Demand Driven Manufacturing
Part 5 of 5

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Master Production Schedule

The Master Production Schedule is the anticipated build schedule for those items produced by the company. It is the primary input into the MCRP System, and determines to a great extent how the entire Production Planning and Control System operates. How the Master Production Scheduling function is handled is influenced considerably by the Demand Response Strategy employed, as described below.

In Engineer-to-Order, based on the order quantity and due date inputs from Demand Management and the tech­nical and schedule information from Engineering, the Master Production Scheduler schedules the product so that it will be manufactured and delivered in the quantity, quality, and time required by the customer. The Master Scheduler schedules the product in the Master Production Schedule in conjunction with all other products ordered by other customers. Customer order promisingis based on the backlog plus estimates for design, procurement, and manu­facturing for a particular item. The Master Production Scheduler is concerned with controlling these custom or­ders as they progress through all steps in the process.

In Make-to-Order, the customer order normally repre­sents the unit of control in the Master Production Schedule; the backlog of customer orders forms part of the overall lead time for the product. Overall, the order backlog is a critical measure for estimating material and capacity requirements. With the Master Production Schedule and the Manufacturing Bill of Materials as inputs, the Material and Capacity Requirements Planning system "explodes" the product to determine the required quantity and timing for the manufacture and/or purchase of the subassemblies, parts, and raw materials needed to build the product on time.

In Assemble-To-Order to schedule the Master Produc­tion Schedule, the company can either forecast and sched­ule each module, or better yet, they can create a Super Modular Planning Bill to drive a two-level MPS. In the Super Modular Planning Bill, the parent is an unbuildable assembly of modules while the children are the actual modules exploded by percentages based on their historical usage. When received, the customer orders are sent directly to the Final Assembly Schedule, and the lead time is equal to the time for assembly, provided the modules are in stock. A key task of the MPS is to provide viable customer promise dates. Since accurate promise dates are important, the MPS should be extremely stable and pre­dictable, which can be achieved by instituting and enforc­ing time fences in the MPS.
In Make-to-Stock, the MPS is usually stated in end items, and these end products are produced to forecasted demand. The accuracy of product forecasts are extremely important in Make-to-Stock, and forecasts must be carefully moni­tored Customer orders are filled directly from stock in order to provide short delivery times for commodity prod­ucts. Customer order promising is normally not required; if the item is not in stock the customer will usually buy from another producer. The Final Assembly Schedule and the Master Production Schedule are one and the same sched­ule, except when a Family Planning Bill is used.

Conclusions

The Demand Response Strategy is an important element of manufacturing strategy that has received too little atten­tion to date. With the increase in time competition, this aspect of manufacturing strategy will become more impor­tant. It is imperative that companies recognize this, and take steps to determine and implement viable Demand Response Strategies for their products.

The Demand Response Strategy must be well matched with the company's products and its market, if the com­pany is to be successful. In turn, the Manufacturing Process and the Production Planning and Control System must be well matched with the company's Demand Re­sponse Strategy for the company to be most effective. Also, the Demand Response Strategy adopted will have a signifi­cant effect on how the Demand Management and the Master Production Schedule should be operated. Failure to maintain the proper match between these elements of the manufacturing system will result in inefficiency, poor competitiveness, and loss of profits.