Production Planning

for Supply Chain

Chapter 5:
Master Production Scheduling (MPS)

1 MPS-S20
 Resource Sales and operations Demand
Planning planning management

Enterprise Resource Planning (ERP) System

Master production
scheduling Front End

Detailed capacity Detailed material

planning planning
Engine
Material and
capacity plans

Shop-floor Supplier Back end

systems systems

Manufacturing Planning and Control System

2 MPS-S20
MPS

MPS provides basis for:

 Good use of manufacturing resources
 Making customer delivery promises
 Resolving trade-offs between sales and
manufacturing
 Attaining the Firm’s strategic objectives as
reflected in the SOP (Sales & Operations Plan)

3 MPS-S20
What is the MPS?

 The MPS translates the Sales &

Operations Plan (SOP) into a plan for
producing specific products in the
future.
 The MPS is the translation of the SOP
into producible products that make up
the output of a production plant.

4 MPS-S20
MPS-Inputs,Outputs

Demand Management

MPS
Sales & Operations
Planning

Material Capacity
requirements Planning &
Planning Utilization
(MPR)
5 MPS-S20
Conceptional Level

 MPS (which specifies the volume and mix of the

output& timing)
 CONVERTS SOP (which balances supply and
demand)
 Into A Specific Manufacturing
Schedule

6 MPS-S20
Day to Day Basis

 MPS:
 Provides information by which Sales and
Manufacturing are coordinated
 Shows when products will be available – Sales
to promise deliver to customers
 Plan can be used to determine trade-offs when
problem arise that create delivery issues

7 MPS-S20
Operational level . .

 The MPS is developed to be

compatible with the Materials
Requirement Planning (MRP) system
and to provide the information for
coordination with sales.
 The MPS is a statement of planned
future output.

8 MPS-S20
 Resource Sales and operations Demand
Planning planning management

Enterprise Resource Planning (ERP) System

Master production
scheduling Front End

Detailed capacity Detailed material

planning planning
Engine
Material and
capacity plans

Shop-floor Supplier Back end

systems systems

Manufacturing Planning and Control System

9 MPS-S20
MPS – Make to Stock

 Produced in batches (economics of

scale)
 Inventory is finished goods (typically)
 Can run product to semi finished point
 Individualize to customer
specifications
 eg tool manufacturer makes tools for
different brands

10 MPS-S20
MPS – Assemble to Order
 Number of end configurations
 made from sub assemblies and/or
components
 Customer delivery times are shorter than total
manufacturing times
 Start basic sub assemblies and components
into production
 final assembly after order is received
 Controlled by a separate Final Assembly
Schedule (FAS) which is defined at the very last
moment
11 MPS-S20
MPS – Make/Engineer to Order

 NO finished good inventory

 Customers expect to wait for a large portion of
the entire design and manufacturing lead time
 Need product specification and bill of materials
prior to scheduling in the MPS
 Customer can also block out a production
period while specifications/design are being
developed

12 MPS-S20
As a statement of output, the
MPS

 Forms the basic communication

between the market and
manufacturing.

 Is stated in product specification terms

(part numbers) for which there are Bill
of Materials (BOM).

13 MPS-S20
 MPS can be stated in
terms of?

 End-item product units

 Options or modules from which a

variety of end products could be
assembled.

 Numbers of units of an “average” final

product
14 MPS-S20
Conversion of MPS is

 Controlled by a separate Final

Assembly Schedule (FAS) which is
defined at the very last moment.

15 MPS-S20
 Resource Sales and operations Demand
Planning planning management

Enterprise Resource Planning (ERP) System

Master production
scheduling Front End

Detailed capacity Detailed material

planning planning
Engine
Material and
capacity plans

Shop-floor Supplier Back end

systems systems

Manufacturing Planning and Control System

16 MPS-S20
 Basic Master Schedule

1 2 3 4 5 6
Forecast 10 10 10 10 10 10
Available 20 20 20 20 20 20
MPS 10 10 10 10 10 10
On hand 20

17 MPS-S20
18 MPS-S20
19 MPS-S20
20 MPS-S20
21 MPS-S20
Bill of Materials Structuring
for the MPS

 It is an engineering document that

specifies the ingredients (or
subordinate components) required
physically to make each part number
or assembly.

22 MPS-S20
Single-level BOM

 Comprises only those subordinate components

that are immediately required (not the
components of the components).
 Example, Swiss Army Knife. (finished blades,
assembled scissors, polished end plates, etc)

23 MPS-S20
Indented BOM

 Is a list of components, from the end item, down

to the raw materials (it does show components
of the components).
 Example, Swiss Army Knife (finished blade –
sheet metal, machined/hardened/polished,
bushing; scissors – sheet metal,
machined/hardened/polished, spring, bushing)

24 MPS-S20
 Other definitions

 BOM files are those computer records designed to

provide desired output formats.
 BOM Structure relates to the architecture of the
BOM files
 BOM Processor is a computer software package
that organizes and maintains linkages in the BOM
as dictated by the BOM structure.

