Check following OSS notes:

100757, 63493, 96262, 87843, 82033, 64946

Is material transferred from one manufacturing/production facility or to another or

between them?
Valuation levels : it should be plant otherwise the MRP will not run.

Remember you have to consider physical/geographical locations, facilities and

postal addresses.
How many different production processes are run in/under a manufacturing facility
or location?
Do you need to create individual plants in SAP for all the production processes happening within one plant?
What will be the advantages & disadvantages? What is the impact?
While creating plant in SAP, what are the major points you need to focus on?

Scenario:
There are three production/manufacturing processes under one roof. Do we define one Plant or 3
separate plants?

Are the three MFG processes in 3 different units? or all share same shop floor?
Output of Each MFG process is an Input to the next process?
Are the different MFG processes just subsequent operations leading to one Final Saleable product?
Or are the outputs of each MFG process different Finished Saleable goods?

Creating a separate Plant for each MFG process, depends a lot on MRP requirements , Valuation
requirements as well as Storage requirements.

If a common Raw Material is used for all the different MFG Processes of Plant A , then u need to ask
client if they store and Plant that RM separately for Each MFG process or do they Store and Plant it for
all the processes Combined. If they use the first option, then you will need to create a new Plant for each
MFG process (unless you go for MRP Area concept) .

If they are just subsequent operations leading to one Final Saleable product , then you dont need 3
different Plants, each MFG process will be an operation mapped in PP module as "Operation "(via
Routings ) and the Input / output can be mapped as Storage locations for material staging.

How are they physically identified? Are the three MFG processes in 3 different units? Or do all share
same shop floor?

And are saleable Product of 1 is sold to MFG process 2 as input? If thats the case then you will have to
create multiple Plants ( or Do they sell to their own unit? or is it just Profit / price transfer?)

How you will record the sale entries? If each of them are selling then you might have to setup 3 different
plants.

Even though all the mfg processes are happening under one roof, sometimes logically you have to go
with individual plants like each mfg processes will be captured as individual plants.
Also you have to consider how you transfer materials/inventory?
Also how about excise duty payments? Do they have 3 separate excise registrations legally? If so then
you have to create 3 Plants.
Do you use one excise registration number to more than 1 plants? Then what happens?

Do you run MRP for the 3 manuf. Processes separately? If yes then maybe you have to go in for 3 Plants.
Is material transferred from one loc to another between them? If all movements or transfers are recorded
then you need to create more plant depending on the situation.

Scenario:
You have several people and buyers working in Purchase dept in a location? Do you need to create that
as one Pur Org or do you create multiple Pur Orgs for that location?

Understand the Physical /logical division of the company's purchase function.

Do they have more than One Purchase department / head?
centralised contract : you should have ref. purchase organisation defined in the system.
..

WAREHOUSE:
"It is possible to manage warehouses from different plants or different company codes under onewarehouse
number."
Even if several plant/storage location combinations are assigned to one warehouse object, the stock still is managed
in Invnentory Management in plant/storage location (and in SAP warehouse management it is registered to which
plant/storage location the particular stock belongs; warehouse will just show the exact location of the stock but has no
meaning/importance from valuation point of view).

VALUATION:
If you procure one material and want to store in two storage locations(different states) then the valuation of material
will be different in two states.