Through Long Term Planning Transfer

SOP through Long Term Planning Transfer to LIS/PIS/Capacity
5
1
Purpose 5
2
Prerequisites 6
2.1
Master Data
6
2.2
Roles 7
2.3
Preliminary Steps
7
2.4
Business Conditions
7
3
Process Overview Table 9
4
Process Steps 11
4.1
Create Sales Plan
11
4.1.1 Sales Quantity Budget and Transfer to SOP
11
4.2
Sales and Operations Planning 11
4.2.1 Aggregate Sales Data from COPA 12
4.2.2 Demand Verification (Checking Sales Plan)
13
4.2.3 Create Rough-Cut Production Plan
14
4.2.4 Transferring Rough-Cut Production Plan to Inactive Demand Management
15
4.3
Long Term Planning
17
4.3.1 Create LTP Planning Scenario
17
4.3.2 Execute LTP MRP Run
19
4.3.3 Evaluating Capacity Requirements
20
4.4
Purchase Material Price Planning
22
4.5
Manufacturing Cost Center Planning
22
5
Appendix
24
5.1
Reversal of Process Steps
24
5.2
SAP ERP Reports 24
SOP through Long Term Planning Transfer to LIS/PIS/Capacity
1
Purpose
Businesses typically have an annual planning exercise known as Annual Operating
Planning (AOP). In this planning, all aspects of the business are planned, namel
y: revenue, production, direct and indirect procurement, capacity, and product/o
verhead costs.
The AOP planning is also sometimes referred to as the Annual budget. The plan is
prepared for the next fiscal year. Data collection for the plan / budget is usu
ally started in the last quarter of the current fiscal year.
The AOP exercise generally begins with forecasting the sales quantities and reve
nue for the coming fiscal year.
The sales managers review and adjust the sales quantities based on their informa
tion and judgment. The revised sales quantity plans are loaded into CO-PA. The s
ales quantities are again reviewed, adjusted manually if necessary, and then val
uated. This results in valuated sales revenue and cost of sales for the planned
sales quantities.
AOP - Sales Qty Budget
The process details up to this step are described in 172
and Transfer to SOP.
The current business process description deals with the process steps starting f
rom this point of the AOP process.
The accepted sales quantities are then transferred to Sales and Operations Plann
ing (SOP). In SOP, rough cut capacity planning of the budget sales quantities oc
curs to verify whether the goods to be sold can run through the company s bottlene
ck resources, which are required to produce these goods.
After the production plan has been roughly proven feasible by SOP, it is transfe
rred to a planning scenario in Long Term Planning module (LTP), by creating plan
ned independent requirements (PIR) that reflect the production plan generated by
SOP.
Based on these PIRs, Materials Requirements Planning (MRP) is run in a simulated
mode to create and review planned requirements for all the materials (component
s, raw materials) and all resources required to execute the production plan crea
ted in SOP. Simulation of MRP also allows review of capacities of the plants. Ca
pacity leveling can then be carried out to smooth out the bottlenecks in the cap
acities.
After running MRP, the prerequisites are given to perform one of the key objecti
ves of the logistics part of AOP
the calculation of the total utilization of the
activity types assigned to the manufacturing work centers that are allocated by
the production plan. The utilization is based on the consumption of activity ty
pes being defined in the routings of the (semifinished and finished) products be
ing derived from the production plan.
The aggregated utilization of the work center s activity types is the basis for th
e budgeting process of the manufacturing cost centers.
2
Prerequisites
2.1
Master Data
A range of indispensable master and organizational data was created in your ERP
system in the implementation phase, such as the data that reflects the organizat
ional structure of your company, as well as master data that suits its operation
al focus. For example, master data for materials, vendors, customers, and so on.
This master data usually consists of standardized SAP Best Practices default val
ues and enables you to go through the process steps of this scope item.
You can test the scope item with other material or organizational data for which
you have created master data. For more information about creating master data,
refer to the Master Data Procedures documentation.
Use the following master data in the process steps described in this document:
Manufacturing / Trading
Production Plant = Planning Plant
Master data
Value Other mat.
Comments
Plant 1000
In this demo script the planning plant is the production plant
Product Group
Level 1 00001B001
Product Group
Level 2
00001B000100000001
MTO products all finished MTO products may be assigned
Product Group
Level 2 00001B000100000002
MTS products all finished MTS products may be assigned
Product Group
Level 2 00001B000100000003
Parts
all trading material and semi- fin
ished materials may be assigned.
Other important data
SOP version
002
LTP Version
002
Value
Other mat.
Bus. cond.
Comments
Use these versions in the demo script
Use these versions in the demo script
2.2
Roles
Use
To test this scope item in the SAP NetWeaver Business Client (NWBC), ensure that
the following roles are installed and assigned to the users testing this scope
item. These roles are only required if you are using the NWBC interface. You do
not need these roles if you are using the standard SAP GUI.
Prerequisites
The business roles have been assigned to the user who is testing this scope item
.
Business role Technical name Process step
Employee (Professional User)

