What are the steps to building a master production schedule

What are the steps to building a master production schedule? What are the differences between planned order releases and a schedule order receipt?

Solution

Steps to build a master production schedule -

1. Understanding the Business Objective - These are the objectives set by the organization on an annual level. Usually, these objectives contain annual sales goals and production goals. These provide inventory levels that need to be maintained as well as planned cost of goods sold. By doing this, we are developing a manufacturing plan keeping in mind the yearly objectives.

2. Breaking down the requirements - Now that we know the annual requirements, we break down the annual requirements into monthly and daily plan. This helps to determine the staffing requirements or any season variations that need to be kept in mind depending on the last year\'s sales pattern.

3. Aggregation and Synchronization - Once the daily and monthly schedules have been determined, MPS can be developed by assigning schedules against all BOMs\' (Bill of Materials). All of these are synchronized in order to be included in the MPS.

Planned order releases and schedule order receipt -

Planned order release is the output from the MRP which tells us when the production order should begin whereas schedule order receipts are orders placed that represent a commitment to make or buy such as in the case of manufacturing. These show the quantities which are ordered and when are they expected to be available.