Master Production Scheduling

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Master Production Scheduling

• Chapter 6

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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

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MPC System
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Master Production Scheduling

• Effective MPS provides the basis for
• Making customer delivery promises
• Utilizing plant capacity effectively
• Attaining firms strategic objectives (from
  production plan)
• Resolving trade-offs between production and
  marketing

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MPS Activities

• Operational levelprocessing 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 basismarketing and production coordinate
  through order promising (shipment date for a
  customer order)

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MPS TechniquesTime-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.

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MPS TechniquesTime-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

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MPS TechniquesRolling through Time

• MPS is periodically updatedchanges 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

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MPS TechniquesOrder Promising

• Available-to-promise deduct existing booked
  orders from available inventory. (See Figures
  6.8, 6.9, 6.10)
• Time-phased MPS record conventionuse 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.

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MPS TechniquesConsuming the Forecast

• Forecast estimates versus actual booked orders.
• Negative Availableneed 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.

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BOM Structuring for the MPS

• BOMengineering 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.

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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 ordera unique end item.

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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

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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).

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Final Assembly Schedule (FAS)

• States exact set of end products to be produced
  over give time period (final assembly lead time).
• MPSanticipated 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 6.16-6.19.

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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.

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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.

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MPS Stability

• Firm planned ordersquantity, timing are set by
  the master planner, not adjusted automatically by
  the software.
• Frozen time periodsno changes in the stated time
  periods are possible.
• Time fencingspecify periods in which differing
  types of changes are possible (e.g., ice, slush,
  water zones)

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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

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Managing the MPS and Data Base

• Stability and proper buffering
• Force the sum of the MPSs 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).

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Concluding Principles

• The MPS should reflect the companys approach to
  the business environment in which it operates.
• The MPS is one part of an MPC systemthe 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.

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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.

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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.

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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