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Having established the models for parties and party roles and their relationships, this chapter focuses on the products that parties produce and use. Products are defined as goods or services that were, are, or will be sold by the enterprise. Goods are products that are more tangible in nature and generally created in advance for sale. Services are products that involve the use of parties' time and are less tangible in nature. Every organization needs to know a great deal of product information on a regular basis, such as the following issues:
- How do the enterprise's services or goods compare in quality and price to those of its competitors?
- What inventory is needed at each location to meet the needs of customers?
- What are the prices, costs, and profitability for the services or goods that are offered?
- Where can the enterprise purchase the best services and goods at the best prices? Just as the party model stores common information about parties indepen- dent of their roles, the product model stores common product information regardless of whose products they are. This product model is therefore more
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flexible, stable, and understandable because product information is modeled only one time, regardless of whether it is the enterprise's products, competi- tors' products, or suppliers' products. This chapter models information on the following areas of product: •i Product definition
- Product category
- Product identification
- Product feature
- Suppliers and manufacturers of products
- Inventory item storage
- Product pricing
- Product costing
- Product to product associations (alternate model also provided)
- Product and parts (alternate model also provided)
Product Definition
Just as parties include both internal and external parties, the product model includes products that the enterprise provides, products from suppliers, and products that competitors provide. Some of the information may be indepen- dent of the supplier, such as the description, category, and features of the prod- uct. Some of the information about the products, such as the availability and pricing of products, may depend on the supplier of the product. Figure 3.1 shows an entity called PRODUCT that models all products includ- ing the products the enterprise sells, products from suppliers, and competitors' products. The model shows that the key is product id, which is an identifier for the product. The attributes of PRODUCT are name, which uniquely describes a product; introduction date, stating when the product was first available to be sold; sales discontinuation date, which documents when the product will not be sold any more by the manufacturer; support discontinuation date, which states when the product will no longer be supported by the manufac- turer; and a comment, which documents particular descriptions or notes relat- ing to the product. Products include both tangible goods, which are called GOODs, and non- tangible offerings, which are called SERVICES. For example, a GOOD may include specific types of pens, furniture, equipment, or anything that can be physically stored. (Even a software program, which is a GOOD, can be physi- cally stored.) The alternate subtype, SERVICE, is for products that involve sell-
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Often, these classifications are shown as separate entities in the data model. The issue of showing these product categories separately is that other infor- mation may be based on any of these categories and should be related to the supertype of PRODUCT CATEGORY to provide more flexibility. For instance, targeting market interest in products may be based on several product cate- gories. Another example is that product pricing may be based on and related to many product categories. Figure 3.2 illustrates that a PRODUCT may be classified in one or more PRODUCT CATEGORYs to group products together that may be useful for sev- eral purposes, such as catalog organization, sales analysis, listings, or other types of product analysis. The PRODUCT CATEGORY can include more that one PRODUCT, and therefore the associative entity, PRODUCT CATEGORY CLASSIFICATION describes which products are in which category. For exam- ple, all pens, pencils, paper, notebooks, desk sets, and diskettes are classified into the category of office supplies. Product categories may change over time; therefore, the PRODUCT CATE- GORY CLASSIFICATION has the attributes from date and thru date, which state when the product was classified into its grouping. PRODUCT CATEGORYs may be made up of other PRODUCT CATEGORYs and hence the recursive entity PRODUCT CATEGORY ROLLUP that allows each product category to be made up of many other categories as well as a sub- category to be in a different parent category. An example of this is that the product, "Johnson fine grade 8 1/2 by 11 bond paper," is classified as a paper product, which is a subcategory of the office supplies category and may also be a subcategory of the computer supplies category. To assist in sales forecasting and prospecting, the entity MARKET INTER- EST is included in this model. It is an intersection entity linking information about PARTY TYPE and PRODUCT CATEGORY that allows an enterprise to record the category of products for which particular types of parties may be interested. If the PARTY TYPE includes specific industries or industry seg- ments as types and these have been associated with actual parties, then an enterprise can easily identify organizations within segments of a target industry that may be interested in types of products or services. These organizations could then be the focus of a new sales campaign for those types of products. Because interests change over time, the attributes from date and thru date are also included. Table 3.2 illustrates examples of product categories. Notice that diskettes are categorized as both office supplies and computer supplies. This categorization may be useful for showing different types of products under various product catalogs. The enterprise needs to be careful when classifying a product into multiple categories, as it can result in misleading results when performing cer- tain queries. For instance, if products were grouped into multiple categories and there was a sales analysis report by category, the total sales amount for the
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Figure 3.2 Product category.
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stances within this entity could be "primary category for catalogues," "primary category for sales analysis" and so on.
