According to recent research from Deloitte, nearly 75% of organizations are using master production scheduling (MPS) to optimize their manufacturing operations. Further supporting this study is a recent study from IFS that found that companies using MPS are able to reduce their inventory costs by up to 50%.
Additionally, a recent survey by Gartner showed that 78% of companies had seen a reduction in lead times when implementing master production schedules.
In fact, a recent survey by McKinsey revealed that 87% of companies that implemented MPS saw an increase in customer satisfaction. According to the same survey, MPS implementations have resulted in an average of 10% cost savings.
All of these statistics highlight the benefits of implementing a master production schedule in your manufacturing operations. As is evident from its name, a master production schedule (MPS) is a production plan that states which products will be manufactured, as well as their amounts and start dates.
Thus, through the implementation of master production schedules, you will be able to ensure that you are able to cater to the demands of all your customers, you are able to maximize your productivity and profitability, and you are able to ensure the success of your business.
However, considering the complexities of manufacturing and, therefore, evident complexities that would be involved in making your company’s master production schedule, it is vital that you have a comprehensive understanding of it.
This article will help you thereby covering the following topics:
- What is a Master Production Schedule?
- Objectives of Master Production Schedule
- 5 Main Functions of a Master Production Schedule
- Elements of a Master Production Schedule
- 7 Proven Steps for Creating an Effective Master Production Schedule
- 3 Tips for Creating a Master Production Schedule
- How do Manufacturers Use a Master Production Schedule?
- Benefits of Master Production Schedule
- FAQs about the Master Production Schedule
- How can Deskera Help You Make and Manage Your Master Production Schedule?
- Key Takeaways
- Related Articles
What is a Master Production Schedule?
The master production schedule is a production planning tool that defines how much of a product needs to be manufactured at different periods. This simple schedule can thus be used as a basis for further planning and scheduling throughout the business. It is thus a crucial part of production planning and scheduling.
Usually, a master production schedule does not go into detail, like what materials will be used in production and which employees will be assigned to the tasks.
Rather, it is more of a contact between the sales department and the manufacturing department, thus helping in balancing supply and demand by defining the necessary quantities to be produced and the timeframes of production.
If your business has a make-to-stock manufacturing environment where your demand forecast will drive production planning, then a master production schedule is an especially important tool for you.
Additionally, if your business has a make-to-order environment, along with mixed-mode manufacturing where your business manufactures standard products, then a master production schedule will again be a useful tool for you to implement.
Here, the sales forecast, along with the master production schedule, will help you plan the inventory that will be needed for production. This will thus optimize your inventory management.
What you must keep in mind regarding the master production schedule is that considering it is often used as the main driver of production activity, you need to ensure that it is accurate as well as viable for having a positive effect on the profitability of your business.
Also, a standard master production schedule is a long-term plan that is made separately for each product. It is done with a planning horizon (i.e., the amount of time your organization will look into the future when preparing a strategic plan) of three months to two years, with a minimum time bucket (smallest time frame specified) of one week.
Thus, a master production schedule is the backbone of every productive manufacturing business that will help you:
- Make adjustments to fluctuations in demand
- Prevent stockouts
- Improve your efficiency
- Perform effective cost control
A quick overview of the master production schedule process steps that you will need to follow when putting this together are:
- Map your demand, and then make a demand plan.
- Figure out the raw materials that you will need, and then get your supply chain up and running with production planning processes.
- The prior steps will now get you ready to develop a master production schedule proposal. This is a rough draft that will help you assess whether your production schedule is workable or not.
- Use a rough-cut capacity planning technique to calculate if you can meet your proposed master production schedule manufacturing. You should continuously use this technique to assess if your capacity can meet demand when your master production schedule is in action. This will thus increase the efficiency of your resource capacity planning while helping you save on additional business expenses.
- If the proposal of your master production schedule is workable, then you should evaluate it with regard to the effective use of resources, inventory investment, and customer service.
Once you have implemented a master production schedule, every employee on your shop floor will be clear on what needs to be produced each week. Thus, your master production schedule will help you with shop floor scheduling as well, ensuring its accuracy.
Hence, your master production schedule will make sure that everyone in your business is working towards the same goal. The insights provided through it will help you in knowing when you need to decrease or increase your production.
