What Is A Master Production Schedule? (How To Implement One)
By Indeed Editorial Team
Published 13 July 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
The master production schedule (MPS) is a method for production planning and scheduling that specifies the production quantity of a product over time. MPS helps the manufacturing process to align with the expected sales. Learning how to use a master production schedule can help you advance your career and give you the opportunity to support an organisation's objectives. In this article, we answer the question, "What is a master production schedule?", discuss how to implement such a schedule, explain its importance and benefits and outline the differences between a master production schedule and manufacturing resource planning.
What Is A Master Production Schedule?
The answer to the question, "What is a master production schedule?" is that it is a tool that manufacturing companies can use to define how much of a particular product to manufacture at different periods to meet demand. MPS contains details about the goods to produce, their expected output and the preferred manufacturing schedule. While MPS does not extensively cover the allocations of production materials, it helps facilitate a clear understanding between the sales and manufacturing departments of what and how much to produce for the business to meet its client demand.
Why Is A Master Production Schedule Important?
A master production schedule is important, as it enables a business to plan effective production using projections of anticipated demand. This can help reduce waste and increase revenue. For instance, if a business expects reduced demand for a product during a specific season, they might plan to manufacture less, which can reduce costs and the number of unsold goods. Although MPS cannot ensure that the actual demand matches the demand forecast, a business can utilise MPS to make an informed decision about the most effective product production plan.
How An MPS Works?
The master production schedule produces a set of outputs useful for decision-making by employing many variables as inputs. Common inputs include demand forecast, production costs, inventory funds, customer needs, inventory status, supply, lot size, production lead time and capacity. An enterprise resource planning (ERP) system that connects a sales department with a production department can automatically fetch inputs. For instance, when the sales department records a transaction, the MPS may adjust the anticipated demand automatically to suit the new demand. Manually calculated forecast data can also act as an input for preparing MPS.
Some of the most useful outputs the MPS provides include production quantity, staffing requirements, quantity available for demand and an anticipated budget. Findings of the MPS can also help with material requirements planning (MRP).
Benefits Of A Master Production Schedule
Following are some of the major benefits of using a master production schedule in a manufacturing business:
Minimises waste: A company can reduce production waste by only producing what is necessary using a precise master production schedule.
Prevents shortages: An organisation can ensure that it produces enough products to satisfy all interested clients by monitoring product production and optimising it on demand.
Increases profitability: A business can avoid wasting resources by producing goods that are not in demand by developing a master production schedule. This can cut costs and boost revenue by helping optimise resource allocation.
Encourages collaboration: A master production schedule encourages communication between the manufacturing, sales and marketing departments to ensure a precise estimate. It also encourages the dissemination and integration of corporate objectives into all plans and initiatives.
Promotes forecasting data: Forecasts of consumer demand help in a master production schedule to establish the proper level of output. This motivates a business to allocate a budget for thorough forecasting to develop a more precise timetable.
Offers long-term understanding: A business can establish a master production schedule that projects out far in the future. Based on the long-term demand, this can assist a business in determining both short- and long-term goals.
Helps resources allocation: By helping create a material requirements planning, the master production schedule can assist a business plan and assign the optimal quantity of resources to production.
Aligns to business goals: A master production schedule is simple and adaptable, making it easy to change based on current business objectives. The schedule may change as these objectives do.
Allows faster calculation: A business may quickly develop a master production schedule without requiring specialised computer software, as it needs only a few pieces of information. This may reduce the necessary resources to develop and plan the timetable.
How To Create And Implement A Master Production Schedule
Following are six key steps you can follow to develop and implement a master production schedule successfully:
1. Decide the timeframe
Decide the future period that you expect the master production schedule to cover. After creating this specification, you may choose how long each manufacturing phase lasts. For instance, designate each production period as a month and develop a master production schedule for two years. This implies reviewing your monthly inventory demands and objectives. Business objectives and information used to make future forecasts may also affect the timeframe.
2. Count initial inventory
Initial inventory is an important input variable for creating a master production schedule. This may impact how much the company produces throughout the period. The business might require 300 units of a certain product to meet demand. Given that there are already 100 units, the business only has to build 200 more. This can help improve effectiveness and save waste.
3. Include current order portfolio
Add details about current orders for each period to a master production schedule to make it precise. This can improve prediction accuracy and ensure the business can fulfil all previously placed orders. It can also affect the availability of current stock.
4. Consider sales forecast
The next step in developing a master production schedule is to utilise the available information to understand future orders and purchases. Making prediction models based on recent orders or doing detailed market trend forecasts are two ways to find out. Depending on the information and how far into the future you make the forecasts, prediction accuracy can vary.
5. Determine production quantity
After gathering all of this data, you can use a common mathematical equation to predict the period's production needs. For instance, the business can plan to make 200 units in that time if it has 50 units of the product in stock, has received an order for 50 and anticipates receiving orders for 200 more. You can enter this data in a spreadsheet, which you can then modify for every new time period as you receive new data.
6. Coordinate between departments
Coordination among all departments is one technique to complete a master production schedule. Everyone engaged can find it crucial to understand the company's business plan and how it might impact the schedule. For instance, a business that intends to grow may wish to produce more products to satisfy the demands of an anticipated larger clientele.
To contribute reliable information to the master production schedule, sales, manufacturing and marketing teams can work together. You can highlight an increase in demand on the production schedule if the marketing team has scheduled a sales campaign. The product's recorded demand may be lower if a sales team decides to reduce the sales campaign for one product in favour of another.
Difference Between Master Production Schedule And Manufacturing Resource Planning (MRP)
Following are a few key differences between a master production schedule and manufacturing resource planning:
A master production schedule can assist a business in determining how much to produce to meet demand, but manufacturing resource planning is a more sophisticated technique that considers additional production channels. A master production schedule act as a component of a more thorough manufacturing resource planning system. For example, a business can use a master production schedule as the first step in its resource planning procedure.
A master production schedule considers expected product demand while setting manufacturing objectives. It may consider orders, available stock and any other elements that might impact demand. Manufacturing resource planning also considers data from financial records, human resources, machine capacity and material requirements. MRP helps to get a very detailed outlook on production requirements and goals.
A business can often generate a master production schedule manually or using spreadsheet software because it considers fewer inputs. Planning for manufacturing resources is more difficult and requires more data inputs. Preparing MRP often requires specialised software.
A master production schedule forecasts necessary production requirements based on a predetermined duration. It does not offer daily business information, but a business can update it to reflect new sales or availability information. A business can use MPS to get accurate resource availability information at any time since it frequently uses a computer programme to perform material resource planning.
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