User Defined Hierarchies are maintained in the Hierarchy Editor:
On level one items the User Field Label field, is provided to record a name that might correspond to an external system. The Label applies to all the child items of the level one.
Once configured, a User Hierarchy must be selected in Tools > Options, User Fields, so it can be applied to any Asset. To utilise Standard Defect, Response Time functionality, one User Hierarchy needs to be selected in the Asset User Hierarchy 1 Asset Priority:
With this Hierarchy available, all Assets can be assigned an item from it.