Organizational Structure In Material Management #1 - ERP Great

The organizational structure in the MM module is a hierarchy in which various organizational units are arranged according to their tasks and functions. The different organizational units that constitute the organizational structure of the company are as follows:

• Client — A self-contained unit in the SAP system with separate master records and its own set of tables.
• Company Code — The smallest organizational unit. You can create an independent set of accounts for this unit for the purpose of external reporting.
• Plant — An organizational unit where materials are produced or goods and services are provided. You can divide an enterprise into various plants according to production, procurement, maintenance, and materials planning.
• Storage location — An organizational unit where the goods produced in the plant are stored.
• Warehouse Number — An alphanumeric key that represents a warehousing system, which is made up of different organizational and technical storage areas.
• Storage Type — An area such as a goods receipt area, goods issue area, or picking area. Also the physical or logical division of a complex warehouse.
• Purchasing Organization — An organizational unit that procures materials and services and negotiates with vendors to purchase materials or goods.
• Purchasing group — An alphanumeric key for a buyer or a group of buyers who are involved in purchasing activities. The purchasing group is responsible for materials procurement and dealing with vendors.

The client is the highest level unit of the organizational units in Enterprise Structure in SAP R/3. The client is followed by the company code, which represents a unit with its own accounting, balance, and profit and loss (P&L). The next level of organizational units in Enterprise Structure is the plant, which represents an operational unit of a company.

3. Define Client. What is its importance in SAP?

A client can be defined as a person, company, or organization that purchases goods from another person, company, or organization. In terms of SAP, a client is defined as a unit that has its own master records and a set of tables. The client is important in SAP because it stores and maintains data about the organization where SAP is implemented.

4. How to create a client in MM module?

You can create a client in the MM module either by using the transaction code SCC4 or by performing the following steps:

• Select SAP Menu -> Tools -> Administration -> Administration -> Client Administration.
• Double click SCC4–Client Maintenance. The display view Clients: Overview screen appears.
• Select Display -> Change. The information dialog box appears.
• Click Continue. The change view Clients: Overview screen appears, where you can create a new client.

A company is an organizational unit for which individual financial statements are drawn per the relevant commercial laws. A company consists of one or more company codes. Within a company, all company codes must use the same transactions in addition to the same fiscal year breakdown; however, company code currencies can vary.

A company is different from a client because a client can itself be a company, or an organization that has multiple companies. For example, the owner of the entire SAP system is a client. The system will have only one operational client, but the client may further have a group of companies. The following data are held at the company code level:

• Material number
• Classification data
• Multilingual description
• Units of measure
• Technical data

In SAP, a company code is created using the transaction OX02. The company code field is represented by a four-character alphanumeric string. You can create a company code in SAP by performing the following steps:

• Open the SAP Customizing Implementation guide.
• Select Enterprise Structure -> Definition -> Financial Accounting -> Edit, Copy, Delete, Check Company Code. The Choose Activity dialog box appears.
• Double-click Edit Company Code Data. The change view Company Code: Overview screen appears where you can create a company code.

In SAP, a company code is created using the transaction OX02. The company code field is represented by a four-character alphanumeric string. You can create a company code in SAP by performing the following steps:

• Open the SAP Customizing Implementation guide.
• Select Enterprise Structure -> Definition -> Financial Accounting -> Edit, Copy, Delete, Check Company Code. The Choose Activity dialog box appears.
• Double-click Edit Company Code Data. The change view Company Code: Overview screen appears, where you can create a company code.

Yes. One chart of accounts can be assigned to several Company Codes. However, the reverse is not possible; i.e., you will not be able assign more than one chart of accounts to a single Company Code.

9. How many company codes can be assigned in one chart of accounts?

You can assign many company codes to a chart of accounts.

10. How many company codes can be assigned to a company?

You can assign only one company code to a plant.

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