9/1/2015

IntroductionMaterialManagement
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M&DCPurchasing&SupplyChain:MaterialManagement

Master Scheduling

IntroductiontoMaterialManagement

MasterScheduling

Contents

MaterialRequirementsPlanning
CapacityManagement

1.

Introduction

2.

Definition

3.

Objectives

Purchasing

4.

PurposesofMPS

Forecasting

5.
6.

InputsforMPS

ProductionActivityControl

InventoryFundamentals
OrderQuantities

1.Introduction

IndependentDemandOrderingSystems

MasterproductionscheduleMPSisthenextstepinMPCthemanufacturingplanningandcontrol
PhysicalInventoryandWarehouseManagement process
PhysicalDistribution

MPSisameansofCommunication,aLinkorContractbetweenMarketingandManufacturing.
TheMPSreportincludesanATPAvailabletoPromisefiguretoenablerealistic,achievable
deliverypromisestobemadetocustomers.
Itisaplanofwhatistobeproducedandwhen
Itisanagreeduponplanbetweenmarketingandmanufacturing.
TheMPSisaPriorityPlanforManufacturing.
Itisnotmeanttoberigid.Itisthebasistomakechangesthatareconsistentwiththe
demandsofthemarketplaceandthecapacityofmanufacturing.

ItbreaksdownthePPintotheRequirementsforIndividualEndItems,ineachfamily,bydate
andquantity.
ThesumofallFamilyMPSitemsmustequaltheagreedSOPSalesandOperationsPlanforthat
Familyovereachplanningperiod(normallyamonthor4weekperiod).
MPSapplicationusuallydependsonproductionenvironment(MTS,ATO,andMTO)

TheMPSdrivestheMaterialRequirementsPlanMRP
ItemsplannedattheMPSlevelareexplodedbyMRPtoproducethedetailmaterialandcapacity
requirements.
Asascheduleofitemstobebuilt,theMPSandBOMBillsOfMaterialdeterminewhat
componentsareneededfrommanufacturingandpurchasing.

2.Definition
TheMPSisalineonthemasterschedulegrid(MPSMatrix)thatreflectstheanticipated
buildscheduleforthoseitemsassignedtothemasterscheduler.
Themasterschedulermaintainsthisschedule,andinturn,itbecomesasetofplanning
numbersthatdrivesMRPMaterialRequirementsPlanning.
Itrepresentswhatthecompanyplanstoproduceexpressedinspecificconfigurations,
quantities,anddates.
TheMPSisnotasalesitemforecastthatrepresentsastatementofdemand.
TheMPSmusttakeintoaccounttheforecast,theproductionplan,andotherimportant
considerationssuchasbacklog,availabilityofmaterial,availabilityofcapacity,and
managementpoliciesandgoals.(APICS)

3.Objectives
MPSObjectiveistoBalancetheDemand(Priorities)setbythemarketplacewiththeavailability
ofmaterials,labor,andequipment(Capacity)ofmanufacturing.
TheObjectiveindevelopinganMPSare:
toMaintainthedesiredlevelofCustomerServiceby

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maintainingfinishedgoodsInventoryLevelsor
bySchedulingtomeetcustomerdeliveryrequirements,
tomakethebestuseofmaterial,labor,andequipment,and
tomaintaininventoryinvestmentattherequiredlevels.
Constraintstheplanmustbewithinthecapacityofmanufacturing,andbewithintheguidelinesof
theproductionplan.

