Material Management Org.

Structures

Organizational Structures
Valuation Level

You define the valuation level by specifying the level at which material stocks are valuated. You
can valuate material stocks at either the company code level or at the plant level. If you want to
use the Production Planning (PP) module or Costing, then you should set the valuation level to
plant. The valuation level is valid for the entire client. Once the valuation level is set, then it
cannot be changed except by a trained SAP consultant, and it requires a data conversion. To see
the valuation setting, following the menu path

Tools Customizing IMG Edit Project

Enterprise Structure Definition Logistics - General Define valuation level

(click clock icon )

You should get the following screen:

Note that the valuation level is already set at the plant level. Also, the choices are "grayed-out,"
which means that they cannot be changed. Since the valuation level is set for the client and all
students are in the same client, it has already been set and cannot be changed via this screen.

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1. Define Plant
The plant usually represents a manufacturing facility, a distribution center or a warehouse,
although it does not have to represent an actual physical facility. Manufacturing Requirements
Planning (MRP), the process of determining what production and purchase orders should be
released and when, occurs at the plant level. In the University Cellular company, there is only
one plant, and it can be defined using the following menu path:

Tools Customizing IMG Edit Project

Enterprise Structure Definition Logistics - General Define, copy, delete, check

plant (click clock icon )

This will bring up the following screen:

Double-click on
Define Plant

Double-click on Define Plant, which will produce the following screen:

Click on New Entries

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Click on the New entries icon ( ), which will produce the following screen:

Enter:
 ##CP for plant
 ## University Cellular Plant
 US for Factory Calendar
Then click on the address icon

The factory calendar defines which days are working days. The entry US is the standard US
factory calendar, which defines Monday through Friday as working days and Saturdays, Sundays
and Public Holidays as non-working days.

Click on the address icon ( ), which will produce the following screen:

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Click Here

This screen is just like the screen for entering company code data. Enter the following
information for the plant:

Title: Company
Name: ## University Cellular Plant
Search Term: ##
Street: Business Court
House Number: 83
Postal Code: 49008

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City: Kalamazoo
Country: US
Region: MI

Next, click on the more fields icon ( )in the address panel:

This will bring up additional fields. Enter Tax Jurisdiction Code MI0000000 (MI followed by
seven zeros):

Enter Tax Jurisdiction Code

MI0000000 here (seven 0's)

Click the checkmark ( ) and then click on the save icon ( ). This will bring up the

address screen again for some reason. Click on the checkmark ( ) again and the data will be

saved. Click on the back icon ( ) and confirm that your plant is now listed:

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Click on the back icon ( ), and then click on the cancel icon for the Choose Activity window
to return to the IMG.

2. Define Storage Locations

A storage location is a subdivision of a plant where materials are managed. It may be a physical
location, or it may just be used as an organizational tool. For the University Cellular Company,
we will create three storage locations:

Sloc Description
100 Raw Materials
200 Production
300 Finished Goods

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Where Sloc is the number assigned to the storage location. By using Sloc numbers 100, 200 and
300, we can add more detailed storage locations in the future and still have a rational numbering
scheme.

To create the storage locations, follow the menu path

Tools Customizing IMG Edit Project

Enterprise Structure Definition Materials Management Maintain storage

location (click clock icon )

This will produce the following screen:

Enter ##CP for plant,

then click on Continue

Enter ##CP for plant and then click on the check mark ( ), which will produce the following
screen:

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Click on the New entries icon ( ), which will allow you to enter the storage
locations:

Enter the three storage

locations here

Click on the save icon ( ), and then on the exit icon ( ) to complete the creation of the
storage locations.

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3. Define Purchasing Organization

The purchasing organization is responsible for all purchasing activities, including requests for
quotations (RFQ) and purchase orders (PO). A purchasing organization can be assigned to
several company codes (e.g. centralized purchasing for General Motors divisions). A purchasing
organization must be assigned to one or more plants. Each purchasing organization has:

• Its own vendor master data and vendor evaluation

• Its own pricing conditions
• Its own external purchasing documents (RFQ, PO, Contract, Scheduling Agreement)

To define a purchasing organization for University Cellular, follow the menu path:

Tools Customizing IMG Edit Project

Enterprise Structure Definition Materials Management Maintain purchasing

organization (click clock icon )

This will produce the following screen:

Click on the New entries icon ( ), which will allow you to create a purchasing
organization for University Cellular:

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Enter purchasing
organization here

Enter:

Purch. organization: ##CR

Purh. org. descr.: ## Purchasing

Click on the save icon ( ) and then on the exit icon ( ) to complete the creation of the
purchasing organization.

4. Create Purchasing Groups

A purchasing group is a buyer or group of buyers who are responsible for a group or category of
items. The purchasing group in SAP provides for reporting functionality. Business Reports in
the Logistics Information System (LIS) can be summarized according to purchasing group.

For University Cellular, two purchasing groups will be defined: ## Components and ##
Packaging.

To define a purchasing group, follow the menu path:

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Tools Customizing IMG Edit Project

Materials Management Purchasing Create purchasing groups (click clock icon

)

which will produce the following screen:

Click on the New entries icon ( ), which will allow you to create purchasing
groups for University Cellular:

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Enter Purchasing Group

Enter the following purchasing group:

Purchasing
Group Description
##C ## Components
##P ## Packaging

Click on the save icon ( ), then on the exit icon ( ) to complete the creation of the
purchasing groups.

Definition and Assignment

Much of configuration involves definition of objects and then assigning these objects to each
other, a process that can be referred to as "Definement and Assignment." With all of the basic
materials management structures defined, it is time to assign them to each other.

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5. Assign Plants to Company Code

Follow the menu path:

Tools Customizing IMG Edit Project

Enterprise Structure Assignment Logistics-General Assign plant to company

code (click clock icon )

And click on New entries icon ( ), which will produce the following screen:

Enter your
company code
##UC and plant
##CP then Save

Click on the back icon ( ), you should be able to see that the assignment has been made. You
may need to scroll down to find your company and plant:

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Assignment of plant to
company code has been made

Click on the save icon ( ), then on the exit icon ( ) to complete the assignment of the
plant to the company code.

6. Assign Purchasing Organization to Company Code

Follow the menu path:

Tools Customizing IMG Edit Project

Enterprise Structure Assignment Materials Management Assign purchasing

organization to company code (click clock icon )

which will produce the following screen:

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Enter your company code

##UC

Click on the save icon ( ), you should be able to see that the assignment has been made

and then on the exit icon ( ) to complete the assignment of the purchasing organization to
the company code.

7. Assign Purchasing Organization to Plants

Follow the menu path:

Tools Customizing IMG Edit Project

Enterprise Structure Assignment Materials Management Assign purchasing

organization to plant (click clock icon )

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And click on New entries icon ( ), which will produce the following screen:

Enter your purchasing organization ##CR and

your plant ##CP

Click on the save icon ( ), then on the back icon ( ), to confirm the assignment of the
purchasing organization to the plant.\

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Your purchase organization has

been assigned to your plant.

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