Presentation on theme: "Ch. 6 Master Production Scheduling"— Presentation transcript:
1 Ch. 6 Master Production Scheduling SCM 461Dr. Ron Tibben-LembkePages: ,
2 Master Production Schedule Provides basis for:Making good use of manufacturing resourcesMaking customer delivery promisesResolving tradeoffs between sales and manufacturingAttaining strategic objectives in the sales and operations plan
3 What is “Master Production Scheduling?” Start with Aggregate plan(Aggregate Sales & Ops Plan)Output level designed to meet targetsDisaggregatesConverts into specific schedule for each item
4 S&OP vs MPS“The role of the sales and operations plan is to balance supply and demand volume, while the MPS specifies the mix and volume of the output”MPS shows when products will be available in futurePlanned production, not forecast
5 Master Production Scheduling Techniques Available = inventory position at end of week= starting inventory + MPS – forecastPlan to have positive inventory levelBuffer in case production below planOr demand higher than anticipatedMPS row is amount to make, MRP system has to figure out how to make it
6 Figure 6.2 Level demand, level production plan 1 2 3 4 5 6 7 8 9 10 11 12ForecastAvailable (End)20MPSOn hand (start)
7 Figure 6.3 Different sales forecast Same total: 120 units, starts lower, goes higherLevel production plan
8 Figure 6.4 Same demand as 6.3 Production adjusts to meet demand “Chase” production strategy
9 Figure 6.5 Lot size of 30 units Produce if projected balance falls below 5 unitsExtra on-hand inventory is “cycle stock”5 unit “trigger” is safety stock
10 Figure 6.5a – next week Demand in week 1 was 10 Marketing decides forecast was incorrectRaise forecasts to 10 for weeks 2-6Ending Available for wk 2 projected to be 0Need to produce in week 2.
11 Figure 6.6 Roll forward one week Higher demand over weeks 1-12 Total was 120, now is 155Need to revise MPS
12 Figure 6.7 Production planned for week 4 moved to 2 – can we do it? Planned to do 4 batches in 12 weeks, now need 5 – feasible?Changing schedule is expensive, maybe very expensive
13 Order Promising 6.8 Track # units ordered for each period More orders expected for periods 2,3From on-hand, how many units not yet spoken for?ATP = 20 – (5+3+2) = 10
14 Available to Promise ATP Backlog of 10 orders over first 3 weeks: 5,3,2Actual firm customer orders, not forecasts.Total shipments expected to be 5 in early weeks20 units on hand.10 units are available to promise20 units on hand have to cover all demands until next production
15 Week 1 Demand is 10 Suppose demand is 10 in week 1. Orders for 5 week 1 units were received in week 1.Already had firm orders for 5 for wk 1.Increase forecasts of future week shipments.Started period 1 with 20, demand was 10, ended with 10.
16 Order Promising – Fig. 6.9 Received more orders for periods 2-4 Period 2 ending inventory would be 0, so have to produce in week 2.(10+30) – (5+5+2)=28Order backlog went from 10 to 12- factor in revising forecasts?
17 Starting inventory plus production is 10+30 = 40. We have orders for 5 in period 2It looks like we could accept orders for up to 35 more units in week 2.But we can’t. We’ve promised 7 of those units to weeks 3&4.Selling more would mean we have to expedite another shipment, like we just did, but which we really, really don’t want to have to do.So, not safe to assume we can easily expedite in short term
18 Calculating “Available” Current batch plus on handMinus the greater of Forecast and confirmed ordersPrevious available + MPS – (greater of forecast or orders)
19 Calculating ATP Calculated in current week and any week with MPS>0 Current period: on-hand plus any current period MPS, minus all orders in that and subsequent periods until next MPSLater periods: MPS – all orders until next MPSATP = MPS in weeks 5, 8, 10, 12
20 ATP: Future Deficiencies Order for 35 in week 10.Wk 10 ATP goes to 0, 5 additional units need to come from ATP for previous MPSWeek 8 MPS goes to 25Set MPS for 11? We need to do something.
21 Consuming the Forecast Fig. 6.10 Go back to Fig. 6.9Can we accept following orders?5 units week 215 units week 335 units week 610 units week 5
22 5 in week 2? 5 in week 2 – must come from ATP in week 2. ATP in 2 is 28, so it works.Reduce ATP to 23, add order
23 5 in week 2? OKReduced ATP to 23, add 5 to Orders
24 15 in week 3? 15 in week 3 – needs to come from ATP in week 2. ATP in 2 is 23, so it works
25 15 in week 3? OK Reduced ATP to 8, added 15 to “Orders” Notice all future ending levels went down by 10Consider moving MPS from 5 to 4.Depends on marketing’s beliefs about 4.If no more than 10 will come, we might be OK.
26 35 in week 6?ATP in week 5 is only 30.How could this work?
27 35 in week 6? OK 30 from ATP in week 5, which goes to 0. Need 5 more ATP from week 2, ATP in 2 goes down to 3.But it would only be prudent to approve it if:You think this 35 represents all the demand you’ll see(Those forecasted other orders are not coming), ORYou can adjust the MPS to meet forecasted demandNo room to accommodate 10 in w 5, could do in week 8
28 Fig. 6.10 Roll one week forward in time What to do about Available < 0?Maybe nothing. forecasted sales may not appearIf they do, we’re in trouble – produce more, or earlier, depends on other products’ needs
29 Bill of MaterialsBill of Materials – Parent-child diagram that shows what goes into what.Used to make sure enough parts for production planEach part has LT, ordering policyOne BOM for every end productBikeFrameAssyWheel AssyWheelTiresComponentsFrameHubs & RimsSpokes
30 BOM formats Single-level BOM only shows one layer down. Indented BOM BikeFrame AssemblyComponentsFrameWheel AssemblyWheelHubs & RimsSpokesTiresSpokesWheelTires
31 Low-Level Code Numbers LLC1234Lowest level in structure item occursTop level is 0; next level is 1 etc.Process 0s first, then 1sKnow all demand for an itemWhere should blue be?
32 LLC Drawing Item only appears in one level of LLC drawing 1234Item only appears in one level of LLC drawingEasier to understandSimplifies calculations
33 Final Assembly Schedule Master Production schedule is anticipated build scheduleFAS is actual build scheduleExact end-item configurations
34 Schedule StabilityStable schedule means stable component schedules, more efficientNo changes means lost salesFrozen zone- no changes at allTime fences>24 wks, all changes allowed (water)16-23 wks substitutions, if parts there (slush)8-16 minor changes only (slush)< 8 no changes (ice)