Or Own Purchasing Organization. Below Image Represent How Above Organizational Structure Related To Each Other.

client at the topmost. after client have three company code, company code 1,company code 2,company code 3. company code 1 have centralized purchasing unit for plant, and storage location. Company code 2 have 2 plant b and plant c each plant have it's own purchasing unit and storage location. now next question is what client, company code, plant etc.

SAP organizational structure basic term

what is Client in SAP ?

a client is in highest level in sap organizational structure with it's own master data record and tables which are accessible for all company code and other organizational unit. Any data or specifications entered at this level are valid for all company codes and other organizational structures within the client. in SAP you can create multiple clients within a single SAP system to isolate business processes, data structure, user administration.in multiple system client is independent from other client to providing security and easy administration.

what is company Code in SAP ?

company code is next second highest level. company code represent a legally entity of independent company. company code have own financial statements, financial transactions, reporting, resource management, profit, losses, sales and distribution, warehouse storage location etc. you can define more than one company code within single client.in sap each company code is unique and cannot be shared with other company codes. for example amazon is client which are running their business to multiple country. each country have different currency, tax policy etc. Amazon define multiple company code for different country which are associated with single client amazon.

what is Plant in sap ?

in any organization unit which will manufacture goods and materials, responsible for production and services is known as plant. each manufactured materials and goods are specific plant. here all actual production and operation take place.in a single company code you can assign multiple plant.

what is storage location in sap?

Storage Location stored and differentiate different type materials, goods, a single plant have multiple or single storage location where materials stored. in sap storage location assigned for tracking materials, stock management, inventory management etc.

what is Purchase organization in sap ?

purchasing organization is responsible for all type materials procurement, creating purchase orders and negotiating conditions for vendors, vendor performance evaluation of vendor. type of Purchase organization is depend on materials and processes but some of the commonly used:

• Centralized purchasing: responsible for purchasing materials on behalf of the entire organization. it is associated with single or multiple client.
• company purchasing: responsible for purchasing materials on behalf of the assigned company (company code). a plant which are assigned to same company code is also purchase materials through company purchasing.
• Plant Purchasing: responsible for purchasing materials on behalf of the assigned plant. if a single purchasing unit is assigned to multiple plant for purchase or procurement of materials is known as Cross-Plant Purchasing Organization
• department Purchasing: responsible for purchasing materials on behalf of the different department.

what is purchasing group in sap?

a group which are responsible for purchasing materials, services and goods. these group have different levels, role and responsibility for purchasing.