SAP SOP Creating Planning Hierarchy

A planning hierarchy is created for a given information structure, it is created as a master data to define the characteristics values and their proportional engagement in the organizational. Though it

should be noted that the sequence of the characteristics in which they are supposed to be planned is already decided in the information structure and one would only enter the values of these characteristics which are supposed to be planned in the sales and operational planning. The proportional placement of the characteristics values in the organization is one of the most important outcomes sought in the creation of a planning hierarchy.

Therefore a planning hierarchy is created for the following two important reasons:

Firstly to let the system know the characteristics values involved in sales and operational planning.

Secondly to let the system know the percentage proportional weight of each of the characteristics values in the organizational hierarchy (called as the disaggregation percentage). The disaggregation percentage is used by the system to disaggregate or aggregate the data across the levels. 

In level by level planning the disaggregation percentage is used directly for the disaggregation/aggregation purposes whereas in consistent planning the disaggregation percentages are used to calculate the proportional factors used in aggregation and disaggregation. 

Below are prerequisites and important notes before one creates a Planning Hierarchy. 

·         Firstly you should have created an information structure and it should be in an active status. 

·         Secondly you should have configured the planning parameters for an information structure. 

·         Thirdly you should have created the update rules and activated these rules. 

·        Only one planning hierarchy can be created for a given information structure. It should be noted that one can only use one information structure in consistent planning whereas in level by level planning one can use one or multiple information structures. 

·       The availability of update rules activation is not a mandatory action before creation of a planning hierarchy but it is recommended to have that ready for starting on the creation of the planning hierarchy.

Creation of a Planning Hierarchy: 

The following are the transaction codes to create the planning hierarchy: 

a) The transaction code to manually maintain the planning hierarchy and the disaggregation percentages (for an entered information structure) is MC61 

b) And the SAP transaction code to have the system automatically create the planning hierarchy along with the disaggregation percentages based on the historical data available in the information structure and its version is MC9A – Generate Master Data (In MC9A, you can simulate the creation as well). 

When the planning hierarchy is created, each of the planning levels or characteristics levels are maintained in an hierarchical fashion and together they look as one organizational structure, as shown in the figure SOP_7. 

The disaggregation percentages are maintained at the time of maintaining the hierarchy for the characteristics combinations. The aggregation factor is no more maintained and the field has been discontinued. You can maneuver from the first level to the next level by selecting the characteristics values and pressing the button – “Next Level” or by just double clicking on it as shown below. The final graphical hierarchy that would be generated would be depicted by fig – SOP_7. You can check the graphical depiction by pressing the graphical hierarchy buttons in the Maintain Planning Hierarchy transaction or directly in the MC67 transaction code.

To maintain the next level below the Sales organization 3100, keep a cursor on “3100” and press the “Next Level Button”. To go back to the previous level, press the back button or F3.

To maintain the next level below the Distribution Channel 10, keep a cursor on “10” and press the “Next Level Button”. To go back to the previous level, press the back button or F3.

To maintain the next level below the Division 21 (the last level), keep a cursor on “21” and then press the “Next Level Button”. To go back to the previous level, press the back button or F3. 

The above Planning hierarchy in transaction code MC61 is created as shown in the below tables (the maintenance is explained in the below table):

To enable drilling down of the higher level data to the lower levels (disaggregation) or progressively sum up the data from the lower levels to the higher levels (aggregation of sum or average), SOP offers creation of a planning hierarchy and maintenance of disaggregation percentages for the characteristics values or characteristics value combinations in an hierarchy.  

Tools like aggregation and disaggregation helps the planner to plan at one organizational (characteristics) level and transfer the values to other characteristics levels based on the proportions. Automatic aggregation and disaggregation is a play-tool available with the planner to arrive at a much stronger plan. Automatic aggregation and disaggregation is available consistently between the levels in consistent planning, while in level by level planning the same has to be triggered. 

One has to remember that the ultimate goal of SOP is to obtain this plan at the lowest level of the characteristic combinations (for example at the product group or material levels) and push the plan for production. 

The planning hierarchy contains the values of the characteristics combinations and their disaggregation percentages. 

If you have a characteristics combination of sales organization, distribution channel, division and material, then you could view the historical sales data or a forecasted plan for a given combination of the characteristics, i.e., you could view the data at sales organization + distribution channel + division level or just view it summed at sales organization level, or have it drilled down or disaggregated to the subsequent lower levels using the disaggregation percentages. The system disaggregates if the data is viewed at the lower levels and it aggregates the same if the data is viewed at the higher levels using the same set of percentages. 

Example:  

The disaggregation percentages are maintained while creating the planning hierarchy. The disaggregation percentages are not directly used as absolute values in consistent planning (unlike in level by level planning method); the system calculates a proportional factor arising out of multiplication of the percentages maintained on each of the involved levels. For example if you are using consistent planning with 3 levels of characteristics in the information structure (Sales organization + Division + Material) with disaggregation percentages maintained as then the system would calculate the proportional factors as shown below:

To revise the planning hierarchy structure for addition/deletion of planning hierarchy characteristics values, you should always use an option of Revise Structure using MC59. You can also find this option in the transaction code for changing the planning hierarchy – MC62 (in the selection screen itself).

The disaggregation percentages (or the proportions) that one would enter manually as shown above in the table, can be calculated by the system in the “create planning hierarchy transaction code itself”; you can do this by selecting the level and pressing the EDIT > Calculate Proportions Button. This will bring in the actual disaggregation percentages as calculated by the system for the existing data in a given information structure for a given information structure data version and date range.   

It should also be noted that it is not mandatory to maintain the disaggregation percentages or proportions, for the levels while maintaining the planning hierarchy; one could have the proportions calculated and inserted in the planning hierarchy by running the transaction codes MC8U – Calculate Proportions Using Actual Data. This would fetch the percentages from the information structure for a given version and date range.

Selecting the indicators on the screen (adjust planning hierarchy proportions or disaggregation proportions, would update the proportions in the planning hierarchy and if you do not set the indicators, the proportions are not updated and it behaves a simulation run.

After the maintenance of the planning hierarchy, you should advisably run the transaction code MC9B - Using Planning Hierarchy, in the case of consistent planning, to allow the system, calculate the proportional factors based on the disaggregation proportions. These factors become the base in consistent planning for the consistent aggregation and disaggregation. 

Using the hierarchy and disaggregation percentages, one can, not only propagates through the planning data for the sales or production key figures, but they can also propagate the values for the other key figures generated with the help of macros in the planning table.   

The planning hierarchy master data for standard SOP is created using through the maintenance of the product groups using transaction code MC84. You can also generate the master data automatically using the transaction code MC8P for information structure S076 (Alternatively you can also run the program RMCPSOPP to generate the master data for information structure S076). 

Standard SOP has a pre-configured characteristics hierarchy as shown below. Therefore MC84 can be used to maintain the disaggregation proportions for product groups >> Plant >> Production Version. 

Planning Hierarchy in Standard SOP

Use Transaction code MC84 to create the Planning Hierarchy Master data in Standard SOP as below. 

Press Enter in the below screen and Maintain the Material Masters in the Product Group

Alternatively you can directly start with Materials instead of Product Groups

To maintain the Next level in the Hierarchy – the Production version Level, (as shown in the above screen) press the “Versions” Button to maintain the versions of the materials and their corresponding disaggregation proportions.  

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