Organization of an Enterprise in the SAP System 

This section describes the organization of an enterprise in the SAP system. It also demonstrates how Purchasing is integrated into this structure.


Organizational Levels

The structure of an enterprise is represented in the SAP R/3 System by the following organizational levels:

A grouping or combination of legal, organizational, business and/or administrative units with a common purpose.

Example: a corporate group.

Company code
This level represents an independent accounting unit within a client. Each company code has its own balance sheet and its own profit and loss statement.

Example: a subsidiary company, member of a corporate group.

Operational unit within a company code.

Example: production facility, branch office.

Purchasing organization
An organizational unit responsible for procuring materials or services for one or more plants and for negotiating general conditions of purchase with vendors. The purchasing organization assumes legal responsibility for all external purchase transactions.

Purchasing group
The purchasing organization is further subdivided into purchasing groups (buyer groups), which are responsible for day-to-day buying activities.
A purchasing group can also act for several purchasing organizations.


Assignments of Organizational Levels "Plant", "Purchasing Organization", and "Company Code"

In the SAP system, a plant must be assigned to one or more purchasing organizations.

Furthermore, a plant must always be assigned to a company code.

A purchasing organization can (but need not) be assigned to a company code.

If you do not assign a company code to a purchasing organization, the latter can engage in procurement operations for every company code.
A prerequisite for this is that the plant for which procurement is carried out is assigned to the purchasing organization.

Organization of Purchasing

Centralized/Distributed Purchasing

You can organize your purchasing function in the following ways:

The following graphic illustrates the different ways of organizing your purchasing function in the SAP System:



For more information on the organizational structure of an enterprise's purchasing function, see the Implementation Guide (IMG) for the Enterprise Structure (section Maintaining a Purchasing Organization).

Reference Purchasing Organization

Depending on the way your system is set up, either a central purchasing department can exist side by side with, but separate from, local purchasing departments, or local purchasing departments can make use of contracts and conditions created by the central purchasing department. The latter situation can be replicated in the SAP System with the aid of Reference Purchasing Organizations.

You can either assign a reference purchasing organization to a company code or not assign it to any company codes. As a rule, no plants are assigned to the purchasing organization. However, if you wish, you can assign one, two, or several plants to it.

An example of reference purchasing organizations can be found in the section Example: Working with Reference Purchasing Organizations.

Advantages of a Reference Purchasing Organization

The purchasing organizations responsible for procurement in the individual plants can issue release orders against this Centrally Agreed Contract, thus availing themselves of its more favorable terms and conditions.

More information on centrally agreed, corporate-wide contracts is available in the section Centrally Agreed Contract.

For more information on this topic, refer to the section Distributed Contracts.

Working with a reference purchasing organization saves time and effort in maintaining data because purchasing organization data for vendor master records and purchasing info records only has to be created by the reference purchasing organization. Other purchasing organizations that are linked to the latter via Customizing can use this data without having to maintain data themselves.

Inter-Company-Code Stock Transfer

You can set up your system in such a way that one purchasing organization procures material for a plant from a vendor (plant) that belongs to another company code within the same client (corporate group). This is an instance of an inter-company-code stock transfer with an SD delivery and a billing document.

For information on inter-company-code stock transfers, refer to the documentation MM Special Stocks and Special Forms of Procurement in Materials Management ( section Inter-Company Stock Transfers).