( An IACBE Accredited Institution )( An IACBE Accredited Institution )

Term-IIITerm-III

C-2-Operations Management C-2-Operations Management Prof. K. K. MohanProf. K. K. Mohan

ExecutiveExecutive Post Graduate Program (E-PGP) in Post Graduate Program (E-PGP) in ManagementManagement

©Alliance Business School#2&3, 2nd Cross, 36th Main, Dollars Scheme, BTM 1st Stage, Bangalore- 560058

SESSION 5SESSION 5

Quality Management, Quality Management,

Maintenance ManagementMaintenance Management

CONTENTSCONTENTS : :

1.1. DIMESIONS OF QUALITYDIMESIONS OF QUALITY

2.2. DETERMINANTS OF QUALITYDETERMINANTS OF QUALITY

3.3. COST OF QUALITYCOST OF QUALITY

4.4. TRADITIONAL QUALITY MANAGEMENTTRADITIONAL QUALITY MANAGEMENT

5.5. MODERN QUALITY MANAGEMENTMODERN QUALITY MANAGEMENT

6.6. RELIABILITYRELIABILITY

77.. STATISTICAL QUALITY CONTROLSTATISTICAL QUALITY CONTROL

8. 8. TQM CONCEPTSTQM CONCEPTS

9. 9. QUALITY MANAGEMENT RECOGNITIONQUALITY MANAGEMENT RECOGNITION

10.10. BENCH MARKING & CONTINOUS IMPROVEMENTSBENCH MARKING & CONTINOUS IMPROVEMENTS

11.11. SUPPLIER DEVELOPMENT & PARTNERSHIPSUPPLIER DEVELOPMENT & PARTNERSHIP

12.12. ASPECTS FOR SERVICE SECTORASPECTS FOR SERVICE SECTOR

QUALITY :QUALITY :

THE QUALITY OF A THE QUALITY OF A

PRODUCT OR SERVICEPRODUCT OR SERVICE IS A IS A

CUSTOMER’SCUSTOMER’S PERCEPTION PERCEPTION

OF THE DEGREE TO WHICHOF THE DEGREE TO WHICH

THE PRODUCT OR SERVICETHE PRODUCT OR SERVICE

MEETS HIS OR HERMEETS HIS OR HER

EXPECTATIONSEXPECTATIONS

QUALITY :QUALITY :

YOU MAYYOU MAY

LOOSE BUSINESS TOLOOSE BUSINESS TO

LOWER PRICED PRODUCTSLOWER PRICED PRODUCTS,,

BUT YOU WIN IT BACKBUT YOU WIN IT BACK

WITH SUPERIORWITH SUPERIOR

PRODUCT QUALITYPRODUCT QUALITY

QUALITY WHERE ?QUALITY WHERE ?

INCOMING MATERIALS

IN PROCESSINSPECTION

FINISHED PRODUCTSTESTING

AtSupplier/ Vendor

INCOMINGINSPECTION

FEED BACK FROMCUSTOMERS

DIMENSIONS OF QUALITY :DIMENSIONS OF QUALITY :

a)a) PERFORMANCEPERFORMANCE

b)b) RELIABILITYRELIABILITY

c)c) DURABILITYDURABILITY

d)d) FEATURESFEATURES

e)e) SAFETYSAFETY

f)f) APPERANCEAPPERANCE

g)g) CUSTOMER SERVICECUSTOMER SERVICE

h)h) SERVICEABILITYSERVICEABILITY

DETERMINANTS OF QUALITY :DETERMINANTS OF QUALITY :

QUALITY OF DESIGN – Products / servicesQUALITY OF DESIGN – Products / services

QUALITY CAPABILITY OF PRODUCTION QUALITY CAPABILITY OF PRODUCTION

PROCESSPROCESS

QUALITY OF CONFORMANCEQUALITY OF CONFORMANCE

QUALITY OF CUSTOMER SERVICEQUALITY OF CUSTOMER SERVICE

QUALITY CULTUREQUALITY CULTURE

VARIOUS ASPECTS OF QUALITY :VARIOUS ASPECTS OF QUALITY :

