1. Master Production Scheduling
Chapter 6

2. Master Production Schedule
A master production schedule (MPS) is a production plan (anticipated build schedule) for an individual product, a customer order, or a product option and common parts
Make-to-stock: finished product
Make-to-order: customer order
Assemble-to-order: product option and common parts

3. MPC System

4. Master Production Scheduling
Effective MPS provides the basis for:
Making customer delivery promises
Utilizing plant capacity effectively
Attaining firm’s strategic objectives (from production plan)
Resolving trade-offs between production and marketing

5. MPS Activities
Operational level—processing MPS transactions, maintaining MPS records and reports, having a periodic review and update cycle (“rolling through time”), responding to exception conditions, and measuring effectiveness of schedules
Daily basis—marketing and production coordinate through order promising (shipment date for a customer order)

6. MPS Techniques—Time-Phased Record
Record (by periods)
Forecast
Available: projected inventory balance at the end of the period. [available from prior period + MPS – forecast]
MPS: quantity and time of completion of production
On hand: beginning inventory for the first period.

7. MPS Techniques—Time-Phased Record
Strategies:
Leveling: MPS constant. Excess inventory to meet future forecasts
Chase: MPS matches forecast. No inventory except safety stock
Mixed (hybrid): lot-sizing approach that falls between the two strategies. Inventory for future periods called cycle stock

8. MPS Techniques—Rolling through Time
MPS is periodically updated—changes in forecast, orders, production, etc., may require adjustments for future periods
One “pointer” would be negative available balances
A counter-balancing force would be feasibility of change

9. MPS Techniques—Order Promising
Available-to-promise: deduct existing booked orders from available inventory. (See Figures 6.8, 6.9, 6.10)
Time-phased MPS record convention—use the greater of forecasts or booked orders to calculate available inventory balance.
Accurate order promising helps a firm to reduce inventory by using buffer delivery promise dates instead.

10. MPS Techniques—Consuming the Forecast
Forecast estimates versus actual booked orders.
Negative Available—need a MPS lot (if feasible).
ATP calculated by using only actual orders and scheduled production.
Use both available and ATP rows for MPS planning: negative available quantities represents a “potential” problem, but a negative ATP is a real problem.

11. BOM Structuring for the MPS
BOM—engineering document specifying subordinate components.
Single-level BOM.
Indented BOM.
Assemble-to-order may represent almost unlimited number of end items (options multiply), leading to other BOM options for MPS planning.

12. Modular Bill of Materials
Establish the MPS at option or module level. BOM links options/modules to components but not to end items. Not Buildable.
MPS can be stated in fewer units.
Hill-Rom example (p. 231): 160 end item possibilities, but only 19 time-phased MPS records needed.
Customer order—a unique end item.

13. Planning Bill of Materials
Planning Bill: Created expressly for forecasting and master scheduling
Unique configuration, not buildable
Store in BOM file
Revise with engineering changes
Phantom Bill: A bill for a subassembly whose components are consumed during the assembly of its parents

14. Super Bill of Materials
Super bill: describes the options or modules that make up an average end item.
Is used as the MPS unit: the plan would be to build per the average option proportions.
Adds complexity to order entry (ATP logic must be applied to each option in the order).

15. Final Assembly Schedule (FAS)
States exact set of end products to be produced over give time period (final assembly lead time).
MPS—anticipated build schedule; FAS is actual build schedule. In assemble-to-order MPS stated in super bills and options, FAS stated in end items per customer order.
Hill-Rom example, Figures

16. Master Production Scheduler (Master Planner)
Consolidate all sources of requirements –forecasts, customer orders, interplant orders, service parts orders, etc.
Carefully evaluate MPS changes to see effect on material and capacity plans. (Resolving competing demands.)
Issue production and assembly orders.

17. Master Production Scheduler (Master Planner)
Understand trade-offs between customer needs and MPC system objectives.
Resolve conflict on production requirements among functions.
Report performance and problems to top management.

18. MPS Stability
Firm planned orders—quantity, timing are set by the master planner, not adjusted automatically by the software.
Frozen time periods—no changes in the stated time periods are possible.
Time fencing—specify periods in which differing types of changes are possible (e.g., ice, slush, water zones)

19. Managing the MPS and Data Base
MPS Data Base
Maintain data integrity
Define clear functional responsibilities
Proper control of changes to BOM
Have a realistic MPS; do not overstate the MPS

20. Managing the MPS and Data Base
Stability and proper buffering
Force the sum of the MPS’s to equal the production plan.
Measures:
Output/period (dollars or units) vs. the MPS or the budget.
Customer service (hitting order acknowledgement or promise dates).

21. Concluding Principles
The MPS should reflect the company’s approach to the business environment in which it operates.
The MPS is one part of an MPC system—the other parts need to be in place as well for a fully effective MPS system.
Time-phased MPS records should incorporate useful features of standard MRP record processing.

22. Concluding Principles
Customer order promising activities must be closely coupled to the MPS.
Available-to-promise information should be provided to both the master planner and the sales department.
A final assembly schedule (FAS) should be used to convert an anticipated build schedule (MPS) into an actual build schedule.

23. Concluding Principles
The master planner must keep the sum of the parts (MPS) equal to the whole (production plan).
The MPS activities must be clearly defined in an organization.
Firm planned orders can be used in the MPS.
Stability should be designed into the MPS.
The MPS should be evaluated with a formal performance measurement system.

24. Chapter 6 Assignments Problems 6.4, and 6.12 a & b, and 6.14
Due Tuesday, Sept. 24
Use Excel to do Problems 6.4 & 6.14