(2) Integrated CO-PA Planning Leveraging Your SOP Forecast

1. Integrated CO-PA Planning Leveraging Your SOP Forecast Michael Wolf Senior Manager, 2. 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 3. 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. 4. Learning Points Overview of Sales & Operations Planning (S&OP) integration with CO-Profitability Analysis Key steps and configuration settings to set up integrated planning process Benefits of integrated planning data to the organization 5. Agenda Introduction to SOP Processes Key Benefits Configuration Requirements SOP setup CO-PA configuration Profitability Analysis Planning Definition Execution of Integrated Planning Conclusion 6. Integrated Planning Process Overview LIS CO-PA Interface Sales Planning Valuation and Analysis Review & Update Consistent Sales & Financial Plan 7. 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. 8. 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 . 9. Agenda Introduction to SOP Processes Key Benefits Configuration Requirements SOP setup CO-PA configuration Profitability Analysis Planning Definition Execution of Integrated Planning Conclusion 10. 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 11. Agenda Introduction to SOP Processes Key Benefits Configuration Requirements SOP setup CO-PA configuration Profitability Analysis Planning Definition Execution of Integrated Planning Conclusion 12. 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 13. 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 14. LIS Transfer Definition A key activity in the outbound data setup is defining the planning activity key IMG Path (release 4.6): Logistics General > Logistics Information System (LIS) > Planning > Functions > Mass Processing > Define Activities 15. 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 16. CO-PA Configuration IMG Path (release 4.6): Controlling>Profitability Analysis>Master Data>Valuation>Valuation Strategies Controlling>Profitability Analysis>Integrated Planning > Define LIS Interface 17. CO-PA Transfer Definition All SOP data is stored in LIS info-structures Transfer rules are defined to

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(2) Integrated CO-PA Planning Leveraging Your SOP Forecast

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. 18. CO-PA Transfer Definition Mapping of Characteristics and Value Fields in LIS to corresponding COPA fields IMG Path (release 4.6) : Controlling>Profitability Analysis>Planning> Integrated Planning> Define LIS Interface 19. CO-PA Transfer Definition Characteristic Assignment LIS characteristics to be included in the transfer are assigned to corresponding CO-PA characteristics 20. CO-PA Transfer Definition Key Figure Assignment Defined for planning data Quantity fields are mapped in this step 21. CO-PA Transfer Definition Define 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 22. 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 23. CO-PA Configuration Details Valuation Strategy 24. CO-PA Configuration Details Valuation 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 25. CO-PA Configuration Details Valuation 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 26. CO-PA Configuration Details Valuation 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 27. CO-PA Configuration Assignment 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 28. 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 29. CO-PA Configuration Costing Key Key Assignments: Assign costing variant Determination of which cost estimate to transfer 30. CO-PA Configuration Costing 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. 31. CO-PA Configuration Cost 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. 32. Agenda Introduction to SOP Processes Key Benefits Configuration Requirements SOP setup CO-PA configuration Profitability Analysis Planning Definition Execution of Integrated Planning Conclusion 33. 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 34. Profitability Analysis Planning Definition SAPs Planning Framework 35. Planning Framework Tips Characteristics defined in the planning framework must be consistent between

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(2) Integrated CO-PA Planning Leveraging Your SOP Forecast

each of the steps LIS info structures should include key characteristics Required Fields Plant Needed for costing data Pricing specific characteristics Needed for SD pricing reference 36. 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 37. Agenda Introduction to SOP Processes Key Benefits Configuration Requirements SOP setup CO-PA configuration Profitability Analysis Planning Definition Execution of Integrated Planning Conclusion 38. 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. 39. 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 40. 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 41. 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 42. Execution of Integrated Planning Step 2: Transfer SOP Plan data to CO-PA Mass Processing Settings Key Point: Aggregation level must be consistent with the characteristic transfer rules 43. Execution of Integrated Planning Results transferred to CO-PA View results of planning data in CO-PA Only incremental quantities are transferred with this step 44. Execution of Integrated Planning Step 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. 45. Execution of Integrated Planning Step 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 46. Execution of Integrated Planning Step 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 47. Execution of Integrated Planning Results transferred to CO-PA Additional Quantity Quantity has been updated in SOP Recorded results in CO-PA Additional 250 units entered. New total = 1250 48. Testing of Valuation in CO-PA Valuation Simulation Testing & Simulation can be performed to validate COPA plan definition settings Transaction code KE21S Simulate Valuation Enter Qty and characteristics found in data transfer 49. Testing of Valuation in CO-PA Results of Simulation 50. Agenda Introduction to SOP Processes Key Benefits Configuration Requirements SOP setup CO-PA configuration Profitability Analysis Planning Definition Execution of Integrated Planning Conclusion 51. Integrated Planning Process Overview LIS CO-PA Interface Sales Planning Valuation and Analysis Review & Update Consistent Sales & Financial Plan 52. 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 53. Q & A Michael Wolf Senior Manager Hitachi Consulting www.hitachiconsulting.com Direct: 312.372.0672 Mobile: 612.325.6678 [email_address] Inspiring your next success! 54. 2104 Session Code:

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(2) Integrated CO-PA Planning Leveraging Your SOP Forecast

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Planning in COPA SAP

Planning in COPA SAP

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