The ERP Software Master Production Schedule: Is it the Be-All and End-All?

Is the shop floor spiralling out of control? Don’t know who is really controlling the shop floor? The planning / production staff, or the sales department? Do you know what needs building tomorrow? Or even next week?

In a previous installment, we looked at the data requirements needed to successfully manage the inventory.

We now take a look at Master Build Schedules for controlling the manufacturing schedule. Is it the right tool for your environment? Or is there potentially a better way?

First, what is the Master Production Schedule (MPS) in ERP Software?

A master production is exactly what it sounds like. It is a schedule used for determining manufacturing production on the floor.

Yes, it can be changed. However, the whole idea of a Master Production Schedule (MPS) is to provide some predictability to the manufacturing process and the long-term ordering of material requirements.

In an MPS environment, production can be planned a number of days or weeks prior to the need.

This does not mean that it will always be perfect, but at least the production people can plan their jobs, and the purchasing department can plan for the required materials to be on hand.

The Ongoing Changing Demands of a Forecast

If production is based on a calculated forecast, then every time you run a forecast calculation, your net “demand” will change – it becomes a moving target.

We often hear companies complain about this unpredictable model with forecasting, especially in an environment where market demands keep changing.

The ensuing aftermath results in inefficient production runs due to “emergency” production, increased shipping costs to get materials quicker, and lost employee productivity due to “fire-fighting”.

There will still be those times when demand will outpace the production due to un-expected circumstance (such as the marketing department running a promotion to counter a competitor’s promotion).

But you are now in a better position to react to that situation, since you can now compare expected production to changing forecast requirements, as well as actual real demand.

The planning department can plan accordingly for the short-term, while keeping the MPS alive and well for the medium and long term.

You can overcome the short-term problem by planning for overtime, moving production around to accommodate the need, or cut production of several other products where actual demand may be wavering.

Is Master Production Scheduling (MPS) Right For You?

If you are a production line facility that produces consumable goods on a regular basis, then MPS is definitely the way to go.

If your production is made-to-order, then this is likely not your best option, unless the components used can be pre-made through an MPS (for example, you produce a common consumable using MPS, and then have made-to-order jobs that use that consumable packaged to customer requirements).

In this case, MPS can be used for predictable production of the consumable, and a more appropriate tool, such as a Factory Scheduler can be used for more effective management of the shop floor.

What If I Also Have Custom Production Orders?

Custom products may still fall into the MPS realm. For example, if you have a custom product that you produce for a particular customer at the same time every year, then you can specifically place this in the MPS so it is in the long-term plan.

If special demands are not that specific, but you have long lead-times for deliveries, then MPS will still work.

If there are short lead times for special products, then MPS might not work, especially if there are long lead times for materials. If there is some predictability to these orders, then straight forecasting may be the better option.

Can Forecasting And Master Production Scheduling (MPS) Be Used Simultaneously?

If Material Requirements Planning (MRP) is used for long-term purchasing, then MPS and Forecasting can be used together, but not on the same item.

If an item is flagged to be an MPS item, then the MRP system will ignore forecasts for that item when calculating demand.

Forecasts can still be maintained for the MPS items even though they do not affect demand. Forecasts on MPS items can be used to provide comparisons against the MPS.

By performing this function, the Planners can see if the planned production schedule will meet the upcoming demand in the near and long term, and adjust schedules accordingly.

How Did I Know How We Did?

In our next installment, we’ll look at the tools available for reviewing our performance. How did actual sales compare to our forecast? What were our service levels really like?

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