Here it is:

A path to mastery over your day-to-day manufacturing challenges.

It’s called a Master Production Schedule.

It’s an essential supporting document for your entire production planning and scheduling.

In short, it’s a big deal.

It’s one of those secret ingredients that takes your business from a good earner to a truly
outstanding enterprise.

But how can something like a master production schedule do this?

Imagine you are trying a complex recipe from your favorite celebrity chef cookbook.

How would it turn out if the instructions did not give you any information about the amount of each
ingredient or the time it takes for each process to be completed?

You would end up spending much longer trying to work out how to produce the finished product by
looking at videos and pictures. Maybe you’d get it somewhat right, but there would be a lot of
thinking time and uncertainty along the way.

This is the difference between having a master production schedule and making do without one.

A small change makes all the difference. That’s why investing time in learning about master
production scheduling disproportionately boosts your business’ power.

It’s a force multiplier. And you have what you need to know right here.

What is Master Production Schedule?

The master production schedule definition is that it’s a centralized source telling you what you need
to produce, how much you need to produce, and when you need to produce it. In short, everything
related to production in your business, including the time frames, like lead time.

It’s an essential part of the support structure of your manufacturing business.

The Master Production Schedule (MPS) enables you to keep your commitments to your customers.

It’s a master plan for your modern manufacturing business.

Simple enough in theory. So how do you implement master production scheduling?

The person in charge of scheduling sets out the production schedule on a calendar view. With the
right MRP system, this can be controlled from a single dashboard. Using the cloud, the master
production schedule can be seen by anyone you give access to.

Once your MPS is implemented, every staff member on your shop floor is clear about what needs to
be produced each week. Your master production schedule makes sure everyone in your business is
working towards the same goal.

The master scheduler (cool title, right?) can then forecast relationships between demand and your
supply and know when you need to increase or decrease production.

The master production schedule is a crucial input into the aggregate operations plan, giving an
overview of everything your business needs to do for 100% order fulfillment. This is producing sales
orders and having them delivered on time, without any problems or defects. This is known as perfect
order — and it’s what every business should strive for on all their sales channels.

The master production schedule has become an essential tool of manufacturing operations for good
reason. It’s a staple for optimum manufacturing productivity and deadline keeping for businesses of
all times — which is why MPS is here to stay.

Main Functions of Master Production Schedule

The technical manuals on master production scheduling might go on about the main function of
the master production schedule.

It’s to save you time by making the hours you spend managing your production flow much more
efficient. This time can be better used to scale your manufacturing business.

Once you understand the ultimate goal of MPS, you can realize that the other master production
schedule objectives are all aligned towards achieving this goal.

So what kind of manufacturers can use a master production schedule? Well, no matter the size of
your manufacturing business, the sooner you start, the better. This is because it fosters good
business habits, so when you do scale up, things like MPS is second-nature. Your business habits are
a key predictor of long-term success.

The master production schedule is compatible with different production workflows:

 — Make-to-Stock (MTS);

 — Make-to-Order (MTO); and

 — Assemble-to-Order (ATO).

Master production scheduling focuses on the production of finished goods, or components (if you
have an ATO workflow). The goods that are the most profitable for your business are likely to make
up most of the resources needed for production.

The other master production schedule objectives are:

1. Makes your demand flow smoother;

2. Keeps your lead-time low;

3. Standardizes communication across your business;

4. Helps you to prioritize requirement;

5. Helps keep production stable;

6. Generates workable plans for your manufacturing orders; and

7. Assists in making accurate purchase and transfer orders.

Those are the desired outcomes of your MPS. Now let’s look at the ingredients of the ideal master
production schedule.
How the master production schedule steps that show how MPS fits into the bigger picture in your
manufacturing business. Demand management refers to forecasting sales so you have an idea about
how much you need to produce each week. Your Production Plan involves figuring out the processes
required to make each product. These inform your master production schedule. While your MPS is in
play, it’s a good idea to use rough-cut capacity planning to measure your capacity against actual
demand and make adjustments. Material requirements planning (MRP) puts your MPS into action by
sourcing the materials needed to fulfill your demand. These steps will be discussed in more detail
below.

Parts of Master Production Schedule

Before you can learn how to create a master production schedule, you first need to know how much
product your workshop needs to make.

For this you need a demand plan. In order to generate a demand plan, you need up-to-date and
accurate historical sales data. You use this to work out your projected demand for the coming
weeks. Don’t forget to adjust this on a week-to-week basis. Furthermore, it’s a good idea to keep
some safety stock around in case you receive an unusually large or uncommon order.

