Manufacturing Planning and ControlCopyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Master Production Scheduling
An effective Master Production Schedule (MPS) provides the basis for making good use of manufacturing resources, making customer delivery promises, resolving trade-offs between sales and manufacturing, and attaining the firm’s strategic objectives, as reflected in the Sales and Operations Plan.
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Agenda
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Master Production Scheduling and the Manufacturing Planning and Control System
The MPS is a statement of the specific products that make up manufacturing output
The MPS is a translation of the sales and operations plan into producible products with their timing and quantities determined
The MPS shows when products will be available in the future
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The MPS is a statement of production, not of demand
The MPS is not a forecast
The MPS considers factors such as capacity constraints, costs of production, resource limitations, and the sales and operations plan
The MPS is stated in terms of product specifications–usually part numbers which have specific bills of materials (BOM)
In assemble-to-order environments, the MPS may be stated in terms of an “average” final product
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MPS and the Business Environment
In a make-to-stock company, the MPS is a statement of how much of each end item to be produced and when it will be available
In a make-to-order (or engineer-to-order) firm, the MPS is usually defined as the specific end item(s) that make up an actual customer order
In an assemble-to-order firm, the large number of possible product combinations is represented with a planning bill of materials
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Resource
planning
Front End
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1,200
1,500
100
300
8
7
6
5
4
3
2
1
Week
February
January
Month
Master Production Scheduling Linkages
The MPS is the driver of all detailed manufacturing activities need to meet output objectives
The MPS is the basis for key inter-functional trade-offs
Production and sales
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A means of gathering and displaying critical scheduling information (Forecast, available stock, production schedule)
On hand
MPS Process–with Lot Sizing
Order size driven by lot sizing constraint, order timing/quantity driven by safety stock constraint
As time progresses, new information becomes available
On hand stock =
= (20 + 0 – 10)
Updated forecast for periods 2 – 6 changes projected available balancing, prompting rescheduling
Period 1 – 5 plan
Period 2 – 6 plan
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Revising the MPS
Additional production orders in periods 2 and 5 to meet safety stock requirements
Period 2 – 6 plan
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Available-to-Promise
When immediate delivery is not expected (or is not possible due to stockouts), a promised delivery date must be established
The order promising task is to determine when the shipment can be made
Available-to-promise (ATP) procedures coordinate order promising with production schedules
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Period 1: Total customer demand before next production = 8 units
Period 1: ATP = available balance – customer orders = 20 -8
Period 1: Projected available = Previous available + MPS – MAX(Forecast, Orders)
Period 3: ATP = MPS – customer orders = 30 -2
Period 3: Total customer demand before next production = 2 units
Period
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Period 1: Total customer demand before next production = 8 units
Period 1: ATP1 = available balance – customer orders = 20 - 8
Period 1: Projected available = Previous available + MPS – MAX(Forecast, Orders)
Period 3: ATP3 = ATP1 + MPS – customer orders = 12+ 30 - 2
Period 3: Total customer demand before next production = 2 units
Period
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ATP–Consuming the Forecast
In the ATP calculation, demand is considered to be the maximum of forecast and actual customer orders
This is a conservative approach
Assumes that we will eventually sell at least the forecast quantity
Adjusts for periods where demand exceeds the forecast
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In an assemble-to-order (ATO) environment, the possible combinations of end items can be huge
Specific end item bills of materials (BOM) are replaced with a planning bill of materials, which represents the potential product combinations
One type of planning BOM is the super bill, which describes the usage of options and components that make up the average product
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Bicycle(1)
Super Bill of Materials (Planning Bill of Materials)
Parts used in all configurations are listed with usage probability of 1.0
Mutually exclusive option sets are listed together, with a usage probability for each option
Safety stock absorbs variations in actual mix
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Common Parts Available?
Is the requested gear option available?
Is the requested Taylor option available?
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Two-Level Master Production Schedules
When a planning BOM is used, a final assembly schedule (FAS) is often used
States the set of end products to be built over a time period
Two-level MPS coordinates component production and the FAS
Component production is controlled by aggregate production plan in the FAS
Final assembly is controlled by the FAS
Either discrete or cumulative ATP logic can apply
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Normal ATP logic applies to FAS items
For planning BOM items projected available balance is always zero because the item doesn’t actually exist
Planning BOM orders are the sum of FAS orders
4-Horsepower Tillers (Aggregate)
Period
40
40
40
40
40
Orders
42
37
23
0
0
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Stability allows improved plant performance
Excessive MPS changes can lead to reduced productivity
Failure to change the MPS can lead to reduced customer service and increased inventory (failure to react)
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Inside the frozen horizon no order changes are allowed
Demand Time Fence
Planning Time Fence
Only occasional changes
To be controlled, the MPS must be realistic
People should only be held accountable for attainable performance levels
Stability and buffering are important
The MPS must not be overstated
Sum of the MPS should equal the production plan
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Principles
The MPS unit should reflect the business environment and the company’s chosen approach.
If a common ERP database is implemented, the MPS function should use that data.
Regardless of the firm’s environment, effective scheduling is facilitated by common systems, time-phased processing, and MPS techniques.
Customer order processing should be closely linked to MPS.
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Principles
ATP information should be derived from the MPS and provided to the sales department.
An FAS should be used to convert the anticipated build schedule into the final build schedule.
The master production scheduler should ensure that the sum of the parts (the MPS) is equal to the whole (the operations plan).
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Quiz – Chapter 5
The Master Production Schedule (MPS) shows when products will physically be available to ship? (True or False)
In which environment is a planning bill-of-material (BOM) most likely to be used?
Available-to-promise (ATP) is likely to be least useful in which environment?
A Super Bill represents average usage of components in an assemble-to-order environment? (True or False)