A significant feature of Sales & Operations Planning (SOP) is its multi-level capabilities. You can plan both top-down and bottom-up throughout a complex planning hierarchy. Thus, both centralized and decentralized planning are supported.

The functions that enable you to do this are known as aggregation and disaggregation. In SOP, aggregation is the process by which planning data at an aggregate level is generated through the totaling, copying, or averaging of key figure values at a more detailed level. Disaggregation, on the other hand, is the process by which planning data at a detailed level is generated through the distribution of key figure values from an aggregate level.

Aggregation and disaggregation in SOP are supported by Application Link Enabling (ALE). This is a technique similar to EDI whereby data is exchanged between centralized and distributed applications running on different computers in a network. Thus, you can plan across regional and even national boundaries.

In standard SOP, planning typically begins at an approximate, general level and is then gradually refined as you move down the product group hierarchy. Since both an active and an inactive planning version can be disaggregated, you can try out several different scenarios for the same hierarchy.

Whether you disaggregate sales volumes or production volumes or both depends on the current emphasis of your planning activities. Have you planned just the sales quantities of the product hierarchy root, which you now want to distribute to different sales regions¾modeled as product groups? Or have you already taken your production decisions, in which case your objective is to distribute production over several plants, product lines, or manufacturing methods that are also represented in the product group hierarchy?

The planning method in standard SOP is level-by-level planning; aggregation or disagregation, if desired, is triggered by the user.

Thanks to SOP’s different planning methods, you have a wide choice of possibilities for aggregating and disaggregating your planning data:

• Consistent planning

• Level-by-level planning

• Delta planning

The degree to which you wish aggregation and disaggregation to be automated, and therefore the decision on which planning method to use, will depend on a number of considerations. Do you want to plan top-down or bottom-up? Is data consistency your primary concern¾for example, in a complex planning hierarchy with multiple nodes and a great many materials? Or is it more important for you to be able to keep a check on data at individual planning levels?