Master Production ScheduleMaster Production Schedule

OverviewOverview

• Define Define MMaster aster PProduction roduction SSchedulechedule• Explain MPSExplain MPS• Discuss How MPS WorksDiscuss How MPS Works• Example From “Real Life”Example From “Real Life”• Brainstorm: How Can MPS Help Your Brainstorm: How Can MPS Help Your

Firm?Firm?• Practice MPS LogicPractice MPS Logic

What is MPS?What is MPS?

• MMaster aster PProduction roduction SSchedule – chedule – States the requirements for States the requirements for individual end items by date and individual end items by date and quantity. -quantity. -APICSAPICS

MPS ExplainedMPS Explained

• Breaks down, or disaggregates, the Breaks down, or disaggregates, the production plan into product production plan into product familiesfamilies

• Promotes valid order promisesPromotes valid order promises• Provides a communication medium Provides a communication medium

between Marketing/Sales and between Marketing/Sales and OperationsOperations

Explanation ContinuedExplanation Continued

• Proactively control ability to deliver Proactively control ability to deliver goods to customersgoods to customers

• Resource availability controlResource availability control• Proactively control inventory levelsProactively control inventory levels

Disaggregate the Sales and Disaggregate the Sales and Operations PlanOperations Plan

• The production plan is broken into The production plan is broken into product familiesproduct families

Promotes Valid Order PromisesPromotes Valid Order Promises

• By validating the capacity for the By validating the capacity for the MPS through rough cut capacity MPS through rough cut capacity planning, alterative plans can be planning, alterative plans can be made when there are more orders made when there are more orders than productionthan production

Marketing Marketing Operations Operations

• Marketing communicates demand Marketing communicates demand through customer orders and through customer orders and forecastsforecasts

• Operations communicates capacity Operations communicates capacity through inventory levels and through inventory levels and constraintsconstraints

Resource Availability Resource Availability ControlControl

• Production shortfalls will be known Production shortfalls will be known ahead of time and alternative plans ahead of time and alternative plans can be made.can be made.

Customer ServiceCustomer Service

• Proactively control ability to deliver Proactively control ability to deliver goods to customersgoods to customers

Inventory ControlInventory Control

• Proactive approach to inventory Proactive approach to inventory controlcontrol– Items are scheduled to arrive when Items are scheduled to arrive when

neededneeded– Safety stock has less importanceSafety stock has less importance

Planning OrganizationPlanning Organization

S h o p F lo o r C o n tro l

M a te ria ls R e so u rce p la n n ing

M a s te r P ro d uc tio n S ch e d u le

S a le s a nd O p e ra tio n s P lan

In p u t/O utp u t

C a p a c ity R e q u ire m e n ts P lan

R o u g h C ut C a p a c ity P la n n ing

R e so u rce P la n n ing

How MPS WorksHow MPS Works

• Information needed for MPS logicInformation needed for MPS logic– Lot SizeLot Size– Lead TimeLead Time– Product DemandProduct Demand– Starting InventoryStarting Inventory

How MPS Works Cont.How MPS Works Cont.

Period 1 2 3 4 5

Demand 30 30 30 30 30

Available 20 15 10 5 0

MPS 50 25 25 25 25

W2 Inc. MPS for WidgetsLot Size = 25 unitsLead Time = 0 periods

Jet Spray Corp. ExampleJet Spray Corp. Example

• Jet Spray CorporationJet Spray Corporation– Markets dispensers for hot & cold beveragesMarkets dispensers for hot & cold beverages– Uses an integrated system that includes:Uses an integrated system that includes:

• MRPMRP• Capacity PlanningCapacity Planning• Shop floor controlShop floor control• MPSMPS• Inventory ManagementInventory Management

Example ContinuedExample Continued

Brainstorming ExerciseBrainstorming Exercise

• How can an MPS system be used in How can an MPS system be used in your Firm?your Firm?

You’re the Master You’re the Master Scheduler…Scheduler…

• WW22 Inc. is scheduling production for Inc. is scheduling production for a new product called the Widget a new product called the Widget 50005000

• Starting Inventory = 0Starting Inventory = 0• Lot Size = 50Lot Size = 50• Lead time = 0Lead time = 0

WW22 Inc. Continued Inc. Continued

Period 1 2 3 4 5 6 7

Demand 25 25 25 0 15 35 25

Available              

MPS 50            

SummarySummary

• MPS breaks the Sales & Operations MPS breaks the Sales & Operations plan into product familiesplan into product families

• Maintains Desired Level of Maintains Desired Level of Customer ServiceCustomer Service

• Allows proactive control of Allows proactive control of inventoryinventory

BibliographyBibliography

• Sources:Sources:• Cox III, James F., and Blackstone Jr., John H., Cox III, James F., and Blackstone Jr., John H.,

eds. eds. APICS Dictionary. APICS Dictionary. 1998 1998

• Vollman, Thomas E., William L. Berry, D. Clay Vollman, Thomas E., William L. Berry, D. Clay Whybark, (1997) Whybark, (1997) Manufacturing Planning and Manufacturing Planning and Control SystemsControl Systems (4 (4thth ed.). New York McGraw- ed.). New York McGraw-Hill Hill

• APICS. (2000). APICS. (2000). Basics of Supply Chain Basics of Supply Chain Management.Management. Virginia. Virginia.