Rccp report

ROUGH-CUT CAPACITY PLANNING

Rough Cut Capacity Planning (RCCP)

Type of capacity planning using some load profiles (sometimes called “representative routings) defined for the product families, focused on key or critical work centers, lines, departments, cells, suppliers, and support areas (engineering, distribution, shipping).

Importance of RCCPMRP system assumes that needed capacity always is available.

RCCP helps to identify the key resources and to test the feasibility of the supply plan, production plan and master schedule before doing any detailed capacity/material planning.

It also helps to initiate action for making mid- to long-term capacity adjustments.

What is RCCP and how does it work?

Rough Cut Capacity Planning (RCCP) is a rough check to evaluate all the key resources, to test the validity of MPS, to determine the feasibility of fulfilling the approved Production Plan that was developed in the Sales & Operations Planning process.

Once the master scheduler determines that a realistic plan exists, the production plan is then load into MRP to drive the allocation for all the lower-level materials. The production plan now translates into discrete part numbers, quantities and due dates.

Overstated MPS

It is a problem commonly encountered in operating MRP systems .An overstated master production schedule is one that orders more production to be released than production can complete.

Causes of Overstated MPSIt causes raw materials and WIP inventories to increase. It also causes a build-up of job queues on the shop floor. Since jobs have to wait to be processed, actual lead time increase.As lead times increase, forecast accuracy over the lead-time diminishes.

Few reasons of why RCCP techniques are not used in some companies are:

Data requirements are quite high - firm demand, forecasts, past data, lead times, utilization, products and process knowledge. They don't have a stable MPS. They don't have the right skill, it is very time-consuming, or they are doing it the wrong ways.

Standard Time It refers to Setup time and Run time (processing time) which impact the workload on a resource because it actually tie up that resource.

Lead-Time Offset It is the time between the need for the resource and the date that the product has been promised. Lead-Time Offset is necessary if a product has longer lead times.

Required Resource Time  = (Run Time x BOM qty) + (Setup Time x

number of Setups required)

+ margin % of total non- standard times

When using process routings sheet and BOM to create the Resource Profile, it is better to use this formula

Several types of capacities being used:

Demonstrated Capacity- This is the proven or historical

capacity of a key resource or work center. Demonstrated capacity could potentially change if resources are added or if operations are altered. In such case, adjustments to planned capacity must be considered before making evaluation of the production plan.

Planned Capacity- This is demonstrated capacity plus

or minus anticipated changes or adjustments to the product-flow process.

Maximum Capacity- This is the maximum load a

resource can handle under any reasonable set of circumstances. This can be achieved through several means: use of available overtime, adding shifts, staff additions, offload volume to outside vendors, pay extra for supply priorities, paying premium freights to expedite materials delivery, etc).

Determining Capacity Available or Planned

CapacityAdjustment Factors:Utilization.  Utilization is a number between 0 and 1 which is equal to 1 minus the proportion of time typically lost due to machine breakdown, labor shortage, parts failure, or material unavailability. Efficiency. Efficiency is defined as the average of standard hours of actual production (after minus the unavoidable lost time - setup time, change shift, rest time).

If a time standard is exactly right, efficiency is 1. If the time actually required to perform the work is less than the standard, efficiency is more than 1. If the time actually required to perform the work is more than the standard time, efficiency is less than 1.

Capacity available is determined by multiplying time available x utilization x efficiency

Capacity Available = Time Available x Utilization

x Efficiency

The Resource Profile Technique

This technique is designed to convert the master production schedule from units of end items to be produced into the amount of time required on the key resources. Resource Profile approach considers lead-time offsets.Resource Profile technique is the most detailed rough-cut approach, but is not as detailed as Capacity Requirements Planning.Resource Profile technique uses detailed data on the time standards for each product at the key resources.

Time Standard

It is the time it should take an average worker working at a normal pace to produce one unit of an item. The time standard for any part has built into it an allowance for rest to overcome fatigue or unavoidable delays, etc.

