Integrated CO-PA Planning Leveraging Your SOP Forecast

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Integrated CO-PA PlanningLeveraging Your SOP
Forecast

• Michael Wolf
• Senior Manager,

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Objective

• Provide an overview of the integrated planning
  functionality between Sales Operations Planning
  (SOP) and Profitability Analysis Planning (CO-PA)
• Explain the setup and configuration requirements
  of the integration process
• Demonstrate and describe the planning process
  including an example of the data flow
• Outline tips, pitfalls and benefits of this
  process

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NOT Covered in this Presentation

• Business processes surrounding the creation of a
  sales plan
• Configuration for Sales Operations Planning
  using flexible planning and the Logistics
  Information System
• Reporting and analysis functions in CO-PA.

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Learning Points

• Overview of Sales Operations Planning (SOP)
  integration with CO-Profitability Analysis
• Key steps and configuration settings to set up
  integrated planning process
• Benefits of integrated planning data to the
  organization

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Agenda

• Introduction to SOP Processes
• Key Benefits
• Configuration Requirements
• SOP setup
• CO-PA configuration
• Profitability Analysis Planning Definition
• Execution of Integrated Planning
• Conclusion

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Integrated Planning Process Overview
Sales Planning
LIS CO-PA Interface
Valuation and Analysis
Review Update
Consistent Sales Financial Plan
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Overview of Interface

• The interface between CO-PA and LIS covers all
  the instances where data that exists in one
  application should be available in the other
  application. This allows the user to draw on the
  functions of both modules to achieve the maximum
  benefit.
• This interface is typically used to define a
  production plan iteratively.
• Quantities are entered into LIS/SOP where they
  are adjusted to fit capacities.
• The sales quantities are sent to CO-PA, where
  they are used as a basis for a revenue plan.
• Sales quantity plan is created in CO-PA from a
  revenue-oriented viewpoint.
• This cycle can be repeated as often as necessary.

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Introduction to SOP

• Sales and Operations Planning Defined
• Sales and Operations Planning is the management
  process for developing a company game plan that
  ensures resource capability meets market demand.
  Representing "management's handle on the
  business", Sales and Operations Planning
  integrates all functions of the business through
  a "single set of numbers" from which all other
  detailed plans and schedules can be derived.
• Sales and operations planning a flexible
  forecasting and planning tool that can set
  targets in sales, production, and other parts of
  the logistics chain. It is particularly
  well-suited to long and middle-term planning.

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Agenda

• Introduction to SOP Processes
• Key Benefits
• Configuration Requirements
• SOP setup
• CO-PA configuration
• Profitability Analysis Planning Definition
• Execution of Integrated Planning
• Conclusion

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Key Benefits

• Consistency in key data
• Sales Planning
  Production Planning
  Financial Planning
• Single point of data entry
• Leverage qty data
• Use costing and pricing data
• Ability to incorporate changes in a timely manner
• Will help streamline the planning process which
  will lead to time and money savings

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Agenda

• Introduction to SOP Processes
• Key Benefits
• Configuration Requirements
• SOP setup
• CO-PA configuration
• Profitability Analysis Planning Definition
• Execution of Integrated Planning
• Conclusion

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Configuration Requirements

• SOP Setup
• Flexible Planning Structures (Not covered in
  detail)
• LIS Transfer Definition Outbound Data Setup
• CO-PA Configuration
• Transfer Definition Inbound Data Mapping
• Valuation Strategy
• Material Costing
• Planning Workbench

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SOP Setup

• Flexible Planning Structures
• Info structure created to capture required data
• Planning parameters defined for new info
  structure
• Planning type created
• Defines the parameter control for entering SOP
  data
• Planning hierarchy created
• SOP master data
• Planning characteristics created
• Plan data ready to be entered

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LIS Transfer Definition

• A key activity in the outbound data setup is
  defining the planning activity key

IMG Path (release 4.6) Logistics General gt
Logistics Information System (LIS) gt Planning gt
Functions gt Mass Processing gt Define Activities
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LIS Transfer Definition Steps

• Configuration Steps
• Create key figure assignment profile
• Create characteristics assignment profile
• Create the CO-PA transfer profile
• Process Steps
• Create mass processing activities
• Create mass processing job (w/ variant)
• Schedule job monitor post processing results

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CO-PA Configuration
IMG Path (release 4.6) ControllinggtProfitability
AnalysisgtMaster DatagtValuationgtValuation
Strategies ControllinggtProfitability
AnalysisgtIntegrated Planning gt Define LIS
Interface
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CO-PA Transfer Definition

• All SOP data is stored in LIS info-structures
• Transfer rules are defined to transfer planned
  quantity data from SOP info-structures to CO-PA
• A separate process can be defined to transfer
  data from CO-PA into SOP to complete the
  iterative process
• Some of the CO-PA transfer steps need to be
  defined as prerequisites for the LIS
  configuration and vice-verse.

