cancel
Showing results for 
Search instead for 
Did you mean: 

Supplier Hierarchies - Why we need it ?

channu_s
Participant
0 Kudos

Hello All ,

   I know that is very basic question  , but  by the help.sap.com   documentation am not able to understand from business point of view ,

Why we need "Supplier Hierarchies"   ? How it adds value to customer in SRM / SLC ? .

Thanks in advance .

Channa.

Accepted Solutions (1)

Accepted Solutions (1)

vinita_kasliwal
Active Contributor
0 Kudos

Hi Channappa

Please find below some information ..

We generally have these 3 types of hierarchies listed below .. and the reason for the vendor hierarchy in layman's term is to  basically do grouping of the Vendors for whom you want the same rules to apply or they have multiple contact point but have to be a apart of the same vendor ..

Product category hierarchies

Supplier hierarchies

Central contract hierarchies

The structure of a vendor's organization is likely to change over time. For this reason, the vendor hierarchies you create to represent your vendors must be flexible. For example, you can move or change nodes within a hierarchy. When you reassign a node to a new location in the hierarchy, the system automatically reassigns any vendors, and other nodes, which are attached to the node you are moving. This reduces the amount of vendor master data you have to maintain.

In addition, when you assign a new vendor to an existing hierarchy, you ensure that the vendor automatically inherits, for example, all pricing agreements that apply to this hierarchy node.

Apart from this they are mainly employed for reporting purposes. They also guarantee, for example, that releases against contracts are made within a particular vendor hierarchy.

Refer all links below for more information

http://help.sap.com/saphelp_47x200/helpdata/en/12/0845cd470311d1894a0000e8323352/content.htm?framese...

http://help.sap.com/saphelp_45b/helpdata/EN/12/084669470311d1894a0000e8323352/frameset.htm

http://help.sap.com/saphelp_srm70/helpdata/en/45/f1f12c68063112e10000000a1553f7/frameset.htm

http://help.sap.com/saphelp_srm50/helpdata/en/43/2022b83fbc2be8e10000000a11466f/content.htm

http://help.sap.com/saphelp_srm50/helpdata/en/fd/dc804258544b76e10000000a155106/frameset.htm

http://help.sap.com/saphelp_srm703/helpdata/en/45/f1f12c68063112e10000000a1553f7/content.htm?framese...

http://help.sap.com/static/saphelp_rc10/en/43/4d1f3fde9657bfe10000000a155369/Chap%2002%20CA%20Cross-...

Hope it helped .

Regards

Vinita

channu_s
Participant
0 Kudos

Hi Vinita,

Thanks a lot for reply, but still I have couple of doubts, can you kindly provide some inputs on this.

    So my understanding is that, “Supplier/Vendor Hierarchies” are created for structural functions, like re usage kind of . But 

         do  we create these hierarchies  for vendor specific , like  , for big vendors who has multiple product range and multiple retail chains  ?

Below is the example from SAP . In this case "Smith" is the single company .

   or

       do we create these hierarchies for  Process specific  , like  the vendors who belonging to  Retail chains , or vendors who belonging to manufacturing ..

Also we have the vendor organizations already, what is so specific usage of these hierarchies   ?

Thanks

Channa

vinita_kasliwal
Active Contributor
0 Kudos

Hi Channappa

It is something which depends on the vendor .. generally it will be more of a vendor company sub divided into hierarchies based on maybe the location , Process or even related to one being a parent company and the other a sister concern ..

Vendor org is a Higher node and then we have Vendor hierarchies .. so its like

Vendor Company has 2 Vendor Orgs A and B

And Vendor Org A has Hiearchies like A1 , A2 etc ..

It is also helpful for reporting mainly .. and you can read the links which I had shared earlier that provides the information in detail ..below is one of the excerpts from the link for your reference ..

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   <project name>  Configuration  SAP SRM <release>  Basic Settings for SAP SRM   Cross-Application Settings   Hierarchies   Define Supplier Hierarchies  .

Let me know if that helps ..

Regards

Vinita

channu_s
Participant
0 Kudos

Hi Vinita,

Thanks a lot for information .

thanks

Channa

Answers (0)