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Organization Structure
Organization Structure – Significance & Impacts Standard SAP Organization StructureProposed Organization Structure – FI/COProposed Organization Structure – Logistics (MM,SD & MM)
Agenda
Significance of Defining Organization Structure
Definition of organizational Structure is a fundamental & Mandatory step
Mapping the current Organizational. structure to ERP Organization levels.Structure definition is backbone of Implementation.
Once defined Changes in Structure is a very difficult process.
It is a Critical factor from Change Management perspective.
Impact of defining Organization Structure
Levels of Legal and Managerial Reporting
Levels of Data Management (Transactional Data)
Levels of Authorization Control
Defines route of Information flow (top - down / bottom – up)
Defines rules for Automatic Account Posting
Levels of Inventory valuation / Product Costing
ERP Organization Structure• Operating Concern• Controlling Area• Chart of Accounts• Company• Company Code• Profit Center Hierarchy• Cost Center Hierarchy• Credit Control Area• Plant• Storage Location• Purchasing Organization• Purchasing Groups• Sales Organization• Distribution Channel• Division• Sales Area• Sales Office• Sales Group
Sales Area
Client
CompanyOperating Concern
Credit Control Area
Chart of Accounts
Controlling Area
Company Code
Cost Center
Profit Center
Sales Organization
Distribution Channel
Division
Sales Office
Sales Group
Plant
Storage Location
Purchasing Organization
PurchasingGroup
Organization – Finance & Controlling
•Operating concern – Organization Object to analyze the profitability market segment wise. The Characteristics and Value Fields will be defined and assigned to this Operating Concern. The Profitability Segments will be defined, at which the profitability can be seen.
• Controlling Area–Hierarchical structure to represent the organization according to the cost incurrence. The Cost Center Standard Hierarchy and Profit Center Standard Hierarchy will be defined and assigned to this Controlling Area.
Chart of Accounts - It is a list of G/L accounts used by one or more company codes. Can be attached to many company codes.
Company Code - is the organizational unit that allows you to structure your enterprise from a financial accounting perspective.
Segments Definition
Segments are used for reporting from external market viewpoint. As such, segment does not have any relationship with normal Org. Structure
Segments are defined with a concept of product category level.
Common Segment is defined to book expenses which cannot directly be assigned to a particular segment.
7
Chips IN
POY IN FDY IN
Trading Power Lease
Common PTY
INDIA KOREAChips KR POY KR FDY KR
ITY KR Common Trading
Mauritius
Common
Singapore
Common
Power Rent
Common
SSYPL
Profit Centre Hierarchy
Each segment will have one to many relationship with profit Center.
Profit centers are grouped under Profit Center Group.
Profit center hierarchy is created, which represents organization in accordance to revenue and cost incurrence.
Profit center is a basic object were cost and revenue are collected and reported.
Cost Centre Hierarchy
Cost center hierarchy is created, which represents organization in accordance to cost incurrence.
Cost center are basic objects where cost is collected and reported.
Cost Centers can be grouped under cost center group.
Cost Center (Concept)
ORG(1000)
Corporate Office
Finance and Accounts
HR & Admin
Sales & Distribution
Purchase
Common
ORG(2000)
Corporate Office
Finance and Accounts
HR & Admin
Sales & Distribution
Purchase
Common
Logistics Organization Structure
Org. Business Overview
Inventory valuation of Materials may be different at different Plant (Units)Each Manufacturing Plant (Unit) has
General Raw Material Stores Production Staging Area (Stores) Finished Goods Stores Consumables Stores Packaging Stores Spare stores
Inventory Management (Goods Movement such as Receipt , Issue, Delivery etc) takes place at all above Stores
Physical Inventory is carried out at all above StoresPurchasing and Inventory Reporting and Analysis is based Unit wise/Location wise/Material wise/Purchasing Dept wise
Slide 12
Org.Business Overview
Slide 13
Planning of Materials is/will be done By Production Dept of each Unit based on Made-to-Stock concept.Planning of Trading Material is based on Customers/Market requirement. Maintenance Activity is done in each Manufacturing Unit.Procurement for Materials required for In-house Manufacturing /Services is done by Purchase dept at At Mumbai/Delhi Domestic and ImportLocal Common Purchase Dept for all UnitsPurchase Dept atProcurement for Trading Materials is done from Mumbai office.Currently distinct Purchase groups within ach Purchase dept is not operational.Proposed Purchasing Groups will be Dept Specific and/or Material Specific.
