Aggregate Planning vs MPS
4 min read
By
TranZact Solutions Team
· Published
Aggregate planning balances total demand against total capacity, workforce, and inventory at a product-family level, weeks to months ahead. The master production schedule (MPS) breaks that plan into a SKU-level build schedule tied to specific dates. Aggregate planning decides how much capacity to commit; MPS decides exactly what gets built and when.
This guide covers what separates aggregate planning from the master production schedule, and how the two feed into each other. It also shows why skipping straight to MPS without an aggregate plan causes capacity surprises.
What Is Aggregate Planning and What Is an MPS?
Aggregate planning is the process of balancing overall demand against overall capacity, workforce and material at a product-family or category level. It typically looks weeks to months ahead, before any individual SKU gets scheduled.
A master production schedule (MPS) takes that aggregate plan and breaks it into a specific, SKU-level build schedule. It sets what gets produced, in what quantity and by what date, and feeds directly into MRP and work orders.
The two sit at different altitudes of the same planning process. Aggregate planning answers whether there is enough capacity overall. MPS answers what exactly gets built this week.
Key Differences at a Glance
The two differ on four points that actually matter for planning:
Level of detail. Aggregate planning works at a product-family or category level; MPS works at the individual SKU level with specific quantities and dates.
Time horizon. Aggregate planning looks weeks to months ahead at overall demand and capacity; MPS is typically a shorter, rolling schedule feeding immediate production.
Output. Aggregate planning produces a capacity and workforce plan; MPS produces an actual build schedule that MRP and work orders run off.
Sequence. Aggregate planning happens first. MPS is derived from it. An MPS built without an aggregate plan behind it has no real capacity check.
Where Manufacturers Get This Wrong
The same mistakes show up across manufacturing SMEs:
Skipping aggregate planning entirely. Building the MPS straight from sales orders with no category-level capacity check means the schedule can look fine on paper and still be undeliverable.
Treating MPS as a forecast. MPS should reflect confirmed orders and near-certain demand, not a rough guess, or work orders end up chasing a schedule that keeps changing.
No feedback loop from MPS back to aggregate planning. If MPS keeps missing dates, the aggregate capacity assumption behind it is wrong, not just the schedule.
Planning workforce and material separately. Aggregate planning needs both looked at together. Machine capacity means nothing if material or labour cannot keep up.
Rebuilding the plan from scratch every cycle. Without a stable aggregate plan as the anchor, MPS gets rebuilt reactively every week instead of adjusted incrementally.
From aggregate plan to work orders
Forecast demand by product family
Set capacity, shifts and workforce
Break the plan into a SKU-level MPS
Run MRP against orders and BOMs
Release work orders to the floor
Aggregate Planning vs MPS in Practice
Who owns it: aggregate planning usually sits with a plant head or operations manager; MPS is typically run by a production planner or scheduler.
Update frequency: aggregate plans get revisited monthly or quarterly; MPS is often reviewed and adjusted weekly or even daily.
Input: aggregate planning starts from sales forecasts and category demand; MPS starts from confirmed orders and the aggregate plan’s capacity allocation.
Flexibility: aggregate planning can absorb demand swings by adjusting workforce or shifts; MPS has much less room to move once work orders are already released.
Manufacturer relevance: a factory running multiple product lines needs both. Aggregate planning avoids overcommitting capacity. MPS executes against real dates.
Where TranZact Fits: MRP and Production
TranZact’s MRP engine runs through your orders and BOMs, then tells you what to buy and when. Its production module covers multi-level BOM, work orders, process routing, sub-contracting and production costing. Production management, MRP and indent are on the Scale and Dominate plans.
It does not run a category-level aggregate planning model or set workforce headcount for you. That stays a business planning decision. What it does is tie your material plan to real orders and BOMs, not a manual guess.
If your MPS keeps chasing whatever sales orders arrive that week, the gap is usually upstream. See how orders, BOMs and MRP connect in TranZact for your product lines.