Product Identification Codes
Goods may have various ids that are used as a standard means of identifying the goods. Figure 3.3 provides a data model to identify the various code or id values that a good may have. A single code may uniquely identify goods and/or ser- vices, however, some goods may have more than identification value. The GOOD IDENTIFICATION entity has an attribute of ID value to store the vari- ous identification codes that the good may have. The subtypes of GOOD IDEN- TIFICATION designate the types of ids that may be given to a good. The MANUFACTURER'S ID NO is a good id designated by the manufacturer. The SKU (stock-keeping unit) is a standard product id that distinctly identities var- ious products. The subtype UPCA stands for Universal Product Code—Ameri- can and is a mechanism for identifying products within America UPCE
Figure 3.3 Product identification.
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(Universal Product Code—European) is a mechanism for identifying products in Europe. ISBN (International Standard Book Number) is a mechanism to identify specific books throughout the world. A single good may have more than one standard id. For instance, a certain office supply product may have a manufacturer ID number designated by the manufacturer and a UPCA number identified by the industry.
Product Features
Products may have features that could also be called characteristics, options, variations, or modifiers, allowing either customization of a product or describ- ing the characteristics of-a product. One may think that these should be two separate entities, one to describe the features included in the product and another to record the available options. The issue with having two separate entities is that the same feature may be part of one product and be an option in another product. For example, a "copier paper" product offering may be defined using white paper as a part of the product definition, while another product, "colored stationery," may have the color "white" as an option. Addi- tionally, the same product variation may be part of the product and later in time be considered an optional feature. Therefore, the data model will maintain product features that may be required as part of the product, may come standard with a product (meaning that this feature may be deselected), or may be selected as an option for a prod- uct. Examples of features include the product quality, brand name (which may be different from the manufacturer), color, size, dimension, style, hardware fea- tures, software features, or billing options. In Figure 3.4, a PRODUCT FEATURE entity is used to define these ways in which the product may be modified or tweaked. Because a PRODUCT FEA- TURE may be used in many products and each product may have many fea- tures, the PRODUCT FEATURE APPLICABILITY maintains which PRODUCTS may be available with which PRODUCT FEATURES. The subtypes, STAN- DARD FEATURE, REQUIRED FEATURE, SELECTABLE FEATURE, and OPTIONAL FEATURE allow the capability to specify if the features come as part of the standard configuration of the product, if the feature is mandatory as part of the product, if the feature needs to be selected (e.g., color), or if the fea- ture is an optional component. The UNIT OF MEASURE entity helps define the product in terms of the type of measurement for the product. It also helps further define the DIMENSION subtype of PRODUCT FEATURE. The UNIT OF MEASURE CONVERSION allows different units of measures to be converted to a common unit in order to assess inventory levels of a type of good.
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Product Feature Interaction
The applicability of certain product features may depend on other features that have been selected. For example, if one is buying a laptop computer, the optional feature of selecting an internal DVD may be possible if and only if an internal rewritable CD-ROM has not been selected. The PRODUCT FEATURE INTERACTION entity provides the capability to store which features are incom- patible with other features (they will be subtyped SELECTION INTERACTION INCOMPATIBILITY) and which features are dependent on other features being selected (they will be subtyped FEATURE INTERACTION DEPENDENCY).
Product Feature Subtypes
The PRODUCT FEATURE entity may have many subtypes and will invariably be customized for the enterprise, depending on the types of features that are applicable. Subtypes of PRODUCT FEATURE may include the following:
- PRODUCT QUALITY classifies the product by value such as "grade A" or "grade B." For service products, such as a consultant, this may represent "expert" or "junior."
- COLOR describes the color(s) of the good. A good may have more than one COLOR option, but a different color may also denote that it is a sepa- rate good.
- DIMENSION describes the various numeric descriptions of the good such as "8^-inch width," "11-inch length," or "10 pound." The DIMENSION is related to UNIT OF MEASURE, which has a description attribute that defines how the feature is being measured. The unit of measure may determine how the product can be inventoried and sold, such as by the "box" or "each." For service products, the unit of measure values may be "hours" or "days."
- SIZE specifies how large or small a product is in more general terms than dimension such as "extra large," "large," "medium," or "small." This fea- ture could be useful in the garment industry.
- BRAND NAME describes the marketing name tied to the good, such as "Buick" for a General Motors vehicle. Note that the brand name may be different from the manufacturer's name.
- SOFTWARE FEATURE allows additional software to be added to prod- ucts or allows certain software settings to be specified for a product. For instance, software dollar limits could be set for products that are based on usage, such as meters. Another example could be the setting of soft- ware preferences for a software package or hardware purchase.
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- HARDWARE FEATURES allow for the specification of certain compo- nents that are included or that may be added to a product—for example, a cover for a printer.
