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SAP Enterprise Structure - A Case Study (part 10): Assign Plant to Company Code

This is the part 10 of the series of articles about SAP Enterprise Structure - A Case Study. Read part 1 here.

Assign Plant to Company Code
For the business scenario we've explained before on part 1, we will assign:

A001 and A002 plant to ABCD company code
E001 plant to EFGH company code.

We assign plant to company code with OX18 t-code or from the following menu path of “SPRO” t-code: IMG - Enterprise Structure - Assignment - Logistics-General - Assign plant to company code.

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Posted by Rizki at 13.4.11 1 comments
Labels: Enterprise-Structure
8.3.11
SAP Enterprise Structure - A Case Study (part 9): Define Division

This is the part 9 of the series of articles about SAP Enterprise Structure - A Case Study. Read part 1 here.

Define Division
For the business scenario we will define two divisions:

A1 for starter pack product.
A2 for handset product.


We define division from the following menu path of “SPRO” t-code: IMG - Enterprise Structure - Definition - Logistics - General - Define, copy, delete, check division.

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Posted by Rizki at 8.3.11 4 comments
Labels: Enterprise-Structure
14.2.11
SAP Enterprise Structure - A Case Study (part 8): Define Valuation Level

This is the part 8 of the series of articles about SAP Enterprise Structure - A Case Study. Read part 1 here.

Define Valuation Level
We define valuation level with OX14 t-code or form the following menu path of “SPRO” t-code: IMG - Enterprise Structure - Definition - Logistics - General - Define Valuation Level.


If we’ve never defined this before, the “Valuation Level” screen will be editable, but in this example it is not editable because it has been defined before. Defining the valuation level in Configuring is a fundamental setting, and is very difficult to reverse.

In the next article, I will explain about how to Define Division.

Notes:
You can read the full contents of the SAP enterprise structure - a case study as soon as you buy the e-book at: SAP Study Materials Store

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Posted by Rizki at 14.2.11 0 comments
Labels: Enterprise-Structure
4.1.11
SAP Enterprise Structure - A Case Study (part 7): Define Plant

This is the part 7 of the series of articles about SAP Enterprise Structure - A Case Study. Read part 1 here.

Define Plant

For the business scenario, we will create the following plants:

A001 for the west region of the ABCD company
A002 for the east region of the ABCD company
E001 for the office and warehouse of the EFGH company


There are two options to create company code:

Copy from other plant (or from SAP standard plant)
Create from the scratch


The advantage of copying from existing plant is SAP will also copy the existing plant-specific parameters, such as Consumption-Based Planning plant parameters, which include purchasing processing time, MRP Controller, etc. Then we can change certain data in the relevant application if necessary. This is much less time-consuming than creating a new plant.

But in this book we will create plant from the scratch so we have to define other parameters need in other relevant configuration process manually.

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Posted by Rizki at 4.1.11 0 comments
Labels: Enterprise-Structure
15.11.10
SAP Enterprise Structure - A Case Study (part 6): Enterprise Structure concept in Logistics

This is the part 6 of the series of articles about SAP Enterprise Structure - A Case Study. Read part 1 here.

Enterprise Structure concept in Logistics

Plant

A plant is the place of production, or branch of a company, or simply a collection of several locations of material stocks in close physical proximity.

A plant is represented by a client-unique 4-digit alpha-numeric.

A plant is assigned to one company code.

One company code can have more than one plant.

SAP recommends that to get complete functionality of the SAP ERP system, the country of plant is the same with the country of the company code. We should create a company code for each country where the plant is located.

Plant is used in Material Management (MM), Production Planning (PP), Sales and Distribution (SD), and Plant Maintenance (PM) module.

Division

Division is a way to group materials or services. A wide range of materials or services can be divided into divisions.
Division is a field in the material master data (it can be input/edited on “Basic Data 1” view by MM01/MM02 t-code). That’s why a certain material can be assigned to one division only. Usually, for sales material, we set the division field as a mandatory field in the material master data. A certain material can also not be assigned to any division, for example a non-sales material that we don’t need to categorized into a specific division.
In Sales and Distribution module, division combined with other organization units (sales organization and distribution channel) will define the sales area. We can have sales area specific master data, such as material, customer, and pricing master data.
Division is used in determining business area from logistics transaction in MM and SD module. We will explain this on Assign Business Area to Plant/Valuation Area and Division section.

