-
7/30/2019 SAP Organizational Structure
1/34
Guest Brand
Organization Structure
-
7/30/2019 SAP Organizational Structure
2/34
SAP AG 2009. All rights reserved. / Page 2
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
3/34
SAP AG 2009. All rights reserved. / Page 3
What is the SAP Organizational Hierarchy
SAP Organizational Structure
The SAP hierarchy is the backbone of the SAP
system and is used in every transaction and master
data element in the SAP system.
The result is that the SAP Organizational Structure
provides the translation of the:
Management Structures
MarketsOperational Environment
Geographic Structures
Reporting Requirements
-
7/30/2019 SAP Organizational Structure
4/34
SAP AG 2009. All rights reserved. / Page 4
What is the SAP Organizational Hierarchy
Is the fundamental data and functional architecture within the
SAP system
Is comprised of several customizable organizational entities
Is central to the operation of the software
Encourages common business processes and master data
standards
Usually difficult to change once established
Design should provide flexibility to add new organizational
units
-
7/30/2019 SAP Organizational Structure
5/34
SAP AG 2009. All rights reserved. / Page 5
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
6/34
SAP AG 2009. All rights reserved. / Page 6
SAP Data and the Organizational Hierarchy
The foundation for all data within SAP
Master Data
Transactions
Org
StructureSAP
ClientG/L accounts, Vendors,Customers, Cost Centers,etc.
All activities that use or generate
data within SAP
-
7/30/2019 SAP Organizational Structure
7/34 SAP AG 2009. All rights reserved. / Page 7
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
8/34 SAP AG 2009. All rights reserved. / Page 8
SAP Terminology
Client - The client is the highest level in the SAP System
hierarchy. Specifications that you make, or data
that you enter at this level are valid for all company codes and
for all other organizational structures. Youtherefore only need to
make these specifications, or enter this data once. This ensures
that the data isconsistent.
Controlling Area - Organizational unit in an organization that
represents a closed system used for costaccounting purposes. A
controlling area may contain one or more company codes, which can
operate indifferent currencies, if required.
Company - The smallest organizational unit for which individual
financial statements are createdaccording to the relevant legal
requirements. A company can include one or more company codes.
Company Code - Smallest organizational unit of external
accounting for which a complete, self-contained set of accounts can
be created. This includes the entry of all transactions that must
be postedand the creation of all items for legal individual
financial statements, such as the balance sheet and theprofit and
loss statement.
Business Area - A business area is an economic unit within a
company designed for internalmanagement reporting (e.g. balance
sheet and profit/loss statements). It is used for additional
reportingthat subdivides a company code. Similar to Profit Center
functionality.
-
7/30/2019 SAP Organizational Structure
9/34 SAP AG 2009. All rights reserved. / Page 9
SAP Terminology
Operating Concern - The Operating Concern is the entity that
represents the highest reporting level
in Profitability Analysis. An operating concern is an
organizational unit in your company in which theproduct/market
structure is defined.
Credit Control Area - Credit Control Area is an internal
hierarchy element which is used to addressthe processes of Credit
Control and Credit Management.
Chart of Accounts - This is a list of all G/L accounts used by
one or several company codes
Operating chart of accounts - The operating chart of accounts
contains the G/L accounts that you use forposting in your company
code during daily activities. Financial Accounting and Controlling
both use this chart ofaccounts.
Group chart of accounts - The group chart of accounts contains
the G/L accounts that are used by the entirecorporate group. This
allows the company to provide reports for the entire corporate
group.
Country-specific chart of accounts - The country-specific chart
of accounts contains the G/L accountsneeded to meet the country's
legal requirements. This allows you to provide statements for the
country's legalrequirements.
-
7/30/2019 SAP Organizational Structure
10/34 SAP AG 2009. All rights reserved. / Page 10
SAP Terminology
Profit Center- An entity in Controlling that represents an area
of responsibility within acompany. It is typically a business unit
which monitors both costs and revenues and which
behaves as an independent operating unit for which a separate
operating statement can becalculated.
