1. Supplement D Master Scheduling and Rough-cut Capacity Planning
Operations Management by
R. Dan Reid & Nada R. Sanders
4th Edition © Wiley 2010
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2. Learning Objectives
Explain the role of the master production schedule and describe the objectives of master production scheduling.
Develop a master production schedule and project the capacity needed using rough-cut capacity planning.
Calculate available-to-promise quantities.
Describe time fence policies.
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3. Master Production Scheduling
MPS: The anticipated build schedule
The Master scheduler is the person responsible for managing, developing, reviewing and maintaining the master schedule
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4. MPS As a Basis of Communication
Master production schedule linkages
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5. Objectives of Master Scheduling
The master scheduler considers these points when developing the (master) schedule:
Achieve the desired customer service level either by maintaining finished goods inventory or by scheduling completion of the item or service to meet the customer’s delivery needs.
Make the best use of the company’s resources: material, labor, and equipment.
Ensure that the inventory investment is at the appropriate level.
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6. Developing an MPS The master scheduler:
develops a proposed MPS,
checks the schedule for feasibility in terms of available capacity,
modifies as needed, and
authorizes the MPS.
The master scheduler uses the finished MPS records to develop a proposed master production schedule, which is then checked for feasibility with a rough-cut capacity planning technique.
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7. The MPS Record
Q= 125 units
Projected Available = beginning inventory + MPS shipments - forecasted demand
The MPS row shows when replenishment shipments need to arrive to avoid a stock out (negative projected available)
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8. Revised and Completed MPS Record
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9. Rough-Cut Capacity Planning
Rough-cut capacity planning (RCCP): The process of converting the master production schedule into requirements for key resources such as direct labor and machine time
Demonstrated capacity: Proven capacity calculated from actual performance data
Capacity planning using overall planning factors (CPOPF): A rough-cut capacity planning technique. MPS items are multiplied by historically determined planning factors for key resources. See Procedures for CPOPF below:
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10. Step 1: Determine the Planning factors:
Rough Cut Capacity Problem: a shoe company produces two models of dance shoes. Over the past 3 years 72,000 pairs of Model M have been produced using 21,600 direct labor hours and 5760 machine hours, and 108,000 pairs of Model W using 43,200 hours of labor and 12,960 hours of machine time.
Step 1: Determine the Planning factors:
Labor Factors
Machine Factors
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11. Step 2:Calculate the Workload Generated by This Schedule
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12. Step 3: Calculate the Capacity Needs for Each Resource for Each Time Period
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13. Step 4: Calculate Individual Workcenter Capacity Needs Based on Historical Percentage Allocation
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14. Evaluating and Accepting the MPS
The master scheduler checks that promised customer delivery dates are met.
He also ensures that the MPS provides enough flexibility to cover new customer orders.
Once the master scheduled has evaluated and accepted the MPS, the authorized MPS is entered into the MRP system.
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15. Using the MPS
One use of authorized MPS is order promising (the process of making order-delivery commitments).
Order promising relies on available-to-promise (ATP), which is the uncommitted portion of a company's inventory and planned production that is maintained in the MPS to support order processing.
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16. Using the ATP records
The ATP records show how much inventory is available to satisfy customer demand.
Two rules to help manage the ATP:
A negative number is the projected available row is sometimes a problem.
A negative number in the available-to-promise row is always a problem.
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17. Using the MPS to “Order Promise”
The authorized MPS is used to promise orders to customers
The MPS table is expanded to add customer orders and available-to-promise rows (inventory to satisfy new orders)
ATPAction Bucket = (beginning inventory + MPS shipment) less
(customer orders before next replenishment). Available in period 1
ATP=MPS shipment – Customer orders between current MPS shipment and next scheduled replenishment in periods 3,5,7,8, & 11
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18. Example of Revising the ATP MPS Record: A customer calls marketing willing to purchase 200 units if they can be delivered in period 5. The two tables below show how the system logic would first slot the 200 into period 5 and then how the order would be allocated across periods 1, 3, and 5 and adjusting the ATP row.
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19. Stabilizing the MPS
The master scheduler tries to minimize the changes made to an authorized MPS – each change can impact the feasibility of the MPS.
This figure shows the demand time fence and the planning time fence which split the MPS into three parts.
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20. MPS & Rough-cut Capacity Planning within OM: How it all fits together
In most companies, the operations manager develops the aggregate plan, which determines the resources available to operations to execute the master production schedule. The plan will clearly indicate the size of the workforce and the aggregate production rate. The master production scheduler then develops the master production schedule. The only feasible plan that can be developed is one by the scheduler working with marketing, operations, demand management, and the customers. The master scheduler’s job is to develop an MPS that achieves the company’s desired customer service level, uses capacity effectively, and minimizes the inventory investment. To make sure that the master production schedule is feasible, rough-cut capacity planning is done.
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21. Supplement Highlights
The MPS shows how the resources authorized by the aggregate plan will be used to satisfy the objectives of the organization. The MPS specifies the products and quantities to be built in each time period. The MPS is a common organizational document used to facilitate communication between different functional areas. The master scheduler develops a proposed MPS based on input received from the aggregate plan and demand management. This MPS is checked for feasibility using a rough-cut capacity planning technique.
The objectives of master scheduling are to satisfy customer service objectives, use resources effectively, and minimize costs. An MPS is developed by looking at individual MPS records and calculating when replenishment quantities are needed. The individual MPS records are summed together to show the total proposed workload.
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