Master Production Scheduling MIS 381 - Topic # 5

What is the MPS? The MPS translates the Sales & Operations Plan (S&OP) into a plan for producing specific products in the future. The MPS is a statement of planned future output. MIS 381 - Topic # 5

As a statement of output, the MPS Forms the basic communication between the market and manufacturing. Is stated in product specification terms (part numbers) for which there are Bill of Materials (BOM). [MPS is Concerned with product mix while Sales and Operations Planning is concerned with volume] MIS 381 - Topic # 5

MPS is the basis for Making customer delivery promises Utilizing plant capacity effectively Attaining the strategic objectives in the sales and operations plan Resolving trade-offs between manufacturing and marketing MIS 381 - Topic # 5

MPS conversion . Controlled by a separate Final Assembly Schedule (FAS) which is defined at the very last moment. Environment Basis of conversion MTS Items are produced in batches, carrying finished goods inventories for most, if not all, end-items. ATO MPS unit is typified by limitless number of possible end-item configurations made from combinations of basic components and subassemblies. Probably will not start final assembly until order arrives. MTO MPS unit is defined as the particular end-item composing a customer order. Production starts before a complete product definition (BOM) has been determined. MIS 381 - Topic # 5

Linkages to other firm activities MIS 381 - Topic # 5

Rules for filling the MPS tables The greater of the forecast or order receipts is considered for the calculations. The available row = previous available + MPS – (greater of the booked orders or forecast) Other rules follow the method used (phased, rolling through time, order promising and consuming the forecast. MIS 381 - Topic # 5

Single Level MPS Record Example The Zero Manufacturing Company ships Product A from the firm's plant warehouse to satisfy East Coast demand. Currently, the sales forecast for Product A at the Murphysboro plant is 30 units per period. Product A is considered a make-to-stock item. Plant warehouse on hand inventory = 50 units Safety Stock = 10 units Lot Size = L4L Open Order for 30 units due in period 1 MIS 381 - Topic # 5

MPS TABLE The master production scheduler has heard that an MRP record which uses the forecast for gross requirements and has a lead time of zero can be used for master production scheduling. Complete the following MRP record. How can this be used for master production scheduling? 1 2 3 4 5 6 Projected available balance Planned order release Q = lot for lot; LT = 0; SS = 10 Period Product A Gross requirements Scheduled receipts MIS 381 - Topic # 5

MPS TABLE One way viewing an MPS is as the set of planned order releases and scheduled receipts in a record such as above. The problem is that any errors in forecast will be reflected in the on-hand balance. All changes will come in the planned orders. Use of firm planned orders will reduce this instability. MIS 381 - Topic # 5

MPS Techniques Time phased record Rolling through time Order promising Available to promise (ATP) Figures 6.2; 6.3; 6.4 and 6.5 MIS 381 - Topic # 5

Level vs. Chase vs. Lot Sizing MIS 381 - Topic # 5

Rolling through time actual sales = 10 instead of 5 units, and actual inventory at end of week 1 is 10 units Revised table MIS 381 - Topic # 5

Order promising Received orders for weeks 1,2,3 & 4 MIS 381 - Topic # 5

Consuming the forecast MIS 381 - Topic # 5

The Job of the MPS Scheduler Primary responsibility for making any additions or changes to the MPS records. Has also responsibility for disaggregating the production plan to create the MPS and that the sum of the detailed MPS matches the Production Plan (SO&P). Responsible for launching the FAS. MIS 381 - Topic # 5

The Job of the MPS Scheduler Making sure that there is only one unified database for the MPS Measure actual performance against the MPS and production plan (SO&P) Its useful to think of the MPS as a set of firm planned orders. The scheduler needs to convert planned orders to firm planned orders and to manage the “timing” and amounts of the firm planned orders. MIS 381 - Topic # 5

MPS Stability A stable MPS translates into stable component schedules, which means improved performance in plant operations. Too many changes – lower productivity Too few changes – lower customer service levels. MIS 381 - Topic # 5

Increasing MPS stability Stability is monitored and managed by using: Firm planned order treatment for the MPS quantities Frozen time periods for the MPS and Time fencing to establish clear guidelines for the kinds of changes that can be made. Check 6.24, Text: VBMJ MIS 381 - Topic # 5

Time Fencing This is an extension of the freeze concept. Many companies set time fences that specify periods in which various types of change can be handled. The planning fence indicates the time at which the scheduler should be planning more MPS quantities. MIS 381 - Topic # 5

Guidelines for Managing the MPS Start by having a realistic MPS Stability and proper buffering are important to remove all the excuses for not attaining the performance for which the proper budget has been provided. The overstated MPS erodes belief in the formal system. Always force the sum of the MPS to equal the production plan. MIS 381 - Topic # 5

MPS Measures Measure MPS in concrete terms that reflect the firm’s fundamental goals. Measure customer service (hit promised dates, Quality, etc.). Compare production vs. plan Keep records of backorder supply time to improve them. MIS 381 - Topic # 5