Unit conversions and category hierarchies
Quantity and classification errors cause many data problems in supply chain. Unit conversions and category hierarchies are the two tools that prevent them.
Units, classes and conversions
Units belong to unit classes such as Mass, Length or Quantity. Each item has units for inventory, purchase, sales and BOM, and the system converts between them whenever they differ.
| Conversion type | Scope |
|---|---|
| Intra-class | Between units in the same class (kg and g). Applies to all items |
| Inter-class | Between units in different classes (pieces and kg). Needs a product reference |
| Product-specific | Defined for one product or variant, overrides general ones |
A conversion has a numerator, a denominator and a rounding rule. Inter-class conversions need a product because one piece weighs something different for every item.
Conversions for variants
If variants differ in size, enable Unit of measure conversions on the product master, then enter conversions per variant. If the setting is off, every variant shares the master-level factor.
Use the Rounding fields so that 1.3 cartons can be rounded up to a whole carton when buying.
Category hierarchies
A category hierarchy organizes products into nodes. The role of each hierarchy is assigned in Product information management parameters or on the hierarchy setup.
| Hierarchy | Used for |
|---|---|
| Procurement category | Purchase requisitions, catalogs, spend control, purchase policies |
| Sales category | Product catalogs and e-commerce |
| Commodity code | Reporting such as Intrastat |
| Retail product | Channel assortments |
Create the hierarchy, add parent and child nodes, then assign products. A category node can hold both items and services, so a hardware item and its service contract can share one node. Child nodes inherit settings from the parent unless overridden.
Follow the structure the requirement states. If the policy says categories are by product type and not by country, do not create one node per country.
Exam traps
- Pieces to kilograms is an inter-class conversion and needs a product.
- Per-variant conversions require the setting enabled on the product master.
- A hierarchy does nothing for purchasing until it is assigned the procurement purpose.
- A procurement hierarchy is not the same as an item group; item groups drive posting accounts.
Practice questions
Choose an answer, then review the explanation to check your understanding.
1. Cartons are product variants of different sizes and need different unit conversions. What should you do?
Show answer
Answer: B.With the setting enabled on the product master, conversions can be set for each variant instead of one factor for all.
2. Which conversion applies to all items and converts between units of the same class, such as kg and g?
Show answer
Answer: B.Intra-class conversions work within one unit class (mass) and apply to every product.
3. Purchasers must only order from approved spend categories. What do you set up first?
Show answer
Answer: B.A procurement category hierarchy must be created and designated for procurement before purchasing uses it.
4. A hardware item and its service contract must sit under the same category node. Is this possible?
Show answer
Answer: B.Category nodes can contain released products of type item and service.