egn 5620 mm org structure d-2-1 fall 2012

8/11/2019 EGN 5620 MM Org Structure D-2-1 Fall 2012

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Materials Management(MM) Organizational

Structure

EGN 5620 Enterprise Systems Configuration(Professional MSEM)

Fall, 2012


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MM Organizational Structure

SAP Implementation


Fall, 2012


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January 2008

SAP AG - University Alliances and

The Rushmore Group, LLC 2008. All

rights reserved. 3

MM Organizational Structure

Related Topics

MM and organizational data

Organizational data & structures

Organizational relationships

Warehouse management


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rights reserved. 4

Business Process Integration

Rules

FI

MM

SD

FI SDMM


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rights reserved. 5

MM Organizational Data


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Organizational Data

A hierarchy in which the organizationalunits in an enterprise are arrangedaccording to tasks and functions

Are static data and are rarely changed

The definitionof organization units is a

fundamental step;it is a critical factor inhow the company will be structured andrun.


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Client

CompanyChart of

Accounts

Company

Code

Fiscal Year

Variant

Credit Control

Area

Organizational Structure

Controlling

Area


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SAP Org. Structure (review)

Client

Company

Chart of accounts

Company code Credit control area

Fiscal year variant


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Client (review)

Highest hierarchical level in an SAPenvironment

A complete database containing all the

tables necessary for creating a fullyintegrated information system

Master records are created at the clientlevel


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Chart of Accounts (review)

A Chart of Accounts contains a completelist of all of the accounts utilized in theGeneral Ledger for a given company

A chart of accounts must be assigned to

every company code in order to create theGeneral Ledger for that company

Several company codes can use the samechart of accounts


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Company (review)

Consolidated financial statements arecreated at the company level

A company can include one or more

company codes All company codes must use the same

chart of accounts and fiscal year

Company is not required in the definition

of an enterprise (optional)


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Company Code (review)

A legally independent entity The smallest organizational unit for which

accounting can be carried out

Business transactions are processed at

this level Accounts are managed at this level

Legal financial statements, such as thebalance sheet and the income statement,are generated at this level using theGeneral Ledger balances


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Fiscal Year Variant (review)

Specifies the accounting fiscal year forreporting purposes

Special periods are created to aid in thequarterly or year-end adjusting process

completed prior to preparing financialstatements

A single fiscal year variant is assigned toeach company code


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Credit Control Area (review)

An organizational unit or area ofresponsibility created to control customercredit limits

A company code is assigned to one andonly one credit control area

Multiple company codes can be assignedto one credit control area


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Controlling Area (review)

An organizational unit that serves tobroadly define a managerial accountingand reporting system

Each company code can be assigned toone and only one controlling area

Controlling areas can consist of multiplecompany codes thereby enabling cross-

company allocations


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Controlling Area (continued)

Modules

SD

MM

HR

FI

Cost and

Revenue

Accounting

Profit

Center

Accounting

Overhead Cost

Accounting

ProfitabilityAnalysis

Product Cost

Controlling


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Cost Center Standard Hierarchy

An organizational unit that serves to refine and

focus a managerial accounting and reportingsub-system

Each standard hierarchy is attached to theappropriate Controlling Area

All cost centers (groups) of interest must beentered in the Standard Hierarchy

A mapping of responsibility to individualmanagers and cost centers facilitate:

Expense collection Expense tracking

Expense reporting


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Cost Center Groups

Logical groupings of cost centers in thestandard hierarchy to establishaccountability and responsibility for one ormore cost centers

Facilitates reporting, planning, andallocating costs at a more aggregatedlevel


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Cost Centers Designation

Units that are distinguished, for example,by area of responsibility, location, or typeof activity Copy center Security department Maintenance department

One or more value-added activities areperformed within each cost center

Can be permanent or temporary (e.g.,internal order)


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Cost Centers (continued)

Operates as a collector and assignor ofresponsibility for expenditures

A way to identify and track where costsare incurred for evaluation purposes


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Profit Centers primary revenue collection objects in the

system posted to all balance sheet postings

can be attributed by cost centers

assigned to a single controlling area and asingle company code

grouped together into a hierarchy torepresent the organization structure for

analysis of income versus expenditure fordifferent parts of a organization

Some organizations dont have profit centers


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SAP MM Organizational Structure

Plant

Valuation Area

Storage Locations

Shipping Point

Purchasing Organizations

Purchasing Groups


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January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rightsreserved. 23

Company C001

Plant P001 Plant P002

Storage Loc. 30Storage Loc. 10

Warehouse 1 Warehouse 1

Aisle 1 Aisle 1 Aisle 2Aisle 2 Aisle 3

Rack 1Rack 1 Rack 1

ABC123


Organization structure (Plant)- inventory vs. warehouse mgt.

Inventory

Management

(MM)

Warehouse

Management (WM)

Company Code

Plant

Storage Loc.