4.PurposesofMPS
DevelopmentofMasterProductionSchedule(MPS)
ProjectsInventory/Backloglevels
DrivesDetailedScheduling&planning
OrderPromising
AssistsinassigningjobPrioritiesonFacilityfloor

5.InputsforMPS
TheInformationNeededtodevelopanMPSisprovidedby:
TheProductionPlanPP,
Forecastsforindividualenditems,
ActualOrdersreceivedfromcustomersandforstockreplenishment,
InventoryLevelsforindividualenditems,and
CapacityRestraints

MoreDetailed
InventoryLevelandTargets(forMTS)
BacklogLevelsandTargets(forATO)
TimeFencepolicies
Interplantandintraplantorders
Servicepartsordersandforecasts
DistributionRequirements
PlanningBillsOfMaterialsBOM
Actualproductionandsupplylevels

6.Outputs
MasterProductionScheduleMPS
ProjectInventorylevelsPAB(forMTS)
ProjectedBackloglevels(forATO)
FutureavailabilityofproductsATP
Informationforpromisingfuturecustomerorders

7.Constraints
SumofMPSMasterProductionSchedulequantitiesequalsPPProductionPlan.
Efficientallocation,recognizing
SetupCostsand
InventoryHoldingCosts.
CapacityLimitations

8.RelationshiptoProductionPlanPP(AggregatePlanning)
MPSistheBridgebetweenthestrategicplanexpressedasthePPProductionPlan(aggregate
planningprocess)andtheexecutionofthatplanthroughdetailedmaterialandcapacityplans.
MPStakesInputfromPPProductionPlan.
MPSDisaggregatesthePPProductionPlan

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MPSisstatedinitems(enditem,enditemgroups,options)inordertofigureouttheMaterialsand
Capacityneeds.

AggregatePlan

MasterScheduling

Objective

SupplyRatebyProductFamily

AnticipateBuildSchedule

ItemPlanned

ProductFamily

EnditemorPlanningofBOM

PlanningHorizon

LongestleadtimeResource

LongestcumulativeleadtimeforEndItems

Constraints

Resourcecapacity

Criticalworkcenters

TimePeriods

Monthly

Weeklyormonthly

PlanningFocus

Productvolume

ProductMix

Processoutput

ProductionPlanPP

MasterProductionScheduleMPS

ExampleProblem
1.ProductionPlan:Familyoftwoproducts

Week
Forecast
Projected
Available
ProductionPlan
GivenData

500

1
300

2
350

3
300

4
250

Total
1200

450
250

350
250

300
250

300
250

1000

TotalProductionPlan=TotalForecast+EndingInventoryBeginningInventory
TotalProductionPlan=1200+300500=1000Unit
ProductionPlanperWeek=1000/4=250Unit
ProjectedAvailable=ProductionPlan+PreviousProjectedAvailableForecast
ProjectedAvailable1=250+500300=450Unit
ProjectedAvailable2=250+450350=350Unit
ProjectedAvailable3=250+350300=300Unit
ProjectedAvailable4=250+300250=300Unit

2.MasterSchedule:ProductA

Week
Forecast
Projected
Available
ProductionPlan
GivenData

200

1
200

2
300

3
100

4
100

Total
700

250
250

200
250

100

100
100

600

TotalProductionPlan=TotalForecast+EndingInventoryBeginningInventory
TotalProductionPlan=700+100200=600Unit
ProjectedAvailable=ProductionPlan+PreviousProjectedAvailableForecast
ProjectedAvailable1=250+200200=250Unit
ProjectedAvailable2=250+250300=200Unit
ProjectedAvailable3=0+200100=100Unit
ProjectedAvailable4=100+100100=100Unit

2.MasterSchedule:ProductB

Week
Forecast
Projected
Available
ProductionPlan
GivenData

300

1
100

2
50

3
200

4
150

Total
500

200

150

200
250

200
150

400

TotalProductionPlan=TotalForecast+EndingInventoryBeginningInventory
TotalProductionPlan=500+200300=400Unit
ProjectedAvailable=ProductionPlan+PreviousProjectedAvailableForecast
ProjectedAvailable1=0+300100=200Unit
ProjectedAvailable2=0+20050=150Unit
ProjectedAvailable3=250+150200=200Unit
ProjectedAvailable1=150+200150=200Unit

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9.DevelopingaMasterProductionSchedule
a.