The demand table is used to do a master production schedule calculation. Relax, it’s fairly
simple math, and there are no complex formulas.

You need to know your on-hand inventory for each item, and your historic demand.

Use your historic demand to create your proposed order policy. If you normally sell 40 units of
something in a week, then make it 40.

If a customer order comes in that exceeds this, you can use your on-hand inventory to make up for
the shortfall.

If your demand grows, you need to increase your order policy, so it does not frequently eat into your
safety stock.
So as each week passes, you update your demand plan to create a more accurate MPS order. This
feeds in to your master production schedule. Your MPS may be a WIP for a while, but you will fine-
tune it, making it a valuable tool for your business’ order fulfillment.

The correct procedure for developing master production schedule is to include the following
elements:

1. Product List — All product models you produce. After you have completed your ABC
analysis, you can order them by popularity, so the items you produce the most are at the top
of the list. Convenient;

2. Variation Sub-Lists for Each Product — Have a field for each product variation. One for each
individual SKU. For example, you can split backpacks into S, M, and L for size. You can further
split these into other variations like color;

3. Year, month, and week — This is useful for planning ahead and keeping records, which is
necessary for accurate demand forecasting. Split up your schedule into months and weeks.
The aim is to have a solid plan of what you will produce for the next few months. You can
reassess your projected demand every few months. Don’t be afraid to make
adjustments sooner if the demand calls for it; and

4. Production quantities — This is the number of units you decide to manufacture each week.
Say, after analyzing your demand plan, you decide to manufacture 200 units of product in a
week. You then add the number 200 to the bottom of each weekly column. But don’t stop
there, as you now need to allocate how many of each product variation will make up the
200 total. This depends on what you already have in stock, and what the projected demand
is. For example, one week all 200 units could be of one SKU, whereas the next week the
production could be more evenly distributed across product models.

Now you know what a manufacturing production schedule is made of, it’s time to see one in action.

A Master Production Schedule Example

Here is a quick overview of the master production schedule process steps to follow:

1. Map your demand and make a Demand Plan;

2. Work out the raw materials you need and get your supply-chain up and running
with production planning processes;

3. Now you’re ready to develop a master production schedule proposal. This is like a rough
draft to see if your MPS is workable;

4. Use a rough-cut capacity planning technique to calculate if you have the capacity to meet
your proposed MPS. Continue using this technique to continuously assess if your capacity
can meet demand when your master production schedule is in action; and

5. If your master production schedule proposal is workable, you then evaluate it with regards
to customer service, effective use of resources, and inventory investment.

Once you have completed these steps, you are ready to authorize this as your business’ official
MPS. Keep monitoring your business’ performance to see if everything is working as it should.

Let’s go through a master production example for a leather workshop selling bags.
To keep it simple we will look at just two products, with two variations each, making four SKUs in
total.

 — This workshop’s on-hand inventory is displayed at the top;

 — The projected demand is added below; and

 — The production quantity is then calculated based on current inventory, demand, and
capacity.

First let’s see how this looks in a run-of-the-mill master production schedule that thousands of
business currently use.

Ouch.

One downside to this approach, apart from it being hard on the eyes, is that the master production
schedule is not dynamic. It doesn’t change based on actual orders and capacity. You have to update
it yourself as it is based in a spreadsheet program. Excel is inefficient and vulnerable to business-
harming errors.

There’s a better way.

Here is the same plan, but displayed with clarity (and the production manager’s sanity) in mind.

Katana’s MPS system is a steady flow, not a fire hydrant of data. It prioritizes your schedule so you
see what’s important. Of course, you can see everything at once too.
Production Processes

Every manufacturing business requires a plan. Your business plan is one thing, but how well do you
know your production planning processes?

Mapping out your production processes allows you to keep to your production schedule. In
fact, production planning and scheduling are two sides of the same coin.

Production planning processes make sure you have the requisite raw materials, labor, and
equipment to complete your orders.

Production scheduling is the management of these processes to make sure they are completed in a
timely and economical fashion.

When an unusually large order comes in, you don’t have to estimate or guess, as you have “the
knowledge” — the recipe for everything your businesses produces — at your disposal.

This recipe is part of your bill of materials (BOM) and is a cornerstone of your Master Production
Schedule (MPS).

But before you can make a schedule, you need to define all your processes, raw materials planning
(MRP), and resource planning.

