In Sapo the example enterprise, external procurement – that is the purchase of materials from external vendors – can be organized at three levels in the R/3 System:

• Plant-specific
• Cross-plant
• Cross-company code

Purchasing in Ireland and the Czech Republic is organized in a plant-specific way. You set up a purchasing organization for each of the two plants. This purchasing organization is responsible for the plant assigned to it.

In Germany, purchasing is organized in a cross-plant structure for all the German plants Hanover, Berlin, and Munich. A single purchasing organization is created for all five plants.

Sapo also creates a single cross-company code purchasing organization, which can procure materials for each plant in each legal entity. This purchasing organization concludes group contracts and can negotiate for favorable conditions, since it is purchasing large quantities.