Materials can be grouped according to different criteria. This allows for easier management and better evaluation of materials with similar features. The standard version of the SAP Standard System does not provide exact criteria to differentiate between individual groupings. These result from company-specific applications. The materials can therefore be grouped by the company to meet their specific demands. The groupings are determined and defined by the system administrator. Contact him, if you have questions concerning the existing groupings.

In the standard SAP version the following groupings are possible, for example:

• Material Group

• Material group

• Product Hierarchy

Goods with the same features (for example, nails) can be grouped using the field Material group. Unlike the product hierarchy, the material group does not contain different levels or possible combinations of goods. You can, however, use the material group to carry out different analysis functions.

The material group is defined by a nine-digit, alphanumeric key. It is not primarily of importance for sales and distribution, but is used mainly in materials management.

A further option for grouping materials is represented by the material pricing group. This can be used both for pricing as well as for evaluation and analysis. The material pricing group is defined by a two-digit, numeric key.

The product hierarchy is used to group materials by combining different features. It is used for analyses and pricing. A product hierarchy can consist of up to eighteen characters. Its features can be combined in various ways. The following figure gives an example of how materials can be grouped using product hierarchies.

In this case, a dishwasher can be described by product hierarchy 00010000200000002. This series of characters states that dishwashers belong to the category electrical appliances (series of characters 00001, position 1-5), and also to wet appliances (series of characters 00002, position 6-10) and, finally, to dishwashers (series of characters 00000002, position 11-18).