2012 Spring:: Production Planning

Ch 5. Master Production Schedule

Ch 5. Master Production Schedule 5.1 5.2 5.3 5.4 5.5 MPS Activity Techniques BOM Final Assembly Schedule Company Examples

Textbook: Ch. 6 by Vollmann

Ch 5. Master Production Schedule -2-

Introduction (1/2)

The master production scheduling (MPS) activity: What is the

role of master production scheduling in manufacturing planning and control?

Master production scheduling techniques: What are the basic

MPS tasks and what techniques are available to aid this process?

Bill of materials structuring for the MPS: How can nonengineering uses of the bill of materials assist the master production scheduling function?

Ch 5. Master Production Schedule

Introduction (2/2)

The final assembly schedule: How is the MPS converted into a

final build schedule?

The master production scheduler: What does a master

production scheduler do and what are the key organizational relationships for this position?

Company examples: How do actual MPS systems work in practice? Master production schedule stability: How can a stable MPS be
developed and maintained? and controlled?

Managing the MPS: How can MPS performance be monitored

Ch 5. Master Production Schedule

5.1. MPS Activity

MPS
Translates SOP into a plan

SOP
Provides an aggregate statement of the manufacturing output required to reach company objectives. Role: balance supply and demand volume.

for producing specific products in the future. Role: specify the mix and volume of the output, and the completion time. Input: demand forecast, product specification (BOM) Measure: unit, not dollar.

Ch 5. Master Production Schedule

5.1.1 Business Envir. For MPS

MTS
Produces in batches, carries finished good inventory.

MTO or ETO
No finished good inventory,
Large number of production configurations,

ATO
Limitless number of end item configurations

Ch 5. Master Production Schedule

5.2. MPS techniques

Time-phased record
show relationships between production output, the "forecast" (derived

from the SOP), and expected inventory balance.

Plan revision through rolling through time. Process for promising delivery to customers.

Ch 5. Master Production Schedule

5.2.1 Time-phased record (1/3)

MPS Example
1 10 20 10 20 2 10 20 10 3 10 20 10 4 10 20 10 Week 5 10 20 10 6 10 20 10 7 10 20 10 8 10 20 10 9 10 20 10 10 10 20 10 11 10 20 10 12 10 20 10

Forecast Available MPS On Hand

Quantity and time of completion of production.

Projected available inventory balance. Available(i) = available(i-1) MAX {forecast(i), order(i)} + MPS(i) Minus value => backorder A tolerance errors that buffers production from sales variations.

Ch 5. Master Production Schedule

5.2.1 Time-phased record (2/3)

Level production for seasonal sales
Forecast Av ailable MPS O n Hand 1 5 25 10 20 2 5 30 10 3 5 35 10 4 5 40 10 Week 5 5 45 10 6 5 50 10 7 15 45 10 8 15 40 10 9 15 35 10 10 15 30 10 11 15 25 10 12 15 20 10

Chase sales production

Forecast Av ailable MPS O n Hand 1 5 20 5 20 2 5 20 5 3 5 20 5 4 5 20 5 Week 5 5 20 5 6 5 20 5 7 15 20 15 8 15 20 15 9 15 20 15 10 15 20 15 11 15 20 15 12 15 20 15

Lot production (order point = 5 units)

Forecast Av ailable MPS O n Hand 1 5 15 20
Ch 5. Master Production Schedule 9

2 5 10

3 5 5

Week 4 5 5 5 30 25 30

6 5 20

7 15 5

8 15 20 30

9 15 5

10 15 20 30

11 15 5

12 15 20 30

5.2.1 Time-phased record (3/3)

Level production for seasonal sales Lot production
40

30 40

20 20

10

0 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Cycle stock

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10

5.2.2 Rolling through time

Rolling through time

requires updating the record to define how the MPS reflects actual

conditions. It's necessary not only to construct the MPS but also to process actual transactions and modify the MPS. 1. Forecast revision (actual sales = 10 instead of 5 units)
Forecast Actual sales Av ailable MPS O n Hand 1 5 10 10 20 2 10 0 10 3 10 -10 W eek 4 5 10 10 10 30 0 6 10 -10 7 15 -25 8 15 -10 30 9 15 -25 10 15 -10 30 11 15 -25 12 15 -10 30 13 15 -25

2. MPS revision
Forecast Actual sales Av ailable MPS O n Hand 1 5 10 10 20 2 10 30 30 10 3 10 20 W eek 4 5 10 10 10 30 30 6 10 20 7 15 5 8 15 20 30 9 15 5 10 15 20 30 11 15 5 12 15 20 30 13 15 5

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11

5.2.3 Order promising

Available-to-promising (ATP): the remaining amount after the on-

hand inventory covers all existing customer orders until the next scheduled MPS.
Week 4 5 5 5 30 30 30 25

Order promising example at week 1

Forecast Order Av ailable ATP MPS On Hand 1 5 5 15 10 20 2 5 3 10 3 5 2 5 6 5 20 7 15 5 8 15 20 30 30 9 15 5 10 15 20 30 30 11 15 5 12 15 20 30 30

Order promising example at week 2

1 Forecast 5 Actual shipment 10 Orders 5 Av ailable 10 ATP MPS On Hand 20 2 10 5 30 28 30 10 3 10 5 20 4 10 2 10 5 10 6 10 7 15 8 15 9 15 10 15 11 15 12 15

30 30 30

20

20 30 30

20 30 30

20 30 30

Ch 5. Master Production Schedule

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5.2.4 Consuming the forecast

Richard Ling
actual customer orders consume the forecast. Forecast for week 2 = 10, Order = 5.

Example

Can accept all orders 1 to 3, and part of order 4.