Valuation Level
Valuation level is the organizational level at which material is valuated. The value of valuated materials in SAP ERP is recorded in company code’s General Ledger account, usually under the inventory account.

In a client, there are two possible organizational level at which material is valuated:

Plant.
When stock is valuated at plant level, we can valuate a certain material in different plants at different prices. Valuation must be at this level in the following cases:
If we want to use the application component Production Planning (PP) or Costing
If our system is a SAP Retail system
Company Code.
When stock is valuated at company code level, the valuation price of a certain material is the same in all of a company's plants (that is, in a company code).

SAP recommends that we set material valuation at Plant level. Defining the valuation level in Configuring is a fundamental setting, and is very difficult to reverse.



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Posted by Rizki at 15.11.10 1 comments
Labels: Enterprise-Structure
20.9.10
SAP Enterprise Structure - A Case Study (part 5): Assign Company Code to Company and Define Business Area

This is the part 5 of the series of articles about SAP Enterprise Structure - A Case Study. Read part 1 here.

Enterprise Structure concept in Financial Accounting

Assign Company Code to Company

After creating company and company codes, we need to assign the company codes to the company.
For our business scenario, we need to assign ABCD and EFGH company codes to ABCD company.
We can do it from the following menu path of “SPRO” t-code: IMG - Enterprise Structure - Assignment - Financial Accounting - Assign Company Code to Company.

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Posted by Rizki at 20.9.10 1 comments
Labels: Enterprise-Structure
6.9.10
SAP Enterprise Structure - A Case Study (part 4): Define Company Code

This is the part 4 of the series of articles about SAP Enterprise Structure - A Case Study. Read part 1 here.

Enterprise Structure concept in Financial Accounting

Define Company Code
There are two options to create company code:

Copy from other company code (or from SAP standard company code)
Create from the scratch


SAP recommends that we copy a company code from an existing company code. The advantage is SAP will also copy the existing company code-specific parameters. Then we can change certain data in the relevant application if necessary. This is much less time-consuming than creating a new company code.
But in this book we will create company code from the scratch so we have to define other parameters need in other relevant configuration process manually.
For our business scenario, we need to define two company codes:

ABCD for ABCD Telecommunication company
EFGH for EFGH Telecommunication company

The information that we need to maintain the company are:

Company code
Name
Address, including country
Language key
Local currency


We create company code from the following menu path of “SPRO” t-code: IMG - Enterprise Structure - Definition - Financial Accounting - Edit, Copy, Delete, Check Company Code.

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Posted by Rizki at 6.9.10 3 comments
Labels: Enterprise-Structure
23.8.10
SAP Enterprise Structure - A Case Study (Part 3): Define Company

This is the part 3 of the series of articles about SAP Enterprise Structure - A Case Study. Read part 1 here.

Enterprise Structure concept in Financial Accounting

Define Company
All company codes for a company must work with the same operational chart of accounts and fiscal year. The currencies used can be different.
The information that we need to maintain the company are:

Company ID
Name
Address, including country
Language key
Local currency

For our scenario, we will create one company (ABCD). We can create company from the following menu path of SPRO t-code:
IMG - Enterprise Structure - Definition - Financial Accounting - Define Company

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Posted by Rizki at 23.8.10 1 comments
Labels: Enterprise-Structure
2.8.10
SAP Enterprise Structure - A Case Study (Part 2): Enterprise Structure Concept in FICO

This is the part 2 of the series of articles about SAP Enterprise Structure - A Case Study. Read part 1 here.

Enterprise Structure concept in Financial Accounting

Company Code
A Company Code is an organizational unit that represents an independent and legal accounting entity, for example, a company within a corporate group. Financial reports such as Balance sheets and Profit and Loss statements, required by law, are created at company code level.