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CO-PA Transfer Definition

• Mapping of Characteristics and Value Fields in
  LIS to corresponding COPA fields

IMG Path (release 4.6) ControllinggtProfitability
AnalysisgtPlanninggt Integrated Planninggt Define
LIS Interface
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CO-PA Transfer DefinitionCharacteristic
Assignment

• LIS characteristics to be included in the
  transfer are assigned to corresponding CO-PA
  characteristics

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CO-PA Transfer DefinitionKey Figure Assignment

• Defined for planning data
• Quantity fields are mapped in this step

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CO-PA Transfer DefinitionDefine LIS to CO-PA
transfer structure

• Defined for planning data
• Key step in assigning the LIS info structure to
  the operating concern
• Characteristic assignment scheme
• Key figure assignment scheme

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CO-PA Configuration

• Valuation Strategy
• Definition of the rules used during the planning
  process to determine the planned values to store
  in the CO-PA value fields
• Key Valuation Concepts
• SD Pricing integration
• Material Cost Estimate integration
• User Specific via user exits

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CO-PA Configuration Details Valuation Strategy
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CO-PA Configuration DetailsValuation Strategy

• Revenue value calculation
• COPA defined costing sheet (price determination)
• Integration with SD pricing procedure
• Same access sequence used in price determination
  in the billing process
• Can only be used for planned values, not actuals
• Fields used in the access sequences MUST be
  defined as characteristics in your operating
  concern for the integration to be successful

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CO-PA Configuration DetailsValuation Strategy

• Material cost estimate integration
• Aids in the planning of direct material Cost of
  Sales
• Enables the valuation step to calculate material
  costs
• Use the quantity transferred from LIS as the
  basis for cost calculation

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CO-PA Configuration DetailsValuation Strategy

• Valuation using User Exits
• Customer Enhancement COPA0002
• Function Module - EXIT_SAPLKEAB_002
• Include ZXKKEU04
• Can be used to create customized routines for use
  in the planning processing in CO-PA
• Customer Enhancement COPA0006
• Allows users to create their own planning
  functions

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CO-PA ConfigurationAssignment of Valuation
Strategy

• Valuation strategy assignment determines when to
  invoke the integration
• Point of valuation (manual or automatic planning)
• Record type
• Plan version
• Valuation strategy

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CO-PA Configuration

• Material Costing
• Direct material costs can be determined using the
  stored material cost estimate from the material
  master
• As defined from your standard cost setting
  process
• Can leverage the same valuation strategy used in
  transferring actual cost component details to
  CO-PA during the billing process.
• Configuration of planning costing key

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CO-PA ConfigurationCosting Key
Key Assignments Assign costing
variant Determination of which cost estimate to
transfer
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CO-PA ConfigurationCosting Key

• Assignment of Costing Key
• Required step to activate the integration of
  product costing data with CO-PA planning
• Assign at material specific level
• Assign at material type level
• Custom assignment.

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CO-PA ConfigurationCost Component Assignment

• Cost components can be assigned to specific value
  fields defined in the operating concern
• Leverage existing cost component structure
  defined in product cost planning configuration.

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Agenda

• Introduction to SOP Processes
• Key Benefits
• Configuration Requirements
• SOP setup
• CO-PA configuration
• Profitability Analysis Planning Definition
• Execution of Integrated Planning
• Conclusion

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Profitability Analysis Planning Definition

• Pre-requisites
• All CO planning version maintenance is complete
  and activated for CO-PA
• Number ranges for planning documents are defined
• Profitability Analysis planning definition
• Use of SAPs Planning Framework (t-code KEPM)
• Planning Levels
• Planning Package
• Planning Method

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Profitability Analysis Planning Definition SAPs
Planning Framework
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Planning Framework Tips

