Managing Purchase Organization

Purchase processing

A purchasing organization is an organizational level that negotiates conditions of purchase with vendors for one or more plants. It is legally responsible for completing purchasing contracts. A purchasing group is a key for a buyer or group of buyers responsible for certain purchasing activities.

Purchasing Organization:

Purchasing organization types:

  • Centralized Purchasing
    • Corporate Group-wide purchasing
    • Company-specific Purchasing
  • Distributed Purchasing


So a Purchasing Organization Can be assigned to

Purchasing Organization can also exist without assigning to a company code. Each Purchase organization has its own Info Record and Conditions for pricing & Own Vendor Master Data. The vendor is assigned to only one purchase organization. Each Purchasing Organization evaluates its own vendors using MM Vendor Evaluation. A purchase organization whose conditions and contracts other purchasing organization linked to it may access and use. If several Purchase organizations procure for a plant, you can define one of them as standard Purchase Organization. In Source determination for ‘Stock Transport‘ and ‘Consignment’ and for good issue of ‘Pipeline material’ system utilizes the standard purchase organization automatically.

SPRO -> Enterprise Structure ->Definition -> Material Management ->Maintain purchasing organization.

Here are the steps involved in creating a purchasing organization and purchasing group.

From the IMG screen, perform the following drill down:

Enterprise Structure Definition -> Materials Management -> Maintain purchasing organization

  • Then select the New entries button, enter the purchasing organization (PO_ _ ) and a description ( _ _Purch. Dept.).
  • Click Save.

Create Purchasing Groups (Buyers)

From the IMG screen drill down: Materials Management -> Purchasing -> Create purchasing groups

  • Enter your buyers and assign them to purchasing groups as shown below.
  • Then click Save.

Purchasing Group – Approval and Criteria – CT11

Transaction CT11 is used to determine the Characteristic Value of a Purchasing Group (Approval Rule and the criteria for when the rule is applied).
  • Type CT11 in the white command field on the initial screen and click on the Enter button or press Enter.
  • Type Purch_Group in the Characteristic Field, or select Purch_Group from the dropdown menu. In the Find Value field, enter a Purchasing Group. Change Maximum no. of hits to 50, and execute.

The following screen is displayed

Click on the plus sign in the folder to expand the contents, the following will show as the result. In this example, Purchasing Group SMH, functions with Rule A, Approval is needed beginning with purchases <500.00. In addition to dollar values, approval is needed for RAD (Radiation), Anml (Animals), HAZ (Hazardous), SpnsPgm (Sponsored Programs), and HBO (Hospital Budget Office) to name a few. While displaying the transaction, scroll down to the bottom to receive the complete list.


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