Introduction to Materials Management Chapter 3 – Master Scheduling Use print copy for class

The Master Schedule is: The formal link between production planning and actual production The basis for calculation of resources needed The driving force behind the material requirements plan The primary priority plan for manufacturing

Information Needed to Develop an MPS Production Plan data Forecasts Actual customer orders Inventory levels Capacity constraints

Relationship to Production Plan

Objectives and Steps for the MPS Maintain good customer service Make effective use of resources Maintain effective levels of inventory Accomplished by: Develop a preliminary MPS Check MPS against capacity and resources Reconcile any differences

MPS Example

Rough-cut Capacity Planning Establishes whether critical resources are available Bottleneck operations Critical labor resources Critical material Often uses a resource bill for a single product

Example Resource Bill

Master Schedule “Focal Points” Make-to-Stock – Limited end products, many components Make-to-Order – Many end products, fewer components Assemble-to-Order Many end products, combination of components and subassemblies

Example MPS Environments

Final Assembly Schedule Assembly according to customer schedule Generally used in an Assemble-to-Order environment Many options Too many possible final configurations to forecast or master schedule MPS usually done at the option level

MPS, FAS and Other Planning Activities

MPS Planning Horizon Minimum time horizon over which the master schedule must extend to ensure complete planning Calculated as the longest end-to-end lead time of the product structure

EXAMPLE - Cumulative Planning Horizon For this product – Minimum Planning Horizon 12 weeks

Delivery Promises MPS is a plan for what production can and will do Sales delivery promises can be made from “Consumption” of forecasts – Projected available balance Available to Promise calculations MPS values for a given time period left after actual customer orders are subtracted.

Available to Promise Example

Projected Available Balance Within demand time fence (forecast not taken into account) PAB = Prior period PAB + MPS – customer orders Outside of demand time fence PAB = Prior period PAB + MPS – greater of customer order or forecast

Example of MPS with ATP and PAB (Demand time fence at end of week 3)

Time Fences Points in the planning horizon to define the flexibility allowed in the MPS Frozen Zone (closest to current date) Capacity and materials committed to customer orders, forecast generally ignored Senior management approval for changes Slushy Zone Less commitment of materials and capacity Tradeoffs negotiated between marketing and manufacturing Liquid Zone – All changes allowed within limits of the Production Plan

Time Fences