Think that’s a lot of fancy lingo?

You ain’t seen nothing yet...

Why Should You Care About Production Planning Processes?

You don’t set off on a long journey on unfamiliar roads without consulting a map first. The map is
not just for finding any valid route but evaluating all the possible routes and determining the best
one.

You use a map to consider distance (what’s the shortest route) but also the terrain (which route lets
you get there quickest). Winding country roads may take longer to traverse than a straight freeway.

The aim of production planning processes is to find the right route and make sure you have enough
fuel and supplies to get there.

So, once you find the shortest and quickest route you’re ready to set off, right?

Well savvy navigators know there’s more to it than that.

The “best route” can fail from time to time. You could run into a problem in one of your production
planning steps.

You can get through such problems eventually, but at a huge cost of time and fuel. But why not
avoid them in the first place?

Without dynamic production planning processes for your business, your production may have been
going astray without you realizing it.

A clear plan in place standardizes your processes.

You want process consistency to produce your artisan goods with the same quality each time, no
matter if it’s the first or 1000th unit.
When you gain a new team member, they can learn to do things your way much more quickly.

In fact, you don’t have to spend as much time on quality control, as everyone on your shop floor is
playing to the same tune.

Good production planning and process control ensures expert-level quality every week and every
month.

For your customers, this is the difference between a one-time purchase and a lifetime of purchases.

What is the First Step to Planning a Production Process?

They say the first step is always the hardest...

You may know your destination (the finished product), but you need to define how to get there.

This is done with a production map. This is a fancy term for a flow chart that shows every step you
take to create your finished product.

Your production plan is one of the most important of the production planning processes. It shows
every part of your manufacturing fulfillment cycle, including sourcing, machining, wait-times,
processing — everything that goes into your final products.

Don’t focus on amounts, but the processes. The quantities come later, in your BOM.

Your process maps are the foundation of your production planning processes, so really focus on this.
Once you’ve mapped this out, you can start to evaluate how your workshop is set up to fulfill this? Is
everything the best it can be? There may be some illogical steps, such as long transit times between
sub-assemblies which increases your lead times.

Here is a simple process map to get you started. Can you guess the process it represents?

The key to the right shows the basic labels of process mapping, but there are many others like
“inspect” that is necessary for quality control in the production process. Inspection is represented by
a circle.
No matter how simple or complex your product, the process map is one of the most important
production planning processes.

Having your entire production process laid out will make things much clearer when you move on to
materials requirements planning.

Oh, and the above process map? It represents the process of making pasta. The “preparation” label is
to fill the pan with water.

The first decision label asks “Is the water boiling?” If not, you go to the “delay” label and wait until
the condition is fulfilled. Try to fill in the rest yourself, so you get the idea that even quite simple
processes can be mapped out in a lot of detail.

You may have a simple or complex product, but every manufacturer will benefit from effective
process mapping.

You need it to keep you on the straight and narrow when completing the next steps of
your production planning processes journey.

Production scheduling software can help you get started here.

The Next Production Planning Process Steps

Now you know the answer to “what is the first step to planning a production process?”

Your production map shows you the best route to tackling the remaining production planning
processes.

The following steps help you stay on the right track and identify if you are:

— Straying from your predefined production process; or

— Encountering problems such as bottlenecks, supply chain faults, or insufficient resource

management that reduces your order fulfillment cycle time (OFCT).

This is useful as it lets you know when you need to zone back in on your Plan A, or change tack.

1. Define Your Product Recipes

You have defined your processes, now you need to do some Material Requirements Planning
(MRP). The industry-standard way to do this is with a product recipe or bill of materials (BOM).

Each product variation (defined by an SKU) requires its own specific BOM.

Determine the resources consider every possible resource:

 — Human resources (direct and indirect);

 — Machinery and equipment;

 — Direct materials; and

 — Indirect materials.

With an accurate BOM, when an order comes in, you know the exact materials you need. This
information can be used to keep your inventory up-to-date with every order. That’s right, your BOM
is the key to unlocking perpetual inventory — i.e. automatically updated inventory counts in real-
time.
2. Demand Forecasting

Forecasting demand enables effective capacity and production planning.

So how do you do this without a crystal ball?

First, consider your historical sales demand. Even a very limited sales history is useful as it suggests
that demand won’t suddenly spike to thousands of units. Not counting seasonal factors like the
winter holidays, expect your demand to increase gradually.

