Explaining Hierarchies

Customers want to group their materials for several reasons to enable, as an example, a sufficient selection, reporting and maintenance.

Material groups represent a thematic goods-related structure, which is portrayed in SAP Retail by the merchandise category hierarchy. Materials can therefore be grouped, for example, from procurement points of view according to merchandise categories and displayed as a merchandise category hierarchy.

Every material is assigned to only one material group (base material group). This assignment is valid throughout the company. Material groups can be assigned to material group hierarchy levels. Material group hierarchy levels can, in turn, be assigned to higher hierarchy levels.

The result is a material group hierarchy. This structure makes it easier to monitor and control the activities of the company and reduces the volume of data (for example, condition data) that has to be maintained. In addition, the material group hierarchy structure enables descriptive characteristics to be inherited by subordinate levels from superior levels. Within Fashion the variant building characteristics (like color and size) should be assigned via characteristic profile to the base material group.

Material group reference material can be assigned to every material group. It can then be used as a reference when creating materials. A reference material can be assigned to different material groups and is an existing material master record.

A specific material type (WERT) is provided for defining value-only materials. Material categories are also defined for the individual value-only material categories. Material group value-only material can be created and assigned for each material group. This enables to use inventory management on a value basis at material group level. The value-only material for the material group can be used at POS for transactions at the material group level. A material group value-only material can also be defined for each hierarchy level. This enables to use inventory management on a value basis at material group hierarchy level.

Characteristics can be assigned to hierarchy levels as well as material groups. The lower hierarchy levels inherit the characteristics that are assigned to the higher hierarchy levels.

Characteristic inheritance is when a characteristic and its values are passed on to all the lower classes in a class hierarchy, for example, to all the lower levels in the material group hierarchy or the material group itself.

A characteristic can be for information purposes only or be flagged as variant-creating. When creating a generic material, the variant-creating characteristic is used to create variants of the generic material.

The Article hierarchy enables to group materials, using a customer-oriented structure. This means any hierarchical grouping of materials, in particular the consumer decision tree can be mapped. Whereas material groups mostly observe physical attributes of the goods, the article hierarchy groups materials from a sales perspective. The article hierarchy is used in planning, operations and reporting on different levels of aggregation.

The following are basic facts about article hierarchies:

• It is possible to define/ activate 1 client - wide Article hierarchy or 1 per distribution chain.
• Only activated article hierarchies can be used within any operational processes or can be extracted to SAP BW for reporting and/ or planning.
• Scheduled Article hierarchies can be defined, that is, hierarchies with time-dependent structure and material assignments.
• It is possible to define article hierarchies with multiple material assignments, that is, with several material assignments in an article hierarchy.
• Within an article hierarchy or a subtree of the hierarchy it is possible to reassign nodes for example, to reassign a subcategory to a category. Material assignments are reassigned at the same time.
• From the integrated article maintenance, (new) materials can be assigned to the activated article hierarchy.
• To support planning (merchandise and assortment planning) and reporting for categories or other level from the article hierarchy, it is possible to extract the article hierarchy to SAP BW.
• It is possible to communicate changes to the article hierarchy using a workflow.
• It is possible to simulate copying substructures from one article hierarchy to another article hierarchy.
• Substructures can be copied from one article hierarchy to another article hierarchy.
• In the case a customer wants to use OAPC (operational assortment planning and control) functionality in general within SAP ERP the article hierarchy is mandatory. Remark: The OAPC is not enhanced with segmentation related features.