A supplier hierarchy is a multi-level structure of suppliers represents a corporate structure. The hierarchy can be used for central agreements valid for a group of suppliers or for reporting and analysis purposes. This activity is used to create nodes in the hierarchy structure that can be used for reporting and analysis. An example could be that you want to follow up on the suppliers within a specific region, where the region does not represent a specific supplier record and can then instead be added as a reporting node.
The reporting node can not be added as the top level of the structure.
As a result of this activity a reporting node is added to the supplier hierarchy to which you can add subsidiaries.