Page 262 - Orlicky's Material Requirements Planning

CHAPTER 12 Master Production Schedule 241

The authority for specifying and changing the contents of the MPS is sometimes
improperly assigned or, perhaps even more typically, remains unassigned. In such cases,
marketing tends to influence and change existing MPSs directly, possibly creating a num-
ber of undesirable consequences in production. The principle of separation of forecasting
from scheduling production means that the only thing ever changed by marketing
should be the forecast or some other expression of marketing requirements. Such a
change need not necessarily always result in a schedule change.
Inventories represent another area of responsibility that in many businesses can be
divided between marketing (or a distribution organization) and manufacturing. In such
cases, manufacturing exercises control over and is held responsible for plant inventories
of raw materials, work-in-process, and finished components carried to support current
MPSs. Marketing, on the other hand, assumes responsibility for both field and plant
inventories of finished product.
The responsibility for component materials of optional product features often can
also be divided between marketing and manufacturing. In dividing this responsibility,
management tries to apply the rule that whoever is in a better position to determine the
quantities of materials to be ordered for a given optional feature should assume respon-
sibility for it.
To determine how this responsibility is to be assigned, the options for each product
are ranked according to their relative weight, that is, the percentage of the total cost of the
product. Options representing a significant portion of total product cost are then forecast
by marketing; the balance, by manufacturing. Marketing is in the best position to esti-
mate the trend in future demand for major options, whereas manufacturing typically has
better historical statistics on the use of a host of minor options.
The logistics system that a manufacturing company needs to regulate the flow of
materials through the entire cycle from vendor to finished-goods inventory to customer
must act to coordinate activities of several functional divisions of the company. The MPS,
which “drives” the entire system, serves as a basis for resolving the inevitable conflicts
between the functional divisions and represents a contract between them.
This is why the various steps involved in the development and finalization of an
MPS, reviewed earlier in this chapter, are in most cases carried out by a master schedul-
ing committee or a hierarchy of committees composed of representatives from the inter-
ested marketing, manufacturing, and finance organizations. The creation of an MPS is too
important and critical a function to be entrusted to any one functional division of the
company.

Management and the MPS
On occasion, it has been suggested that the MPS, that is, its preparation and maintenance,
could be automated and brought under complete computer control. This is envisioned as
an extension of the process of automating systems and procedures in the area of manu-
facturing logistics. Where statistical forecasting of demand applies, so the reasoning goes,