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Difference between Material group and Product hierarchy

Hi Guys,

Can you please let me how product hierarchy and Material group are co-related.


Premanshu Gupta

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3 Answers

  • Posted on Dec 22, 2008 at 01:29 PM


    I will explain you with an example

    Say BAR The code given is AA

    In bar you will have Alcoholic,,soft drinks and may be fresh juices

    Alcoholic code is 01

    Soft drinks code is 02

    Fresh juice code is 03

    Under alcholic you have three types say Scotch, Beer,Rum

    Scotch cde is 04

    BeerCode is 05

    Rum code is 06

    Under scoth if you have two varieties Bagpiper, madowells

    bagpiper code is 07

    Mcdowells code is 08

    Under beer if yiu have 2 varieeties say King fisher, golden eagle

    King fisher code is 09

    golden eagle code is 10

    Now if you want to put a sales order for mcdowells you will reperesent it by AA010408

    It means baralcoholscotch--mcdowells

    If you want to put sales order for golden eagle beer then you will represent it by AA010510

    It means baralcoholbeer---golden eagle

    This type of representation is Product hierarchy

    This helps you to identify from the product code from the top level hierarchy till the the end product

    In our example

    beer is a material group

    Scotch is a material group

    Rum is a material group

    Under beer material group you will have two individual materials that is king fisher and golden eagle

    In short material group is the grouping of the materials of similar nature and it will be the last level

    Under this there will be materials which will be individual in nature

    In our example alcoholic,soft drnks and fresh juices are product hierarchy level 1

    Bar is the product hierarchy level 2 that is the highest hierarchy in our example

    Like this n no of hierarchy levels you can build for a product

    The main purpose of it is we can trck the performance of all products at hierarchy level and also pricing can be carried out so that if we introduce some price or discount at higher level hierarchy so that it is subsequently applied to all its lower levels



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  • author's profile photo Former Member
    Former Member
    Posted on Dec 22, 2008 at 01:11 PM

    Hi Gupta,

    Material group

    For each plant, you can group together certain materials to form subgroups. For each of these subgroups, you can create a group material. The goods movements of these materials are then posted to this group material instead of to the material group material for this material group.

    product hierarchy

    The product hierarchy is used for evaluation and pricing.

    A multilevel hierarchy that represents the relationships of certain product categories to each other.

    Product category hierarchies are particularly useful for reporting purposes, for example, when comparing the spend information of related product categories.

    Hope this helps!



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  • Posted on Dec 22, 2008 at 01:18 PM


    I am not sure if this is related to BI - you would have to ask your functional consultants....

    Moving the post to the MM forums...


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