Product classifications in the data model

The product classifications process involves classifying or grouping products. You can classify products based on a set of common categories and custom classification based on business requirements.

Global Product Classification (GPC) is one of the forms of product classification. GPC is a set of common categories that provides a common language to buyers and sellers for grouping products in the same manner globally. GPC is developed, owned, and used by the GS1 user community. GPC is mandatory for global data synchronization. GPC works by defining a hierarchy starting by industry sector or segments. In GPC, a brick defines categories of similar products. You can define bricks by brick attributes.

The product classifications in the PIM system involve the following hierarchies:

Merchandising hierarchy

Merchandising hierarchies contain product categories. Each retailer will have three merchandising hierarchies per banner:
  • Sellable merchandise hierarchy
  • Supplies hierarchy
  • Capital expenditure goods hierarchy

The sellable merchandise hierarchy is the primary Merchandising hierarchy and is typically the one maintained for a PIM repository. It is used to group sellable items into product categories for merchandise planning, forecasting, procurement, allocation, and replenishment.

Location

A location is any legal, functional, or physical location within a business or organizational entity. It can be any point of sale for trade items. Locations generally include corporate headquarters, divisional offices, stores, and distribution centers but might even include a brand. Each location can be represented by a Global Location Number (GLN).

GLN is the EAN.UCC-mandated globally unique thirteen-digit identification number for a location (per the EAN International website). An example of a GLN: 7777777777777, Albertsons Store #7122, 3132 Clement Street, San Francisco, CA 94121.

Location Hierarchy

Locations are organized in location hierarchies. There are three different location hierarchies:
  • Operations hierarchy: This is the primary location hierarchy and lists stores or warehouses by region. All PIM clients use this hierarchy for cost and price management and financial reporting. All PIM clients at the retailer use this hierarchy.
  • Marketing hierarchy: This hierarchy lists stores or warehouses by membership in target markets. Marketing manager clients use it for promotions and promotional circulars within regional target markets.
  • Geographic hierarchy: This hierarchy lists stores or warehouses by existence in cities, counties, and states. Finance manager uses the Geographic hierarchy for managing regional and local tax rates. This hierarchy includes store departments because tax rates often vary by store department.

All three location hierarchies use the mapping of departments to stores. You can visualize them as the leaves of each one of these hierarchies being associated to stores which contain the set of departments mapped to them. As mentioned previously, the SKU's are associated to the individual departments in individual stores.

You can set up the location hierarchies at a retailer in one of the two ways in relation to the different banners in the enterprise:
  • One set of location hierarchies per banner.
  • One set of location hierarchies for the enterprise with the banners as the first level of the location hierarchies.
Your choice depends on the way the organization is structured at the retailer's enterprise. The first variation is illustrated later in this section:

Location hierarchies have the following structure:

Vendor and supplier

A vendor is a seller of trade items to a retailer. Vendor is a WCC Party. Each vendor has one or more points of sale, shipment, or invoicing. Every vendor point of sale, shipment, or invoicing can be represented by a GLN.

A supplier is the same as a vendor, a different term used to mean the same thing in this context.

There are multiple types of vendors:
  • Brand owner: establishes the global product information for a trade item for all information providers.
  • Information provider: provides the product information for a trade item to a retailer. As per the EAN.UCC, the information provider is the entity that provides the global data synchronization network with master data. The data source owns this data. For a given item or party, the source of data is responsible for ensuring permanent updates of the information.
  • Manufacturer: produces a trade item for a retailer either directly or through subcontractors. If a retailer acts as a manufacturer of products for sale in its stores, the retailer is designated as a private label manufacturer.
  • Wholesaler or distributor: ships trade items to a retailer that are manufactured by another vendor. The wholesaler or distributor takes ownership of the trade items.
  • Broker: ships trade items to a retailer that are manufactured by another vendor. The broker does not take ownership of the trade items.
The type of vendors are not important from a PIM data model point of view. They are just described here to provide some context.

Vendor hierarchy

Vendor hierarchies allow you to define the vendor attributes and association of items to vendors.

For example

Black and Decker Dust buster 7.2 volt, GTIN #12345678901234 is mapped to Vendor GLN 8888888888888, Black and Decker Baltimore Mfg. Plant.

There are four vendor hierarchies per retailer:
  • Supply chain
  • Factor relations
  • Offshore supply chain
  • EDI

The Supply chain hierarchy is typically the primary Vendor hierarchy. It defines the ordering, payment, and shipping information flows between a retailer and a vendor.

The Supply chain hierarchy is a location hierarchy. It has three levels:
  • Vendor corporate
  • Vendor manufacturing facility
  • Vendor distribution center
Trade items (not SKU's) are mapped to the Supply chain hierarchy to specify the following data:
  • Primary ordering location
  • Secondary ordering location
  • Primary shipping location
  • Secondary shipping location
  • Primary payment location
  • Secondary payment location

Example

For item 12345 (Black & Decker Dustbuster) in store 678 (Minneapolis), the
  • primary ordering location and primary shipping location: GLN 1234567890123 (also DUNS 12-345-6789), Black and Decker Baltimore plant,
  • primary payment location: Black and Decker HQ, GLN 5555666677777 (also DUNS 44-555-6666),
  • secondary ordering, shipping, and payment location: GLN 223344556677889 (also DUNs 22-333-4444), SuperValu Minneapolis Distribution Center.