What is difference between merchandise category, Assortment, material group and Division?

[AnilSD]

Please let me know the difference between

merchandise category, Assortment, material group and Division? They seems to be grouping material (or Article or Product?

[paul_gendreau · Accepted solution]

Hello Anil:

I strongly urge you to read 1 blog post I've written and watch a 12-minute video:

1 - The Essence of SAP Retail Master Data

- This blog mentions Assortment Management and Execution at a high level, and purpose.

- This blog is a good primer for SAP Retail Master Data

2 - The Secret of SAP Retail Master Data

- This 12-minute video expands on The Essence of SAP Retail Master Data, explaining the concept of reference handling.

I assume from your questions that you have SAP experience, but no SAP Retail experience (at least not Retail master data). If this is the case, you might benefit from reading a third blog: SAP Retail for SAP (non-Retail) Experts. This 3-minute read explains some high-level differences between standard and SAP Retail.

[paul_gendreau]

Hello Anil, for a good explanation of Merchandise Category I suggest that you read my blog: Merchandise Category Hierarchy: WHY (Business View).

As answers for your specific and different questions ...

Material Group versus Merchandise Category

In SAP Retail, the term Merchandise Category replaces Material Group. Whereas, in SAP R/3 standard, Material Groups are defined in Customizing, in SAP Retail specific transactions enable the maintenance of Merchandise Categories purely as master data.

It is a mistake in an SAP Retail system to configure Material Groups.

Distribution Chains, not Sales Areas and not Division

A distribution chain is made up of a sales organization and a distribution channel. The purpose of a distribution chain is to structure sales within a retail company. Divisions are not used for any functions developed specifically for SAP Retail. However, a single dummy division is provided where necessary.

Customer relationships are important for controlling logistics processes. You maintain these according to sales area. A sales area is a combination of a sales organization, distribution channel, and division. Unlike in industrial companies, there is generally no differentiation made in SAP Retail between product-related divisions, therefore the distribution chain is definitive for the customer relationship.

Articles are assigned uniquely (client-wide) to one division. The significance of the distribution chain for logistics and price determination is also manifest in integrated article maintenance. In the distribution chain-related sales view you maintain data that is relevant for delivery, for example, the sales unit. For price determination, you maintain the actual sales price and other condition parameters but you also need to enter certain control data, such as the price fixing flag or the competition characterization of the article.

[AnilSD]

Thank You Paul for the detailed explanation 🙂

can you also share the importance of Assortment?

Thanks,

Anil S Doshi

[jpfriends079]

Hello Anil,

Please don't use "answer" for adding "comments" to the response or reply to your question. There is a fair chance that the respondent might not get your comments or subsequent queries/concerns.

Thanks
JP
SAP Community Moderator