PRODUCTION MASTER PLAN: CHARACTERISTICS, EXAMPLE - DUDAS - 2025

A master production plan is a general schedule for manufacturing particular products in each period of time, involving production, personnel, inventory, etc. It is a centralized source that informs what needs to be produced, how much needs to be produced and when it should be produced.

This plan quantifies the processes, parts and other significant resources to optimize production, identifying bottlenecks and anticipating the needs of finished products. In short, it is everything related to production in the company, including deadlines, such as delivery time.

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Since such a plan drives a lot of factory activity, its accuracy and feasibility dramatically affect profitability. Typical production master plans are created by software, with adjustments made by the user.

Due to software limitations, but especially the intensive work required by production master planners, these schedules do not include all aspects of production.

They only include the key elements that have demonstrated their control effectiveness, such as forecast demand, production costs, inventory costs, delivery times, working hours, plant capacity, inventory levels, available storage and supply. of pieces.

It's not a forecast

The master production plan is not a forecast. However, the sales forecast is a critical input in the process that is used to determine it.

It represents what the company plans to produce in terms of product types, quantities, and dates. It takes into account the demand forecast, aggregate production plan, backlog, material availability, and capacity.

characteristics

- It is an essential part of the support structure of the manufacturing business.

- The master production plan allows maintaining commitments with customers.

- It is a master plan for a small manufacturing or craft business.

- The master planner can forecast the relationship between demand and your supply and know when you need to increase or decrease production.

The master production plan is a management tool with an "anticipation" function, which is needed to plan the future of a company, prepare the budget, plan cash flow, labor and resource requirements, in addition to forecasting the profits of the company.

It is a statement about what the company hopes to produce and buy. That is, the amount to be produced, the staffing levels, the dates available to promise, the projected balance.

Importance

The master production plan is a crucial input to the aggregate operations plan, as it provides an overview of everything a company needs to do to fulfill 100% of orders.

This is producing the sales orders and having them delivered on time, without problems or defects. This is known as the perfect order, and it is what all companies should strive for in all their sales channels.

It has become an essential tool in manufacturing operations for good reason. It is a staple for optimal manufacturing productivity.

Using the master production plan helps avoid shortages, costly improvisation, last minute scheduling, and inefficient resource allocation.

Working with this plan enables companies to consolidate planned parts, produce forecasts and master schedules for any level of the bill of materials, for any type of part.

goals

It focuses on the production of finished products or components. The goods that are the most profitable for the company probably have the most resources necessary for production. Other objectives of the production master plan are:

- Make demand flow better.

- Keep delivery time low.

- Standardize communication throughout the company.

- Help prioritize requirements.

- Help keep production stable.

- Generate viable plans for manufacturing orders.

- Help make accurate transfers and purchase orders.

Relationship with other components

Here's how the master production plan fits into the big picture of the business.

Demand planning refers to forecasting sales to get an idea of ​​how much needs to be produced each week. The production schedule involves figuring out the processes needed to make each product. These inform the master production plan.

It's a good idea to use capacity planning to measure capacity against actual demand and make adjustments. Materials requirement planning puts the master plan into action by sourcing the materials needed to meet demand.

How do you make a master production plan?

Before creating a production master plan, you must first know how much product needs to be made in the company. For this you need a demand plan. To generate it, historical sales data is needed. This is used to resolve projected demand for the next few weeks.

Do not forget to adjust this week by week. Also, it is a good idea to maintain a safety inventory in case an unusually large or rare order is received.

The demand plan is used to calculate the master production plan. You must know the available inventory for each item and its historical demand.

The historical demand is used to create a production policy. If 40 units of a product are normally sold in a week, then 40 will be produced.

If a customer order arrives in excess of this amount, the available safety inventory can be used to make up the shortfall.

As each week passes, the demand plan is updated to create a more accurate master production plan. When adjusted, it becomes a valuable tool in order to fulfill the company's orders.

Plan elements

The correct procedure for developing the master production plan is to include the following elements:

List of products

They are all types of products that the company produces. Once the ABC analysis has been completed, they can be sorted by popularity so that the top-produced items will be at the top of the list.

Sub-lists of variants for each product

There is a field for each variant of the product. One for each individual type. For example, backpacks can be divided into S, M and L to indicate the size. They can be divided into other variations, such as color.

Year, month and week

This is useful for planning ahead and keeping records, which is necessary to have an accurate forecast of demand. The schedule is divided into months and weeks.

The goal is to have a solid plan for what will happen in the coming months. Every few months the projected demand may be reassessed. Do not be afraid to make adjustments before, if the demand requires it.

Production quantity

This is the number of units that it is decided to manufacture each week. Suppose that after analyzing the demand plan, you decide to manufacture 200 units of a product per week. Then the number 200 is added to the end of each weekly column.

But do not stop there, since now you need to assign how many units of each product variant will make up the total of 200. This depends on what is already in stock and on the projected demand.

For example, one week, the 200 units could be of a single type, while the following week the production could be distributed more evenly among the different types of the product.

Steps to follow

The steps to follow in the production master planning process are as follows:

- Make a map of the demand and make a demand plan.

- Calculate the raw materials that are needed and start the supply chain with the production planning processes.

- Now you are ready to develop a production master schedule proposal. This is like a draft to see if the master production plan is feasible.

- Use a capacity planning technique to be able to know if you have the capacity to comply with the proposed master production plan. This technique continues to be used to continually assess whether capacity can meet demand when the master production plan is operational.

- If the production master plan proposal is viable, then it is evaluated with respect to customer service, effective use of resources and investment in inventory.

- After completing these steps, you will be ready to authorize this as the company's official production master plan. The company's performance continues to be monitored to see that everything works as it should.

Example

Below is an example of a master production plan for a factory that sells leather bags. To keep it simple, only two products will be seen, with two color variants for one and three variants for the other, making a total of five product types.

- First the initial inventory available for this factory is placed on the left side of the table.

- The total projected demand is added to the far right of the table.

- The quantity to be produced is calculated from the initial inventory, the demand and the production capacity that it has. In this example, the eight weeks corresponding to two months are taken.

Through this master plan, the total quantity to be produced weekly by the factory during the two-month period can be observed, detailed for each variant of the two selected products.

In the end, the total quantity produced must be able to satisfy the expected demand, also taking into account the initial inventory available for the period.

References

1. Wikipedia, the free encyclopedia (2019). Master production Schedule. Taken from: en.wikipedia.org.
2. Katana (2019). The Only Master Production Schedule Guide You'll Ever Need. Taken from: katanamrp.com.
3. Planet Together (2018). Objectives of Master Production Scheduling (MPS). Taken from: planettogether.com.
4. Springer Link (2000). Master Production Schedule (MPS). Taken from: link.springer.com.
5. Wikiversity (2019). Master Production Schedule. Taken from: en.wikiversity.org.
6. Gideon Halevi (2014). Master Production Planning. Researchgate. Taken from: researchgate.net.