Production Planning
for Supply Chain
Chapter 5:
Master Production Scheduling (MPS)
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Resource Sales and operations Demand
Planning planning management
Enterprise Resource Planning (ERP) System
Master production
scheduling Front End
Detailed capacity Detailed material
planning planning
Engine
Material and
capacity plans
Shop-floor Supplier Back end
systems systems
Manufacturing Planning and Control System
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MPS
MPS provides basis for:
Good use of manufacturing resources
Making customer delivery promises
Resolving trade-offs between sales and
manufacturing
Attaining the Firm’s strategic objectives as
reflected in the SOP (Sales & Operations Plan)
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What is the MPS?
The MPS translates the Sales &
Operations Plan (SOP) into a plan for
producing specific products in the
future.
The MPS is the translation of the SOP
into producible products that make up
the output of a production plant.
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MPS-Inputs,Outputs
Demand Management
MPS
Sales & Operations
Planning
Material Capacity
requirements Planning &
Planning Utilization
(MPR)
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Conceptional Level
MPS (which specifies the volume and mix of the
output& timing)
CONVERTS SOP (which balances supply and
demand)
Into A Specific Manufacturing
Schedule
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Day to Day Basis
MPS:
Provides information by which Sales and
Manufacturing are coordinated
Shows when products will be available – Sales
to promise deliver to customers
Plan can be used to determine trade-offs when
problem arise that create delivery issues
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Operational level . .
The MPS is developed to be
compatible with the Materials
Requirement Planning (MRP) system
and to provide the information for
coordination with sales.
The MPS is a statement of planned
future output.
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Resource Sales and operations Demand
Planning planning management
Enterprise Resource Planning (ERP) System
Master production
scheduling Front End
Detailed capacity Detailed material
planning planning
Engine
Material and
capacity plans
Shop-floor Supplier Back end
systems systems
Manufacturing Planning and Control System
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MPS – Make to Stock
Produced in batches (economics of
scale)
Inventory is finished goods (typically)
Can run product to semi finished point
Individualize to customer
specifications
eg tool manufacturer makes tools for
different brands
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MPS – Assemble to Order
Number of end configurations
made from sub assemblies and/or
components
Customer delivery times are shorter than total
manufacturing times
Start basic sub assemblies and components
into production
final assembly after order is received
Controlled by a separate Final Assembly
Schedule (FAS) which is defined at the very last
moment
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MPS – Make/Engineer to Order
NO finished good inventory
Customers expect to wait for a large portion of
the entire design and manufacturing lead time
Need product specification and bill of materials
prior to scheduling in the MPS
Customer can also block out a production
period while specifications/design are being
developed
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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).
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MPS can be stated in
terms of?
End-item product units
Options or modules from which a
variety of end products could be
assembled.
Numbers of units of an “average” final
product
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Conversion of MPS is
Controlled by a separate Final
Assembly Schedule (FAS) which is
defined at the very last moment.
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Resource Sales and operations Demand
Planning planning management
Enterprise Resource Planning (ERP) System
Master production
scheduling Front End
Detailed capacity Detailed material
planning planning
Engine
Material and
capacity plans
Shop-floor Supplier Back end
systems systems
Manufacturing Planning and Control System
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Basic Master Schedule
1 2 3 4 5 6
Forecast 10 10 10 10 10 10
Available 20 20 20 20 20 20
MPS 10 10 10 10 10 10
On hand 20
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Bill of Materials Structuring
for the MPS
It is an engineering document that
specifies the ingredients (or
subordinate components) required
physically to make each part number
or assembly.
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Single-level BOM
Comprises only those subordinate components
that are immediately required (not the
components of the components).
Example, Swiss Army Knife. (finished blades,
assembled scissors, polished end plates, etc)
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Indented BOM
Is a list of components, from the end item, down
to the raw materials (it does show components
of the components).
Example, Swiss Army Knife (finished blade –
sheet metal, machined/hardened/polished,
bushing; scissors – sheet metal,
machined/hardened/polished, spring, bushing)
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Other definitions
BOM files are those computer records designed to
provide desired output formats.
