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IE 304

Chapter 2

MASTER PRODUCTION

SCHEDULING (MPS)

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Mid and Short Range Planning Details

Aggregate Planning

Master Production Scheduling

Materials Requirement Planning

Aggregate Unit

Demand

End Item (SKU)

Demand

Corporate Strategy

Capacity and Aggregate Production Plans

SKU-level Production Plans

Manufacturing

and Procurement

lead timesComponent Production lots and due dates

Part process

plans

(Plan. Hor.: 1 year, Time Unit: 1 month)

(Plan. Hor.: a few months, Time Unit: 1 week)

(Plan. Hor.: a few months, Time Unit: 1 week)

Shop floor-level Production Control

(Plan. Hor.: a day or a shift, Time Unit: real-time)

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3

They

combine

Eventually, the time comes when individual end item products and services

must be scheduled at specific work centers.

This is accomplished by master scheduling

Which means, producing a SUPPLY PLAN (a time table including quantities) to produce specific

items or provide specific services within a given time period.

Aggregate Production

& Capacity Plans

Products into

product groups.

Demand into

monthly totals.

Personnel

Requirements

across departments

Which alltogether

reflect Top Management

Decisions.

Master Scheduling

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THE ENVIRONMENT

Before describing the activities involved in creating and managing

the MS,

we need to examine the different organizationalenvironments inwhich master scheduling takes place.

THESE ENVIRONMENTS ARE DETERMINED BY

the companys STRATEGIC RESPONSESto;

and

Thus, a COMPETETIVESTRATEGY evolves...

the INTERESTS of

CUSTOMERS

the ACTIONS of

COMPETITORS

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Preemptive Tactics

There may be ways to manage the extremes

of demand:

Discount prices during the valleys.... have asale

Peak-load pricing during the highs .... electric

utilities, airline tickets

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Objectives of MPS

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 theproduction facility so that production

capacity is efficiently utilized and low

production costs result.

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l The rules for scheduling

No Change

+/- 5%

Change

+/- 10%

Change

+/- 20%

Change

Frozen FirmFull

Open

1-2

weeks2-4

weeks

4-6

weeks6+weeks

Time Fences

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Time Fences

The rules for scheduling:

Do not change orders in the frozen zone

Do not exceed the agreed on percentage

changes when modifying orders in the other

zones

Try to level load as much as possible Do not exceed the capacity of the system when

promising orders.

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Developing an MPS

Using input information

Customer orders (end items quantity, due dates)

Forecasts (end items quantity, due dates)

Inventory status (balances, planned receipts)

Production capacity (output rates, planned

downtime)

. . . more

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Developing an MPS

Schedulers must:

estimate the total demand for products from all

sources assign orders to production slots

make delivery promises to customers, and

make the detailed calculations for the MPS

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Master Production Schedule

Provides basis for:

Making good use of manufacturing resources

Making customer delivery promises

Resolving tradeoffs between sales and

manufacturing

Attaining strategic objectives in the sales andoperations plan

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What is Master Production

Scheduling?

Start with Aggregate plan

(Aggregate Sales & Ops Plan) Output level designed to meet targets

Disaggregates

Converts into specific schedule for each item

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The (Master) Production Scheduling Problem

MPS

Placed Orders

Forecasted Demand

Current and Planned

Availability, eg.,

Initial Inventory,

Initiated Production,

Subcontracted quantities

Master Production

Schedule:

When & How Much

to produce for each

product

Capacity

Consts.

Company

Policies

Economic

Considerations

Product

Charact.

Planning

Horizon

Time

unit

Capacity

Planning

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Example: Master Production

Scheduling

Arizona Instruments producesbar code

scanners for consumers and other manufacturers

on aproduce-to-stockbasis. The productionplanner is developing an MPS for scanners for the

next 6 weeks.

The minimum lot size is 1,500 scanners, and

the safety stock level is 400 scanners. There are

currently 1,120 scanners in inventory. The

estimates of demand for scanners in the next 6

weeks are shown on the next slide.

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Example: Master Production Scheduling

Demand Estimates

CUSTOMERS

BRANCH WAREHOUSES

MARKET RESEARCH

PRODUCTION RESEARCH

500

200

0

10

1

0

50

300

1000

0

0

500

400

2 3 4

200

000

300500

0100

700

65

1000

200

WEEK

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Example: Master Production Scheduling

ComputationsCUSTOMERSBRANCH WAREHOUSES

MARKET RESEARCH

PRODUCTION RESEARCH

500

200

0

10

1

0

50

300

1000

0

0

500

400

2 3 4

200

000

300500

0100

700

65

1000

200

WEEK

TOTAL DEMAND

BEGINNING INVENTORY

REQUIRED PRODUCTION

ENDING INVENTORY

710

1120

0

410 560

1500

410

1350

1160

1500

900

560

700

1250950460

4601160

150015000

1010 1200

950

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Rough-Cut Capacity Planning

As orders are slotted in the MPS, the effects

on the production work centers are checked

Rough cut capacity planning identifiesunderloading or overloading of capacity

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Example: Rough-Cut Capacity Planning

Texprint Company makes a line ofcomputer printers

on a produce-to-stock basis for other computer

manufacturers. Each printer requires an average of 24

labor-hours. The plant uses a backlog of orders to allow alevel-capacity aggregate plan. This plan provides a weekly

capacity of 5,000 labor-hours.

Texprints rough-draft of an MPS for its printers is

shown on the next slide. Does enough capacity exist toexecute the MPS? If not, what changes do you

recommend?

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Example: Rough-Cut Capacity Planning

Rough-Cut Capacity Analysis

PRODUCTION (MPS) 100 200 200 280250

1 2 3 4 5

WEEK

TOTAL

1030

LOAD 2400 4800 4800 67206000 24720

CAPACITY 5000 5000 5000 50005000 25000

UNDER orOVER LOAD 2600 200 200 17201000 280

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Disaggregation

Working with aggregate units facilitate intermediate planning.

But to put this plan into action we should translate it,

decompose it, disaggregate it and state it in terms of actual units

of products and for a shorter period

Aggregate planning was for 12 or more months. Now we should break it down into shorter periods, say 2-3 months.

Disaggregation;

Breaking down the aggregate plan into specific products.

From aggregate product to real specific products.

Based on the specific products, then calculate detail of manpower,

material and inventory requirements.

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Disaggregation

Aggregate PlanMonth Jan Feb Mar

lawn Mower 200 300 400

Master Schedule

Push 100 100 100Self-propelled 75 150 200

Riding 25 50 100

Total 200 300 400

Total of aggregate and

disaggregate products are notnecessarily equal

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Master Schedule

Aggregate plan: 12 months.

Master schedule: 12 weeks.

Master schedule is updated every 2 week.

Therefore, it is on a rolling basis, always we

have a disaggregated plan for the next 12

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Final Assembly Schedule

Master Production schedule is anticipated

build schedule

FAS is actual build schedule

Exact end-item configurations

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Schedule Stability

Stable schedule means stable component

schedules, more efficient

No changes means lost sales

Frozen zone- no changes at all

Time fences

>24 wks, all changes allowed (water)

16-23 wks substitutions, if parts there (slush)

8-16 minor changes only (slush)

< 8 no changes (ice)

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QUESTIONS?

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