Once you’ve worked out your average demand, you can use this to work out your expected material
requirements based on a forecast of similar demands.

But what if your demand suddenly spikes?

This is where you apply a safety stock formula to determine the “emergency stock” that will be
sufficient to get you out of a tight spot. Setting up backorder channels is another good emergency
method.

These are the basics, but you can go further. You can invest in Smart Manufacturing Software to
record your sales history so you can make more accurate forecasts.

3. Prioritize Your Inventory

It’s not just how many total units you need to produce.

How much of each product variation will you sell? You need to make sure you have machine and
material availability for these workloads.

This lets you set up MRP for these high-demand SKUs, so you don’t have stock with low turnover
adding to mounting carrying costs.

One law of manufacturing is that demand is not evenly distributed. Top selling items can greatly
outperform the rest.

The ABC or Pareto Approach states that when reviewing your inventory, you should rate your
products from A to C, based on the following:

 — A items (green) are goods with the highest average annual value to your business. They
are your most popular products, the top 10-20%, that make up between 70-80% of your
sales revenue;

 — B items (yellow) are the ones in the middle, with a medium value to your business. They
contribute 15-25% of sales value and make up around 30% of total inventory items; and

 — C items (red) are the items with the lowest value to your business. They may be cool and
unique items but bring in the lowest combined sales income. They account for around 5% of
total sales but make up 50% of your total product inventory.

The trick is to identify which items you stock are A, B, or C items. Once you have done this you can
reduce the associated raw material inventory and floor space requirements for these items.

You can think about adopting just-in-time manufacturing so you don’t have to wade through
mountains of low turnover ratio product on your shop floor.
This is a well-known inventory optimization model known as an ABC or Pareto Analysis graph. It
supposes that most of a manufacturing company’s revenue comes from a minority of their product
variations. The graph above shows that just under 15% of product variations count for 70% of sales
revenue (Item A). The trick is to identify your “A” items and set up your production planning
processes to best serve the manufacture of these products.

4. Monitor and Control

Make sure problems on your shop floor are identified and dealt with straight away. You as a
production planner or operations manager should keep an eye on everything. But you can’t be
everywhere at once: having well-trained staff — and a clear chain of responsibility goes a long way
to excellent floor control.

Having these policies in place will allow you to detect problems like bottlenecks before they become
a major problem.

Once production is underway, you need to monitor and oversee the whole process. You don’t have
to be fixated on every minute detail. This is where having production planning software helps. It can
flag up any problems automatically.

5. Evaluation and Adjustments

Once you’ve made a plan, it shouldn’t be set in stone. It should accommodate adjustments.

You need to keep an eye on how your workshop is performing. One objective way to do this is
with Performance Measurement (PM) metrics that track the implementation of your production
planning processes.

One important metric is throughput. This tracks how much a particular machine produces. You can
use it to track the efficiency of a machine, and when you need to make an adjustment, such as
moving its position in the production process. More major action to be to replace the machine
altogether if you see a throughput drop-off due to wear and tear.

At times it may come to light that a production map you chose that looked great on paper has some
hiccups that you didn’t anticipate.

There’s no shame in that. That’s why we continuously track our production planning processes.

Don’t just consider the schedule for when everything goes to plan. Consider a plan B and C, so you
are never caught short.

Don't Neglect Your Production Planning Processes

Advances in IT and software have not necessarily been taken up by business owners, many of which
are not taking advantage of the tools available to them.

They might take hours to pore over several disconnected spreadsheets, updating them to keep up
with everything going on in their business.

Sometimes it’s easy to get caught up in spreadsheets and fail to think about your customers.

Customers give life to a business. They are the end-point of your products’ journey. They satisfaction
contributes to your reputation.

Customers decide whether a business will be around in 1, 5, or 10 years’ time.

When a customer orders something from your business, you are giving them a promise to deliver
what they ask within the agreed boundaries of time and quality.

Production planning processes make sure you can keep your promises to your customers.

So, everything you do in your business to increase efficiency and productivity should be geared
towards your customers’ satisfaction.

How can you use production planning processes to get your customers what they want, when they
want it?

Perfect Production Planning and Process Control with Katana

Combine your insights and experience with software that keeps you on track.

For example, you don’t have to remember scheduling and planning rules.

You are free to think of the next big thing.

Your production process maps can be disseminated across all team members. Katana is cloud-based
and supports multiple users.
It’s a diamond-edged precision tool to get all your materials, labor, equipment, and sub-
assemblies where they need to be.