Agenda g

Define Master Production Schedule (MPS) and Master Schedule (MS) Discuss Some Key Issues Managing Master Schedule (MS)

MPS & competitive environments [MTS, ATO MTO] Structuring of Bill of Materials (BOM) Lead Time and Time fences Creating Master Schedule Maintaining MS- Accepting Customer Order Order, Available to Promise Rough Cut Capacity Planning

Manufacturing Resource Planning- MRP-II g g

Input from Higher Level Business Plan

PLANNING HORIZON
Sales Planning

MATERIAL PLAN (PRODUCTION OUTPUT LEVEL)

CAPACITY PLAN (RESOURCE USE PLAN)

Master Plan

Long Term
Demand Management

Production Planning Pl i

Resource Requirement Plan Pl

Aggregate Planing

Medium Term

Master Production Scheduling (MPS) Material Requirement Planning (mrp)

Rough Cut Capacity Planning (RCCP) Capacity Requirement Planning (CRP)

Short Term

Production Activity Control/Shop Floor Ctrl

Execution Plan

Hierarchy of Planning in MRP-II

Relationship between Aggregate Plan (Overall Production Rate) and MPS (Product Mix)
- family total quantity of mattress in production plan is disaggregated to planned
production quantities of three models or end items in MPS for first 9 weeks

Month 1 Matress Production 1000

2 900

3 950

4 950

5 900

6 900

Aggregate P d ti Plan for A t Production Pl f Mattress Family [Pseudo Part Name]

Week Model-327 Model-528 Model 528 Model-749 Total

1 200

2 200

4 200

5 100 100 200

6 100 100 200

7 100 100 200

9 250

200

200

200 200

200

250 250

250

Master Production Schedule (MPS) for Mattress Models [Real Parts]

Master Production Schedule (MPS) ( )

The Master Production Schedule- represents what the company plans to produce expressed in specific configurations, quantities, and dates. Master Production Schedule (MPS) is defined as anticipated build schedule [e.g., products likely to be build] for those items assigned to master scheduler. It drives material requirements planning planning.

Master Schedule (MS)

[Although term MS is used interchangeably with MPS sometime it is more broader in scope than MPS]

The master schedule (MS) is a time-phased planning chart which presents demand demand, including the forecast and the backlog (customer orders received), the master production schedule (th supply plan), th d ti h d l (the l l ) the projected on hand (POH) inventory, and the available to promise available-to-promise (ATP) quantity. It helps the master scheduler creating master production schedule (MPS).

An Example Master Schedule [MS]

0 Aggregate forecast Production Aggregate inventory Item A Forecast Production (MPS) Inventory Item B Forecast Production (MPS) Inventory Total Production Aggregate plan capacity Deviation Total Inventory Aggregate plan inventory Deviation 1 100 150 450 60 150 390 40 100 60 150 150 0 450 450 0 2 200 150 400 120 150 420 80 -20 150 150 0 420 400 -20 Week 3 150 150 400 90 150 480 60 -80 150 150 0 480 400 -80 4 150 150 400 90 390 60 150 10 150 150 0 400 400 0 5 200 150 450 120 270 80 150 80 150 150 0 350 450 0 320 300 Month Total 800 750

400

480 450

300

400 400

Manufacturing Environments and MPS

The competitive strategy of an organization may be any of the following: MTS: Make finished items to stock (sell from finished fi i h d goods inventory) d i t ) ATO: Assemble final products to order and make components, subassemblies components subassemblies, and options to stock MTO: Custom design and make-to-order It is not unusual for an organization to have different strategies for different product lines and, thus, use diff h different MS approaches. h

MPS in Make-to-Stock Environment

Limited number of end items assembled from relatively large number of components. The competitive strategy of make-to-stock emphasizes Th titi t t f k t t k h i immediate delivery of reasonably priced off-the-shelf standard items. In this environment the MPS is the anticipated build schedule of the items required to maintain the finished goods at the desired level. Note that the MPS is the same as the final assembly schedule (FAS) in this case. case End Item/Product MPS and FAS

Raw Material/Components

Product Structure Tree or Bill of Material in MTS environment

THE BILL OF MATERIAL (BOM): An inclusive definition of a final product includes a list of the items, p , ingredients, or materials needed to assemble, mix, or produce that end product. This list is called a bill of material.

Table

Top (1)

Leg (4)

An end item (e.g., Table) bill of material (BOM) is used in Make-to-Stock environment.

MPS in Assemble-to-Order Environment

In this environment, options, subassemblies and components are either produced or purchased to stock The competitive strategy is stock. to be able to supply a large variety of final product configurations from standard components and subassemblies within a relatively short lead time. End Item/Product Example: automobile may FAS be ordered with or without MPS air conditioning, an option. Assemblies/options MPS for the options, accessories, and common components as well as final t ll fi l assembly schedule (FAS).

