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S2019302018 m saqib nawaz mps
1. 21-Jan-20
University of Management & Technology
• Course: Managing Supply Chain
• Topics: MPS, Lead Time & ATP
• Semester: 2nd
• Submitted to: Sir Ali Bukhari
• Submitted by: M Saqib Nawaz (S2019302018)
2. 21-Jan-20
What is Master Planning Schedule?
• What to produceA master production schedule (MPS) is a plan for individual
commodities to be produced in each time period such as production, staffing, inventory,
etc. It is usually linked to manufacturing where the plan indicates when and how much
of each product will be demanded.
• It also enable us to think that what to produce and when to produce and how much to
produce.
• The MPS is developed on weekly basis, which helps to maintain the weekly production
schedule.
• Considering today’s complexity in manufacturing, the MPS helps to decide:
• What batch sizes
• When to produce
• What sequence to adopt
3. 21-Jan-20
Importance & Scope of MPS?
• It provides a solid base to build, improve and track the sales forecast.
• It provides a solid base to determine the desired inventory levels.
• It allows optimizing the installed capacity and balancing the load of the plant.
• Manufacturing can estimate the production and maintenance costs associated
with the work centers.
• The financial department of the company can get income and expenses,
derived from the MPS and generate a forecast of the cash flow in the company.
• The Department of Human Resources can take advantage of the MPS to
anticipate the requirements of hiring labor.
4. 21-Jan-20
Importance & Scope of MPS?
• It makes possible reliable delivery promises. It provides salespeople information
on available-to-promise (ATP) indicating when end products are available. ATP will
be discussed later.
• It is a tool that can be used to evaluate the effects of schedule changes. It is a
device for communication and a basis to make changes consistent with the
demands of the marketplace and manufacturing capacity.
• It coordinates plans and actions of all organizational functions and is a basis to
measure the functions’ performance.
• It provides management with the means to authorize and control all resources
needed to support integrated plans.
5. 21-Jan-20
Importance & Scope of MPS?
• In the short horizon, MPS serve as the basis for planning material requirement,
production of components, order priorities, and short-term capacity
requirements.
• In the long horizon, MPS serves as the basis for estimating long-term demands on
the company resources such as people, equipment, warehousing, and capital.
• MRP input data include MPS, external demand for components, forecasts of
independent demand for components, BOM, and fundamental data in item
master such as lead times, safety stocks, scrap allowances and lot-sizing rules.
Among the above data, MPS is the primary input to MRP. It enables MRP to
translate the end item schedules into individual component requirements.
Therefore, MRP depends on the validity and realism of the MPS for its
effectiveness.
6. 21-Jan-20
Inputs of MPS
o The data needed to develop an MPS include:
o
o Aggregate planning.
o Customer orders.
o Demand forecast.
o Inventory replenishment orders.
o Interplant requirements.
o Safety stock.
o Released production orders for end products.
o Capacity constraints.
7. 21-Jan-20
Difference between Aggregate & MPS production:
• Production plans and master production schedules differ in their precision. Production
plans are “macro” plans, while MPS are “micro” plans. Production planning is for
preparing resources to accomplish business objectives. Resource requirement planning is
used to reconcile business objectives with the resources available. MPS is the schedule of
end item production. It is a decision of manufacturing actions subject to the constraints of
capacity.
• The master scheduler must devise an MPS to fit the constraints of the PP. MPS is derived
from the customer orders and the forecasts, but must not exceed the production plan
quantities
8. 21-Jan-20
Outputsof MPS:
Common MPS Output are:
Available-to-Promise: –Presents the available-to-promise quantities for each MPS line
item. The report is time-phased, usually into weekly basis.
Demand Tracking Report: – Provides historical data on actual shipments and order
bookings as compared to management forecasts.
Forecast Data Report: – Summary of historical demand activity, which indicates the
significance of errors between forecast and actual and provides a statistical summary.
Period Summary Forecast: – Forecast by line item within a product group for each period
through the future 12 periods, with summaries by period for the group and yearly for line
items.
9. 21-Jan-20
Outputsof MPS:
Item Demand and Forecast: – Presents several years of historical data (user-specified)
and the next 12 months of forecast demand for each item. Typical data elements can
include YTD totals, total yearly demand and quarterly totals, with comparisons by
percent between items and their total product group.
Build Schedule Report :– Reports the build schedule for one or all assemblies.
Schedule vs. Actual Output – Reports the actual output compared with the scheduled
output at a particular work center.
Where Used Report: – Lists all parts/tools used at each work center/machine.
10. 21-Jan-20
Difference between MPS & Aggregate Production:
• The term Master Planning comes from the recursive process of optimization. It means
that the quantities to be produced of each unit are defined based on the
aforementioned inputs and constraints. The final result will be the Production Master
Plan. This plan will not be static, but renew weekly or monthly.
• Remember that MPS involves planning, and it’s much more than simply scheduling.
• Scheduling just gives answers to when, typically setting a timeline, in chronological
order things to be done. The typical example is when a person schedules things to do.
This will include the list of activities using a calendar and sometimes describing who
will take responsibility.
• Instead, the MPS involves planning activities and many categories, departments,
resources and people. These categories can be broken down in higher levels of detail
and deliver to multiple team members. Finally, the team members will coordinate and
work simultaneously to achieve a common business goal.
11. 21-Jan-20
Difference between MPS & Aggregate Production:
• On the other hand, consider that MPS is not the same as Production Planning (PP).
• Production Planning is a previous stage that defines the levels of production at higher
levels and fewer details. They determine the amount of production in terms of families,
not individual items.
• For example, the PP will define the amount of chairs to be produced while the MPS will
consider at individual. The planning horizon in the case of PP is also the middle term, from
6 months up to 24 months. The PP helps determining the required resources and
determines the inventory levels at higher levels.
• It’s a powerful plan for the top management in which they can have visibility of the
business from the manufacturing point of view.
12. 21-Jan-20
MPS Usage in ManufacturingCompanies:
To successfully implement an MPS, it must be understood that its purpose is not to
state the quantities and delivery times of the products. The MPS is in fact a solid
contract between Sales and Production. The MPS defines what Production will
produce, and it’s not a forecast at all.
There are manufacturing variables that the planner has to consider when running the
MPS.
These variables are:
• Batch criteria
• Sequence constrains
• Set-up times
• Capacity over-saturation
13. 21-Jan-20
Lead Time:
• Lead Time is the amount of time between process initiation of the production till its
deliverance. For our customers Lead Time is the time between a confirmed customer
order and its scheduled pick up or delivery based on our terms and conditions. This
varies based on the customer and the product.
14. 21-Jan-20
Available to Promise:
Available to promise (ATP) is the projected amount of inventory you have left available
to sell, not including allocated inventory. ATP only considers material availability and
assumes infinite capacity resources. By calculating ATP firm / company could have on
distribution and allows businesses to keep the minimum amount of a given product
within their warehouses so that they use their inventory space efficiently.
Available-to-Promise is the uncommitted portion of a company’s inventory and
planned production, maintained in the master schedule to support customer order
promising. The ATP quantity is the uncommitted inventory balance in the first period
and is normally calculated for each period in which an MPS receipt is scheduled. In the
first period, ATP equals on-hand inventory plus MPS (if it is positive) less customer
orders that are due and overdue. In any period containing MPS schedule receipts, ATP
equals the MPS less customer orders in this period and all subsequent periods before
the next MPS schedule receipt. A negative ATP takes over prior periods’ ATP until it
turns from negative to zero or the prior periods’ ATP becomes zero.