25 MPS-S20
 More definitions
 Product Structure a company should have one and
only one set of BOM records.
 Low-Level Code number should be designated for
each part, component, subassembly or finished item
in the BOM. These numbers indicate where in the
product structure a particular item is with respect to
the end item.

26 MPS-S20
Modular BOM
for Assemble to Order
 When the combinations of end-item product
are many, it is better to use the MPS at the
option or module level. The MPS is stated in
the terms in which the product is sold not built.
 The most widely used is called the super bill.
(6.14)

27 MPS-S20
28 MPS-S20
 Final Assembly Schedule
(FAS)

 FAS job is to convert MPS records into FAS

records as we roll through time.
 Ideally, this will be done at the last possible
moment in time. There are techniques to
aid this last minute decision – for example,
stocking subassemblies.
 Relates directly to actual customer orders

29 MPS-S20
FAS

30 MPS-S20
 MPS Stability
 A stable MPS translates into stable component
schedules, which means improved performance in
plant operations.
 Too many changes – lower productivity
 Too few changes – lower customer service levels.
 Jumpy MPS leads to customer “nervous” not service!

31 MPS-S20
 Increasing MPS stability
 Strike a balance where stability is monitored and
managed by:
 Use firm planned order treatment for the MPS
quantities
 Frozen time periods for the MPS and
 Time fencing to establish clear guidelines for the
kinds of changes that can be made.

32 MPS-S20
 MPS - Frozen Schedule
 Stable time period in production.
 Time period that no changes to the MPS can be
made.
 In reality, no is extreme, changes can be made but
are increasing difficult closer to present time
(management intervention.

33 MPS-S20
 Time Fencing

 This is an extension of the freeze concept.

 Many companies set time fences that specify periods
in which various types of change can be handled
(company specific).
 Common practice is to have 3 fences.
 Example of fences at 4, 8, 16 weeks
 Beyond 16 weeks, marketing/logistics can make any
changes but must maintain synchronization with
pProduction Plan.

34 MPS-S20
Time Fencing – cont’d
 Between 8-16 weeks, substitution of a end item
for another provided parts/components/material
would be available and Production Plan is not
violated.
 Between 4-8 weeks, MPS is quite rigid, minor
changes made with like items provided
parts/components/material are available.
 Prior to 4 weeks, no changes, difficult to make
changes but not impossible.

35 MPS-S20
Common Fences
 Demand Fence – Planning Fence
 Prior to Demand Fence, the forecast is ignored
in calculating the available, customer orders
matter (difficult to change the MPS).
 Between Demand/Planning Fences,
management trade-offs must be made to make
changes.
 Beyond the Planning Fence the Master
Scheduler can make changes.

36 MPS-S20
 The Master Production
Scheduler

 Its useful to think of the MPS as a set of firm

planned orders (FPO). The scheduler needs to
convert planned orders to firm planned orders and
to manage the “timing” and amounts (quantity) of
the firm planned orders.

37 MPS-S20
 The Job of the Master
Production Scheduler
 Making sure that there is only one unified database for
the MPS, by ensuring:
A) All departments know their responsibility
B) Software package supports time phasing
technique AND data integrity is maintained
C) Launching FAS orders if they are being used
 Measure the effectiveness of the MPS.
 Analyzing trade-offs.

38 MPS-S20
 The Job of the Master
Production Scheduler

 Responsibility for disaggregating the SOP ( $ to Units)

to create the MPS and that the sum of the detailed
MPS matches the SOP.
 Primary responsibility for making any additions or
changes to the MPS records.
 Software does not do it all, judgement is required.

39 MPS-S20
 Managing the MPS
 MPS must be realistic. It cannot be a “Wish List”!
 Production levels must be attainable to hold people
accountable (important to remove all the excuses
for not attaining the performance for which the
proper budget has been provided).
 Significant amount of past due is an indication of a
sick Manufacturing Planning and Control System
(MPC).

40 MPS-S20
 The Overstated MPS
 The overstated MPS erodes belief in the formal
system.
 Key to not overstating the MPS is to force the sum of
the MPS to equal the production plan.
 Manufacturing & Marketing should work diligently to
respond to product mix changes but within the
budget.
 “You want more of this, then less of what do you
want?”.
 Capacity.

41 MPS-S20
 MPS Measures
 Not easy to do (conflicting metrics).
 Measure in concrete terms that reflect the firm’s
fundamental goals: Schedule Attainment (were due
dates met?)
 Measure customer service (hit promised dates,
Quality, etc.) eg. Fill Rate
 Compare production vs. plan
 Keep records of backorder supply time to improve
them.
 Company specific.

42 MPS-S20