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Organizational Data 87

Company-Level Purchasing Organization
With the company-level purchasing organization, also known as the cross-
plant model, a single purchasing organization is responsible for multiple plants
in one company code. Figure 4-4 illustrates such a model for GBI. In the
fi gure, there are two purchasing organizations: US00 and DE00. US00 is
responsible for all three U.S. plants, and DE00 is responsible for the two
German plants. This approach is less centralized than the enterprise-level
model. In this model the purchasing organization is assigned to both the plant
and the company code. However, a purchasing organization can be assigned
only to one company code.

Figure 4-4: Company-level purchasing organization

GBI has one company in the United States and one in Germany, each
of which has its own purchasing organization. If GBI had additional compa-
nies in other European countries, then each country could have a separate
purchasing organization. Alternatively, one purchasing organization could
manage purchasing for several countries. In fact, it is fairly common to set up
a separate purchasing organization for each country to deal with that country’s
distinctive set of laws, taxes, and business practices.

Plant-Level Purchasing Organization
The most decentralized model is the plant-level purchasing organization,
also known as a plant-specifi c purchasing organization, in which each plant
has its own purchasing organization. Figure 4-5 illustrates a plant-specifi c
model for GBI. Note that each plant has its own purchasing organization

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