In fact, your master production schedule will be a crucial input into your aggregate operations plan. This is because it will give you an overview of everything that your business needs to do for 100% order fulfillment.
This will include the production of sales orders and having them delivered on time, without any problems or defects. This will help your business increase its net revenue as well as net profit ratio.
Objectives of Master Production Schedule
- Save you time by increasing the efficiency of your production flow
- Makes your demand flow smoother
- Ensures standardization of communication across your business, thus also making sure that your production scheduling is synchronized with other departments
- Lowers your lead time
- Helps you to prioritize your requirements, thereby preventing undue pressure on your working capital
- Helps you to keep your production stable
- Generates workable plans for your manufacturing orders after taking into consideration available resources, customer requirements, and company goals
- Assists in making accurate purchases and transfer orders
- Monitor and adjust the production schedule when necessary
- Monitor and adjust inventory levels as needed
- Develop an effective and efficient system for managing production schedules.
- Develop effective and efficient communication systems to ensure that all stakeholders are aware of production schedules.
- Optimize the use of resources to maximize efficiency.
- Track and report on performance against the production plan.
5 Main Functions of a Master Production Schedule
The primary purpose of a master production schedule is to save you time by ensuring that the hours you spend managing your production flow, you are able to do so more efficiently. This thus gives you more space to scale your manufacturing business.
All the other objectives and functions of the master production schedule are aligned toward achieving its aforementioned primary purpose. Thus, the other functions of a master production schedule are:
Translating Production Plans
The master production schedule will help you determine how many items you need to produce within a specific time period.
This means that it will help you manage your operations such that you are able to strike a balance between demand, labor requirements, and equipment capability.
It will do so in a manner that your customers are satisfied, thus ensuring customer loyalty towards your business.
Evaluating Alternative Schedules
Through a master production schedule, you will be considering multiple manufacturing routes. This will help you determine which is the most efficient route for your business.
Additionally, it will also help you account for any problems that may arise along a production line.
Knowing this in advance will help you be prepared for it, thereby ensuring that the quality of your production is maintained and you also have the required safety stock levels.
Consequently, your manufacturing costs, as well as other additional expenses, will be minimized.
Produce Capacity Requirements
When you undertake rough-cut capacity planning with your master production schedule, you will be able to figure out your realistic capacity requirements to meet your demand, increase profits, minimize costs, and encourage returning customers.
Facilitating Information Processing
Your master production schedule will be able to help you set your reorder points of inventory so that you are able to make timely deliveries.
This is made possible because, through the master production schedule, you will be able to coordinate with different management information systems like finance, marketing, sales, and more.
Utilization of Capacity
Lastly, with a master production schedule, you will be able to establish the loads and utilization requirements of your equipment and machines such that it is productive as well as profitable.
Elements of a Master Production Schedule
To be able to have a master production schedule, you will first need a demand plan. However, for demand planning, you will need to stay updated with accurate historical sales data.
Then using this, along with the upcoming buyer persona trends, seasonal trends, and other such factors, you will be able to generate a projected demand for the upcoming weeks. You need to ensure that you adjust your projected demand on a week-to-week basis.
Additionally, to ensure that you are able to fulfill a large or uncommon order, you must keep safety stock. However, if demand grows, then you must adjust your order policy accordingly so that it does not eat into your safety stock frequently.
Thus, it is essential that as each week passes, you update your demand plan to create a more accurate production calendar. This will then help you make your master production schedule as well as updates in the same.
Once you have fine-tuned your master production schedule, it will become a valuable tool for your business’ order fulfillment.
However, to be able to have such a master production schedule, the elements that are must are:
- Product List - All the product models that you produce should be a part of this list. In fact, once you have completed your ABC analysis, you can arrange these models based on their popularity. This means that the items that you produce the most are at the top of your list.
- Variation Sub-Lists for Each Product - It is crucial that you have a field for each product variation. This means that you will need a field for each SKU. For example, if you split your backpacks into S, M, and L based on their sizes. You can further split them into other variations like color and material.
- Year, Month, and Week - This information will be useful to you for planning and keeping records, as well as for accurate demand forecasting. Thus, you should split up your schedule into months and weeks.
The main reason for this is that it will let you have a solid plan of what you should produce for the next few months. Then, every few months, you should reassess your projected demand, letting you make adjustments to it when required.
