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Ch. 6 Master Production Scheduling SCM 461 Dr. Ron Tibben-Lembke Pages: 168-181, 183-188.

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Presentation on theme: "Ch. 6 Master Production Scheduling SCM 461 Dr. Ron Tibben-Lembke Pages: 168-181, 183-188."— Presentation transcript:

1 Ch. 6 Master Production Scheduling SCM 461 Dr. Ron Tibben-Lembke Pages: ,

2 Master Production Schedule Provides basis for: Provides basis for: –Making good use of manufacturing resources –Making customer delivery promises –Resolving tradeoffs between sales and manufacturing –Attaining strategic objectives in the sales and operations plan

3 What is Master Production Scheduling? Start with Aggregate plan Start with Aggregate plan –(Aggregate Sales & Ops Plan) –Output level designed to meet targets Disaggregates Disaggregates Converts into specific schedule for each item Converts 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 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 future MPS shows when products will be available in future Planned production, not forecast Planned production, not forecast

5 Master Production Scheduling Techniques Available = inventory position at end of week Available = inventory position at end of week = starting inventory + MPS – forecast = starting inventory + MPS – forecast Plan to have positive inventory level Plan to have positive inventory level –Buffer in case production below plan –Or demand higher than anticipated MPS row is amount to make, MRP system has to figure out how to make it MPS row is amount to make, MRP system has to figure out how to make it

6 Figure Forecast10 Available (End)20 MPS10 On hand (start)20 Level demand, level production plan Level demand, level production plan

7 Figure 6.3 Different sales forecast Different sales forecast Same total: 120 units, starts lower, goes higher Same total: 120 units, starts lower, goes higher Level production plan Level production plan

8 Figure 6.4 Same demand as 6.3 Same demand as 6.3 Production adjusts to meet demand Production adjusts to meet demand Chase production strategy Chase production strategy

9 Figure 6.5 Lot size of 30 units Lot size of 30 units Produce if projected balance falls below 5 units Produce if projected balance falls below 5 units Extra on-hand inventory is cycle stock Extra on-hand inventory is cycle stock 5 unit trigger is safety stock 5 unit trigger is safety stock

10 Figure 6.5a – next week Demand in week 1 was 10 Demand in week 1 was 10 Marketing decides forecast was incorrect Marketing decides forecast was incorrect Raise forecasts to 10 for weeks 2-6 Raise forecasts to 10 for weeks 2-6 Ending Available for wk 2 projected to be 0 Ending Available for wk 2 projected to be 0 –Need to produce in week 2.

11 Figure 6.6 Roll forward one week Roll forward one week Higher demand over weeks 1-12 Higher demand over weeks 1-12 –Total was 120, now is 155 Need to revise MPS Need to revise MPS

12 Figure 6.7 Production planned for week 4 moved to 2 – can we do it? Production planned for week 4 moved to 2 – can we do it? Planned to do 4 batches in 12 weeks, now need 5 – feasible? Planned to do 4 batches in 12 weeks, now need 5 – feasible? Changing schedule is expensive, maybe very expensive Changing schedule is expensive, maybe very expensive

13 Order Promising 6.8 Track # units ordered for each period Track # units ordered for each period More orders expected for periods 2,3 More orders expected for periods 2,3 From on-hand, how many units not yet spoken for? From on-hand, how many units not yet spoken for? ATP = 20 – (5+3+2) = 10 ATP = 20 – (5+3+2) = 10

14 Available to Promise ATP Backlog of 10 orders over first 3 weeks: 5,3,2 Backlog of 10 orders over first 3 weeks: 5,3,2 –Actual firm customer orders, not forecasts. –Total shipments expected to be 5 in early weeks 20 units on hand. 20 units on hand. 10 units are available to promise 10 units are available to promise 20 units on hand have to cover all demands until next production 20 units on hand have to cover all demands until next production

15 Week 1 Demand is 10 Suppose demand is 10 in week 1. 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. Increase forecasts of future week shipments. Started period 1 with 20, demand was 10, ended with 10. 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)=28 Order backlog went from 10 to 12- factor in revising forecasts?