Order Number 1 2 3 4

Amount 5 15 35 10

Desired Week 2 3 6 5

Since cumulative ATP is 58 for weeks 2 through 6, only 3 units of order #4

could be shipped in this period. So, delivery date for order 3 is changed to 8 week.
1 5 10 10 2 10 10 30 8 30 10 3 10 20 10 3 30
Ch 5. Master Production Schedule 13

Forecast Orders Av ailable ATP MPS On Hand

4 10 2 0

5 10

6 10 35 20 -15 0 30

Week 7 8 9 10 11 12 13 14 15 15 15 15 15 15 15 15 10 -30 -15 -30 -15 -30 -15 -30 -45 20 30 30 30 30 30

20

1 Forecast 5 Actual shipment 10 Orders 5 Av ailable 10 ATP MPS On Hand 20

2 10 5 30 28 30 10

3 10

Week 4 5 10 10

6 10

7 15

8 15

9 15

10 15

11 15

12 13 15 15

5 20

15

2 10

10
30 30 30

35
20 5 20 30 30 5 20 30 30 5 20 30 30 5

Order Number 1 2 3 4
1 5 10 10

Amount 5 15 35 10
2 10 10 30 8 30 10 3 10 20 10 3 30 4 10 2 0

Desired Week 2 3 6 5
5 10 6 10 35 20 -15 0 30 Week 7 8 9 10 11 12 13 14 15 15 15 15 15 15 15 15 10 -30 -15 -30 -15 -30 -15 -30 -45 20 30 30 30 30 30

Forecast Orders Av ailable ATP MPS On Hand

20

Ch 5. Master Production Schedule

- 14 -

5.3 Bill of Material

BOM
an engineering document that specifies the ingredients or subordinate

components required physically to make each part number or assembly.

single-level BOM comprises only those subordinate components that are

immediately required, not the components of the components.

indented BOM is a list of components, from the end item all the way

down to the raw materials; it does show the components of the

components.
Numbering convention: level 0 for end item

Ch 5. Master Production Schedule

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An Example BOM

Ch 5. Master Production Schedule

16

Modular BOM
Conflicts
A key use of bill of materials files is in translating the MPS into

subordinate components requirements.

One bill of materials structure or architecture calls for maintaining all

end-item buildable configurations.

Engineering BOM Production BOM = modular BOM

Master scheduling may be made easier by using modular bills, but order

entry tasks are more complex since each option must be evaluated.

Ch 5. Master Production Schedule

17

The Planning BOM

Planning BOM
is any use of BOMs approaches for planning only, as opposed to use for

building the products.

Modular BOM is one form of a planning bill.

Super Bill
describes the related options or modules that make up the

average end item;

is as much a marketing tool as a manufacturing tool.

For example, an average GM J-body car might have 0.6 Chevrolet unique

parts, 2.6 doors, 4.3 cylinders, 0.4 air conditioners, and the like.
The forecast is now stated in terms of total average units, with attention given

to percentage breakdowns and to managing module inventories by using

available-to-promise logic on a day-to-day basis as actual customer orders

are booked.
Ch 5. Master Production Schedule 18

Example of Super Bill

XX Co. makes rototillers
Horsepower: 3 HP, 4 HP, 5 HP; Drive train: Chain, gear; Brand name: Taylor,

Garden Till, OEM. ( 18 rototillers) 1,000 4-HP super bill units -> 1,000 common parts, 600 gear options, 400 chain options, 400 Taylor options, 500 Garden-Till options, and 100 OEM options.

Safety stock is used to absorb the variations in the mix.

The same quantity of material

for common part is ordered and used. For example, in gear options, 1,000 super bill -> materials for 600 gear options are ordered, & 750 units of gear options can be promised or shipped. 4-HP Super Bill
Ch 5. Master Production Schedule 19

Example of Super Bill

Order entry
To accept a customer order, the available-to-promise logic must

be applied to each option in the order, meaning it's necessary to check each of the affected modules.

Ch 5. Master Production Schedule

20

5.4. Final Assembly Schedule

Difference between MPS and FAS
MPS represents an anticipated build schedule; FAS is the actual build

schedule.
MPS disaggregates the production plan into end items, options, or

groups of items; FAS is the last disaggregation.

MPS generally incorporates forecasts or estimates of actual customer

orders in its preparation, with actual orders thereafter imperfectly consuming these forecasts; the FAS represents the last possible adjustment that can be made to the MPS.

Ch 5. Master Production Schedule

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Hill-Rom FAS
Hill-Rom Co. Example
Manufacturing Lead Time = 20 weeks MPS for 19 parts

must be maintained over at least this time horizon. 160 end-item possibilities

Over-Bed Table Super Bill

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22

MPS lead time: 20wk

FAS lead time: 4wk

Comm.

Top 1

622M

BC1 BC4 BC1 BC4 BC1 BC4 BC1 BC4

623M

Top 2 622M

623M

160 end items

Top 10

622M

BC1

Ch 5. Master Production Schedule - 23 -

FAS Example
19 time-phased MPS records for week 5 to at least 20, plus 160 time-

phased FAS records for each end item for weeks 1 through 4. Order Promising

FAS for one end-item out of 160 For urgent order 200, when to deliver? 120+50-10 160+50-200

Ch 5. Master Production Schedule

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MPS Example
Order 200 units in week 6

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ATP logic

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5.5 Company Example

Ethan Allen Co.:

furniture, 14

geographically dispersed factories, 980 consolidated item numbers. Load jobs with the small priority first. Priority = available / demand

Ch 5. Master Production Schedule

27

TPOP Example

Time-phased order point

Ch 5. Master Production Schedule

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