• Characteristics defined in the planning framework
  must be consistent between each of the steps
• LIS info structures should include key
  characteristics
• Required Fields
• Plant
• Needed for costing data
• Pricing specific characteristics
• Needed for SD pricingreference

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Planning Framework Tips

• Characteristics defined in the planning framework
  must be consistent between each of the steps
• CO-PA planning level must include the key
  characteristics used in the planning process
• The planning layout defined for the planning
  method must have consistent characteristics

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Agenda

• Introduction to SOP Processes
• Key Benefits
• Configuration Requirements
• SOP setup
• CO-PA configuration
• Profitability Analysis Planning Definition
• Execution of Integrated Planning
• Conclusion

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Execution of Integrated Planning

• Due to integrated nature of this process, the
  sales and operations departments will work
  closely with the finance department during this
  planning process.

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Execution of Integrated Planning

• 3 step process will be demonstrated
• Enter SOP Unit Plans
• Transfer SOP Plan Data to COPA
• Run CO-PA valuation routine
• The integrated planning process results in two
  planning documents recorded in CO-PA
• One record for quantity
• One record for values
• If quantity changes are recorded in SOP unit
  planning, the process is repeated and only
  changed quantity valuation is recorded in COPA
• Can perform what if analysis by using planning
  simulation

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Execution of Integrated Planning Step 1 Enter
SOP Unit Plans

• Flexible planning is used MC93/MC94
• Ensure planning hierarchy is completely defined
• Monthly quantities are entered by customer /
  material

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Execution of Integrated Planning Step 2
Transfer SOP Plan data to CO-PA

• Use mass processing functionality in flexible
  planning
• Similar to transferring data to demand management
  (MRP)
• Create and schedule the transfer job
• MC8D / MC8E / MC8G
• Monitor transfer results in post processing
• MC8J

Key Point Check Status monitor messages
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Execution of Integrated PlanningStep 2
Transfer SOP Plan data to CO-PA

• Mass Processing Settings

Key Point Aggregation level must be consistent
with the characteristic transfer rules
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Execution of Integrated PlanningResults
transferred to CO-PA

• View results of planning data in CO-PA
• Only incremental quantities are transferred with
  this step

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Execution of Integrated PlanningStep 3 Run
CO-PA Valuation Routine

• Pre-Requisites for running the valuation routine
• SD Pricing maintenance for planning period
• Valuation reads valid pricing data from SD
  pricing tables
• Current material cost standards
• Cost portion of planning data is driven from
  saved material cost estimates.

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Execution of Integrated PlanningStep 3 Run
CO-PA Valuation Routine

• A key Step to be executed in the planning
  framework
• KEPM CO-PA Planning Framework
• Step found in the planning method

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Execution of Integrated PlanningStep 3 Run
CO-PA Valuation Routine

• Analyze planning results
• A second plan document is created that includes
  the revenue (pricing) value and the Cost of
  materials value

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Execution of Integrated PlanningResults
transferred to CO-PA Additional Quantity

• Quantity has been updated in SOP
• Recorded results in CO-PA

Additional 250 units entered. New total 1250
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Testing of Valuation in CO-PAValuation Simulation

• Testing Simulation can be performed to validate
  CO-PA plan definition settings
• Transaction code KE21S Simulate Valuation
• Enter Qty and characteristics found in data
  transfer

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Testing of Valuation in CO-PAResults of
Simulation
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Agenda

• Introduction to SOP Processes
• Key Benefits
• Configuration Requirements
• SOP setup
• CO-PA configuration
• Profitability Analysis Planning Definition
• Execution of Integrated Planning
• Conclusion

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Integrated Planning Process Overview
Sales Planning
LIS CO-PA Interface
Valuation and Analysis
Review Update
Consistent Sales Financial Plan
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Conclusion

• Leveraging your SOP planning data will ensure
  data consistency across planning platforms in SAP
• Existing CO-PA structure and planning tools are
  utilized
• Combined with other planning techniques, multiple
  planning scenarios become available
• Integration with other SAP functions provides for
  a complete set of planning information and
  reduces data entry
• Flexible Planning
• SD Pricing
• Product Costing
• Financial Planning Tools

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Q A
Michael Wolf Senior Manager Hitachi Consulting
www.hitachiconsulting.com Direct
312.372.0672 Mobile [phone] mwolf_at_hitachicon
sulting.com Inspiring your next success!
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2104
Session Code