In business management, failure to plan is planning to fail. This is particularly true in manufacturing environments that risk losing profits from both over-producing and under-producing. Production schedules abate these risks through preparation, coordination and execution of core business practices.
Overview: What is a master production schedule?
A master production schedule (MPS) serves as the general outline for your entire production process. The primary input for scheduling is expected market demand over a specific time period, which can range from a few weeks to a few years. Essentially, the schedule includes the type and amount of items that need to be produced to satisfy customers in a set time period.
3 benefits of a master production schedule
Unlike a business charter or mission statement, production schedules are much more specific and data-oriented. Goals are set based on market data and production capacity. Schedules are useful in any kind of business, but they’re particularly important in make-to-stock manufacturing environments.
1. Knowing what to expect
The main benefit of a MPS is the ability to set and communicate expectations across all of your departments. It establishes a single timetable and framework for every team and employee. Creating this schedule also requires careful market forecasting and analysis, which also helps executives plan for fluctuations in total income.
2. Opportunity to improve
After mapping market demand inputs, creating a master schedule also requires examination of the entire production process to ensure viability. This gives schedulers opportunities to identify bottlenecks and shortfalls that could be addressed to improve efficiency or increase total production capacity in the future.
3. Stock up without overproducing
Manufacturers often face the difficult decision of risking a stock out by producing just enough to meet demand or facing losses by producing too much. A market-driven master schedule allows manufacturers to adjust their production process according to expected changes in the market to avoid these situations.
Why are master production schedules important to understand?
Business leaders need to understand the importance of their MPS because it sets the bar for their entire operation. Making a major mistake with the master schedule can cause serious problems that could lead to missed opportunities or loss of profits.
1. Foundation for preparation
The master schedule is the basis for all other production plans across your company. Errors or misjudgements here can spread and compound throughout the organization, which can be disastrous for morale and efficiency.
2. The plan spans departments
This schedule is also one of the few ways to coordinate and integrate between departments. It’s essentially an arrangement between the marketing, sales and production teams. Successful coordination and integration of departments can make or break a manufacturing enterprise.
3. It’s all about information
It’s easy to cross the line from fact to fantasy when setting any kind of long-term plan. That’s why schedulers need to stay true to the data. There should be ample information to back up every goal set forth in the schedule.
An industry example of a master production schedule
A national motorcycle manufacturer has 2000 units in stock and wants to plan their production for the next 3 years with as little overproduction as possible. Normally, the manufacturer sells about 14,000 vehicles in each 3-year period. This means they need to produce 4,000 additional motorcycles annually through the period to meet total demand, which would leave them with zero units rolling over into the next period.
However, after a careful analysis, the marketing team realizes that rising gas prices and mild winter temperatures will lead to an increase in demand for motorcycles compared to previous cycles. They estimate a rise in demand from 14,000 to 17,000 units during the next 3 years. This data prompts the motorcycle maker to adjust their master production schedule to plan for production of 5,000 units each year instead of 4,000, which means they need to order more supplies and hire more employees immediately.
4 best practices when thinking about master production schedules
The benefits of a MPS are only tangible if you use it correctly. These practices are essential for a useful and reliable master schedule.
1. Focus on the big picture
The master schedule is a general outline that connects expected market demand with general production potential. It’s a big-picture plan that accounts for time periods measured in months or years. It should not include details of day-to-day or even weekly production targets.
2. Ensure accuracy and viability
Make sure that your marketing analysis is as thorough as possible. It’s the foundation for the entire plan, so don’t hesitate to investigate all the factors that could influence future demand. The same applies to viability assessments. Don’t just guess. Base your estimates on your own historical data or comparable data from competitors in your industry.
3. Think about the next cycle
You should always think about the next cycle when you plan the one right in front of you. It’s a good idea to prepare a back-up stock that you can keep rolling forward. That way you have a little breathing room if there’s an unexpected problem in your production or a sudden spike in demand. You don’t want to miss out on sales opportunities because you ran out of products.
4. Learn from mistakes
Don’t be afraid to change your plan if it’s not working. Ideally, master schedules will remain fixed through their time period. However, if things aren’t going as you expected, be prepared to adapt to these circumstances as much as possible to cut your losses.
Frequently Asked Questions (FAQ) about master production schedules
1. How is it related to MRP?
The material requirements plan (MRP) is essentially an off-shoot of the MPS. It’s a second-tier plan that supports the master schedule and focuses entirely on material input requirements to ensure viability of the schedule.
2. What should be included when developing a master schedule?
Master schedules should account for any factors that influence production potential, including: available materials, storage capacity, human resources and logistical concerns. Your plan needs to accommodate all of the things that could limit your ability to reach production goals.
3. How do you write an MPS?
The language in your master schedule should be basic and brief to ensure it can be understood by all readers. You should include charts and tables to illustrate data sets when possible. Be sure to include all important dates, timetables, quantities and other number targets.
Make a plan to succeed
For manufacturers, an MPS is the document that ties everything together. It’s the foundation for all of the preparation and planning throughout all levels of the organization. You need to do it right, and you need to make every effort to stick to it. Accountability is essential, particularly for leaders and managers of key processes that could become bottlenecks that cause a domino effect on the rest of your operations.