Outlining Planning Methods

Planning layouts are customized screens for entering plan data. The definition of a planning layout controls the appearance of the Planning screen and some of its functions. This allows complete flexibility in controlling the planning entry process.

A planning layout definition consists of the following parts:

• General data selection:

  In this part, you specify the characteristic values that are valid for the entire layout. For example, if you do not want to display actual data beside the plan data, you can set the plan-actual-indicator in the general data selection. Otherwise, you need that characteristic in the specific column.

• Lead columns:

  In these columns, you specify characteristic or value field combinations. For example, the characteristic might be "Customer". However, you do not want to plan data for all customer numbers specified in the planning level, but only the specific customer numbers you enter in the lead column on a specific row.

Each row and column intersection in a planning layout definition requires valid values for the special characteristics version, record type (for costing-based CO-PA), and the plan or actual indicator. When these values are employed in the layout design, layouts can be created in which the values can be planned for multiple versions at a time. Employing these values in the layout design also means that history data can be displayed for reference.

You can use variables when defining planning layouts to give them maximum flexibility. Variables can be used for any characteristic and they can be installed in rows, columns, or the general data selection. Users are prompted to enter the values for these variables when planning.

Separate planning layouts are required for costing-based CO-PA and Margin Analysis. This is because planning figures on the two sides of CO-PA are not related or linked.

When defining layouts in costing-based CO-PA, the characteristic record type is necessary.

A general planning layout that corresponds to the selections made in the plan level and package can be created automatically. Specific layout features can be maintained manually.

The basic options for defining the lead columns are as follows:

• Each row in the lead column can be defined separately and consists of a combination of characteristic values. In this case, the columns are value columns. Alternatively, each row can be a value row, in which case the columns are characteristic values.

• The entire lead column can be selected to represent a characteristic, in which case the columns are value columns. If you use this option, you can obtain multiple lead columns but you cannot hard-code any rows.

Value columns are defined using characteristics, value fields, attributes, and formulas. If the lead column contains only characteristics, each value column must at least contain a value field. The column can also contain characteristic values pertaining to the value field.

The following attributes can be tagged to each value column:

• A distribution key for distributing the summarized values to periods

• A unit for the value field (either a currency or a unit)

• A long text indicator (indicating that long text can exist)

• All characteristics

You can define the variables for your planning levels and planning packages.

For example, you can use a variable instead of a planning package to specify the planning period.

You can use all the planning packages for planning runs in subsequent fiscal years without the need to change each planning package. Instead, you can change the characteristic of the variable centrally.

You can maintain variables directly from the Planning screen by choosing Edit→Variable.

At the start of the first planning phase, in which you plan target values, you define average prices and the cost of goods manufactured. Introducing ratios helps simplify planning prices manually. With the Goal Seek function, you can enter the target revenue, and the system calculates the planned price required to attain it.

A ratio is a quotient involving two value fields, such as price = sales/quantity. Ratios can be used as a basis for simulating corresponding adjustments and alterations of quantities and prices in the planning layout.

You can define ratios centrally in Customizing. They can be selected in the same way as normal value fields when you define the planning layout.

Ratios or prices are not saved on the database. Instead, they are calculated dynamically from the quantities and values at each planning level. This helps to avoid the buildup of redundant data and ensure a consistent dataset.

Ratios are summarized in a ratio scheme. You can apply these schemes against existing plan data. This is done to valuate the existing plan base values with ratio values, or the rates calculated based on specific reference data. The reference data can be the actual data or data from another planning version. For example, if a ratio scheme contains a ratio for per-unit price, you can use a ratio scheme to valuate a sales quantity plan and determine the price for each piece from the actual data.

You can use ratio schemes in both manual and automatic planning. In manual and automatic planning, you can indicate the ratio scheme and reference data (plan data or actual data, plan version, record type, and reference time interval). In automatic planning, you can apply ratio schemes using the Copy and Change functions.

You can perform data simulations in planning using the Goal Seek function. This function allows you to enter a target contribution margin in manual planning, and enables the system to calculate the corresponding quantity sold.