Warehouse

Aisle

Storage Rack

Quantity


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Plant

Lowest valuation area Organizational level where Material

Requirements (MRP) runs

Generally used to describe a productionsite, a distribution center or centralizedwarehouse

May be a physical or logical unit


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Valuation Area

The valuation area determines at whichlevel a material is valuated (inventoryvalue is established)

SAP R/3 allows valuation at the companycode or plant level, but recommendsvaluation area be set at the plant level


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Storage Location

Subdivision of a plant Where materials are managed (inventory

management) Raw Materials

Maintenance, Repair, and Other (MRO) materials

Finished Products

May be a physical or logical unit


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Organizational Relationship

Plant/Storage Location

Storage Location

20 - Quality

Storage Location

10 - Inventory

Plant P001


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Shipping Point

Shipping points are independentorganizational entities within whichprocessing and monitoring of thedeliveries as well as goods issue is carried

out. A delivery is processed by one shipping

point only.


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SAP (Sub)modules in MM (I)1. Purchasing Management

SAP sub-module that involves the acquisition ofgoods and services to support the creation ofgoods and services in the organization

Master data for the purchasing management exists

in the (MM) as well as the (FI) modules It interfaces with the Production Planning (PP), andQuality Management (QM) modules

2. Inventory Management A SAP sub-module that involves goods movement, material

stock and inventory controlling, material documents, & periodprocessing


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SAP Modules using MM (II)

Warehouse management

A SAP module that focuses on managingmaterials location in a warehouse

No connection with its financial module


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Purchasing Organization

Organizational unit is responsible for theprocurement of materials and services.

SAP requires that purchasing organizationsbe assigned at the plant level

A purchasing organization can be assignedto more than one plant

A purchasing organization can be assignedto a company code


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Plant/Purchasing Organization (1)

One plant multiple purchasing organizations

Purchasing

OrganizationP002

Purchasing

OrganizationP001

Plant P001

Organizational Relationships


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Each plant has its own purchasing organization

Purchasing

OrganizationP002

Plant P002

Purchasing

OrganizationP001

Plant P001

Organizational Relationships(Continued)


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One purchasing organization for multiple plants

Plant P002Plant P001

Purchasing

Organization

P001

Organizational Relationships(Continued)


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Organizational Relationships(continued)


One purchasing organization for multiple company codes

Company Code

C002

Company Code

C001

Purchasing

OrganizationP001

Plant

P002Plant

P001


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Purchasing Group

Responsible for specified purchasingactivities

Often used to identify individual buyers

Used for reporting


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Organizational Relationships

Purchasing Organization/Purchasing Group

Purchasing Group

002

Purchasing Group

001

Purchasing

Organization

P001


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Purchasing

OrganizationP001

Company Code

C001

Storage Location

20 - Quality

Storage Location

10 - Inventory

Plant P001

PurchasingGroup

001


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Warehouse Management

Not required for purchasing functionalityof SAP R/3

A separate module in the SAP R/3

environment Many functions and elements can be

performed outside of the module


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Warehouse Management Elements

Receiving, identifying and sorting goods Placing goods into storage bins

Taking inventory

Monitoring and inspecting goods in storage

Preplanning distribution of materials

Picking and accumulating orders

Packaging, loading and shipping goods


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Company C001

Plant P001 Plant P002


Warehouse 1 Warehouse 1

Aisle 1 Aisle 1 Aisle 2Aisle 2 Aisle 3

Rack 1Rack 1 Rack 1

ABC123


Inventory Management & WarehouseManagement Relationships

InventoryManagement

(MM)

Warehouse

Management (WM)

Company Code

Plant

Storage Loc.

Warehouse

Aisle

Storage Rack

Quantity


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PEN, Inc.MM



Fall, 2012


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Pen Inc. Organizational Structures

Plant

(Pxxx)

Client (600)

Chart of

Accounts (Cxxx)

Company

Code (Cxxx)

Fiscal Year

Variant (2012)

Credit Control

Area (Cxxx)

PurchasingOrganization

(Pxxx)

Purchasing

Group (xxx)Shipping

Point

(Sxxx)

Controlling

Area (Cxxx)

SL10 SL20

Cost CenterStandard

Hierarchy

(PENINCxxx)

ADMINxxx

A005 A015 A020A010


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Exercises: (Due Date 8/18/2012)

60. Create Vendor Master Accounting

61. Create Vendor Master Purchasing Record62. Create Vendor Master Record Centrally63. Create Vendor Master Record Centrally64. Create Vendor Master Record Centrally

69. Create material Master for Trading Goods82. Create Vendor Master Record for Landlord83. Create Rent Expense Account84. Create for Invoice Receipt for Rent Expense85. Display and Review G/L Account Balances and

Individual Line Items


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Exercises:

86. Display and Review Vendor Account Balances

and Individual Line Items87. Post Payment to Landlord88. Display and Review G/L and Vendor Account

Balances and Individual Line Items124. Create Shipping Point

201.Create Controlling Area202. Assign Company Code to Controlling Area203. Create Cost Center Standard Hierarchy

211. Maintain Cost Center Standard Hierarchy

egn 5620 mm org structure d-2-1 fall 2012

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