40 master schedule
DESCRIPTION
mscTRANSCRIPT
Advanced Production Management Chapter 4:
Master Schedule
Technical Management
25.04.2014
M.Eng. Maria J. Aragón S.
2
Content
1. Introduction to the “Master Schedule”
2. Time Horizon & Time Fences
3. Master Production Schedule (MPS)
4. Available to Promise (ATP)
5. Approaches in different environments
6. Demand Management
3
Introduction
• Sales & Operations Planning is done on a product family
level on a strategic time horizon that allows for general
middle-term planning
Master Schedule
• A higher level of detail is needed
for the every-day operations:
+ For specific products
+ On a shorter time frame
4
Master Schedule Introduction
• The “Master Schedule” shows:
+ What should be produced
+ How much should be produced
+ When should it be ready
• Every company has one!
+ Even if it’s informal
+ Even if is not called “Master Schedule”
+ Even if it’s only inside somebody’s head
5
Master Schedule Introduction
The Master Schedule allows a company to:
• Break-down the aggregated plans made in S&OP, into
specific products
• Sever as a plan that uses actual customer orders in
addition to forecast data
• Develop much more specific capacity and resource plans
• Translate customer orders in to effectively time production
orders for the facility
• Plan inventory levels (specially at the finished good level)
6
Master Schedule Horizon
• It MUST be at least as long as the “cumulative
lead time” of the product to be planned
“Cumulative Lead Time”
7
Master Schedule Horizon
• Example: Bicycle
https://www.cbsi-corp.com/wp-content/uploads/2012/02/NA50_03_Bill_of_Materials2.pdf
8
Bicycle Assembly
Wheel Manufacturing
Frame Manufacturing
Master Schedule Horizon - Bicycle Example
5d
6d
6d
Assemble Frame & Fork
Attach handlebars,
brakes, saddle
Assemble wheels,
pedals, chain Final finishing
Manufacturing tubes
Welding and gluing
Finishing & Painting
Spoke lacing
Tensioning and truing
Tire & valve assembly
Based on this information, can you determine the minimum time horizon needed for scheduling?
9
Frame Manufacturing
Bicycle Assembly
Master Schedule Horizon - Bicycle Example
6d
Assemble Frame & Fork
Attach handlebars,
brakes, saddle
Assemble wheels,
pedals, chain Final finishing
5d
Manufacturing tubes
Welding and gluing
Aligning and finishing the
frame
Wheel Manufacturing
6d
Spoke lacing Tensioning and truing
Tire & valve assembly
12d
10
Master Schedule Horizon - Bicycle Example
Level 3
Level 2
(Sub assemblies)
Level 1
(Sub assemblies)
Level 0
(Finished Good)
Bicycle
( 1 pc.)
Wheel
(2 pcs.)
Rim
(2 pcs.)
Tire
(2 pcs.)
Tire Valve
(2 pcs.)
Spokes
(72 pcs.)
Frame
(1 pc.)
Color
(1 l)
Tubes
(4,5 m)
https://www.cbsi-corp.com/wp-content/uploads/2012/02/NA50_03_Bill_of_Materials2.pdf
Bicycle Bill of Material (BOM)
Purchased Parts also have a lead time that must be considered in the
Scheduling Horizon!
11
Master Schedule Horizon - Bicycle Example
Level 3
Level 2
(Sub assemblies)
Level 1
(Sub assemblies)
Level 0
(Finished Good)
Bicycle
( 1 pc.)
Wheel
(2 pcs.)
Rim
(2 pcs.)
Tire
(2 pcs.)
Tire Valve
(2 pcs.)
Spokes
(72 pcs.)
Frame
(1 pc.)
Color
(1 l)
Tubes
(4,5 m)
https://www.cbsi-corp.com/wp-content/uploads/2012/02/NA50_03_Bill_of_Materials2.pdf
Bicycle Bill of Material (BOM) 6d
5d 6d
2d 3d 2d 2d 3d
2d
6+6+3+2 = 17d
6d
6d
3d
2d
12
Example – Exploded View of a Pump
13
Time Fences
• Since forecasts are almost always wrong, how to
use them for specific scheduling?