BOM Structure relates to the architecture of the
BOM files
BOM Processor is a computer software package
that organizes and maintains linkages in the BOM
as dictated by the BOM structure.
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More definitions
Product Structure a company should have one and
only one set of BOM records.
Low-Level Code number should be designated for
each part, component, subassembly or finished item
in the BOM. These numbers indicate where in the
product structure a particular item is with respect to
the end item.
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Modular BOM
for Assemble to Order
When the combinations of end-item product
are many, it is better to use the MPS at the
option or module level. The MPS is stated in
the terms in which the product is sold not built.
The most widely used is called the super bill.
(6.14)
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Final Assembly Schedule
(FAS)
FAS job is to convert MPS records into FAS
records as we roll through time.
Ideally, this will be done at the last possible
moment in time. There are techniques to
aid this last minute decision – for example,
stocking subassemblies.
Relates directly to actual customer orders
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FAS
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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.
Jumpy MPS leads to customer “nervous” not service!
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Increasing MPS stability
Strike a balance where stability is monitored and
managed by:
Use 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.
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MPS - Frozen Schedule
Stable time period in production.
Time period that no changes to the MPS can be
made.
In reality, no is extreme, changes can be made but
are increasing difficult closer to present time
(management intervention.
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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
(company specific).
Common practice is to have 3 fences.
Example of fences at 4, 8, 16 weeks
Beyond 16 weeks, marketing/logistics can make any
changes but must maintain synchronization with
pProduction Plan.
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Time Fencing – cont’d
Between 8-16 weeks, substitution of a end item
for another provided parts/components/material
would be available and Production Plan is not
violated.
Between 4-8 weeks, MPS is quite rigid, minor
changes made with like items provided
parts/components/material are available.
Prior to 4 weeks, no changes, difficult to make
changes but not impossible.
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Common Fences
Demand Fence – Planning Fence
Prior to Demand Fence, the forecast is ignored
in calculating the available, customer orders
matter (difficult to change the MPS).
Between Demand/Planning Fences,
management trade-offs must be made to make
changes.
Beyond the Planning Fence the Master
Scheduler can make changes.
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The Master Production
Scheduler
Its useful to think of the MPS as a set of firm
planned orders (FPO). The scheduler needs to
convert planned orders to firm planned orders and
to manage the “timing” and amounts (quantity) of
the firm planned orders.
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The Job of the Master
Production Scheduler
Making sure that there is only one unified database for
the MPS, by ensuring:
A) All departments know their responsibility
B) Software package supports time phasing
technique AND data integrity is maintained
C) Launching FAS orders if they are being used
Measure the effectiveness of the MPS.
Analyzing trade-offs.
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The Job of the Master
Production Scheduler
Responsibility for disaggregating the SOP ( $ to Units)
to create the MPS and that the sum of the detailed
MPS matches the SOP.
Primary responsibility for making any additions or
changes to the MPS records.
Software does not do it all, judgement is required.
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Managing the MPS
MPS must be realistic. It cannot be a “Wish List”!
Production levels must be attainable to hold people
accountable (important to remove all the excuses
for not attaining the performance for which the
proper budget has been provided).
Significant amount of past due is an indication of a
sick Manufacturing Planning and Control System
(MPC).
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The Overstated MPS
The overstated MPS erodes belief in the formal
system.
Key to not overstating the MPS is to force the sum of
the MPS to equal the production plan.
Manufacturing & Marketing should work diligently to
respond to product mix changes but within the
budget.
“You want more of this, then less of what do you
want?”.
Capacity.
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MPS Measures
Not easy to do (conflicting metrics).
Measure in concrete terms that reflect the firm’s
fundamental goals: Schedule Attainment (were due
dates met?)
Measure customer service (hit promised dates,
Quality, etc.) eg. Fill Rate
Compare production vs. plan
Keep records of backorder supply time to improve
them.
Company specific.
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