Materials Management (MM) Organizational Structure

As market leader in enterprise application software, SAP helps companies of all sizes and industries run better. Founded in 1972, SAP (which stands for “Systems, Applications and Products in Data Processing”) has a rich history of innovation and growth as a true industry leader. From back office to boardroom, warehouse to storefront, desktop to mobile device, SAP empowers people and organisations to work together more efficiently and use business insight more effectively to stay ahead of the competition, by extending the availability of software across on-premise installations, on-demand deployments and mobile devices.

The Material Management module (MM) is a core component of the SAP software. The functionality within MM is the engine that drives the Supply Chain. In this post, I am going to introduce the Materials Management Organizational Structure.

  • Client: Within one SAP instance, a number of clients could be created. The master data cannot be accessed from outside the client. In SAP we have objects that are used by all the clients in a SAP system called client independent and objects that are used by only one client called client dependent. SAP delivers the software with three clients: 000, 001 and 066. During the implementation, normally we will have one client for development and testing, one client for training and another client for production. Some 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: SAP defines a company and a company code separately. A company can contain one or more company codes, but they must use the same chart of accounts and the same fiscal-year breakdown. The company code will represent legally independent companies. The company field is defined in transaction OX15 and the company code is created in transaction OX02. To maintain the company code address you need to use transaction OBY6. Some facts about the company code:
    1. Balance sheet, profit loss statements require by law are created at company code level.
    2. To create a company code we can easily copy the standard one and then customized it.
  • Plants: A plant it is a location that holds valuated stock or contains service or maintenance facilities. A four-character string defines the plant field -tr. OX10-. Tip: When creating a plant just copy the standard plant which automatically make the entry in the plant table and all others depended tables. The valuation level it is an important configuration step because it specifies the level at which material stock are valuated for the whole client -tr. OX14-. There are two options: plant level or company code level. Once a valuation is determined, it should not be changed. Once a valuation level has been stablished, it is possible to assign a plant to an existing company code -tr. OX18-.
  • Storage Locations: It is a place where stock is physically kept within a plant. There will be always at least one storage location defined for one plant -tr. OX09-. It is the lowest level of location definition and organizational structure within the MM module, but it is not the lowest level in the SAP system, since the Warehouse Management (WM) module provides the opportunity to manage inventory at a bin level (Warehouse → Storage Type → Storage Sections → Storage Bins). It is possible to create storage locations automatically (for each plant where this is needed) when an inward goods movement for a material is performed, but only for normal stock, not special stock -tr. OMB3-.

About Darío Franco
I enjoy reading science books and making photos. Passions: Technology, websites, management, running, MTB, nature, adventure sports and snowboarding. Favourite quote: “Whatever you are, be a good one.” Abraham Lincoln.

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