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    01 - 02 - Reference Purchase Organization

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    Sambit Mohanty
    There are two types of purchase organizations: central and decentralized. In a central model, one purchase organization handles procurement for an entire company code, while in a decentralized model each plant has its own purchase organization. A hybrid reference purchase organization model assigns one purchase organization as the reference to handle large vendor contracts, while other purchase organizations can utilize those contracts for their plants. This allows for some decentralization with the benefits of central contracts.

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    01 - 02 - Reference Purchase Organization

    Uploaded by

    Sambit Mohanty
    77 views2 pages
    There are two types of purchase organizations: central and decentralized. In a central model, one purchase organization handles procurement for an entire company code, while in a decentralized model each plant has its own purchase organization. A hybrid reference purchase organization model assigns one purchase organization as the reference to handle large vendor contracts, while other purchase organizations can utilize those contracts for their plants. This allows for some decentralization with the benefits of central contracts.

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    There are two types of purchase organizations: central and decentralized. In a central model, one purchase organization handles procurement for an entire company code, while in a decentralized model each plant has its own purchase organization. A hybrid reference purchase organization model assigns one purchase organization as the reference to handle large vendor contracts, while other purchase organizations can utilize those contracts for their plants. This allows for some decentralization with the benefits of central contracts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    77 views2 pages

    01 - 02 - Reference Purchase Organization

    Uploaded by

    Sambit Mohanty
    There are two types of purchase organizations: central and decentralized. In a central model, one purchase organization handles procurement for an entire company code, while in a decentralized model each plant has its own purchase organization. A hybrid reference purchase organization model assigns one purchase organization as the reference to handle large vendor contracts, while other purchase organizations can utilize those contracts for their plants. This allows for some decentralization with the benefits of central contracts.

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    © All Rights Reserved
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    Reference Purchase Organization

    Central Purchase-

    One Purchase Organization is responsible for the procurement of all the plants in a Company Code

    PO- Purchase Organization, CC-Company Code

    1PO-----1CC

    One PO can be assigned to only one CC. But a CC can be assigned to multiple POs

    1PO----1PLANT

    1PO----2PLANT

    1PO---3PLANT

    1PO---1PLANT OF OTHER CC

    One Plant can have many Purchase Organizations and same one Purchase Organization can have
    many plants

    De centeral Purchase:

    Each Plant will have its own Purchase Organization to handle their Procurement internally.

    1PO – No assignment to Company Code

    2PO— No assignment to Company Code

    3PO— No assignment to Company Code

    1PO---1PLANT

    2PO---2PLANT

    3PO---3PLANT

    Reference Purchase Organization:

    Central:

    One Purchase Organization is responsible for all the Plants of a Company Code

    Decentral:

    Each Plant will have its own Purchase Organization to handle the Procurement activities.

    Decentral is very good but we are facing the issues when we deal with Global and same vendor who
    is procuring materials to all the Plants of Company Code 80% Decentral+ 20% Central
    Reference Purchase Organization:

    1PO—1PLANT

    2PO- 2PLANT

    3PO- 3PLANT

    1PO as reference Purchase Organization and assign 1PO to other Purchase Organizations of the
    Company Code

    1PO has a contract with Vendor X for the value of 10000 M USD. Then this contract will be used by
    any other Purchase Organization which is assigned to 1PO.

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