Rough Cut Capacity Planning
For a company running a production line, and particularly organizations tendering for large supply contracts, rough-cut capacity planning (RCCP) is an essential tool in helping you establish a set of requirements from your production schedule. RCCP is a part of the resource capacity planning process because it allows manufacturers to understand the capacity they have available at the current moment. Rough-cut capacity planning creates a benchmark that is then analyzed by capacity planners against sales order forecasts to see if the current capacity will be sufficient in the coming years or if an investment in additional capacity is required.
Rough cut capacity planning is similar to supply chain optimization in that it allows you to plan your production schedule based on the resources available to you, and the resources you will have in the future. But let’s take a more detailed look at the rough-cut capacity planning definition.
What is Rough Cut Capacity Planning?
So, what is rough-cut capacity planning? In its simplest form, RCCP is the process of establishing what your production capacity is. This can then be used to judge whether you have the capacity to meet the requirements of your master production schedule.
As a basic example, if meeting your master production schedule would require you to source two tonnes of a specific raw material every week, but you can only get one ton of said material, you would know that you do not have the capacity for that project. From there you can make informed decisions about your next move, such as increasing capacity or passing on the project.
In a modern production environment capacity planning, including rough-cut capacity planning, is done using capacity planning tools. These tools in turn are usually a part of modern advanced planning and scheduling (APS) software systems.
Rouch cut capacity tools allow you to answer questions like:
- When will we need to add additional capacity?
- How much will we need to add?
- Where in the production process is the capacity required?
- What type of capacity do we need to add to our operation?
- If production demand for a product is decreasing, how do we scale down our capacity?
The Advantages and Disadvantages of Rough Cut Capacity Planning
Knowing what the process is and how it works is useful, but it can also help to have the pros and cons explicitly laid out for you. Here are the advantages and disadvantages of RCCP.
Advantages
- Understanding of Project Needs – The main advantage, as mentioned above, is knowing what your project will require before you start, so you know how close to capacity you will be, and can adequately plan for eventualities like missed shipments or machine downtime.
- Improved Resource Management – A complete picture of the hours of work going into the manufacturing process will enable you to more accurately judge where workloads need adjusting.
- Better Project Management – A better understanding of all the operations in your project will allow you to plan more completely, perhaps moving certain operations to later in the schedule due to them having a shorter turnaround time.
- Shorter Lead Times – With the better understanding mentioned above, you can better identify problem areas, such as bottlenecks in the production line, allowing you to resolve those issues and increase the efficiency of your project
Disadvantages
- Limited Scope – The only real disadvantage is that rough-cut capacity planning provides something of a simplistic snapshot of your project’s requirements. It would not, for example, factor in potential delays due to temporary cash-flow problems.
Planning and Forecasting
It should be noted that, while RCCP may be sufficient for a stand-alone project with a clearly defined start and end date, most production lines run a little more open-ended. In those cases, planning and forecasting become extremely important, as the information provided by RCCP will be of limited usefulness if you don’t know what capacity you are going to need in the coming months.
By combining RCCP with advanced planning and scheduling software, you get a complete picture of your current and future capacity side by side with the requirements of your organization.