SAP_NBPR_EMPLOYEE_S
Assignment of this role
is necessary for basic functionality.
Strategic Planner
SAP_NBPR_STRATPLANNER_S MC76 Break Down PG Plan
MC75 Transfer Product Group to Planning
MS31 Create Planning Scenario
MS01 Long-term planning run
CM38 Capacity Planning
2.3
Preliminary Steps
No preliminary steps are required to test this scope item.
2.4
Business Conditions
The business process described in this Business Process Documentation is part of
a bigger chain of integrated business processes or scope items. As a consequenc
e, you must have completed the following processes and fulfilled the following b
usiness conditions before you can start going through this scope item:
Business condition
Scope item
You have completed all steps described in the Business Process Documentation Pre
requisite Process Steps (154). Prerequisite Process Steps (154)
You have completed all steps described in the Business Process Documentation Sal
es Qty Budget and Transfer to SOP (with CO-PA), Revenue Planning (172). In this
scope item, you perform revenue planning. The result is a sales plan in value or
quantity. Usually, the sales plan is based on the sales history and is in quart
erly, monthly, or weekly buckets.
Sales Qty Budget and Transfer to SOP (wi
th CO-PA), Revenue Planning (172)
Process Overview Table
Step Name
External Process Reference
Business Condition
Role
Transaction Code
Expected Results
Create sales plan
Sales-/ Revenue Planning
See 172
AOP - Sales Qty Budget and Transfer to S
OP
See 172 AOP - Sales Qty Budget and Transfer to SOP See 172
AOP - Sales Qty Budget and Transfer to SOP
The annual sales plan is created
.
SOP
Aggregate sales data from COPA
To reconcile COPA and SOP at product gro
up Level
Strategic Planner
MC76
Sales data is aggregated
Demand Verification (check sales plan)
After sales figures have been tr
ansferred to SOP
Strategic Planner
MC76
Sales plan has been veri
fied
Create Rough-Cut Production Plan
After Sales plan has been checke
d
Strategic Planner
MC76
Production Plan created
Transfer Rough-Cut Production Plan to Inactive Demand Management
Production Plan and Rough Cut Capacity Profiles exist Strategic Planner
MC75
The inactive version is transferred to demand management.
Long Term Planning
Create LTP Planning Scenario
Before running simulated LTP MRP
Strategic Planner
MS31
LTP Planning scenario is created
Execute LTP MRP Run
Strategic Planner
MS01
The LTP
MRP run is simulated.
Evaluate Capacity Requirements
Strategic Planner
CM38
Work centers capacity planned
See 174 Purchased Matl Price Planning scope item
See 174 Purchased Matl Pr
ice Planning scope item
See 174 Purchased Matl Price Planning scope item
Purchased prices planned annually

