Product Category Hierarchies and Supplier Hierarchies 
You can use hierarchies to group together related product categories and suppliers, making them easier to find and report on. SAP Supplier Relationship Management (SAP SRM) has three types of multilevel hierarchy:
Product category hierarchies
Supplier hierarchies
Central contract hierarchies
Central contract hierarchies are specific to central contract management and are described separately under Central Contract Hierarchies.
You have activated each type of hierarchy in Customizing for SAP Supplier Relationship Management under .
You have made all necessary configuration settings for the relevant hierarchy types in SAP Solution Manager under .
You can use product category hierarchies and supplier hierarchies for reporting within SAP NetWeaver BI. To access the reports, go to the SAP NetWeaver documentation in SAP Help Portal at http://help.sap.com.
Product Category Hierarchies
Product category hierarchies provide the following:
Extended search of product categories
Import of product category hierarchies into the SAP SRM system, for example:
Back-end material categories from SAP ERP
Standard product category hierarchies (such as UNSPC, eClass)
Customer-defined product categories
For information about importing external product category hierarchies, see SAP Solution Manager under.
Automatic determination of supply sources
During the sourcing process, the system selects all sources of supply that are assigned to the product category of a contract item or a supplier list entry. If no source of supply can be selected from the product category, the next superordinate product category level in the product category hierarchy is used.
Supplier Hierarchies
Supplier hierarchies provide the following:
Structure and model of supplier relationships
In the back-end system, use transaction BPH to structure and model supplier relationships (for example, you have a superordinate supplier and want to assign dependent, local subsidiaries to it). For more information about how to use transaction BPH, see SAP Help Portal at http://help.sap.com.
Hierarchy upload and download
Import of external supplier hierarchies into the SAP SRM system
You can import external data sources, such as D&B family trees or your own existing supplier categories. This means that you can incorporate the latest market information into your supplier hierarchies. For example, new mergers and acquisitions in the supply base can immediately be taken into consideration in reporting. For information about importing external supplier hierarchies, go to SAP Solution Manager under .