Lesson 3 of 5
Logistics units: plant and storage location
9 min
Finance sees the company as legal entities and profit centers. Logistics sees it as places where goods are made, stored and shipped. The two most important logistics units are the plant and the storage location.
Plant
A plant is an operating location: a factory, a distribution center, a maintenance site or a regional office where materials are produced, stored, planned or maintained. Each plant has a four-character key and an address, and it is assigned to exactly one company code. That assignment is how a goods movement in a plant knows which company code’s books to post to.
Plants matter to almost everything in logistics. Material master data has plant-level views (planning, purchasing, storage, costing). MRP plans per plant. Inventory is usually valued per plant, so the same alternator can carry a different standard cost in Detroit and Chicago.
| Plant | Location | Role at Contoso | Company code |
|---|---|---|---|
1710 | Detroit, Michigan | Main manufacturing plant for alternators; ships to vehicle makers | 1710 |
1720 | Chicago, Illinois | Second plant: final assembly, spare parts and regional distribution | 1710 |
Contoso Motor Co. plants
Storage location
A storage location subdivides a plant into places where stock is kept: a raw materials area, a finished goods store, a quality inspection area. Each storage location belongs to exactly one plant and has a four-character key that is unique within that plant. Stock quantities are recorded per storage location; stock value is normally kept at plant level.
Storage locations are simple, but a missing one causes surprisingly many failures. If a material has never been extended to storage location 172A, a goods receipt into 172A may fail or require automatic extension, depending on configuration. If a warehouse process expects stock in 171B but production put it in 171A, a delivery cannot be picked even though the plant has stock.
Other logistics units you will meet
- Shipping point: the place from which deliveries are processed, such as the Detroit dock. It is assigned to one or more plants and determined automatically for each delivery.
- Warehouse number: used when a plant runs detailed warehouse management with bins; covered in later warehouse courses.
- Valuation area: the level at which inventory is valued, normally the plant.
What would you do?
A goods receipt test passes in Detroit plant 1710. The same steps for Chicago plant 1720 fail with an error about the storage location. What is the best next step?
- A plant is an operating location assigned to exactly one company code.
- A storage location subdivides a plant and belongs to exactly one plant.
- Stock quantity is kept per storage location; value usually per plant.
- Contoso: plant 1710 Detroit (171A, 171B) and plant 1720 Chicago (172A), both in company code 1710.
Check your understanding · not graded
Lesson check
1. To how many company codes can a plant be assigned?
2. To how many plants does a storage location belong?
3. A goods receipt in plant 1720 posts to which company code at Contoso?