Step One: Evaluating the Forecast
The master production schedule is established by analyzing demand forecasts. The demand forecast tells manufacturers how much product they will need to produce in a specific period. It's essential to make an accurate forecast to avoid stockouts or worse still, overproduction. With an accurate forecast, a manufacturer can plan for material procurement, labor, and resource allocation.
Step Two: Identifying Available Resources
It's essential to know the available resources, including production equipment, staff, and manufacturing capacity. This step is vital in ensuring that you don't over or underutilize the available resources. Underutilization can lead to a waste of resources, while overutilization can lead to increased manufacturing costs or delays in meeting the production schedule.
Step Three: Building the Master Production Schedule (MPS)
Once you have a reliable forecast of the demand and an accurate understanding of your available resources, you can then begin building the MPS. The MPS is detailed and specifies the quantity of each product to be produced each week or month. Developing the MPS requires a delicate balance between meeting customer demand and keeping production overhead costs low. The MPS also considers factors such as available resources and the time required to produce each product.