Forecasting
Exercise Introduction
SAP provides a complete set of forecasting tools that can be used in a number of sales and
operations areas. The most flexible set of forecasting tools are provided in the Sales and
Operations Planning (SOP) transaction.
Product Group
In this exercise, we will be creating forecasts for a product group. Frequently, forecasts and
plans are created for a group of products to simplify the process. The forecasts for the product
group can then be disaggregated to the individual products using historical percentages. For this
exercise, we will use a product group consisting of two products: NRG-A and NRG-B bars. We
will assume that, consistent with past sales data, NRG-A bars will make up 70% of sales.
You may have already created this product group if you ran the Sales and Operations Planning
Exercise. There are a couple of ways to check whether you have already created the product
group. Perhaps the simplest way is to follow the directions below to create a product group. If
you have already created a product group, the SAP system will inform you of that.
1.1 Create Product group
To create a product group for NRG bars, follow the menu path:
Logistics Production SOP Product Group Create
which will produce the following screen:
Enter ## NRG Group for group
## NRG-A and NRG-B Group for description
Enter ##PT for Plant and CS for base unit
then click on the enter icon
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Enter the data shown in the figure above, then click on the enter icon ( ). If you have already
created a product group, then you will get the following error message at the bottom of the
screen:
and you can skip the following material on creating a product group an go on to section 1.2
Create SOP for Product Group.
If you do not already have a product group, you will get the following screen:
Click on the Member number field to get the search icon ( ), then
click on the search icon to search for the first material in the group
Click on the Member number field to get the search icon so that we can use the search
capabilities in SAP to find the material number for the NRG-A bars. Clicking on the search icon
( ) will call up the following screen:
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Make sure you are on the Material
number/Material Description tab,
enter ##* for the material description,
then click on the enter icon
Search for you material by entering ##* in the Material description, then clicking on the enter
icon ( ) to find all materials where the description begins with your data set number:
Select ## NRG-A, then click on
the enter icon to enter your first
material in the group
You will now have the material number for ## NRG-A bars entered in the Create Product
Group screen:
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Complete the product group screen so that it looks like the following screen. Make sure you use
your own data set numbers for the materials and plant:
Complete the Create Product Group
screen, then click on the enter icon
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Complete the Create Product Group screen, which specifies that we expect 70% of sales to be
of ## NRG-A bars and 30% of ## NRG-B bars. When you click on the save icon ( ), you
should get the following message:
1.2 Create SOP Plan for Product Group
In a previous exercise, we created the ## NRG Group. Historical Sales (consumption) values
have been loaded for the two products that make up this group, and we will now use these values
to generate a forecast. To do this, follow the menu path:
Logistics Production SOP Planning For Product Group Create
Enter ## NRG GROUP and
##PT, then click on enter
Enter ## NRG GROUP and ##PT, then click on the enter icon (
following pop-up window:
) which will bring up the
Enter version 1## and Version description
Version 1##, then click on the enter icon
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Enter version 1## and Version description Version 1##, then click on the enter icon (
which will bring up the Create Rough Cut Plan screen:
),
In the previous exercise in Sales and Operations Planning, we entered a few sales values
manually to see how the process worked. In practice, we would likely take advantage of
previous sales history and use SAP’s forecasting tools to estimate future sales levels based on the
historical sales values.
To create a forecast in SOP, follow the pull-down menu path:
EditCreate Sales PlanForecast
Which will produce the following pop-up window:
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The SAP system will
create a forecast for 13
months starting with
this month
If available, the system
will use 5 years (60
months) of historical
data
SAP will
determine the
forecast model
to use
The default forecast profile for
SOP (SAP Profile) determines the
default forecast parameters
Click on Forecast Profile
To generate a forecast, a number of parameters must be specified (forecast period length, model
to be used, etc.). The SAP system provides Forecast Profiles, which are pre-defined
combinations of forecast parameters. In the SOP module, the SAP profile is set as the default.
To see what is specified in the forecast profile, click on the Forecast Profile icon
(
). This will produce the following pop-up window:
Click on the change icon
Although we don’t want to change the SAP profile, to see what it contains you need to click on
the change icon ( ). This will produce yet another pop-up window, which will show the
parameters specified by the SAP forecast profile:
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Click on the Forecast strat. Field,
then on the search icon, to see
what forecast strategies are
available
Use the search icon in the Forecast strat. field to see what forecast strategies are available:
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Strategy 53 used in the SAP profile means that the SAP system will test the historical data for
both trend and seasonal components and, because Automatic Model selection has been specified,
will use a model that includes trend and seasonal components if they are detected in the data.
