TOPIC -1
Organizational structure
• SAP MM (Materials Management) organizational structure consists of multiple levels
that define how procurement and inventory management are structured within a
company. Below is a step-by-step process to practice and understand SAP MM
organizational structure.
Step 1: Understand the SAP MM Organizational Structure
Before practicing in SAP, understand the key components of the SAP MM organizational
structure:
1. Client – The highest level in the SAP system.
2. Company Code – Represents a legal entity for financial reporting.
3. Plant – Represents a manufacturing facility or storage location.
4. Storage Location – Subdivision of a plant where materials are stored.
5. Purchasing Organization – Responsible for procurement activities.
6. Purchasing Group – A group of buyers responsible for procurement.
Step 2: Create Organizational Elements in SAP
To practice in SAP, follow these steps to configure the MM organizational structure.
1. Define Company Code
• Transaction Code (T-Code): OX02
• Path: SPRO > Enterprise Structure > Definition > Financial Accounting
> Define Company
• Click on "New Entries" and create a Company Code with:
o Company Name
o Address
o Currency
o Language
2. Define Plant
• T-Code: OX10
• Path: SPRO > Enterprise Structure > Definition > Logistics - General >
Define Plant
• Click on "New Entries" and create a Plant with:
o Plant Name
o Address details
o Company Code assignment
3. Define Storage Location
• T-Code: OX09
• Path: SPRO > Enterprise Structure > Definition > Materials Management
> Maintain Storage Location
• Click "New Entries" and create:
o Storage Location Code
o Description
o Assign it to the Plant
4. Define Purchasing Organization
• T-Code: OX08
• Path: SPRO > Enterprise Structure > Definition > Materials Management
> Maintain Purchasing Organization
• Click "New Entries" and create:
o Purchasing Organization Name
o Assign it to a Company Code or Plant
5. Define Purchasing Group
• T-Code: SPRO
• Path: SPRO > Materials Management > Purchasing > Create Purchasing
Group
• Click "New Entries" and define:
o Purchasing Group Code
o Description
Step 3: Assign Organizational Elements
After defining the structures, they need to be linked.
1. Assign Company Code to Company
• T-Code: OX02
• Path: SPRO > Enterprise Structure > Assignment > Financial Accounting
> Assign Company Code to Company
• Select the company code and assign it to the company.
2. Assign Plant to Company Code
• T-Code: OX18
• Path: SPRO > Enterprise Structure > Assignment > Logistics - General >
Assign Plant to Company Code
• Select the plant and assign it to the company code.
3. Assign Storage Location to Plant
• T-Code: OX09
• Path: SPRO > Enterprise Structure > Assignment > Materials Management
> Assign Storage Location to Plant
• Select storage location and assign it to the plant.
4. Assign Purchasing Organization to Company Code
• T-Code: OX01
• Path: SPRO > Enterprise Structure > Assignment > Materials Management
> Assign Purchasing Organization to Company Code
• Select purchasing organization and assign it to the company code.
5. Assign Purchasing Organization to Plant
• T-Code: OX17
• Path: SPRO > Enterprise Structure > Assignment > Materials Management
> Assign Purchasing Organization to Plant
• Select purchasing organization and assign it to the plant.
Step 4: Verify the Configuration
After assigning all elements, verify them in SAP Tables:
• T001 – Company Code
• T001W – Plants
• T024W – Purchasing Organizations
• T001L – Storage Locations
Step 5: Test Procurement Process
Once the organizational structure is set, you can practice the procurement process:
1. Create Material Master – MM01
2. Create Vendor Master – MK01 or BP
3. Create Purchase Requisition – ME51N
4. Create Purchase Order – ME21N
5. Goods Receipt – MIGO
6. Invoice Verification – MIRO
Conclusion
By following these steps, you will understand the SAP MM organizational structure and its
importance in procurement and inventory management. Let me know if you need further
details!