See 176 Manuf. Center Cost Planning
ng
See 176 Manuf. Center Cost Planning
4
See 176
Manuf. Center Cost Planni
Process Steps
4.1
Create Sales Plan
4.1.1 Sales Quantity Budget and Transfer to SOP
After the sales and revenue plan has been created and released, the accepted sal
es quantities are then transferred to Sales and Operations Planning, where plann
ing for the manufacture of the budget sales quantities occurs.
For this activity, run the 172 Sales Qty Budget and Transfer to SOP scope item do
cument in its entirety, using the master data from this scope item document.
4.2
Sales and Operations Planning
Use
Sales & Operation Planning (SOP) is the link between sales planning and manufact
uring.
It is a forecasting and planning transaction that enables sales, production, and
inventory targets to be reached based on historical, existing, and estimated fu
ture data. In the process described below, SOP is used to:
Verify the sales (demand) plan coming from COPA or other sources
Create a rough-cut production plan aimed to satisfy demand and to meet inventory
targets
Visualize capacity utilization of the critical resources (usually the bottleneck
resources) to verify the feasibility of the plan at an aggregated level.
SOP is particularly suitable for long- and medium-term planning.
In this process, you view the SOP figures. This is done after sales figures have
been transferred from CO-PA to SOP.
You can visualize the following key figures:
Sales plan
Production plan
Projected Stock
4.2.1 Aggregate Sales Data from COPA
Use
Sales figures are transferred from COPA to SOP at material. The purpose of this
activity is to aggregate the planning data from the lower-level material to the
high-level product group; this step is required so that data is reconciled at ma
terial and product group level.
Prerequisites
This activity can be performed after sales figures have been transferred from CO
-PA to SOP.
Procedure
1.
Access the transaction choosing one of the following navigation options:
Option 1: SAP Graphical User Interface (SAP GUI)
SAP ECC Menu
Logistics ? Production ? SOP ? Disaggregation ? Break Down PG Pl
an
Transaction code
MC76
Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role
Business role Strategic Planner
(SAP_NBPR_STRATPLANNER_S)
Business role menu
Production ? SOP ? Disaggregation ? Disaggregation: Plan
ning
2.
On the Change Plan: Initial Screen, make the following entries:
Field name
Description
User action and values Comment
Product group
Product group ID defined in central master data BB in la
yer 2.
For example, 00001B000100000001 and
00001B000100000002
Plant
Plant 1(1000))
3.
Choose Inactive version.
4.
If the Choose Inactive Version dialog box displays, select version 002 (
version used for annual budget planning) and confirm with Enter.
5.
In the dialog box, keep the default values and choose Enter.
6.
If the Check proportions dialog box displays, choose Yes.
7.
From the menu, choose Edit ? Macro. For NWBC, choose Menu ? Edit ? Macro
8.
Select Aggregation: Sales and choose Enter. All sales figures are copied
to the product group level.
9.
Save your entries.
Result
You have viewed the S&OP figures on product level and aggregated the sales plan
on product group level.
4.2.2 Demand Verification (Checking Sales Plan)
Use
The purpose of this activity is to disaggregate the planning data from the highlevel product group to lower-level materials according to predefined or online e
ntered proportion.
The sales plan is created at the product group level. You can disaggregate the p
lan according to predefined proportional factors, to the material level. In this
case, it is useful to define the proportional factors according to historical s
ales figures to come to realistic forecasts at the material level.
Prerequisites
In SAP you have various methods for disaggregating the planning data from produc
t group to product/ material level.
1.
In COPA, you disaggregate the data based on a top-down approach
2.
In SOP, you can again disaggregate the data based on proportional factor
s.
If you do not want to disaggregate data again in SOP and want to keep the same d
ata as per COPA at the material level (after top down distribution), you can als
o skip this step.
Prerequisites
This can be done after sales figures have been transferred from CO-PA to SOP.
Procedure
1.
SAP ECC menu
an
Transaction code
MC76
Option 2: SAP NetWeaver Business Client (SAP NWBC) via Business Role
Business role menu
ning
2.
On the Change Plan: Initial Screen, make the following entries:
Field name
Description
Product group
Product group ID defined in central master data BB in la
yer 2. Select Product group for which you are doing planning