- Production Quantities - This is the number of units that you decide to manufacture each week. For instance, you decide to manufacture 200 units of your product in a week based on your demand plan. This means that at the bottom of each weekly column, you are adding the number 200.
However, you also need to allocate how many of each product variation will make up a total of 200. This will depend on what you already have in stock and what is your projected demand.
For example, in one week, all 200 units could be of one SKU, however, in the follow-up production, it could be evenly distributed across product models.
7 Proven Steps for Creating an Effective Master Production Schedule
The seven steps that you must follow to make an effective master production schedule are:
Understand and Define Your Products
Your master production schedule depends upon an in-depth knowledge of your products and clear definitions for product categories and product groups. Thus, before making your master production schedule, it is important to form strict categories and definitions for your products.
Additionally, it is also important that you organize your products into their respective categories. Within these categories, you can define similar products together to create product groups.
Thus, to create an accurate master production schedule, you must define your product lines which will represent different categories of products, as well as product families, which will represent similar products within a line.
Set Your Lead Time Targets
It is important that you know how long it is going to take to complete manufacturing a batch of your products. In fact, you must know it as accurately as possible because you will have to pass this information on to your customers.
Only if you adhere to the deadline you give them will you see an improvement in your customer retention, as well as in your operational metrics.
Thus, you must consider how long each component of the manufacturing process will take you to complete. You should then be able to answer the following questions:
- After the order is placed, how long will it take you to get all the relevant materials?
- How long will it take you to turn these materials into a manufactured product?
- How long will it take for your products to be packaged and sealed after undergoing quality checks?
- How long will it take for the packaged products to be made ready for delivery?
- How long will the delivery take before it reaches your final customers?
After considering all these different components, you will know your total lead time, i.e., the time taken from when the order is placed till the customer receives it. To determine your lead times as accurately as possible, you should draw upon your past experiences and your manufacturing data.
Assess Public Demand and Decide Upon the Required Rate of Production
In this step towards making an effective master production schedule, you need to assess whether your product is already in demand among your customers or not. This is because if your product is already in demand among your customers, then you will have to be capable of a high rate of production to be able to cater to that demand.
An additional benefit of having a high rate of production in such a scenario will ensure that your product does not get sold out and continues to remain available to your customers. This will lead to improved cash flow and a higher ratio of accounts receivable to accounts payable.
On the other hand, if your demand is low, then your rate of production must reflect this. This is essential because if you develop and deliver too many products, your retailers will face difficulties in selling them. Additionally, it will also lead to a waste of your money and resources.
Thus, it is crucial that you assess the public demand for your product and accurately calculate how many items you will be producing over a set time period for making your master production schedule.
Make Sure that Available Resources Align with the Production Rate
This is your next step in making an effective master production schedule. Once you have calculated the required rate of production for each product category and product group, you must plan for the resources that you will need to fulfill this.
For instance, for some of your product groups, the production rates may be in excess of normal levels in order to ensure that your retailers are well-stocked with the products. In this step, then, you will have to assess how feasible this required production rate is with your current levels of available resources.
This step will help you determine if you need to expand the levels of resources available to your teams. Additionally, it will also help you identify if you need to reallocate resources from lower-demand production chains to higher ones in order to hit your targets.
Lastly, this step will also include assessing what resources you have currently and how you can optimize this ahead of the next round of production. This will help you in improving your business metrics, as well as other relevant key performance indicators.
Identify Production Shortfalls and Troubleshoot These Problem Areas
In this step of making an effective master production schedule, you will be able to identify those sections of your production line which are unable to meet demand.
While these problems may be due to individual components that are particularly difficult or time-consuming to manufacture, they might also be more widespread, thereby covering the entire production line.
In this step, you will also need to identify how you can overcome these problems and troubleshoot these issues. You will be able to do so only after you have identified the problem areas. Then you will need to calculate how you can free up resources to increase the rate of production, or you can figure out how to streamline and optimize your production method.
Use Quantitative and Qualitative Data to Craft Your Master Production Schedule
In all the above-mentioned steps, you would have managed to gather a significant amount of information and data. This data will be quantitative, like the numbers relating to production rates, resource availability, and customer demand. However, this data will also be qualitative, like, the product categories and groups, as well as retail partner requests and other information.
