4. Master Production Schedule

The MPS (Master Production Schedule) define precisely the required quantity per period for each finished product to sell. The bucket is usually the week and the time horizon up to 3-6 months or a least twice the longest product leadtime.

The aggregate MPS at product level should match with the S&OP defined at product family level and the deviation should be under 3-5% maximum.The MPS is the reference for the customer service that needs to satisfy its customers, and also for the manufacturing that should plan accordingly taking into account the constraints.

The APICS dictionary defines the Master Production Schedule as follows:
1) The anticipated build schedule for those items assigned to the master scheduler. The Master Scheduler maintains this schedule, and in turn, it becomes a set of planning numbers that drives Material Requirements Planning. It represents what the company plans to produce expressed in specific configurations, quantities, and Dates. The Master production Schedule is not a sales forecast that represents a statement of demand. The Master Production Schedule must take into account the forecast, the production plan, and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals. Syn. Master Schedule
2) The result of the master scheduling process. The master schedule is a presentation of demand, forecast, backlog, the MPS, the projected on hand inventory, the available-to-promise quantity.

The MPS is a vital link in the production planning system:

- It forms the link between production planning and what manufacturing will actually build;
- It forms the basis for calculating the capacity and resources needed;
- The MPS drive the MRP. As a schedule of items to be built, the MPS and bills of material determine what components are needed from manufacturing and purchasing;
- It keeps priorities valid. The MPS is a priority plan for manufacturing.

The MPS forms a vital link between sales and production as follows:

- It makes possible valid order promises. The MPS is a plan of what is to be produced and when. As such, it tells sales and manufacturing when goods will be available for delivery;
- It is a contract between marketing and manufacturing

Relationship to production plan
A PP is developed for a family of several items. The next step is to forecast demand for each item in the product family. With this data, the master scheduler must now devise a plan to fit the constraints. The term “master production schedule” refers to the last line of the matrix. The term “master schedule” refers to the process of arriving at that line. Thus the total matrix is called a master schedule.

Developing a MPS


The objectives in developing an MPS are as follows:
- To maintain the desired level of customer service by maintaining finishedgoods inventory levels or by scheduling to meet customer delivery requirements;
- To make the best use of material, labor and equipment;
- To maintain inventory investment at the required levels.

To reach this objectives, there are 3 steps in preparing a MPA:

- Develop a preliminary MPS,
  (1) calculating the projected on-hand inventory and
  (2) determining the timing and size of the production quantities of specific products.
- Check the preliminary MPS against available capacity,
- Resolve differences between the preliminary MPS and available capacity.

In some weeks, there may be no MPS quantity for a product because sufficient inventory already exists. For the projected requirements for this week, the scheduler uses whichever is larger—the forecast or the customer orders booked—recognizing that the forecast is subject to error. If actual booked orders exceed the forecast, the projection will be more accurate if the scheduler uses the booked orders because booked orders are a known quantity. Conversely, if the forecast exceeds booked orders for a week, the forecast will provide a better estimate of requirements for that week because some orders are yet to come in.

Preliminary Master Production Schedule

  Part Number ITEM001            
  Lot Size 30            
  On Hand 20            
                 
                 
    Period 1 2 3 4 5 6
    Sales Forecast 60 40 60 70 60 50
  Proj Avail Balance (PAB) 20            
    Master Production Schedule            

To show the process of developing a MPS, an example is used that assumes the product is made to stock, an inventory is kept and the product is made in lots. This process of building an MPS occurs for each item in the family. If the total planned production of all items in the family and the total ending inventory do not agree with the PP, some adjustment to the individual plans must be made so the total production is the same.
  Part Number ITEM001            
  Lot Size 30            
  On Hand 20            
                 
                 
    Period 1 2 3 4 5 6
    Sales Forecast 60 40 60 70 60 50
  Proj Avail Balance (PAB) 20 20 10 10 0 0 10
    Master Production Schedule 60 30 60 60 60 60

Once the preliminary mater production schedules are made, they must checked against the available capacity. This process is called rough-cut capacity planning.

Scheduling Decisions:
The approach to master scheduling will vary depending on the supply environment.If too many items are included, it will lead to difficulties in forecasting and managing the MPS. In each of the Manufacturing Environments - Make To Stock MTS, Make To Order MTO, and Assemble To Order ATO - Master scheduling should take place where the smallest number of product options exists.

