1. Master Production Schedule
Master Production Schedule Training Slides
By John Kash
For
Operations Management 345
Dr. Tom Foster
by John Kash

2. Master Production Schedule
Overview
Define Master Production Schedule
Explain MPS
Discuss How MPS Works
Example From “Real Life”
Brainstorm: How Can MPS Help Your Firm?
Practice MPS
Topics Covered in presentation.
by John Kash

3. Master Production Schedule
What is MPS?
Master Production Schedule – States the requirements for individual end items by date and quantity.
The APICS dictionary defines the Master Production Schedule as follows:
1) The anticipated build schedule for those items assigned to the master scheduler. The Master Scheduler maintains this schedule, and in turn, it becomes a set of planning numbers that drives Material Requirements Planning. It represents what the company plans to produce expressed in specific configurations, quantities, and Dates. The Master production Schedule is not a sales forecast that represents a statement of demand. The Master Production Schedule must take into account the forecast, the production plan, and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals. Syn. Master Schedule 2) The result of the master scheduling process. The master schedule is a presentation of demand, forecast, backlog, the MPS, the projected on hand inventory, the available-to-promise quantity.
by John Kash

4. Master Production Schedule
MPS Explained
Breaks down, or disaggregates, the production plan into product families
Promotes valid order promises
Provides a communication medium between Marketing/Sales and Operations
Breaks down, or disaggregates, the production plan into product families: The production plan is broken into product families for the Master Production Schedule and Production is planned based on demand forecasts provided by marketing.
Promotes valid order promises: Order promises can be made against planned production. This job falls to marketing and is referred to as “consuming” the Inventory.
Provides a communication medium between Marketing/Sales and Operations. When more product has been promised than will be produced, marketing and operations must work together to develop a strategy to meet customer requirements. This can take the form of many options including; subcontract, allow overtime, increase capacity through equipment acquisition, expand facilities, increasing staffing levels, improve processes, etc…
by John Kash

5. Explanation Continued
Master Production Schedule
Explanation Continued
Proactively control ability to deliver goods to customers
Resource availability control
Proactively control inventory levels
Proactively control ability to deliver goods to customers: The MPS allows for better understanding of capacity and gives visibility to capacity shortfalls. This allows action to be taken to meet demand or prioritize customer orders ahead of time.
Resource availability control: Understanding future capacity shortfalls creates the ability to plan the best uses of resources or increase resources if needed.
Proactively control inventory levels: MPS gives a firm the ability to not rely on safety stock or “reactive” EOQ models.
by John Kash

6. Objectives of Master Production Schedule (MPS)
1. Keeping the inventories at the desired level by making perfect use of the resources that are available with the company.
2. Setting up due dates for the availability of the end items and also providing the required information regarding resources and also the materials – which act as the supporting pillars of the aggregate planning.
3. Maintaining properly, the desired level of customer service.
4. Setting particular schedules for the production of the parts and the components that are used as the inputs to materials requirements planning, in the end items.

7. Disaggregate the Sales and Operations Plan
Master Production Schedule
Disaggregate the Sales and Operations Plan
The production plan is broken into product families
The Sales and Operations Plan is broken into smaller product families. An example would be an auto maker breaking their automobile production down into small cars, sudans, trucks, etc…
by John Kash

8. Promotes Valid Order Promises
Master Production Schedule
Promotes Valid Order Promises
By validating the capacity for the MPS through rough cut capacity planning, alterative plans can be made when there are more orders than production
Promotes valid order promises: By validating the capacity for the MPS through rough cut capacity planning, alterative plans can be made when there are more orders than production. Management has several options and implement something before customer orders are late or missed.
by John Kash

9. Marketing  Operations
Master Production Schedule
Marketing  Operations
Marketing communicates demand through customer orders and forecasts
Operations communicates capacity through inventory levels and constraints
Marketing communicates demand through customer orders and forecasts: Marketing researches and monitors data to provide input on actual customer demand and forecasted customer demand to the Operations department
Operations communicates capacity through inventory levels and constraints: Operations researches and monitors data tp provide input on capacity, inventory levels, and production constraints.
by John Kash

10. The main steps in master production schedule can be summarized as – 1
The main steps in master production schedule can be summarized as – 1. Forming a preliminary MPS. 2. Performing rough – cut capacity planning. 3. Resolving differences.

