What is Master Production Schedule?
Master Production Schedule is a comprehensive production planning and scheduling process that provides a granular view of the production process, and enables businesses to establish production priorities, perform capacity planning, and make decisions pertaining to what is required to be manufactured, at what time, and in how much quantity.
Master Production Schedule is critical for modern-day manufacturers who want to leverage technological advancement & innovation to reduce disruptions in the production process, minimize costly stock-outs, and ensure timely fulfillment of the customer’s orders. MPS facilitates a smooth flow of information between the production and sales departments to achieve the collective organizational goals.
Components of a Master Production Schedule
Now that we’ve covered the definition of the Master Production Schedule and its functions, let us discuss its essential components:
1. Products List
Products List is an important component of the Master Production Schedule (MPS). It contains a complete catalog of all the stock keeping unit (SKU) planned for manufacturing. It is up to the manufacturer to keep certain products at the top of this list. While some manufacturers may choose to keep high-priority products, others may keep widely popular products at the top of the list.
2. Product Variants List
Another crucial component of the Master Production Schedule is product variants. It is also commonly referred to as a Sub-list of the original Products List. Product Variants splits items in the original product list by size, color, ingredients, and other parameters. For example, a company selling smartwatches will create a Product Variants List consisting of different smartwatches split by their usage type, hardware configurations, colors, and price range.
3. Time Factor
Time Factor is another important component that helps manufacturers develop a realistic production plan and meet the forecasted demand for the product in the next week, month, or year. Sometimes, things do not happen as anticipated. A good production plan should be flexible enough to make emergency adjustments to accommodate the changing needs.
4. Quantities to Manufacture
This component denotes the number of product quantities the manufacturer has planned to manufacture in the upcoming week, month, or year. Product quantities are not a single digit of number. Instead, the manufacturer assigns it to different variations of products. For example, manufacture 500 units of red color plastic bags, and 200 units of black color plastic bags.
What are the Functions of a Master Production Schedule?
Master Production Schedule plays a critical role in bringing efficiency to the company’s production process. Here are its important functions:
1. Complete Production Planning
Determine the ways to manage operations to balance labor requirements, demand, and equipment capability. So here, the Master Production Schedule (MPS) will help the business plan for the total number of products to be manufactured for a specific period.
2. Evaluating Alternate Schedules
A Master Production Schedule plan should find out ways to efficiently plan the entire production operation process and identify all the problems that are likely to occur during the process. Evaluating alternatives helps businesses proactively mitigate risks using a solid backup plan.
3. Optimum Production Capacity
Capacity planning along with a Master Production Schedule will help in cracking the requirements to meet demand, minimize costs, and maximize profits. Maintaining optimum manufacturing capacity benefits the business in a variety of ways from improved workflow, lower manufacturing cost, and better agility to demand fluctuations, to reduced need for maintaining safety stocks.
4. Facilitates Information Processing
Manufacturing ERP Software also helps in setting re-order points to make deliveries that have to be placed. It enables coordination with management information systems such as marketing, finance, etc. Master Production Schedule ensures a smooth flow of information with the marketing, sales, and finance teams.
5. Demand Management
Master Production Schedule facilitates better demand forecasting, strategy building, and bridging the gap between the company’s internal operations. Businesses can calculate the elasticity of demand to measure the responsiveness of the demand to changes in pricing. However, it is also important to ensure that the Master Production Schedule is provided with the most up-to-date information.
Master Production Schedule Example
Now that we’ve discussed everything from what is Master Production Schedule, its functions and components, let us move to the Master Production Schedule example.
In the below illustration, a small manufacturer sells two types of smartwatches – Android smartwatches and Linux-powered smartwatches. Both of these smartwatches can be further divided into Hybrid, Luxury, and Fitness Tracker types.
Master Production Schedule provides complete visibility into the smartwatches planned for manufacturing on the 1st, 2nd, 3rd, and 4th week of December 2023 and January 2024 respectively. As a result, the production team can efficiently plan their production process and make changes to it as per changing requirements.
What are the Benefits of Master Production Planning?
Why are an increasing number of companies across the world adopting Master Production Planning? Here are the key benefits it offers:
1. Increased Production Capacity
Production planning is a broader concept that encompasses different activities such as production capacity planning, resource allocation, and pre-planned procurement of raw materials with procurement software. One of the key benefits of implementing a Master Production Schedule is that it helps decision-makers develop strategies to achieve their production goals.
2. Higher Asset Turnover Ratio
Asset Turnover Ratio depicts how efficiently a company is using its assets to generate revenue. The higher the Asset Turnover Ratio, the better it is. The asset management module in the Master Production Schedule helps companies calculate the percentage Asset Turnover Ratio and improve it by making the best of their resources.
3. Lower Inventory Costs
Another benefit of the inventory management system module in the Master Production Schedule is that it helps businesses align their production to meet the constantly changing market requirements. By adopting a balanced and cost-efficient way, companies maintain adequate cash flow, minimize excessive inventory storage costs, and reduce out-of-stock incidents.
4. Reduced Machine Idle Time
Master Production Planning promotes better material management, and improves visibility into different aspects of the production process — raw materials management, customer demands, and machine capacity data. It helps optimize the production resources to their maximum capacity and reduce idle time. Reduced idle time pays off with reduced energy consumption and cost savings.
5. Timely Order Fulfilment
Business Management Software brings complete visibility into the production process. With deeper insights into the entire process, the company can reject orders that cannot be met in the anticipated time frame. Overall, it helps stress out the manufacturing department and ensures orderly fulfillment of the products while maintaining acceptable quality level for maximum customer satisfaction.
Transforming Master Production Planning with Innovation & Technology
Traditionally, businesses used spreadsheets for production planning and scheduling. Over-dependence on spreadsheets led to various issues. It increased data entry and led to efficiency loss. Besides, human errors could lead to inadequate or surplus manufacturing, thereby causing poor customer experience, loss of opportunities, and increased production costs.
Adopting the Enterprise Resource Planning (ERP) tool helped manufacturers overcome these traditional challenges. ERP consolidates data from different departments and supports aggregate planning to quickly scale up production to meet market trends.
Summing Up…
ERP Software provides a complete set of modules that automate the production process, reduce human errors, and minimize defects. It facilitates better coordination between different departments and provides analytical tools for production planning & cost control measures.
Sage X3 is a strategic tool that enables manufacturers to use its proactive framework to employ various high-level strategies in the production process. They can align the manufacturing process to changing market conditions, and take advantage of modern technology to achieve manufacturing excellence.
FAQs
1. What is the Definition of Master Production Schedule?
Master Production Schedule meaning is that it is a comprehensive report that records the timing & quantities of the production activity, in order to prevent unexpected mishaps in the production process and allocate the required resources.
2. Which Information is Stored in a Master Production Schedule?
Master Production Schedule contains a host of information such as different product types scheduled for production, the number of quantities scheduled to be produced every week/ month/ year, the actual date of production, materials/ ingredients required, and so on. However, the actual information may depend on the manufacturer and the complexity of the product.
3. Which Tool is Useful for Generating a Master Production Schedule?
The best ERP software in India provides demand forecasting, production planning & scheduling, inventory management, and other powerful capabilities required to develop a Master Production Schedule. Decision-makers get access to real-time reports, analytical tools, and customized dashboards to increase the responsiveness to the customer’s demands.
4. How Do KPIs Benefit the Master Production Planning Process?
A Key Performance Indicator (KPI) is a quantifiable measure of performance during a certain period. KPIs benefit the Master Production Schedule process through the following ways:
- Production Volume: This KPI is used to measure the production volume in quantities.
- Cycle Time: This KPI is tracked using PLM software to determine the time required to complete a production cycle.
- Inventory Turnover: This KPI is used to determine how frequently a stock is replaced.
- Defect Rate: Indicates the percentage of defective products out of the total production
5. How is Master Production Schedule Different from the Production Schedule?
Master Production Schedule is a high-level plan for the overall manufacturing activity in the medium to long-term horizon, such as determining which products and variants to produce and in how much quantity. In contrast, the Production Schedule provides thorough details about each production activity such as the steps that are needed to be executed, resources needed to be allocated, and the timing of each job.
