Product Hierarchy in Margin analysis

If we want to drill down through all the levels of the product hierarchy in the margin analysis and post and each level, we need to represent each of the individual levels as a separate characteristic in CO-PA.

Product hierarchy derivation in ECC:

In SAP ECC, the product hierarchy is stored in the material master WHICH IS contained in an 18-character field that is logically divided into different levels.

To derive product hierarchy in ECC two ways are available:

1/ Product hierarchy maintained in Mara (VLOOKUP derivation rule)

We can use the product hierarchy maintained in the general material master (table MARA, field PRDHA).


We suppose that the product hierarchy contains 2 parts, the first with 10 length and second length 14. (The max length is 18 char)

In CO-PA, we need to define the following three characteristics for these three levels (transaction KEA0):

A/ Create a VLOOKUP derivation rule in KEDR

B/ Maintain the source and target fields :



2/ Product hierarchy maintained in MVKE (VLOOKUP derivation rule)

  • We can use the product hierarchy maintained in SD, which is also dependent on the sales organization and distribution channel (table MVKE, field PRODH).

Maintain the source and target fields :

NB: For both of the scenarios we need to maintain the characteristic values for each level of the product hierarchy.

For more information, please refer to the OSS note: 62690 – Info: product hierarchy in CO-PA


Product Hierarchy classification based (Flexible hierarchy):

With SAP S/4 Hana, flexible product hierarchy can be used for product classification and reporting.

With this enhancement the product hierarchy become more flexible.

We can create product classification with several level and without the limit of 18 digits.

Until now, SAP doesn’t provide any standard solution to use this new classification in COPA.

But we can use the following workaround if we want to do so:

Derivation rule in COPA : 

1/ Create a new specific table to store the new product hierarchy. (Z table)

2/ Make sure that the characteristic values are maintained for any new entry in the product classification.

3/ Create an enhancement derivation rule based on the Z table for all the required levels of the product hierarchy.

Please share with us your feedback, suggestions and thoughts with us regarding this topic in comments.

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