At each of the stages of a bill of material, the company commits itself to more cost and fewer alternatives. Therefore the cost of making a change increases and the company’ s flexibility decreases as production gets closer to the delivery time.
But changes to MPS is ineviatble and might occur for below reasons
- Customers cancel or change orders;
- Suppliers have problems and miss delivery dates;
- Machines break down or new machines are added, changing capacity;
- Processes create more scrap than expected.
A company wants to minimize the cost of manufacture and also be flexible enough to adapt to changing needs. Changes to production schedules can result in the following:
- Cost increases due to re-routing, rescheduling, extra setups, expediting and buildup of work-in-process inventory;
- Decreased customer service. A change in quantity of delivery can disrupt the schedule of other orders;
- Loss of credibility for the MPS and the planning process.
Changes that are far off on the planning horizon can be made with little or no cost or disruption to manufacturing. To help in the decision-making process, companies establish zones divided by time fences. The zones and time fences are
Release Time Fence
Release time fence used to allow automatic release of orders falling within this planning horizon. For example, a planner may want to automatically create released orders for certain items when the requirement falls within 1 or 2 days of the current date.
Demand Time Fence (Frozen zone)
It is
- That point in time inside of which the forecast is no longer included in total demand and projected available inventory calculations; inside this point, only customer orders are considered. Beyond this point, total demand is a combination of actual orders and forecasts, depending on the forecast consumption technique chosen.
- In some contexts, the demand time fence may correspond to that point in the future inside which changes to the master schedule must be approved by an authority higher than the master scheduler. Note, however, that customer orders may still be promised inside the demand time fence without higher authority approval if there are quantities available-to-promise (ATP). Beyond the demand time fence, the master scheduler may change the MPS within the limits of established rescheduling rules, without the approval of higher authority.
Capacity and material are committed to specific orders. Since changes would result in excessive costs, reduced manufacturing efficiency and poor customer service, senior management’ s approval is usually required to make changes. The extend of the frozen zone is defined by the demand time fence. Within the demand time fence, demand is usually based on customer orders, not forecast.
Planning time fence(Slushy zone):
Capacity and material are committed to less extend. This is an area for tradeoffs that must be negotiated between marketing and manufacturing. Materials have been ordered and capacity established; these are difficult to change. However, changes in priorities are easier to change. The extent of the slushy zone is defined by the planning time fence. Within this time fence the computer will not reschedule MPS orders. Changes inside the planning time fence must be made manually by the master scheduler.
Outside the planning time fence, customer orders may be booked and changes to the master schedule can be made within the constraints of the production plan.
Liquid zone
Any change can be made to the MPS as long as it is within the limits set by the PP. Changes are routine and are often made by the computer program.