What is a main production plan? With examples - MRPeasy (2023)

The master production plan is a production planning tool that defines the quantity of a product that needs to be manufactured in different periods. This simple schedule can be used as a basis for further planning and scheduling throughout the organization.

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What is a Master Production Schedule (MPS)?

The Main Production Plan (MPS) is the partproduction planningIt describes which products have to be manufactured when and in what quantities. A master production plan does not usually include details about the materials to be used in production, the people assigned to the tasks, etc. Rather, it is like a contract between the sales department and the manufacturing department that balances supply and demand by defining the necessary requirements. quantities to be produced and production dates.

The Master Production Plan is an important tool inProduction in stockEnvironments in which a demand forecast guides production planning. Since an MPS is often used as the main driver of manufacturing activity, it must be accurate and workable to have a positive impact on a company's profitability.

MPS can also be used in certainmake to orderMixed-mode manufacturing and environments where a company manufactures off-the-shelf products. In this case, the sales forecast and the master production plan are used to plan the inventory required for production.

A standard master production plan is a long-term plan developed separately for each product. is done with oneplanning the horizonfrom 3 months to 2 years, with a minimum time interval (shortest specified period) of 1 week.

The basic inputs required to create a workable master production plan are:

1. Start inventory.How many units are already in stock?

2. Sales forecast.How many orders are expected for the period?

3. Current backlog.How many orders are already planned for the period?

4. Quantity to be produced.How many units must be produced during the period to keep supply and demand in balance?

He canDownload a free master production plan template here.

Example

Suppose you produce wooden furniture such as chairs, dining tables and coffee tables.

At the beginning of the period you have 40 chairs in stock. Your sales forecast says you will sell 200 of them. This means that you have to produce 160 chairs in this period to meet the demand.

This means that the starting inventory for the next period is 0. Since business is stable, another 200 chairs are sold. That means you now have to produce 200 chairs at a time to keep up with demand.

Master the production schedule and safety stock

Unless you've absolutely perfected thatJust-in-time manufacturingmodel, you always want to keep a certain number of drives as a backup in case of an unforeseen increase in demand. Therefore we can supplement the master production plan with:

5. Safety Stock.How many units would you like to keep in stock for peak demand?

In the master production plan, the safety stock is expressed as a portion of the opening stock for the period, which is carried forward as the opening stock to the next period.

example continued

Now, to continue with the previous example, suppose you want to keep 40 chairs as safety stock at all times. Therefore, 160 chairs will not be enough to meet demand and replenish safety stock in the first period. This means that you have to produce a total of 200 chairs to keep your customers happy and the necessary buffer.

learn more aboutSafety stock and how to calculate it.

Master production planning and rough capacity planning

When planning production, you should always consider exactly how much you can produce in a given period of time. If you accept orders that require you to produce 1,000 chairs in a month but can only produce 500, you will disappoint your customers and your company. Therefore you should always consider:

6. Production capacity. If everything goes well, how many products could you produce in this period?

Rough capacity planning is an important tool that can be used in conjunction with main production planning. To calculate your production capacity, you need to know the capacity of your products.processing timeand the total productive hours of your workshop.

After creating your first production master plan, you can test its feasibility by creating a rough capacity plan according to MPS. If the capacity plan shows that your production capacity cannot reach the production levels in any of the time periods defined in the MPS, you need to find ways to increase capacity or change the MPS.

The main production planning and the rough capacity planning are mutual processes. This means that any change to either requires an overhaul of the other.

learn more aboutProduction capacity planning and approximate capacity.

Additional MPS Considerations

Freezing of the main production schedule

Freezing the MPS means locking the first periods for a period of time, e.g. one to two weeks before production is scheduled to start. This is done to avoid last minute changes that create confusion and bottlenecks that slow down production and ultimately ruin your plans.

available to promise

Available to Promise is the number of units that you can also promise to deliver to customers (as firm orders) in the relevant period. It is calculated according to the main production plan. It takes into account all firm orders and planned quantities over the MPS horizon. ATP plays an important role in thissupply chain management.

batch criteria

When creating a master production plan, you should always consider batch sizes; H. how many products you produce in one run. This determines the pitch of your values. For example, if you manufacture in batches of 25 products, your quantity to produce cannot be 240, but must be 250 or 225.

maximum stock

The MPS is a great tool for planning ahead and preparing for spikes in demand. However, there are physical and practical limitations on the quantities you can stock. Even if you had production capacity, you may not be able to use it if your inventory is full. Or at a certain inventory level, too much money can get stuck in inventory.

Benefits of a Master Production Plan

The introduction of an MPS in a manufacturing company has several advantages:

• It provides a solid foundation on which to build, improve and track sales forecasting.
• It provides a solid basis for determining desired inventory levels.
• Provides a solid basis for calculating quantities of parts, subcomponents, or raw materials to be purchased or produced as part of the next stage ofMaterial Requirements Planning.
• It provides a solid basis for calculating required labor and shifts.
• It allows the optimization of the installed power and the load balancing of the system.
• The manufacturing department can estimate the production and maintenance costs associated with the workstations.
• The company's finance department can get expected income and expenses from the MPS and create a cash flow forecast. Among other benefits, this helps in making investment plans.
• HR can use MPS to anticipate hiring needs.

The MPS should reflect the business plan as accurately as possible. This requires constant updating of all areas of the company.

For example, if the marketing department is planning a sales promotion, increased demand should be reflected in the MPS and forecast. If the sales team advises against selling a product line in favor of a new one, the MPS and forecast must be adjusted.

Master production plan vs. manufacturing resource planning

The main production plan is one of the starting points forManufacturing Resource Planning (MRP II). However, in addition to the MPS, MRP II uses additional inputs such as inventory reports, BOMs, routings, material costs and requirements, financial records, manpower and machine capacities, etc. This allows the MRP II system to create a very detailed plan for all the different resources that are at are involved in production and provide a real-time overview of your business.

Unlike creating a master production plan, the complexity of manufacturing resource planning makes it impossible to do it manually. Today there are many different software vendors offering MRP systems, but many of them evolved from accounting or inventory management software and are limited in their manufacturing resource planning capabilities. use properlySoftware MRPHowever, it is becoming increasingly important when it comes to staying competitive in the manufacturing sector.

main topics

• A Master Production Schedule (MPS) describes which products have to be manufactured in what quantities and when.
• It is an indispensable tool in make-to-stock environments where demand forecasting drives production planning.
• A standard master production plan is a long-term plan developed separately for each product. It is carried out with a planning horizon of 3 months to 2 years with a minimum term of 1 week.
• The inputs that a viable master production plan has are: opening inventory, sales forecast, current backlog, quantity to be produced, safety stock, production capacity.
• When creating an MPS, you can also consider lot, commitment available, and maximum stock criteria.
• Freezing the MPS is required to block parts of the schedule for a specified period of time before the schedule is used. This helps avoid confusion from last-minute changes.
• MPS benefits every downstream planning in the company, be it financial, warehouse, human resources or production itself.
• Manufacturing resource planning software is an innovation over the manual MPS process. It uses a variety of different inputs to create detailed plans and provide a real-time view of the entire organization.

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