Cost Center- Cost Centers are the smallest area of cost
responsibility within a companysoverall organizational structure.
The smallest area of responsibility where budget cont ro lis
required.
Cost Element - Classification of the organization's valuated
consumption of production factorswithin a controlling area.
Activity Type - A unit in a controlling area that classifies the
activities performed in a costcenter.
Fiscal Year - Usually a period of twelve months for which a
company regularly creates financial
statements and checks inventories.
Currencies - Legal means of payment in a country.
-
7/30/2019 SAP Organizational Structure
11/34 SAP AG 2009. All rights reserved. / Page 11
Organizational Hierarchy Design Options
Instance Worldwide SAP System
Country-Specific SAP System
Client Global Company
Business Unit
Company Code Legal Entity
Country
Business Unit
Business Unit Segment
Company Global Company
Holding Company
Consolidation Unit
Business Area Business Unit
Country
Product Group
None
Profit Center Business Unit
Country
Market Segment
Product Line
Product Category
Operating Concern
Global Company
Sales Organizations
Market Segments
Controlling Area
Global Company
Country
Cost Center
Department (Budget Center)
Plant
Work Station
Credit Control Area
Global Company
Country
Sales Organization
Business Unit
Country
Company Code
Market Segment
Division
Product Line
Business Unit
Distribution Channel
Sales Channel
Plant Manufacturing Site
Warehouse
Distribution Center
Cost Center
Physical Building
Stockroom
Storage Location
Stock Room
Warehouse
Plant -Defined
Purchasing Organization
Company worldwide
Company
Purchasing Group
Entire Purchasing Org
Buyer
Warehouse
Storage Type
Storage Bin
-
7/30/2019 SAP Organizational Structure
12/34 SAP AG 2009. All rights reserved. / Page 12
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
13/34 SAP AG 2009. All rights reserved. / Page 13
Organization Hierarchy Example
Operating Concern
Controlling Area
Controlling Area
Controlling Area
Company
Company Code
Company Code
Company Code
Business Area
Business Area
Business Area
Company Code
Company
Plant
Plant
Plant
Plant
Sales Area
Sales Area
Sales Area
Profit Centers
Cost Centers
Profit Centers
Cost Centers
Management Reporting
Management Reporting
Client
Company
-
7/30/2019 SAP Organizational Structure
14/34 SAP AG 2009. All rights reserved. / Page 14
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
15/34 SAP AG 2009. All rights reserved. / Page 15
Organizational Structure - SD
SD Organizational Hierarchy
Foundation for transactional execution and reporting from a
sales perspective
Accommodate sell thru and transactional processes and create
common sales reporting
Mandatory Elements:
Sales Organization
A sales org is the highest level of sales reporting within a
company code. (ie. Total LLC salesreporting)
Each sales org is assigned to one, and only one, company
(code).
Distribution Channel
Distribution channels are means through which materials reach
the customer.
In past SAP offerings was utilized, better handling elsewhere in
SAP
Division
A division can be used to segment a business into product
lines.
In past SAP offerings was utilized, better handling elsewhere in
SAP
-
7/30/2019 SAP Organizational Structure
16/34 SAP AG 2009. All rights reserved. / Page 16
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
17/34 SAP AG 2009. All rights reserved. / Page 17
Organizational Structure - SD
Sales Area
A Sales Area is a unique combination of:
Sales Org + Distribution Channel + Division
Rules
A sales area is required in creating a Sales Order or Customer
Master Data for
sales use.
The sales area can be used for pricing and reporting.
When receiving orders, best practice is fewer Sales Areas
Proposed: use one Sales Area per Company Code
-
7/30/2019 SAP Organizational Structure
18/34 SAP AG 2009. All rights reserved. / Page 18
Organizational Structure - SD
Sales Office and Sales Groups (optional)
The Sales Area can be subdivided to create sales reporting on
different
organizational levels.
Sales Office
Can be viewed as a regional or management reporting function.
Assigned to
sales areas.
