Introduction

In this final module of the PCF Essentials course we will discuss the difference between category and SKU level PCFs.  Module Outcomes: Understand that ‘product’ in a PCF can have multiple meanings in the context of PCFs Detail the key differences between creating PCFs at different levels within the product hierarchy (category level Vs SKU level PCFs) Understand how to select a reference product for a product category for a specific customer

What levels are included within a product hierarchy?

The product hierarchy consists of various levels:

• Product portfolio: The entire product set sold by a business unit​

• Product category: A group of products fulfilling equivalent functions​

• Product level: Any tangible product​

• Product variant or SKU: A unique identifier to a product variant within an organization​

PCF assessments can be conducted at any level within this hierarchy, offering flexibility to practitioners. It's acceptable to create a PCF for a group of products, reducing the burden on suppliers, especially those with extensive product lines.

• Comparison between individual SKU/product level PCFs and product category PCFs

  • Individual PCFs provide a detailed assessment of a single product variant, including specific variations.​

  • Product category PCFs offer a broader view, representing a range of products within a category.​

  • Despite the difference in granularity, the calculation methodology remains consistent for both levels of PCFs.

• Buyers vs. supplier categorization

  A buyer might categorize the products it purchases differently to a supplier, causing potential confusion. To ensure PCFs are being reported for the appropriate product it may be necessary to ask for further clarification of reporting requirements that buyers have set.

• ​What are the options for generating PCFs at a customer’s product category level?

  There are three main options for responding to a product category level request of a PCF:

  1. Generate a PCF for each individual SKU within the customer's product category and provide alongside relevant sold volumes for each.​

  2. Generate one PCF representing all products within the customer's category, containing extensive data and provide alongside relevant sold volumes. ​

  3. Create a PCF for a single product within the customers' category, representative of the broader category and provide alongside relevant sold volumes.​

   

  If there is doubt, a supplier should clarify requirements with their customer.​

Self-assessment Quiz

Now that we have learnt more about differences between Individual & Category level PCFs, test your knowledge by completing the below self-assessment quiz

Please note that completing the self assessment quiz also keeps your customers informed on your progress if they have asked you to engage with the M2030 PCF Academy. M2030 will never share answers or performance, simply that you have completed the quiz for this module. 

Cheat Sheet PDF

You can download a PCF version of this module below:

• PCF Essentials 7 - Products & product categories.pdf900 KB