Master Planning and Scheduling An Essential Guide to Competitive Manufacturing

The newly revised Fourth Edition of Master Planning and Scheduling: An Essential Guide to Competitive Manufacturing delivers a masterful exploration of today's master planning and scheduling techniques, as well as an insightful discussion of the future of the master planning and scheduling processes and profession.

Written in the context of an ever-evolving digital environment and augmented with new and critical information required to implement best practices, the book is a guide for practitioners and leaders on the principles of master planning and scheduling and its application in modern and future work environments.

In this book, readers will learn:

• Insights regarding top-down, bottom-up, and side-to-side integration of business practices in support of a company's strategic direction and tactical deployment
• The critical link between time-phased integrated business planning, master planning, master scheduling, capacity planning, and material planning
• "How-to" details and examples to support master planning and scheduling implementation and enhancements within the company's demand and supply organizations

Master Planning and Scheduling is an indispensable guide for supply chain professionals, planners and schedulers in all functional domains of a business. It also belongs on the bookshelves of any executive or manager who seeks to improve their understanding of best practice planning and scheduling processes and how those processes enable a business to outperform the competition through alignment, integration and synchronization across all functions in an organization.

JOHN F. PROUD is a business advisor with Oliver Wight. Throughout his career, Mr. Proud has enjoyed collaborating with several large companies, from Lockheed Martin and Boeing to Weyerhaeuser and Starbucks. He has educated and consulted throughout the USA as well as around the free world. Numerous companies under his leadership and coaching have implemented supply chain management including master planning and scheduling best practice principles for more than 50 years. Mr. Proud was a recipient of Who’s Who Albert Nelson Marquis Lifetime Achievement Award in 2021 and will be listed in Who’s Who in America in 2022.

ERIC DEUTSCH is a business advisor with Oliver Wight, working with companies to implement and improve their integrated business planning processes. He has an academic background and career experience in the biotech industry and, since starting his consulting practice, has worked across many industries to coach and advise clients through transformational change. In addition to advising clients, he is a member of the Oliver Wight Board of Directors, and teaches the Oliver Wight Master Planning and Scheduling Course offered publicly several times per year.

 Acknowledgments xxiii

Foreword xxix

Introduction xxxi

Initial Thoughts xxxix

1 Chaos in Manufacturing 1

Problems in Manufacturing 2

And the Solutions 7

Getting Out of the Overloaded Master Plan and/or Master Schedule 16

Rescheduling the Overloaded Master Plan and/or Master Schedule 19

2 Why Master Planning and Scheduling 25

The Four Cornerstones of a Manufacturing Business 25

Between Strategy and Execution 27

What Is a Master Plan versus a Master Schedule? 31

Maximizing, Minimizing, and Optimizing 32

Objectives of Master Planning and Scheduling (If You Don’t Know Where You’re Going, Any Road Will Get You There) 33

Challenges for the Master Planner and Master Scheduler 35

Principles of Master Planning and Scheduling 37

MPS, MRPII, ERP, SCM, and ITP 39

Finding the Diamond in the Rough—Why It’s Important 58

The Four Cornerstones of Manufacturing Revisited 67

Four Levels of Planning (Sometimes Use Only Three) 68

Why Master Planning and Scheduling Is a Must in Business Excellence 74

3 The Mechanics of Master Planning and Scheduling 79

The Importance of Master Planning and Scheduling 79

The Master Planning and Scheduling Matrices 80

Master Scheduling in Action 87

Why and How Master Scheduling Drives Material Requirements Planning and Detailed Scheduling 92

The What, Why, and How of Safety Stock 99

Additional Material Planning Techniques 103

Maintaining Demand/Supply Balance Inside the Planning Time Fence 107

Master Plan and Schedule Design Criteria 113

So, What’s Next? 115

4 Managing the Supply Chain with Master Planning and Scheduling 117

The Master Planner’s and Master Scheduler’s Job 119

Exception-Driven Action Messages 125

Six (Sometimes Seven) Key Questions to Answer 129

Answering the Six (or Seven) Questions 133

Time Zones as Aids to Decision Making 134

Planning Within Master Planning and Scheduling Policy 138

No Past Dues 141

Managing with Planning Time Fences 142

Load-Leveling in Manufacturing 147

Lean Manufacturing and Continuous Improvement 150

Mixed-Model Scheduling 151

Planned Plant Shutdowns 154

5 Using the MPS Output for Make-to-Stock Products 159

The Master Schedule Screens 160

Working Make-to-Stock Master Scheduled Items 168

Time Phasing the Bills-of-Material 170

Understanding Exception-Driven Action Messages 172

Bridging Data and Judgment 180

The Seven Key Questions Revisited 184

Scheduling in a World of Many Schedules 185

From Master Planning and Scheduling to Time-Phased Material Requirements Planning 194

