From 52 Weeks to Tomorrow: Connecting Capacity Planning, MPS and Production Scheduling

Oct 6

5 min read

There is a big difference between knowing that you have a capacity problem coming and discovering it when the production schedule is already on fire.

I've always believed that good supply planning should give a business time to make decisions.

Not simply tell you what has already gone wrong.

One example from my consultancy work involved developing a connected planning process that brought together:

52-week Rough-Cut Capacity Planning
26-week Master Production Scheduling
Detailed production scheduling
Forward inventory visibility
Management reporting

The tools were developed in Excel, but the important part wasn't Excel.

It was the planning process behind them.

Start far enough ahead to see the problem

The first element was a 52-week Rough-Cut Capacity Plan (RCCP).

The objective was to provide a forward view of:

Demand → Available shifts → Expected output → Capacity requirements → Inventory

The model provided a weekly view of supply and demand alongside the expected inventory position.

This meant that capacity wasn't being considered simply in terms of whether there were enough hours available next week.

It allowed the business to ask:

“If demand develops as expected, can we realistically support it over the coming year?”

That is a very different question.

And importantly, it creates time.

Time to consider additional shifts.
Time to consider labour requirements.
Time to look at equipment constraints.
Time to review inventory policy.
Time to question demand assumptions.
Time to make a commercial decision.

The further ahead you can see a constraint, the more options you usually have to deal with it.

The RCCP therefore wasn't intended to create a detailed production plan 52 weeks into the future.

It was there to provide visibility of what might be coming.

Then bring the horizon closer

The next step was a 26-week capacity-balanced Master Production Schedule.

This took the longer-term view and moved it closer to something the planner could actively manage.

The MPS allowed production requirements to be maintained against inventory policy, taking account of demand, production frequency and the expected inventory position.

The objective wasn't simply:

“How much do we need to produce?”

It was:

“What do we need to produce, when should we produce it, and what does that do to our future inventory and capacity position?”

That distinction is important.

A production requirement can look perfectly reasonable in isolation.

But when you put it alongside everything else that needs to be produced, the available capacity and the expected inventory position, the picture can change quickly.

The MPS therefore becomes the bridge between the forward supply strategy and the detailed production schedule.

Then turn the plan into something the factory can actually run

The next stage was the production schedule.

This was where the planning became much more detailed.

The schedule identified:

Production sequence
Time-based production requirements
Planned production duration
Changeover time
Break periods
Planned versus actual performance
Variances

This matters because a production schedule isn't simply a list of products.

If you know that Product A takes 60 minutes to run and Product B takes 90 minutes, that is useful.

But if moving from A to B requires a changeover, that also consumes time.

Breaks consume time.

Unexpected downtime consumes time.

And if the actual production rate differs from the planned rate, the schedule starts to move.

Suddenly, the difference between:

“We have 168 available hours”

and

“We can actually produce what we need within those 168 hours”

becomes very important.

The schedule also creates a feedback loop

One of the useful aspects of the detailed schedule was the ability to compare plan versus actual.

That's important because a planning process should not simply produce a plan and then forget about it.

If the planned production time was 90 minutes but the actual production took 110 minutes, that's information.

If a changeover was planned for 30 minutes but repeatedly takes 60 minutes, that's information.

If production consistently achieves less than the assumed production rate, that's information.

Those variances can then be used to improve the assumptions behind future planning.

Otherwise, businesses can find themselves repeatedly creating plans based on what should happen rather than what actually happens.

And that is where planning can gradually lose credibility.

Then make the information useful to management

The final piece was a management dashboard providing forward visibility of capacity and inventory expectations.

This is an important distinction.

A planner needs detailed information.

Management usually doesn't need to see every production order.

They need to understand:

Where are we heading?

Where are the constraints?

What is likely to happen to inventory?

Where might capacity become an issue?

What decisions might we need to make?

The supporting workbook brought together views including capacity utilisation, planned hours, production plans, inventory profiles, inventory cover and production-to-ship information.

The purpose wasn't to create another dashboard because dashboards are fashionable.

It was to make the planning information useful for decision-making.

The important part wasn't the spreadsheets

It's tempting to look at something like this and conclude:

“That's a clever Excel model.”

But that misses the point.

The technology was relatively straightforward.

The difficult part was understanding:

What decisions needed to be made
What information was required to make them
How far ahead those decisions needed to be made
How capacity constrained the plan
How inventory responded to production decisions
How the detailed schedule connected back to the MPS
How actual performance could improve future planning assumptions

The spreadsheets were simply the mechanism for bringing those things together.

The process came first.

One plan, different levels of detail

I think this is one of the most important principles behind the approach.

You don't necessarily need one enormous planning system trying to answer every question.

Different planning horizons need different levels of detail.

52 weeks

RCCP

Can we see potential capacity and supply issues coming?

26 weeks

MPS

What should we produce to balance demand, capacity and inventory?

Days and hours

Production Schedule

What are we actually going to run, in what sequence, and when?

Management view

Dashboard

What do we need to know and what decisions might we need to make?

Each level has a different purpose.

But they need to be connected.

And this is where productivity comes in

There's a productivity lesson here that goes beyond planning.

If a business only discovers capacity problems when the schedule is already under pressure, people have limited options.

They start expediting.

Schedules change.

Priorities move.

Overtime increases.

Inventory gets moved around.

People spend more time reacting.

The business becomes busy.

But not necessarily more productive.

Good forward planning doesn't eliminate every problem.

It gives the business time to make better decisions before those problems become urgent.

And that, in my view, is one of the real benefits of supply planning.

Planning isn't about predicting everything perfectly.

It's about creating enough visibility to make better decisions earlier.