Jonah Patel
A master production schedule (MPS) is a crucial planning function that uses current supply and demand data, sales forecasts, and historical data to deliver accurate and timely production plans. It is a priority plan for manufacturing that helps businesses achieve their production objectives, minimize costs, and improve efficiency. The MPS outlines which products need to be manufactured, in what quantity, and when, balancing market demand with the availability of resources. It also helps identify potential bottlenecks and create plans to avoid them. The MPS is a key driver of the material requirements plan and can determine which components are needed for manufacturing and which need to be purchased. It is a complex process that requires balancing production capacity, inventory levels, material requirements, and other aspects to fulfill orders and customer demands.
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What You'll Learn
Forecasting demand
To create an effective demand plan, businesses must consider several factors. Firstly, starting inventory or stock levels are essential. This includes understanding how many units of each SKU are already available. Next, sales forecasts are crucial. By predicting the number of orders expected, businesses can plan their production accordingly. Current order portfolios are also significant, as they represent orders already planned for the period.
However, forecasting demand is not without its challenges. Demand uncertainty poses a complex problem for supply chain planning. Traditional planning methods often rely on basic safety stock calculations and point forecasts, neglecting the unique demand distribution of each product. To address this, machine learning-based probabilistic forecasting offers a more robust solution. It captures intricate demand patterns and advocates for flexible parametric distributions, enhancing decision-making under demand uncertainty.
The MPS also needs to balance demand with resource availability. This includes evaluating production capacity and ensuring sufficient raw materials are sourced to meet the forecasted demand. By optimising the capacity of the production process, the MPS ensures it can meet the demand for products.
Additionally, the MPS provides a framework for evaluating the performance of the production process. By comparing actual production against the planned schedule, businesses can identify areas for improvement and make necessary adjustments. This continuous assessment ensures that the MPS remains dynamic and adaptable to changing market conditions.
In summary, forecasting demand is a pivotal function of the MPS, driving production planning and ensuring businesses can meet customer demand efficiently. By leveraging historical data, sales forecasts, and resource availability, businesses can effectively forecast demand and optimise their production processes through the implementation of the MPS.
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Production planning
The MPS is a meticulously detailed plan that outlines which products need to be manufactured, in what quantity, and when. It is a production planning tool that helps to figure out how much of a product needs to be manufactured at different periods. It is a key component of material requirements planning (MRP) and outlines the processes and resources needed to keep production running smoothly.
The MPS is a priority plan for manufacturing. It helps identify the components needed from manufacturing and what needs to be purchased. It also helps to balance demand with the supply of raw materials and the capacity of equipment to deliver goods.
To create an MPS, a demand plan is required. This uses historical sales data to forecast customer orders over the coming months or years. It also includes a safety stock amount to protect against stockouts. The demand plan is then translated into a build plan, using planned orders.
The MPS is a vital tool in make-to-stock manufacturing environments, where demand forecasts drive production planning. It is also important in make-to-order environments, where many different finished goods can be produced from a small number of raw materials.
Overall, the MPS is a crucial planning function that uses current supply and demand data, as well as forecasts, to deliver accurate and timely production plans. It helps manufacturers achieve their production objectives, improve efficiency, and control costs.
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Inventory management
A master production schedule (MPS) is a vital tool for inventory management. It is a production planning tool that outlines which products need to be manufactured, in what quantity, and when. It is a high-level plan that provides an overview of the production process for a specified period, usually with a planning horizon of three months to two years.
The MPS helps to control inventory levels by determining the quantity of finished products that should be produced and when they should be produced. It is proactive, driving the production process by determining what should be manufactured and what materials should be purchased. It is the main driver of the material requirements plan, determining what components are needed from manufacturing and what must be purchased.
The MPS is a priority plan for manufacturing, focusing its planning capabilities on the production of finished goods, components, or parts that generate the greatest profitability for the manufacturer. It is a crucial planning function that uses current supply and demand data, sales forecasts, and historical data to deliver accurate and timely production plans. It helps manufacturers achieve their production objectives, minimize costs, and improve profitability.