For example, 00001B000100000001
AND
00001B000100000002
Plant
Plant 1(1000)
3.
Choose Inactive version.
4.
If the Choose Inactive Version dialog box displays, choose version 002 (
version used for annual budget planning) and confirm with Enter.
5.
In the Change Plan: Initial Screen dialog box, select all materials (sec
tion Product Group Members). Choose Create sales plans and Disaggregate sales pl
an (section Disaggregation and choose Enter.
6.
If the Check proportions dialog box displays, choose Yes.
7.
From the menu, choose Edit ? Macro. For NWBC, choose Menu ? Edit ? Macro
8.
Select Aggregation: Sales and choose Enter. All sales figures are copied
to the product group level.
9.
Save your entries.
Result
You have viewed the S&OP figures on product group level and created the sales pl
an on material level based on the sales plan on product group level.
If the aggregate information is not displayed for all periods, to enhance the pe
riod display, use the Column-right button or the Page-right button, available on
the screen below the two information tables.
4.2.3 Create Rough-Cut Production Plan
Use
In this activity, you generate the rough cut production plan based on your sales
forecast. For this, you have several options (see below).
Procedure
1.
SAP ECC menu
an
Transaction code
MC76
Business role menu
ning
2.
You are still in the transaction for Demand verification (see previous t
ask) and continue without leaving it. If you have left the transaction, run thro
ugh steps 1 to 5 of this process before continuing with the next step.
3.
From the menu, choose Edit ? Create production plan ? Synchronous to sal
es. This action makes production figures equal to sales at product group and mat
erial levels.
4.
There are some more strategies in Standard SOP for automatically generat
ing a production plan that can easily be activated through the menu path:
Edit ? Create production plan ? <create production plan option>
Production quantities are the same as sales quantities in each period (synchrono
us to sales)
Production quantities are such that target stock levels are reached
Production quantities are such that target days supplies are reached
Production quantities are such that the stock level at the end of each period is
zero.
5.
Save your entries.
4.2.4 Transferring Rough-Cut Production Plan to Inactive Demand Management
Use
In this activity, you transfer the inactive version of the production plan from
SOP to Demand Management where the quantities are posted as planned independent
requirements.
For many reasons, you can post the production plan at first in an inactive versi
on.
In our scenario, we use inactive versions for the following purposes:
Version 001: for simulation and long term procurement purposes (forecast)
see 144: Logistics Planning
Version 002: for supporting the annual budgeting process (described in this docu
ment)
Procedure
1.
SAP ECC menu
Logistics ? Production ? SOP ? Planning ? For Product Group ? Tr
ansfer PG to Demand Management
Transaction code
MC75
Business role menu
Production ? SOP ? Product Group ? Transfer PG to Demand
Management
2.
Make the following entries:
Field name
Description
Product group
Product group for which you are planning
For exam
ple, 00001B000100000001
AND
00001B000100000002
Plant
Plant 1(1000)
Version
002
Depends on version used in scenario: annual budget plan
Production plan for material or PG member
Selected
From date
<earliest date of change>
Typically first day of b
udget month
To date
<earliest date of change PLUS 18 months>
Last date of the
budget month
Requirements type
Leave blank
Version
02
Active
Deselected
Deselect Active on the initial screen to make sure that it is inactive in demand
management. To transfer a single material, use transaction as below
SAP ECC menu
Logistics ? Production ? SOP ? Planning ? For Material ? Transfe
r Material to Demand Management
Transaction code
MC74
Business role menu
Production ? SOP ? Material ? Transfer Material to Deman
d Management
a.
Choose Transfer now. Confirm additional information with Enter.
Result
The inactive version is transferred to demand management. To display the inactiv
e version for a single material in Demand Management, use transaction MD63.
SAP ECC menu
Logistics ? Production ? Production Planning ? Demand Management
? Planned Independent Requirements ? Display
Transaction code
MD63
Business role menu
Production ? Production Planning ? Demand Management ? D
isplay Planned Indep. Requirements
4.3
Long Term Planning
In long-term planning, future demand programs are simulated within a planning ru
n. This allows you to calculate capacity requirements, activity type requirement

