McDonald’s Lime crush limestone from their quarry near Te Kuiti, and process some of their production in their lime kilns in Te Kuiti and Otorohanga. The quarry produces several quality grades of rock, two of which can be put through the kilns for different markets, and other grades which have uses as diverse as landscaping and animal feed.
When raw rock from the quarry is crushed through the crusher, a range of sizes of rock come out, and only certain sizes of rock are useful for each purpose. It’s possible, but not efficient, to re-crush rock if you find you have too much big rock, but not enough small pebbles, but it’s impossible to put rock that’s crushed too small back together if you need larger sizes.
Some demands for limestone - like for fertiliser and animal feed - are highly seasonal, while others - supplying the steel and gold-mining industries - are fairly constant throughout the year, except when there’s plant shutdowns.
Operating the quarry and kilns is a balancing act between making sure that the right amount of the right grades and sizes of rock are available when customers want them, and trying to keep stockpile levels under control so that quarry space is not lost to huge piles of rock in sizes no-one wants.
There is some control over the distribution of sizes of rock the crusher produces, and it’s possible to change the sizes of rock that the kiln uses a little, but both of these controls are limited. It’s also possible for the sales team to expand markets for certain sizes and grades of rock if they get sufficient warning of an oversupply. Indeed, some rock grades that were previously byproduct for the quarry are now top sellers. Unfortunately, marketing campaigns take a while to have an effect and can’t help out in a hurry when you’re in a squeeze.
A good production plan means that the quarry makes what is needed as close as possible to when it is needed and so keeps stockpiles low. Seasonal demands and shutdowns mean some stockpiling is necessary in quiet periods to prepare for busy periods, and a good plan will give McDonald’s forewarning of any rising stockpiles so something can be done to get those products moving.
An important feature of a good plan is that gives everyone a steady schedule to work on. McDonald’s take their employees needs seriously, and so a plan that has staff working 10 or 20 hours a week in quiet periods and then expecting them to work 60 hours a week when demand is high is not satisfactory.
We built a quarry production planner for McDonald’s in Excel using OpenSolver. The planner takes an 18 month sales forecast and produces a monthly production plan designed so that the operating hours for the quarry are the same, or nearly the same every month, ensuring that work schedules are steady for everyone. Each month, the planner decides which grades of rock the quarry should crush as well as which grades should be used in the two kilns. It provides a forecast of stockpile levels so any stock expansions can be managed in advance.