How to create Purchasing organisation in MM Module

Purchasing organisation can be defined in sap at enterprise level or company code level. It can also be defined at plant level. It’s a decision which the business process owner should take.

If the organisation has a central purchasing unit which manages and coordinates with other companies for purchasing related activities then it can be defined at the enterprise level.

If you want to centralise it at the company code level then define purchasing organisation at company code level. Similar way you can also define at plant level if you have a larger business and such types of management at plant level is required. 

You can define it by using below path;

SPRO > IMG > Definition > Materials Management > Material Purchasing Organisation

Enter a name and description to it and press save button.

Assign to company code

It can be assigned to your company code by using transaction code OX01 or below path;

SPRO > IMG > Enterprise structure > Assignments > Material Management > Assign Purchasing organisation to company code

Assign to plant

If you have a bigger company then assign it at the plant level. To create it at plant level use transaction code OX17 or below path;

SPRO > IMG > Enterprise structure > Assignment > Material Management > Assign Purchasing organisation to plant

As you will be assigning it to a plant, you must define your plant structure in sap prior to this assignment.

Reference purchasing organisation

Reference purchasing organisation can be defined as one of the strategic department. This department monitor the purchase activities and after analysis try to negotiate the best price with vendor for material or services that they render. So they need price sensitive information related to the entire PO Orgs created.

You can assign your purchasing organisation to this reference PO Org by using following path;

SPRO > Enterprise structure > Assignment > Material Management > Assign purchasing organisation to reference purchasing organisation

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