Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

8.4.2b Master Production Scheduling (MPS) Process for Several Independent Locations

Intended learning outcomes: Explain the master production scheduling (MPS) process and the planning group for several locations that operate independently of one another.

Continuation from previous subsection (8.4.2)

This structure is not comparable with a company and its depart­ments, because, in this case, the “departments” are independent companies or profit centers within a group of companies. The principles of supply chain management apply here, particularly the following:

  • The people involved must regard one another as partners. This applies to the schedulers at the company that manufactures the active substances (the pipeline products) as a whole, and also to schedulers at the companies involved in producing the product. There is no point in any of the parties overplaying their negotiating position, since the entire pipeline is under the control of people. Mutual respect and consideration do not simply foster good relation­­ships among all parties involved; they also increase people’s willingness to attempt to understand specific problems. See also Section 2.3.3.[note 805]
  • Information systems must be networked, to exchange forecasts and other planning data. The results of the central coordinating pipeline planning process must be fed back to the companies involved in the pipeline. See Section 2.3.5.

Figure shows the process for master planning.

Fig.        Master production scheduling process for several locations that operate independently of one another.

The central planning office sends the result of master planning, that is, the master production schedule (MPS) for the entire pipeline, to the individual companies involved, where it will be adjusted to suit local scheduling needs. The result of this process is then returned to the central pipeline planning department, and so on. The planning process is organized on a rolling basis, and the planning horizon may be as long as one or two years hence. Figure shows suggested scheduling groups.

Fig.        Planning group for several production locations operating independently of one another.

The scheduling group comprises a (central) pipeline manager (PM) and representatives from the scheduling groups of all the plants involved (plant schedulers, PS). It is important to ensure that all the schedulers constantly exchange information with one another. It can also be useful to have an independent arbitrator. The presence of an arbitrator is a typical indicator of the weakness of every model of this kind, whenever the pipeline or network develops no self-understood culture of cooperation.

Course section 8.4: Subsections and their intended learning outcomes