17 Starting inventory plus production is = 40. Starting inventory plus production is = 40. We have orders for 5 in period 2 We have orders for 5 in period 2 It looks like we could accept orders for up to 35 more units in week 2. It looks like we could accept orders for up to 35 more units in week 2. But we cant. Weve promised 7 of those units to weeks 3&4. But we cant. Weve 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 dont want to have to do. Selling more would mean we have to expedite another shipment, like we just did, but which we really, really dont want to have to do. So, not safe to assume we can easily expedite in short term So, not safe to assume we can easily expedite in short term

18 Calculating Available Current batch plus on hand Current batch plus on hand Minus the greater of Forecast and confirmed orders Minus the greater of Forecast and confirmed orders Previous available + MPS – (greater of forecast or orders) Previous available + MPS – (greater of forecast or orders)

19 Calculating ATP Calculated in current week and any week with MPS>0 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 MPS –Later periods: MPS – all orders until next MPS –ATP = MPS in weeks 5, 8, 10, 12

20 ATP: Future Deficiencies Order for 35 in week 10. Order for 35 in week 10. Wk 10 ATP goes to 0, 5 additional units need to come from ATP for previous MPS Wk 10 ATP goes to 0, 5 additional units need to come from ATP for previous MPS Week 8 MPS goes to 25 Week 8 MPS goes to 25 Set MPS for 11? We need to do something. Set MPS for 11? We need to do something.

21 Consuming the Forecast Fig Go back to Fig. 6.9 Go back to Fig. 6.9 Can we accept following orders? Can we accept following orders? 1.5 unitsweek unitsweek unitsweek units week 5

22 5 in week 2? 5 in week 2 – must come from ATP in week 2. 5 in week 2 – must come from ATP in week 2. ATP in 2 is 28, so it works. ATP in 2 is 28, so it works. Reduce ATP to 23, add order Reduce ATP to 23, add order

23 5 in week 2? OK Reduced ATP to 23, add 5 to Orders Reduced ATP to 23, add 5 to Orders

24 15 in week 3? 15 in week 3 – needs to come from ATP in week in week 3 – needs to come from ATP in week 2. ATP in 2 is 23, so it works ATP in 2 is 23, so it works

25 15 in week 3? OK Reduced ATP to 8, added 15 to Orders Reduced ATP to 8, added 15 to Orders Notice all future ending levels went down by 10 Notice all future ending levels went down by 10 Consider moving MPS from 5 to 4. Consider moving MPS from 5 to 4. –Depends on marketings 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. ATP in week 5 is only 30. How could this work? How could this work?

27 35 in week 6? OK 30 from ATP in week 5, which goes to from ATP in week 5, which goes to 0. Need 5 more ATP from week 2, ATP in 2 goes down to 3. Need 5 more ATP from week 2, ATP in 2 goes down to 3. But it would only be prudent to approve it if: But it would only be prudent to approve it if: You think this 35 represents all the demand youll see You think this 35 represents all the demand youll see (Those forecasted other orders are not coming), OR (Those forecasted other orders are not coming), OR You can adjust the MPS to meet forecasted demand You can adjust the MPS to meet forecasted demand No room to accommodate 10 in w 5, could do in week 8 No room to accommodate 10 in w 5, could do in week 8

28 Fig Roll one week forward in time Roll one week forward in time What to do about Available < 0? What to do about Available < 0? –Maybe nothing. forecasted sales may not appear –If they do, were in trouble – produce more, or earlier, depends on other products needs

29 Bill of Materials Bill of Materials – Parent-child diagram that shows what goes into what. Bill of Materials – Parent-child diagram that shows what goes into what. Bike Frame Assy Wheel Assy Components WheelTires Hubs & Rims Spokes Frame Used to make sure enough parts for production plan Used to make sure enough parts for production plan Each part has LT, ordering policy Each part has LT, ordering policy One BOM for every end product One BOM for every end product

30 BOM formats Single-level BOM only shows one layer down. Single-level BOM only shows one layer down. Indented BOM Indented BOM Bike Bike –Frame Assembly Components Frame –Wheel Assembly Wheel –Hubs & Rims –Spokes Tires WheelTires Spokes

31 Low-Level Code Numbers Lowest level in structure item occurs Lowest level in structure item occurs Top level is 0; next level is 1 etc. Top level is 0; next level is 1 etc. Process 0s first, then 1s Process 0s first, then 1s Know all demand for an item Know all demand for an item Where should blue be? Where should blue be? LLC

32 LLC Drawing Item only appears in one level of LLC drawing Item only appears in one level of LLC drawing Easier to understand Easier to understand Simplifies calculations Simplifies calculations LLC

33 Final Assembly Schedule Master Production schedule is anticipated build schedule Master Production schedule is anticipated build schedule FAS is actual build schedule FAS is actual build schedule –Exact end-item configurations

34 Schedule Stability Stable schedule means stable component schedules, more efficient Stable schedule means stable component schedules, more efficient No changes means lost sales No changes means lost sales Frozen zone- no changes at all Frozen zone- no changes at all Time fences Time 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)

35 HW Pages , Pages , DQ: 1,3,5 DQ: 1,3,5 Problems: 1,4,6,8 Problems: 1,4,6,8


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