Cancel out of the pop-up windows until you are back at the Forecast Model Selection window:
Click on Historical to look at the historical data
Click on the Historical icon (
) to see what the historical sales data looks like.
This will bring up a pop-up window that cryptically warns you that you don’t have 5 years of
historical data:
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Click on the enter icon to ignore the warning
That there are not 5 years of historical data is not a problem. There is sufficient data to make a
good forecast. Click on the enter icon ( ) to ignore the warning, and a pop-up window will
appear that shows the historical data values in a table:
Your dates will
be different
Click on the interactive graphics icon
It’s hard to make sense of tabular values of data. Looking at a graph of the data will make things
clearer. Click on the interactive graphics icon (
) to call up graphs of the historical sales data.
Two graphs are displayed:
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Outlier
Outlier
The first graph is an SAP statistics graph, which has the capability to show the entire sales
history. The second graph is an SAP Business Graph. It is limited to the most current 32 periods
of data, but allows for correction of outliers. An outlier is a historical data value that doesn’t fit
the overall trend. Usually there is an external cause for the outlier, like inclement weather
(blizzard, hurricane, etc.), and it is a good idea to see if the cause for the outlier can be
determined. In forecasting, outliers tend to distort the forecast and should be “corrected.” In the
graphs above, it is clear that there is a sales value that does not follow the pattern. SAP allows
for correction of outlier data points in the SAP Business Graphic. First, click on the Historical
(corr.) bar in the SAP Business Graphic, then drag the outlier point up:
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Click on Historical
(corr.), then drag
the outlier point up
After dragging the outlier point up, it may not appear that anything happened. That’s because
the SAP Business Graphic switches back to the original data in the graph--Historical (org.):
Click on Historical
(corr.) to see the
corrected data
Click on Historical (corr.) to see the corrected data:
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Outlier data point is
“corrected”
You can see both the original data and the corrected data on the SAP statistic graphic:
Original and corrected data shown
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To see the impact of an outlier, we will not save the correction at this point. Click on the cancel
icon ( ) on either graphic to go back to the Historical Values pop-up menu without saving the
correction:
Click on the Forecasting icon
to generate the forecast
Click on the forecasting icon (
produce the following screen:
) to start the forecasting process, which will
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Forecasting procedure will test for
Trend and Seasonal Components
Click on the forecasting icon (
) again to generate a forecast:
Click on interactive graphics to evaluate the forecast
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This window shows the forecast values in tabular format. It is much easier to evaluate the
forecast in a graph. Click on the interactive graphics icon (
) to call up a graphs of the
forecast. The SAP statistic graph provides a good comparison of the forecast to the historical
data:
Notice that the forecasting model interpreted the outlier as a seasonal variation and repeated it in
the forecast. At this point, we could correct the forecast to remove the effect of the outlier in the
same way that we “corrected” the historical data. Rather than doing that, we will correct the
historical sales figures. Use the cancel icons ( , ) until you are back at the Create Rough
Cut Plan screen:
Use the pull-down menu path:
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EditCreate Sales PlanForecast
to initiate the forecast process again. Correct the historical data values to remove the outlier:
To use the corrected
values, click on the
Copy icon
Click on the Copy icon to use the corrected values. You will be returned to the Historical
Values table. Scroll down to see that the corrected value has been transferred:
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Scroll down to see the
corrected value that
will be used in the
forecast
Click on the forecasting icon (
corrected value:
) twice to generate a forecast using the
Click on the enter icon to save the forecast and transfer it
to the sales line of the Create Rough Cut Plan screen
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enter icon ( ) to save the forecast values to the Create Rough Cut Plan screen. Follow the pulldown menu path:
EditCreate Productn PlanSynchronous to sales
To create a production plan to match the sales forecast:
This screen cannot be printed directly, but the data can be easily exported to an Excel
spreadsheet. To do this, follow the pull-down menu path:
ExtrasMicrosoft Excel
which will call up the following pop-up menu:
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pick an appropriate location to store the file PT.XLS. When you click on the Save icon
(
), and SAP will save the file and open the file in Excel. Print this file to hand in.
Be sure to neatly print your name on a
printout of the Excel Spreadsheet of your
forecast and production plan to hand in.
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