Control Disaggregation Using a Proportional Factor for Consistent Planning in SAP APO

  • by Alok Jaiswal, Consultant, Infosys Limited
  • March 29, 2016
Learn the configuration, use, and importance of proportional factors. See how they can be used to control the disaggregation of values in SAP Advanced Planning and Optimization (SAP APO) Demand Planning (DP). Follow a step-by-step procedure to configure and run the associated master data objects, run simulations, and interpret the results.
Learning Objectives

By reading this article, you will learn about:

  • The disaggregation mechanism and use of the proportional factor
  • Configuration in Demand Planning
  • Running a simulation for fixed proportional calculation and interpreting the results
  • Running a simulation for detailed proportional calculation and interpreting the results
  • Running a simulation for manual proportional maintenance and interpreting the results
  • Differences between pro-rata disaggregation and disaggregation on other key figures
  • Automation and recommendations within proportional calculations
Key Concept

Demand Planning (DP) in SAP Advanced Planning and Optimization (SAP APO) is used to carry out forecasting using different statistical algorithms. It helps to carry out consistent planning at all levels. Aggregation is used to sum the values at a detailed level and show or carry out planning at an aggregate level. Disaggregation is the drill-down or breakup of values from the aggregate to a detailed level. Both aggregation and disaggregation of data help to carry out consistent planning across all levels. Values in key figures are always stored and saved at the lowest level.

SAP Advanced Planning and Optimization (SAP APO) Demand Planning (DP) is based on the concept of consistent planning across all levels. It means that if you look at the data at the aggregate level, values at the detailed level are summarized in real time. In other words, any change at the aggregate level is automatically disaggregated down to the detailed level in real time. It helps in providing a consistent and stable view of data from all directions.

Proportional factors in SAP APO allow you to disaggregate data from the aggregate level to a detailed one. Use of proportional factors in DP provides businesses with the flexibility to decide which rules to use to control the disaggregation process. For example, suppose a television (TV) manufacturer sells different models of TVs in different regions, and each region has different customers. Past sales history can be used to forecast future sales data. The aggregation level to carry out forecasting depends on the business requirement — for example, product or location. If the forecast is executed at the product-location level, it needs to be further disaggregated down to a lower level — for example, customers. This level of disaggregation can be controlled by the proportional factors by deciding which method and what proportions to use.

Overview of the Disaggregation Mechanism and Use of Proportional Factors

All data that can be represented as numerical values is stored in key figures. Settings in the calculation type of the key figure determine how values are aggregated and disaggregated. The settings are valid for all planning books in which key figures are used. Figure 1 shows the high-level classification of different structural disaggregation methods present in SAP APO. Although there are other methods such as D (average at the lowest level), they are variants and depend on these more general methods. For discussion in this article and to show the calculation via proportional factors, I focus on the methods S and P.

Figure 1
High-level classification of structural disaggregation methods

Configuration in DP

Before using proportional factors, you need to set up a few DP objects. I assume that you know how to set up master data in SAP APO and how to configure basic DP objects. For this article, I show screenprints of the important DP objects highlighting configurations specific to proportional factor calculation. My focus is on explaining how calculations are done and how to interpret the results.

Master Planning Object Structure (MPOS)

An MPOS is created via transaction code /SAPAPO/MSDP_ADMIN. For the example discussed in this article, the MPOS contains the Location, Product, Product Group, and Customer as shown in Figure 2.

Figure 2

Alok Jaiswal

Alok Jaiswal is a consultant at Infosys Limited.

He has more than six years of experience in IT and ERP consulting and in supply chain management (SCM). He has worked on various SAP Advanced Planning and Optimization (APO) modules such as Demand Planning (DP), Production Planning/Detailed Scheduling (PP/DS), Supply Network Planning (SNP), and Core Interface (CIF) at various stages of the project life cycle.

He is also an APICS-certified CSCP (Certified Supply Chain Planner) consultant, with exposure in functional areas of demand planning, lean management, value stream mapping, and inventory management across manufacturing, healthcare, and textile sectors.

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