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author's profile photo Former Member
Former Member

business prcocess of customer hirarchey

hi expert

can any bady explain me customer hirarchey with

help of live example and also give me configuration

hints to explain your example so that i can map in IDES

for better understanding

please take one scnerio and explain with configuration

awaiting for your response


Nisha A

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2 Answers

  • author's profile photo Former Member
    Former Member
    Posted on Dec 06, 2007 at 06:14 PM


    Customer hierarchy is used to map real life business situations where one big corporate group has many smaller companies who place their own separate purchase orders. So perhaps the Sales Manager would like to check the sales to the individual company, as well as to the group as a whole. This also applies to discounts e.g. he can decide to give a discount to the whole group which is applicable to all these smaller companies.

    The best example would be the Tata Group which has many many companies. So e.g. if your company sells office stationary, then you would be perhaps selling to almost all of the Tata group companies. Now if you wish to give a discount to the Tata group as a whole, then this can be done easily with the help of the Hierarchy.

    You can define the top node as 'Tata'. And the rest of the companies below that. E.g.

    > Tata

    >>>>> Tata Motors

    >>>>> Tata Steel

    >>>>> Tata Tea


    I hope this explains the general concept. For config etc, it is better you refer to SAP help.

    Best Regards


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  • author's profile photo Former Member
    Former Member
    Posted on Dec 07, 2007 at 03:37 AM


    Purpose of the customer hierarchy is different customers into different levels.based on the customer levels company may give special discounts or special prices to set of customers only.

    All the customizing is in SD/Master Data/business Partner/Customers/Customers hierarchy

    1) Define hierarchy type: just put and ID and a name to the new hierarchy.

    2) Set partner determination: if you want to user the hierarchy in price determination, then, in the orders, at the header level, you have to have a Partner Procedure with a partner function for each level. In the partner procedure, in each partner function you must indicate the source partner function. With this informacition, in the order, you obtain the bussiness partner for each partner function.

    3) Assign account groups: you indicate which accounts groups are allowed for being part or your hierarchy.

    4) Assign sales areas: simple you indicate which sales areas are allowed in your hierarchy. (Here you can customize common sales areas, just for not having to build the hierarchy in all the different sales areas).

    5) Assigning hierarchy type for pricing: you indicate which classes of documents uses hierarchy in pricing determination.

    It is possible to maintain so called customer hierarchies. This might be useful when for example you create a condition discount for a customer that is part of such a hierarchy structure. All sub nodes in the hierarchy below that customer, will thus receive the same discount.

    Customer hierarchy setup, firstly decide the hierarchy type to be used.

    The standard is type A.

    You can also assign a partner function to the customer so that the higher level customer in the hierarchy is copied into a sales order as a partner function - but you don't need that right?

    Next assign your customer account group to the hierarchy type. And enter the combinations that will be allowed for creating the hierarchy.

    You want to assign a ship-to to a payer. So enter the ship to account group and enter the payer account group as the higher level.

    You must also make an entry for permitted sales area assignments. So if you want to a hierarchy for customers in the same sales area then enter the sales area and enter the same one as the higher level sales area.

    All these settings can be found in the IMG. Under SD - master data - business partners - customers - customer hierarchy

    <b>Example </b>customer hierarchy when you have an company like Unilever and you agree both on a discount. Unilever does have different locations / businesses and you have to maintain the discount for all customers. If you use a customer hierarchy you can maintain the discount for the partner in the top of the hierarchy and in this way it will be valid for all customers in the hierarchy

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