Explaining Product Taxonomies for Retail (5FJ)

The figure shows the basic set-up of a Retail organization with the headquarters (US Retailer Inc.), and their distribution centers and stores. Additionally, there are the (external) business partners: suppliers for merchandise procurement, and customers (wholesale, re-sellers,..), and consumers on the sales side.

This unit focuses on the headquarters processes, which cover site maintenance, setting up merchandise categories, and creating retail articles, including vendor data. Furthermore, assortment modules are created, connecting sites and articles. To complete master data maintenance, sales prices are created. With that, the basis for retail operations are set.

In solution process Sites for Retail (3I3), sites are set up across SAP Central Business Configuration, retail-specific product configuration, and master data maintenance in the application. Site groupings are created for use in reporting, as selection criteria in various applications, and to select sites in various applications. The merchandise category hierarchy, covered in solution process Product Taxonomies for Retail (5FJ), is the central classification for the retail articles. Characteristics can be used to define attributes for information purposes, but can also be assigned to classes, which are then used to define the variants of generic articles. The solution process Products for Retail (3I1) explains the retail article categories single article, generic article, and structured articles, and how to maintain vendor-article specific data in purchasing info records. It also introduces functions for managing retail article master records, such as data creating via interface, mass maintenance, discontinuation. The Assortments (3I5) solution process introduces the maintenance of assortment modules, which are used to connect articles and sites, which includes the creation of article-site specific data in the background. With that, the articles are ready to be ordered, received, and sold in the sites. Actually, to be sold, a sales price has to be defined for the articles. The system supports the creation of sales prices for the articles on different pricing levels in the sales price calculation function, as explained in solution process Sales Pricing for Retail (3I4).

Each solution process represents a lesson in this unit, and can be completed individually.

This lesson covers the solution process Product Taxonomies for Retail (5FJ).

In the retail industry, specific terms differ from the standard terms used in other lines of business. The following terms are used synonymously in this document:

The Merchandise Category Hierarchy is part of the general SAP classification system, but comes with additional functionality for the merchandise categories, which are the classes at the base level of this hierarchy structure. The additional functionality specifically supports the control, handling, and maintenance of the typically large numbers of articles in a retail system.

Each article, which is created in SAP Retail, is assigned to a single merchandise category (unique assignment) across the whole company. This reflects the general concept of a hierarchical class type, where each object (in this case: article master record) is assigned to one class (in this case: merchandise category). The merchandise category hierarchy allows you to classify and structure the entire range of goods offered for sale by your company (breadth and depth), and is an essential tool for efficient merchandise category management. The main focus for the management of your merchandise shifts from individual articles to merchandise categories.

A merchandise category comprises articles that are similar from a process perspective: the huge number of different articles causes several challenges for efficient process execution. To meet these requirements, you can select all articles of one or more merchandise categories for process steps, and furthermore specify controlling parameters at the merchandise category (or merchandise hierarchy) level, for example, sales price strategies or default supplying sites. This higher data retention level - above the article - enables a more efficient management of all items that a company procures or produces, stores, and sells. Furthermore, reporting at the merchandise category level is typically more tangible and easier to comprehend, including reports on procurement, inventory management and master data: When you enter an article in a document (line item), the system automatically also includes its merchandise category.

In SAP Retail, the implementation of merchandise categories is mandatory, as - upon creation - each article is assigned to a merchandise category. This means, merchandise categories, and - to be able to build the hierarchy structure - merchandise category hierarchy levels are to be created, before article master records can be created. To ease the creation of articles, a (dummy) reference article can be created, or an existing one assigned to each merchandise category. The reference article then delivers default data when creating a new article for the respective merchandise category.

The figure above, Merchandise Category Hierarchy — Attributes, shows a 5-level merchandise category hierarchy example, with the top node Trading Goods, down to Frozen Produce as the lowest merchandise category hierarchy level. The (base) merchandise categories, in our example Frozen Vegetables, Frozen …, form the lowest level in the merchandise category hierarchy.

The Merchandise Category Hierarchy structure can be set up using a comprehensive number of apps:

• Create Hierarchy Level - Merchand. Cat. Hier. (CLWM)
• Maintain Hierarchy Level - Merchand. Cat. Hier. (CLWN)
• Assign Hierarchy Level - Merchand. Cat. Hier. (CLW1)
• Delete Hierarchy Level - Merchand. Cat. Hier. (CLWP)
• Create Merchandise Category (WG21)
• Maintain Merchandise Category (WG22)
• Delete Merchandise Category (WG23)

You use the Create / Maintain Hierarchy Level, and the Create / Maintain Merchandise Category apps to define the individual classes you want to use in your structure. Then, you choose the Assign Hierarchy Level app to set up the hierarchy level structure, and you can use the Create / Maintain Merchandise Category apps for their assignment to the relevant hierarchy level. For each merchandise category, you define additional data, such as the reference article, and possibly maintain further assignments such as the division, authorization group, and so on. It is also possible to assign characteristics for information purposes.

The top merchandise category hierarchy node delivered by SAP is MCH_RETAIL.

Merchandise Category (A2X) (Version 0002): The OData service API_MERCHANDISECATEGORY can be used to integrate external applications for the creation, reading, updating, and deletion of merchandise category data. It includes merchandise category description, assignment of characteristic to merchandise category, assignment of merchandise category to merchandise category hierarchy node, and characteristic value restriction.