Raw Material/Components

MPS in Make-to-Order Environment

Many items made from limited number of base materials based on customer orders. In many situations the final design of an item is part of what is purchased. The final product is usually a combination of standard items and items custom designed to meet the special needs of the customer Example, special trucks for off-the-road work on utility lines and facilities are another. Thus, there is one MPS for the raw material and the standard items that are purchased, fabricated or built to purchased fabricated, stock and another MPS for the custom engineering, fabrication, and final assembly. End Item/Product FAS

MPS Raw Material/Components

Structuring of Bills of Material for MPS i ATO/MTO environments in i t

Requires forecast of options as well as total demand. MPS for options, accessories & common f ti i components developed based on anticipated or forecast demand. FAS for end item should be developed based on booked orders. Modular Bill of Material, a planning bills of material is used for this purpose

Modular BOM (A type of planning BOM)

Modular bills
-Product assembled from major j subassemblies & customer options -Modular bill kept for each major subassembly b bl -Simplifies forecasting & planning X10 automobile example (in the next slide)
Total: 3 x 8 x 3 x 8 x 4 = 2,304 , configurations Only: 3 + 8 + 3 + 8 + 4 = 26 modular bills

Modular Bills of Material

-Disaggregate t e group total to the to module/option total based on sagg egate the g oup tota t e odu e/opt o tota o
proportion factors shown in modular BOM -Safety stocks for options to absorb variations in mix can be included

X-10 Automobile

Engine
(1 of 3)

Exterior color
(1 of 8)

Interior Interior color

(1 of 3) (1 of 8)

Body
(1 of 4)

4-Cylinder (.40+.1) 6-Cylinder (.50) 8-C li d (.10) Cylinder ( 10)

Bright red (.10) White linen (.10) Sulphur ll S l h yellow (.10) ( 10) Neon orange (.10) Metallic blue (.10) Emerald green (.10) Jet black (.20) Champagne (.20)

Leather (.20) Tweed (.40) Plush ( 40) Pl h (.40)

Grey (.10) Light blue (.10) Rose ( 10) R (.10) Off-white (.20) OffCool green (.10) Black (.20) Brown (.10) B/W checked (.10)

Sports coupe (.20) Two-door (.20) TwoFour-d Four-door (.30) F ( 30) Station wagon (.30)

Planning Horizon of MPS g

The planning horizon is the amount of time the master schedule extends into the future. A principle of p p p planning is that a p g plan must cover a p period at least equal to the q time required to accomplish it. This means that the MS planning horizon must be at least as long as the lead time required to fabricate the MS items. This includes production and procurement time as well as engineering time in a custom design environment. This is normally set to cover a minimum of cumulative lead time along the critical path of low level components low-level

MPS P li i Policies: Ti Time F Fences

MPS is a link between operations (production) and sales. ( ) Hence need to have some policies in maintaining MPS, otherwise it may cause confusions. Many organizations divide the planning horizon into periods with different controls on schedule changes. The closer a period is to the present, the tighter are the controls on schedule changes. Varying lead times, market conditions, and processing flexibility make for different time fences As the time for order fences. execution and manufacturing approaches, labor and material are committed. A change in the schedule can be disruptive and costly, and the costs must be compared with the benefits of the change. change Following time-fence-control guidelines, which reflect guidelines realistic lead time constraints and competitive factors, will result in an MPS that promotes manufacturing stability and productivity while providing reasonable flexibility in meeting marketing demands demands.

Example: Time Fences and Zones

DTF is future master schedule period inside to which changes to MPS are typically not accepted due to excessive cost caused by the g yp y p y schedule disruption. PTF is future master schedule period inside to which changes to MPS are evaluated to prevent costly schedule disruption. Outside PTF g p y p planned can be freely changes by computer logic.

Demand Time Fence (DTF):

Planning Time Fence (PTF):

Creating the master schedule (MS)

Must recognize all sources of the demand Sum of disaggregate fi S f di t figures should match h ld t h with aggregate figures of production, inventory and forecast Disaggregation over time should be efficient (i.e., optimize cost etc.) Avoid overloading or underloading the production facility so that production capacity is efficiently utilized and low production costs result. Appropriate items must be included in MPS considering environment MTS, ATO, MTO

Techniques for Developing q p g an MS

Cut and Fit Methods: Try out various allocations of capacity to p p y products in a group until a satisfactory combination is determined. Linear Programming: Can write LP model to generate master plan considering all constraints, factors and relevant costs.

An Example Master Schedule generated using Cut and Fit Method

0 Aggregate forecast Production Aggregate inventory Item A Forecast Production (MPS) Inventory Item B Forecast Production (MPS) Inventory Total Production Aggregate plan capacity Deviation Total Inventory Aggregate plan inventory Deviation 1 100 150 450 60 150 390 40 100 60 150 150 0 450 450 0 2 200 150 400 120 150 420 80 -20 150 150 0 420 400 -20 Week 3 150 150 400 90 150 480 60 -80 150 150 0 480 400 -80 4 150 150 400 90 390 60 150 10 150 150 0 400 400 0 5 200 150 450 120 270 80 150 80 150 150 0 350 450 0 320 300 Month Total 800 750

400

480 450

300

400 400

Customer Order Booking & MPS g

Interactions between demand management and MPS is frequent. The projected available balance (PAB) and available-to-promise ( (ATP) are two techniques used by the master scheduler to p j ) q y project available inventory or capacity and to promise future production against customer orders. The PAB considers the availability of goods based on consuming the forecast with actual orders That is in distinct future periods the orders. is, periods, PAB uses the forecast while in the near future periods, customer orders are used as a statement of demand. Available to promise (ATP) is found to determine if future customer orders can fit within the existing master schedule A tool for sales schedule. people. The ATP uses customer orders alone as a basis of its computation. We will consider three methods of calculations of ATP figures.

