Organizational Structure

Organizational structure is the most important thing to run a business by the organization. We all have a physical structure of an organization. This structure is implemented logically in the SAP system where the structure is as follows.

Client:

This is the highest entity of an organization where the SAP system is installed. Let us suppose we have a client of TATA group. So here TATA motors, TCS, TATA telecomm, TATA Technologies etc will be different company codes. One client can have more than one company codes.

Company Code:

It executes the business process. With the help of company code we can operate any business. For each company code financial accounts are created to calculate the profit and loss. Now financial accounts complete a company’s clear view. One company can have more than one plant.

Plant:

This is basically a factory where every operational and development works are done for the business. Those works are like production, maintenance, repair, servicing, sales etc. More than one plant can locate different geographical location.

Storage Location:

One plant can have more than one storage location but the physical existence of those storage locations must be inside that plant. This stores the stocks of raw materials, finished goods, stocks etc.

Purchasing Organization:

It carries out all the purchasing activity centrally for the organization. Purchasing organization can have more than one purchasing group.

Purchasing Group:

It refers to a group or an individual which deals with purchasing. Generally materials or services are purchased through the purchasing organization.

Firstly we need to create a client. Then we have to create company code and plant. After that we can assign the company code to the client and the plant to the company code. Similarly after creating a storage location we can assign it to a plant.