Master Production Scheduling

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Master Production Scheduling

• SCM 461
• Dr. Ron Tibben-Lembke

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Master Production Schedule

• Provides basis for
• Making good use of manufacturing resources
• Making customer delivery promises
• Resolving tradeoffs between sales and
  manufacturing
• Attaining strategic objectives in the sales and
  operations plan

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What is Master Production Scheduling?

• Start with Aggregate plan
• (Aggregate Sales Ops Plan)
• Output level designed to meet targets
• Disaggregates
• Converts into specific schedule for each item

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SOP vs MPS

• The role of the sales and operations plan is to
  balance supply and demand volume, while the MPS
  specifies the mix and volume of the output
• MPS shows when products will be available in
  future
• Planned production, not forecast

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Master Production Scheduling Techniques

• Available inventory position at end of week
• starting inventory MPS forecast
• Plan to have positive inventory level
• Buffer in case production below plan
• Or demand higher than anticipated
• MPS row is amount to make, MRP system has to
  figure out how to make it

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Figure 6.2

• Level demand, level production plan

1 2 3 4 5 6 7 8 9 10 11 12
Forecast 10 10 10 10 10 10 10 10 10 10 10 10
Available (End) 20 20 20 20 20 20 20 20 20 20 20 20
MPS 10 10 10 10 10 10 10 10 10 10 10 10
On hand (start) 20
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Figure 6.3

• Different sales forecast
• Same total 120 units, starts lower, goes higher
• Level production plan

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Figure 6.4

• Same demand as 6.3
• Production adjusts to meet demand
• Chase production strategy

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Figure 6.5

• Lot size of 30 units
• Produce if projected balance falls below 5 units
• Extra on-hand inventory is cycle stock
• 5 unit trigger is safety stock

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Figure 6.5a next week

• Demand in week 1 was 10
• Marketing decides forecast was incorrect
• Raise forecasts to 10 for weeks 2-6
• Ending Available for wk 2 projected to be 0
• Need to produce in week 2.

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Figure 6.6

• Roll forward one week
• Higher demand over weeks 1-12
• Total was 120, now is 155
• Need to revise MPS

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Figure 6.7

• Production planned for week 4 moved to 2 can we
  do it?
• Planned to do 4 batches in 12 weeks, now need 5
  feasible?
• Changing schedule is expensive, maybe very
  expensive

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Order Promising 6.8

• Track units ordered for each period
• More orders expected for periods 2,3
• From on-hand, how many units not yet spoken for?
• ATP 20 (532) 10

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Available to Promise ATP

• Backlog of 10 orders over first 3 weeks 5,3,2
• Actual firm customer orders, not forecasts.
• Total shipments expected to be 5 in early weeks
• 20 units on hand.
• 10 units are available to promise
• 20 units on hand have to cover all demands until
  next production

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Week 1 Demand is 10

• Suppose demand is 10 in week 1.
• Orders for 5 week 1 units were received in week
  1.
• Already had firm orders for 5 for wk 1.
• Increase forecasts of future week shipments.
• Started period 1 with 20, demand was 10, ended
  with 10.

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Order Promising Fig. 6.9

• Received more orders for periods 2-4
• Period 2 ending inventory would be 0, so have to
  produce in week 2.
• (1030) (552)28
• Order backlog went from 10 to 12- factor in
  revising forecasts?

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• Starting inventory plus production is 1030 40.
• We have orders for 5 in period 2
• It looks like we could accept orders for up to 35
  more units in week 2.
• But we cant. Weve promised 7 of those units to
  weeks 34.
• Selling more would mean we have to expedite
  another shipment, like we just did, but which we
  really, really dont want to have to do.
• So, not safe to assume we can easily expedite in
  short term

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Calculating Available

• Current batch plus on hand
• Minus the greater of Forecast and confirmed
  orders
• Previous available MPR (greater of forecast
  or orders)

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Calculating ATP

• Calculated in current week and any week with
  MPSgt0
• Current period on-hand plus any current period
  MPS, minus all orders in that and subsequent
  periods until next MPS
• Later periods MPS all orders until next MPS
• ATP MPS in weeks 5, 8, 10, 12

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ATP Future Deficiencies

• Order for 35 in week 10.
• Wk 10 ATP goes to 0, 5 additional units need to
  come from ATP for previous MPS
• Week 8 MPS goes to 25
• Set MPS for 11?

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Consuming the ForecastFig. 6.10

• Go back to Fig. 6.9
• Can we accept following orders?
• 5 units week 2
• 15 units week 3
• 35 units week 6
• 10 units week 5

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5 in week 2?

• 5 in week 2 needs to come from ATP in week 2.
• ATP in 2 is 28, so it works.
• Reduce ATP to 23, add order

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5 in week 2? OK

• Reduced ATP to 23, add 5 to Orders

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15 in week 3?

• 15 in week 3 needs to come from ATP in week 2.
• ATP in 2 is 23, so it works

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15 in week 3? OK

• Reduced ATP to 8, added 15 to Orders
• Consider moving MPS from 5 to 4.
• Depends on marketings certainty about 4.

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35 in week 6?

• ATP in week 5 is only 30.
• How could this work?

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35 in week 6? OK

• 30 from ATP in week 5, which goes to 0.
• Need 5 more ATP from week 2.
• ATP in 2 goes down to 3.
• No room to accommodate 10 in w 5, could do in
  week 8

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Fig. 6.10

• Roll one week forward in time
• What to do about Available lt 0?
• Maybe nothing. forecasted sales may not appear
• If they do, were in trouble produce more, or
  earlier, depends on other products needs

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Bill of Materials

• Bill of Materials Parent-child diagram that
  shows what goes into what.

• Used to make sure enough parts for production
  plan
• Each part has LT, ordering policy
• One BOM for every end product

Bike
Frame Assy
Wheel Assy
Wheel
Tires
Components
Frame
Hubs Rims
Spokes
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BOM formats

• Single-level BOM only shows one layer down.

• Indented BOM
• Bike
• Frame Assembly
• Components
• Frame
• Wheel Assembly
• Wheel
• Hubs Rims
• Spokes
• Tires

Spokes
Wheel
Tires
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Low-Level Code Numbers
LLC 0 1 2 3 4

• Lowest level in structure item occurs
• Top level is 0 next level is 1 etc.
• Process 0s first, then 1s
• Know all demand for an item
• Where should blue be?

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LLC Drawing
LLC 0 1 2 3 4

• Item only appears in one level of LLC drawing
• Easier to understand
• Simplifies calculations

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Final Assembly Schedule

• Master Production schedule is anticipated build
  schedule
• FAS is actual build schedule
• Exact end-item configurations

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Schedule Stability

• Stable schedule means stable component schedules,
  more efficient
• No changes means lost sales
• Frozen zone- no changes at all
• Time fences
• gt24 wks, all changes allowed (water)
• 16-23 wks substitutions, if parts there (slush)
• 8-16 minor changes only (slush)
• lt 8 no changes (ice)

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HW

• DQ 1,3,5
• Problems 1,4,6,8