of the cost centers, and the requirement of purchased parts.
The demand programs that can be simulated may include planned independent requir
ements and/or sales orders.
You can evaluate and optimize the simulation regarding to material requirements
planning, capacity planning, order volumes, purchasing budget, cost center plann
ing, and inventory controlling. Following the evaluation of the simulative plann
ing results, you can replace the current demand program with the preferred versi
on in long-term planning and can continue it there.
You can transfer the data for external procurement to the purchasing information
system using a special report and evaluate it there.
The principle of long-term planning is to simulate different versions of the dem
and program. The simulation can take into account operative data (for example, m
aster data, sales orders, purchase orders, production orders).
The simulation can be used to optimize the demand program, and the production an
d procurement data regarding material requirements planning, capacity planning,
order volumes, purchasing budget, cost center planning, and inventory controllin
g.
Long-term planning can also be executed based on operative master data: BOMs, ro
utings, work centers, and material masters. You do not have to create any new op
erative data.
4.3.1 Create LTP Planning Scenario
Use
For simulation purposes, you set the up LTP-Planning scenarios that represent pl
anning areas that you can use independently from each other.
In this activity, you create the LTP Planning Scenario.
If the LTP planning scenario already exists, use transaction MS32 to make change
s.
Procedure
1.
SAP ECC menu
Logistics ? Production ? Production Planning ? Long-Term Plannin
g ? Scenario ? Create
Transaction code
MS31
Business role menu
Production ? Production Planning ? Long-Term Planning ?
Create Planning Scenario
2.
Field name
Description
Planning scenario
002
<enter 002 and description>
Always use planning scenario 002. If the scenario already exists, skip this proc
ess step.
Long-term planning
Selected
3.
Choose Enter.
4.
Field name
Description
From date
<budget start date>
To date
<start date Plus 12 months>
Dep.reqmts for reorder point materials
Selected
Consider sales orders
Selected
Include firm receipts
Selected
Include firm purchase requisitions
Selected
Include firm planned orders
Selected
5.
Choose Planned Independent Requirements.
6.
In the dialog box, choose New entry.
7.
Field name
Description
Version
02
Inactive version from demand management
From date
<budget start date>
To date
<start date Plus 12 months>
8.
Choose Confirm.
9.
Choose Plants.
10.
In the dialog box, choose New entry.
11.
Field name
Description
Planning plant
Plant 1(1000)
You can repeat the steps for all planning plants.
12.
Choose Confirm.
13.
Choose Release + Save.
Result
The LTP Planning scenario is created. Make a note of the Planning Scenario numbe
r here:
4.3.2 Execute LTP MRP Run
Use
In this activity, you perform the Long term planning MRP run.
Procedure
1.
SAP ECC menu
g ? Long-Term Planning ? Planning Run ? Online
Transaction code
MS01
Business role menu
Long-Term Planning: Total Planning
2.
Field name
Description
Planning Scenario
<from previous step>
Plant
Plant 1(1000)
Display material list
Selected
Scheduling
2
Lead time scheduling and capacity planning
3.
Choose Enter.
4.
The system displays the message: Please check input parameters.
5.
Choose Enter.
6.
The system displays the message: To start the planning run, press enter.
Choose Enter.
Use the following transaction to check
o 002, material Finished Good MTO (for
Option 1: SAP Graphical User Interface
SAP ECC menu
Logistics ? Production
g ? Evaluations ? Stock/Reqmts List
Transaction code
MS04
the planning results for planning scenari