- A BILLING FEATURE is an example of a product feature that specifies the standard types of terms that may be associated with a product, such as recording that an Internet access service may be available with either monthly or quarterly billing.
Product Feature Examples
An example of a sample product with features is a "Johnson fine grade 8 1 /2 by 11 gray bond paper" where Johnson is the brand name, 8 1/2 inches wide and 11 inches long are the dimensions, gray is the color, fine grade is the quality, and bond paper is the product type. In this example, these features would all be maintained as REQUIRED FEATURES. This product may be further defined by specifying the particular colors in which the product is available. This is done by associating the available optional features that could be associated with this product. This product may come in two colors, and therefore there is a need to relate two optional product features that could be selected: "blue" and "gray" bond paper. These optional features allow pricing to be related at the base product and the ability to spec- ify optional features to a particular product that may or may not affect other information about the product such as pricing. In the example, a customer may order the product with different colors; however, the prices associated with the product need be stored only once, at the product level. Alternatively, pricing may be based on the product features also. (There will be more discussion on product pricing later in this chapter.) Products may be defined at multiple levels of specificity. For example, an enterprise may want to define a product known as "Johnson fine grade 8 1/2 by 11 bond paper" as well as another product offering that is more specific, such as "Johnson fine grade 8 1/2 by 11 gray bond paper". This data model will allow a great deal of flexibility to define required features that help determine the prod- uct or as optional features that could be available for the product. Table 3.3 shows examples of possible products and different types of fea- tures. Notice that the product name may describe many of the features of a product so that it may be ordered by name, while the feature allows products to be correctly defined and categorized and allows for customization of the prod- uct without necessarily having to store a product for each product variation. The details behind the product are stored in PRODUCT FEATURE APPLICA- BILITY entity and are shown in this table to clarify the definition of the product. There are other possible types of features of products, many of which are dependent on the enterprise's type of business. Shoe manufacturers may be
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The associative entity UNIT OF MEASURE CONVERSION provides the capa- bility to use a common unit of measure to calculate how much inventory the enterprise has of a product. The attribute conversion factor in UNIT OF MEA- SURE CONVERSION is provided for this purpose. For example, there may be several products for Henry #2 pencils that have different units of measure such as "each," "small box," and "large box." In many cases, organizations need to show total inventories, costs, and sales for all of a product regardless of its unit of measure. By defining a common unit of measure, such as "each," and includ- ing a conversion factor (e.g., 12 for "small box" and 24 for "large box"), it is pos- sible to determine the total amount of Henry #2 pencils there are in inventory and how many have been sold. Another example is process manufacturers that are often dealing with liters, gallons, tons, and other metric conversion factors. It is often necessary to pro- vide a common unit of measure to determine inventory levels. If this type of unit of measure conversion is required, then the UNIT OF MEASURE CON- VERSION entity could be used. This would show the many-to-many recursion between different units of measures. The conversion factor attribute is required in the UNIT OF MEASURE CONVERSION entity to provide for a con- version to common units of measure. For example, the conversion factor would be "4" in the relationship between quarts and gallons.
Suppliers and Manufacturers of Products
Figure 3.5 shows which suppliers and manufacturers are associated with each product. Because products may be sold by more than one organization and organizations sell more than one product, the entity SUPPLIER PRODUCT shows which products are offered by which organizations. The available from date and available thru date state when the product is offered by that sup- plier. This information is important because it provides the capability to find out where and when specific products may be purchased, what products com- petitors sell, and which products the enterprise sells. Another important con- sideration for SUPPLIER PRODUCTS is lead time, which indicates the average amount of time it takes for a supplier to deliver the product to the customer location from the time of order. While the actual average lead time can be derived from information stored in orders and shipments (this will be covered in later chapters), the standard lead time is provided because some suppliers quote a standard amount for delivery of each product. Because there may be many suppliers from which the enterprise can order products, the PREFERENCE TYPE entity provides information to track the pri- ority of whom to order from first, second, third, and so on. This priority is the information that would be stored in the description attribute and related back to the SUPPLIER PRODUCT entity. In addition to preferences that rank the pre-
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Figure 3.5 Suppliers and manufacturers of products.
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its cars. Because the original car manufacturer is still responsible for the prod- uct, it is considered the manufacturer.
Inventory Item Storage
Figure 3.6 shows how inventory items are modeled. While a GOOD represents a cataloged item or a standard product that can be purchased, an INVENTORY ITEM represents the physical occurrence of a good at a location. The GOOD may be "Johnson fine grade, 8 1/2 by 11 bond paper," while the INVENTORY ITEM is the 100 reams of this good sitting in the central warehouse.
Figure 3.6 Inventory item storage.
