1

Master Scheduling

Chapter 3

2

Master Production Schedule

• 3 months - 1 year - timeframe

• What will manufacturing build?• How many? When?

• What other components are needed?

• What capacity constraints exist?

• What material constraints exist?

• It keeps priorities valid

3

Master Production Schedule• Deals with end items requirements• Drives the integrated Materials Requirements Plan• It is a priority plan for manufacturing

• MPS has three functions:• to interlock the business plans and day-to-day operating

plans• to provide a “control handle” for management on daily

operations• to drive the formal, integrated planning and control system

4

Master Production Schedule

• Information needed to create an MPS• Production Plan (Previously completed)

• Forecasts for individual items

• Actual orders received from customers & for stock replenishment

• Inventory levels for individual items

• Capacity constraints

5

Grand Scheme of Things

Strategic Business Plan

Production Plan

Master Production Schedule

Material Requirements Plan

Production Activity Control & Purchasing

Planning

Implementation

Master Plan

6

Developing an MPS

• Objectives• Maintain desired level of customer service

• Make best use of material, labor and equipment

• Maintain inventory investment $$ at required levels

• Steps1. Develop a preliminary MPS

2. Check preliminary MPS against available capacity (rough-cut capacity planning)

3. Resolve any differences

7

Preliminary MPS

• Page 52-53. Do on Board.

8

Preliminary MPS

• Page 53. Walk Through

• (Projected Available + MPS - Forecast = Current Week Projected Available)

• Week 1: 50 + 100 - 75 = 75• Week 2: 75 + 0 - 50 = 25• Week 3: 25 + 100 - 30 = 95• Week 4: 95 + 0 - 40 = 55• Week 5: 55 + 100 - 70 = 85• Week 6: 85 + 0 - 20 = 65

• The MPS of 100 units was added at Week 1,3 & 5 to avoid a negative number

Week 1 2 3 4 5 6

Forecast 75 50 30 40 70 20

Projected available 50 75 25 95 55 85 65

MPS 100   100   100  

9

Preliminary MPS

• MPS & Production Plan must match

• Go back to Example on Page 51. Do on Board.

10

Rough-Cut Capacity Planning

• Looks at whether critical resources (capacity) are available to support “preliminary” MPS

• Look at Example on page 54

• Look at Example on page 55.

11

Rough-Cut Capacity Planning

• Resolution of Differences• Total Time VS Available Capacity

• Three more items to look at1) Resource use2) Customer Service3) $ (cost)

12

•Few items; many components

•Ships, Buses, Large Machine Tools

MPS

MPS

•Many items; Many components; good commonality

•Small Home Appliances, Electric Motors, Food products

MPS

•Many items; many components; few modules; many options

•Automobiles, computers, machine tools

Top Assy of BOM

Bottom of BOM

Make-to-Stock Make-to-Order Assemble to Order

MPS Scheduled to finished-goods items MPS Scheduled to customer orders

FAS FAS

13

Final Assembly Schedule (FAS)

• Used in “Assemble to Order” & “Make to Order”

MPS

FAS

MPS

FAS

14

Planning Horizon

• Time span for the plan (how far into the future)

• Shown: 26 weeks is the time span for this product

B

A

C D

E

Lead Time= 6 weeks

Lead Time= 2 weeks

Lead Time= 5 weeks

Lead Time= 8 weeks

Lead Time= 16 weeks

15

Time Fences

• Lead times determine when a part will be available for delivery to the customer

• Critical lead times determine the minimum planning period that must be used

• As you get closer to the delivery date production becomes more inflexible

• Changes to the MPS should only occur when• Customers cancel or change orders

• Machine breakdowns, etc.

• Supply problems

• Higher scrap than anticipated

B

A

C D

E

Lead Time= 6 weeks

Lead Time= 2 weeks

Lead Time= 5 weeks

Lead Time= 8 weeks

Lead Time= 16 weeks

16

Zones and Time Fences

• Frozen zone• Capacity and materials are committed to specific orders

• Requires senior management approval to change

• Slushy zone• Commitment is to a lesser extent

• Changes are easier to make

• Liquid zone• Changes can easily be made

0

Actual Orders

(EmergencyChanges Only)

Frozen Slushy Liquid

Actual and Forecast

(Trade-offs)

Forecast Only

DueDate

DemandTimeFence

PlanningTimeFence

2 weeks 26 weeks

17

MPS & Sales

• MPS is not a sales forecast, it is instead, a forecast of production.

• It may not necessarily be what we want; it should be what we can do.

• MPS must be realistic & achievable; otherwise, the plan fails, deliveries are not met, & manufacturing has to react to circumstances rather than planning for them (Proactive VS Reactive)

18

MPS and Delivery Promises• As orders are received, they “consume”

available production and inventory

• Any part not consumed is Available-To-Promise

• "Available To Promise" (ATP) simply means that a product is in stock and can be promised to a buyer.

• With Available To Promise (ATP) it is possible to see how much inventory or projected inventory is not committed to current customer orders and is therefore available for order promising.

CustomerOrders

Available-To-Promise

Time

Un

its

Production Capacity or Inventory

19

Available-To-Promise

• Customer Order• Can it be filled from existing inventory without

changing schedule?

• Looks ahead for availability of product

20

Available-To-Promise

• Go over Figure 3.8 page 60

• Also Figure 3.8 (bottom of page 61)

21

Available-To-Promise

22

Projected Available Balance

• Forecast is not always accurate

• PAB takes both Forecast & Customer Order into account

• Two methods• Prior Demand Time Fence

• PAB = prior period PAB or on-hand balance + MPS - customer orders

• After Demand Time Fence• PAB = prior period PAB + MPS – [greater of customer orders

or forecast]

23

Projected Available Balance

• The demand time fence is the end of week 3, the order quantity is 100, 40 are available at the beginning of the period.

• Before Demand Time Fence

• (prior period PAB or on-hand balance + MPS - customer orders)

Week 1: 40 + 0 - 39 = 1

Week 2: 1 + 100 - 42 = 59

Week 3: 59 + 0 - 39 = 20• After Demand Time Fence

• (prior period PAB + MPS – [greater of customer orders or forecast])

Weed 4: 20 + 100 - 40 = 80

Week 5: 80 + 0 - 40 = 40

Week 1 2 3 4 5

Forecast 40 40 40 40 40

Customer orders 39 42 39 33 32

Week   1 2 3 4 5

Projected Available Balance 40 1 59 20 80 40

MPS     100   100  

24

Summary

• MPS Major Functions• Forms the link between APP & what manufacturing

builds• Plans capacity requirements - the MPS determines the

capacity required• Plans material requirements - the MPS drives the

(MRP)• Keeps priorities valid - the MPS is a priority plan for

manufacturing

25

Summary

• MPS Links Sales & Production

• Aids in making order promises - the MPS is a plan for what is to be produced & when

• Informs sales & manufacturing when goods will be available for delivery

• Creates a contract between marketing & manufacturing - an agreed-upon plan

26

Summary

• The MPS must be realistic & based on what production can & will do, if not,• Resource overloads or underloads do occur• Unreliable schedules result & delivery performance

suffers• High levels of work-in-process (WIP) inventory build-

up• Customer service is poor• Planning system loses credibility