What is product type in SAP LO-MD - Logistics Basic Data?

SAP Term: product type

• Component: LO-MD

• Component Name: Logistics Basic Data

• Description: A grouping together of products with the same basic attributes such as raw materials, semifinished products, or finished products. Note that here, product refers to an object that includes products, materials, articles, and services. All products must be assigned to a product type which determines: Whether the product is intended for a specific purpose such as a configurable product or process product Whether the product number can be assigned internally or externally The number range from which the product number is drawn Which screens appear and in what sequence Which user department data you may enter What procurement type the product has; that is, whether it is manufactured in-house or procured externally, or both This term is relevant for S/4HANA Master Data Management.

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• Key Concepts: 
  Product type is a classification of materials in the SAP system. It is used to group materials with similar characteristics and to assign them to a specific material type. In the LO-MD Logistics Basic Data component, product type is used to determine the material master data that is required for a particular material. 
  
  How to use it: 
  Product type is used to classify materials in the SAP system. It is assigned when creating a material master record and can be changed at any time. The product type determines which fields are required for the material master record and which fields are optional. 
  
  Tips & Tricks: 
  When creating a material master record, it is important to select the correct product type. This will ensure that all of the necessary information is included in the record and that any optional fields are not left blank. 
  
  Related Information: 
  Product type is related to other SAP terms such as material type, material group, and industry sector. It is also related to other components such as LO-VC Valuation and Account Assignment and LO-WM Warehouse Management.