In SAP, a company code is represented by a unique 4-digit alpha-numeric for a specific client. It is the central organizational element of Financial Accounting. At least there is one company code in a client. We can set up several company codes in one client in order to manage various separate legal entities simultaneously, each with their own balanced set of financial books.
With SAP FI module, we can generate the financial reports of a company code. A company code's financial reports can be used for external purpose, such as for external auditors, shareholders/stock exchange commission, tax office, etc.

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Posted by Rizki at 2.8.10 1 comments
Labels: Enterprise-Structure
16.7.10
SAP Enterprise Structure - A Case Study (part 1)

This post is the first one of a series of articles that I am planning to write about SAP Enterprise Structure in the Material Management (MM) module's point of view. Due to its integration with other modules, I will also explain about some Enterprise Structure organizational units in Financial Accounting (FI) and Sales & Distribution (SD) modules.

Actually, I have published this series of posts as an e-book that is sold at SAP Study Materials Store. From now on, I am planning to write the e-book contents on this blog so you can read them for free. But I will write them in a series of post on this blog (could be 20 posts). If you haven't registered to our feed, you can do it now, so you'll be notified every time I post the new article on this blog:
In a reader
or, please enter your email address:


Alternatively, you can read the full contents as soon as you buy the e-book at:

SAP Study Materials Store, or
Amazon Kindle Store


Case Study Business Scenario
ABCD is a telecommunication company. It sells intangible telecommunication services, such as voices, sms, and data usage to the end-customers. The services can be consumed by the end-customers through the handset and starter pack (RUIM/sim card) inserted in it. The ABCD company has two branches: west region (which also the Head Office/HO) and east region.

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Posted by Rizki at 16.7.10 6 comments
Labels: Enterprise-Structure
17.5.10
SAP Enterprise Structure - Purchasing Organization Concept

Purchasing Organization is an organizational unit in Purchasing of MM module.

Purchasing Organization is an organization unit that has responsibility to company’s purchasing activities, such as create Request For Quotations (RFQ), Contract, Purchase Order (PO), etc. aIt negotiates purchasing conditions (price, discount, term of payment, etc) with vendors. A Purchasing Organization is represented by a client-unique 4-digit alpha-numeric.

A purchasing organization must be assigned to one (in the case of plant-specific purchasing) or more plants.

One plant can have one or more Purchasing Organizations.

A purchasing organization can be assigned to one company code (in the case of company-specific purchasing).

A purchasing organization can’t be assigned to more than one company code. If we want the purchasing organization serves more than one company code, we must not assign the purchasing organization to any company code. But, we assign the purchasing organization to plants that it’s responsible for. Since each plant is assigned to a company code, SAP system will determine the company code from the plant. Since the company code is on the header level of the purchasing documents and the plant is on item level, we need to input the company code for each purchasing document.

A company code can have one or more purchasing organizations.

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Posted by Rizki at 17.5.10 0 comments
Labels: Enterprise-Structure, MM, MM--Purchasing
5.4.10
E-Book: SAP Enterprise Structure Concept and Configuration Guide

E-book: SAP Enterprise Structure (MM and related modules such as FI, Logistics, and SD) Concept and Configuration Guide
SAP enterprise structure is organizational structure that represents an enterprise in SAP R/3 system. It consists of some organizational units which, for legal reasons or for other specific business-related reasons or purposes, are grouped together. Organizational units include legal company entities, sales offices, profit centers, etc. Organizational units handle specific business functions.

Organizational units may be assigned to a single module (such as a sales organization assigned to Sales and Distribution (SD) module, or to several modules (such as a plant assigned to Materials Management (MM) and Production Planning (PP) module).

SAP ERP system can represent a complex enterprise structure. Its flexibility can integrate the structure of an enterprise by linking its organizational unit. Enterprise structure design is a fundamental process in a SAP implementation project. The design is mainly determined by the business scenarios performed in an enterprise. Once the design is determined, it will affect many things such as how to perform a transaction and generate reports on SAP system. Although it’s possible, it requires great effort to change the enterprise structure. So , we must ensure that the enterprise structure designed in the SAP implementation project can accommodate all business scenarios and enterprise’s requirements for current and future situation.

