Purchasing Organization

Definition

The purchasing organization is an organizational unit within Logistics. Almost all business transactions related to procurement are carried out in a purchasing organization.

Use

The purchasing organization represents the procuring unit in a legal sense. The way in which you assign purchasing organizations to company codes and plants determines the procurement method.

Purchasing organizations in the R/3 System help structure procurement (external organization).

There are three purchasing methods:

It is possible to combine different methods and portray them using reference purchasing organizations.

A purchasing organization can avail of the conditions and centrally agreed contracts contained in the assigned reference purchasing organization.

A purchasing organization is assigned one or more plants for which it has direct responsibility for procurement. In particular, you may assign plants that are assigned to different company codes to a purchasing organization, for example, central purchasing.

In the business transactions for a purchasing organization, you either have to enter the company code manually, for example an outline agreement, or it is derived from the relevant plants, for example an order.

Criteria for defining purchasing organizations

Purchasing organizations may be defined according to the following criteria:

You create purchasing-specific information for each purchasing organization, for example:

Procurement methods

The purchasing organization is then active for all company codes and is not assigned directly to one company code. In this case, you assign the purchasing organization to the company code when procurement processes are being carried out.

Integration

For more information, see:

Purchasing Organization Integration (Organizational Unit)