A work center hierarchy is a business object in PP/DS that defines the structure and sequence of resources that are used for a production process. You use this object to represent the logical and physical dependencies of the resources and to control the scheduling and sequencing of the operations or orders. A work center hierarchy allows you to model the production flow and capacity more realistically and ensure the technical feasibility of the production plan1 A work center hierarchy can also be used to cumulate the available capacity and capacity requirements of the resources in capacity planning. You can cumulate the available capacities from subordinate work centers to a superior work center level in order to determine the total available capacity for the superior work center. This way, you can use a work center hierarchy as a group of alternative work centers that provide a cumulative available capacity for production23 Reference:
Work center hierarchy | SAP Help Portal
Work Center Hierarchy - SAP Help Portal
Highlights for Manufacturing in SAP S/4HANA 2021 - Part 2: Production Planning, Engineering, Operations | SAP Blogs