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Materials Management Materials Management (MM) Organizational (MM) Organizational
StructureStructure
EGN 5620 Enterprise Systems ConfigurationEGN 5620 Enterprise Systems Configuration
Fall, 2015Fall, 2015
MM Organizational Structure MM Organizational Structure
SAP ImplementationSAP Implementation
January 2008January 2008
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MM Organizational Structure MM Organizational Structure Related TopicsRelated Topics
MM Organizational data & structures
Organizational relationships
January 2008January 2008
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Business Process Integration Business Process Integration
FI
MM
SD
Org
Dat
a
Rules
FI
MM
SD
Master D
ata
FI
MM
SD
FI SDMM
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MM Organizational DataMM Organizational Data
MM
Org
Dat
a
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Organizational DataOrganizational Data
A hierarchy • Multi level structure• Organizational units at each level arranged
according to tasks and functions
Static data and rarely changed
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Client
CompanyChart ofAccounts
CompanyCode
Fiscal YearVariant
Credit ControlArea
Organizational Structure
Controlling Area
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SAP Org. StructureSAP Org. Structure
◦Client◦Company◦Chart of accounts◦Company code◦Fiscal year variant◦Credit control area◦Controlling Area
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Client (review)Client (review)Highest hierarchical level in an SAP
environmentA complete database containing all the
tables necessary for creating a fully integrated information system
Master records are created at the client level
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CompanyCompany
Consolidated financial statements are created 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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Chart of AccountsChart of Accounts
A Chart of Accounts contains a complete list of all of the accounts utilized in the General Ledger for a given company
A chart of accounts must be assigned to every company code in order to create the General Ledger for that company
Several company codes can use the same chart of accounts
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Company Code (review)Company Code (review)A legally independent entity Smallest organizational unit for which
accounting can be carried out Business transactions are processed at
this levelAccounts are managed at this levelLegal financial statements, such as the
balance sheet and the income statement, are generated at this level required by US SEC (Securities & Exchange Commission)
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Fiscal Year VariantFiscal Year VariantSpecifies the accounting fiscal year
for reporting purposesSpecial periods are created to aid in the
quarterly or year-end adjusting process completed prior to preparing financial statements
A single fiscal year variant is assigned to each company code
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Credit Control AreaCredit Control Area
An organizational unit or area of responsibility created to control customer credit limits
A company code is assigned to one and only one credit control area
Multiple company codes can be assigned to one credit control area
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Controlling AreaControlling Area
An organizational unit that serves to broadly define a managerial accounting and reporting system
Each company code can be assigned to one and only one controlling area
Controlling areas can consist of multiple company codes thereby enabling cross-company allocations
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Controlling Area (continued)Controlling Area (continued)
ModulesSDMMHRFI
Cost andRevenue
Accounting
ProfitCenter
Accounting
Overhead CostAccounting
ProfitabilityAnalysis
Product CostControlling
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Cost Center Standard HierarchyCost Center Standard HierarchyAn organizational unit that serves to refine
and focus a managerial accounting and reporting sub-system
Each standard hierarchy is attached to the appropriate Controlling Area
All cost centers (groups) of interest must be entered in the Standard Hierarchy
A mapping of responsibility to individual managers and cost centers facilitate:
Expense collection Expense tracking Expense reporting
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Cost Center GroupsCost Center Groups
Logical groupings of cost centers in the standard hierarchy to establish accountability and responsibility for one or more cost centers
Facilitates reporting, planning, and allocating costs at a more aggregated level
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Cost Centers DesignationCost Centers DesignationUnits that are distinguished, for example,
by area of responsibility, location, or type of activity◦Copy center◦Security department◦Maintenance department
One or more value-added activities are performed within each cost center
Can be permanent or temporary (e.g., internal order)
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Profit CentersProfit Centersprimary revenue collection objects in
the systemposted to all balance sheet postingscan be attributed by cost centersassigned to a single controlling area
and a single company codegrouped together into a hierarchy to
represent the organization structure for analysis of income versus expenditure for different parts of a organization
Some organizations don’t have profit centers
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SAP MM Organizational StructureSAP MM Organizational Structure
PlantValuation AreaStorage LocationsShipping PointPurchasing OrganizationsPurchasing Groups
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PlantPlant
Lowest valuation areaOrganizational level where Material
Requirements (MRP) runsGenerally used to describe a production
site, a distribution center or centralized warehouse
May be a physical or logical unit
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Valuation AreaValuation Area
Valuation area determines at which level a material is valuated (inventory value is established)
SAP ERP allows valuation at the company code or plant level, but recommends valuation area be set at the plant level
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Storage LocationStorage LocationSubdivision of a plant Where materials are managed (inventory
management)◦Raw Materials◦Finished Products◦Semi-finished products◦Trading materials◦Miscellaneous materials◦Maintenance, Repair, and Other (MRO) materials
May be a physical or logical unit
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Organizational Relationship Organizational Relationship
Plant/Storage Location
Storage Location20 - Quality
Storage Location10 - Inventory
Plant P001
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Shipping PointShipping Point
Shipping points are independent organizational entities within which processing and monitoring of the deliveries 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)SAP (Sub)modules in MM (I)1. Purchasing Management
SAP sub-module that involves the acquisition of goods and services to support the creation of goods 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), and Quality Management (QM) modules
2. Inventory Management A SAP sub-module that involves goods movement,
material stock and inventory controlling, material documents, & period processing
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Purchasing OrganizationPurchasing OrganizationAn organizational unit
• responsible for procuring materials or services for one or more plants and for negotiating general conditions of purchase with vendors.