DevelopaPreliminaryMPS.

b.

CheckthepreliminaryMPSagainstCriticalavailablecapacityinthePotentially
ConstrainingWorkCenter(RoughCutCapacityPlanning)RCCP

c.

ResolvedifferencesbetweenthepreliminaryMPSandcapacityavailability.

a.PreliminaryMasterProductionSchedule
Onhand=80units
Lotsize=100units

Period
Forecast
ProjectedAvailable
MPS

80

1
60
20

2
60
60
100

3
60
0

4
60
40
100

5
60
80
100

6
60
20

IfPreviousProjectedAvailableForecastThenMPS=0
IfPreviousProjectedAvailable<ForecastThenMPS=100

ProjectedAvailable=PreviousProjectedAvailable+MPSForecast
ProjectedAvailable1=80+060=20
ProjectedAvailable2=20+10060=60
ProjectedAvailable3=60+060=0
ProjectedAvailable4=0+10060=40
ProjectedAvailable5=40+10060=80
ProjectedAvailable6=80+060=20

b.RoughCutCapacityPlanningRCCP
CheckswhethercriticalresourcesareavailabletosupportthepreliminaryMPS
Criticalresourcesmayinclude:
Bottleneckoperations
Labor
Criticalmaterials
Itissimilartoresourcerequirementsplanningusedintheproductionplanningprocess,exceptwe
nowworkwithaproductandnotafamilyorproducts.
Theresourcebillisforasingleproduct

ExampleProblem
MasterProductionSchedule

Week

Total

ProductA
ProductB

40

25

40

15

120

20

10

30

20

80

4
7.5
24
31.5

Total
60
96
156

ResourcesBillforBottleneckWorkCenterWC20

workCenter
WC20

HoursperUnit
A
B
0.5
1.2

Answer:RequiredCapacityinworkinghoursonWC20

Week

A
B
TotalHours

1
20
24
44

2
12.5
12
24.5

3
20
36
56

c.ResolutionofDifferences
Comparethetotaltimerequiredtotheavailablecapacityoftheworkcenter.
Ifavailablecapacityisgreaterthantherequiredcapacity,theMPSisworkable.
Ifnot,methodsofincreasingcapacityhavetobeinvestigated
overtime,
additionalworkers,
routingthroughalternateworkcenters,or
subcontracting
Ifnot,revisetheMPSanddecreasedemand

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10.EvaluatingtheMPS
ResourceUse:
IstheMPSwithincapacityrestraintsineachperiod?
CustomerService:
Willduedatesbemet?
Willdeliveryperformancebeacceptable?
Cost
Istheplaneconomical?
Willexcesscostsbeincurred?
OT,subcontracting,expediting,transportation,etc.

11.MasterScheduleDecisions
a.MPSDecisionLevel
Iftoomanyitemsareincluded,itwillleadtodifficultiesinforecastingandmanagingtheMPS.
IneachoftheManufacturingEnvironmentsMakeToStockMTS,MakeToOrderMTO,and
AssembleToOrderATOMasterschedulingshouldtakeplacewherethesmallestnumberof
productoptionsexists

b.DifferentMPSenvironments
MTSMakeToStockproducts"A"Structure

Alimitednumberofstandarditemsareassembledfrommany
components.
Televisionsandotherconsumerproductsareexamples.
TheMPSisusuallyascheduleoffinishedgoodsitems.
FocusonForecasting,ServiceLevel,fillrate(unit,line,
ororderfillrate)andResourceUtilization.
UseManufacturingBasedMPSMatrix(finishedproductslevel)
Itemno:

Description:

20

OnHand

LeadTime:

2 periods

DemandTimeFenceDTF:

SafetyStock

PlanningTimeFencePTF:

50

LotSizing:

