DOM 301 : Operations Management Practice

Master Production ScheduleMaterials Requirement PlanningManufacturing Resource Planning

By;Munyao Mulwa

Dept Management Science

Master Production schedule

MPS is the plan that a company develops for production, inventory, staffing, etc.

  Sets the quantity of each end item to be completed in each week over short-range planning horizon.

Master Production schedule

A statement of production, not a statement of market demand MPS takes into account capacity limitations, as well as desires to utilize capacity fully Stated in product specifications – in part numbers for which bill of material exist Since it is a build schedule, it must be stated in terms used to determine component partneeds and other requirements; not in monetary or other global unit of measure

Master Production schedule

An effective MPS provides

Basis for making customer delivery promises

Utilizing plant capacity effectively

Attaining the firm’s strategic objectives as reflected in the production plan and

Resolving trade-off between manufacturing and marketing

Master Production schedule

MPS INPUTS: Forecast Demand Production Costs Inventory Costs Customer Orders Inventory Levels Supply Lot Size Production Lead Time capacity

Master Production schedule

MPS OUTPUT (production plan): Amounts to be Produced Staffing Levels Quantity Available to Promise Projected Available Balance

Firm orders from knowncustomers

Forecastsof demand

from randomcustomers

Aggregateproduction

plan

Masterproductionschedule

(MPS)

Materialplanning

(MRP)

Engineeringdesign

changes

Bill ofmaterial

file

•What to produce•When to produce•How much to

produce

Inventoryrecord

file

Reports12

Structured Approach to Master Scheduling

• Select the items and /or levels in the product structure to be included in the master schedule

• Determine the time horizon and time fences for the master schedule

• Obtain demand information for each item in the schedule over the time horizon

• Prepare tentative master schedule

• Perform rough-cut capacity planning on the tentative master schedule

• Revise the tentative master schedule so it is capacity feasible

9

Time Fences

• Frozen– No schedule changes allowed within this window

• Moderately Firm– Specific changes allowed within product groups as

long as parts are available

• Flexible– Significant variation allowed as long as overall

capacity requirements remain at the same levels

10

Time Fences

8 15 26

Weeks

FrozenModerately

Firm Flexible

Firm Customer Orders

Forecast and availablecapacity

Capacity

9

Master Schedule stability

• Freezing and time fencing concepts are used for stability

• No changes (or changes only after tougher negotiations) incorporated in certain number of recent periods of the schedule in the case of freezing

• Frozen period provides a stable target for manufacturing to hit

• Time fences specify periods in which various types of changes can be handled

• Two common fences are demand fence and planning fence, demand fence is the shorter of the two

9

Examples of MPSMPS using Level Strategy

Week

1 2 3 4 5 6 7 8 9 10 11 12

Forecast 5 5 5 5 5 5 15 15 15 15 15 15

Available 25 30 35 40 45 50 45 40 35 30 25 20

MPS 10 10 10 10 10 10 10 10 10 10 10 10

On hand 20

9

Examples of MPS

MPS using Chase Strategy

Week

1 2 3 4 5 6 7 8 9 10 11 12

Forecast 5 5 5 5 5 5 15 15 15 15 15 15

Available 20 20 20 20 20 20 20 20 20 20 20 20

MPS 5 5 5 5 5 5 15 15 15 15 15 15

On hand 20

9

Material Requirements Planning (MRP)

• Material Requirements Planning (MRP) is a computer-based production planning and inventory control system.

• It is a material control system that attempts to keep adequate inventory levels to assure that required materials are available when needed

• MRP is applicable in situations of multiple items with complex bills of materials (dependent) demand items

9

Objectives of an MRP system

• Ensure the availability of materials, components, and products for planned production and for customer delivery,

• Maintain the lowest possible level of inventory

• Plan manufacturing activities, delivery schedules, and purchasing activities.

4

Product Tree Structure (BOM)

D(1) C(1)

D(2)

A

Product Structure Tree for Assembly of Meter A LT InventoryA 2week 50C 1 week 40D 1 week 200Safety stock for A, C & D = 20, 30 & 120 respectively

Demand for meter type A

Week 42 = 200 Meters

Required;Create a schedule to satisfy demand, stating any assumptions made

Level 0

Level 1

Level 2

23

Manufacturing Resource Planning (MRP II)

• Goal 1: Plan and monitor all resources of a manufacturing firm – manufacturing, marketing, finance, engineering etc firm in a closed loop system generating financial figures

• Goal 2: Simulate the manufacturing system. Generate what if scenarios

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Manufacturing Resource Planning (MRP II)

• The fundamental manufacturing equation is;–What are we going to make?

–What does it take to make it?

–What do we have?

–What do we have to get?

• Using the example of Meter Type A, answer the above questions