The Master Production Schedule (MPS) is the pillar of a seamless and productive manufacturing business. A Master Production schedule is a process of planning the entire production process such as the required raw materials, when to manufacture, and how much quantity to manufacture. It helps the manufacturer to plan ahead lower demand production chains so that there won’t be any bottlenecks during the production process.
What is the Master Production Schedule (MPS)?
The master production plan is the creation of the entire production plan so that it will be easier for the manufacturer to determine the quantity and the start dates to manufacture products. The major goal of creating a master production schedule is to reduce the production of overstock goods while simultaneously maximising timely delivery. And balancing manufacturing processes, such as production capacity, inventory levels, material requirements and many other factors to fulfil orders is crucial.
The manufacturing process involves complex operations that have to be planned ahead. The manufacturer must analyse the customer demand and link it with the production capacity. First, inventory costs of the required raw materials are analysed by the finished good BOM and this data is integrated into the current inventory data to prepare the MRP for raw materials procurement.
So, MPS is basically a contract and communication between the sales department and manufacturing. With this contract, the sales can make promises that production can keep. It is an effective plan for the business that can be changed based on demand and capacity.
Also Read : 3 Advantages of using MRP and MPS in ERP Systems to Meet Increased Demands
A master production schedule takes about three months to two years to be created. For the production scheduling of each product, the following factors are taken into account-
- Find out the starting inventory or the current inventory stock.
- Total stocks are expected to be produced for the time period depending on the sales forecast.
- The total number of orders that are planned beforehand.
- The total stocks that have to be produced to balance supply and demand.
- To prevent inventory stockouts, how much extra are you planning to manufacture?
The master production planning tool is a part of the manufacturing system which is included in modern Advanced planning and scheduling software (APS). It helps the business to go for the best option based on stock availability and capacity. This plan in place makes the production process faster.
Contents of the Master Production Schedule
Master production schedule MPS is represented in the following format listed below :
⇒ Demand forecast – Company’s analysis of demand for its products.
⇒ Allocated – Actual customer orders that are accepted in the system.
⇒ Reserved – Production slots that are reserved by the management with the expectation of receiving actual customer orders.
⇒ Unplanned – Production slots for unexpected customer orders that were not included in the demand forecast.
⇒ Net demand – In a particular duration, it is the subtotal of the allocated, reserved, and unplanned line products. It is termed as demand forecast.
⇒ Firm-planned orders – Orders that are released on the master production schedule proposal, floor that appear near the start of the master production schedule.
⇒ Planned orders – Orders that are automatically calculated by the planning system or those that are manually entered. These appear in MPS after the firm planned orders have already been stated.
Here is the formula for planned order :
⇔ Safety stock + Net demand – Projected available balance (prior period) – Firm planned orders = Planned orders
Projected available balance – Number of available units that are projected and the formula is :
⇔ Projected available balance (prior period) + Planned orders + Firm planned orders – Net demand= Projected available balance
Available to promise – Total number of units available for new customer orders.
Advantages of the Master Production Schedule (MPS)
If the MPS is managed efficiently, it is capable of preventing product stockouts and can speed up the entire production line and process to deliver the goods on time. Simultaneously, it also minimises overtime, and machine usage, and lower freight charges. A highly effective MPS should be able to do the following.
- It should act as a guide for the entire production process.
- Integrate overall business planning and detailed production operations.
- Must be able to commit to timely delivery of products to the customers.
- Boost the efficacy of the manufacturing process.
- Assist in the production planning process regarding the usage of production capacity.
Functions of the Master Production Schedule
The major purpose of MPS is to expedite the master production scheduling process and to seamlessly monitor and manage all of its operations to scale up your manufacturing company. So once the MPS is clearly understood by your business, the company objectives are aligned properly to achieve this goal together. Some of the functions of the master production schedule are enumerated below :
⇒ Translating production plans
Determine the ways to manage operations to balance labour requirements, demand and equipment capability. So here MPS will help the business to plan for the total number of products to be manufactured for a specific period.