The MPS helps to identify the starting inventory or stock available, the expected orders for a given period based on sales forecasts, and the current order portfolio. With this information, manufacturers can determine the quantity to be produced to keep supply and demand in balance. It also helps to set reorder points for inventory to ensure timely deliveries.
The MPS is a dynamic tool that connects multiple modules within an organization, including accounting, customer relationship management, inventory, and purchasing. It improves communication between departments and enhances the ability to respond to changing customer demands. It is an essential step in the manufacturing process, providing a clear plan for production and ensuring efficient inventory management.
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Resource allocation
The MPS helps identify the resources needed for production, including raw materials, components, and finished goods. It determines the quantity of each product variation that will make up the total production for a given period, based on stock levels and projected demand. This allocation ensures an efficient use of resources, minimising costs and optimising production runs.
The MPS also aids in allocating resources by defining products clearly and categorising them into specific groups. This accurate product definition and categorisation streamline the production process, making it more efficient. It helps in precise scheduling, reducing errors and inefficiencies, and enhancing overall manufacturing efficiency.
Additionally, the MPS assists in allocating resources by setting realistic lead times. Lead times refer to the time taken from order placement to customer delivery. By continuously assessing and adapting lead times, manufacturers can fine-tune their processes, ensuring accurate delivery schedules and enhancing customer satisfaction and trust.
Furthermore, the MPS is used to evaluate the best options for production considering available resources and capacity. This evaluation includes using Rough Cut Capacity Planning (RCCP) to assess if production capacity meets demand. If there is a lack of capacity, the MPS may need adjustments to ensure efficient resource allocation and timely delivery.
Overall, the MPS is a vital tool for resource allocation, helping manufacturers optimise their production processes, minimise costs, and enhance efficiency and customer satisfaction.
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Customer service
A master production schedule (MPS) is a vital tool for customer service, ensuring that products are delivered to customers on time and as promised. It is a key driver of the material requirements plan, determining the components needed for manufacturing and those that need to be purchased.
The MPS is a priority plan for manufacturing, focusing on the production of finished goods, components, or parts that generate the most profitability for the manufacturer. It is a long-term plan, usually covering several months to a year, and is concerned with managing the overall production plan.
To create an MPS, a demand plan is essential. This involves using historical sales data to forecast customer orders for the upcoming months or years. The demand plan includes safety stock to account for unexpectedly large orders and prevent stockouts. The MPS should also include a product list, with the most frequently ordered products at the top, and product sub-lists for each variation, such as colour or size.
The MPS helps to improve customer service by ensuring that the necessary resources, such as raw materials, labour, and equipment, are available to meet the production schedule. It provides a detailed schedule of what products will be produced, the quantities, and the production timeline. This enables businesses to meet customer orders on time and maintain the necessary service levels.
Additionally, the MPS defines clear and measurable objectives for business operations, which is crucial for customer service. It should align with the overall business goals, such as reducing inventory holding costs or achieving high service levels. Accurate MPS planning and execution can significantly enhance customer satisfaction by ensuring order fulfilment and maintaining the required service levels.
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Frequently asked questions
A master production schedule is a plan for individual commodities to be produced in each time period, including production, staffing, inventory, etc. Its primary purpose is to forecast the demand for a product over a period.
The main functions of a master production schedule include planning, making adjustments to the schedule, preventing stockouts, improving efficiency and controlling costs, and facilitating order fulfillment.
A master production schedule helps build, optimize, and track demand planning more efficiently. It also helps determine the ideal inventory level and improves operations by helping to identify the following: production, planning, purchasing, and management.
The steps to creating a master production schedule include mapping your demand and making a demand plan, working out the raw materials needed and securing a supply chain, developing a master production schedule proposal, and using a rough-cut capacity planning technique to calculate if you can meet your proposed MPS manufacturing.
