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MPS Master Production Scheduling

 

Contents

1. Definitions

  • “The MPS is a line on the master schedule grid (MPS Matrix) that reflects 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 MRP Material Requirements Planning.

  • It represents what the company plans to produce expressed in specific configurations, quantities, and dates.

  • The MPS is not a sales item forecast that represents a statement of demand.

  • The MPS 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.” (APICS)

  • MPS is the planning of production (usually End Item Production) to satisfy Current and Forecast Orders.

  •  MPS states for an individual end item in a e.g. weekly level:

  •  What will be produced

  •  How many should be completed

  •   When these products are needed

  •  MPS is a vital Link (or Contract) between Sales and Production.

  • MPS is a vehicle for Communication with sales

    • Sales can make accurate order promising against MPS

    • The MPS report includes an ATP Available to Promise figure to enable realistic, achievable delivery promises to be made to customers.

  • The sum of all Family MPS items must equal the agreed SOP Sales and Operations Plan for that Family over each planning period (normally a month or 4 week period).

  •  MPS is used to drive the material requirements plan MRP:

    Items planned at the MPS level are exploded by MRP to produce the detail material and capacity requirements.

  •  Orders should be FPO Firm Planned Orders at least as far as the Cumulative Lead Time.

  •  MPS application usually depends on production environment (MTS, ATO, and MTO)

 

MPS and PP Production Plan (Aggregate Planning)

  • MPS is the bridge between the strategic plan expressed as the PP Production Plan (aggregate planning process) and the execution of that plan through detailed material and capacity plans.

  • MPS takes input from PP Production Plan.

  • MPSdisaggregates” the PP Production Plan

  • MPS is stated in items (end item, end item groups, options) in order to figure out the materials and capacity needs.

 

Aggregate Plan

Master Scheduling

Objective

Supply Rate by Product Family

Anticipate Build Schedule

Item Planned

Product Family

End item or Planning of Bill of Materials

Planning Horizon

Longest lead time Resource

Longest cumulative lead time for End Items

Constraints

Resource capacity

Critical work centers

Time Periods

Monthly

Weekly or monthly

Planning Focus

Product volume

Product Mix

Process output

Production Plan PP

Master Production Schedule MPS

MPS and RCCP Rough-Cut Capacity Plan

  • RCCP check whether critical resources are available to support the preliminary MPS

  • Where there is insufficient capacity we may increase capacity or decrease demand

 

Relationship of MPS to sales and “ability to promise”

  • MPS makes possible valid delivery promises

  •  ATP Available-To-Promise is the uncommitted portion of inventory and planned production

  • customer orders “consume ATP

  • ATP is normally calculated for each period in which an MPS is scheduled

 

Auditing MPS

  • Demand management techniques: Abnormal demand filters, forecasting, rough cut capacity planning, are often poorly understood or integrated.

  • A poorly structured MPS drives inventory up, and customer service down.

  • You need to audited your MPS process

2. Purpose of MPS

  •  Development of Master Production Schedule (MPS)

  • Projects inventory/backlog levels

  • Drives detailed scheduling & planning

  •  Order promising

  • Assists in assigning job priorities on facility floor

  • Determine the quantity and timing of completion of end items over a short-range planning horizon.

  • Schedule end items (finished goods and parts shipped as end items) to be completed promptly and when promised to the customer.

  • Avoid overloading or underloading the production facility so that production capacity is efficiently utilized and low production costs result.

Norman Gaither, Greg Frazier , Production and Operations Management, South-Western College Publishing

3. Inputs

  • Production Plan PP from aggregate planning

  • Detailed Forecasts

  • Inventory Level and Targets (for MTS)

  • Backlog Levels and Targets (for ATO)

  • Time Fence policies

  • Customer Orders

  • Interplant and intra-plant orders

  • Service parts orders and forecasts

  •  Distribution Requirements

  • Planning Bills Of Materials BOM

  • Actual production and supply levels

4. Outputs

  • Master Production Schedule MPS

  • Project Inventory levels PAB (for MTS)

  • Projected Backlog levels (for ATO)

  •  Future availability of products ATP

  •  Information for promising future customer orders

5. Procedures

  • Create a prospective MPS. Note this is constrained by Production Plan.

