![]() ![]() In RCCP, the principle assumption is that family-level assumptions are good approximations for the SKU level detail and the change in the mix will not have a big impact on the capacity projection. This is called Rough Cut Capacity Planning (or RCCP). In this scenario, we are making decisions at the product family level and leaving the SKU level detail for later. So, if 1000 end items can be collapsed into 5 families, and one could do some approximation about production rates, etc., then the problem can again be solved in a spreadsheet. The engine can be either rule-based or optimization-based.ĭecide to do the MPS at some higher level, say, product family. This type of a program can be inside an ERP or a best of breed SCP system. This then presents two choices to the business:Įmploy an advanced program that can crunch the numbers at the SKU-production resource-time bucket level and show the results to the users in a meaningful way. ![]() How about 100 how about 1000?Īs one gets towards higher SKU counts, it simply becomes impossible to deal with this in a spreadsheet format. Well, one needs 5 sheets then that is easy. The programming of the above spreadsheet is relatively straightforward. If the projected usage goes above a threshold, it is flagged as an alert for the planner to then work on. ![]() The spreadsheet is programmed in a way that as production is moved around, the projected capacity used is highlighted. Then, the user does the planning by moving production from one period to another. There are several ways to do this: The easiest way is to set up a spreadsheet program where all the ins and outs are shown. Read More: An Example of When Optimization Is Helpful in Supply or Central Planning The essential question that is being answered by the MPS scheduler is this: Accounting for the starting and incoming inventory, how much more should I make when and where to meet the demand and inventory targets in a capacity feasible way? Production for end items is scheduled over several time periods and recorded on a master production schedule. MPS schedules (or plans) the production of the abovementioned end items and states the quantity and timing of the production of specific end items. For example, if a company makes and sells orange juice, then the orange juice is the end item with the independent demand, whereas the orange is the consumed item with the dependent (or derived) demand. By contrast, dependent demand is a demand that is passed down because of the need to produce the end item. This demand is directly from the customer requirements (or forecasted requirements). Independent Demand is a demand that comes from Sales Orders, Service Orders, or forecasts on end items, i.e., items that we sell to customers. Master Production Scheduling (MPS) plans for items that are independent (or direct) demand. The question seemed interesting enough that I decided to blog about it. Recently, I was asked to explain the difference between RCCP and MPS by a prospect. ![]()
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