Organizational Structure in SAP MM – Complete Guide
In SAP Materials Management (MM), the organizational structure forms the foundation for business processes. It defines how data is structured and managed in procurement and inventory management. Here’s a breakdown of key organizational units, how to configure them, and the role each plays.
1. Client (MANDT)
Definition: The highest hierarchical level in an SAP system that represents a self-contained unit with its own master data and configuration.
Purpose: Global settings across company codes and plants.
TCode: SCC4 (View client settings)
Tips:
No transactional data crosses client boundaries.
All configurations are client-specific.
2. Company Code (BUKRS)
Definition: Represents an independent accounting unit with its own balance sheet and P&L statement.
Configuration Path:
SPRO → Enterprise Structure → Definition → Financial Accounting → Define Company
TCode: OX02
Example: MML1, IN01, DE01
Tips:
Required for posting financial transactions.
Each plant must belong to a single company code.
3. Plant (WERKS)
Definition: A physical or logical location such as a manufacturing facility, distribution center, or warehouse.
Configuration Path:
SPRO → Enterprise Structure → Definition → Logistics-General → Define, Copy, Delete, Check Plant
TCode: OX10
Tips:
Plays a central role in procurement, production, and inventory.
Linked to company code, storage locations, and purchasing orgs.
4. Storage Location (LGORT)
Definition: Subdivision of a plant where inventory is physically stored.
Configuration Path:
SPRO → Enterprise Structure → Definition → Materials Management → Maintain Storage Location
TCode: OX09
Tips:
Used to manage stock on a location level.
One plant can have multiple storage locations.
5. Purchasing Organization (EKORG)
Definition: An entity responsible for procurement activities and contract negotiations.
Types:
Plant-specific: Linked to one plant.
Cross-plant: Linked to multiple plants in one company code.
Central: Linked to all company codes (used in central procurement).
Configuration Path:
SPRO → Enterprise Structure → Definition → Materials Management → Maintain Purchasing Organization
TCode: OX08
Tips:
Purchasing info records, vendor master, and contracts are created at this level.
6. Purchasing Group (EKGRP)
Definition: Represents buyers or a group of buyers responsible for specific materials or vendors.
Configuration Path:
SPRO → Materials Management → Purchasing → Create Purchasing Groups
TCode: OMEO
Tips:
Used in reporting and workflow routing.
Not tied to org structure (no assignment to purchasing org or plant).
🔧 Assignments (Must-Do)
To ensure end-to-end functioning, the following assignments must be completed:
Assignment | Path | TCode |
|---|---|---|
Assign Plant to Company Code | SPRO → Enterprise Structure → Assignment → Logistics-General | OX18 |
Assign Purchasing Org to Company Code | SPRO → Enterprise Structure → Assignment → Materials Management | OX01 |
Assign Purchasing Org to Plant | SPRO → Enterprise Structure → Assignment → Materials Management | OX17 |
🛠️ Key TCodes Summary
Activity | TCode |
|---|---|
Define Company Code | OX02 |
Define Plant | OX10 |
Define Storage Location | OX09 |
Define Purchasing Org | OX08 |
Assign Plant to Company Code | OX18 |
Assign Purchasing Org to Plant | OX17 |
Define Purchasing Group | OMEO |
📝 Expert Tips
Use naming conventions (e.g., IN01, IN02 for Indian plants) for better manageability.
Leverage central purchasing org if you plan for group-wide contracts.
Ensure master data consistency (vendor, material) across plants and company codes.
Maintain BP (Business Partner) configuration in S/4HANA, replacing vendor master.
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