MTS environment:

Std products are supplied in accordance with a sales forecast & the master scheduling is conducted at the level of the finished product. Televisions and other consumer products are examples.

The MPS is usually a schedule of finished-goods items.

Focus on Forecasting, Service Level, fill rate (unit, line, or order fill rate) and Resource Utilization.

Use Manufacturing Based MPS-Matrix (finished products level)

“A” Structure - MTS (Make To Stock)

 

ETO & MTO
MTO Environment:
Master scheduler forecast supply for raw materials & then is responsible for building products from raw material stocks to order within management targets for lead time & customer service.

ETO Environment: Master scheduling in this environment resembles project management & Gantt charts & project milestones are used to perform master scheduling.

The MPS is usually a schedule of the actual customer orders.
Focus on Delivery Time and Product Option
Use Gross Requirements MPS-Matrix is Based on Raw Material (Single Level MPS Record Processing)
"V" Structure
Custom-tailored clothes are an example

 

ATO Environment

Master scheduling occurs at 2 levels a semi finished level where std module products or subassemblies are produced in accordance with a forecast & a final assembly schedule where std modules or subassemblies are configured to specific customer requirements on receipt of an actual customer order.

Many end items can be made from combinations of basic components and subassemblies.

Small amount of modules enable a large amount of end products. Instead of end products, fewer modules (options) are forecasted and controlled. Through this, better forecast accuracy is achieved.

Focus on Delivery Time and Product Option, Forecasting, Service Level, fill rate (unit, line, or order fill rate) and Resource Utilization

Use Tow Level MPS-Matrix. Example company manufactures paint from a base color and adds tints to arrive to many final colors.  Production is planned at the level of the base color and the ten tints.  Once a customer's order is received, the base color and the required tints can be combined (assembled) according to the order.

Remanufacture/Rebuild environment: Products are received back from the field & are inspected to determine what work is required to prepare them for resale. The actual extent of the work required is not known until the inspection is complete & since during the process additional work may be identified the actual bill of material can not be identified in advance & may change during actual production. The
master schedule is composed of a forecast of the no of units to be returned in a given time period & a backlog of actual orders that have been received for refurbished products.

Process Environment: The products may be MTS, MTO, ATO or ETO. Continuous process such as oil refineries are typically MTS. Intermittent or batch lot, production operations such as specialty chemicals tend to be MTO. Some operations are ATO E.g. contact lens solution that is manufactured in bulk & packaged to order. Other process manufacturer may have ETO processes such as biotechnology generic manufacturing specific to one person’s DNA. Master scheduling thus depends on the work processes used.

Distribution Resource Planning: It is modified form of multi site master scheduling. In a distribution network with multiple distribution centers; a time phased order point process is run in each location, the o/p from each center is collected centrally which becomes the master supply schedule.

Services differ from products in that they typically are produced at the time of consumption. Scheduling is critical & is based on capacity of service & demand.

Master Schedule Grid (Format)

The master schedule format is a time phased grid format that is basically a spreadsheet where the rows represent supply & demand & the columns represent time periods/buckets from the present to the end of the planning horizon.
If the time bucket is one day, the system is called Bucketless.

It is important that the planning horizon be established beyond the cumulative lead time of the longest lead time component. The master production schedule is a rolling plan where new periods are added at the end of the planning horizon as the current periods become history.
The rows in the master schedule are as below :

Forecast:
Forecast as calculated in demand management for all the periods

Customer Orders: the backlog of planned shipments for the product. This demand is certain & should always be used in preference to the sales forecast within the demand planning fence.

Projected Available Balance (PAB):

“An inventory balance projected into the future. It is the running sum of on-hand inventory minus requirements plus scheduled receipts and planned orders”. A –ve value here within the planning time fence should cause the master scheduler to take action by creating an MPS quantity.

