Master Production Scheduling (MPS)

Master Production Scheduling (MPS) Production Planning and Control System Sales and Operations Planning (S&OP) Establishes overall production, workforce, and inventory levels Determines when specific products will be made, when specific customers orders will be filled, and what products inventory are available to meet new demand Master Production Scheduling (MPS) Calculates the timing and quantities of material orders needed to support the master schedule Material Requirements Planning (MRP) Purchasing Control Production Control (PAC)

PLANNING AND CONTROL ACTIVITIES IN MANUFACTURING ENTERPRISE Strategic plan Sales&Operation Plan (Aggregated Production Plan) Master Production Schedule (MPS) Material Requirements Plan Purchasing Control Production Control Input /Output Control Detailed Capacity Requirements Plan Rough-cut Capacity Plan Resources Planning Plan Execution Demand Forcasts Customers Orders Resources

Master Production Scheduling (MPS) Master Production Scheduling allows the firm to: „Break down” the aggregated plans made in the SOP into production schedule of specific products which are ordered by customer. Serve as a plan that uses actual customer orders in addition to forecast data Serve as a source of information by which it is possible to develop much more specific capacity and resource plans. Serve as a method to effectively translate customer orders into effectively timed production orders for the facility. Serve as an effective tool for planning finished goods inventory levels

Master Production Schedule A statement of what the company plans to produce in terms of products, quantities and planning periods MPS PURPOSE: A schedule for production orders for MPS items Drives the MRP calculation Input to Rough-Cut Capacity Planning Basis for making delivery promises to customers WHERE APPLICABLE ? In all manufacturing companies

Master Production Scheduling (MPS) Week 1 2 3 4 5 6 7 8 Stool X 50 Stool Y 150 100 Master Production Schedule should take into account: customers requirements (quantities and delivery time) capacity and time constraints (be feasible) production efficiency factors (minimum production batch size, inventory holding level)

Master Production Scheduling Master Production Scheduler Requirements: Demand forecasts Customer orders Safety stock Orders from Final Product Warehouse Resources: Materials Capacity Over time Regular time Subcontracting

Master Production Scheduling in production environments SOP – sales and operations plan FAS – final assembly schedule MTS A MTO X V MPS SOP, MPS, DRP Make to Stock Make to Order Assembly to Order SOP, FAS Final Products Materials Modules Master Production Scheduling depends on the production environment (MTS or MTO or ATO). MPS operates at the level that has the fewest items that need to be scheduled. The subject of planning : MTS - specific final products ATO – modules and components to be assembled MTO – standard components and raw materials

Sales and Operations Plan disaggregation (family of ABC products case) Month January February March April Demand 3000 3400 Production Inventory Demand disaggregation in March and April A,B,C products demand decomposition in March and April Product participation in total demand: B= 26.5%, C = 26,5%, A =47% Month March April Week 9 10 11 12 13 14 15 16 Product A Demand 350 450 Product B 200 300 Product C 100

Master Production Scheduling Product: B Lot size: 400 units On-hand: 300 units Week 9 10 11 12 13 14 15 16 Demand 200 300 Projected 300 available 100 -100 Net requirements MPS 400 Projected available – planned inventory available at the end of the week On-hand – current inventory (initial inventory) Lot size – minimal quantity accepted MPS – Master Production Schedule

Master Production Scheduling (Make to Stock environment) Product: B Lot size: 400 On-hand: 300 Week 9 10 11 12 13 14 15 16 Demand forcast 200 300 Projected available 300 100 MPS 400 Projected available - inventory available at end of the week Projected available = On Hand MPS Demand forcast + -

Customer orders entry = + - Demand sources: individual customers orders, distributors orders, final products warehause orders Week 9 10 11 12 13 14 15 16 Total orders 250 200 170 130 80 70 Product: B Lot size: 400 On-hand: 300 Week 9 10 11 12 13 14 15 16 Demand forcast 200 300 Customer orders 250 170 130 80 70 Projected available 50 350 150 MPS 400 Larger Forcast/Orders MPS On Hand Projected available - Projected available – planned inventory available at end of the week + =

Total orders to the next MPS Total orders to the next MPS Available to promise Available to promise allows the firm very quickly and realistically promise delivery of products to the customer without any changes in MPS Product: B Lot size: 400 On-hand: 300 Week 9 10 11 12 13 14 15 16 Demand forcast 200 300 Customer orders 250 170 130 80 70 Projected available 50 350 150 MPS 400 Available to promise (ATP) 30 270 240 330 Total orders to the next MPS MPS (1) Available to promise Week 1 - = On Hand + Total orders to the next MPS MPS (n) Available to promise Week n - =