What is a master production schedule – key points in preparation

We often hear that the main functions of APS cover master production schedule (MPS) and detailed production plan, so what is master production plan? Simply put, the master production plan is a plan that determines the production quantity of each specific final product in each specific time period; that is, the production capacity is scheduled to the point in time. Products here include finished products and parts. In other words, the main plan is to schedule products to the day, and the detailed plan is to schedule every day, each piece of equipment or production line, and what time to do.

The time precision of the master plan may be days, weeks, or months, and the time precision will change depending on the time span. For example, some companies schedule their plans within a month to days, to quarters to weeks, and to annual plans to months. Some companies also have full-year plans that are accurate to days or weeks, which requires powerful computing capabilities.

Why prepare a master plan? So why don’t we arrange production directly according to demand forecasts and orders, but do a master plan?

This is because forecasts and customer orders are unstable and unbalanced. If they are used directly to arrange production, tasks will sometimes be unable to be completed despite working overtime, and sometimes equipment will be idle, leaving many people without work. We must use reasonable algorithms to keep production balanced so that human and equipment resources are within reasonable loads.

We have to prepare a lot of work in advance. For example, many material procurement lead times are very long. Without a long-term and stable master plan, material planning cannot be done. At the same time, material planning also involves financial planning, warehouse preparation, etc., which all need to be planned in advance. In addition, human resources must be prepared in advance. Recruiting or temporarily hiring from an agency also takes a certain amount of time. So we need to determine in advance what time to produce and what resources are needed.

The master production plan is not just a finished product plan. When the finished product requires component assembly, it also includes plans for components at all levels. Capacity constraints take into account all parts.

1. Demand disaggregation. If the forecast is accurate to a monthly or quarterly level, or the customer places a large order but requires delivery in batches, the order must be disaggregated and a plan prepared.

2. Consider the cumulative demand and cumulative delivery. If the demand in each time period is different and there are peaks and troughs, then the peaks and valleys will be cut and moved forward to carry out a balanced plan. If there are holidays, production must be advanced.

3. The preparation of production plans requires comprehensive consideration of various conditions and objectives. You cannot only consider one factor, but must maximize benefits.

Balanced production is not completely average, because this may cause inventory to be too high. Allow a certain amount of production capacity to float. While ensuring delivery (customer service level), control inventory levels and maintain balanced production to maximize profits.

For example, employee working hours can float between 5*8*2 and 6*10*2. Within this range, production time can be arranged as close to the delivery date as possible instead of pursuing the same working hours every week.

4. The preparation of the plan must not exceed the maximum production capacity at any time. If the demand exceeds the maximum production capacity during a certain period, including equipment and manpower, production needs to be advanced and moved forward. If the forward push still cannot satisfy the demand, you should consider whether to outsource or expand production capacity, such as purchasing equipment, leasing equipment, recruiting employees, etc.

5 Calculated based on crude production capacity. Rough production capacity is not calculated based on the production capacity of the entire factory, but the products are decomposed into components according to the BOM level, and calculated based on the key bottleneck resource production capacity of each component. For example, a finished product includes multiple parts such as injection molding, electronics, and hardware, and each workshop must independently define its production capacity.