From Master Planning to Master Scheduling (It’s Called Master Planning and Scheduling) 199

6 Where and What to Master Plan and Master Schedule 203

Manufacturing Strategies Defined 204

Choosing the Right Manufacturing Strategy 206

Master Planning, Master Scheduling, and Product Structures 210

Multilevel Master Planning and Scheduling 213

Ensuring That Supply Plans and Schedules Are Aligned, Synchronized, and Integrated 216

Master Scheduling Capacities, Activities, and Events 224

7 Scheduling in a Flow Environment 227

Different Manufacturing Environments 228

Similarities Between Intermittent and Flow Environments 232

Product Definition 236

The Planning Process 239

Process Company Using Rough Cut Capacity Planning: An Extended Example 244

Catalysts and Recovered Material 250

Production Line Scheduling 251

Planning Multiplant Workloads 252

8 Planning Bills 255

The Overly Complex Bill-of-Material 257

Anatomy of a Planning Bill 266

Creating Demand at the Master Planning and Scheduling Level 271

9 Two-Level MPS Coupled with Other Advanced Techniques 277

The Backlog Curve 277

Identifying Demand 281

Creating the Master Plan and/or Master Schedule for Products Using a Make-to-Order Manufacturing Strategy 288

Option Overplanning 292

Calculating Projected Available Balance for Pseudo Items 294

Calculating Available-to-Promise 295

Using Available-to-Promise to Commit Customer Orders 297

Changes in Projected Available Balance 303

Option Overplanning for Products in the Make-to-Stock Environment 305

Master Planning and Scheduling Products in Make-to-Stock and Make-to-Order Environments: A Comparison 309

10 Using MPS Output for Make-to-Order Products 313

Using Planning Bills to Simplify Option Scheduling 315

The Scheduling Process 317

Master Scheduling Common Components 321

Analyzing the Detail Data 325

Balancing the Sold-Out Zone for Common Components 326

Handling Abnormal Demand 328

Action Messages 330

Working the Pseudo Options 330

Master Scheduling Purchased Items in the Planning Bill 341

Linking the Master Plan to the Master Schedule to the Material Plan 346

Manufacturing Strategies—Products in the Make-to-Order Environment 350

11 Master Planning and Scheduling in Custom-Product Environments 355

The Unique Challenges of the DTO and ETO Environments 356

The Case of New Product Introduction 358

Master Planning and Scheduling—Activities and Events 363

Prices and Promises to Keep 367

What Can Go Wrong 368

Integrating Design and Operation Activities 370

Plan Down, Replan Up 373

Make-to-Contract Environments 381

The Need for Standards—A Long Time Ago 382

When Supply Can’t Satisfy Demand 386

12 Finishing or Final Assembly Scheduling 389

Manufacturing Strategy Tied to Finishing/Final Assembly Schedules 389

Manufacturing Strategy Approaches 391

Traditional Means of Communicating the Master Plan and/or Master Schedule 395

The Role of People and Computers in Finishing and Final Assembly Scheduling—Past, Present, and Future 397

The Kanban System 399

Tying It All Together (Aggregate Integrated Business Planning Through Master Planning and Scheduling Through Detailed Production Scheduling) 403

Final Assembly or Process Routings 406

Configuring and Building to a Customer Order 408

Finishing or Final Assembly Combined Materials and Operations List 411

Choosing the Most Effective Approach 413

Master Plans versus Master Schedules versus Finishing Schedules 414

Master Scheduling Logistics (Sharing In/Out Information) 415

13 Data Integrity Requirements to Support Master Planning and Scheduling 417

What Is Data Integrity and Why Is It Important? 418

Gaining Control and Integration Points 422

The Four Pillars of Data Integrity 425

Applying the Four Pillars of Data Integrity in Support of Master Planning and Scheduling 438

Summary 452

14 Integrated Business Planning 455

Integrated Business Planning Process Elements in Brief 457

Workable, Adjustable Plans 466

Master Supply Planning 468

Integrated Business Planning and the Master Supply Schedule 470

Synchronizing and Assessing Demand and Supply 481

Measuring Accuracy and Performance 487

The Evolution of Integrated Business Planning 495

15 Resource Requirements Planning and Rough Cut Capacity Planning 499

Know Before You Go 500

Rough Cut Revealed 502

The Rough Cut Process 502

Creating the Resource Profile 505

Finalizing the Resource Profile 512

Capacity Inputs 514

Overloading Demonstrated and/or Planned Capacity 520

Rough Cut Capacity Planning at the Master Planning and Master Scheduling Levels 522

