SAP123  »  SAP Hierarchy -- Materials Management

Willem Hoek on Jan 11, 2013

SAP version used for this post: SAP ECC (ERP Central Component) 5.0

Key Org structure objects used by Materials Management are:

(the red crosses indicate links that are not allowed – see notes below)

Q: Why do we set up SAP Organisational Structures (or SAP Hierarchy)?

To keep it simple you want minimum amount of SAP Hierarchy objects (companies, plants, storage locations, …). Example: Don’t just create a lot of plants – always ask why, why, why?

Company Code

Set up on the FI side of SAP.
Required if we need to do external financial reporting.
All companys must have different codes (company code is 4 characters)
Questions to ask business:


Used by all Logistics modules (MM, PM, PP, QM, PS,…)
Must be link to a company code. (only one)
All plants must have different numbers (plant number is 4 characters)
Questions to ask business:

Storage Locations

Used by Inventory Management (and Warehouse Management)
Part of one Plant.
Storage locations within the same plant must have unique number (4 characters)
Questions to ask:

Purchase Organisation

A plant must have a purchase organisation (one or more)
The link to company code is optional. If a Purchase Organisation is link to a company code, it can only be used by plants within that one company code.
Contracts / Pricing are done in the purchase organisation.
It consists of people (purchasing groups) that manage the purchasing function.
Purchasing views in vendor master is per Purchasing Organisation
Questions to ask:

Plants can also be linked to a default Purchase Organisation. This is used for example in “Auto PO create (when doing GR)” functionality, so that the system knows what P.Org to use. This link is only required if these functionalies are used.


Creating and Assigning (linking) Plants

First create a plant by copying an existing plant:
IMG: Enterprise Structure > Definition > Logistics > Define, copy, check Plant
Select Activity: Copy, delete, check plant

No assign the plant to a company code: IMG: Enterprise Structure > Assign > Logistics > Assign Plant

Creating Storage Locations (within plants)

IMG: Enterprise Structure > Definition > MM > Maintain Sloc

It is also possible to give a storage location “address” information (optional)

Create and Assigning (linking) Purchase Organisations

Create the purchase organisation

Then link it to the plants where it will be used.

It can also be link to a company code (this only takes place if the P.Org will be used plants linked to this company code).

Link to default Purchase organisation (if required)