1 Overview 01 APR 2014

Sales, Master Scheduling and Sequencing
Overview
Date: April 2014

www.iaqg.org/scmh Section 1.1.2
Manufacturing typologies
Variety /
Complexity
Project
manufacturing
The choice of the manufacturing system

depends on various circumstances but it
must meet two objectives :
Come up to customers satisfaction
Be cost effective
Lot / Batch /
Intermittent
manufacturing
Line /
Repetitive
manufacturing
Continuous
process
Volume
2
Characteristics of Project manufacturingg

Variety /
Complexity
Project
manufacturing
Lot / Batch /
Intermittent
manufacturing
Usually one unique product

Definite beginning and definite end
Fixed position layout
Potential risks of cost overruns due to
complexity
Difficulty in coordinating multi-disciplinary
teams
Line /
Repetitive
manufacturing
Continuous
process
Volume
3
Characteristics of Intermittent manufacturing

Variety /
Complexity
Project
manufacturing
Long manufacturing lead time

Large work-in-progress
Discontinuous flow of materials
General purpose machines
Process layout
Lot / Batch /
Intermittent
manufacturing
Line /
Repetitive
manufacturing
Continuous
process
Volume
4
Characteristics of Repetitive manufacturing

Variety /
Complexity
Project
manufacturing
Special machines purpose

Product layout
Less flexibility in production schedules
Limited range of similar products
Little work-in-process
Lot / Batch /
Intermittent
manufacturing
Line /
Repetitive
manufacturing
Continuous
process
Volume
5
Characteristics of Continuous process

Product produced and stocked in the
Variety /
Complexity
Project
manufacturing
warehouses awaiting sales

Special purpose machines with builtin-control
Highly mechanized materials handling
High investments
Lot / Batch /
Intermittent
manufacturing
Line /
Repetitive
manufacturing
Continuous
process
Volume
6
Manufacturing Planning & Control System
Whatever the manufacturing typology, companies have to

implement a manufacturing planning and control system. Its
purpose is to respond to customers requirements by
managing efficiently the flow of material, the utilisation of
people and equipment, and by managing the performance of
the suppliers
A good planning and control system must answer four basic
questions: what are we going to make ? What does it take to
make it ? What do we already have ? What must we get and
when ?
This fully integrated planning and control system is called
Manufacturing Resources Planning (MRP2)
7
MRP2 is a Manufacturing Planning and Control System

concerned with planning and controlling all aspects of
manufacturing, including managing materials, scheduling
machines and people, and coordinating suppliers and key
customers
MRP2 objective is to balance demand with supply
Demand refers to the products that the organization is being
asked to provide, expressed in customer orders, sales
forecasts, distribution center replenishment, interplant
transfer
Supply refers to the resources available to meet that
demand: materials, manpower, machinery, suppliers and
their capacity, testing, storage space, money
8

OBJECTIVES AND
CONTENTS
HORIZON
UPDATE
Express the company policy

Define market share by families of
products
Identify new technologies
All companys departments are
concerned
5 years and more
Yearly
SALES AND
OPERATIONS
PLANNING
Stabilize manufacturing
Express the Strategic Business Plan for
manufacturing
Plan sales by families
Define inventory level and customer
service level
1 year and more
Monthly
MASTER
PRODUCTION
SCHEDULE
Contract between manufacturing and

sales
List of all demands for end items and
spare parts
It represents what the company plans to
produce expressed in specific
configurations, quantities, and dates
Minimum : Supply +
Manufacturing Lead
Times
Weekly
MATERIAL
REQUIREMENT
PLANNING
It makes recommendations to release

replenishment orders for material
Compare needs to available resources
Propose a time-phased planning
Plan priorities
Bill of material
explosion from Master
Production Schedule
Weekly Daily
1 day to 1 week
Daily Hourly
SEQUENCE
STRATEGIC
BUSINESS PLAN
PRODUCTION
ACTIVITY
CONTROL
Schedule the load by operation

Smooth the workload
Evaluate the effectiveness of
production operations

Step by step
planning
Strategic Business
Plan
SBP drives
S&OP
Demand
Management
S&OP constrains SBP

when inconsistencies
Sales & Operations

Planning
S&OP drives
MPS
MPS drives
MRP
Check feasibility through

resources availability
check
Resource
(Requirement) Planning
MPS constrains S&OP

Master Production
Schedule

check
Rough Cut Capacity

Planning
MRP constrains MPS

Material Requirement
Planning
Purchasing
Step by step
capacity check
Production Activity
Control

check
Control, monitor and report
Capacity Requirement
Planning
Input/Output control &
Operations sequencing
10
At each level, there are three questions:

What are the priorities?
What capacity is available?
How can differences be resolved?
These are questions for reconciling demand with supply:

MRP2 is a way to ensure the organization will always be
able to deliver to its commitments and will not commit if it is
not capable
11
Master Planning Scope
Master Planning encompasses:
Demand management
Sales and Operations Planning and Resource Requirement Planning
Master Production Scheduling and Rough Cut Capacity Planning
Master Planning scope
Demand
management
Purchasing
Strategic Business
Plan
Sales & Operations
Planning
Resource
(Requirement) Planning
Master Production
Schedule
Rough Cut Capacity

Planning
Material Requirement
Planning
Capacity Requirement
Planning
Production Activity
Control
Input/Output control &

Operations sequencing
12
Master Planning objectives
Purposes of Master Planning are:

To ensure integration and implementation of the
business, sales, marketing, engineering, finance and

manufacturing plans
To manage inventory and backlog to a position desired by
the companys executive team
To commit to products deliveries and feel confident about
the ability to fulfil these commitments
13
Demand management
Demand management is the function of recognizing and

managing all forms of demand
Demand management is a gateway module in

manufacturing planning and control, providing the link to the
marketplace, sister plants, warehouses, and other sources of
demand (service parts, intra-company demand,)
Manufacturing Planning
and Control boundary
Marketplace
(customers and other
demand sources)
Demand
management
Sales and
Operations
Planning
Resource
Planning
Master
Production
Scheduling
Rough-Cut
Capacity
Planning
14
Sales & Operations Planning and Resources

Requirement Planning
Sales and Operations Planning is the process for

determining levels of production based on product groups.
The objective is to develop a plan which integrates the
various functional planning efforts in a company.
The sales and operations plan links strategic goals to

production and coordinates marketing plan, financial plan,
operations plan and human resources plan
15
Sales & Operations Planning and Resources

Requirement Planning
Resources Requirement Planning encompasses long-range

planning of facilities. Involved is the translation of extended
operations plans into capacity requirements, usually on a
gross or aggregate basis
The need is to plan capacity that requires top management

approval. The horizon must be as long as it takes to make
major changes such as invest in new machines, anticipate
people take on,
16
Example of S&O meeting tool

Products family
Month
J A S O N D J F M A M
Inventory
target
J J A S O N D J F M A M J J A S
Sales Plan
Planned
Actual
Difference
Production Plan
Planned
Actual
Difference
Inventory
Planned
Actual
Difference
17
Master Scheduling and Rough Cut Capacity Planning
Master Scheduling is the business process designed to

balance demand and supply at the detailed, mix level
Objectives are:
To maintain desired level of customer service
To make best use of resources
To keep inventories at desired level
18
Inputs to Master Scheduling Process
Production Plan
Forecasts
Orders from customers
Additional independent demand (eg: spare parts)
Inventory levels
Capacity constraints
19
Rough Cut Capacity Planning
Rough Cut Capacity Planning checks whether critical

resources are available to support the Master Schedule
Critical resources are not only machines or direct labor.

They can also be:
Process engineering skills
People and specific control devices involved in First
Article Inspection process
Quality organization involved in accepting non-conform
items by concessions
Suppliers that have a specific know-how
20

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Sales, Master Scheduling and Sequencing

Date: April 2014

The choice of the manufacturing system

Characteristics of Project manufacturingg

Usually one unique product

Characteristics of Intermittent manufacturing

Long manufacturing lead time

Characteristics of Repetitive manufacturing

Special machines purpose

Characteristics of Continuous process

warehouses awaiting sales

Manufacturing Planning & Control System

Whatever the manufacturing typology, companies have to

Manufacturing Resources Planning (MRP2)

MRP2 is a Manufacturing Planning and Control System

Manufacturing Resources Planning (MRP2)

Express the company policy

5 years and more

1 year and more

Contract between manufacturing and

It makes recommendations to release

Schedule the load by operation

Manufacturing Resources Planning (MRP2)

S&OP constrains SBP

Sales & Operations

Check feasibility through

MPS constrains S&OP

Check feasibility through

Rough Cut Capacity

MRP constrains MPS

Check feasibility through

Control, monitor and report

Manufacturing Resources Planning (MRP2)

At each level, there are three questions:

These are questions for reconciling demand with supply:

Master Planning Scope

Master Planning encompasses:

Rough Cut Capacity

Input/Output control &

Master Planning objectives

Purposes of Master Planning are:

business, sales, marketing, engineering, finance and

Demand management is the function of recognizing and

Demand management is a gateway module in

Sales & Operations Planning and Resources

Sales and Operations Planning is the process for

The sales and operations plan links strategic goals to

Sales & Operations Planning and Resources

Resources Requirement Planning encompasses long-range

The need is to plan capacity that requires top management

Example of S&O meeting tool

Master Scheduling and Rough Cut Capacity Planning

Master Scheduling is the business process designed to

Inputs to Master Scheduling Process

Rough Cut Capacity Planning

Rough Cut Capacity Planning checks whether critical

Critical resources are not only machines or direct labor.

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