Resource Requirements and Rough Cut Capacity Planning Graphs 529

Using and Working the Rough Cut Capacity Plan 533

Simulations—Rough Cut Capacity Planning 538

Screen and Report Formats 540

Rough Cut Capacity Planning at a Process Company (Industry Example) 543

The Benefits and Limitations of Rough Cut Capacity Planning 551

Implementing the Rough Cut Capacity Planning Process 554

Closing Comments Regarding Resource Requirements Planning and Rough Cut Capacity Planning 555

16 Supply Management and Aggregate Master Planning 559

Supply Management and Master Planning in Action 565

The Impact of New Product in Supply Management and Master Planning 567

Inventory Projection and Planning 572

Will the Plan Work? 575

Product-Driven, Disaggregated Inventory Planning 577

Product-Driven, Aggregated Backlog Planning 579

Product-Driven, Disaggregated Backlog Planning 585

Production-Driven Environments 589

Reviewing and Approving the Aggregate Supply Plan 591

Interplant Product Integration 592

Key Performance Metrics—Calculations, Colors, Standards 597

Should Companies Have Supply Managers and/or Master Planners? 598

17 Demand Management and Aggregate Master Planning 603

What Is Demand Management? 603

The Impact of New Product in Demand Management 608

Master Launch Plan and Pipeline Funnel Examples for New Products 609

Problems with the Demand Forecast 614

The Impact of Demand Bias on Supply Chain Management 615

Coping with Forecast Inaccuracies 617

Reviewing and Approving the Aggregate Demand Plan 619

It’s About Quantities 621

It’s About Time 623

Demand and Forecast Adjustment 631

Customer Order Processing with Process Flow Diagram Example 637

Possible Problems Caused by Abnormal Demand 640

Customer Linking 642

Getting Sales Pipeline Control 645

Distribution Resource/Requirements Planning 646

Available-to-Promise 655

ATP with Two Demand Streams 659

Should Companies Have Demand Managers? 663

18 The Proven Path to a Successful MPS Implementation (Phase 1) 669

From the Original Implementation Plan to the Current Proven Path 669

The Proven Path to Successful Operational Excellence 671

The Decision Point 673

Going on the Air 675

The Former Proven Path to Master Planning and Scheduling in a Class A Operational Excellence Environment 676

The Journey to Excellence—Today and Tomorrow 679

Oliver Wight’s Class A Integrated Planning and Control Milestone 681

The Proven Path (3rd Version) to Successful Supply Chain Management and Master Planning and Scheduling Implementation 683

Phase 1: Lead Phase (Understanding and Committing) 685

Company Vision of Operations (A Modified Client Example) 687

Case for Change (A Modified Excerpt from a Client Example) 696

Segue to . . . 702

The Proven Path to a Successful MPS Implementation (Phase 2) Influencers Transform MPS Process Design and Structure 702

19 The Proven Path to a Successful MPS Implementation (Phase 2) 705

Methodology for Implementing Change Revisited 705

Phase 2: Transform Phase (Process Designing and Structuring) 707

Policy, Flow Diagrams, Procedures, Work Instructions, and Metrics Defined 731

Segue to . . . 741

The Proven Path to a Successful MPS Implementation (Phase 3) Users Own MPS Launch and Measures 741

20 The Proven Path to a Successful MPS Implementation (Phase 3) 743

Methodology for Implementing Change Revisited—Again! 743

Phase 3: Own Phase (Launching and Measuring) 745

Deterrents to Successful Implementation of the Master Planning and Scheduling Process and Supporting System Technology 762

The Master Planner’s and Master Scheduler’s List of Responsibilities 764

Putting It All Together to Ensure Success—Guaranteed 768

An Aggressive Master Plan and Schedule for the MPS Implementation 771

The Variables of a Master Planning and Scheduling Implementation 774

Epilogue

Order from Chaos 779

Final Thoughts – People and Process and Profession 783

Appendix A Master Planning and Scheduling Process and Performance Standards 809

Appendix B Master Planning and Scheduling Improvement Initiative Task Listing 817

Appendix C Master Planning and Scheduling Policy, Procedure, and Flow Diagram 827

Appendix D Master Planning and Scheduling 831

Appendix E Supply Chain Management Overall Process Flow Diagram (An Example) 843

Appendix F Master Planning and Scheduling Process Flow Diagram Examples 845

Appendix G Master Planning and Scheduling RACI Examples 851

Appendix H Master Planning and Scheduling Spinoff Task Team Charter 855

Appendix I Master Planning and Scheduling Oliver Wight International Offerings Founders’ and Co-Authors’ Biographies 859

Glossary 865

Index 895

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