What is the difference between material types and material groups?

The material type is a key controlling feature of the material master while the material group is a classification of materials having similar attributes. Material groups are typically beneficial for reporting purposes, especially from a procurement and inventory management standpoint, while material types, which include standard material types like ROH (raw material) , HALB (semi-finished material( and FERT: (finished material) determine important functions such as number range, procurement type, price control and field selection.