Rough-Cut Capacity Planning (RCCP)

Rough-Cut Capacity Planning (RCCP): A Comprehensive Guide for CPIM Exam Success

Introduction to Rough-Cut Capacity Planning (RCCP)

Rough-Cut Capacity Planning (RCCP) is a critical planning technique used in manufacturing and supply chain management to verify whether sufficient capacity exists to meet the Master Production Schedule (MPS). It serves as an early warning system that identifies potential capacity constraints before detailed material and capacity planning takes place. Understanding RCCP is essential for the CPIM exam, particularly within the context of internal supply sources and master planning.

Why Is RCCP Important?

RCCP plays a vital role in the planning hierarchy for several reasons:

1. Validates the Master Production Schedule: Before committing resources and launching detailed Material Requirements Planning (MRP), RCCP checks whether the MPS is feasible from a capacity standpoint. Without this validation step, organizations risk creating plans that cannot be executed.

2. Prevents Costly Downstream Problems: Identifying capacity issues early — at the master planning level — is far less expensive and disruptive than discovering them during shop floor execution. RCCP acts as a gatekeeper that prevents unrealistic plans from flowing into detailed planning.

3. Focuses on Key (Critical) Resources: RCCP does not examine every work center. Instead, it focuses only on key resources, also known as critical resources or bottleneck resources. This makes it a fast, efficient check that concentrates attention where it matters most.

4. Supports Decision-Making: When RCCP reveals a capacity shortfall, planners can take corrective action such as adjusting the MPS, adding overtime, outsourcing, or acquiring additional equipment — all before detailed plans are generated.

5. Links Strategic and Operational Planning: RCCP bridges the gap between the Sales and Operations Plan (S&OP) and detailed operational execution. It ensures that high-level plans are grounded in operational reality.

What Is RCCP?

Rough-Cut Capacity Planning is a long-range to medium-range capacity planning technique that converts the Master Production Schedule into capacity requirements for key resources. It answers the fundamental question: "Do we have enough capacity at our critical resources to execute this MPS?"

Key characteristics of RCCP include:

- Level in the Planning Hierarchy: RCCP sits at the MPS level of the planning hierarchy, above Capacity Requirements Planning (CRP) but below Resource Planning (which supports the Production Plan/S&OP).

- Scope: It examines only key or critical work centers, not all work centers. Typically, these are bottleneck operations, expensive equipment, or resources with long lead times.

- Input: The primary input is the Master Production Schedule (MPS).

- Output: The output is a load profile (or capacity requirements) for each key resource, compared against available capacity.

- Planning Horizon: RCCP typically covers the same planning horizon as the MPS, which may extend from several weeks to over a year.

How Does RCCP Work?

RCCP uses simplified methods to estimate capacity requirements. There are three common techniques:

1. Capacity Planning Using Overall Factors (CPOF)

This is the simplest and least detailed RCCP method.

- It uses total labor or machine hours per unit from historical data.
- These total hours are then distributed across key work centers using historical percentages.
- Example: If a product requires 10 total hours and historically 40% of that time is spent at Work Center A, then 4 hours are assigned to Work Center A per unit.

Advantages: Very simple, requires minimal data.
Disadvantages: Least accurate; does not consider lead time offsets or the specific routing of products.

2. Bill of Labor (Bill of Resources)

This method is more detailed than CPOF.

- A bill of labor (or bill of resources) is created for each end item, listing the amount of capacity required at each key work center.
- The MPS quantities are multiplied by the bill of labor to determine total capacity requirements at each key resource.
- Example: If the bill of labor for Product X shows 2 hours at Work Center A and 3 hours at Work Center B, and the MPS calls for 100 units, then 200 hours are needed at Work Center A and 300 hours at Work Center B.

Advantages: More accurate than CPOF; directly links products to specific key resources.
Disadvantages: Does not account for lead time offsets (assumes all capacity is needed in the same period as the MPS).

3. Resource Profile

This is the most detailed and accurate RCCP method.

- It is similar to the bill of labor but also incorporates lead time offsets.
- Capacity requirements are time-phased, meaning they are assigned to the period in which the work actually occurs, not just the period of the MPS due date.
- Example: If an item is due in Week 10 but the operation at Work Center A occurs 3 weeks before final assembly, the capacity load for Work Center A is placed in Week 7.

Advantages: Most accurate of the three RCCP methods; provides a realistic time-phased load profile.
Disadvantages: Requires more data and is more complex to maintain.

Summary Comparison of RCCP Techniques:

- CPOF: Least detailed, uses overall percentages, no lead time offset
- Bill of Labor: Moderate detail, product-specific resource needs, no lead time offset
- Resource Profile: Most detailed, product-specific resource needs WITH lead time offsets

The RCCP Process Step-by-Step

Step 1: Identify Key Resources — Determine which work centers, machines, or labor pools are critical (bottlenecks, expensive assets, scarce skills).

Step 2: Obtain the MPS — Retrieve the current Master Production Schedule with planned quantities and timing.

Step 3: Select an RCCP Technique — Choose CPOF, Bill of Labor, or Resource Profile based on the level of accuracy needed and data availability.

Step 4: Calculate Capacity Requirements — Using the chosen technique, compute the capacity load on each key resource for each planning period.

Step 5: Compare Requirements to Available Capacity — Create a load profile that compares required capacity against demonstrated (or rated) capacity at each key resource.

