VBW Chapter 1

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Master Production Scheduling
Chapter 6
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
MPC System
Resource
planning
Production
planning
Demand
management
Rough-cut
capacity
planning
Master
production
schedule (MPS)
Front end
Detailed
capacity
planning
Detailed
material
planning
Shop-floor
systems
Material
and capacity
plans
Engine
Vendor
systems
Back end
Master Production Scheduling

Effective MPS provides the basis for:
Making customer delivery promises
Utilizing plant capacity effectively
Attaining firm’s strategic objectives
(from production plan)
Resolving trade-offs between
production and marketing
MPS Activities


Operational level—processing 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 basis—marketing and production
coordinate through order promising
(shipment date for a customer order)
MPS Techniques—Time-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.
MPS Techniques—Time-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
MPS Techniques—Rolling
through Time

MPS is periodically updated—changes 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
MPS Techniques—Order
Promising



Available-to-promise: deduct existing
booked orders from available inventory.
(See Figures 6.8, 6.9, 6.10)
Time-phased MPS record convention—use
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.
MPS Techniques—Consuming
the Forecast

Forecast estimates versus actual booked orders.

Negative Available—need 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.
BOM Structuring for the MPS

BOM—engineering 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.
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 order—a unique end item.
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
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).
Final Assembly Schedule (FAS)

States exact set of end products to be
produced over give time period (final
assembly lead time).

MPS—anticipated 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.
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.
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.
MPS Stability

Firm planned orders—quantity, timing are set
by the master planner, not adjusted
automatically by the software.

Frozen time periods—no changes in the
stated time periods are possible.

Time fencing—specify periods in which
differing types of changes are possible (e.g.,
ice, slush, water zones)
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
Managing the MPS and Data
Base

Stability and proper buffering

Force the sum of the MPS’s 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).
Concluding Principles

The MPS should reflect the company’s approach
to the business environment in which it operates.

The MPS is one part of an MPC system—the
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.
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.
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.
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
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