11. Resource Availability Control
Master Production Schedule
Resource Availability Control
Production shortfalls will be known ahead of time and alternative plans can be made.
Production shortfalls will be known ahead of time and alternative plans can be made: Based on the sales forecast and capacity review, a firm will know when they will not be able to meet forecasted demand and will be able to make alternative plans to wither increase capacity in some manner or subcontract.
by John Kash

12. Master Production Schedule
Customer Service
Proactively control ability to deliver goods to customers
Proactively control ability to deliver goods to customers: Management will be able to proactively manage customer relations by deciding how to handle production shortfalls in advance.
by John Kash

13. Why is it important to deliver to customers on time or when promised?

14. Master Production Schedule
Inventory Control
Proactive approach to inventory control
Items are scheduled to arrive when needed
Safety stock has less importance
Proactive approach to inventory control: By planning out the production based on demand, inventory can be deliver as it is needed. This helps to lower the cost of carrying goods that are not currently needed.
by John Kash

15. Planning Organization
Master Production Schedule
Planning Organization
Explanation Continued:
The chart displayed is based on the Planning and Control Hierarchy from Basics of Supply Chain Management.
The sales and operations plan sets the direction for the markets that a firm will compete in based on that firms core competencies. This information is broken down or disaggregated into product families by the MPS. The MPS then sets dates for the completion of end items based on input from the sales forecast. In turn, this information is fed to the MRP system for further disaggregation.
The MPS is checked through rough cut capacity planning. This is where the firm determines if they have the capacity to produce the necessary volume dictated by the sales forecast. If there is not enough capacity then other options should be explored.
by John Kash

16. A good master scheduler always tries to consider the following five key questions before making any final decision for changing the master schedule –
1. Is there any real change in demand? 2. What is the impact on the production plan? 3. Is material available? 4. Is capacity available? 5. What are the risks involved? 6. What are the costs involved?

17. Inputs into the MPS Known Orders Key Capacity Constraints
Key Capacity Constraints
Demand Forecast
Master Production Schedule (MPS)
Inventory Levels
Sister Plant Demand
Spares Demand
R & D Demand
Exhibition/ Promotion Requirements
Safety Stock Requirements

18. Master Production Schedule
How MPS Works
Information needed for MPS logic
Lot Size
Lead Time
Product Demand
Starting Inventory
Lot size, Lead time, and product demand are the basic elements used to create a MPS.
by John Kash

19. Master Production Schedule
Summary
MPS breaks the Sales & Operations plan into product families
Maintains Desired Level of Customer Service
Allows proactive control of inventory
Thanks!
by John Kash

20. Calculating the Master Production Schedule (MPS)
JUNE 2016
JULY 2016 1 2 3 4 5 6 7 8
Forecast 30 35 60 40 20
Customer Orders (Committed) 15 10
Projected on-hand Inventory -
MPS 45
Available to Promise 56 43
Calculating the Master Production Schedule (MPS)
Opening Stock = 40 units
Minimum Batch Size = 15 units

21. June
July 1 2 3 4 5 6 7 8 9
Forecast Units
150
125
145
160
170
180
210
155
220
Customer Orders (Committed) 35 20 15 10
Projected on-hand Inventory
MPS
Available to Promise
Exercise 1
Siyabonga Textiles, a manufacturer of women’s garments has compiled the following sales forecast for the months of June and July 2016:
The opening inventory for this period was 50 units and the factory can only produce batches of 12 units. Calculate:
Projected on hand inventory
Master Production Schedule
Available to Promise (ATP)

22. June
July 1 2 3 4 5 6 7 8 9
Forecast Units
4900
4500
5750
6200
4550
4985
5280
6560
7750
Customer Orders (Committed)
5100
3750
2460
2155
1450
Projected on-hand Inventory
MPS
Available to Promise
Exercise 2
Nomvete Garments, a manufacturer of women’s garments has compiled the following sales forecast for the months of June and July 2016:
The opening inventory for this period was 850 units and the factory cab only produce batches of 1200 units. Calculate:
Projected on hand inventory
Master Production Schedule
Available to Promise (ATP)

23. June
July 1 2 3 4 5 6 7 8 9
Forecast Units
4500
5500
5750
6100
4200
4800
5270
6560
5850
Customer Orders (Committed)
5100
3750
2460
2155
1450
Projected on-hand Inventory
MPS
Available to Promise
Exercise 3
Siyafunda Fashion, a manufacturer of women’s garments has compiled the following sales forecast for the months of June and July 2016:
The opening inventory for this period was 650 units and the factory can only produce batches of 1350 units. Calculate:
Projected on hand inventory
Master Production Schedule
Available to Promise (ATP)