PTF

DTF

3
8

Period

10

11

Forecast

20

21

20

22

24

26

28

28

25

25

20

CustomerOrders

19

20

21

21

25

24

20

18

16

12

10

31

10

38

13

37

31

31

ProjectedAvailableBalancePAB

20

AvailableToPromise

CumulativeAvailabletoPromise

MasterProductionSchedule

10
50

14

50

16

20

50

36

50

11
28
64

50

MTSMakeToOrderproducts/ETOEngineerToOrder"V"Structure
Manydifferentenditemsaremadefromasmallnumberof
components.
Customtailoredclothesareanexample.
TheMPSisusuallyascheduleoftheactualcustomer
orders.
FocusonDeliveryTimeandProductOption
UseGrossRequirementsMPSMatrixisBasedonRaw
Material(SingleLevelMPSRecordProcessing)

ProductA
Grossrequirements
Scheduledreceipts

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Period
1
2
3
4
5
6
30 30 30 30 30 30
30

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Projectedavailablebalance 50 50 20
Plannedorderrelease

Q=lotforlotLT=0SS=10

10
20

10
30

10
30

10
30

ATOAssembleToOrderproducts."X"Structure
Manyenditemscanbemadefromcombinationsof
basiccomponentsandsubassemblies.
Wehaveverysmallamountofmodulesenablealarge
amountofendproducts.
Insteadofendproducts,fewermodules(options)are
forecastedandcontrolled.
Throughthis,betterforecastaccuracyisachieved.
FocusonDeliveryTimeandProductOption,
Forecasting,ServiceLevel,fillrate(unit,line,or
orderfillrate)andResourceUtilization
UseTowLevelMPSMatrix
Examplecompanymanufacturespaintfromabasecolorandaddstintstoarrivetomanyfinal
colors.
Productionisplannedatthelevelofthebasecolorandthetentints.
Onceacustomer'sorderisreceived,thebasecolorandtherequiredtintscanbecombined
(assembled)accordingtotheorder.

Family

Week
S&OP
CustomerOrders
ATP

40

40

40

40

20

16

12

10

18

28

40

Itemno:

LeadTime:

Description:

Buffer:

DemandTimeFence
DTF:

PlanningTimeFenceDTF:

LotSizing:

LFL

Week

ItemForecast
ProductForecast=60%S&OP
ActualDemand=60%CarCO
TotalDemand
ProjectedAvailableBalance
PAB
0
AvailableToPromise
CumulativeAvailabletoPromise
MasterProductionSchedule

PTF

2
6

c.Finalassemblyschedule(FAS).
Thisisascheduleofwhatwillbeassembled.
It is used when there are many options and it is difficult to forecast which combination the
customerswillwant.
Masterproductionschedulingisdoneatthecomponentlevel
Thefinalassemblytakesplaceonlywhenacustomerorderisreceived.
TheFASschedulescustomerordersastheyarereceivedandisbasedonthecomponents planned
intheMPS.
ItisresponsibleforschedulingfromtheMPSthroughfinalassemblyandshipmenttothecustomer.

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Theplanninghorizonisthetimespanwhichcoversaperiodatleastequaltothetimerequiredto
accomplishtheplan(seefigure3.5).Theplanninghorizonisusuallylongerbecausethelongerthehorizon,
thegreaterthevisibilityandthebettermanagementsabilitytoavoidfutureproblemsortotakeadvantage
ofspecialcircumstances.Asaminimum,theplanninghorizonforafinalassemblyschedulemustinclude
timetoassembleacustomersorder.Itdoesnotneedtoincludethetimenecessarytomanufacturethe
components.ThattimewillbeincludedintheplanninghorizonoftheMPS.

