Hierarchy Management

Hierarchy management plays a crucial role in master data management (MDM) by organizing and maintaining the relationships between data entities in a structured manner.

Definition and Role

Hierarchy management in master data refers to the processes and tools used to define, organize, and manage the relationships between different data entities, such as products, suppliers, customers, locations, and organizational units. It ensures that these relationships are accurately represented and maintained across the entire data ecosystem.

Examples of Hierarchy Management in Practice

Product Hierarchies:

Organizing products into categories, subcategories, and individual items, enabling better inventory management, sales analysis, and marketing strategies.

Supplier Hierarchies:

Defining hierarchical relationships between parent companies and their subsidiaries or different branches, helping with understanding the complete structure of the supplier organization.

Customer Hierarchies:

Structuring customer data into segments such as regions, demographics, and purchase behavior, aiding in targeted marketing and personalized customer service.

Organizational Hierarchies:

Defining the organizational structure in terms of departments, teams, and roles, which supports HR processes, reporting lines, and resource allocation.

Geographical Hierarchies:

Arranging data based on geographical regions, countries, states, and cities, which is crucial for location-based analysis and decision-making.

Supplier hierarchy approaches

Dunn & Bradstreet (D&B)

The D&B number, also known as the D-U-N-S? (Data Universal Numbering System) number, is a unique identifier assigned to businesses by Dun & Bradstreet (D&B). It plays a significant role in building and managing vendor to supplier relationships, especially in the context of master data management (MDM).

The use of D&B numbers ensures that vendor and supplier data is unified and consistent. While the D&B number will address legal ownership, it will only show Vendors that are legally associated with a Supplier. It will not address distributors and other entities that are handling the Supplier products.

GTIN to GLN Mapping

GTIN (Global Trade Item Number) and GLN (Global Location Number) are essential components in master data management (MDM). GTIN is already an attribute of an item / product.

• GTIN (Global Trade Item Number): A unique identifier for trade items, such as products and services. GTINs are used to identify products at different levels of packaging, from individual items to cases and pallets.
• GLN (Global Location Number): A unique identifier for locations and legal entities. GLNs are used to identify physical locations, such as warehouses, stores, and corporate offices, as well as legal entities involved in business transactions.

By mapping GTINs (Global Trade Item Numbers) to their owner/manufacturers? GLN (Global Locator number), a business can addresses distributors and 3rd parties by allowing it to pull only the Supplier’s own items from all vendor numbers.

Combining Vendor to Supplier Hierarchy and GTIN to GLN Mapping

By combining both the D&B corporate family hierarchy with GTIN to GLN mapping, a Supplier such as Nestle can get access to all their legal entities items as well as to the items that they own from multiple suppliers.