Purchase organization

[Former Member]

Hye there

I have a doubt?

What is the difference between

Reference Purchasing Organization,

Centralized Purchasing Organization,

Standard Purchasing Organization

Where are they located in organization structure and what do they control

[Former Member]

Hi Rajesh,

Reference purchase oragniation is A purchasing organization whose conditions or contracts other purchasing organizations linked to it may access and use.

A reference purchasing organization can make especially favorable conditions or contracts available to other purchasing organizations.

You assign Purchasing oragnisations to Reference Purchase organisation.

Centrialised Purchase org means with just one purchasing organization in the org structure, which you can use for all the activities

If several purchasing organizations procure for a certain plant, you can define one of them as the standard purchasing organization for the transactions "pipeline procurement", "consignment" and "stock transfers".

Standard purchasing organisation is assigned at plant level.

Thanks & Regards

Kishore

[Former Member]

reference purchasing organization

Simply if contract is made with this Purchase org withs is decleared as Ref pur org then other purchase org can release PO with reference to the contract made by Ref pur org

Example

The reference purchasing organization RORG, which belongs to head office in Atlanta, has negotiated a comprehensive contract for the material Steel bolt 01 with favorable conditions with vendor Smith Corp.

The purchasing organization EORG, responsible for procurement in the Houston and Austin plants, wants to issue release orders for the material Steel bolt 01 against this contract. Purchasing organization EORG procures other consumable materials from regional suppliers.

Prerequisites:

Before the purchasing organization EORG can issue release orders against the above contract, the following settings and data must have been maintained:

Maintaining Customizing Settings

• Both purchasing organizations are maintained in Customizing for the Enterprise Structure under Definition  Materials Management  Maintain Purchasing Organization.

• The reference purchasing organization RORG can be maintained with or without a company code and plant(s).

• The purchasing organization EORG is assigned to company code 1000 and the two plants.

• Purchasing organization RORG is maintained as the reference purchasing organization for the purchasing organization EORG in Customizing for the Enterprise Structure ( Assignment  Materials Management  Assign Purch. Organization to Reference Purch. Organization).

Entering Application and Master Data

• The vendor Smith Corp. is maintained for both purchasing organizations.

• The material Steel bolt 01 is maintained for the plants Houston and Austin.

• A centrally agreed contract has been created without a plant by the reference purchasing organization RORG.

Process Flow

1. An employee belonging to the purchasing organization EORG creates a purchase requisition for the plant in Houston.

2. The purchasing department processes the requisition and carries out a source determination procedure.

3. The contract of the reference purchasing organization is determined as a valid source.

Reward if u get the concept corect

[Former Member]

Hi Rajesh

If more than one Porg serves for a plant, one will be identifed as standard Porg (assigned to plant). This Porg is used for performing transactions stock transports, conignment, pipe line etc.

In addition to dedicated Porg for individual plants, one common Porg serves for procurement of common materials by issue of central contracts, such cases, this is regarded as referece Porg. Contract is issued by ref Porg and release orders will be generated at individual plants.

There is no centralized Porg but by virtue of functionality, the ref Porg can be assumed as centralzed Porg.

You can see detailed documentation w.r.t. Porgs in the respective node in IMG--> org structure --> assignments.

warm regards

sairam akundi

[Former Member]

Hi

check following notes by SAP

rom the Materials Management and Purchasing view, the purchasing organization is responsible for all purchasing activities (including the processing of requests for quotations and purchase orders, for example).

The purchasing organization is integrated within the organizational structure as follows:

A purchasing organization can be assigned to several company codes.

(= Corporate-group-wide purchasing).

A purchasing organization can be assigned to one company code.

(= Company-specific purchasing).

A purchasing organization can also exist without being assigned to a company code.

Since each plant must be assigned to a company code, the latter can be determined via the plant at the time of each procurement transaction even if the procuring purchasing organization has not been assigned to a company code.

A purchasing organization must be assigned to one or more plants.

(= Plant-specific purchasing).

A purchasing organization can be linked to one or more other purchasing organizations.

(= reference purchasing organization)

For more on this topic, refer toAssign Purchasing Organization to Reference Purchasing Organization.

A purchasing organization can be divided into several purchasing groups that are responsible for different operational areas.

Each purchasing organization has its own info records and conditions for pricing.

Each purchasing organization has its own vendor master data.

Each purchasing organization evaluates its own vendors using MM Vendor Evaluation.

Authorizations for processing purchasing transactions can be assigned to each purchasing organization.

All items of an external purchasing document, that is, request for quotation, purchase order, contract, or scheduling agreement, belong to a purchasing organization.

The purchasing organization is the highest level of aggregation (after the organizational unit "client") for purchasing statistics.

The purchasing organization serves as the selection criterion for lists of all purchasing documents.

Possible organizational forms

You can organize your purchasing function in the following ways:

Corporate-group-wide purchasing

Company-specific purchasing

Plant-specific purchasing

All of these forms can co-exist within a single client.

Corporate-group-wide purchasing:

A purchasing organization is responsible for the purchasing activities of different company codes.

In this case, you do not assign a company code to the purchasing organization, but specify the company code concerned for each individual purchasing transaction. You assign plants from different company codes to the purchasing organization.

Company-specific purchasing:

A purchasing organization is responsible for the purchasing activities of just one company code.

In this case, you assign a company code to the purchasing organization. The purchasing organization may procure only for this company code. You assign only plants of the company code concerned to the purchasing organization.

Plant-specific purchasing:

A purchasing organization is responsible for the purchasing activities of one plant.

In this case, you assign the plant and the company code of the plant to the purchasing organization. The purchasing organization may procure for this plant only.

Note

If you wish to work with a mixture of the above organizational forms, the reference purchasing organization is of significance to you.

It is possible to allow one purchasing organization to access the contracts and conditions of another - a so-called reference purchasing organization. This makes it possible for advantageous terms negotiated by one purchasing organization to also be used by other purchasing organizations.

Vishal...