Master Production Scheduling
Master Production Schedule
Provides basis for:
Making good use of manufacturing resources Making customer delivery promises Resolving tradeoffs between sales and manufacturing
Attaining strategic objectives in the sales and operations plan
What is Master Production Scheduling?
Start with Aggregate plan (Aggregate Sales & Operations Plan) Output level designed to meet targets Disaggregates Converts into specific schedule for each item
S&OP vs MPS
The role of the sales and operations plan is to balance supply and demand volume, while the MPS specifies the mix and volume of the output MPS shows when products will be available in future Planned production, not forecast
Master Production Scheduling Techniques
Available = inventory position at end of week = starting inventory + MPS forecast
Plan to have positive inventory level Buffer in case production below plan, or Demand higher than anticipated MPS row is amount to make, MRP system has to figure out how to make it
MPS Example: Company Operations
Grain cracking (1 milling machine)
Mashing (1 mashing tun)
Boiling (1 brew kettle)
Fermentation (3 40-barrel ferm. tanks)
Filtering (1 filter tank)
Bottling (1 bottling station)
Dealing with the Problem Complexity through Decomposition
Corporate Strategy Aggregate Unit Demand Aggregate Planning
(Plan. Hor.: 1 year, Time Unit: 1 month)
Capacity and Aggregate Production Plans End Item (SKU) Demand Master Production Scheduling
(Plan. Hor.: a few months, Time Unit: 1 week)
SKU-level Production Plans Manufacturing and Procurement lead times Part process plans Materials Requirement Planning
(Plan. Hor.: a few months, Time Unit: 1 week)
Component Production lots and due dates Shop floor-level Production Control
(Plan. Hor.: a day or a shift, Time Unit: real-time)
Master Production Scheduling Problem
Capacity Company Product Economic Consts. Policies Charact. Considerations
Placed Orders Forecasted Demand Current and Planned Availability, eg., Initial Inventory, Initiated Production, Subcontracted quantities
MPS
Master Production Schedule: When & How Much to produce for each product
Planning Horizon
Time unit
Capacity Planning
Driving Logic behind the Empirical Approach
Initial Inventory Position Scheduled Receipts due to initiated production or subcontracting
Demand
Availability:
Compute Future Inventory Positions Net Requirements
Future inventories
Lot Sizing
Scheduled Releases
Resource (Fermentor) Occupancy
Product i
Feasibility Testing
Schedule Infeasibilities
Revise Prod. Reqs
Master Production Schedule
Bill of Materials
Bill of Materials Parent-child diagram that shows what goes into what.
Bike Frame Assy Wheel Assy
Wheel Tires
Components
Frame
Hubs & Rims Spokes
Used to make sure enough parts for production plan Each part has LT, ordering policy One BOM for every end product
Example: The (complete) MRP Explosion Calculus
Item BOM:
Alpha B(1) D(2) E(1) C(2) E(1) F(1)
Gross Reqs for Alpha Period 6 7 8 9 10 11 12 13
C(1) F(1)
Item Alpha B C D E F
Lead Time 1 2 3 1 1 1
Current Inv. Pos. 10 20 0 100 10 50
Item Levels:
Level 0: Alpha Level 1: B Level 2: C, D Level 3: E, F
BOM formats
Single-level BOM only shows one layer down.
Spokes Wheel Tires
Indented BOM Bike
Frame Assembly
Components Frame Wheel
Hubs & Rims Spokes
Wheel Assembly
Tires
Low-Level Code Numbers
Lowest level in structure item occurs Top level is 0; next level is 1 etc. Process 0s first, then 1s Know all demand for an item Where should blue be?
LLC 0 1 2 3 4
LLC Drawing
Item only appears in one level of LLC drawing Easier to understand Simplifies calculations
LLC 0 1 2 3 4
Final Assembly Schedule
Master Production schedule is anticipated build schedule
FAS is actual build schedule
Exact end-item configurations
Schedule Stability
Stable schedule means stable component schedules, more efficient No changes means lost sales Frozen zone- no changes at all Time fences
>24 wks, all changes allowed (water) 16-23 wks substitutions, if parts there (slush) 8-16 minor changes only (slush) < 8 no changes (ice)
The MRP Explosion Calculus
Lead Lot Sizing Times Policies
BOM
MPS
Current Availabilities
MRP
Planned Order Releases Priority Planning
Some Lot Sizing Methods employed in the traditional MRP framework
Main focus: Balance set-up and holding costs Wagner-Whitin Algorithm for dynamic Lot Sizing Economic Order Quantity (EOQ): Compute a lot size using the EOQ formula with the demand rate D set equal to the average of the net requirements observed over the considered planning horizon. Periodic Order Quantity (POQ): Compute T = round(EOQ/D), and every time you schedule a new lot, size it to cover the net requirements for the subsequent T periods. Silver-Meal (SM): Every time you start a new lot, keep adding the net requirements of the subsequent periods, as long as the average (setup plus holding) cost per period decreases. Least Unit Cost (LUC): Every time you start a new lot, keep adding the net requirements of the subsequent periods, as long as the average (setup plus holding) cost per unit decreases. Part Period Balancing (PPB): Every time you start a new lot, add a number of subsequent periods such that the total holding cost matches the lot set up cost as much as possible.
Some Limitations of MRP-based Planning
The employment of fixed nominal lead times
This problem is mitigated in case of a stable operational environment where past experience and / or approximate formal models can provide insight for setting lead times Lead time assessment is also facilitated by a well-structured, cellular shop-floor
Possible system nervousness due to re-planning and the applied lot sizing policies
Potential remedies Firm orders Time fences L4L planning whenever possible
Lack of an inherent mechanism for detecting and managing shopfloor congestion a purely Push approach
However, it is possible to combine the planning visibility offered by the MRP explosion calculus with more sophisticated production control mechanisms that take advantage of the existing technology of Manufacturing Execution Systems (MES).
