Last Updated on August 17, 2022 by admin

Purchasing Organization in SAP S4 HANA

Purchasing Organization is one of the important organizational units within logistics that deals with all the procurement activities. Purchasing organization is responsible to procure materials, and services and negotiating with the vendors.

  • You can assign one or more purchase organizations to one company code.
  • The relationship between purchasing organization and plant can m;n relationship, which means one purchasing organization can be assigned to many plants or one plant can be assigned to many purchase organizations.

Types of Purchasing Organizations

Different types of purchasing organizations are used at the plant level, company level, and enterprise level.

  1. Purchasing at the company level
  2. Purchasing at the enterprise level
  3. Purchasing at the plant level

Real-Time Scenario: Based on the client’s requirements, purchasing organizations are created in the SAP system. One purchase organization can be used across all company codes or create one purchase organization for each company code.

How to define Purchasing Organization in SAP S/4Hana

You can define purchasing organization in SAP S/4Hana MM by using the following configuration steps

  • IMG Menu Path: SPRO > IMG > Enterprise Structure > Definition> Materials Management > Maintain Purchasing Organization.
  • Transaction Code: OX08

Step 1: From the SAP Easy Access screen of the S/4Hana system, enter transaction code “OX08” and press enter to continue.

OX08 transaction code in SAP Hana

Step 2: On the change view purchasing organization overview S/4Hana screen, click on new entries to create a new purchasing organization in SAP.

Purchasing organization new entries in SAP S4Hana

Step 3: On new entries of Purchasing organization screen, update the following details.

  • Purchasing organization: Enter the 4 characters that define the purchasing organization in the SAP S/4Hana system.
  • Purch. org. descr. : – Enter the description for the newly created purchasing organization in SAP.

Define Purchasing Organization in SAP S4Hana

After maintaining the required details, click on the save icon and save the newly created purchase organization in the SAP S/4Hana system.

After the configuration of the purchase organization, the next configuration step is the assignment of purchasing organization to the plant.