SAP Organization Structure

SAP ORGANIZATION STRUCTURE

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SAP ORGANIZATION STRUCTURE
SAP Hierarchy, or Organizational Structure, is the fundamental functional
architecture within the SAP system. It must be defined in order to use the SAP.
Ø Enterprise Structure.
o Company Code.
o Sales Organization.
o Distribution Channel.
o Division.
Ø Sales Area.
Ø Sales Office
Ø Sales Group
Ø Shipping.
Ø Shipping Point .
Ø Plant



SAP ENTERPRISE STRUCTURE
There are various SAP organizational units that can be mapped to
business structure based on the real world business requirements
such as:

o
o
o
o
o

Company Code
Plant
Storage Location
Sales Organization
Distribution Channel etc.



SAP ENTERPRISE STRUCTURE



COMPANY CODE
Smallest organizational unit of external
accounting for which a complete, selfcontained set of accounts can be created.
This includes the entry of all transactions
that must be posted and the creation of all
items for legal individual financial
statements, such as the balance sheet and
the profit and loss statement.

Function of Sales Organization,
o A legal entity and independent accounting unit .
o A company code level we create:
o Balance Sheets required by law.
o Profit and Loss statement.

o Highest organization entity for SAP FI.



SALES ORGANIZATION
The sales organization represents the selling
unit in the legal sense. It is responsible for
example for product liability and other rights
of recourse; customer deliveries; business
partner contacts; and direct mailing
campaigns. It also helps us to offset business
operations internally.

Function of Sales Organization,
• Distributing goods and services.
• Negotiating sales conditions.
• Product liability and rights of recourse.



SALES DISTRIBUTION CHANNEL
The distribution channel represents the channel
through which salable materials or services reach
customers. Typical distribution channels include
wholesale, retail and direct sales.

Function of Distribution Channel,
•Through which materials reach the customer.
• Represents the distribution of goods and/or services to customer.
• Ex: Whole sale trade, retail trade, internet trade and so on.



SALES DIVISION
In the SAP System you can define a divisionspecific sales organization. Product groups, i.e.
divisions, can be defined for a wide-ranging
spectrum of products.

Function of Distribution Channel:
•Represents a product line, Ex: Motorcycles, Spare parts, Services and so on.



SAP SALES AREA
SD is organized according to sales
organization, distribution channel and
division. A combination of these three
organizational units forms the sales area.

Function of Sales Area:
•Combination of sales organization, distribution channel, and division.
•Defines the distribution channel, that a sales organization uses to sell
products of a certain division.



SAP SALES OFFICE
Geographical aspects of the organization in
business development and sales are defined using
the term sales office. A sales office can be
considered as a subsidiary. A sales office establishes
contact between the firm and the regional market.

Function of Sales Office:
•They can be used for reporting purposes. Sales offices are optional.



SAP GROUP
The staff of a sales office may be subdivided into
sales groups. For example, sales groups can be
defined for individual divisions.

Function of Sales Group:
•They can be used for reporting purposes.



SAP SHIPPING POINT
Shipping points, are responsible for scheduling
and processing deliveries to customers, as well
as replenishment deliveries to our own
warehouses.

Function of Shipping Point:
•Shipping is an integrated module of SD processing.
•The shipping point is the highest-level organizational unit of shipping, that
controls the shipping activities.
•Each outbound delivery is processed by exactly one shipping point.



SAP PLANT
A plant can either be a place of production or a
single storage location, or a combination of closely
situated storage locations where stock is kept.
Every plant is assigned to a company code. This
ensures that stocks and stock values can be
managed separately in each company.



SAP INTEGRATION LINKS
The plants allowed for sales are determined for
each sales organization according to the
distribution channel, so that a sales organization
can sell goods from several plants. A plant can be
assigned to different sales organizations. All of
these sales organizations can sell from that plant.
We can differentiate further between the plants
belonging to a sales organization from the sales
view using the distribution channel. For certain
plants within a sales organization, the distribution
channel "sales from plant" is allowed, but not for
others.



SAP INTEGRATION LINKS
By assigning sales organizations and
plants we create a link between
company
codes
and
sales
organizations. A plant, though always
linked to one company code, can be
assigned
to
different
sales
organizations. Within a company code
several sales organizations can be
active. Business transactions can also
be carried out between different
company codes (for example, during
inter-company sales processing).



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This eBook contain best practice configuration, user
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SAP Organization Structure

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