8.PlanningHorizon
Theamountoftimethemasterscheduleextendsintothefuture.Thisisnormallysettocovera
minimumofcumulativeleadtimeplustimeforlotsizinglowlevelcomponentsandforcapacity
changesofprimaryworkcentersorofkeysuppliers.AIPCS

PlanningHorizon>MinimalCumulativeLeadPlanningHorizon>MinimalCumulative
LeadTime
Minimum=Manufacturingleadtime(=Cumulativeleadtime)
Planninghorizonisusuallylongertoallowvisibility
Insidethecumulativeleadtimeordersareconsideredasfirm,i.e.changescanonlybe
madeafterthoroughanalysis

ProductionPlanning,MasterScheduling,andSales
Theproductionplanreconcilestotalforecastdemandwithavailableresources.
TheMPSisbuiltfromforecastsandactualdemandsforindividualenditems.It
reconcilesdemandwiththeproductionplanandwithavailableresourcestoproducea
planthatmanufacturingcanfulfill.TheMPSisaplanforwhatproductioncanandwill
do.
Inamaketostockenvironment,customerordersaresatisfiedfrominventory.
However,inmaketoorderorassembletoorderenvironments,demandissatisfied
fromproductivecapacity.Salesanddistributionneedtoknowwhatisavailableto
satisfycustomerdemand.Asordersarereceived,theyconsumetheavailable
inventoryorcapacity.Anypartoftheplanthatisnotconsumedbyactualcustomer
ordersisavailabletopromisetocustomers.
Availabletopromise(ATP)isthatportionofafirmsinventoryandplanned
productionthatisnotalreadycommittedandisavailabletothecustomer(see
exampleson57,58&59).TheATPiscalculatedbyaddingscheduledreceiptsto
thebeginninginventoryandsubtractingactualordersscheduledbeforethenext
scheduledreceipt.
Ascheduledreceiptisanorderthathasbeenissuedeithertomanufacturingortoa
supplier.Ifcustomerordersaregreaterthanthescheduledreceipts,thenthe
previousATPisreducedbytheamountneeded.

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Projectedavailablebalance(PAB)iscalculatedbasedonthelargerofactual
customerordersandtheforecast.ThePABiscalculatedinoneoftwoways,
dependingonwhethertheperiodisbeforeorafterthedemandtimefence.For
periodsbeforethedemandtimefence:
PAB=priorperiodPABoronhandbalance+MPScustomerorders
Forperiodsafterthedemandtimefence,forecastwillinfluencethePABsoitis
calculatedusingthegreateroftheforecastorcustomerorders.

PAB=priorperiodPAB+MPSgreaterofcustomerordersorforecast
Thedemandtimefenceisthenumberofperiods,beginningwithperiod1,inwhich
changesarenotexceptedduetoexcessivecostcausedbyscheduledisruption.
Theplanninghorizonmustbeatleastaslongasthecumulativeleadtimeforthe
productstructure.Thecostofmakingachangeincreasesandthecompanys
flexibilitydecreasesasproductiongetsclosertothedeliverytime.Faroffchanges
canbemadewithminimalcostordisruptiontomanufacturing,butthenearerto
deliverydate,themoredisruptiveandcostlychangeswillbe.
ChangestotheMPSwilloccurduetocustomerordercancellationorchange,
changingcapacity,supplierproblems,andexcessiveprocessscrap.
Changestoproductionschedulescanresultincostincreasesduetorerouting,
rescheduling,extrasetups,expediting,andbuildupofWIPinventorydecreased
customerserviceandlossofcredibilityfortheMPSandtheplanningprocess.
ChangestotheMPSmustbemanagedanddecisionsmadewithfullknowledgeof
thecostsinvolved.
Frozenzonecapacityandmaterialsarecommittedtospecificorders,changes
resultinexcessivecosts,andsoseniormanagementapprovalisrequiredtomake
changes.Theextentofthefrozenzoneisdefinedbythedemandtimefence.
Slushyzonecapacityandmaterialsarecommittedtolessextent.Salesand
manufacturingnegotiatechanges.Theextentoftheslushyzoneisdefinedbythe
planningtimefence.
LiquidzoneAnychangecanbemadetotheMPSaslongasitiswithinthelimits
setbytheproductionplan.

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