WHAT IS MASTER PRODUCTION

SCHEDULE?
The Master Production Schedule (MPS) is a plan for the production of individual
final items. The MPS breaks down the production plan to show, in each period,
the quantity to produce of each final article.
Each final article is also called Stock Keeping Unit, usually using its acronym
SKU. The Master Production Program, which is developed over a period of time,
is called the planning horizon. The planning horizon generally extends between
3 and 18 months, depending on the manufacturing cycles of the item in
question.
The information or input data feeding the MPS is the following:

1. Aggregate production plan, in product units

2. The forecast of each final article, in product units
3. The current order portfolio
4. The stock inventory level
5. The available production capacity
The MPS must be verified at any time against the capacity constraints of the
most critical resources. This process is called Rough-Cut Capacity Planning
(RCCP). The RCCP identifies any instance of unfeasibility of production before
the plan is operational. It is recommended to evaluate its manufacturing
feasibility during the planning horizon. Once the MPS has been executed, the
planner will carry out the plan for the next period.
The planning horizon should be as long as the longest cumulative delivery time
plus a future visibility period. The cumulative delivery time is the longest period
of time required to carry out the manufacturing activities of the product. It can
be determined by the product time structure (BOM), looking for the longest
performance time for each production step.
How is the MPS used in Manufacturing
Company?
Considering today’s complexity in manufacturing, the MPS helps to decide:

• What to produce
• What batch sizes
• When to produce
• What sequence to adopt
To successfully implement an MPS, it must be understood that its purpose is not to state the
quantities and delivery times of the products. The MPS is in fact a solid contract between
Sales and Production. The MPS defines what Production will produce, and it’s not a forecast
at all.
How is the MPS used in Manufacturing
Company?
There are manufacturing variables that the planner has to consider when running the MPS.
These variables are:

1. Batch criteria
2. Sequence constrains
3. Set-up times
4. Capacity over-saturation
Benefits of working with the MPS
There are multiple benefits when a manufacturing business introduces an MPS. They are
described below:

• It provides a solid base to build, improve and track the sales forecast.
• It provides a solid base to determine the desired inventory levels.
• It provides a solid base to calculate the quantities of parts, subcomponents or raw
materials to buy or produce, as part of the MRP next stage.
• It provides a solid base for calculating the required amount of labor and shifts, as part of
the MRP next stage.
• It allows optimizing the installed capacity and balancing the load of the plant.
Benefits of working with the MPS

• Manufacturing can estimate the production and maintenance costs associated with the
work centers.
• The financial department of the company can get income and expenses, derived from
the MPS and generate a forecast of the cash flow in the company. It will help to build
other financial statements, such as the Balance sheets, Profit and Loss statements, and
the investment plans.
• The Department of Human Resources can take advantage of the MPS to anticipate the
requirements of hiring labor.
Benefits of working with the MPS

The MPS should reflect the business plan as closely as possible. This requires a constant
update by all departments of the company. If the Marketing department plans a sales
promotion, the increase in demand must be reflected in the MPS and the forecast. If the
sales team discourages the sale of a product line in favor of another new created line, the
MPS and the forecast will be adjusted.

The MPS helps the Marketing and Sales departments when they embark on a promotional
campaign. Thanks to this resource, it’s possible to discuss and confirm the actual plan with
the Planning department.
Benefits of working with the MPS
The fact of achieving a high level of collaboration between the different departments of the
company is, in itself, a great benefit. The MPS sets the basis for creating the Material
Requirements Plan (MRP). The MRP operates at a higher level of detail, both in time and in
item breakdown.

Remember that the MRP breaks down each item into its components or parts. Purchasing
and Production departments may find possible to meet additional demand for products.
They will be able to find enough quantities of the components and sub-assemblies needed
for the product manufacturing.

You can download a free master production schedule here.

The difference between MPS and
Production Scheduling

The term Master Planning comes from the recursive process of optimization. It means that
the quantities to be produced of each unit are defined based on the aforementioned inputs
and constraints. The final result will be the Production Master Plan. This plan will not be
static, but renew weekly or monthly.

Remember that MPS involves planning, and it’s much more than simply scheduling.
The difference between MPS and
Production Scheduling
Scheduling just gives answers to when, typically setting a timeline, in chronological order
things to be done. The typical example is when a person schedules things to do. This will
include the list of activities using a calendar and sometimes describing who will take
responsibility.

Instead, the MPS involves planning activities and many categories, departments, resources
and people. These categories can be broken down in higher levels of detail and deliver to
multiple team members. Finally, the team members will coordinate and work simultaneously
to achieve a common business goal.
The difference between MPS and
Production Scheduling
On the other hand, consider that MPS is not the same as Production Planning (PP). Production
Planning is a previous stage that defines the levels of production at higher levels and fewer
details. They determine the amount of production in terms of families, not individual items.

For example, the PP will define the amount of chairs to be produced while the MPS will consider
individual SKUs. The planning horizon in the case of PP is also the middle term, from 6 months
up to 24 months. The PP helps determining the required resources and determines the inventory
levels at higher levels.

It’s a powerful plan for the top management in which they can have visibility of the business from
the manufacturing point of view.
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production-schedule/

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