FOR COOs, VPs AND GENERAL MANAGERS
Plans that last past Wednesday
Most mine plans are built from P50 rates for every department. When no department has spare capacity to catch up after a shock, a P50 plan behaves like a much lower one. Your planners feel it first, re-cutting the plan every week. The owner feels it next, in guidance and the cost of capital.
SIGNS TO LOOK FOR
Signs your plan has no shelf life
Planners and superintendents know most of these. Few of them reach an executive dashboard.
-
The weekly plan is re-cut by Wednesday, most weeks.
-
Planning says operations will not follow the plan, and operations says planning writes fantasy schedules.
-
Your planners spend more of the week explaining variance than planning.
-
Experienced planners have left, and their spreadsheets and know-how left with them.
-
A bad week is recovered with overtime and weekend heroics, or not at all.
-
New scheduling software reports the risk more precisely, and the misses continue.
-
Production lands in the lower half of guidance more often than the upper half.
If three or more sound familiar, look at the capacity design underneath the plan before you look at the planners.
THE COST OF A PLAN THAT BREAKS
Who pays when the plan breaks
The planner pays first, in the job itself. The owner pays later, in how the asset is financed and valued.
WHAT IT DOES TO PLANNERS
Accountable for a plan the mine cannot keep
-
A planner answers for plan attainment, while the capacity that decides it is set elsewhere, often in a cost review.
-
Burnout research has long linked exhaustion to that kind of mismatch between workload and control.
-
The knowledge that keeps a fragile mine running sits in spreadsheets and in people's heads, and it leaves when they do.
-
Each departure makes the next plan more fragile.
-
In our view, much of the planner attrition the industry reports starts here.
WHAT IT DOES TO THE OWNER
Unpredictable output costs more than the lost tonnes
-
Much of a mine's cost is fixed, so a small change in output moves EBITDA a long way.
-
Research across listed firms finds that more volatile cash flows go with lower investment and dearer outside capital.
-
The same body of research links steadier cash flows with higher market values.
-
Lenders increasingly test mine projects at 85 to 90 per cent of nameplate, and weight demonstrated performance above projections.
-
Missed guidance can bring stricter funding terms and discounted equity raisings.
-
In our view, a mine whose P50 behaves like a much lower plan ends up financed and valued as a smaller mine.
For owners and boards, the investment side is set out on Before buying more capacity, test the capacity you already own.
Steady output is worth more than the same tonnes delivered unevenly.
WHAT THE INDUSTRY SAYS
The planner shortage is real
A McKinsey survey of mining leaders found that 71 per cent say the talent shortage is holding back their production targets, and that mine planning is among the hardest fields to recruit. McKinsey also reports that Australian enrolments in mining engineering have fallen by about 63 per cent since 2014.
The usual answers are more graduates, skilled migration, better pay and better scheduling software. Each has its place. None of them changes the job the planner is asked to do. The loop below is our reading of how that job drives people out.
Mining leaders on the talent shortage
71% say it holds back production
Mines at or below the lower half of their own guidance range, over five years
60%
If guidance midpoints were true P50s, about half of mines would land there.
Sources: McKinsey & Company, Has mining lost its luster? (2023), survey of mining leaders; Accenture, The mining industry's $64 billion production gap (2025). The loop is our interpretation, and neither source tests it.
THE ARITHMETIC
Why a P50 plan behaves like a much lower plan
1 Each department plans to its average
In a balanced chain every department is resourced to the same average rate. On any given day, each has roughly an even chance of reaching it.
2 The mine needs all of them on the same day
With six departments in series and nothing in hand between them, all six reach their rate on about one day in 64. Our earlier article called this a P50 plan living in a P02 reality.
3 Lost time at the bottleneck stays lost
Operations science has a law for this. Hopp and Spearman's variability buffering law says variability is paid for with some mix of stock, spare capacity and time. Take out the stock and the spare capacity, and the mine pays in time. With no department able to run harder for a few shifts, the lost tonnes are never made up.
4 So the plan is re-cut
The plan is cut again by mid-week, and again the week after. Better scheduling software measures the risk accurately and still cannot remove it. Better maths cannot overcome bad physics.
Illustrative arithmetic. It assumes each department misses its rate independently, with nothing in hand between them. Real mines carry some stock between stages, which improves the odds; the mechanism is the same.
Protective capacity changes those odds. When the departments around the bottleneck can run harder for a few shifts, they refill the stock in front of it after a bad day, and one department's bad day stops being the mine's.
The design that produces the most looks the least efficient on a utilisation report.
See it for yourself in One mine, two scoreboards, a five-minute simulation.
WHAT THE NEW WAY DELIVERS
The same mine, before and after
TWO YEARS AFTER MOS
Wide swings, a budget out of reach
A NSW longwall had run a full MOS for two years, with the planning cascade, Leader Standard Work and meeting cadence all in place. Daily ROM averaged 9,612 tonnes against a budget of about 13,000, and swung widely from day to day.
Its best three days averaged 14,136 tonnes, so the installed system had already shown it could beat the budget on a good day.
PHASE 1 WITH A FLOW ROOM
A narrower band, closer to budget
A Flow Room was then added beside the MOS. In the first phase daily ROM averaged 12,047 tonnes, about 25 per cent higher, and the day-to-day swings narrowed. The gap between the average and demonstrated capacity fell from 32 per cent to about 15 per cent, with no conventional capacity project.
