Demystifying the Organization Structure in SAP PP

SAP Production Planning (PP) is a core module any manufacturing company uses. But have you ever wondered how SAP PP structures your organization for optimal production planning? This blog dives into the key elements that define the organization structure within SAP PP.

The Pillars of Organization: Plants and Storage Locations

While SAP doesn’t define a traditional organizational chart within PP, it focuses on two crucial elements: Plants and Storage Locations. These form the foundation for managing your production data and processes.

• Plants: Think of plants as individual production facilities or logical production units. A unique code identifies each plant and is the central point for planning, production execution, and material movement within SAP PP.
• Storage Locations are physical areas within a plant where raw materials, work-in-progress (WIP), and finished goods are stored. They are crucial for managing stock levels and ensuring smooth production flow.

Why is this Structure Important?

The organization structure in SAP PP plays a vital role in various functionalities:

• Master Data Management: Production-related master data, such as bills of materials (BOMs) and routings, are created and assigned to specific plants.
• Production Planning: Material Requirement Planning (MRP) is run at the plant level, ensuring all necessary materials are available for production.
• Production Execution: Production orders are created and managed for specific plants, including production confirmations that track progress.
• Inventory Management: Goods movements (receipt and issue) are linked to plants and storage locations, providing real-time stock visibility.

Beyond Plants and Storage Locations

While plants and storage locations are central, SAP PP integrates with other modules that contribute to the overall organization structure:

• Company Code: Each company within your organization is represented by a company code in SAP. This code is linked to the plants it operates.
• Client: The highest level in the SAP structure represents your entire organization.

Conclusion:

Understanding the organization structure in SAP PP is essential for effective production planning and execution. By leveraging plants, storage locations, and their integration with other modules, you can optimize your manufacturing processes and gain valuable insights into your production environment.