Master Scheduling

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Chapter 3
 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

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 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

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 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

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 Grand Scheme of Things
Strategic Business Plan
Master
Production Plan Plan

Planning

Master Production Schedule

Material Requirements Plan

Implementation
Production Activity Control
& Purchasing
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 Developing an MPS

• Objectives
• Maintain desired level of customer service
• Make best use of material, labor and equipment
• Maintain inventory investment $$ at required levels
• Steps
1. Develop a preliminary MPS
2. Check preliminary MPS against available capacity
(rough-cut capacity planning)
3. Resolve any differences
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 Preliminary MPS

• Page 52-53. Do on Board.

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 Preliminary MPS

• Page 53. Walk Through

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  

• (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
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 Preliminary MPS
• MPS & Production Plan must match
• Go back to Example on Page 51. Do on Board.

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 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.

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 Rough-Cut Capacity Planning
• Resolution of Differences
• Total Time VS Available Capacity
• Three more items to look at
1) Resource use
2) Customer Service
3) $ (cost)

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 Make-to-Stock Make-to-Order Assemble to Order
Bottom of BOM MPS

Top Assy of MPS

BOM
MPS FAS FAS
•Few items; many •Many items; Many •Many items; many
components components; good components; few
commonality modules; many
•Ships, Buses,
Large Machine •Small Home options
Tools Appliances, •Automobiles,
Electric Motors, computers, machine
MPS Scheduled Food products tools
to finished-
goods items MPS Scheduled to customer orders
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Final Assembly Schedule (FAS)
• Used in “Assemble to Order” & “Make to
Order”

MPS

MPS
FAS FAS

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 Planning Horizon
• Time span for the plan (how far into the future)
• Shown: 26 weeks is the time span for this product

Lead Time
A
= 2 weeks

B Lead Time C Lead Time D Lead Time

= 6 weeks = 5 weeks = 8 weeks

Lead Time
E
= 16 weeks
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 Time Fences A
Lead Time
= 2 weeks

Lead Time Lead Time Lead Time

B C D
= 6 weeks = 5 weeks = 8 weeks

• Lead times determine when a part will be E

Lead Time
= 16 weeks

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
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 Zones and Time Fences
0 2 weeks 26 weeks

Frozen Slushy Liquid

Actual Orders Actual and Forecast Forecast Only

(Emergency (Trade-offs)
Changes Only)
Demand Planning
Due
Time Time
Date
Fence Fence

• 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 16
 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)
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 MPS and Delivery Promises
• As orders are received, they “consume” available
Production Capacity or Inventory

Units
production and inventory
Customer Available-To-
Orders Promise
• Any part not consumed is Available-To-Promise Time

• "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.

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 Available-To-Promise
• Customer Order
• Can it be filled from existing inventory without
changing schedule?
• Looks ahead for availability of product

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 Available-To-Promise
• Go over Figure 3.8 page 60

• Also Figure 3.8 (bottom of page 61)

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Available-To-Promise

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 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]

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 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.

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  
• 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

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 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

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 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

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 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

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