Homework problems 345679 2 1 The MPS Activity What is an MPS It is the output of the master scheduling process which encompasses the variety of activities involved in the preparation and maintenance of the master schedule ID: 730400
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Slide1
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5. Master Production Scheduling
Homework problems: 3,4,5,6,7,9.Slide2
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1. The MPS Activity
What is an MPS?
It is the output of the master scheduling process, which encompasses the variety of activities involved in the preparation and maintenance of the master schedule.
It is an anticipated build schedule, Not a forecast
It is a statement of Production, NOT a statement of Demand
It translates the SOP into a plan for producing specific products in the future. Figure 5.1
SOP is an aggregate statement of the manufacturing output required, but MPS is a statement of the specific products that make up that output.
As the statement of output, the MPS forms the basic communication link between the market and manufacturing.Slide3
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1. The MPS Activity
MPS and the Business Environment
The MPS is stated in terms of product specifications–usually part numbers which have specific bills of materials (BOM)
In a make-to-stock company, the MPS is a statement of how much of each end item to be produced and when it will be available.
In assemble-to-order environments, the MPS may be stated in terms of an “average” final product.
In an assemble-to-order firm, the large number of possible product combinations is represented with a planning bill of materials.
In a make-to-order (or engineer-to-order) firm, the MPS is usually defined as the specific end item(s) that make up an actual customer order.Slide4
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1. The MPS Activity
An MPS is a detailed plan (a statement of planned future output) that states how many end item/products (or product options or group of models) will be produced within specified periods of time.
End items are either finished products or the highest level assemblies from which shippable products are built.
An MPS must be stated in terms used to determine component-part needs (e.g., BOM) and other requirements, but NOT in dollars.
Time periods are usually measured in weeks, although they may be measured in hours, days, or even months.Slide5
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Constraints of MPS
a. Sum of the MPS quantities must equal those of PRODUCTION PLAN
b. Total requirements for a product must be allocated over time in an efficient manner. Considerations involved are:Costs of production (and setups)
Inventory carrying costs
c. CAPACITY LIMITATION must be recognized.
Production may be delayed or take place before market demand in order to improve utilization, reduce cost, etc.
Slide6
6
An MPS Example
200
Ladder-back chair
Kitchen chair
Desk chair
1
2
April
May
790
3
4
5
6
7
8
200
150
120
200
150
200
120
Aggregate
production plan
for chair family
550Slide7
7
The MPS Process
No
Yes
Are resources available?
Authorized production plan
Prospective master production schedule
Material requirements planning
Authorized master production scheduleSlide8
8
1. The MPS Activity
Master Production Scheduling LinkagesThe MPS is the driver of all detailed manufacturing activities need to meet output objectives.
The MPS is the basis for key inter-functional trade-offs.
Production and sales
Financial budgets should be integrated with MPS activities.Slide9
9
Fig. 5.1 MPS in the MPC System
Resource
planning
Sales and operations
planning
Demand
management
Master production
scheduling
Detailed material
planning
Enterprise Resource Planning (ERP) System
Front End
Engine
Rough-cut capacity
planningSlide10
10
2. MPS TechniquesSlide11
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2. MPS Techniques
The time-phased record (Fig. 5.2)Leveling strategy (Fig. 5.2)
Chase strategy (additional example)Lot sizing strategy (Fig. 5.3)Rolling through time (Figs. 5.3, 5.4, 5.5)
Order promising and ATP (Figs. 5.6, 5.7)
Consuming the forecast (Figs. 5.8,5.9,5.10)
Demand time fence and planning time fence
(handouts)Slide12
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2. MPS Techniques
The time-phased record with level MPS strategy (Fig. 5.2)
A means of gathering and displaying critical scheduling information (Forecast, available stock, production schedule)
On hand
Period
1
2
3
4
5
Forecast
5
5
8
10
15
Projected available balance
20
25
30
32
32
27
Master production schedule
10
10
10
10
10Slide13
13
2. MPS Techniques
Chase MPS strategy example
Production (MPS) reflects the forecasted demandConstant projected available balance inventory
On hand
Period
1
2
3
4
5
Forecast
5
5
8
10
15
Projected available balance
20
20
20
20
20
20
Master production schedule
5
5
8
10
15Slide14
Lot Sizing strategy (Fig. 5.3)
Period 1 – 5 plan
Period
On hand
1
2
3
4
5
Forecast
5
5
8
10
15
Projected available balance
20
15
10
32
22
7
Master production schedule
30
Lot size = 30 Safety stock = 5Slide15
Rolling through time (Fig. 5.3
5.4)
Period 1 – 5 plan
Period