Step 6: Resolve Imbalances — If capacity is insufficient, take corrective action:
- Adjust the MPS (reduce or shift quantities)
- Add overtime or extra shifts
- Outsource or subcontract
- Acquire additional equipment or labor
- Use alternate routings
If excess capacity exists, consider pulling work forward or reducing resources.

Step 7: Approve or Revise the MPS — Once the MPS is validated as feasible against key resources, it can proceed to MRP and CRP for detailed planning.

RCCP vs. CRP: Understanding the Difference

This is a frequently tested concept on the CPIM exam:

- RCCP works at the MPS level, focuses on key resources only, uses simplified data (bills of labor, resource profiles, or overall factors), and is performed before MRP is run.
- CRP (Capacity Requirements Planning) works at the MRP level, examines all work centers, uses detailed routing and scheduling data, and is performed after MRP is run.

Think of RCCP as the "rough check" and CRP as the "detailed check."

RCCP vs. Resource Planning

- Resource Planning operates at the Production Plan / S&OP level, which is higher and more aggregated than the MPS level.
- RCCP operates at the MPS level, which is more detailed — dealing with specific end items and specific time periods.

Key Terminology for the Exam

- Key Resources / Critical Resources: The limited number of work centers, machines, or labor types that RCCP evaluates.
- Load Profile: A graphical or tabular comparison of capacity required versus capacity available at a resource over time.
- Demonstrated Capacity: The proven capacity based on actual historical performance data. This is often used as the benchmark in RCCP.
- Rated Capacity: Calculated capacity based on available time, utilization, and efficiency.
- Lead Time Offset: The adjustment of capacity requirements to the time period when the work actually occurs, used in the Resource Profile technique.
- Bill of Labor / Bill of Resources: A listing of the capacity required at key resources per unit of an end item.

Exam Tips: Answering Questions on Rough-Cut Capacity Planning (RCCP)

Tip 1: Know Where RCCP Fits in the Planning Hierarchy
Many exam questions test your understanding of the hierarchy: Resource Planning (S&OP level) → RCCP (MPS level) → CRP (MRP level). If a question asks which capacity technique validates the MPS, the answer is RCCP. If it asks which validates the Production Plan, it is Resource Planning. If it asks which validates detailed planned and released orders, it is CRP.

Tip 2: Remember the Three RCCP Techniques and Their Order
A common question format asks you to rank techniques from simplest to most detailed: CPOF → Bill of Labor → Resource Profile. Remember that only the Resource Profile uses lead time offsets. If a question mentions time-phasing or lead time offsets in the context of RCCP, the answer is Resource Profile.

Tip 3: RCCP Focuses on Key Resources Only
If an exam question describes a capacity check that examines all work centers in detail, that is CRP, not RCCP. RCCP is intentionally limited to a small number of critical or bottleneck resources to keep the process fast and manageable.

Tip 4: RCCP Is Done BEFORE MRP
RCCP validates the MPS before MRP is run. CRP is done after MRP generates planned orders. This sequence is frequently tested. If you see a question about the order of planning activities, remember: MPS → RCCP (validate) → MRP → CRP (validate).

Tip 5: Understand the Corrective Actions
When RCCP shows that the MPS exceeds capacity at a key resource, the planner must take action. Common corrective actions include: modifying the MPS, adding overtime, subcontracting, using alternate routings, or adding shifts. The exam may present a scenario and ask what the planner should do — focus on actions that are realistic and aligned with the planning level (MPS-level adjustments, not shop floor dispatching).

Tip 6: Input and Output
The primary input to RCCP is the MPS. The primary output is a load profile for key resources. If a question asks what drives RCCP, the answer is the Master Production Schedule.

Tip 7: Do Not Confuse RCCP with Finite Capacity Scheduling
RCCP is an infinite loading technique — it calculates the total load without automatically adjusting for capacity limits. It simply compares load to capacity and highlights overloads. Finite capacity scheduling, by contrast, limits the load to available capacity by adjusting timing. Exam questions may try to trick you on this distinction.

Tip 8: Practice Calculation Questions
Be prepared for simple calculations. For example: given an MPS of 200 units and a bill of labor showing 0.5 hours at a key resource, the capacity requirement is 200 × 0.5 = 100 hours. If available capacity is 80 hours, there is a 20-hour shortfall. Practice these types of calculations to build speed and confidence.

Tip 9: Watch for Keywords in Questions
Keywords like "rough-cut," "key resources," "critical work centers," "validate the MPS," and "load profile" all point to RCCP. Keywords like "all work centers," "detailed routing," and "planned orders from MRP" point to CRP.

Tip 10: Link RCCP to the Closed-Loop MRP System
RCCP is a key component of the closed-loop MRP system. In this system, capacity checks occur at multiple levels to ensure plans are realistic. Understanding this closed-loop concept — where feedback from capacity checks can cause plan revisions — is fundamental to many CPIM exam questions.

Conclusion

Rough-Cut Capacity Planning is an essential bridge between the Master Production Schedule and detailed planning. By focusing on key resources and using simplified but effective techniques (CPOF, Bill of Labor, Resource Profile), RCCP ensures that the MPS is feasible before significant planning effort is invested in MRP and CRP. For the CPIM exam, mastering RCCP means understanding its place in the planning hierarchy, knowing the three techniques and their differences, and being able to apply RCCP concepts to scenario-based questions. With a solid grasp of these fundamentals and the exam tips provided above, you will be well-prepared to tackle any RCCP question with confidence.