How to make a master production schedule (MPS)

A Master Production Plan (MPS or PMP) is the document that contains a detailed manufacturing plan of the references to be produced in our factories in a given period of time. It is an extremely important element in the operations department of any productive company and needs to be nurtured by different areas in order to be executed successfully.

With the PMP we can determine, through the different production or manufacturing orders (PO or OF), the specific volumes of each product that we are going to manufacture in the short term, generally, with a weekly or biweekly vision and always having as a minimum point the manufacturing cycle of the product itself. The PMP must consider the final product, available for shipment to the end customer, and reflect in detail the planning of by-products or intermediate products.

The Master Production Plan generally falls under the responsibility of operations management (or production management in its absence) and must contain the following elements:

Depending on the type of product we manufacture, the needs will be different. For example, perishable food products, which have a very short shelf life, will require continuous and short-term planning, whereas the production of a tool such as a hammer has a longer service life and is easier to operate with safety stocks.

On the other handOn the other hand, the sales department must be able to provide accurate and solid information that will help us to have a vision in a specific time frame, for example:

• Firm orders and delivery times.
• Orders with high probability of entry also with their delivery dates.
• Historical information that allows us to make analogies with similar periods.
• Additional information that can be transmitted from the sales area, e.g. promotions, unusual circumstances or “feeling”.
  feeling
  “of customers.

With this demand analysisWith this demand analysis, we will be able to determine the references that we have to serve, their approximate quantity and with a schedule of product outlets.

The second step, which involves the logistics and procurement areas, consists of determining stock levels with finished product, ready for shipment to the customer, raw materials, auxiliary and intermediate products. With all this information we can determine the volume of references to be manufactured to fulfill the orders and the possible safety stocks that we have defined.

By involving the purchasing or procurement department, we will be able to know, in case it is necessary to purchase volumes of raw materials or auxiliary materials, the delivery times to ensure that we can manufacture according to the established plan.

Our facilities have a production capacity that we are aware of thanks to
KPI’s such as OEE
obtained from a

MES system

or similar. Therefore, we know how much we can produce per unit of time. At this point, it is vital to involve the maintenance area, which, through a

CMMS

has established preventive maintenance plans that are vital for the proper functioning of our facilities, so that knowledge of the scheduled actions will determine the expected capacity once they are known.

It is also important to take into account the teams available according to their work schedules. In many cases we have limitations such as certifications or specific training to operate certain machines to be considered in the plan.

In addition to taking into account sales forecasts, our stocks and the availability of our factory, we also need to take into account other elements that, depending on our way of working or our sector, may be necessary, for example:

• 
  Temporary blocks
  of the quality department to ensure that the product is suitable for shipment to the end customer.
• 
  Minimum storage
  required by a final product.
• 
  Maximum delivery times
  for products with an expiration date, for example.
• Corporate strategies or priorities.

Once we have seen what a Master Production Plan should include, it is now time to execute it, but how do we do it?

From the PMP, the production department generates the different production orders and, together with the planning area, which is usually supported by advanced planning and sequencing tools (APS), generates a sequenced and optimized production plan that allows us to start working and it will be the production area that executes the orders.

• Detailed planning of requirements and ability to meet them.
• Anticipate problems to prevent them from arising in the execution of the plan (stoppages, stock-outs, delivery date failures).
• Compliance with customer delivery dates and therefore customer satisfaction.
• Improve stock levels of raw and auxiliary materials and finished product, in order to be more efficient and to optimize time and space.
• Synergy between the different departments and collaboration to achieve the company’s objectives.

We show a basic exercise of an MPS, we will be based on a FMCG company, focusing on a product “x”, this company works with forecasts. Example with a data simulation:

• Initial inventory: 2,000 units
• Lot size: 1,500 units, refers to the number of units produced in each period.
• Demand forecast for September: 5,000 units
• Demand forecast for October: 7,000 units

This basic sample exercise shows forecast demand and orders.

• We are always considering the plus or minus value between forecasted units and sales orders.
• If the initial inventory has a higher value than the forecasted or customer orders, the production of MPS will not be necessary.