Difference between Material group and Product hierarchy

[Former Member]

Hi Guys,

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

Thanks,

Premanshu Gupta

[former_member550050 · Accepted solution]

Hi

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

Regards

Raja

[former_member184494]

Premanshu,

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...

Arun

[Former Member]

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!

Thanks

Lalit