What is purchasing organization in SAP (MM-PUR - Purchasing)?

SAP Term: purchasing organization

• Component: MM-PUR

• Component Name: Purchasing

• Description: An organizational unit in Logistics, subdividing an enterprise according to the requirements of . A purchasing organization procures materials and services, negotiates conditions of purchase with vendors, and is responsible for such transactions. You specify the form of procurement by assigning purchasing organizations to company codes and plants. Possible forms are: Enterprise-wide: One purchasing organization procures for all the company codes of a client - that is, for all companies belonging to a corporate group Company-specific: One purchasing organization procures for one company code Plant-specific: One purchasing organization procures for one plant Mixed forms are possible. These are replicated in the system using reference purchasing organizations. A purchasing organization can access and use the most favorable conditions and centrally agreed contracts of the reference purchasing organization assigned to it.

Smart SAP Assistant

• Key Concepts: 
  A purchasing organization is a component of the Materials Management (MM) module in SAP. It is a legal entity within an enterprise that is responsible for procuring goods and services from external vendors. It is responsible for the entire purchasing process, from creating purchase orders to receiving goods and services. 
  
  How to use it: 
  The purchasing organization is used to define the organizational structure of the purchasing process. It can be used to define the organizational units responsible for different tasks, such as creating purchase orders, receiving goods and services, and managing vendor relationships. It can also be used to define the rules and regulations governing the purchasing process. 
  
  Tips & Tricks: 
  When setting up a purchasing organization in SAP, it is important to ensure that all relevant information is included. This includes the organizational structure, rules and regulations, and any other relevant information that may be necessary for the successful completion of the purchasing process. 
  
  Related Information: 
  The purchasing organization is closely related to other components of the Materials Management module, such as vendor master data, material master data, and pricing conditions. It is also related to other modules in SAP, such as Financial Accounting (FI) and Controlling (CO).