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The Master Production Schedule (MPS)

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The MPS (Master Production Schedule) is the schedule program aimed at defining precisely the required quantity per period for each finished product to sell. It is the main part of the manufacturing production plan to make the supply chain work.

The bucket is usually the week and the time horizon up to 3-6 months or a least twice the longest product leadtime.

 

The aggregate master production schedule (MPS) at product level should match with the S&OP defined at product family level and the deviation should be under 3-5% maximum to be consistent accross the supply chain.

The master production schedule (MPS) is the reference for the customer service that needs to satisfy its customers, and also for the manufacturing that should plan accordingly taking into account the constraints from the entire supply chain.


The Master production schedule (MPS) is established from firm customer orders, Sales forecasts and finished good stock levels and is aimed at:

  • Anticipate the customer demand per product (forecast)
  • Explode S&OP families into part numbers for each period
  • Input quantity to produce and deadlines for each product
  • Follow current Sales versus forecasts
  • Insure the required customer service level while maintaining a low stock level
  • Inform the customer service on the available-to-promise (ATP) quantity for a given product


MPS levels


According to the bill of material, the master production schedule (MPS) could be at different level. The idea is to define the MPS level where there are fewer components:

  • Low finished products variety but lots of components: MPS at finished product level
  • High finished products variety but few components: MPS at component level

But there can be a finished goods variety due to intensive customer personalization or customization, but a fewer components to assemble and high raw material variety.

In this case we have multiple MPS levels:

  • Finished goods MPS
  • Planned BOM with probability by components (or component types) in order to forecast the sub-assembly items to launch per period


Planned BOM

Percentage or ratios are used to plan for components on a make-to-stock mode. Here we see that the finished good sales forecasts will be at 80% with option B1 and at 60% with module M2 but in all cases the component A is always required.


Available-To-Promise (ATP)


The ATP represents the products manufactured on stock and available for customer orders. This encompasses all what can be sold without modifying the MPS and allow quick responses by the supply chain organisation.

The available to promise (ATP) is a tool for the customer service to accept or not an order and to give a firm promise to the customer.




MPS time horizon


As stated before the minimum time horizon in the master production schedule (MPS) is twice the manufacturing leadtime in order to be able to plan. In most cases, planning is done for a full quarter.
But this horizon is split into 2 areas: firm and planned zone.

Firm zone

The firm zone corresponds to firm customer orders, usually not negotiable or modifiable. Only the manufacturing manager is allowed to accept or not any change.
We also called it the frozen horizon where all orders are frozen, in term of start date or quantity.

The goal of this firm horizon is to prevent any bullwhip effect or chaotic variability that will disorganize the production lines and lower its efficiency.

The MRP-2 states that the firm horizon should be equal to twice the longest manufacturing leadtime, as when we’re getting close to the manufacturing leadtime, any change is critical since it screwed up all shop floor scheduling.


Forecast zone

Over the frozen horizon, the orders can still be modified, or at least are negotiable. Change of customer orders is also still possible (options or customization), but subject also to manufacturing manager.



MPS Example


Let’s build an MPS for 8 weeks, fed with forecasts and firm orders.

Batch size = 50 units
Manufacturing Leadtime = 1 period
Safety Stock = 20 units
The first 2 weeks is the frozen horizon.

Let’s do it:


In Firm horizon:
-    Inventory and ATP are calculated from sales orders only
-    Inventory[P] = Inventory[P-1] + MPS_due_date[P] – sales_orders[P]
-    The ATP is calculated between 2 consecutive MPS_due_date  not null, intial value is equal to the initial inventory one

In Forecast horizon:
-    Inventory is calculated from max(sales_orders,forecasts) in order to take into account the forecasts
-    Inventory[P] = Inventory[P-1] + MPS_due_date[P] – Max(sales_orders[P];forecast[P])
-    The ATP is calculated from sales orders only! (otherwise no ATP concept)
-    The ATP is calculated between 2 consecutive MPS_due_date not null

ATP[next MPS>0] = ATP[last_value] + Sum(MPS_due_date)- Sum(sales_orders)

Last modified on Tuesday, 28 August 2012 08:17

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