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Developing a MPS

By Anonymous - Posted on 26 December 2011

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)


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.

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