ATP (discrete) (di t ) Cumulative ATP (without lookahead) Cumulative ATP (with lookahead)

Available to Promise (ATP): D ( )

PAB CALCULATIONS: It is based on a concept called consumption of forecast by actual orders. PRIOR TO DTF:

PAB = PRIOR PERIOD PAB OR ONHAND INVENTORY + MPS CUSTOMER ORDERS

AFTER DTF:

PAB = PRIOR PERIOD PAB + MPS MAX(CUSTOMER ORDERS, FORECAST) ATP = ON-HAND INVENTORY (APPLICABLE ONLY FOR PERIOD 1) + ( ) MPS (TOTAL ORDERS BOOKED UNTIL NEXT MPS).
Production Capacity or Inventory

Available to promise Firm customer orders (consuming

forecast/capacity)

Time

ATP: Calculations
Lead Time:1 ON Hand:140 Week FORECAST ORDERS PAB MPS ATP 1 100 110 30 2 100 80 -50 50 3 4 100 100 50 20 Lot Size: 300 DTF: 2 PTF: 4 5 6 100 100 0 0

[140 110] [140-110]

[30 80] [30-80]

ATP: Calculations
Lead Time:1 ON Hand:140 Week FORECAST ORDERS PAB MPS 1 100 110 30 2 100 80 250 300 3 100 50 150 4 100 20 50 Lot Size: 300 DTF: 2 PTF: 4 5 6 100 100 0 0 -50 50

[30+300-80] [30+300 80]

ATP: Calculations
Lead Time:1 ON Hand:140 Week FORECAST ORDERS PAB MPS 1 100 110 30 2 100 80 250 2 0 300 3 100 50 150 1 0 4 100 20 50 0 Lot Size: 300 DTF: 2 PTF: 4 5 100 0 250 2 0 300 6 100 0 150 1 0

[30+300-80] [250-100] [30+300 80] [250 100]

ATP: Calculations
Lead Time:1 ON Hand:140 Week FORECAST ORDERS PAB MPS ATP 1 100 110 30 30 2 100 80 250 300 150 3 100 50 150 4 100 20 50 Lot Size: 300 DTF: 2 PTF: 4 5 100 0 250 300 300 6 100 0 150

[ [140-110] [300-(80+50+20)] ]

[300-(0+0)] [300 (0+0)]

Cu u a e Cumulative ATP with a d without lookahead and ou oo a ead

ATP from previous period is added while computing next period s ATP. periods ATP Without lookahead does not take into consideration those periods when there is no production, hence overestimates. production overestimates
0 Item A Forecast Production (MPS) Inventory I t Orders ATP(discrete) ATP(without lookahead) ATP(with lookahead) 1 60 150 120 60 120 120 120 2 120 150 150 55 95 215 215 Week 3 90 150 210 50 30 315 245 4 90 0 120 40 275 245 5 120 0 0 30 245 245

30

Rough-Cut Capacity Planning g p y g

As orders are slotted in the MPS, the effects on the production work centers are checked Rough cut capacity planning (RCCP) identifies underloading or overloading of capacity on a few critical resources. There are several approaches, such as Bill of approaches as, Resources approach and overall factors. Bill of R f Resource: Thi gives th number of h This i the b f hours required at each critical resource to build a particular end item.

Example: Rough-Cut Capacity Planning

Suppose, work center WC21 is a critical resource. There are two end items A and B are master scheduled. The bill of resources for A and B for work center WC21 may appear like the following. Work Center Part A Part B WC21 2.5 h 2.0 h The following is the MPS:
Week Part A Part B 1 2 3 4 5 6 7 8 10 10 10 10 20 20 20 10 5 25 5 15 10 25 15 10 3 25 10 35 65 30 4 50 30 80 65 -15 5 6 7 50 50 50 20 50 30 70 100 80 65 65 65 -5 -35 -15 8 25 10 35 65 30 Total 300 210 510 520 10

Then RCCP calculations will appear as follows.

Week 1 2 Part A (hours) 25 25 Part B (hours) 10 50 Total (hours) 35 75 Available 65 65 Over(+)/under(-) 30 -10

Example: Rough-Cut Capacity Planning Pl i

If we had considered only the sum (as in aggregate planning), planning) we would have concluded that there is sufficient capacity (520 hours) versus a requirement of 510 hours. However, after performing RCCP we see that several periods have insufficient capacity p p y while others have an excess. Planners options to make MPS feasible: (1) adjust p ( ) j the MPS by changing due dates; or (2) adjust capacity by adding or taking away resources, using overtime, or subcontracting of the work . RCCP can be very rough sometime. A more refined approach capacity requirement planning (CRP) is done during material requirement planning (MRP) phase of planning. planning

Thank You