Stop using fudge factors in your planning

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Fudge factors are often used in the planning or reconciliation process, when there is a quantified difference between planned and actual production. They allow us to sweep underlying improvement opportunities under the carpet. Sure, it is easy, but it is also value destroying.

Reconciliation of estimated/planned to actual production which identifies significant variation should not be looked at as a bad thing. Rather, it represents an opportunity to identify a flawed assumption or process which can be tested and fixed for future production to produce better results.

A classic example is the mine call factor (MCF). The MCF is that loss of metal between what you estimated and you actually mined. It is a factor that is not explained but is generally accepted. Where has this metal gone? Is it lost by poor mining practices, or through a biased estimate of what is in the ground, a combination, or some other factor? Each one of these could be resolved with some thought and determination. But, by accepting the mine call “fudge” factor as inevitable, and incorporating it in future planning, the opportunity to fix these problems go overlooked.

Perhaps it is actually in the tailings dam. Perhaps it never existed. The point is, these operations do not know, because they don’t capture the right data to understand what is happening. Fudge factors are a symptom of poor systems and poor management.

The good news is that there are systems available to assist in identifying the root cause of these variations. Reconcilor is a system Snowden has developed to isolate variations to plan so that you can act on them in order to plan with greater confidence. The system implements tools to assist in improving the quality of your data, identifying variation across a range of dimensions and, drill down on root causes, whilst working alongside common enterprise mining systems.

Visit our Reconcilor page for more information, or contact us at to arrange to speak to our reconciliation experts or arrange a demonstration.

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