Sales Group
Geographic group of employees. Assigned to Sales Office.
-
7/30/2019 SAP Organizational Structure
19/34 SAP AG 2009. All rights reserved. / Page 19
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
20/34 SAP AG 2009. All rights reserved. / Page 20
Organization Structure and Plants
-
7/30/2019 SAP Organizational Structure
21/34 SAP AG 2009. All rights reserved. / Page 21
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
22/34 SAP AG 2009. All rights reserved. / Page 22
Plant Definition
A plant is an organizational unit within a company.
A plant is a place where valued goods and services are:
Produced
Stored
Consumed
Distributed
A plant can be used to define a:
Manufacturing facility
Warehouse distribution center
Corporate headquarters
Sales office
A plant is always assigned to a company code
-
7/30/2019 SAP Organizational Structure
23/34 SAP AG 2009. All rights reserved. / Page 23
Plant Definition Criteria
Materials can be valued differently by plant (i.e. Standard
cost).
Planning activities generally done by plant (MRP, S&OP)
Pricing can be varied by plant
SD availability checking and shipping point designation are
generally done at the
plant level
-
7/30/2019 SAP Organizational Structure
24/34 SAP AG 2009. All rights reserved. / Page 24
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
25/34 SAP AG 2009. All rights reserved. / Page 25
Storage Locations
Storage Location is the lowest level of inventory management in
an SAP system
In the Inventory Management (IM) component, the storage location
is defined as the
location of physical stock in a plant.
If you are using Inventory Management without Warehouse
Management System
(WMS), you can assign one or several physical storage locations
to each plant
-
7/30/2019 SAP Organizational Structure
26/34
SAP AG 2009. All rights reserved. / Page 26
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
27/34
SAP AG 2009. All rights reserved. / Page 27
MRP Areas
Three types of MRP Areas:
Type 01 = for Plant
Type 02 = for Storage Locations
Type 03 = for Subcontractors
You can assign the following to an MRP area:
one or more storage locations a subcontractor
MRP can be carried out specifically for the determined MRP
areas
-
7/30/2019 SAP Organizational Structure
28/34
SAP AG 2009. All rights reserved. / Page 28
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
29/34
SAP AG 2009. All rights reserved. / Page 29
Warehouse Locations
Define individual warehouses (high-rack storage, block storage,
picking area, and so on) as storagetypes within a warehouse complex
and group them together under a warehouse number.
As a rule, it is not necessary to define several storage
locations for a plant since you assign theWMS warehouse number to a
storage location from Inventory Management (IM).
Define storage bins for each of the storage types. In this way,
WMS manages stock information onall materials in the warehouse at
storage bin level.
-
7/30/2019 SAP Organizational Structure
30/34
SAP AG 2009. All rights reserved. / Page 30
Warehouse Locations
You can also manage stock for several plants in the same
warehouse at the same time.In this case, the same warehouse number
is assigned to the storage locations for theseplants.
-
7/30/2019 SAP Organizational Structure
31/34
SAP AG 2009. All rights reserved. / Page 31
Agenda
SAP TerminologyOrganization Hierarchy Example
Plant Definition
Sales Area
Organization Structure and Plants
Organization Structure and Sales
Storage Locations
MRP Areas
Warehouse Locations
What is the SAP Organizational HierarchySAP Data and the
Organizational Hierarchy
Purchasing Organization
-
7/30/2019 SAP Organizational Structure
32/34
SAP AG 2009. All rights reserved. / Page 32
Purchasing Organization
A Purchasing organization is 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.
In the SAP system, a plant must be assigned to one or more
purchasing organizations.
A purchasing organization can (but need not) be assigned to a
company code.
O
-
7/30/2019 SAP Organizational Structure
33/34
SAP AG 2009. All rights reserved. / Page 33
Purchasing Organizations
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.
Centralized purchasing, with just one purchasing
organization
Distributed purchasing, with a number of different purchasing
organizations each responsible for different
plants
-
7/30/2019 SAP Organizational Structure
34/34
Thank you!