The SAP Enterprise Structure is a fundamental setting and needs a comprehensive understanding of the business processes and their integration. We have to work with other departments and SAP modules, such as Accounting department (FI module), and Sales department (Sales and Distribution module).

I have written a pdf e-book that explains in details about the SAP Enterprise Structure (MM and related modules such as FI, Logistics, and SD) Concept and Configuration Guide. Just like other articles on my SAP Study Materials blog, I wrote the e-book in a simple-to-understand way, so you can learn it easily. You don't need to have extensive SAP knowledge and experience to be able to configure the SAP Enterprise Structure, as the e-book start explaining each step with the basic concept behind it. After understanding the concept, the e-book will show the step-by-step configuration with the screen shots.

You can buy the e-book for USD 25.00 19.95 at: Buy Now

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Posted by Rizki at 5.4.10 0 comments
Labels: Enterprise-Structure, SAP-Books
7.9.09
SAP SD Enterprise Structure & Master Data

SAP SD Enterprise Structure

Enterprise structure or Organizational structure in SAP is a structure of SAP organizational units that reflects the structure of the business in the real world. There are various SAP organizational units that can be mapped to business structure based on the real world business requirements such as: Client, Company Code, Plant, Storage Location, Sales Organization, Distribution Channel, Division, Sales Office, Sales Group, Sales Person, Shipping Point, Loading Point, etc.

We must set the enterprise structure correctly in the first place. The change of it usually requires a great effort and very time consuming. To set it up correctly we must have a comprehensive knowledge about the business processes and how to map it to SAP configuration.

A specific organizational unit is defined by a specific function or module in SAP. Company code is defined by FI module. Plant is defined by Logistics function. Storage Location and Purchasing Organization are defined by MM module.
In SD module we have to define Sales Organization, Distribution Channel, and Division. We have an option whether to use Sales Office, Sales Group, and Sales Person or not.













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Posted by Rizki at 7.9.09 2 comments
Labels: Enterprise-Structure, SD
10.1.08
MM Configuration: Assign Purchasing Organization to Company Code and Plants

Step by step SAP Material Management (MM) Configuration: Assign Purchasing Organization to Company Code and Plant

Purchasing Organization is an organization unit that has responsibility to company’s purchasing requirements. It negotiates purchasing conditions (price, discount, and other things) with vendors.

We can assign Purchasing Organization to a company code if we want a Company-specific purchasing. The purchasing organization may procure only for this company code. Then, we assign only plants of the company code concerned to the purchasing organization.

You can read our previous post to understand more about Purchasing Organization in SAP Enterprise Structure.

In this example we will assign “GC00” Purchasing Organization to “GC00” company code and to “GC01” plant. We can do this in a SAP R/3 client with T-code: SPRO. SAP step-by-step Screen shots of How to assign a Purchasing Organization to company code and plants are:

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Posted by Rizki at 10.1.08 1 comments
Labels: Enterprise-Structure, MM, MM--Purchasing
30.12.07
MM Configuration: Maintain Purchasing Organization

Step by step SAP Material Management (MM) Configuration: Maintain Purchasing Organization

Purchasing Organization is an organization unit that has responsibility to company’s purchasing requirements. It negotiates purchasing conditions (price, discount, and other things) with vendors. You can read our previous post to understand more about Purchasing Organization in SAP Enterprise Structure.

We can define Purchasing Organization in a SAP R/3 client with T-code: SPRO.
SAP step-by-step Screen shots of How to maintain a Purchasing Organization are:

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Posted by Rizki at 30.12.07 0 comments
Labels: Enterprise-Structure, MM, MM--Purchasing
MM Configuration: Maintain Storage Location

Step by step SAP Material Management (MM) Configuration: Maintain Storage Location
A Storage Location is a storage area comprising warehouses in close proximity.

A Storage Location is represented by a plant-unique 4-digit alpha-numeric.

Material stocks can be differentiated, on a quantity basis, within one plant according to storage location.

Storage locations are always created for a plant.

It is possible to store material data specific to a storage location, such as storage bin.

Physical inventories are carried out at storage location level.

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