Enterprise Structure in the Procurement Process
The organizational levels can be further described as follows:
- Client
The client is the highest organizational unit. The client is self-contained in both legal and organizational terms. It is also self-contained in terms of data because it uses separate master records and an independent set of tables. For example, from a business point of view, the client can represent a corporate group.
Specifications or data that you create and enter at the client level applies to all company codes and all other organizational units. Therefore, you do not have to enter the specifications and data more than once in the system at the client level. This ensures a uniform data status.
The system assigns access authorization on a client-specific basis. You need to create a user master record for every user for the client to work. The client separates and stores all the user input. Similarly, the processing and evaluation of data are carried out on a client-specific basis.
The system defines each client uniquely using a three-digit numeric key.
- Company Code
The company code is the smallest organizational unit of external accounting for which a complete, self-contained bookkeeping system can be replicated. This includes entering all the events that need to be posted to the accounts and creating a complete audit trail for the balance sheets and profit and loss statements. A company code represents an independent unit producing its own balance sheet, for example, a company within a corporate group (client).
You can set up several company codes in a single client to maintain separate sets of accounting books.
The system defines a company code uniquely in the client using a four-character alphanumeric key.
- Purchasing Organization
The purchasing organization is an organizational unit within logistics that subdivides the enterprise according to the purchasing requirements.
The purchasing organization is responsible for procuring materials or services and negotiating the conditions of purchase with vendors, and assumes responsibility for the purchasing activities.
- Purchasing Group
A purchasing group is a key to represent a buyer or group of buyers responsible for certain purchasing activities.
The purchasing group is internally responsible for the procurement of a material or class of materials. Externally, the purchasing group supplies the contact person for vendors. The purchasing group is not assigned to other units in the company structure.
- Plant
The plant is an organizational unit within logistics that subdivides an enterprise into production, procurement, and materials planning. The system defines a plant in the client using a four-character alphanumeric key.
A plant can represent a variety of entities, including the following:
The production facility
The central issuing storage location
The regional sales office
The corporate headquarters
The maintenance location
- Storage Location
The storage location is an organizational unit that facilitates the differentiation of stocks of materials in a plant. Inventory management is carried out in the plant at the storage location level.
The system defines a storage location using a four-character alphanumeric key. Each storage location has a unique key.
Cross Company Code Purchasing Organization
If you need to set up a cross-company-code purchasing organization, you must not assign the purchasing organization to any company code. When you create a purchase order, the system asks you to enter the company code you want to procure the material.
The data maintained in a view may be valid for more than one organizational level. This means that, in the material master, you need to maintain the organization-level data wherever required, such as in the company code, the plant, and the storage location.
Cross-Plant Purchasing Organization
Plant-Specific Purchasing Organization
In plant-specific procurement, the purchasing organization is responsible for procuring the materials for one plant. The purchasing organization is assigned to one company code and one plant of the company code.