When making your master production schedule, you should draw up on all of this data. Using this data, your master production schedule will become the master sheet, followed by your entire production operation. This master sheet will outline the following:
- Which products are to be manufactured?
- Viable lead times for all these products
- Rates of production based on demand
- Available resources
- Resource reallocation plans
- Potential problem areas during manufacturing
It will thus help you ensure that you have satisfied customers and healthy financial statements and financial KPIs.
Check, Assess and Adapt Your Master Production Schedule During the Production Operation
After step 6, your first draft of the master production schedule will be completed. Post this hence, your manufacturing operations can begin. However, what you must remember is that a master production schedule is not a static document, as it is designed to grow and evolve over time as you fine-tune your processes.
To make this happen, you will need to have a continuous policy of monitoring, assessing, and adapting your master production schedule as required.
For example, you find out that your lead time calculations are not as accurate as you presumed them to be. You thus need to alter these.
Additionally, you might also find that your predictions regarding resource requirements were incorrect and that you need to update that data too.
Once you update this data in your master production schedule, you are ensuring that it becomes a document that is more and more valuable to your team.
3 Tips for Creating a Master Production Schedule
To make your master production schedule more accurate, you should follow the following three tips:
Create a Realistic Schedule
When you are making your master production schedule, it is important that you are realistic about the amount of product you want to produce. This will ensure that you do not end up cramming items into your schedule or that you do not overschedule yourself and then run into problems.
Start with Your High-Priority Items
Before starting to make your master production schedule, it is important that you list the most necessary items for your business. These items should be at the top of your list and given priority treatment in your production schedule.
Break Down Each Task into Smaller Steps
To be able to better estimate how much time you will take to complete certain tasks, it is important that you break them down into smaller steps. This insight should then be used by you when making your master production schedule, which will further help you ensure that each job is completed on time.
How do Manufacturers Use a Master Production Schedule?
Irrespective of the size of your business or the industry that you are part of, the sooner you start using a master production schedule, the better it will be for your business. This is because a master production schedule will foster good business habits in you.
Considering that your business habits are a key predictor of your long-term success, this implementation will thus help you increase your net revenue, net profits, and return on investment.
Remember, the master production schedule is compatible with different production workflows:
- Make-to-Stock (MTS) - In this specialized scenario, a minimal quantity of items are assembled to form a more significant number of components. Here hence, your master production schedule would finish valuable items.
- Make-to-Order (MTO) - In this case, minimal raw materials are used to make various finishing goods. For example, the manufacturing process of automobile vehicles. Here, the main aim of your master production schedule will be the periodic arrangement of the actual customer orders.
- Assemble-to-Order (ATO) - Here, raw materials are utilized to effectively produce subassemblies and the essential components. Then, these components and sub-assemblies work in harmony to form various finishing goods. Here, your mast production schedule will help you emphasize the subassembly level.
Note: If you have an ATO workflow, then your master production scheduling will focus on the production of finished goods or components.
What you need to always keep in mind is that the goods that are the most profitable for your business are likely to make up most of the resources needed for production. Thus, as a manufacturer, a master production schedule will help you:
- Understand what needs to be produced
- Determine the size of your production batch
- Determine when the production of a batch should be scheduled
- The manufacturing route that your products should follow
Therefore, when making your master production schedule, you also need to consider the following important variants for which your master production schedule will be helpful:
- What are your batch criteria?
- What are your sequence constraints?
- What are your set-up times?
- What is the capacity over-saturation?
And other such relevant variants related to your manufacturing operations.
Benefits of Master Production Schedule
The master production schedule will help you plan, manage and modify your production processes. Its implementation will thus lead to the following benefits:
- Improved customer service by ensuring the timely delivery of products to customers.
- Reduced inventory costs due to improved forecasting accuracy.
- Better planning for resource utilization.
- Enhanced production efficiency by providing a clear plan for production.
- Improved communication between departments for better coordination.
- Enhanced profitability due to better inventory management.
- Reduced lead times for production and delivery of products.
- Improved scheduling of materials and resources.
- Increased ability to handle customer orders and inquiries.
- Acts as an effective barrier against the shortage of raw material and any unexpected mishap.
- Enhanced ability to respond quickly to changing customer demands.
- Reduced waste due to better scheduling and planning.
- Improved customer satisfaction by providing timely deliveries.