In our experience, that narrower spread is what gives a weekly plan its shelf life.
Annual production, NSW longwall coal mine
+33%
From a 2.4 Mt average over 2018 to 2023 to 3.2 Mt in 2024, with no additional people and only minor capital spend.
More ore to surface, Australian underground mine
About 20%
From one extra production drill rig on day shifts, at about 1 per cent of operating cost.
Our historical range
10 to 40%
Often within 12 weeks. Context from past work, never a forecast for your mine.
FROM THE METHOD'S LINEAGE
Two buffers: one defended, one cut
These accounts come from talks by the late Arrie van Niekerk about work his teams did in southern African mines.
OPEN-CUT COAL
The loader that ran at 30 per cent
The team built a stockpile in front of the crusher and bought a large front-end loader to feed from it. The loader never reached 30 per cent utilisation, so the team made sure head office understood exactly why it was there. When heavy summer rain in 2008 stopped many coal mines in the region, this one kept loading and took every train it could. After that, Arrie said, head office stopped tampering with the arrangement.
UNDERGROUND GOLD
The shaft that rose by two-thirds, then fell back
A shaft facing closure built buffers of locos, hoppers, spares and maintenance skills, alongside changes to tramming and to how supervisors worked. Output rose from 9,500 to 16,000 square metres a month and held for two years. A new manager then closed the stores and cut crews back to the standard templates. The shaft fell to 7,000 square metres a month.
Protective capacity has to be written down and agreed with finance, or the next cost review will remove it.
WHERE LEAN, SIX SIGMA AND OEE FIT
The methods work in sequence
The rule of thumb is short. Where a site controls most of its variability, start with Lean. Where it cannot, start with the bottleneck, then use Lean and Six Sigma in the stable areas that creates.
Lean and TPS. Remove waste and standardise work where conditions are stable. On a mine, aim it first at the bottleneck: its cycle, changeovers and maintenance.
Theory of Constraints. Sets the structure: the bottleneck, its buffers and the measures that serve it. It decides where the mine absorbs the variability it cannot remove.
Six Sigma and OEE. Six Sigma suits recovery and reagent control in the plant. OEE is worth chasing hard at the bottleneck. Set for every machine, it rewards running whether or not the chain needs the output.
In practice that gives a sequence.
1 Set the structure first
Choose the bottleneck, size its buffers and agree the measures that serve it. Lean work can start alongside.
2 Aim Lean at the bottleneck
Standard work for its cycle, faster changeovers and maintenance planned around it raise output directly.
3 Use Lean and Six Sigma in the plant
Fixed equipment and steady feed suit them well.
4 Shrink buffers last
Only after variability has fallen, and in measured steps. In our experience, cutting a buffer first brings the pressure back to the crews within weeks.
BEFORE YOU SIGN ANY PROGRAMME
Questions to put on the table
These work whichever method a provider sells. A good answer to each is short and specific to your site.
-
Which stage sets this mine's output, and how will the programme protect it?
-
How many days of work does that stage have in hand today, and who watches that number daily?
-
What utilisation will each other department be asked to run at, and why?
-
Which stocks and which spare capacity will be cut, and what variability will they then stop absorbing?
-
How quickly could the mine refill its buffers after a wet month, and what would that cost?
-
How soon should we see a change at the bottleneck, and what is the stop rule if we do not?
-
Who in finance will understand why the protective capacity is there?
WORKING WITH STRATFLOW
A contained first look at one operating asset
The daily Flow Room makes this routine. Department heads meet for about 30 minutes each morning to look at the bottleneck and its buffers, and settle cross-department calls in the room. It runs beside your existing management operating system.
Through many interventions we have found that in the absence of a Flow Room, the gains fade. Our part is deliberately small. The site team does the work and keeps the result.
1
Check the gap
Run the Best-Day Diagnostic on six months of daily production. The calculation stays in your browser.
2
Talk it through
A 30-minute confidential call about the gap, the bottleneck and its buffers.
3
Five days on site
A discovery with your site team to find the bottleneck and see where its protection has gone.
4
Decide
A go or no-go decision before any wider commitment. If it is a go, the Flow Room starts beside your existing routines.
EVIDENCE AND LIMITS
Held to what it shows
The queueing and buffering results on this page are established operations science. The teaching model shows the mechanism with its assumptions stated; it is not a forecast for any mine. The site results are case evidence, not controlled trials, and our historical range is context, never a forecast. Production results are not safety results, and we report safety measures separately.
The method was developed by the late Arrie van Niekerk over more than 20 years and more than 90 mining interventions. Hendrik Lourens, FAusIMM, COHSProf and TOCICO certified, trained under him and has applied it in eight interventions over 12 years.
RELATED READING
On this site
Green departments, red mine
Why a sound management operating system still stalls, and the daily routine that sits beside it.
More capital, or a lower target?
How to point existing capital at the bottleneck, with a payback calculator.
Full Potential: when every cost centre improves and the mine loses
Why benchmark-driven savings can remove the capacity a mine needs.
One mine, two scoreboards
A five-minute simulation of a mine where every department reports green.
Australian longwall coal mine
Annual production up from a 2.4 Mt average to 3.2 Mt.
Figures marked illustrative are examples only, not forecasts for any site. Sources: Australian Bureau of Statistics, Estimates of Industry Multifactor Productivity 2024–25; Hopp and Spearman, Factory Physics; Kingman (1961) on queueing; Harter (1961) on order statistics.