How the Master Production Schedule Changed Through Time

Executive Summary

  • The term master production schedule changed through time and differs in critical ways from the term MRP.
  • Four dimensions make up the MPS, but there are questions as to whether an MPS is still necessary.

A Strangely Named Term

The Master Production Schedule or Master Production Schedule was always a problematic term. Firstly it never restricted its area of control to just production, and secondly, the term master seems to imply it is all-encompassing, when in fact, it was actually meant to mean the highest level type of analysis (only critical materials, no BOM explosion). However, what is interesting is that the term had one meaning back from the 1960’s to the 1980’s, and at some point changed.

In fact, the early definition of Master Production Schedule sounds something like S&OP. The current usage of Master Production Schedule is more tactical, and I will argue in this paper that there is a good probability that the term how outlived its usefulness, and is now confusing people more than describing actual events in systems.

The Change of Master Production Schedule Through Time

To prove the point regarding the alteration of the meaning of Master Production Schedule I will use three definitions of Master Production Schedule in order to show that different authors seem to highly different aspects of what makes MPS different from MRP.

Wikipedia has the following definition of a Master Production Schedule. Surprisingly, this definition is missing an important element.

“Due to software limitations, but especially the intense work required by the “master production schedulers”, schedules do not include every aspect of production, but only key elements that have proven their control effectivity (emphasis added), such as forecast demand, production costs, inventory costs, lead time, working hours, capacity, inventory levels, available storage, and parts supply. The choice of what to model varies among companies and factories. The MPS is a statement of what the company expects to produce and purchase (i.e. quantity to be produced, staffing levels, dates, available to promise, projected balance).” – Wikipedia

This is in line with the classical definition of Master Production Schedule. Here is another quote in line with the classical definition which is from 1967 to 1985 (it is hard to know exactly when the quote originated as I do not have the first edition of the book from which I am quoting)

The Classical Definition of the MPS

“The master production schedule provides the mechanism by which policies are converted to plans, me process of translating policies to numbers (called master scheduling) requires teamwork among all functions. The set of numbers developed by this process is used to drive the formal system. Once policy has been established. the manufacturing planning and control manager develops plans to suit these. When the master production schedule is deemed realistic (achievable), the system goes to work. Plans for material and capacity requirements are generated in detail or updated, feedback during execution detests significant deviations from the plan and corrective actions are initiated.”George Plossl

George Plossl discusses the Master Production Schedule as if it were more like an S&OP process. He considers it the first step in the overall planning process. He states that:

“The fundamental issue is really what types of bill of materials to use to convert the Master Production Schedule into the priority and capacity planning details view. One or more of the three different types of BOMs may be used:”

“Specific finished products

Major subassemblies

Planning modules”

“The greater the difficulty in forecasting the product model or combination of options in a product model that a customer will buy, the greater the need for a well-defined planning module at the BOM.”George Plossl

However, while this may have been true at the time this was written, modern systems can easily explode the BOM in a complete fashion. In fact, there is now little need to discuss the BOM as being exploded in single-level or multi-level, as it is easy for modern computers to explode the multi-level BOM every time.

What is the Master in Master Production Schedule?

The “master” in Master Production Schedule describes the most important or main products that the company plans. A Master Production Schedule does not include all products in the company’s product database. This is demonstrated by the definition below.

“Main Idea: The Master Production Schedule is a form of MRP that concentrates  planning on the parts or products that have the great influence on company profits or which dominate the entire production process by taking critical resources. These items are marked as ‘A’ parts (MPS items) and are planned with extra attention. These items are selected for a separate MPS run that takes place before the MRP run.  The MPS run is conducted without a BOM explosion so that the MRP controller can ensure that the Master schedule items (MSI) are correctly planned before the detailed MRP run takes place.” – SAPIMG.com

For instance, when a company moves towards constraint-based planning, it does not set constraints for non-critical, non-Master Production Schedule products. This would be too much work. However compared to how well-known MRP guru George Plossl uses Master Production Schedule, it is hard to see if many companies even have a Master Production Schedule process.

Master Production Schedule Explicitly Stated

So a Master Production Schedule run is really four things that relate to product, timing, constraining and the BOM. These are listed below:

  • Product: A subset of the overall product database
  • Timing: Run ahead of the MRP run
  • Constrained: MPS runs are constrained, which of course is not possible with MRP (which is strange then that MPS is a type of MRP run.)
  • BOM: The Bill of Material is not exploded with the Master Production Schedule

To keep these straight in people’s minds I created the following graphic.

However, this is not at all how the term MPS is used today. In most cases, it is simply used interchangeably with the term MRP.  This is replicated at least at one vendor. To find out how SAP uses the term MPS see this article.

