In this article, we’ll take a look at some of the pitfalls around master production scheduling.
What is an MPS and where does it come from?
MPS stands for Master Production Schedule – The MPS sets the “drumbeat” of production setting the quantities of items to be manufactured in each range of time (Days/Weeks/Months) within the planning horizon.
The use of MPS as a tool is widespread in industry, it’s one of the most common methods to set production plans. However, it is not infallible and if not managed appropriately, it’ll have problems. Sometimes ones with dire consequences.
What happens when MPS goes wrong?
While there are various results from an MPS gone bad, one of the most common issues is that when the MPS fails not enough key parts (often for key customers) are produced. When it goes wrong all hell can break loose on production. For example, the sales team coupled with general management might discount the MPS and production capabilities and fall into the trap of overloading the master schedule, “make this now”, “do that next” often without the knowledge of dependencies or likely results. As a consequence, the production plan is missed and more often than not ‘prestige’ customer demands are met by high-cost overtime, racing to achieve a target that is then prone to quality issues and further issue.
So what are the likely issues that are common with Master Production Scheduling? Here’s our own top 10.
1/ The plan is not agreed
The first issue relates to the process in which the MPS gets created. Is it created from input from key departments backed up by data and facts or is it on a whim of a certain individual? Without an agreed plan bought off by all key stakeholders, you could end up building the wrong parts in the wrong quantities.
2/ The plan is not constrained
Sure your plan can say that you’ll build 10 Million widgets but do you have the resources to do it? Your MPS plan needs to be constrained with a view of key inputs (Materials, Workers, Plant + Equipment etc). Without it, it’s merely a list of wishes not backed up by any likelihood of success.
3/ Information doesn’t flow from other areas of the business
As in 1 if an MPS is successful it needs to take information from other areas of the business. An MPS is not an island, without information from Sales, manufacturing etc your plan may not be viable.
4/ Poor S&OP
MPS thrives on a well balanced and well executed S&OP process (Sales & Operational Planning). Having a cyclical review process so that the MPS remains both current and tuned helps your MPS shine.
5/ MPS is not flexible and becomes out of synch with demand patterns
Your MPS needs to stay fresh. For example what if your MPS sets out a plan that produces items that your customers no longer want? Perhaps you’ve introduced an updated model but the MPS is still churning out its vintage counterpart? Same is true with fluctuations in volume – if your S&OP works well (see point 4) then you’ll be OK.
6/ Time fences used are inappropriate
Time fences help define policy around when an MPS can be changed (i.e. within cumulative lead time). Time fences are a critical element of planning they define when things get released, helping to ensure items are built to plan. It’s ok having a wonderful MPS but if the mechanics of how it gets released to build are flawed well…..it’s going to be messy.
7/ Inexperienced MPS custodian
While MPS isn’t rocket science it does require the appropriate resource (with the right authority) to administer it. The best are likely to have a deep understanding of planning methods and principles and tend to be System Experts. That last point is often key, every ERP/MRP system has it’s own take on how MPS is executed (albeit following some common themes). Without the advanced knowledge of setting up the system appropriately and ensuring that all data needs are met could result in a dud.
8/ Actual demand falls short of forecast
We all know that demand is fluid and it changes frequently (why else would we have a forecast accuracy measure in S&OP right?) If your forecast becomes your MPS then all well and good but what happens if actual demand falls short of (or exceeds) the plan? How fluid is your planning process to compensate? The worst you can do is let your MPS go stale and not reflect actual requirement.
9/ The mix is wrong – common parts, complete assemblies etc
Your MPS is like a shopping list of the things you want to manufacture. It should cover most (if not all) of your forecast requirements. You can be tempted to focus in on those key items, ignoring the rest but if you do how will the work for those get launched?
10/ The MPS plan doesn’t get executed
You’ve gone to the trouble of creating your plan you’ve taken the inputs from your key colleagues, you’ve got the system setup correctly but your plan doesn’t get executed. One of the key reasons for this is often “well-intentioned medellers”, those who believe that they know best and the company would be best served by deviating from the plan and prioritizing resources to make something else. The only way of getting around this is to ensure that the whole organization is familiar with the MPS and that enforced through S&OP it gets signed off and mandated by senior management.
So there’s our top 10 list of potential MPS pitfalls, we’d love to hear yours in the feedback section below.