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Define Plant

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what factors determine whether a company can have 1 plant or many plants? other than the type of production, boss/ownership, and strategy planning?

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Answers (3)

Answers (3)

sanilbhandari
Product and Topic Expert
Product and Topic Expert

Hi

Some of the crieterion to define a plant could be the below though there could be more depending on business requirements:

1) Physical Manufacturing locations in addition to any location from which sales of stock or requisition for purchase is being done

2) In certain countries, a plant could also be linked to a tax registeration number, which is also one of the criterion to define a plant

3) One of the most important factor is the valuation of inventory, if at a plant level.

4) MRP Run is done at a plant level, so it also decides the number of plants

5) If a location does maintainence planning, than it should also be defined as a plant.

There could also be more factors, which can be dependent on business requirement, such as customs port , SEZ Location, ware houses, distribution centers etc

Regards

Sanil Bhandari

Oscar_DC
Active Contributor

both answers above are correct, you really have to understand the implications of planning plants in the environment you're in.

Remeber the configuration of planning plants has far reaching effects, is not only MM

https://blogs.sap.com/2021/09/10/lessons-learned-from-eam-enterprise-structure-and-master-data-plann...

BijayKumarBarik
Active Contributor

Consider plant creation based on business processes operation for an entity. A plant can be.....

1. A production plant/unit

2. Organization Head office

3. Reginal branch office/s

4. Large storage as Warehouse

5. Virtual plant

6. Plant Abroad