• Legal responsible for all external purchase transactions.
A purchasing organization can be assigned to more than one company code
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Organizational StructureOrganizational Structure
Purchasing Organization – P001
Company CodeC001
Storage Location20 - Quality
Storage Location10 - Inventory
Plant P001
Purchasing GroupN##
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Plant/Purchasing Organization (1)
One company code/plant – multiple purchasing organizations
Purchasing Organization – P002
Purchasing Organization – P001
Plant P001
Organizational Relationships Organizational Relationships
Company code C001
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Plant/Purchasing Organization (2)
Each plant has its own purchasing organization
Purchasing Organization – P002
Plant P002
Purchasing Organization – P001
Plant P001
Organizational Relationships Organizational Relationships (Continued)(Continued)
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Plant/Purchasing Organization (3)
One purchasing organization for multiple plants
Plant – P002Plant – P001
Purchasing Organization – P001
Organizational Relationships Organizational Relationships (Continued)(Continued)
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Organizational RelationshipsOrganizational Relationships(continued) (continued)
Plant/Purchasing Organization (4)
One purchasing organization for multiple company codes
Company CodeC002
Company CodeC001
Purchasing Organization – P001
Plant – P002Plant – P001
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Purchasing GroupPurchasing Group
Responsible for specified purchasing activities
Often used to identify individual buyersUsed for reporting
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Organizational Relationships Organizational Relationships
Purchasing Organization/Purchasing Group
Purchasing Group002
Purchasing Group001
Purchasing Organization – P001
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SAP Modules using MMSAP Modules using MMWarehouse management (WM)
◦A SAP module that focuses on managing materials location in a warehouse
◦No connection with its financial module
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Warehouse ManagementWarehouse Management
WM is not required for purchasing functionality of SAP ERP
Many functions and elements can be performed outside of the module
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Warehouse Management ElementsWarehouse Management Elements
Receiving, identifying and sorting goodsPlacing goods into storage binsTaking inventoryMonitoring and inspecting goods in storagePreplanning distribution of materialsPicking and accumulating ordersPackaging, loading and shipping goods
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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
Storage Loc. 40Storage Loc. 20
Inventory Management & Warehouse Inventory Management & Warehouse Management RelationshipsManagement Relationships
Inventory Management(MM)
Warehouse Management (WM)
Company Code
Plant
Storage Loc.
Warehouse
Aisle
Storage Rack
Quantity
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MM RulesMM Rules
Rules
MM
MM
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RulesRules
Rules define the parameters for Master Data and Transactions
Rules determine functionality for Master Data and Transactions
Rules are relatively fixedRules change, when corporate policy
changes
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Rules in Material ManagementRules in Material Management
• Fiscal Periods• Account Groups• Material Types• Plant Parameters• Purc./Rec./Inv.
Tolerances • Automatic Account
Assignment• Reservations• Material Group• Loading Group
Global Bike, Inc. Global Bike, Inc. MM MM
Organizational StructureOrganizational Structure
GBI. Organizational Structures GBI. Organizational Structures
Plant (DL## Plant (DL## /MI##/SD## _)/MI##/SD## _)
Client (330) Client (330)
Chart of Chart of Accounts (GL##)Accounts (GL##)
CompanyCompanyCode (US##)Code (US##)
Fiscal YearFiscal YearVariant (K1)Variant (K1)
Credit ControlCredit ControlArea (GL##)Area (GL##)
PurchasingPurchasingOrganization Organization
(US##)(US##)
Purchasing Purchasing Group (N##)Group (N##)
Controlling Controlling Area (NA##)Area (NA##)
RM##RM## FG##FG##
Cost Center Standard Cost Center Standard Hierarchy (NA##)Hierarchy (NA##)
NAEX10##
Work center Work center (ASSY/INSP/(ASSY/INSP/PACK/MANT/PACK/MANT/
SERV)SERV)
Shipping Point (DL##/MI##/SD##)Shipping Point (DL##/MI##/SD##)
SF##SF## TG##TG##
MI##MI##
N10##N10## N10##N10## N10##N10## N10##N10## N10##N10##
N11##N11## N12##N12##
NAIS10##NAEX20##
Cost centersCost centers
Cost center Cost center groupsgroups
Exercises: Exercises: (Due Date 9/5/2015)(Due Date 9/5/2015)
1. Define account group2. Copy document number range3. Set up company for payment transaction4. Maintain number ranges for controlling5. Define tolerance groups for employees6. Define retained earnings account7. Copy general ledger accounts8. Create standard hierarchy9.Maintain purchasing organization10.Assign purchasing organization11. Assign purchasing organization to plants12.Create purchasing group13.Group together valuation areas