Master Production Schedule and Computing Power Restrictions

One also should question why an MPS run (and I speak of its classical meaning here) is required in the first place. Why not simply perform a normal MRP run with full BOM explosion and simply glean the necessary information for the MPS from this run. The answer is that this was not possible in the past due to the limited processing of computers when the MPS concept was originally developed. However, with today’s computers, it makes little sense to invest resources in developing a special run that is only used for MPS purposes. Therefore, in my view, the term MPS has outlived its usefulness as it is a method of restricting the load onto hardware resources that is from a different era.

To learn about the history of MRP see this article.

The Four Factors that Make Up the Master Schedule for the Supply Plan

Different companies use the term Master Schedule or Master Production Schedule (MPS) in often inaccurate ways. In the vast majority of cases, it is not the official definition of the term. In many cases, it is used interchangeably with the term MRP or even the forecast, which is incorrect. It turns out that Wikipedia has a reasonably good definition of the MPS.

“A master production schedule (MPS) is a plan for individual commodities to be produced in each time period such as production, staffing, inventory, etc.[1] It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded.[2] This plan quantifies significant processes, parts, and other resources in order to optimize production, to identify bottlenecks, and to anticipate needs and completed goods. Since an MPS drives much factory activity, its accuracy and viability dramatically affect profitability. Typical MPSs are created by software with user tweaking.”

However, Wikipedia falls a bit short in drawing a distinction between the MPS and other plans.

An MPS run is a combination of four things that relate to product, timing, constraining and the BOM. These are listed below:

  • Product: A subset of the overall product database.
  • Timing: Run ahead of the initial supply planning run.
  • Constrained: MPS runs are constrained, which of course is not possible with MRP (which is strange then that MPS is a type of MRP run.)
  • BOM: The Bill of Material is not exploded with the master schedule.

Why These Four Factors?

These factors make up the master schedule because it allows the master schedule to be created as almost a simulation run. The reason for each factor is included below:

A Subset of the Overall Database

The reason for making the MPS run a subset of the overall product database is twofold.

  1. The first reason is that the MPS run is to only be for critical parts.
  2. A second reason, which is now dated, is that earlier computer system was limited in processing capabilities, and order to get the MPS to run in a timely manner, and possibly to run it multiple times, it was important to limit the amount of data the system had to process.

This leads to a related topic of whether MPS itself is an anachronism, which is covered in this article.

Why Constraints?

This makes the master schedule more realistic. However, this is more of an additive factor. The master schedule runs tend to be constrained, but of course, a constrained planning run could lack any of the other three factors and not be a master schedule.

Why Timing?

The MPS must be run before the network or initial planning run.

Obviously, a simulation run like the MPS would make little sense if it were run after or at the same time as the initial planning run.

Why Limited BOM Explosion?

This is well described by a quote from SAP.

“In the MPS menu there is a separate single-level planning run, which can be executed as single-item planning or total planning. This planning run only includes the master schedule items. Dependent requirements are created for the BOM level directly below the planning level. Levels below this, however, are not planned. This means that the MRP controller can authorize any changes to the master plan before they affect the various BOM levels.” – SAP Help

Interestingly, the sentence in blue is no longer a selling point of MPS, as it assumes that the system does not have a simulation environment. That is a copy of the system model that connects to the user interface). However, with modern systems, simulation environments can be used to perform planning at any level of detail without affecting the “production” instance.

For more on MPS see this article.


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References

https://en.wikipedia.org/wiki/Master_production_schedule

Production and Inventory Control: Techniques and Principles 2nd Edition,” George Plossl, Prentice Hall, 1985

Production and Inventory Control: Applications,” George Plossl, George Plossl Education Services, 1983

https://www.sap-img.com/production/difference-between-mrp-vs-mps.htm

I cover this topic in depth in the following book.

Brightwork MRP & S&OP Explorer

Improving Your Supply Planning, MRP & S&OP Software

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Capacity Planning Book

Capacity Managment

Combining Two Types of Capacity Planning

This book is called capacity management because it encompasses two areas of planning that are usually discussed independently. Short-term capacity leveling or capacity constraining, which is the movement of demand to fit within the available supply, and long-term capacity planning. This is the planning of long-term market demand to determine if the capacity should be changed.

Using Comparative Applications

In this book, both topics are covered, and they are included using multiple software applications to explain the concepts of capacity management. These are two closely related processes. However, they are often discussed separately. This book combines their explanation as well as their relationship to one another.

By reading this book you will learn:

  • How resources are modeled in capacity management systems.
  • How the structured nature of capabilities leveling and constraining differs from capacity planning.
  • How the various planning processes fit into one another, and where the gaps can be found.
  • The time horizons of the capacity management process.
  • How to improve capacity management at your company.

Chapters

  • Chapter 1: Introduction
  • Chapter 2: Capacity Leveling
  • Chapter 3: Constraint Based Planning
  • Chapter 4: Resources
  • Chapter 5: Forecast Consumption, Allocation, Scheduling Direction and Timing
  • Chapter 6: Capacity Planning with S&OP and the MPS
  • Chapter 7: The Relationship Between Planning Systems and S&OP System
  • Conclusion