The Display Merchandise Category Hierarchy app (WGUS) provides a good overview of the hierarchical structure (hierarchy levels) under the selected node, and of the objects of the merchandise categories: The articles created for the merchandise category, and the site assignments.

Unused / outdated / mistakenly created merchandise category hierarchy levels and merchandise categories can be deleted using the relevant apps. Note: The deletion is only possible when no objects are created for the resp. merchandise category, and when there are no other assignments.

Merchandise categories can be assigned to the site master for specific control settings. You can learn about that in solution process Sites for Retail (3I3).

Characteristics and their values are used to describe the attributes of an object, such as the color of a blouse, the size of a T-shirt, or the flavor of a yoghurt. For the characteristic color, the values for example could be white, red, yellow, and so on. To make the characteristics available for the objects, you have to assign them to the classes, which are used to create these objects. This means, you can assign characteristics for information purposes to a merchandise category, and when you create an article for this merchandise category, you can assign a value. This information can then be used in reporting.

Characteristics are created with the Manage Characteristics (CT04) app. Here, amongst other settings, you determine the data type, for example character, date, currency, numeric, and the number of characters for the value keys. You can then directly create the values (key and description) in this app. Alternatively, you can for example refer to a Check Table, which holds the values you want to use for this characteristic. Another option is using the comprehensive functions of the Characteristic Value Storage. This method of managing characteristic values is particularly useful for characteristics with numerous characteristic values. If you want to use this option, you have to set character format (CHAR) with a maximum number of 18 characters for your characteristic, and then assign function module WRF_CHECK_CHAR_VAL (delivered by SAP) for the value check, as indicated in the figure above, Characteristic Values: Creation Options. After saving the new characteristic, you can use the apps in the figure below, Characteristic Value Maintenance, to enter further data.

You use the Maintain Characteristic Values (WRFCHVAL) app to create the characteristic values. It is possible to not only maintain a key and description for each value, but it is possible to use up to 10 additional, customer-specific fields. As an example, for a color characteristic, you could add an analyzing color, and a standard color code, and so on. It is also possible to type the characteristics. Specifically in fashion retailing, where many color and size characteristics are used, the typing helps to control the use of characteristics. Four characteristic types are available. Characteristic 1 (for color), Characteristic 2 (for size 1), Characteristic 3 (for size 2), and Not typed (for characteristic types other than color and size). For example, trousers can have different colors (characteristic 1), and 2 sizes: Waist (characteristic 2), and Length (characteristic 3). Another setting is for the control (Check Option) that checks the system response when you try to assign a characteristic value to an article, or delete a characteristic value. These settings can be made within this app, but also specifically in the Maintain Characteristic Type Data (WRFCHVALTYPE) app, which provides an overview of all these characteristics in a convenient table format for a good overview. For example, you can see which characteristics of each type you already have.

In the case of color and size characteristics, as a rule, a large number of characteristic values is concerned (for example, several hundred, or even thousand color values, which are subject to constant seasonal enhancements), where, in the case of individual generic articles, only a very limited section from the characteristic value spectrum is required (for example, 20 colors and 20 sizes). This spectrum of relevant characteristic values can vary from one generic article to the next. Against this background, it is important that the available characteristic values can be logically bundled into customer-specific groupings. For example, for a color characteristic, the groups basic, spring/summer, and autumn/winter are created, and the relevant color values assigned (a color may be used in more than one group). When you create a new "basic" generic article, you can quickly identify the relevant characteristic values by selecting the 'basic' group. Optionally, the value assignments can even be maintained on merchandise category level. However: Using the grouping function of the Maintain Groups - Characteristic Values app (WRFCHVALGRP) is completely optional.

To create generic articles in SAP Retail, you need variant-creating characteristics. To that end, you create classes of class type 300, and assign the relevant characteristics. For example, for a generic article t-shirt, you typically need a color and a size characteristic. The variants are then created for the selected characteristic value combinations. Details are provided in solution process Products for Retail (3I1).

This section explains how you can change existing article and merchandise category assignments. The reclassification function allows you to change your merchandise category hierarchy, including the objects assigned to the hierarchy (articles and variants). For example, changes may be necessary for the following reasons:

• Articles were accidentally assigned to incorrect merchandise categories when they were created.
• Introduction of a new merchandise category: Dairy specialty articles should be moved from merchandise category Dairy products to the new Dairy Specialty merchandise category.
• A merchandise category or merchandise category hierarchy level that is too large and no longer manageable, is to be split in two. Some articles or merchandise categories in the old hierarchy level are reassigned to the new one.

You can reclassify individual articles using the Reclassify Article - Merchandise Category (WRCR) app. for the reclassification of merchandise categories, or merchandise category hierarchy levels, you can use the Create Reclassific. Version - Merchandise Category (WRC4) app. The relevant apps perform various checks to determine, if the re-assignment is possible. For example, when you reclassify an article, the system checks (among others) if there are open purchase orders and allocation tables for that article, and you can determine to have these documents updated when the reclassification is executed.

Summary

The key process flows covered in the tutorials for this process are to:

• Create a new Merchandise Category
• Maintain/Display a Merchandise Category
• Use the Reclassification