Master Production Scheduling is balancing demand with supply. It means satisfying the customers within the constraints of the factory and the supplier base. It’s doing this in the most economical, efficient, productive, and profitable manner. Master Scheduling is an especially tough job because, even in a Class A environment, both supply and demand are continually changing. As a company becomes better and better at managing its schedules, the change requests (should) become more frequent. A company’s improved competitiveness begins to attract requests from an ever-widening customer base, since Class A companies are often seen as the place to go when an emergency order or special service is needed.

The need to continually manage change and keep schedules in balance is the real ongoing job of the master scheduler. A good master scheduler must always be ready to react to change. But there is a very real risk of overreacting, reacting too soon, or reacting in a way that will throw other things out of balance. Good master schedulers, therefore, always consider five key questions before making a final decision to change the master schedule.

For example, take a product that has an annual forecast of 1000, but with a seasonal factor such that the current month has a forecast of 120. The current week’s forecast of 30 is overshadowed by actual customer orders of 45 due for immediate shipment. The master scheduler must decide whether or not to react to this "demand change." Should the annual forecast for 1000 stay the same? Is this month’s forecast for 120 still good? Is selling 45 in a week just "normal" lumpy or uneven demand? Should the master schedule be changed every time there’s an increase in demand, or are there times when demand will even itself out?

On the surface these may seem to be more demand management questions than master scheduling questions, but don’t they need to be answered before the master schedule can be changed? Underlying the answers to these questions should be an analysis of the given item’s demand compared to its normal historical pattern. This first question can be restated as "Do we really need to change?"

QUESTION #2: What is the impact on the Production Plan?

In a Class A MRP II environment, aggregate monthly rates of production (the Production Plan) by family are reviewed and authorized by senior management in the Sales & Operations Planning process. The master scheduler must operate within these rates to ensure that the master schedule communicates detailed priorities that will achieve business objectives and be supported by the resources budgeted and authorized by senior management. This means that individual line item master schedules can only be altered in a way that preserves the validity of the overall monthly Production Plan totals. A master scheduler may have to find a way to counterbalance any master schedule change with an equal but opposite one for another item in the same family. If this is not possible, the need to change the overall family aggregate Production Plan rate needs to be discussed with senior management so approval for any resource changes and acceptance of restated targets can be gained. This key question can be restated as "Are we allowed to change?"

If the desire and permission to change are ascertained, the third key question to be answered is whether change is constrained by the ability to alter the supply of resources needed to produce the product. This includes resource capacity in the factory, in support departments, or at suppliers. Is extra capacity available where and when it’s needed? Can more capacity be garnered through overtime, redeployment of people or equipment, some subcontracting, etc.? Or conversely, will lower utilization caused by schedule reductions have adverse effects that cannot be accepted?

Capacity alone is not enough. Are the proper materials available for schedule increases? Or, if requirements are being lowered, can increased inventories and added storage space requirements be accommodated? Will schedule changes have any impact on the ability to meet other end product schedules or on other material requirements?

Questions #3 and #4 are really asking "Are we able to change?"

In most cases, extra capacity can be found and more material can be acquired, but often at some premium cost or by taking some risk with other items, products, or customers that are in the schedule. Likewise, reduced requirements can be accommodated, but sometimes at the cost of increased inventories or underutilized assets and people. Is this level of cost and risk acceptable? Does management understand the impact on the ongoing weekly and monthly operating and financial measurements? This must be balanced against the importance of the change and the potential impact on supporting other customers and products. From a business viewpoint, this last and crucial question can be restated as "Do we want to change?"

Each of these questions must be answered before any master schedule is changed. Obviously, in complex environments where many materials and resources are used to build the product and where many products are built, answering all these questions in total detail could be an enormously time consuming and almost overwhelming task. In such environments, timesaving tools like Rough Cut Capacity Planning (which focuses attention on only the key resources and materials) are invaluable. Equally invaluable is the master scheduler’s experience and judgment in knowing when and what key resources need to be checked into, at what level of detail.

Sometimes the answer to one or more of these questions will be intuitive and happen in a matter of seconds as the master scheduler considers the problem. In other cases, it can take hours or days for the master scheduler to consult with the proper people to get the required information and to ensure that a consensus is reached by all interested parties. The depth and extent of these analyses will obviously vary, based on the complexity and scope of the change in question.

A good master schedule will satisfy demands (forecasts, contracts, backlogs, etc.) along with normal, predictable variation around that demand, utilizing safety stock, safety capacity, and selective "overplanning." Building a good master schedule requires a lot of deliberate thought and analysis. But the even bigger challenge is keeping a good master schedule, one that can be met at least 95% of the time. Certainly this is as much art as science, as the master scheduler must balance the time and resources needed against the impact of the decisions.

The five key considerations to guide this process are summarized below. They are the road map a good master scheduler must follow to stay on course and keep the master schedule the true driver of a Class A manufacturing company.

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