What is MPS? Distinguishing MPS and MRP
18-10-2025 472
MPS, short for Master Production Schedule, is a commonly used term that plays an important role in the overall production and planning process. However, the concept of MPS is still confusing to many people. Let’s learn more about this term through the article below!
What is MPS?
MPS (Master Production Scheduling), also known as Master Production Schedule, is an important concept that describes a business's overall production plan. MPS provides detailed information about the quantity of goods to be produced in a certain period of time, helping businesses manage the production process more effectively.
Key Data for Building an Effective MPS
1. Customer Demand Forecast
A plan to forecast customer demand for a product or service is a key element in building a production strategy. To create this plan, businesses need to collect historical sales data from departments such as Marketing and Sales. This data will help measure and predict customer demand in the future. However, this plan needs to be updated and adjusted periodically (usually weekly) to ensure that businesses do not miss or go against market demand trends.
2. Safety Stock Parameters
Inventory is one of the important factors that directly affect the success of the production process. Therefore, businesses need to pay attention to safety stock parameters to be able to reserve goods, especially when receiving unusually large orders. Updating the raw material import policy must be done in a reasonable and timely manner to avoid affecting the volume of safe stock.
3. Product Catalog
The product catalog includes all product models that the enterprise produces. After completing the ABC analysis, the enterprise should arrange the product catalog according to popularity, with the most produced items at the top of the list.
4. Variation list for each product
For each product, the enterprise needs to create a separate variation list. For example, in the fashion industry, it is necessary to divide by size (S, M, L) or color of the product to serve the diverse needs of customers.
5. Specific time catalog
The enterprise should set up a specific time catalog including day, week, month and year. The target will be set by year, while the schedule will be by month and week, and the specific work will be allocated by day. This helps determine the production plan for the coming period, from which the business can flexibly adjust according to demand.
6. Production quantity
Finally, it is necessary to determine the quantity of products that the business produces according to the set periodic time (can be weekly, monthly or yearly). This will help the business have a clearer and more effective production plan.
Reasons why businesses need a master production schedule MPS
Master production schedule (MPS - Master Production Schedule) is an important tool to help businesses optimize production activities and manage resources effectively. Below are 9 reasons why you should apply MPS in your business:
- Accurate demand planning: MPS helps businesses monitor and adjust production plans based on actual demand, avoiding product surplus or shortage.
- Effective inventory control: Enterprises can determine the optimal inventory level, reduce storage costs while still ensuring a stable supply.
- Forecast production requirements: Relevant departments can preview the production plan, thereby better coordinating to prepare raw materials, human resources and equipment.
- Optimize raw materials: MPS helps enterprises calculate the amount of raw materials needed, avoid shortages or surpluses, and ensure that the production process is not interrupted.
- Determine human resource needs: Based on the production schedule, enterprises can accurately forecast the number of workers needed, thereby optimizing human resources and limiting shortages or surpluses.
- Timely equipment maintenance: Planning in advance helps enterprises have time to periodically check and maintain machinery, ensuring stable equipment operation and limiting production interruptions.
- Ensure product quality: With a clear production schedule, businesses can control the production process more closely, ensuring that products meet the set quality standards.
- Reasonable production inventory management: MPS helps calculate the appropriate inventory for each production stage, limiting the shortage of raw materials or overstocking of finished products.
Effective financial planning: The finance department can use the master production schedule to forecast cash flow, manage budgets and ensure that the business always has enough financial resources for production.
1. Understand and define the product
To build an MPS production plan, a business needs to have a practical understanding and in-depth knowledge base about its product. The first step is to fully describe the information related to the product, including the constituent materials, technical specifications, and the intended production quantity. This information needs to be clearly defined before planning.
2. Determine the time to complete the production process
The business needs to determine a certain period of time to complete the product as required. To do this, it can rely on the following questions:
After receiving an order, how long does it take to import and collect the necessary raw materials?
How long does it take to put raw materials into the production line?
How long does it take to package and check the product quality?
How long does it take for the product to be ready for delivery to the customer?
In addition, businesses can also use past production data and experience to determine these periods more accurately.
3. Assess market demand to decide production volume
This step requires businesses to rely on customer demand assessment to determine market trends. For products with high demand, businesses need to ensure large production volumes to avoid shortages. On the contrary, for products with low demand, it is necessary to balance production to avoid excess, causing waste of resources and costs.
Once the production volume has been calculated, businesses need to arrange the necessary resources to implement it.
Human factor: Based on the production volume, businesses need to allocate a reasonable number of workers, while ensuring that the skill level meets production requirements.
Equipment and machinery: Machinery and equipment need to be listed in detail and accurately, as they can affect the production process. It is necessary to consider the technical specifications and factory area to avoid affecting other resources.
Raw materials: Enterprises need to make a list of raw materials to be used, including quality, quantity, and supplier. At the same time, there should be a backup plan for risks such as damage or expiration during the production process.
Benefits of MPS production planning for enterprises
MPS (Master Production Scheduling) is considered a key factor in the production process, especially in determining the necessary raw materials to form BOM (Bill of Materials) for the finished product. MPS production planning helps enterprises to flexibly adjust and change the plan according to market demand as well as actual production capacity. Below are the specific benefits that MPS brings to enterprises:
Optimize customer demand forecasting plans: MPS helps businesses track and optimize demand forecasting plans, thereby providing a clearer view of production activities.
Provide detailed information: Related departments in the production process will have the necessary information about production requirements, helping to coordinate more effectively.
Optimize raw material management: MPS helps businesses manage raw materials better, avoiding material shortages during the production process.
Prepare human resources: Businesses can prepare the necessary human resources for upcoming production activities, ensuring everything goes smoothly.
Predict production line maintenance: Determining the required production volume helps businesses plan maintenance for the production line, increasing efficiency.
Safe Inventory Management: MPS allows businesses to calculate safe and reasonable inventory levels, improve raw material import processes and avoid waste.
Maximize profits and reduce costs: Following the MPS plan helps businesses maximize profits, minimize costs and enhance reputation in the eyes of customers.
>> See more: Production schedule in Smart Factory
Distinguishing MPS and MRP
MPS (Master Production Schedule) and MRP (Material Requirements Planning) are two popular production planning systems in supply chain and manufacturing management, but they have different goals and methods. Here are the main differences between MPS and MRP:
| MPS | MRP | |
| Purpose | The main objective of MPS is to plan the overall production, which determines what products to produce, in what quantities, and when. It provides a detailed production schedule for each end product, based on customer demand forecasts and orders. | The primary purpose of MRP is to determine the need for raw materials and components needed to carry out the production plan defined in MPS. MRP helps calculate material requirements and ordering times, ensuring that materials are available when needed to meet production schedules. |
| Input and output | Inputs: Demand forecasts, customer orders, inventory information, and production capacity constraints. | Input: Schedule from MPS, bill of materials (BOM), production time and delivery time from suppliers. Output: Material requisition list, order lead time, and material purchase orders. |
| Level of detail | Usually at an overview level, focusing on the final product, without going into details of components or materials. | In more detail, focus on all components, parts and materials required for production, based on the product's BOM. |
| Nature | Strategic, orienting the entire production plan. | Operational, supporting MPS by providing detailed information on raw material requirements |
However, many businesses today are still having difficulty finding effective production management and planning methods. So what is the optimal solution to support businesses in building MPS production plans? Please contact Hotline 0966.966.032 - 0986.448.456 to receive enthusiastic support from Intech Group's experienced team of experts.
References:
