Question Re: Different plant codes in Enterprise Resource Planning Q&A

Different plant codes

Former Member — Fri, 13 Sep 2013 06:44:19 GMT

Hi,

Our one of the client has maintained different plant codes which are in same geographical area. Also they have maintain different plants code which are 6 kilometer away from each other.

So kindly confirm what would be the impact if i club all this plant to one plant and give different storage location to respectively divisions.

Also put some light that why clients go to different plant codes if the location is in same geographical region.

Regards,

Re: Different plant codes

Former Member — Fri, 13 Sep 2013 07:11:27 GMT

Hi,

Diff plants codes are used in order to meet the requirement where a company have more plants at different locations (regions like country, state or area) in order to post correct tax data or accounting data when there is movement of stock from plants, stock/material valuation at plant level, etc.

Thanks and Regards,

Noorul.

Re: Different plant codes

rajneesh_saxena — Fri, 13 Sep 2013 08:33:06 GMT

Dear Sun

May be your client requirement to transfer the material from one plant to other plant for some obvious reasons like they may be having limited facility of manufacturing upto semi finished level and on other plant they may be finishing it. There may be several reasons for having different plants. If you club all the plants in to one you may not be able to achieve above goals.

So have a deep look of the business and then decide to go for one plant.

Regards

Rajneesh Saxena

Re: Different plant codes

Former Member — Fri, 13 Sep 2013 14:21:27 GMT

Dear Sun Riser,

It is common to have multiple plant codes which are physically closer to each other, or often located within a single campus.

The Actual business design, processes, and requirements drive these organizational settings.

You may also recall that the earlier versions of SAP did not support the STO functionality between storage locations within a plant; and the newer versions do.

Assuming that your client has their SAP system since long, they might have set up the organization structure with this limitation earlier; and continue to operate with that design even with the newer version for simple reason of continuity and not planning to go for re-implementation of the whole system for this functionality, unless they see significant benefits.

There could be various reasons. Few examples below -

a. Organizational Reporting requirements at different plant levels

b. Product Costing requirements at Plant levels

c. Internal Profit center accounting requirements

d. Buyer-Seller relationships between plants

e. Earlier SAP versions did not support internal STOs between Storage locations within a plant

The change that you mention is a significant Orgnizational level change requiring probably a mini-project ; and hence, you the business may wish to consider the investments required vs the real benefits expected; before actually changing them.

Regards,

Senthil

Re: Different plant codes

former_member42743 — Fri, 13 Sep 2013 15:18:48 GMT

6 km is quite a distance. If you transport materials between these two plants, and you travel on public roads, in the US at least you need all the same paperwork as if you are shipping the material to a customer. Setting up two "close" plants storage locations would require development around how to provide those papers for storage loc to storage loc transfer.

In purchasing you'd have to designate unloading points somehow in your purchase orders to tell vendors where to deliver to. Storage locations typically don't have their own addresses.

At 6 km's apart do they have their own separate labs? You'd have to do a bit of extra work to make sure each lab knows what inspections are for them. There might also be security issues involved of not allowing certain users to work on certain lots.

What at the FI impacts? Are both plants under the same budgets and reporting structures? Do they share cost centers?

In MRP do they share planners? How would you plan demand for a storage location? Is that a concern?

There are a ton of issues to be looked at and every module of SAP would have an opinion on this as every module will be impacted differently. It might be fine to group them all together as one plant and use storage locations. It's probably not however. It all depends though on the business and their requirements.