Explain the Basic Organizational Structure in MM?

The major Organizational Elements of MM include:

􀂃 Purchasing Organization

􀂃 Plant

􀂃 Storage Location

The Purchasing Organization is typically attached to one Company Code. But a single

Company Code can have one or more purchasing organizations. One or more Plants are attached to a purchasing organization. One or more Storage Locations are attached to a plant. One or more plants are assigned to a Company Code, but one plant is attached to only one Company Code. Depending on how the purchasing organization has been structured, you may come across three types of structures as detailed below:

􀂃 Cross-plant purchasing organization

The purchasing organization caters to more than one plant of the same Company Code.

􀂃 Plant-specific purchasing organization

Each Plant has it is own purchasing organization.

􀂃 Cross-company code purchasing organization

A single purchasing organization is responsible for the procurement activities of more than one Company Code. The plants attached to this purchasing organization are also cross Company Code. In this case, the purchasing organization is not attached to any of the Company Codes; instead, the various plants are attached to the purchasing organization. This kind of purchasing organization is known as a central purchasing organization. This kind of organizational structure is essential in the case of centralized procurement in an enterprise.