Sales and Operations Planning Long term planning What-if analysis, Sales planning, Operational feasibility planning, Materials planning, Budgeting for Business, Sales Planning integration with operational feasibilty.

1. Sales and Operations
Planning
(S&OP)

2. S&OP basics:
• Sales and Operations must work together.
• S&OP is for planning make to stock production.
• You can only plan production quantities but cannot execute the production
plan.
• The input to S&OP is historical values.
• Customer requirements comes in as input from the Sales Information
System(SIS).
• Production Requirements come from Planned Independent
Requirements(PIR) from LIS.
• Inventory requirements can be input.
• These historical values are used to derive upon a Future Projected
Capacity related Sales quantity / Production quantity that can be
sold/produced.

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4. • The S&OP planning includes an updated forecast that leads to a sales
plan, production plan, inventory plan, customer lead time (backlog)
plan, new product development plan, strategic initiative plan and
resulting financial plan.
• The S&OP process also enables effective supply chain management.
• Short product life cycles and high demand volatility require a tighter
S&OP planning than steadily consumed products.

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8. Information Structures
• The Sales & Operations Planning (SOP) application is based on
information structures.
• Every SAP modules have its own information system and these are
handled using the concept called information structures.
• An information structure contains three kinds of information:
characteristics, key figures, and a period unit along with a breakup
proportion at different levels.
• Information structure is only a template and extracts and displays
data from the underlying ECC database.
• ECC uses RDBMS Data Structure where data is represented in rows ad
columns and have key fields to link every table to a parent table.

9. • LIS works on Information structures.
• Information structures are 2 dimensional used in S&OP whereas the
advanced Infocubes are 3 dimensional information storage handling
used in Demand planning.
• SAP defined standard Information structures start with S followed by
3 digit number and customer defined will start with X or Y or Z
followed by 3 digit number.
• The planning tables contains the details of the actual ,planned and
variance quantities planned.

10. Information structures

11. S&OP comprises two core elements:
Flexible planning and Standard SOP

12. • With Standard SOP, you work with just one organizational unit, the product
group hierarchy, and plan predefined key figures in a planning table with a
set layout.
• All plans in Standard SOP are based on the standard information structure
S076.
• This information structure uses level-by-level planning where the planning
hierarchy levels are independent of one another.
• Standard SOP is a simplified variant of flexible planning in which a specific
planning process is already defined.
• You can execute planning in SOP for product groups or materials.
• The table captures the planned, actual and variance of quantity of material
produced.
• Product groups are created in SOP. You can define them by specifying their
members and the associated proportional factors that determine how the
planning data is divided among the members.

13. Standard Planning table used for planning

14. • S&OP are established at product group level.
• WHAT:
• Table has one line for each - Sales , Production , Stock level, Target
stock level(for inventory), Day’s supply, Target day’s supply these are
characteristics.
• WHEN:
• Columns will be period units that tells when the product is required.
• HOW MUCH:
• Key figures will be the values in the rows, that’s the required
sales/production quantity.

16. With Flexible S&OP you can:
• Planning at higher level and Disaggregation at lower level.
• Plan at lower level and aggregate at higher level, thats at material
level or product group level.
• Or historical values can be used to conclude the sales quantity on
how much material was sold in the past and then aggregate at higher
level.
• Or plan any way in between and aggregate up and disaggregate down

18. Creation of the planning table:
The Planning Hierarchy can be graphically
shown below.

19. Enter the planning type

20. • Enter the characteristics combinations for which you want to create
the planning table for. You may leave this blank

21. • Enter the version number of the information structure data that is to
be used in the planning table.

22. Initially if the planning table is executed for the Actual version 000,
then the data from the information structure for the actual version will
be pulled in, into the planning table.

23. • With planning tables and Information structure and the historical
values you can do planning.
• Collect all the historical data and run a forecast and the output will be
a pattern of data v have collected.
• The pattern can be seasonal, regional or trend(upward/downward) or
flat(no variation).
• With this pattern i will plan the quantity to be projected for
sales/production.

24. • A properly implemented S&OP process routinely reviews customer demand and
supply resources and “re-plans” quantitatively across an agreed rolling horizon.
• The re-planning process focuses on changes from the previously agreed sales and
operations plan, while it helps the management team to understand how the
company achieved its current level of performance, its primary focus is on future
actions and anticipated results.
• First take forecast result in the planning table and then do planning considering
the capacity available.
• then modify the forecasted quantity based on the production capacity.
• also consider requests from inventory and change the plan accordingly
• also consider if u r doing a promotion then increase the qty
• consider the monsoon and reduce/alter quantity
• consider any strike upcoming and modify the sales quantity .
• There might be different versions of planning with one active version.
• There might be various cycles before v release a final S&OP.

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