MM Organization Structure
Org. 1
Raw Material for PTY
Packaging
Consumables
Spares
General
Scrap
Finished Goods PTY
SFG -PTY
Prod.Storage for RM-PTY
Org 2
Raw Material for PTY
Packaging
Consumables
Spare
General
Scrap
Finished Goods PTY
SFG - PTY
Prod. Storage for RM - PTY
Slide 15
OrgRaw Material for POY/FDY
Raw Material for Chips
Raw Material for Dyed Yarn
Raw Material for PTY
Raw Material for ITY
Packaging
Consumables
Spares
General
Scrap
Finished Goods - POY
Finished Goods - FDY
Finished Goods - CHIPS
Finished Goods - PTY
Finished Goods - ITY
Finished Goods - Dyed
SFG-Chips
SFG-FDY
SFG-Poy
SFG-PTY
SFG-ITY
SFG-Dyed
Production Storage for RM/Packing-FDY
Production Storage for RM/Packing-POY
Production Storage for RM/Packing-Chips
Production Storage for RM/Packing-PTY
Production Storage for RM/Packing-ITY
Production Storage for RM/Packing-Dyed
Plan
t w
ith
Res
pect
ive
Stor
age
Loca
tion
Storage Location (Stock Monitoring & PI) as per category wise
Raw Material for POY/FDY Raw Material for Chips Raw Material for Dyed Yarn Raw Material for PTY Raw Material for ITY
Packaging Consumables Spares General Scrap Finished Goods - POY Finished Goods - FDY Finished Goods - CHIPS Finished Goods - PTY Finished Goods - ITY Finished Goods - Dyed
SFG-Chips SFG-FDY SFG-POY SFG-PTY SFG-ITY SFG-Dyed Production Storage for RM/Packing-FDY Production Storage for RM/Packing-POY Production Storage for RM/Packing-Chips Production Storage for RM/Packing-PTY Production Storage for RM/Packing-ITY Production Storage for RM/Packing-Dyed
Purchasing Organization Specification Organizational Unit within Logistics that sub divides an
enterprise according to purchasing requirement.
Purchasing Organization negotiates Terms and Conditions with Vendors and Assumes responsibility for such Business with Vendors.
Responsibility and Master Data
1. Each Purchasing Organization has its own Vendor Master Data (Purchasing Data)
Purchasing Organization Specification
Responsibility and Master Data
1. Each Purchasing Organization has its separate Vendor Evaluation
2. Purchasing Organization is highest Summarization level for Purchasing Statistics after Client
3. All items of Purchasing Document (RFQ,PO Contract) are assigned to respective (only one) Purchasing Organization
4. Approval strategy can be defined based on Purchasing Org.
5. Purchasing Organization serves selection criteria for list of all purchasing document
Sales & DistributionOrganization Structure
Sales Organization: • An organizational unit that sells and distribute products, negotiates term of sales and is responsible for all sales related transactions.
• Sales organization is assigned to only one company code.
• All Reports, Authorizations, products, pricing, Master data and transactions will be separated at the level of Sales Organization.
Distribution Channel:
• The channel through which the products reach customers.
• Can be assigned to one or more sales organizations.
• In case of Some organization , Distribution channels have been divided in to
“Domestic”, “Exports Sales” and “Stock transfer” within the org Plants.
Division
• Represents the range of products.
• Can be assigned to one or more sales organizations.
• Each time a new range of product is introduced a division will have to be
created.
Sales Area: A combination of Sales Organization, Distribution Channel and Division. It is
mainly used for reporting purposes. All data relevant for sales can defined per sales area.
Sales Office:• Sales Office represents the various sales team’s locations or office branches.• It can be assigned to more than one sales area. • It is an optional organizational unit in ERP .
Organization
Domestic Sales
Domestic-Dealer
Domestic-Broker
Export Sales
Export-Dealer
Intercompany
Stock Transfer
Domestic Trading
Export Trading
Plant Maintenance – maps the maintenance activities in the Plants.
Organization Structure developed on the FI-CO, PP and MM.
Maintenance Plant – plant where technical objects exist and where maintenance activity can be done.
Maintenance Planning Plant – plant where Maintenance Planning is done for the technical objects of the maintenance plant(s).
Thank You