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Master Scheduling
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Sales/Operations Planning Process

The existence of a Master Scheduling process is not a guarantee that operations planning and execution will be successful. Top Management needs a way to communicate the Master Planning management processes to Master Scheduling. When making this linkage, the Sales/Opera≠tions Plan and Review Process seems to work well for most companies. Sales/Operations Planning brings together all the product line and product family Demand and Produc≠tion Plans. This gives a total picture of the business and provides a platform for Top Management to coordinate their strategies. The outputs from the process should be the tactical directives that initiate the detail actions for daily operations.

The Sales/Operations Plan report represents the culmina≠tion of Top Management planning and coordination. The effective implementation of strategic initiatives should involve a monthly review processes that bring Finance, Marketing/Sales and Operations together. The Sales/ Operations Plan provides a structure and important infor≠mation for these discussions. Top Management should first review the performance of the immediate past period

and then focus on the current and future periods. During
the review the key Business Plan information, like current period sales revenue projections, can be compared with planned shipments. Forecast changes from the Demand Planning process, by product line and families, are lined up with current Production Plans. Significant swings in plans can be seen by evaluating the absolute changes in units or dollars and keying in on the percentages. For a Make-To-Stock company the changes in the planned inventory are an important consideration and reflect the ability of the business to stay on track in reaching its goals. The Sales/ Operations Plan shows the significant differences and signal Top Management that some adjustment may be needed.

One of the key principles that tie the Master Schedule to the Production plan is that the sum of all the Master Production Schedules for a product line must equal the Production Plan for that product line. Similarly, the sum of the product line Production Plans must equal the total of the Production of the product family in the Sales/ Operations Plan. This check and balance applies to De≠mand Planning where the sum of the item forecasts in the Master Production Schedules equals the product line fore≠casts in the Production Plan, etc. The result is that Top Management can review the complete Master Plan with everyone using the same information. The results of their decision are show in quantitative terms.

As an example, Sales/Marketing could be considering a product promotion and take advantage of an opportunity to gain market share. Simultaneously, Operations may be concerned about increasing inventory levels and is consid≠ering a cutback in production activity. For the product lines involved the Sales/Operations plan should show a significant change in forecasts and production schedules accompanied by a dramatic inventory reduction. This is a clear signal that the tactical implementation of their strategies are out of line. Even when all the Master Plans are coordinated, Top Management can monitor progressó like the inventory buildup for a seasonal demand peak.
Master Planning is a Top Management process that begins with Business Planning and takes the mission, strategies and objectives of the enterprise and converts them into executable plans through Demand Planning and Produc≠tion Planning. The Sales/Operations Planning process synchronizes these plans and guides the preparation of the Master Schedule. Then the Master Schedule becomes an important way to carry out business strategies within daily operations. The results can be a significant improvement in the quality of the material and capacity plans. Top Management can better see and understand how the daily operations tie back to their strategic objectives. Effective Sales/Operations Planning is top management's responsi≠bility and their best means of carrying out business strat≠egies through the Master Schedule.


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