Best practices
What is the MPS?
How to achieve a good balance between load and capacity?
The new MPS-optimization tools
The MPS is a reliable and clear indicator of stock management. It allows you to define your stock policy and helps you manage storage and supply costs.
This article proposes to look at several important points that will help you optimize your MPS as much as possible but also the overall productivity of your company.
If you are starting out in industry, the first part of this article summarizes the objectives of the MPS but also those of the S&OP.
If you already master these subjects, go to the second part about optimizing the load-capacity balance.
The MPS is a medium-term program of 1 to 6 months (2 to 3 production cycles). It makes it possible to define, by individual finished product, the production needs (taking into account the management rules and the calendar of the different needs) to meet demand and to anticipate the balancing decisions according to the available resources and load. It must be updated on a daily basis to take into account stock levels and new logistics constraints such as supplier lead times.
The Master Production Schedule (MPS) is based on the Sales & Operations Plan (S&OP). The S&OP is a long-term vision of 1 to 3 years depending on the field of activity and is updated monthly or quarterly. It defines broader objectives for product families.
Once the S&OP is established, the MPS makes it possible to specify, item by item, finished-product needs consistent with past production. Such production planning brings the production and supply chain teams together around a common objective for the coming weeks and months. With this production or load objective known thanks to the MPS, it can be verified that it balances with production capacity. Thus, a good master production schedule will prevent not only significant costs such as renting machines or relocating the workforce at the last minute if the load is too high, but also a substantial shortfall if the capacity is too high and units are not used.
As you know, load/capacity balancing consists of estimating the resources to mobilize to meet the production needs of a given period.
Accurate planning and forecasting
So before looking at capacities, you absolutely must estimate your load. Over a given period, often quite short, you have a clear view of demand, but if you establish a load plan over more than 3 months, it is possible that you do not have a precise idea of the evolution of demand. You will then have to develop demand forecasts using statistical methods based on history to anticipate future needs and adjust capacity accordingly.
→ Learn more about planning best practices
Capacity flexibility
Your MPS covers on average a period of 3 to 12 months, and you will agree, a lot can happen in 12 months. Therefore, developing your company's ability to adapt quickly to changes in demand, for example by using modular equipment, by training employees to be versatile, or by establishing partnerships with third-party suppliers to increase or reduce capacity as needed, proves to be a good strategy.
But do not stop there. Capacity must also be able to adapt to unforeseen events that are not necessarily linked to demand. This can involve integrating and reacting to machine breakdowns, absences, etc. However, without having carried out a digital transition, it will always be extremely complex for you to achieve such agility.
Stock management
Still on the capacity side, the management of your stock, for its part, can protect you from stockout incidents, incidents whose resolution often depends on a third party, depriving you of autonomy.
Optimize the management of your stock to maintain an appropriate level of finished products and raw materials, taking into account delivery times and demand fluctuations, as much as possible.
Continuous improvement
Once you have managed your capacity, you will have to optimize it to increase it.
For this, identify and eliminate the bottlenecks and inefficiencies at each stage of your production process to increase capacity without investing in new equipment or facilities.
Communication and collaboration
While at first sight recommending that you foster transverse and effective communication between all the departments of your company may give the impression of stating the obvious, we assure you that many industrial groups still silo information and key figures.
Ensuring effective communication between the company's different departments is a start, but the ideal is still to ensure end-to-end communication across the entire supply chain. This makes it possible to obtain increased visibility, fast and flexible deliveries, customized products, better quality and traceability, etc. After all, it is the entire supply chain that creates a value chain.
→ Learn more about the end-to-end supply chain
Monitoring and control
Obvious statement no. 2, the implementation of key performance indicators (KPIs) to track and evaluate the balance between load and capacity, and to adjust the production plans according to the results. But to go further, and in particular to be able to work on demand predictability, you will have to collect and store this data.
Ideally, if you have already carried out your digital transformation, these KPIs will be calculated automatically in the tool you will have carefully selected according to your needs, and you will thus be able to broadcast them to the different departments.
The optimization of your Production Plan will therefore depend on your ability to integrate and optimize all the variables mentioned above… with Excel and your ERP.
Excel is an extremely powerful tool with multiple features; however, it is not an intuitive, truly ergonomic, and collaborative tool. Most production sites, moreover, often depend on a single Excel Master, and updates must therefore be carried out by hand, most of the time only once a week, by this person. And you will agree, we are certain, it is blocking and very frustrating.
As for the ERP, it is a formidable cash register that starts from structured and structuring but non-dynamic data, a bit trapped.
Today, several solutions exist, planning 4.0 solutions, that connect easily to your ERP and allow you to run load-capacity simulations to consider several scenarios, clearly visualize the impact of production assumptions, and thus optimize your MPS upstream.
These solutions, like Oplit, can also report the various incidents, thus modifying your capacities accordingly.
These solutions represent the future of industrial planning, and support very well the companies that are initiating their digital transformation.