In all supply environments the available inventory in future periods can be tracked as the projected available balance. The PAB considers the availability of good based on consuming the forecast with orders. In the distant future periods the PAB uses the greater of the forecast qty. or customer order quantities while in the near future customer orders are used as the statement of demand. The PAB is
calculated in the following way:

For the 1st period: PAB = Current on hand qty + MPS – Customer Orders

After the 1st period & prior to the demand time fence: PAB = Prior period PAB + MPS –Customer Orders

After the demand time fence:  PAB = Prior period PAB + MPS – (> forecast or customer orders, take the greater value of either the
forecast or the summed customer orders)

It is usually necessary to calculate a PAB beyond the planning time fence

Available to promise:

“The uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. The ATP quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled. In the first period, ATP includes on-hand inventory less customer orders that are due and overdue. Three methods of calculation are used: discrete ATP, cumulative ATP with lookahead, and cumulative ATP without lookahead”.

It helps to project available inventory/capacity. ATP is a technique used with ATO & MTO operations to commit the uncommitted portion of a company’s inventory or planned production to customer orders. It ignores forecasts. ATP is maintained as a tool for customer order promising. It is uncommitted future inventory or capacity. It is calculated from the MPS & the summed customer orders until the next MPS qty is due. The ATP uses customer orders alone as the basis for it’s demand computation i.e. not forecasted values.

ATP = On hand balance + MPS –Sum of customer orders before the next MPS (1st period only).
For each other period ATP is calculated only in those periods where there is a MPS using the following formula:
ATP = MPS – Sum of customer orders before the next MPS.

Production Scheduling

Scheduling is an important tool for manufacturing and engineering, where it can have a major impact on the productivity of a process. In manufacturing, the purpose of scheduling is to minimize the production time and costs, by telling a production facility when to make, with which staff, and on which equipment. Production scheduling aims to maximize the efficiency of the operation and reduce costs.

Production scheduling tools greatly outperform older manual scheduling methods. These provide the production scheduler with powerful graphical interfaces which can be used to visually optimize real-time work loads in various stages of production, and pattern recognition allows the software to automatically create scheduling opportunities which might not be apparent without this view into the data. For example, an airline might wish to minimize the number of airport gates required for its aircraft, in order to reduce costs, and scheduling software can allow the planners to see how this can be done, by analyzing time tables, aircraft usage, or the flow of passengers.

Companies use backward and forward scheduling to allocate plant and machinery resources, plan human resources, plan production processes and purchase materials.

Forward scheduling is planning the tasks from the date resources become available to determine the shipping date or the due date.
Backward scheduling is planning the tasks from the due date or required-by date to determine the start date and/or any changes in capacity required.

Back scheduling The usual process is to start with the due date and using the lead times to work back to find the start date for each operation. This process is called back scheduling. To schedule, we need to know for each order:
- The quantity and due date;
- Sequence of operations and work centers needed;
- Setup and run times for each operation;
- Queue, wait and move times;
- Work center capacity available (rated or demonstrated),

The information needed is obtained from the following:

- Order file. Quantities and due dates;
- Route file. Sequence of operations, work centers needed, setup time and run time;
- Work center file. Queue, move and wait times and work center capacity.

The process is as follows:

- For each work order, calculate the capacity required (time) at each work center;
- Starting with the due date, schedule back to get the completion and start dates for each operation.

Time Fences

“A policy or guideline established to note where various restrictions or changes in operating procedures take place. For example, changes to the master production schedule can be accomplished easily beyond the cumulative lead time, while changes inside the cumulative lead
time become increasingly more difficult to a point where changes should be resisted. Time fences can be used to define these points”.
Time Fence is an artificial time boundary used to separate periods or groups of periods for planning purposes

At each of the stages of a bill of material, the company commits itself to more cost and fewer alternatives. Therefore the cost of making a change increases and the company’ s flexibility decreases as production gets closer to the delivery time. Bur changes to MPS is ineviatble & might occur for below reasons:
- Customers cancel or change orders;
- Suppliers have problems and miss delivery dates;
- Machines break down or new machines are added, changing capacity;
- Processes create more scrap than expected.

A company wants to minimize the cost of manufacture and also be flexible enough to adapt to changing needs. Changes to production schedules can result in the following:
- Cost increases due to re-routing, rescheduling, extra setups, expediting and buildup of work-in-process inventory;
- Decreased customer service. A change in quantity of delivery can disrupt the schedule of other orders;
- Loss of credibility for the MPS and the planning process.