To use Goal Seek, both sides of the relevant data cells must be mathematically inclined, that is, as a formula or as a ratio. In the figure, Reaching Objectives Using Goal Seek, ratios that are hidden in the layout create the relationship between the contribution margin and the quantity sold. To use Goal Seek, first select the two relevant data cells and choose Edit→Goal Seek.

Enter a target value in the dialog box that appears, such as a revenue of 120,000. The system then calculates the appropriate quantity, which in this case is 6,000 items.

Top-down distribution is a process for distributing data that has been planned at one level in CO-PA to the additional levels based on reference data. Reference data can be plan or actual CO-PA data. Top-down distribution can only be used in automatic planning.

An example of top-down distribution is planning values at product group level, and then distributing these values to the individual products in a group. Another example is planning values at product level, and then distributing these values to the plants from which the products are sold.

Plan values can be distributed strictly according to the reference data by period or the reference data aggregated across periods. Reference data aggregated across periods equalizes the distribution percentages across periods for the receivers.

When performing a top-down distribution, you specify the field or fields in the reference data. The values of the reference data field or fields are used as the reference base.

The options for specifying fields in the reference data during top-down distribution are as follows:

• Fixed value fields:

  The data of all value fields is distributed according to the distribution of values of this value field.

• All value fields:

  The data of each value field is distributed according to the relative reference data for each profitability segment for the same value field.

Top-down distribution enables you to distribute the data from a higher planning level to lower levels. For example, you can perform planning at the product group level and distribute the values to the product level.

The plan data is distributed in the same way as the existing reference data. With top-down distribution, you can use plan or actual data as reference data and you can distribute the data separately by period or aggregate the values over several periods to level out fluctuations.

In the figure, Method: Distributing Unassigned Values, the unassigned plan data (value 1000) at the product group level is distributed to the individual products in the same way as the base values (the actual quantities sold). This distribution is at a ratio of 3:2.

The product group is credited with 1000, and the products are debited with 600 (product A1) and 400 (product A2). We assume the initial plan for each pump was 1000 a piece.

In the figure, Method: Distributing Total Values, the sum of the plan data for the product group is the individual values of the products (each prior value) and the unassigned values (value #) at the product group level. The sum is distributed to the individual products in the same way as the base values (actual quantities sold ), which is at a ratio of 3:2. The product group is credited and the products are debited.

In the parameter set, you can choose between the following top-down methods that define what values are to be distributed:

• Using the Only Distribute Unassigned method, you can distribute only values that are posted directly at the higher level.

• Using the Distribute Total Value method, you can distribute all the values located at the higher level, regardless of whether they were posted there directly or rolled up from more extensive levels. When you use this method, the values taken from the extensive level are overwritten by the new distributed value.

You specify the receiver characteristic for the distribution under Receiver Characteristic. You can select several characteristics from the characteristics specified in the planning level.

In the Reference value field, you can enter a specific value field for the reference data or a key figure calculated from value fields, as the basis for distribution. Alternatively, you can specify that the distribution occurs according to value fields. In this way, each value field is taken as the basis for its distribution.

You can select Cumulative Periods to smooth out incidental differences that occurred from period to period in the reference data.

You specify the time frame for the reference data used as the basis for executing the planning method.

You can specify the following settings in the parameter set:

• Specify whether the data to be used as the reference data is the actual data, the data from the plan version for the planning package, or data from a different plan version that is yet to be specified.

• Specify for a sender characteristic that a different characteristic value in the reference data forms the basis for distribution. That is, the distribution of the product groups for the product data of country 1 is executed based on the product data of country 2. To do this, use the Transform Characteristic Values function.

• Specify whether the planning method is to be executed in a test run or in an update run, or whether this decision is to be postponed until the execution of the parameter set.

• Specify whether to jump to a background processing screen.

• Specify the value fields that are to be distributed on the Value fields tab page.

In bottom-up planning, plan data is created at the customer and the product group levels and aggregated to corresponding higher levels.