It would seems logical to accept that if the required capacity is :

No more than 10% greater than the planned capacity, the master schedule is considered realistic. More than 20% greater than the planned capacity, the master schedule is considered unrealistic.Between 10% and 20% greater than the planned capacity, the master schedule is questionable.

In many of today's ERP systems, there is also a "What-If" scenarios analysis capability being built into the capacity planning module, that makes it possible for the scheduler to juggle the numbers - shifting workers, reschedule in and -out, alternate routings, splitting lots, add equipments, off-loading to vendors, overtime, hiring temporary workers and so on.

3 Approaches to Rough-Cut Capacity Planning

Capacity planning using Overall factors (CPOF) Approach – the least detailed approach which is quickly computed but is insensitive to shifts in product mix. Bill of Labor – a second approach which involves multiplying two matrices, the bill of labor and the master production schedule.. Resource Profile – approach which takes lead-time offsets into account.

Drum-buffer Rope It is an emerging procedure that eliminates the need for iteration found in all RCCP approaches. It is presently used by a small but growing number of corporations.

Material Requirements Planning (MRP)

It uses Master Production Schedule (MPS) of end items to determine the quantity and timing of component part production. It is capacity insensitive; it implicitly assumes that sufficient capacity is available to produce components at the time they’re needed.

APICS Monograph (Berry, Voliman, and Whybark 1979) presents case histories of several companies, including details on the capacity planning process.

The Role of RCCP in Production Planning &

Control Capacity management techniques usually are separated into four categories that represent the four time horizons : Manufacturing Resource Planning (MRP II) Aggregate Production Planning Rough Cut Capacity Planning (RCCP) Capacity Requirements  Planning (CRP).

In any MRP system, the same sequence is to create a master schedule, use Rough Cut Capacity Planning to verify that the MPS is feasible, perform the MRP explosion, and send the Planned Order Release data to Capacity Requirements Planning

Role of RCCP in the overall PPC system:

To develop an achievable Master Production Schedule.To plan and control priorities and capacities.Priority Planning is the process of specifying batch quantities and their start and finish dates for all Supply Orders where procurement and manufacturing are involved.Priority Control is making the right things at the right time. It is completely dependent on maintaining a balance between MPS requirements and factory Output rates, in which suppliers delivery performance is vital.Capacity planning is the task of determining how much output is needed from factory and from suppliers.Capacity control is the comparison between planned levels and actual outputs achieved, and the identification of significant variances above or below plan. Corrective action must be done quickly (adjust capacity or changing the master schedule).

Typical resources that might be planned as pat of rough-cut capacity planning: Overall plant capacity Labor hours in total or for people with unique skills Assembly hours in a specific cell or bottleneck process. Testing cell capacity Engineering hours needed to configure the final product to the customer’s specification. Space required in a warehouse or storage area Waste or effluent release, etc. Shipping labor Design time or credit release time Inspection or QC timeSupplier Capacity

Rough-Cut Capacity Planning Functions Shows consumption of critical resources.Enables master schedulers to:

Test end-item production plansCalculate capacity to meet the master scheduleCompare and modify required and planned capacityAnalyze load on key resources by time periodIsolate and resolve potential problems.

Rough-cut Capacity Planning V.S. Capacity

Planning CRP uses time-phased material plan information, while RCCP uses aggregate data. MRP takes into account capacity stored as inventory. Shop floor systems take into account W.I.P. – only consider what's needed to complete the requirement. CRP considers service and spare parts requirements also.

EXAMPLE problem:

Let's assume a lamps manufacturer I call it Johor's Lamps. Johor's Lamps runs 3 shifts, 120 hours per week from Monday to Friday; Planned Production Lost Time per shift (change shift & rest time) is 35 minutes, and company allows a maximum overtime of 10% of per shift either during weekdays or through Sat. & Sunday.

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