Improving performance with sophisticated master production scheduling

Journal article, 2015

Literature addressing master production scheduling (MPS) typically focuses on the development of sophisticated MPS methods with the expectation that these methods will result in feasible plans and improved performance. However, empirical evidence showing that sophisticated methods are better than simpler ones remains scarce, and companies have reported difficulties with using sophisticated planning methods. In this study, we therefore investigate how sophisticated MPS methods impact three perception-based performance variables—namely, plan feasibility, inventory turnover rate, and delivery service—while accounting for the complexities of planning environments and MPS maturity. We define six MPS methods, ranging from those that ignore capacity to those exhibiting capacity-constrained planning using optimisation. An analysis of survey data from a sample of Swedish manufacturing companies reveals a significant negative effect of less sophisticated methods compared to highly sophisticated ones in terms of plan feasibility, as well as a significant negative effect of the simplest method in considering available capacity compared to highly sophisticated methods in terms of delivery service. The maturity of the MPS process most significantly impacts all performance measures, whereas planning environment complexity shows only a weak negative impact. Findings also indicate that both MPS process maturity and sophisticated MPS methods mediate the negative performance prompted by complex planning environments. Results thus suggest that sophisticated MPS may generally affect performance both directly and indirectly. Using sophisticated MPS methods reduces the negative effects of complex planning environments and results in more feasible plans irrespective of environment complexity and process maturity.