Changes that are far off on the planning horizon can be made with little or no cost or disruption to manufacturing. To help in the decision-making process, companies establish zones divided by time fences. The zones and time fences are

Release Time Fence :
Release time fence used to allow automatic release of orders falling within this planning horizon. For example, a planner may want to automatically create released orders for certain items when the requirement falls within 1 or 2 days of the current date.

Demand Time Fence (Frozen zone):

It is “1) That point in time inside of which the forecast is no longer included in total demand and projected available inventory calculations; inside this point, only customer orders are considered. Beyond this point, total demand is a combination of actual orders and forecasts, depending on the forecast consumption technique chosen.
2) In some contexts, the demand time fence may correspond to that point in the future inside which changes to the master
schedule must be approved by an authority higher than the master scheduler. Note, however, that customer orders may still be promised inside the demand time fence without higher authority approval if there are quantities available-to-promise (ATP). Beyond the demand time
fence, the master scheduler may change the MPS within the limits of established rescheduling rules, without the approval of higher authority”.

Capacity and material are committed to specific orders. Since changes would result in excessive costs, reduced manufacturing efficiency and poor customer service, senior management’ s approval is usually required to make changes. The extend of the frozen zone is defined by the demand time fence. Within the demand time fence, demand is usually based on customer orders, not forecast.

Planning time fence(Slushy zone):
Capacity and material are committed to less extend. This is an area for tradeoffs that must be negotiated between marketing and manufacturing. Materials have been ordered and capacity established; these are difficult to change. However, changes in priorities are easier to change. The extent of the slushy zone is defined by the planning time fence. Within this time fence the computer will not reschedule MPS orders.Changes inside the planning time fence must be made manually by the master scheduler.

Outside the planning time fence, customer orders may be booked and changes to the master schedule can be made within the constraints of the production plan.

Liquid zone:
Any change can be made to the MPS as long as it is within the limits set by the PP. Changes are routine and are often made by the computer program.

Oracle EBS
Demand Time Fence Control
The demand time fence is bordered by the current date and a date within which the planning process does not consider forecast demand when calculating actual demand. Within the demand time fence, Oracle Master Scheduling/MRP and Supply Chain Planning only considers actual demand. Outside the demand time fence, the planning process considers forecast demand. You can specify whether to use demand time fence control when loading a master schedule and launching the planning process.

Planning Time Fence Control
The planning time fence is bordered by the current date and a date within which the planning process does not alter the current material plan or master schedule. You can specify whether to use planning time fence control when launching the planning process.
For discrete items within the planning fence, the planning process does not reschedule in (create earlier) order due dates or create new planned orders for the item to satisfy net demand requirements. However, the planning process can reschedule out or cancel an order when it determines that such orders create excess supply. For discrete items outside the planning time fence, the planning process can generate suggestions to create, change, and reduce entries on the master schedule or the material requirements plan.

For repetitive items, Oracle Master Scheduling/MRP and Supply Chain Planning restricts the planning process to suggest rates of production within the planning time fence that differ from the current aggregate repetitive schedule by no more than the acceptable rate increase and acceptable rate decrease you defined for the item. If either the acceptable rate increase or decrease value is undefined, the planning process is not restricted from increasing or decreasing the repetitive schedule respectively.

Release Time Fence Control
The release time fence is bordered by the current date and a date within which the planning process automatically releases planned orders to Oracle Work in Process as discrete jobs or to Oracle Purchasing as purchase requisitions. You can specify whether to use release time fence control when defining your plan name.

Time Fences and Firm Orders
A firm order is an order that is frozen in quantity and time (unavailable for rescheduling). Oracle Master Scheduling/MRP and Supply Chain Planning automatically creates a planning time fence for the firm order if the firm order exists after the planning time fence date. There are two methods you can use to firm an order that creates a time fence: you can firm a planned order or firm a discrete job in the Planner Workbench, or you can firm a discrete job or purchase order within Oracle Work in Process and Oracle Purchasing directly.
Oracle Master Scheduling/MRP and Supply Chain Planning creates a time fence for a firm order because it implies that resources committed to meeting the firm order would be unavailable for orders scheduled earlier.

You can use the profile option MRP:Firm Planned Order Time Fence to indicate whether to form natural time fences for your MRP firm planned orders when launching the planning process.