AAOM Handbook

ES.08 Extract Work Centre Demand

Context

Operating Master Schedule (OMS) resource demand will in many cases vary over time, and sometimes quite significantly. There are a few principal reasons for this; • The changing nature of the operation or the work. For example, as a mine matures the travel distances may increase at the same time as the available work places decreases, shifting the resource balance between breaking and moving material. • Many elements of Service work occur irregularly, creating peaks and dips in demand for resources. • The OMS is optimised primarily for process performance and only after this for resource demand. Hence peaks and dips in resource demand will not be eliminated. If we are to achieve an optimum process output and cost result, then we will need a resourcing strategy that delivers the most cost effective resource when and where it is needed. Resources such as materials and utilities (that are consumed in the course of completing work) are managed through a supply system, and are charged to the appropriate work order/cost receiver as used. The supply systems uses stock levels (either internal or external to the operation) to buffer the variability between the sourcing and consumption rates. For resources such as labour and equipment, that are continually reassigned to new work in a schedule, we also need to create a 'stock' of capacity that can be used to balance the demand across OMS Activities and to buffer the difference between the ability provide resource capacity and the variability in demand. An ERP utilises the concept of a Work Centre to manage these (a Work Centre is essentially a stock of capacity – e.g. a fleet of equipment or a team of skilled people). Supply systems typically provide a range of strategies for determining optimum stock levels. In a parallel way we need to determine the optimum 'stock' levels for equipment and labour Work Centres. The critical issues for creating an effective Work Centre resourcing strategy are; • the minimum demand, as this will be a guide to the minimum levels for Work Centre labour, equipment and contractor numbers, • the mode, maximum and shape of the demand distribution, as this will be a guide to where the typical Work Centre labour, equipment and contractor numbers should be set, and what additional flexible capacity will need to be provided through the resourcing strategy, and • the predictability of the level of demand changes, as this will be a guide to how flexible capacity should be provided. For unpredictable and urgent increases (which can be identified from the Activity that drives the change), then the additional resources will probably need to be built into the Work Centre equipment or contractor numbers. For predictable or slower demand changes resources can be adjusted to match the demand change as required.

© McAlear Management Consultants 2006

Operational Planning: Set Expenditure Schedule

Updated: August 2018

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