  • Evaluate the MPS using RCCP Rough-Cut Capacity Planning to determine if there is sufficient capacity in the potentially constraining work centers.

  • Revise the MPS if necessary.

  • Re-evaluate the MPS using rough-cut capacity planning again until satisfied the MPS is feasible and realistic.

  • Finalize and communicate the MPS.

6. Constraints

  • Sum of MPS Master Production Schedule quantities equals PP Production Plan.

  • Efficient allocation, recognizing Setup Costs and Inventory Holding Costs.

  • Capacity Limitations

7. Product Structure &  MPS-Matrix (Master Schedule Grid)

  • Product Structure refers to the way that parts, components, sub-assemblies and assemblies fit together to form a product.

  • A Structure - MTS (Make To Stock)

  • We have many components that are “assembled” into just a few end items. We master schedule this plant at the finished products level.

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

  • Manufacturing Based MPS-Matrix (finished products level)

Item no:

 

Lead Time:

2 periods

 

Demand Time Fence DTF:

3

Description:

 

Safety Stock

 

 

 

Planning Time Fence PTF:

8

On Hand

20

 Lot Sizing:

50

 

 

 

 

 

 

 

 

 

PTF

 

 

 

DTF

 

 

 

 

 

 

 

 

Period

1

2

3

4

5

6

7

8

9

10

11

Forecast

20

21

20

22

24

26

28

28

25

25

20

Customer Orders

19

20

21

21

25

24

20

18

16

12

10

Projected Available Balance PAB

20

1

31

10

38

13

37

9

31

6

31

11

Available To Promise

1

9

4

6

16

28

Cumulative Available to Promise

1

10

14

20

36

64

Master Production Schedule

 

50

 

50

 

50

 

50

 

50

 

  • “V” Structure - MTO/ETO (Make To Order / Engineer To Order)

  • We have very few inputs that are transformed into a variety of components, which in turn are transformed into a very large variety of end items.

  • Orders are customer specific and unique

  • Focus on Delivery Time and Product Option

  • Gross Requirements MPS-Matrix is Based on Raw Material  (Single Level MPS Record Processing)

  • “X” Structure Modular - ATO (Assemble To Order)

  • We have very 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

  • Tow Level MPS-Matrix

Family

Week

1

2

3

4

5

6

7

8

S&OP

40

 

40

 

40

 

40

 

Customer Orders

20

16

12

10

8

4

 

 

ATP

4

18

28

40

 

 

Item no:

 

 

Lead Time:

 

Demand Time Fence DTF:

 

2

Description:

 

Buffer:

 

Planning Time Fence DTF:

6

 

 

 

Lot Sizing:

LFL

 

 

 

 

 

 

 

 

PTF

 

 

 Week

1

2

3

4

5

6

7

8

Item Forecast

 

 

 

 

 

 

 

 

Product Forecast = 60% S&OP

 

 

 

 

 

 

 

 

Actual Demand = 60% Car CO

 

 

 

 

 

 

 

 

Total Demand

 

 

 

 

 

 

 

 

Projected Available Balance PAB

0

 

 

 

 

 

 

 

 

Available To Promise

 

 

 

 

 

 

 

 

Cumulative Available to Promise

 

 

 

 

 

 

 

 

Master Production Schedule

 

 

 

 

 

 

 

 

 

8. Planning Horizon

The amount of time the master schedule extends into the future. This is normally set to cover a minimum of cumulative lead time plus time for lot sizing low-level components and for capacity changes of primary work centers or of key suppliers. AIPCS

 

Planning Horizon > Minimal Cumulative Lead Planning Horizon > Minimal Cumulative Lead Time

  • Minimum = Manufacturing lead time (=Cumulative lead time)

  • Planning horizon is usually longer to allow visibility

  • Inside the cumulative lead time orders are considered as firm, i.e. changes can only be made after thorough analysis

 

9. 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.