In the target fields, specify the following information:

• The posting periods to be updated with the copied data

• The plan version to be updated

• The record type under which the plan data is to be saved

In the source fields, specify the following information:

• The posting periods from which data is to be copied

• The plan version from which the data is to be copied (if copying plan data)

• The record type of the plan data you want to copy

• The plan/actual indicator

Specify a distribution key to summarize the source data for all the periods and then distribute them across the target periods. If you leave the Distribution key field blank, the values are copied directly from the source periods to the target periods.

If you want the system to automatically perform valuation during the copy process, select the Valuate radio button. Target value fields can then be populated with values from costing sheets, product costing, and user exits.

Specify whether the source data should overwrite, add to, or subtract from the existing data in the target plan version.

Add and Post options have been added to characteristic transformation.

When using the Add function, the copied values are added to the existing recipient characteristics.

When Add is not selected, the copied values overwrite the existing plan data in the recipient characteristic.

When you select the Clear indicator, the values in the original characteristic are removed.

You can use the forecasting function to automatically calculate new plan data using existing data and customizable forecast profiles. You can use forecasting in manual and in automatic planning.

A forecast profile is a combination of a forecast model delivered by SAP and a set of user-defined parameters.

You can create forecast profiles in the CO-PA user menu. The SAP system supports a number of predefined forecast models, including trend models, seasonal models, and exponential models.

Weighting groups may be required as a parameter for the forecast profile, depending on the model you have selected. Weighting groups are also created in the CO-PA application menu.

With manual planning, you make a forecast by selecting a value or a column, and then choosing the Forecast function. Enter the required parameters, such as the forecast period and the reference data to be used, in the dialog box.

To forecast with automatic planning, choose Automatic Planning→Forecast in the application menu. Then, enter a forecast profile and the required parameters on the initial screen.

You can use planning sequences to combine, sort, and execute several automatic planning methods in one run. For example, first copy the plan values, distribute them using the top-down method, and then revaluate them.

In the fifth planning phase, you complete your sales and profit planning data with the additional plan data from other application components.

The SAP system supports integrated planning in Controlling (CO). Although planning is conducted separately for multiple business activities in CO, the  plans are linked to ensure consistency and drive realistic corporate-wide planning. As a result, the planning results for sales, service, production, procurement, general, and administration activities coincide to form one corporate operational plan.

The integration of multiple plans is accomplished in the SAP system through real-time and periodic synchronization of the data in the plan versions across modules. For example, the sales quantities planned in the Sales Information System (SIS) may be transferred in batch to the Sales and Operation Planning (SOP). SOP then uses the information to generate the necessary planned production and procurement activities. This example can be integrated with the overhead plans in CO-CCA, and the end results can be passed to CO-PA, where the resulting overall profitability plan resides.

The flow of planning data is one of the many possible planning strategies that can be used in the SAP system. The flow used for a given company depends on many factors, such as the modules being implemented, the planning functions in those modules, the integration functions between the modules, and the maintenance steps necessary to achieve integration.

To reflect plan costs from CO-CCA in CO-PA, transfer those costs into the CO-PA portion of a plan version through a cost center assessment. With this tool, planned costs can be allocated across profitability segments in the same way that actual costs can be allocated across profitability segments.

To assess cost center costs in CO-PA, an assessment cycle must first be defined. The assessment cycle consists of a series of segments, each of which defines a unique relationship between senders, receivers, and assessment rules. These segments can be defined on the user side of CO-PA.

When assessment cycles are defined, you must specify the controlling area from which the assessment takes place. This is because the allocations in Management Accounting can only take place within a single controlling area.

When allocating in CO-PA, it is not possible to exceed controlling areas. The controlling area is one part of the definition of the receiver’s operating concern.

You must specify the side of CO-PA from which the tracing factors should be drawn. These tracing factors are for an assessment rule for which variable portions are defined. This setting controls whether values are distributed based on account balances for profitability segments or key figure amounts for profitability segments.

Assessments affect both costing-based CO-PA and account-based CO-PA, if both are active. This is necessary from an SAP costing perspective because costs are being moved from the originating account assignment objects and cost centers. They are then being placed on the receiving objects and profitability segments, which are shared between both sides of CO-PA.