- Reduced inventory carrying costs.
- Improved ability to identify and address potential inventory problems.
- Enhanced ability to forecast future demand and production requirements.
- Help your account department reach income and expenses by providing account statements like profit and loss statements and balance sheets.
FAQs about the Master Production Schedule
- What is a Master Production Schedule?
A Master Production Schedule (MPS) is a plan that is used to manage the supply of products in a manufacturing process. It describes the timing and quantity of production for each product and item, as well as the resources required to meet the demand.
- How often should a Master Production Schedule be updated?
A Master Production Schedule should be updated regularly, ideally on a daily basis, to ensure that the production plan reflects the current demand and supply of products.
- What are the benefits of using a Master Production Schedule?
A Master Production Schedule can help to ensure that production is kept on track and that products are produced in the right quantities at the right times. This can help to reduce costs, improve efficiency and increase customer satisfaction.
- What information is included in a Master Production Schedule?
A Master Production Schedule typically includes information such as the item number, item description, quantity to be produced, date of production, and resources required.
- What are the different types of Master Production Schedules?
There are two types of Master Production Schedules: discrete and continuous. A discrete MPS focuses on the production of one item at a time, while a continuous MPS focuses on producing multiple items at once.
- How is a Master Production Schedule created?
A Master Production Schedule is typically created by analyzing customer demand, inventory levels, and production capabilities. This information is then used to create a plan that outlines the timing and quantity of production for each product and item.
- What is the difference between a Master Production Schedule and a Production Schedule?
A Master Production Schedule is a high-level plan that outlines the overall production process, while a Production Schedule is a more detailed plan that outlines the specific steps and tasks that need to be completed in order to produce a product.
- What are the components of a Master Production Schedule?
The components of a Master Production Schedule typically include the production plan, bill of materials, resource requirements, and delivery dates.
- What tools are used to create a Master Production Schedule?
There are a variety of software tools available that can be used to create and manage a Master Production Schedule. These tools typically include features such as demand forecasting, inventory management, and scheduling.
- What are the key performance indicators for a Master Production Schedule?
The key performance indicators for a Master Production Schedule typically include on-time delivery, inventory accuracy, production efficiency, and customer satisfaction.
How can Deskera Help You Make and Manage Your Master Production Schedule?
As a manufacturer or retailer, it is crucial that you stay on top of your manufacturing processes and resource management.
You must manage production cycles, resource allocations, safety stock, reorder points, and much more to achieve this.
Deskera MRP is the one tool that lets you do all of the above. With Deskera, you can:
- Track raw materials and finished goods inventory
- Manage production plans and routings
- Maintain bill of materials
- Optimize resource allocations
- Generate detailed reports
- Create custom dashboards
And a lot more.
It is also possible to export information and data on Deskera MRP from other systems. Additionally, Deskera MRP will give you analytics and insights to help you make decisions.
So go ahead and book a demo for Deskera MRP today!
Key Takeaways
The master production schedule is a production planning tool that defines how much of a product needs to be manufactured at different periods. This simple schedule can thus be used as a basis for further planning and scheduling throughout your business.
The five main functions of a master production schedule are:
- Translating production plans
- Evaluating alternative schedules
- Produce capacity requirements
- Facilitate information processing
- Utilization of capacity
The elements needed for making your master production schedule are:
- Product list
- Variation sub-lists for each product
- Dividing your production schedule into years, months, and weeks
- Production quantities in a week
The seven proven steps for making an effective master production schedule are:
- Understand and define your products
- Set your lead time targets
- Assess Public Demand and Decide Upon the Required Rate of Production
- Make Sure that Available Resources Align with the Production Rate
- Identify Production Shortfalls and Troubleshoot These Problem Areas
- Use Quantitative and Qualitative Data to Craft Your Master Production Schedule
- Check, Assess and Adapt Your Master Production Schedule During the Production Operation
The three tips that you must follow while making your master production schedule are:
- Create a realistic schedule
- Start with your high-priority items
- Break down each task into a smaller steps
The different production workflows that your master production schedule will be compatible with are:
- Make-to-stock environments
- Make-to-order environments
- Assemble-to-order environments
What will help you make the most effective master production schedule, ease your modifications on it, and help you stay on top of its management without any hassle is the use of software like Deskera MRP, which will automate several of your business processes.
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