The role of the Master Scheduler has existed for years but organizations are still trying to determine the optimal way to manage supply. This has become more difficult over the years due to the volatility in demand, the increased pressure of balancing fulfillment, and the cost of capital. Organizations are striving to be demand-driven, but they require some degree of stability in the supply plan for supply assurance and for managing their capacity constraints― both internal and external. There are a number of factors that influence the master schedule. These may include:
a) The implementation of a postponement strategy or ‘delayed differentiation.’ Organizations that implement postponement strategies design a generic configurable product with customization closer to customer demand. The master schedule is generated at the generic product level.
b) Organizations that outsource. If you outsource you may be providing your partner a production plan which represents the plan at a higher level in the hierarchy. For example, product family. The partner will then be responsible for translating this to the item level master schedule.
c) Sales profile. If your product sales accelerate significantly at the end of the quarter (typically driven by sales incentives), a master schedule decoupled from the sales plan may be more important to you than other organizations. This is particularly important if you have long lead times or capacity constraints. Level loading inside a firm horizon will reduce the risk of supply to support the end of quarter sales.
d) Asset Utilization. Your organization may have significant investments in capital equipment that influence the master schedule. You may be faced with tradeoffs between capacity utilization and lean JIT strategies.
Once the master schedule is created, a big challenge is the monitoring of the master schedule against your production plan and your sales plan. How do you ensure that you are building the right amount of product to meet your organizational objectives? This can be a fine balancing act. You may want to ask yourself:
- Can you easily reconcile the production plan and master schedule at multiple levels of the hierarchy in units and value?
- Do you model your key bottleneck capacity constraints? Are they internal and external (ie. supplier) constraints?
- Do you have a clear view of your capacity constraints and their impact on your master schedule?
- Do you understand the impact your master schedule or changes to your schedule have on customer demand?
- Are you able to compare multiple versions of your schedule and analyze the impact on your KPIs?
- Do you use an alerting system to proactively identify when your master schedule is at risk of meeting your sales plan?
- Are you responsive enough to act before it is too late? What is your response management strategy?
We all understand the concept of creating a plan, but what about monitoring and responding to the plan? I am interested in hearing your point of view. Has the traditional role of the master scheduler changed? How important is this role in supporting an organization’s Sales and Operations Plan?