On hand
1
2
3
4
5
Forecast
5
5
8
10
15
Projected available balance
20
15
10
32
22
7
Master production schedule
30
Lot size = 30 Safety stock = 5
Period 2 – 6 plan
Period
On hand
2
3
4
5
6
Forecast
20
20
20
15
20
Projected available balance
10
-10
0
-20
-35
-55
Master production schedule
30
Lot size = 30 Safety stock = 5Slide16
Rolling through time (Fig. 5.3
5.4)
Period 2 – 6 plan
Period
On hand
2
3
4
5
6
Forecast
20
20
20
15
20
Projected available balance
10
-10
0
-20
-35
-55
Master production schedule
30
Lot size = 30 Safety stock = 5Slide17
Rescheduled MPS (Fig. 5.5)
Period 2 – 6 plan
Period
On hand
2
3
4
5
6
Forecast
20
20
20
15
20
Projected available balance
10
20
30
10
25
5
Master production schedule
30
30
30
Lot size = 30 Safety stock = 5Slide18
Available-to-Promise (ATP)
When immediate delivery is not expected (or is not possible due to stockouts), a promised delivery date must be established
The order promising task is to determine when the shipment can be madeAvailable-to-promise (ATP) procedures coordinate order promising with production schedulesSlide19
Available-to-Promise (ATP) Calculation
ATP
1 = beginning on-hand + MPS – sum of the orders before the next MPS receiptFor subsequent weeks (when MPS occurs):Discrete logic:ATP
subsequent weeks = MPS – sum of the orders before the next MPS receiptCumulative logic:
ATP
subsequent weeks
= Previous ATP + MPS – sum of the orders before the next MPS receiptSlide20
Discrete logic ATP treats each period independently (Fig. 5.6)
Period
On hand
1
2
3
4
5
Forecast
5
5
8
10
15
Orders
5
3
2
0
0
Projected available balance
20
15
10
32
22
7
Available-to-promise
12
28
Master production schedule
30
Lot size = 30 Safety stock = 5Slide21
Cumulative logic ATP carries ATP units forward (Fig.5.7)
Period
On hand
1
2
3
4
5
Forecast
5
5
8
10
15
Orders
5
3
2
0
0
Projected available balance
20
15
10
32
22
7
Available-to-promise
12
40
Master production schedule
30
Lot size = 30 Safety stock = 5Slide22
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Consuming the Forecast
In the ATP calculation, demand is considered to be the maximum of forecast and actual customer orders
This is a conservative approachHope that we will eventually sell at least the forecast quantity
Adjusts for periods where demand exceeds the forecastSlide23
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Consuming the Forecast
Assuming the following orders come in during period 2:
Order # Amount Desired week
1 5 2
2 15 3 3 35 6 4 10 5
Can we accept all these orders?
To accept all these orders, we need to schedule MPS in 5 and 6.
Slide24
Discrete logic ATP (Fig.5.8)
Period
On hand
2
3
4
5
6
Forecast
5
8
10
15
20
Orders
3+
5
(new)
2+
15
0
10
35
Projected available balance
15
7
20
10
-5
-40
Available-to-promise
7
-32
Master production schedule
30
Lot size = 30 Safety stock = 5Slide25
Discrete logic ATP after update (Fig.5.9)
Period
On hand
2
3
4
5
6
Forecast
5
8
10
15
20
Orders
3+5(new)
2+15
0
10
35
Projected available balance
15
7
20
10
25
20
Available-to-promise
7
13
20
-5
Master production schedule
30
30
30
Lot size = 30 Safety stock = 5Slide26
Revising ATP due to negative ATP in subsequent week
Period
On hand
3
4
5
6
7
Forecast
10
10
10
10
15
Orders
20
2
35
Projected available balance
30
10
20
-15
-30
Available-to-promise
3
0
Master production schedule
30
Lot size = 30 Safety stock = 5Slide27
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Compared to the discrete logic, cumulative ATP logic may look easier to use for order acceptance decisions, it might overstate the real availability.
The use of PAB and ATP is the key to effective master scheduling.
Negative PAB => potential problem
Negative ATP => real problem
ATPSlide28
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5.3 MPS in Assemble-to-Order Environments
In an assemble-to-order (ATO) environment, the possible combinations of end items (and thus MPS needed) can be huge (Fig. 5.11 and DELL’s PCs)
Specific end item bills of materials (BOM) are replaced with a planning bill of materials, which represents the potential product combinations
One type of planning BOM is the
super bill
, which describes the usage of options and components that make up the
average
productSlide29
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Fig. 5.11 The MPS Hourglass
Establish MPS at the subassembly level
End items
ComponentsSlide30
30
BOM Structuring for the MPS
Planning Bill (of Material): an artificial grouping of items or events in bill-of-material format used to facilitate master scheduling and material planning
.Super Bill (of Material): a type of planning bill, located at the top in the structure, that ties together various modular bills (and possibly a common parts bill) to define an entire product or product family. That is, it states the related modules/options that make up the
average
end item. The quantity per relationship of the super bill to its modules represents the forecasted percentage of demand of each module. The super bill is very useful for planning and (master) scheduling purposes. Figure 5.12 Slide31
Super Bill (of Materials) Fig. 5.12Slide32
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What are the pros and cons of super bill?
Reduce the large number of MPS needed.But when orders are received, ATP must be applied to EACH option. That is, each of the affected modules must be checked (See Fig. 5.13) Slide33
Using Available-to-Promise Logic with Planning BOM
(Fig. 5.13)
Common Parts Available?Gear Available?
Taylor Available?
Book order
Try 1 period later
No
No
No
Yes
Yes
YesSlide34
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5.4 Two-Level Master Production Schedules
When a planning BOM is used, a final assembly schedule (FAS) is often used
States the set of end products to be built over a time periodTwo-level MPS coordinates component production and the FAS
Component production is controlled by aggregate production plan in the FAS
Final assembly is controlled by the FAS
Either discrete or cumulative ATP logic can applySlide35
Two-Level Master Production Schedule with discrete ATP logic
4-Horsepower Tillers
(Aggregate
)
Period
On hand
1
2
3
4
5
Production Plan
100
100
100
100
100
Orders
100
72
54
0
0
Projected available balance
0
0
0
0
0
0
Available-to-promise
0
28
46
100
100
Master production schedule
100
100
100
100
100
Safety stock = 0
Taylor Brand 4-HP Tillers (
FAS
)
Period
On hand
1
2
3
4
5
Forecast for model (40% of total)
40
40
40
40
40
Orders
42
37
23
0
0
Projected available balance
10
48
88
48
88
48
Available-to-promise
48
20
80
Master production schedule
80
80
80
Lot size = 80 Safety stock = 10Slide36
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5.5 Master Production Schedule Stability
A stable MPS translates to stable component schedules
Stability allows improved plant performanceFailure to change the MPS can lead to reduced customer service and increased inventory (failure to react)
Excessive MPS changes can lead to reduced productivitySlide37
Freezing the Master Production Schedule
Inside the frozen horizon no order changes are allowed
Only occasional changes
Minor changes
Most changesSlide38
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Demand & Planning Time Fence
Demand time fence:The number of periods, beginning with period one, during which changes to the MPS are typically not accepted due to excessive cost caused by schedule disruption. Inside the demand time fence, the
forecast is ignored in calculating the PAB, because customer orders, not the forecast, matter in the near term.
Planning time fence:
The number of periods, beginning with period one, during which the computer will not reschedule MPS orders. Usually the MPS is stated in terms of
firm
planned orders
inside the planning time fence.
The planning time fence is typically at or outside the
cumulative
lead time for the master scheduled item.
Example.Slide39
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PAB with time fence
The projected available balance (PAB) is calculated in two ways, depending on whether the period is before or after the demand time fence.Before: PAB = [prior period PAB] + [MPS] – [Customer Order]
After: PAB = [prior period PAB] + [MPS] – Max (Customer Order or Forecast)Slide40
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MPS example with demand and planning time fenceSlide41
41
H.W. MPS with demand and planning time fence
Onhand
=40; Lost size=50
Demand time fence=4
Planning time fence=10
Period
1
2
3
4
5
6
7
8
9
10
Forecast
18
21
17
17
12
14
23
28
30
25
Orders
19
20
15
20
6
20
4
6
12
0
Projected available balance
Available-to-promise
Master production schedule
Update PAB, schedule MPS, and calculate ATP.Slide42
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5.6 Managing the Master Production Schedule
To be controlled, the MPS must be realistic
The MPS must not be overstated against the manufacturing budget and capacity constraints, and sum of the MPS should equal the production plan.Performance Measures:
Against the schedule
Customer service (meeting due dates; lead time performance)Slide43
Scheduling production using priority index
Beginning
Weekly
Lot
Hours per
Product
inventory
forecast
size
lot size
A
20
5
50
20
B
50
40
250
80
C
-30
35
150
60
D
25
10
100
30
Based on the above data, calculate priority index for each product and schedule
production, where Priority index = weeks of supply = (beginning inventory) / (weekly forecast)
Product
P
1
P
2
P
3
P
4
P
5
P
6
P
7
P
8
A
B
C
D
Priorities: Slide44
Scheduling production using priority index
Product
P
1
P
2
P
3
P
4
P
5
P
6
P
7
P
8
A
4
3
0
-2
4.5
B
1.25
0.25
3.5
1.5
0.5
C
-0.86
0.64
-0.57
0.29
0.71
D
2.5
1.5
-1.5
6.5
5.5
35
30
25
20
15
10
5
0
1
2
3
4
5
6
7
8
Week
Hours
Capacity= 35 hours a weekSlide45
Concluding Principles
45
The MPS unit should reflect the business environment and the company’s chosen approach.If a common ERP database is implemented, the MPS function should use that data.Regardless of the firm’s environment, effective scheduling is facilitated by common systems, time-phased processing, and MPS techniques.
Customer order processing should be closely linked to MPS.Slide46
Concluding Principles
46
ATP information should be derived from the MPS and provided to the sales department.
An FAS should be used to convert the anticipated build schedule into the final build schedule.The master production scheduler should ensure that the sum of the parts (the MPS) is equal to the whole (the operations plan
).