valuation area : Valuation area means at which level material is valuated .
Some cool facts about valuation area :
1 . There are two valuation areas at which a material can be valuated
• At company code level
• At plant level
2 . If valuation is at plant level we can valuate a material at different price at different plants.
3 . When we valuate a material at company code level the price remains same for all the plants in that company code.
4 . if we are using Production planning or production cost accounting components or if our system is a Retail system then valuation in plant level is mandatory .
5. Do not play with the valuation level . Once it is set at one level it is very difficult to change it .
Monday, May 18, 2009
Sunday, May 17, 2009
SAP Organizational Structure
Business Scenarios – Main Elements
Business Scenario: Business-related grouping of business processes localized in a specific organizational area that share some similar goals in an enterprise, such as purchasing, services, balance sheet preparation, production, personnel administration, and so on.
Organizational Unit: Organizational grouping of enterprise areas which, for legal reasons or for other specific business-related reasons or purposes, are grouped together. Organizational units include legal company entities, sales offices, and profit centers.
Master Data: Data which is used long-term in the R/3 System for several business processes.
Examples include customers, materials, and vendors.
Transactions: Application programs which execute business processes in the R/3 System such as creating a customer order, posting an incoming payment, or approving a leave request.
Document: A data record that is generated when a transaction is carried out.
Reports: Program which reads certain data elements and displays them in a list.
Organization levels in Procurement :
Client
Definition :
1. Client is a commercial , organizational unit within the R/3 system , with its own data ,masters records , and set of tables.
2. From a business perspective , the client forms a corporate group .
Some cool facts about the client :
1. Highest hierarchical level in SAP
2. All areas of an organization that are to be integrated into the SAP R/3 production system should be included under one client
3. There is a common set of rules in one client
• Common tables
• Common master files
• Common databases
4. Standardized Data Across the client
• A vendor number and name is common across the client
• A customer is common across the client
• A general ledger number and description is common across the client
• A material number and description is common across the client
Company Code
Definition : It’s the smallest organizational unit having independent accounting department within external accounting.
Some cool facts about the company code :
1. Balance sheet ,Profit loss statement s require by law are created at company code level.
2. We can create several company codes in one client in order to manage various separate legal entities.
3. To create a company code we can easily copy the standard one and then customized it.
Plant
Definition :
1. It is a logistic organizational unit that divides the enterprise from the perspective of production , procurement , plant maintenance and material planning.
2. It’s a manufacturing facility or branch within a company code.
Some cool facts about a plant :
1. When creating a plant just copy the standard plant which automatically make the entry in the plant table and all others depended tables .
Storage Location
Definition : It’s the organizational unit which allows the differentiation of material stocks within a plant
Some cool facts about a storage location:
1. Inventory management at quantity basis in carried out at Storage location level in a plant.
2. A storage location can’t exist without a plant.
3. One storage location can be assigned to only one plant.
So is it the end of the basic structure ?
The answer is nooooo . What do you do with a Television without cable connection? How do you see the channels? Till now the television part is done. Now let’s see what the cable part of it is. The cable which links the organizational units with the external word is Purchasing organization with the help of Purchasing group.
Purchase Organization :
Definition: It is an organizational level which negotiates conditions of purchase with vendors for one or more plants
Some cool facts about a Purchasing Organization:
1. It is responsible for company’s purchase requirement.
2. There are three types of Purchasing Organization.
• Plant Specific : One Purchasing Organization is responsible for only one Plant.
• Company Code specific : One Purchasing organization is responsible for whole the company as well as its all plants .
• Cross-company code specific : One purchasing organization is responsible for one or more company codes and all theirs plants.
3. One purchasing organization can be assigned to one or more plants.
4. One plant can be assign to one or more Purchasing organizations.
Purchasing Group :
Definition : It’s the key for buyer or group of buyers responsible for certain purchasing activities .
Some cool facts about Purchasing Group :
1. We do not assign a purchasing group to any purchasing organization .It enables us to use any purchasing group for any purchasing organization .
Business Scenario: Business-related grouping of business processes localized in a specific organizational area that share some similar goals in an enterprise, such as purchasing, services, balance sheet preparation, production, personnel administration, and so on.
Organizational Unit: Organizational grouping of enterprise areas which, for legal reasons or for other specific business-related reasons or purposes, are grouped together. Organizational units include legal company entities, sales offices, and profit centers.
Master Data: Data which is used long-term in the R/3 System for several business processes.
Examples include customers, materials, and vendors.
Transactions: Application programs which execute business processes in the R/3 System such as creating a customer order, posting an incoming payment, or approving a leave request.
Document: A data record that is generated when a transaction is carried out.
Reports: Program which reads certain data elements and displays them in a list.
Organization levels in Procurement :
Client Definition :
1. Client is a commercial , organizational unit within the R/3 system , with its own data ,masters records , and set of tables.
2. From a business perspective , the client forms a corporate group .
Some cool facts about the client :
1. Highest hierarchical level in SAP
2. All areas of an organization that are to be integrated into the SAP R/3 production system should be included under one client
3. There is a common set of rules in one client
• Common tables
• Common master files
• Common databases
4. Standardized Data Across the client
• A vendor number and name is common across the client
• A customer is common across the client
• A general ledger number and description is common across the client
• A material number and description is common across the client
Company Code
Definition : It’s the smallest organizational unit having independent accounting department within external accounting.
Some cool facts about the company code :
1. Balance sheet ,Profit loss statement s require by law are created at company code level.
2. We can create several company codes in one client in order to manage various separate legal entities.
3. To create a company code we can easily copy the standard one and then customized it.
Plant
Definition :
1. It is a logistic organizational unit that divides the enterprise from the perspective of production , procurement , plant maintenance and material planning.
2. It’s a manufacturing facility or branch within a company code.
Some cool facts about a plant :
1. When creating a plant just copy the standard plant which automatically make the entry in the plant table and all others depended tables .
Storage Location
Definition : It’s the organizational unit which allows the differentiation of material stocks within a plant
Some cool facts about a storage location:
1. Inventory management at quantity basis in carried out at Storage location level in a plant.
2. A storage location can’t exist without a plant.
3. One storage location can be assigned to only one plant.
So is it the end of the basic structure ?
The answer is nooooo . What do you do with a Television without cable connection? How do you see the channels? Till now the television part is done. Now let’s see what the cable part of it is. The cable which links the organizational units with the external word is Purchasing organization with the help of Purchasing group.
Purchase Organization :
Definition: It is an organizational level which negotiates conditions of purchase with vendors for one or more plants
Some cool facts about a Purchasing Organization:
1. It is responsible for company’s purchase requirement.
2. There are three types of Purchasing Organization.
• Plant Specific : One Purchasing Organization is responsible for only one Plant.
• Company Code specific : One Purchasing organization is responsible for whole the company as well as its all plants .
• Cross-company code specific : One purchasing organization is responsible for one or more company codes and all theirs plants.
3. One purchasing organization can be assigned to one or more plants.
4. One plant can be assign to one or more Purchasing organizations.
Purchasing Group :
Definition : It’s the key for buyer or group of buyers responsible for certain purchasing activities .
Some cool facts about Purchasing Group :
1. We do not assign a purchasing group to any purchasing organization .It enables us to use any purchasing group for any purchasing organization .
Topic One : SAP Integration
In SAP , Integration of every module is very important . As all the modules are integrated any changes in one module may replicate to another module. So it is very important to know from where your module is integrated to other modules .
In case of material management it is mainly connected to other modules through MRP except Finance .
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