⇒ Evaluating alternative schedules
An MPS plans should find out ways to efficiently plan the entire production operation process and identify all the problems that are likely to occur during the process.
⇒ Fulfil capacity requirements
Capacity planning along with MPS will help in cracking the requirements to meet demand, minimise costs and maximise profits.
⇒ Facilitating information processing
It also helps in setting re-order points to make deliveries that have to be placed. It enables coordination with management information systems such as marketing, finance etc.
⇒ Utilization of capacity
MPS will assist in setting the loads and utilisation requirements for machines and equipment.
Listed below are some of the objectives of MPS :
- Demands will be fulfilled seamlessly.
- Keeps low lead time.
- Systemises and standardises communication across the business.
- Will help in prioritising requirements.
- Monitors the production process by keeping it stable.
- Create and generate workable plans for your business’ production orders.
- Helps in proceeding with accurate purchases and transfer orders.
Tips to create a Master Production Schedule
To attain the full quantitative and qualitative data accuracy of the customer demand, the following tips should be considered :
⇒ Create a realistic schedule
Be realistic about the number of units you wish to manufacture. It will really help to not overschedule the whole production line and run into a series of problems. All these points have to be considered. to create an accurate master production schedule.
⇒ Start with high-priority items
Before starting with the master production schedule, it is significant to prioritise the products. These items should be on top of the list.
⇒ Split each task into smaller steps
Mention the time duration like the approximate estimation needed to complete each task and it’s crucial to split them into smaller sections. All these details will help when creating a master production schedule.
Components of the Master production schedule
A proper and accurate demand plan is required together with your production calendar. And to generate a demand plan up-to-date, accurate historical sales data is necessary.
It is always safe to keep some safety stock in the inventory in case the demand suddenly increases. So in cases like these, increase the order policy to avoid finishing the safety stock frequently.
The demand plan is updated as each week passes to create a more accurate production calendar. In order to create an accurate procedure, a few elements have to be included.
→ Product list – It includes all the product models you produce. After finalising the ABC analysis, place the order of the products on the basis of popularity. As a result, the products that are produced first are on the top list.
→ Variation sub-lists for each product – It is crucial to have a diverse field for each product variation. Each SKU will have its own. Take, for example, backpacks, they can be separated into S, M and L sizes and further, they can be split based on colour.
→ Year, Month and Week – This field is beneficial for planning and documenting records, which is a necessity for accurate demand planning. Divide your schedule into months and weeks to have a solid and accurate plan for the next few months. And the projected demand can be reassessed every few months. Plus, adjustments can be made if more demand arises.
→ Production quantities – It includes the number of units that are planned to be manufactured each week.
How do manufacturers use master production schedule?
A master production schedule can be created by any business irrespective of its size. MPS will help any business to inculcate good habits which will bring structure and order to the company.
An effective master production schedule also is necessary for the long run as it will impact the net profits, net revenue and return on investment. And the advantage is that the master production schedule is compatible with any production flow.
→ Make to stock (MTS)
In this, a small number of products are assembled to form a large group of significant items. So with the help of inventory management(ABC analysis) and master production scheduling, all the valuable items can be sold first.
→ Make-to-order (MTO)
In this type, minimum raw materials are used to make diverse products. The main aim of the standard master production schedule here is to ensure the actual arrangement of the actual customer orders.
→ Assemble-to-order(ATO)
In this type, the raw material is utilized effectively to make sub-assemblies and essential components. Ans the sub-assemblies and essential components have to work together to form final finished goods. The master production schedule lays focus on the subassembly level.
Conclusion
Wrapping up, the Master production schedule has a critical role to play in the production process. For manufacturing, it is like a blueprint that coordinates production activities such as production activities, optimising resources, and meeting customer demands.
So with the master production schedule, companies can manage production timelines, inventory levels, and capacity constraints. It can enhance efficiency, reduce costs and improve customer satisfaction. So by adopting advanced planning and master production scheduling software tools, businesses can streamline their processes which will result in efficient agility and competitiveness for the current business scenario.
