Introduction to Master Schedule in S&OP

The master schedule – also known as production plan – is crucial within the roles and responsibilities of Sales & Operations Planning (S&OP). It aligns supply chain activities with the company’s strategic business goals. Thus, it is a key function in ensuring the successful implementation of the S&OP plan.

Specifically, the master schedule makes sure the S&OP plan matches the forecasted demand by developing realistic production plans. Both the supply planning and master scheduling functions, alongside the S&OP plan, seek to maximize the company’s profits. However, they can only achieve this by strategically leveraging production capabilities.

Let’s explore how the master schedule/production plan, along with the S&OP plan, can make an impact in your supply chain.

Master Schedule and S&OP Plans: Working Hand in Hand

S&OP planning is a structured and continuous process. It helps all members of the organization jointly focus on achieving corporate objectives at the tactical level. Organizational leaders must have direct visibility and input into the plan. It should also be shared with the external ecosystem partners to ensure it meets customer expectations and suppliers can deliver materials and ingredients when necessary.

To ensure a real alignment, the corresponding departments need to take a set of actions:

• Translating time units from monthly to weekly buckets
• Ensuring coherence in product family names in both plans
• Introducing rates’ differentials per product
• Setting the necessary production levels to meet the forecasted demand
• Determining if shifting production to pre-build inventory if there are capacity issues

Synchronizing Time Units for Accurate Planning

When figuring out how the S&OP plan fits into the master schedule, it’s important to think about cadence variations. The S&OP plan follows a monthly cadence, while the master schedule is a weekly plan. The coordination between them must be both at an aggregate production level and at daily production levels.

To be coherent and meet the business goals, it’s then fundamental to:

• Translate this planned monthly production into a weekly production rate for the master schedule
• Synchronize aggregate production levels between both plans

Standardizing Product Family Definitions Across Plans

Production efficiency is better when manufacturing occurs in a way that minimizes maintenance needs between product families. For instance, let’s look at the example of a pastry products manufacturer. A typical production run  for this manufacturer might begin with the white cake batter. Following runs continue through all the color iterations until they produce a deep chocolate cake batter.

At that point, the equipment shuts down so a thorough cleaning can occur. And then, the next production run starting with white cake batter can begin anew. We could determine “cake batter” is the “product family”. Clearly defining shared product names is important because differences can only drive inefficiencies.

In this example, both plans’ product names should use the same name. In no case should it be “cake batter, white” in the S&OP plan and “white cake batter” in the master schedule.

Leveraging Production Rates Differentials

Not all products run at the same rate. In the previous bakery example, brownie batter production – with a greater density – runs at a slower rate than cake batter. The master schedule must incorporate these rate differentials to produce the amounts specified in the demand plan.

It’s clear then that rates need to match volume. This is key is to maximize throughputs and minimize changeovers, while getting to the market on time. At the same time, this contributes to avoiding over-stock and unnecessary costs.

Driving Bill of Material (BOM) Planning

The master schedule sets production levels for finished product goods. It determines how many units of each product to make so it directly influences the Bill of Material (BOM).

Integrated BOMs generate the necessary raw materials based on the production levels. This streamlined process promotes both manufacturing and organizational efficiencies resulting in:

• Accurate material planning and waste reduction: By linking the master schedule with the BOM, companies can ensure required materials are available. This reduces the risk of production delays caused by raw materials shortages. Moreover, this planning minimizes waste by ordering only the necessary materials and aligning with lean manufacturing principles.
• Inventory optimization: BOM planning helps maintain optimal inventory levels, preventing overstocking of raw materials and reducing carrying costs.
• Enhanced coordination across departments: The integration of the master schedule with BOM planning enhances coordination across procurement, production, and inventory management. This ensures everyone is working with the same data and towards the same goals.

In conclusion, the master schedule’s role is vital for achieving efficient production processes and meeting the overall organizational goals. It constantly adjusts to changes in demand and production capabilities to ensure plans align with business objectives.

Want to Know More About Sales and Operations Planning?

Check out other valuable resources:

• What are the 5 Key Pillars of S&OP?
• 5 Key Benefits of S&OP for your Supply Chain
• Key Capabilities of S&OP for Your Supply Chain
• Connecting the Gaps Between Financial Planning & Operational Planning
• Executive Management’s Role in the S&OP Process
• Driving S&OP Success: The Operations Leader’s Function
• QAD Announces the Next Release of Digital Supply Chain Planning (DSCP)
• Extending Sales and Operations Planning Throughout the Supply Chain

Learn the advantages of putting in place a great S&OP process and ensure alignment with the master schedule. Improve your business performance with QAD Sales and Operations Planning Software.