Demand time fence DTF

  • 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.

  • 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

Planning Time Fence PTF

  •  A point in time denoted in the planning horizon of the master scheduling process that marks a boundary inside of which changes to the schedule may adversely affect component schedules, capacity plans, customer deliveries, and cost.

  • 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. Changes inside the planning time fence must be made manually by the master scheduler. Synonym: Planning Fence.

10.Time Zones

Frozen Zone

  • In forecasting, this is the period in which no changes can be made to scheduled work orders based on changes in demand. Use of a frozen zone provides stability in the manufacturing schedule.

 Firm planned order (FPO)

  • A planned order that can be frozen in quantity and time. The computer is not allowed to change it automatically; this is the responsibility of the planner in charge of the item that is being planned. This technique can aid planners working with MRP systems to respond to material and capacity problems by firming up selected planned orders. In addition, firm planned orders are the normal method of stating the master production schedule. AIPCS

Slushy Zone

  • Capacity and material are committed to less extent. Tradeoffs must be met between marketing and manufacturing

Liquid Zone

  • Any changes can be made to the MPS

Linking the PP Production Plan (Aggregate Planning) and the MPS

  • Production Requirements: MPS  obtain desired production quantities form PP

  • Disaggregate: break-down aggregate product family production quantities, taking into account the desired product mix within each family, current on-hand inventory and booked customer orders.

 

 

A. Calculation of Projected Available Balance PAB (Projected On-Hand Inventory)

Before Demand Time Fence DTF

  • Period 1:             PAB = On hand balance + MPS-quantity – Actual orders

  • Period 2, 3, ...:   PAB = Previous period’s PAB + MPS-quantity – Actual orders

Between DTF Demand Time Fence and PTF Planning Time Fence

  • PAB = Previous period’s PAB+ MPS-quantity – max {forecast, customer orders}

B. Calculation of Available-to-Promise ATP Quantities

Before Planning Time Fence PTF

  • Period 1: ATP = On hand balance + MPS-quantity (if there is in period 1) – Actual orders until next MPS

  • Period 2, 3, ...(where MPS quantity exists) ATP = MPS-quantity – Actual orders until next MPS

After PTF Planning Time Fence

  • (where MPS quantity exists)           ATP = As before PTF (for ATO) or = 0 (depends on company policy)

C. Calculation of MPS Quantities

  • Find the value of MPS which makes PAB  ≥ Zero for  SS =o

  • Find the value of MPS which makes PAB  ≥ Safety Stock SS

  • MPS = The exact quantity calculated in the MPS Matrix (in case of Lot For Lot L4L)

  • MPS = Multiples of Lot Size if we have Minimum Lot Size

 

Lot Size = Lot for Lot (L4L)

 

Lead Time = 0

Safety Stock =

 

20

 

 

Period

 

Product A

1

2

3

4

5

6

 

Gross Requirements

30

30

30

30

30

30

Sum PAB

Scheduled Receipts

30

 

 

 

 

 

Projected Available Balance PAB
= Previous  PAB + Scheduled Receipt +  Planned Order Released  – Gross Requirements

50

50

30

30

30

30

30

250

Planned Order Release 
= Gross Requirements - Scheduled Receipt - PAB + SS

0

10

30

30

30

30

 

 

 

A. Calculation of Projected Available Balance PAB (Projected On-Hand Inventory)

Projected Available Balance PAB = Previous PAB + Scheduled Receipt + Planned Order Released  – Gross Requirements

B. Calculation of MPS Quantities

Planned Order Release = Gross Requirements - Scheduled Receipt - PAB + SS

C. Calculation of MPS Quantities to Minimize the sum of PAB

  • Use Solver in MS Excel

  • Target cell sum of PAB Minimize

  • Decision Variables (Changing Cells) Planed Order Release

  • Constraints:

Planned Orders Gross Requirements - Scheduled Receipt - PAB + SS

Planned Orders Zero

Resources

  • Norman Gaither, Greg Frazier , Production and Operations Management, South-Western College Publishing