What is the purpose of the master production plan or master production schedule?

What is a Master Production Schedule?

The master production schedule (MPS) is a production plan that states which products will be manufactured, as well as their amounts and start dates. Maintaining the schedule can be difficult, since the scheduler has to balance the conflicting goals of producing enough for actual customer orders, while also producing sufficient additional inventory to cover anticipated customer demand. The scheduling chore is further complicated when there are raw material shortages, lengthy ordering lead times for raw materials, bottlenecks in the production process, equipment failures, and reduced staffing situations.

Advantages of a Master Production Schedule

When an MPS is properly managed, it can minimize both finished goods shortages and the expediting of orders through the production process, while also minimizing overtime, machine usage, and expedited freight charges. A well-managed MPS should be able to do the following:

• Act as the guiding document for the management of the manufacturing function.

• Be the link between overall business planning and detailed production operations.

• Allow for the issuance of reliable delivery commitments to customers.

• Enhance the efficiency of the manufacturing process.

• Assist in the planning of how available production capacity will be used.

Contents of a Master Production Schedule

An MPS is presented in tabular format, and contains the following information:

• Demand forecast. This is the company’s best estimate of the amount of customer demand for its products.

• Allocated. This is actual customer orders that have been accepted into the system.

• Reserved. This is production slots reserved by management, on the expectation that actual customer orders will be received.

• Unplanned. This is production slots for unexpected customer orders that were not included in the demand forecast.

• Net demand. Within the time fence, this is a subtotal of the allocated, reserved, and unplanned line items. Outside of the time fence, this is the demand forecast.

• Firm planned orders. This is orders that have already been released to the production floor, and so only appear near the beginning of the MPS.

• Planned orders. This is orders that have been automatically calculated by the planning system, or which have been manually entered into it. They usually appear in the MPS for periods after which firm planned orders have already been stated. The formula for a planned order is:

Safety stock + Net demand – Projected available balance (prior period) – Firm planned orders

= Planned orders

• Projected available balance. This is the projected number of available units. The formula for the projected available balance is:

Projected available balance (prior period) + Planned orders + Firm planned orders – Net demand

= Projected available balance

• Available to promise. This is the number of units available for new customer orders.

A master production schedule (MPS) is a plan for individual commodities to be produced in each time period such as production, staffing, inventory, etc.[1] It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded.[2] This plan quantifies significant processes, parts, and other resources in order to optimize production, to identify bottlenecks, and to anticipate needs and completed goods. Since a MPS drives much factory activity, its accuracy and viability dramatically affect profitability. Typical MPSs are created by software with user tweaking.

Due to software limitations, but especially the intense work required by the "master production schedulers", schedules do not include every aspect of production, but only key elements that have proven their control effectivity, such as forecast demand, production costs, inventory costs, lead time, working hours, capacity, inventory levels, available storage, and parts supply. The choice of what to model varies among companies and factories. The MPS is a statement of what the company expects to produce and purchase (i.e. quantity to be produced, staffing levels, dates, available to promise, projected balance).[1][3]

The MPS translates the customer demand (sales orders, PIR’s), into a build plan using planned orders in a true component scheduling environment. Using MPS helps avoid shortages, costly expediting, last minute scheduling, and inefficient allocation of resources. Working with MPS allows businesses to consolidate planned parts, produce master schedules and forecasts for any level of the Bill of Material (BOM) for any type of part.

How an MPS works[edit]

By using many variables as inputs the MPS will generate a set of outputs used for decision making. Inputs may include forecast demand, production costs, inventory money, customer needs, inventory progress, supply, lot size, production lead time, and capacity. Inputs may be automatically generated by an ERP system that links a sales department with a production department. For instance, when the sales department records a sale, the forecast demand may be automatically shifted to meet the new demand. Inputs may also be inputted manually from forecasts that have also been calculated manually. Outputs may include amounts to be produced, staffing levels, quantity available to promise, and projected available balance. Outputs may be used to create a Material Requirements Planning (MRP) schedule.

A master production schedule may be necessary for organizations to synchronize their operations and become more efficient. An effective MPS ultimately will:

• Give production, planning, purchasing, and management the information to plan and control manufacturing[3]
• Tie overall business planning and forecasting to detail operations[3]
• Enable marketing to make legitimate delivery commitments to warehouses and customers
• Increase the efficiency and accuracy of a company's manufacturing
• Rough cut capacity planning

MPS issues:

• Width of the time bucket
• Planning horizon
• Rolling plan
• Time fencing
• Schedule freezing

Production plan[edit]

An example of a master production schedule for "product A".

See also[edit]

• Material Requirements Planning
• MRP II
• Scheduling
• ERP
• Manufacturing
• Available-to-promise

References[edit]

1. ^ a b J E Beasley. "Master production schedule". Retrieved 2009-04-11.
2. ^ Kinney, Aric. "Production Planning Process & SCM"
3. ^ a b c "Brief information on how a Master Production Schedule works". Timly Software AG. Retrieved 2022-07-19.

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