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The INVENTORY ITEM may be either a SERIALIZED INVENTORY ITEM, which means each item's serial num(ber) is tracked, or a NON-SERIALIZED INVENTORY ITEM, which means a group of items is tracked together and the quantity on hand for these is maintained by their location. The quantity on hand attribute is updated based on incoming and outgoing shipments of this good (shipments will be covered in Chapter 5). The model does not include attributes for ordered quantity expected in or committed quantity going out as this information can be derived from order information (orders will be covered in Chapter 4). A concept found in some production-oriented industries is that of the LOT. A lot is simply a grouping of items of the same type generally used to track inven- tory items back to their source; it is often the result of a production run. Another source of lot information may be from the shipment from suppliers, which could determine the lot This information is very important in the event a recall of items is required. Inventory items can be separately identified by lots because an INVENTORY ITEM may be made up of one and only one LOT. This implies that there may be more than one inventory item of the same item type at a specific location, if there is more than one lot involved. Lot identification numbers, lot ids, are tracked so that if there is a customer complaint at a later time, it will be possi- ble to identify where the items came from. The inventory item may be tracked at a facility level, such as a warehouse, or it may be tracked at a more detailed level within a facility such as a container or a bin. The FACILITY entity is related to the INVENTORY ITEM and maintains the physical structure, building, warehouse, plant, or office where inventory items are located. A more detailed location is referred to as a CONTAINER, which resides within a facility. The CONTAINER TYPE entity specifies the type of container such as a "shelf," "file drawer," "bin," "barrel," "room," or any other detailed location. The INVENTORY ITEM STATUS TYPE maintains the current condition of the items, for example, "good," "being repaired," "slightly damaged," "defec- tive," or "scrap." If a history of the status of inventory items is needed for seri- alized items, then the enterprise may need an additional intersection entity of INVENTORY ITEM STATUS with a status date. This entity would be between the INVENTORY ITEM and INVENTORY ITEM STATUS TYPE. Table 3.5 provides examples of INVENTORY ITEM. ABC Corporation stores most of its office supplies in bins within each facility. The first four rows show how much inventory of various serialized goods is located in various bins within different facilities. Notice that there are two records for "Johnson fine grade 8 1/2 by 11 bond paper": the inventory of 156 reams (the product record defines the unit of measure in reams) stored at 100 Main Street with ABC Cor- poration and the inventory of 300 reams stored at 255 Fetch Street with ABC Subsidiary. The last row shows a serialized item of a copier, a large item that
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The REASON entity provides standard explanations of the variance to the inventory item's on-hand amount. Possible values may be "theft," "shrinkage," "unknown variance," and "ruined goods." The comment attribute in the INVEN- TORY ITEM VARIANCE allows additional non-standard explanations. For example, if the enterprise discovered that there was a loss of inventory items due to theft, it can record the date the theft was discovered, the amount of the product that was stolen, and the specific details behind the theft. This serves as an audit trail to account for any changes to the product's on-hand quantity resulting from transactions other than incoming and outgoing shipments.
Product Pricing
Every organization seems to have different mechanisms for pricing its prod- ucts. There are some common principles behind pricing that are captured in the data model in Figure 3.7. In most organizations, there are several aspects to pricing a product: the base price for which the organization sells the product, various discounts applied against the base price such as quantity breaks, surcharges such as freight and handling charges, and the manufacturer's suggested price. The PRICE COMPO- NENT stores these aspects of prices for each supplier's products. Notice the entity is named PRICE COMPONENT to allow the entity to be reused in other circumstances such as in agreement pricing, which will be cov- ered in Chapter 4.
Pricing Subtypes
This entity is broken down into two non-mutually exclusive sets of subtypes (see explanation in Chapter 1, Non-Mutually Exclusive Sets of Subtypes, describing this notation). One subtyping that occurs is the subtypes of BASE PRICE, which has the starting price for the product, DISCOUNT COMPONENT, which stores valid reductions to the base price, SURCHARGE COMPONENT, which adds on possible charges, and MANUFACTURERS SUGGESTED PRICE. Another subtyping that categorizes types of prices is that the PRICE COMPO- NENT may be a ONE TIME CHARGE (such as for buying a good), a RECUR- RING CHARGE (an ongoing charge such as a monthly fee for a standard type of service), or a UTILIZATION CHARGE, which is a price component based on billing for usage of a product. The RECURRING CHARGE is based on per TIME FREQUENCY MEASURE (per hour, per day, per month), which is a type of UNIT OF MEASURE. The UTILIZATION CHARGE is based on a UNIT OF MEA- SURE, such as per a certain quantity of "internet hits" to describe the charge for Web hosting services.
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Figure 3.7 Standard product pricing.