example, F1000-M1) in plant 1 (1000).
(SAP GUI)
? Production Planning ? Long-Term Plannin
Business role menu
Planning Scenario: Stock/Reqmts List
Result
You have run the simulated LTP MRP.
4.3.3 Evaluating Capacity Requirements
Use
In this activity, you plan work center capacity.
Procedure
1.
SAP ECC menu
g ? Evaluations ? Capacity Requirements ? Work Centers
Transaction code
CM38
Business role menu
Capacity Leveling L-T Planning
2.
On the Capacity Planning
Selection screen, from the menu, choose Planni
ng ? Profiles ? Overall profiles. For NWBC, choose Menu ? Planning ? Profiles ?
Overall profiles.
3.
Enter profile YBLTP01 - LTP: Capacity requirements for AOP and choose En
ter.
To predefine the profile in your user parameter, use transaction SU01 or SU3 (SA
PGUI) or from the role menu (NWBC), IT-Administration ? User Management ? User M
aintenance (Role: SAP_NBPR_IT_ADMIN_S)
Parameter ID: CYX
Parameter Value: YBLTP01
4.
On the Capacity Planning: Selection screen, enter Planning Scenario Long
-Term PI 2 and plant 1000. Entering a work center is optional. Choose Standard O
verview.
5.
From the menu, choose Settings ? General or in (NWBC) Menu ? Settings ?
General and make the following entries:
Field Name
User action and values
Cumulation of requirements
X
Hierarchy
TOT_PLANT
Plant 1000
Entry type
J
Continue (mm/yyyy )
<Start of budget period>
Int.finish (mm/yyyy)
<End of budget period>
6.
Repeat the preceding steps for every plant or work center.
7.
In the dialog box to start the planning run, choose Enter.
Result
Capacity planning is checked. If the result is ok, the results can be used in co
st center accounting for planning the production cost centers.
4.4
Use
Standard costs for purchased materials must be periodically reviewed and updated
, if necessary, to match the current market conditions and negotiated prices.
This process begins with transferring the quantities of materials required from
long term planning and downloading the latest purchase prices. The material requ
irements valuated with the latest purchase prices are reviewed by the buyers to
compare with the current standards. The buyers update the spreadsheet with the p
rices that they determine should be the new standard. The updated prices are the
n uploaded as the new planned prices. These planned prices are used by the produ
ct costing run to valuate the semifinished and finished goods to come up with th
e standard cost of goods sold for the final products.
Procedure
For this activity, run the 174 Purchased Matl Price Planning scenario document in
its entirety, using the master data from this scenario document.
4.5
During the annual budgeting process, the managers of nonmanufacturing and manufa
cturing cost centers such as sales, marketing, administrative, research and deve
lopment, and so on, plan the costs for various cost types/elements for their res
pective cost centers. The usual starting point for development of these plans is
the actual data for the current/previous year.
In this process, the previous year s actual expenses for these cost centers are co
pied into an AOP budget version in cost center accounting. As an alternative, th
e previous year s budget data can also be used as a starting point for the exercis
e. The data in this version is downloaded into spreadsheets by each cost element
and cost center. The respective cost center managers review and update the budg
et values according to their requirements and plans. Then, these plans are uploa
ded back into the system. The plans in the system are reviewed and finalized.
The planned depreciation on fixed assets is transferred separately to the cost c
enter plan version. The system calculates the planned depreciation on assets by
cost center based on the asset values posted on the cost centers. In case of cos
t centers having machinery, the depreciation is planned based on cost center and
activity type.
The resource requirements in the form of planned activity quantities are transfe
rred from Long Term Planning to the cost centers as planned activity consumption
. Plan reconciliation between the LTP activity requirements and manually planned
requirements on the operational cost centers is carried out. Once the activity
quantities and budget amounts are finalized, planned activity prices are calcula
ted in the system.
For this activity, run the 176 - Manuf. Center Cost Planning scope item document
in its entirety, using the master data from this scope item document.
5
Appendix
5.1
Reversal of Process Steps
In the following section, you can find the most common reversal steps, which you
can take to reverse some of the activities described in this document,
Create Long Term Planning Scenario
Transaction code (SAP GUI)
MS31
Reversal:
Change Planning scenario
Transaction code (SAP GUI)
MC75
Business role Strategic Planner (SAP_NBPR_STRATPLANNER_S)
Business role menu
Production ? SOP ? Product Group ? Transfer PG to Demand
Management
Comment You can change the planning scenario
5.2
SAP ERP Reports
Use
The table below lists the most frequently used reports that help you to obtain a
dditional information on this business process.
You can find detailed descriptions of the individual reports in the following BP
D documents, which provide a comprehensive compilation of all important reports:
Financial Accounting: SAP ERP Reports for Accounting (221)
Logistics Processes: SAP ERP Reports for Logistics (222)
The descriptions of some reports that are an indispensable part of the process f
low may be located directly in the section where they belong.
Reports
Report title
Transaction code
Comment
Long-Term Capacity Planning
CM38
The capacity evaluation is displayed.
Change Plan
MC82
Display of planning version.
Evaluation of Product Group Planning

Long-Term Planning: MRP-list
MS05
MD47
Planning situation is displayed.
Simulation of MRP-list

Through Long Term Planning Transfer

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Through Long Term Planning Transfer

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SOP through Long Term Planning Transfer to LIS/PIS/Capacity

Employee (Professional User)

Process Overview Table

Purchased prices planned annually

Manuf. Center Cost Planni

n. This allows you to calculate capacity requirements, activity type requirement

the planning results for planning scenari

Evaluation of Product Group Planning

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