Organizational levels in the SAP procurement process

The organizational level that you see above is the one related to Materials Management. No matter where you go under the MM Processes, you would have to go through at least 1 of the above.

Client
The Client is the highest hierarchical level unit within a SAP system. We can say that it represents an Enterprise. We can also say that within this Enterprise, there might be more than 1 companies, which leads us to the next level, Company Code. It is represented in the system by a 3-digit numeric key.

Company Code

A Company Code is the organizational unit that allows you to structure your enterprise from a financial accounting perspective. It represents an independent unit producing its very own balance sheet, e.g a company within an Enterprise (Client). It is represented in the system by a 4-character alphanumeric key. This includes the entry of all events that require posting to the accounts and the creation of a complete audit trail for balance sheets and profit and loss statements. A company code represents an independent unit producing its own balance sheet, for example, a company within a corporate group (client).

Plant
The plant is an organizational unit where Operations are concerned. When I say operations, I mean Production, Procurement, Materials Planning and Maintenance locations. It is represented in the system by a 4-character alphanumeric key.

Storage location

The storage location is an organizational unit where we differentiate stocks of materials within a warehouse/plant. If further breakdown is required, we can use Storage Bins. It is represented in the system by a 4-character alphanumeric key.

Purchasing Group
Purchasing Group is a key to identify a buyer or a group of buyers responsible for a particular type of purchase. It is however not related to other units in the company structure.

Purchasing Organization

A Purchasing Organization is a unit which is responsible for the procurement of services/materials, and condition negotiations with vendors.