How to Build a Planning Hierarchy

When building a planning hierarchy, every node within a level must be associated to a node at the upper level. If this does not happen, the forecasting process will not work properly.

Building a Hierarchy

  1. Click on Planning Hierarchy in the sub-menu bar under S&OP menu group.
  2. Click on drop down to go to the level where you would like to build a level. Selecting Item will build a hierarchical level above item. Selecting customer will build a hierarchical level above customer.
  3. You also have the option to change the level name. This is helpful when the customer level is something other than customer i.e. market, territory, channel, etcetera.

Example: Adding a Product Family Level Above Item Level

  1. Click "Add Upper Level" in Planning Hierarchy menu bar
  2. An entry box opens where you can name the level. Enter name as required.
  3. Click "Save" to save.
  4. A new level will be added.

Please note that you CAN NOT use a simple generic value for a node within a level since the structure must be top down one to many.

For example, in apparel companies, the product hierarchy is typically Category >> Style >> Color >> Size (item). Since the color level is between a unique style level and the item level where the size resides, you can not use a generic color as a value. For example, if the color is green, it cannot be used since the value is too generic and could be a color used for multiple SKU's within multiple syles thus violating the top down one to many rule. A way around this is to concantenate the syle with the color thus creating a unique entity that ties the top level to the bottom level in a unique string.

Add Nodes to Hierarchical Level

  1. Select the level where the node needs to be created from the drop down.
  2. Click "Add Node"
  3. Add "Node Name"
  4. Save
  5. To delete a node, select the node by clicking on the checkbox
  6. Click "Delete Node"

Associate Items to Nodes

If an lower level node is not associated with a parent node, it will not be forecasted nor will it be included in historical sales. As a result, all new as well as old nodes that are no longer being sold must be added to their appropriate nodes as required or they will not be forecasted. To retain history, of old items, it is recommended to add them to their proper node but then deactivate the items in data maintenance. A deactivated item will not be forecasted or supply planned but will be included in history.

  1. Filter the items you would like to add to the hierarchy using tags and categories. In the example above, the filter was based on the item tag "New Item."
  2. You may also search and add items one at time using the search box.
  3. Use select all to check the items to add to hierarchical node.
  4. Click "Associate to Parent Node"
  5. The Node drop down box appears where you can select the node to add the items from the drop down.
  6. Click save.
  7. To remove a Parent Node association, filter the data as described above and select the applicable items
  8. Click "Disassociate from Parent Node."

You may also upload the hierarchical nodes and relationships by following the steps as described in the article How to create the S&OP hierarchy by uploading.

Once all hierarchies and associations have been created, a new Pareto must be run to formally prepare the data for demand planning.

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