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org structure

Former Member
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hi all

i m working for a chemical industry

so many units are there fr diff diff prodcuts....

some units are using other unit products as raw material also...

all purchases are through delhi only....

i need to knw hw do i define the plants and on what criteria?

sap mm

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Answers (1)

Former Member
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Defining the organization structure depends on various parameters including business need and some times legal requirements.

While in your case, if the units which you have mentioned are physically apart and are producing products, it is advisable to define them as different plants. It doesn't matter whether they use product of one unit as raw material for another product in another unit. This can be easily addressed through stock transfer process.

As far purchase is concerned, you can define one central purchasing organization which can service multiple plants and multiple company codes.

Hope this clarifies your need for defining the organization structure. But please be aware as a total solution in terms of defining the organization structure should also address any other specific issues which could differ from one organization to other and from one country to another.


Former Member
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hi jagdeesh

thanks for suggestion...

but the strore is centralized here those units are nt having ne specific stores...

and the product which they are selling from diferent units is excisable too....

i understood that i hav to trat them as plants but hw to manage the cncept of storage locations?


Former Member
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It looks like you need to create plant where materials are purchased and stored. Once this is done, you can stock transfer these materials to any of the plants that you will be creating.

In any case there should be a storage location for each of the plants for logistics processes. Hence, you may wish to define one or more storage locations for each of those plants which you will be creating.

As far as excise is concerned, since you will be doing stock transfers from your own plants, you can still comply with all excise requirements including availing of CENTVAT. However, since I am not aware of Indian excise requirements (it is some years back I was working in India), you may still get this point clarified from an expert.

Former Member
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that was really a good explanation

Thanks Jagadeesh!