Recently, I was requested to explain the differences between MRP and MPS. Following the explanation, I thought the following information might be useful to offer in a blog:
Master Production Schedule is the abbreviation for Master Production Schedule (MPS). A Master Production Schedule is nearly identical to MRP (Material Requirements Planning); the computations are identical; however, there is one difference.
Independent demand refers to things that have “direct” demand. Sales Orders, Service Orders, and Forecasts are all sources of independent demand. The demand stems directly from the needs of the customers (or forecasted requirements).
Items with “dependent” demand, or demand that is passed down as a result of the necessity to create an item, are planned.
A pen, for example, has a cap, a barrel, and a spring as well as a refill. The pen is an MPS item, according to the definition above. MRP items include the cap, barrel, spring, and refill.
As an example, I’ll use my previous experience in planning:
On a weekly basis, we would lay out an MPS production plan when making pens. The orders and projections for that period would be used to create the final good production plan. This would result in a “Finished Good” plan that couldn’t be altered (well, we tried not to change it). We wanted to manage the production plan to group products together by colour to avoid moulding change over time, therefore this plan was crucial. This level filled our weekly production plan and produced the demand for the components needed to make that finished good plan. MRP would be run on a daily basis to accelerate any parts required for the plan’s production.
So, why would a business keep MPS distinct from its MRP items? Many times, the final good plan will be spelled out and will not be amended. Rather than running MPS items on a daily basis and dealing with change requests (every day, new orders come in and change the requirements; therefore, you get messages that need to be dealt with). This is especially true for businesses that must arrange similar goods together.
I can think of two companies to whom I recommended MPS planning during my consulting period. Both of them have completed good planning requirements identical to the ones I mentioned earlier. They needed to keep the amount of change from one item to the next to a minimum. They had to create a schedule and stick to it. The schedule may be run once a week by running MPS independently, and then MRP could be run more regularly to collect the action messages needed to build and maintain the production schedule.
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