Integrating production planning levels: from high-level plans to detailed scheduling

1. Linking the different levels of production planning and managing changes

So far, we have discussed the different levels of detail of the production planning individually, but in practice, it requires integration across these different levels, from high-level aggregate plans to the detailed scheduling.  

This section addresses how these levels interact and how to handle changes. 

Linking the different levels of planning

High-level production planning to MPS: 

Aggregate demand (if original demand is defined at that level) is disaggregated into specific SKUs and distributed across weeks/months.  

 

Good forecast accuracy at the lowest level is needed as it ensures that the MPS is realistic and actionable, avoiding overproduction or resource underutilization. 

MPS to MRP: 

Weekly SKU targets drive material requirements. The BOM ensures accurate raw material planning for each product type. 


Timely updates to the BOM and lead times in the system of record are crucial. For instance, any delay in binding agent procurement impacts production schedules downstream. 


MRP to detailed scheduling: 

Material availability dictates the feasibility of daily/hourly task assignments in detailed schedules. 


Next, details about machine & labor availability and any other constraints need to be taken into account, while allowing for flexibility because of changes in priorities or late urgent orders coming in. 

Handling changes on these levels 

Scenario 1) a priority customer order arrives 

Impact: adjustments required in the MPS, MRP, and Detailed Scheduling. 

Actions: update MPS to include the new order. Need to Run MRP again to adjust material procurement/manufacturing. Re-sequence detailed schedules, potentially delaying lower-priority tasks 

Scenario 2) machine breakdown 

Impact: delays in daily production. 

Actions: adjust the detailed schedule, assuming the breakdown is only for a short duration. Then communicate changes upstream to revise the MRP and potentially the MPS if needed. 

Example: insulation manufacturing company 

Earlier, we gave the example of an insulation manufacturing company. In this case, a priority FG-20mm order comes in. FG-20mm has the highest margins and this order has been given priority for a key customer that has a service level agreement in place.  

Scenario: adjusting for priority FG-20mm order

MPS impact: FG-20mm targets increase in this week. FG-10mm and FG-30mm targets decrease proportionally to fit capacity, since no extra labor capacity was available in this example. 

MRP impact: Adjust BOM requirements to prioritize FG-20mm materials, expediting binding agent procurement. 

Detailed schedule impact: Reschedule machines to prioritize FG-20mm, leading to a delay in FG-10mm production. This might need to be communicated towards sales or the relevant customers. 

Time fencing

Time fencing is a crucial concept in production planning that helps maintain stability in the short term while allowing flexibility for adjustments in the longer term. It divides the planning horizon into distinct zones—frozen, slushy, and liquid—each with specific rules for how changes can be made.  

  1. 1. Frozen zone (detailed scheduling): 

This covers the first few days to a few weeks, depending on the industry and lead times. 

 

Plans are fixed and require significant approval for changes since changes in this period can disrupt operations, increase costs, and lead to inefficiencies. 

  1. 2. Slushy zone (master production schedule control): 

Begins after the frozen zone and extends up to the cumulative lead time for production and material procurement. 

 

Limited flexibility; changes are possible but require approval and coordination. 

  1. 3. Liquid zone (planning system suggestions): 

Covers the horizon beyond the cumulative lead time, typically up to 12 months. 

 

High flexibility; plans are dynamically generated by planning systems based on forecasts. Used for long-term resource planning and capacity leveling. 

The focus is on aligning the plan with sales and operations planning (S&OP) goals. 

Ownership and accountability

  • Frozen zone: detailed schedulers and operations teams are responsible for execution. 

  • Liquid zone: long-term planners and demand planners ensure alignment with strategic goals.