Lecture 8 - Master Product Scheduling (Revisited). The contents of this chapter include all of the following: Master product scheduling, round cut capacity planning, planning horizons, types of production-planning and control systems, developing MPS, evaluation MPS, planning links to MPS.
Lecture 8 Master Product Scheduling (Revisited) Books • Introduction to Materials Management, Sixth Edition, J. R. Tony Arnold, P.E., CFPIM, CIRM, Fleming College, Emeritus, Stephen N. Chapman, Ph.D., CFPIM, North Carolina State University, Lloyd M. Clive, P.E., CFPIM, Fleming College • Operations Management for Competitive Advantage, 11th Edition, by Chase, Jacobs, and Aquilano, 2005, N.Y.: McGrawHill/Irwin Objectives • • • • • • • Master product scheduling Round cut capacity planning Planning horizons Types of ProductionPlanning and Control Systems Developing MPS Evaluation MPS Planning links to MPS Purpose • • The master production schedule states the requirements for individual end items by date and quantity. It is limited by the production plan and must “disaggregate” the production plan Master planning seeks to plan and control the impact of independent demand on material and capacity Purpose • The master production schedule is a vital link between sales and production – It makes possible valid order promises – It represents a contract between sales and production Inputs • Inputs to the master production schedule include – The production plan – The forecast – Orders from customers – Additional independent demand – Inventory levels – Capacity constraints Objectives • The objectives of a master production schedule are to – Maintain the desired level of customer service – Make the best use of resources – Keep inventories at the desired level Preparing an MPS • • • Make a preliminary MPS Perform roughcut capacity planning Resolve differences Roughcut Capacity Planning • • • Roughcut capacity planning checks whether critical resources are available to support the preliminary master schedule A resource bill shows the time required for individual items on a critical resource What are some possible critical resources? Resolving Differences • • The third step in developing an MPS is to resolve any differences between the priority plan and available capacity. Available capacity must be equal to or greater than required capacity If required capacity exceeds available capacity – Capacity must be increased or Plan must be altered How can capacity be increased or demand be decreased? – • Resolving Differences • The master production schedule must be judged by three criteria – – – Resources use. Is the MPS within capacity restraints in each period of the plan? Does it make the best use of resources? Customer service. Will due dates be met and will delivery performances be acceptable? Cost. Is the plan economical, or will excess cost be incurred for overtime, subcontracting, expediting, or transportation? New Order • Suppose we get an order for 200, can we accept this for delivery in period 5? Page 61 Worksheet for New Order for 200 Period 10 11 12 Forecast 50 50 50 50 75 75 75 75 50 50 50 50 Customer Orders 35 25 25 20 200 15 0 10 0 10 Projected Available 60 10 85 35 125 125 110 Available to Promise MPS 50 80 125 125 125 Fit in the order for 200 (can’t change MPS) Page 62 New Order for 200 Period 10 11 12 Forecast 50 50 50 50 75 75 75 75 50 50 50 50 Customer Orders 35 25 25 20 200 15 0 10 0 10 Projected Available 60 10 85 35 -40 -115 -65 -15 -65 -115 -40 -90 110 Available to Promise MPS 50 80 -90 125 115 115 125 125 125 125 125 Negative number in Projected Available = might be a problem in the future • Negative number in Available to Promise= always a problem Solution? • Page 63 Split up New Order for 200 Period 10 11 12 Forecast 50 50 50 50 75 75 75 75 50 50 50 50 Customer Orders 45 25 105 20 110 15 0 10 0 10 125 125 Projected Available 110 Available to Promise MPS 125 125 125 Check to see if this is OK Page 64 Can you now take 2 more orders? Period 10 11 12 Forecast 50 50 50 50 75 75 75 75 50 50 50 50 Customer Orders 45 25 105 20 110 15 50 10 0 40 Projected Available 60 10 30 -20 -5 -80 -30 110 Available to Promise MPS • • 40 0 125 125 125 125 125 50 units to be delivered in Period 8 30 units to be delivered in Period 12 Page 65 Time Fences Page 66 Time Fences • • • • Frozen: no changes are possible with a certain period of time (i.e. 8 weeks) Time Fence (length of period schedule is frozen, liquid, etc.) Demand Fence: MPS numbers do not change and focus is on orders not forecast Planning Fence: Master Production Scheduler is planning more MPS Page 67 Roughcut capacity planning • • An estimate of the plans’ feasibility Given the demonstrated capacity of critical resources (e.g.: direct labor & machine time), have we overloaded the system? Page 68 RoughCut Capacity Planning • Determine required resources & proposed workload: Planning Factors Model W Model M Direct labor 0.40 0.30 Machine time 0.12 0.08 MPS QRT QRT QRT QRT Total Model W 6,000 5,500 9,500 6,500 27,500 Model M 10,000 12,000 7,500 10,100 39,600 Page 69 Hour s/ uni t Calculate Required Labor Hours Model Labor Factor Model W 0.30 Model M • 0.40 QRT QRT QRT QRT Total MPS Quantity 6,000 5,500 9,500 6,500 27,500 Hours Required 1,800 1,650 2,850 1,950 8,250 MPS Quantity 10,000 12,000 7,500 10,100 39,600 Hours Required 4,000 4,800 3,000 4,040 15,840 Labor Capacity Required 24,090 Compare with hours available Page 70 Calculate Required Machine Hours Model Machine Factor Model W 0.08 Model M • 0.12 QRT QRT QRT QRT Total MPS Quantity 6,000 5,500 9,500 6,500 27,500 Hours Required 480 440 760 520 2,200 MPS Quantity 10,000 12,000 7,500 10,100 39,600 Hours Required 1,200 1,440 900 1,212 4,752 Machine Capacity Required 6,952 Compare with hours available Page 71 Summary • MPS Major Functions – To form the link between production planning and what manufacturing builds – To plan capacity requirements. The MPS determines the capacity required – To plan material requirements. The MPS drives the material requirements plan – To keep priorities valid. The MPS is a priority plan for manufacturing MGMT 3750 72 Summary • MPS Links Between Sales and Production – To aid in making order promises. The MPS is a plan for what is to be produced and when. As such, it tells sales and manufacturing when goods will be available for delivery – To be a contract between marketing and manufacturing. It is an agreedupon plan MGMT 3750 73 Summary • The MPS must be realistic and based on what production can and will do. If not, the following may be the results – Overload or underload of plant resources – Unreliable schedules resulting in poor delivery performance – High levels of workinprocess (WIP) inventory – Poor customer service – Loss of credibility in the planning system MGMT 3750 74 End of Lecture 8 ... requirements for individual end items by date? ?and? ? quantity. It is limited by the production plan? ?and? ?must “disaggregate” the production plan Master planning seeks to plan? ?and? ?control the impact of? ?independent demand on? ?material? ?and? ?capacity... (primarily week 1)? ?and? ?it is overloaded in the last 2 weeks? ?of? ?the schedule – Some? ?of? ?the production scheduled for week 4? ?and? ?5 should be moved to week 1 Demand? ?Management • • • • • Review customer orders? ?and? ?promise shipment? ?of? ?... Flows? ?of? ?materials are planned? ?and? ?controlled by a series? ?of? ?production schedules that state when batches of? ?each particular item should come out? ?of? ?each stage of? ?production Can result in great reductions? ?of? ?rawmaterials