Time Fences
Demand Time Fence Planning Time Fence
14
Time Fences
Time Fences Demand Time Fence
• Shorter
• Frozen
• Only real demand data is considered
• Forecast is ignored
Planning Time Fence
• Approximately the cumulative lead time
• Flexible
• Demand & Forecast data is combined
15
Master Production Schedule (MPS)
Period 1 2 3 4 5 6 7 8 9 10
Demand 40 50 45 50 50 50 50 50 50 50
Projected Available 30 60 15 45 75 25 55 5 35 65
MPS (completion time) 80 80 80 80 80 80
A Sample Master Schedule (Fig 4.4)
On hand = 70 no planned inventory level Lot size = 80
The entire planning tool is called Master Schedule, the specific schedule production quantities and times are called Master Production Schedule (MPS)
16
MPS – Impact of Production Environment
MTS
• Orders are supplied from Stock
• MPS can also be seen as a “final assembly schedule” or “inventory replenishment schedule”
ATO
• The customer chooses various optional subassemblies or features
• Too many options to be individually scheduled
• The MPS focuses therefore on scheduling the options, not the finished goods
MTO
• Customer has a strong influence on the design, so it’s very difficult to master schedule the finished good
• But the raw materials might be common to most of the products
• The MPS focuses on the raw material requirements
17
MPS – Impact of Production Environment
MTS
ATO
MTO
Finished Goods
Raw Materials
MPS
Finished Goods
Raw Materials
MPS
Finished Goods
Raw Materials
MPS
18
MPS – Impact of Production Environment
MTS
• Finished goods
ATO
• Options
MTO
• Raw Materials
19
Available To Promise (ATP)
• Quantities from the master production schedule
that are available on a given period for additional
customer orders
• Or: the quantity that has not yet been “promised”
to any specific customer order
• Benefits of calculating the ATP :
+ It provides visibility of the actual circumstances
+ Gives the ability to communicate immediately and
honestly with customers when new requests come in
20
Available To Promise (ATP) - Example
Product: A
• Lead time: 2 weeks
• Lot size: 60
• On-hand: 56
• Demand Time Fence: 2 weeks
Period 0 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 22 25 20 20 18 18 32 30 28 28 29 23
Customer Orders 24 23 17 22 15 14 17 16 12 16 13 11
Forecast or Real Demand? 24 23 20 22 18 18 32 30 28 28 29 23
Projected Available Balance 56 32 9 49 27 9 51 19 49 21 53 24 1
MPS 60 60 60 60
Promised until next MPS
Available to Promise
21
Available To Promise (ATP) - Example
What options do you have if a customer requests 35 units for period 7 ?
Period 0 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 22 25 20 20 18 18 32 30 28 28 29 23
Customer Orders 24 23 17 22 15 14 17 16 12 16 13 11
Forecast or Real Demand? 24 23 20 22 18 18 32 30 28 28 29 23
Projected Available Balance 56 32 9 49 27 9 51 19 49 21 53 24 1
MPS 60 60 60 60
Promised until next MPS 47 54 31 28 40
Available to Promise 9 6 29 32 20
22
Planning Options in an ATO Environment
• How to plan for the options?
Bicycle
Frame
(x3)
Regular (55%)
Heavy Duty (32%)
Light (21%)
Speeds
(x5)
3 Speeds (12%)
7 Speeds (5%)
10 Speeds (60%)
12 Speeds (20%)
15 Speeds (10%)
Handle bars
(x3)
Regular (55%)
Comfort Curve (25%)
Racing (33%)
Water bottle
(yes/no)
Yes (70%)
Common parts
A “Super Bill” is created
• Each option is planned based on the
historical % of the finished good
• Percentages can add up to more than
100% (“Hedge” or over planning)
• “Two-Level” master schedule is used
23
Two-Level Master Schedule - Example
Week 1 2 3 4 5 6 7 8 9
Bic
ycle
Mas
ter
Sch
ed
ule
Fin
ish
ed
G
oo
d (
Leve
l 0)
Forecast 100 100 100 100 100 100 100 100 100
Customer orders 100 82 70 52 23 12 0 0 0
Projected available 0 50 100 0 50 100 0 50 100
MPS 150 150 150 150 150 150
Available to promise 0 68 28 127 138 150 150
Re
gula
r Fr
ame
Op
tio
n
Mas
ter
Sch
ed
ule
(L
eve
l 1)
- 5
5%
Finished Good (Forecast – Orders) 0 18 30 48 77 88 100 100 100
Option Forecast 0 10 17 26 42 48 55 55 55
Booked orders 51 49 15 20 15 9 0 0 0
Projected available 69 10 78 32 75 18 63 8 53
MPS 100 100 100 100 100
Available to promise 20 65 76 100 100
24
Exercise (p. 95 Chapter 4 - Exercise 5)
25
Demand Management
There must be further alignment and coordination between
Marketing, Sales and Operations (other than S&OP & MPS).
Two main reasons:
• Service, repairs
• Engineering & Prototype requirements
• Quality Assurance Testing
Some Demand is Internal
• Changing Equipment & tooling capacity
• Changing human capacity (training & hiring)
• Submitting changes to suppliers can be costly and time consuming
• Phase in/out of designs
Operations are not as flexible as
Marketing & Sales
26
Demand Management - Elements
• Forecast method selection
• Forecast tracking & evaluation
• Methods to cope with the expected error Prediction
• Order reception
• Order delivery date promising
• Customer order servicing Communication
• Sales & Marketing must work close together with operations
• Understand constraints and opportunities Influence
• Allocation of resources according to order priorities
• Prioritization rules must be clearly defined Prioritization
Coping with Error
Communication
Influence
Lead time reduction
Production Flexibility
Policies for “higher-level” plans
Safety Stock or Over planning
27
Further Reading
• Chapter 4
28
THANK YOU.
Next Session: Inventory Management