System Wide Concept

Organizational Structures and SAP S/4HANA

The enterprise structure of a company is mapped to SAP applications using organizational units.
Organizational units represent the enterprise structure in terms of legal or business-related purposes.
Organizational units include legal company entities, plants, storage locations, sales offices, and profit centers.

The following are examples of organizational levels:

Client is the highest-level unit of all organizational elements. It represents the enterprise or headquarters group.
Company code is a unit used in the balance sheet of a legally independent enterprise. It is the central organizational
element of Financial Accounting (FI).
Sales organization is the central organizational element of Sales and Distribution that controls the terms of sale to the
customer. A division is usually used to represent a product line.
Plant is the central organizational unit in the context of production planning. A plant can manufacture product, distribute
product, or provide a service.
Material stocks can be differentiated within one plant according to the storage location in the context of inventory
management.
Organizational units may be assigned to a single application or to several applications. For example, a sales organization
is assigned to Sales and Distribution, while a plant is assigned to materials management, production planning, and sales.
Master data is created and assigned to organizational structures at various levels.

Enterprise Structure – Financials and Logistics

A controlling (CO) area is the basic organizational unit in Management Accounting. It is a closed entity that is used for
cost accounting. You can allocate costs only within a CO area. These allocations do not affect objects in other CO areas.
An operating concern is the central organizational unit in Profitability Analysis (CO-PA). It represents the structure of
external market segments for the enterprise. You can assign several CO areas to each operating concern so you can
analyze them together.

A company code is an independent accounting unit. You prepare financial and profit and loss (P&L) statements at the
company code level to meet legal reporting requirements. You can use business areas (BAs) to group strategic business
units for reporting financial and P&L statements. BAs are not suitable for auditing; they are only suitable for reporting
purposes. BAs can also group business units that are associated with different company codes.

In logistics, a plant is an organizational unit for categorizing an enterprise according to production, procurement,
maintenance, and materials planning. A plant is a place where materials are produced, or goods and services are provided.
A plant is assigned to a company code.

A purchasing organization is an organizational unit used in MM – purchasing.

A sales organization is an organizational unit that is used in sales order management.

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.
Enterprise Structure in Manufacturing Execution

Enterprise Structure in Sales and Distribution

Organizational levels represent the structure of an enterprise organization. They also represent the legal and organizational
views of an enterprise. The order-to-cash process is part of the Sales and Distribution (SD) application component.

A sales and distribution component module includes organizational levels that are unique to the sales and distribution
processes, such as sales organization, distribution channel, division, and shipping point. It also includes organizational
levels, such as company code or plant, which are used in SD and in other modules.

You can represent your enterprise structure using organizational levels based on your business processes.
Organizational Structure
 Enter the User
Enter the Password
Click Enter
Click on SAP Menu
Click Tools > Customizing > Click IMG > Double click on the Execute Project (or) SPRO
Click on SAP Reference IMG
Click Enterprise Structure > Click Definition

Check the address of the company code

Click Financial Accounting
Click Edit, Copy, Delete, Check Company Code
Double click on Edit Company Code Data
Double Click on 1010
 Click Cancel

Click Back > Back > Click Cancel

Check the Valuation Level

Under the Enterprise Structure > Definition > Click on Logistic General
Click Define Valuation Level
Note that the Valuation area is a plant

Click Back

Check the Key for the Plant

Under the Logistic General > Click on Define, Copy, Delete, Check Plant
Double click on Define Plant
Note the Key for Plant

Click on Back > Click on Cancel

Check the first key for the Sales Organization.
Under the Enterprise structure > Definition > Click on Sales and Distribution
Click Define, Copy, Delete, Check Sales Organization
Double click on Define Sales Organization
Note the first key for the sales organization

Click Back > Click Cancel

Check the Plants which are assigned to company codes

Under the Enterprise Structure > Click on the Assignment

Click Logistic – General
Click Assign Plant to Company Code
Note the plants are assigned to company code

Click Back

Check the Sales Organization which is Assigned to the Company Code

Under the Assignment >Click on the Sales and Distribution
Click Assign Sales Organization to Company Code
Note the Sales Organization is Assigned to Company Code

Click Back
You have now displayed the organizational Structures
Understanding the Concept of Master Data
Business Partner and Assigned Roles

The Business Partner is created and the roles necessary for the usage of the BP are assigned. The different
roles are created on certain organizational levels. The role FI Vendor, which is necessary to use the BP in FI
based purchase postings, is assigned to the company code. So the data in this role can be maintained in each
company code different. Note that vendor is also called supplier.

You can assign a different vendor number and customer number to your BP inside the BP maintenance
transaction.

In the general role of the business partner, the name and address of the BP is entered.

In the role FI vendor (BP used as a vendor in FI), you enter the following data:
The terms of payment
The names of important contacts related to the vendor (for example, sales people)
The reconciliation account from the general ledger (G/L), because the vendor is a creditor of the company

You can decide whether to maintain many roles at once or to add roles later, when you need them.

Material Master Record

The material master contains the information that a company needs to manage a type of material. The material
master defines how a product is sold, manufactured, purchased, inventoried, and costed. The information in
the material master is grouped into views that are organized by business function.

Transactions
Transactions are application programs that execute business processes in the SAP system. Whenever possible,
master data is copied during transaction processing, thus avoiding re-entry of data. For example, when
executing the Create Sales Order transaction, the user must enter the customer master number.

The customer master number is copied into all of the relevant customer information areas. Once the material
master numbers are entered for the items being ordered, the relevant material data will be copied to the sales
order.
 When performing each transaction, applicable organizational elements must be entered. For example, by
specifying the sales organization, the appropriate sales group is given credit for the sales activity. The
designation of the plant and storage location determines product sourcing.

Documents are electronic data records of transactions, and contain all of the relevant, predefined information
from the master data and organizational elements.

Display a Material Master Record

Check the Material Master for the product and see how a material master data record is structured.
In the FIORI APP
Click on the Group you created
Click on Display Material
Enter the material Number
Select the View (Basic Data; Sales Organization Data 1; Sales General\Plant Data; Work Scheduling;
Accounting 1)
Click on Continue
Enter the Plant
Sales Organization
Distribution Channel
Basic Data:
Check the Material Group; Gross Weight
Sales Organization:
Delivering Plant
Sales General/Plant:
Transportation Group for the Material
Work Scheduling
 Production supervisor
Accounting 1:
Valuation Class for the Material
Close

Display the Organizational Structure

https://learning.sap.com/service/media/TS410_17_en-US_media/TS410_17_en-US_simulations/sap_wpb/
trainer/9_5_3_371/trainer.html?show=project!
PR_DisplaytheOrganizationalStructures_Ex&mode=uebung#mode=uebung&show=project!
PR_DisplaytheOrganizationalStructures_Ex:uebung&hash=2

Display a Material Master Record

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trainer/9_5_3_371/trainer.html?show=project!
PR_DisplayaMaterialMasterRecord_Ex&mode=uebung#mode=uebung&show=project!
PR_DisplayaMaterialMasterRecord_Ex:uebung&hash=2

Display Customer Master Record

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trainer/9_5_3_371/trainer.html#mode=uebung&show=project!
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