Definition

An organizational unit subdividing an enterprise according to the requirements of Purchasing. It procures materials and services, negotiates conditions of purchase with vendors, and is responsible for such transactions.

Structure

The form of procurement is defined by the assignment of purchasing organizations to company codes and plants.

The following forms of purchasing exist:

A purchasing organization procures for all the company codes belonging to a client.

A purchasing organization procures for just one company code.

A purchasing organization procures for a plant.

Mixed forms are possible, which can be replicated in the system by the use of reference purchasing organizations.

A purchasing organization can utilize the more favorable conditions and contracts of the reference purchasing organization that has been assigned to it.

Integration

An example of corporate structure with purchasing organization is given in the following graphic representation:

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