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
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 is a way to group materials or services. A wide range of materials or services can be divided into divisions.
In a client, there are two possible organizational level at which material is valuated:
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.
In the next article, I will explain how to Define Plant in SAP configuration.
Notes: 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:
Alternatively, you can read the full contents as soon as you buy the e-book at: SAP Study Materials Store