COMPETITOR QUALITYCOMPETITOR QUALITY

CUSTOMER EXPECTATIONSCUSTOMER EXPECTATIONS

- Varies with each class of product- Varies with each class of product

BEST IN CLASS QUALITYBEST IN CLASS QUALITY

CUSTOMER SURVEYSCUSTOMER SURVEYS

COST OF QUALITY :COST OF QUALITY :

SCRAP SCRAP

REWORKREWORK

DEFECTS AT CUSTOMER END + DEFECTS AT CUSTOMER END +

LIABILITIESLIABILITIES

DETECTING DEFECTS IN PROCESSDETECTING DEFECTS IN PROCESS

PREVENTING DEFECTS : Design, Process, PREVENTING DEFECTS : Design, Process,

Supplier dev, Training.Supplier dev, Training.

As high as 25 % of product costAs high as 25 % of product cost

TRADITIONAL TRADITIONAL QUALITY MANAGEMENT :QUALITY MANAGEMENT :

Inspection – how many ? Inspection – how many ?

Rework products whichever possibleRework products whichever possible

Reject defective productsReject defective products

High cost for achieving high qualityHigh cost for achieving high quality

Prevalent in many U.S, Indian Cos.Prevalent in many U.S, Indian Cos.

Believes that Believes that QUALITY CAN BE QUALITY CAN BE

INSPECTED !INSPECTED !

ANALYSIS OF QUALITY COSTS :ANALYSIS OF QUALITY COSTS :

ANNUALCOST

% PRODUCTS INSPECTED

OPTIMAL TOTAL QC COST

COST OF SCRAP,

REWORK, DETECTINGDEFECTS

COST OF DEFECTIVEPRODUCTS

MODERN MODERN QUALITY MANAGEMENT :QUALITY MANAGEMENT :

Design products & process for ‘ Design products & process for ‘ DO IT DO IT RIGHT THE FIRST TIME ‘RIGHT THE FIRST TIME ‘

Training, Self inspectionTraining, Self inspection High reliability of Machine / processHigh reliability of Machine / process Prevention of defectsPrevention of defects Root cause analysisRoot cause analysis Quality as auditQuality as audit Continuous improvementContinuous improvement High productivity at low costHigh productivity at low cost

DEMING’S 14 POINTS :DEMING’S 14 POINTS :

1.1. Create constancy of purpose towards product Create constancy of purpose towards product quality to achieve organizational goalsquality to achieve organizational goals

2.2. Refuse to allow commonly accepted levels of Refuse to allow commonly accepted levels of poor qualitypoor quality

3.3. Stop depending on inspection to achieve Stop depending on inspection to achieve qualityquality

4.4. Use fewer suppliers selected based on Use fewer suppliers selected based on quality and dependability instead of pricequality and dependability instead of price

5.5. Instill programs for continuous improvements Instill programs for continuous improvements of costs, quality service, and productivityof costs, quality service, and productivity

6.6. Train all employees on quality conceptsTrain all employees on quality concepts

7.7. Focus supervision on helping people to do a Focus supervision on helping people to do a better jobbetter job

DEMING’S 14 POINTS :DEMING’S 14 POINTS :

8.8. Eliminate fear, create trust, encourage Eliminate fear, create trust, encourage communication between workers & Managementcommunication between workers & Management

9.9. Eliminate barriers between departments and Eliminate barriers between departments and encourage joint problem solvingencourage joint problem solving

10.10. Eliminate the use of numerical goals and slogans to Eliminate the use of numerical goals and slogans to make workers work hardermake workers work harder

11.11. Use statistical methods for continuous improvement Use statistical methods for continuous improvement of quality and productivity of quality and productivity

12.12. Remove barriers to pride of workmanshipRemove barriers to pride of workmanship

13.13. Encourage education and self-improvement for Encourage education and self-improvement for everyoneeveryone

14.14. Clearly define management’s permanent Clearly define management’s permanent commitment to quality & productivitycommitment to quality & productivity

P D C A CYCLE :P D C A CYCLE :

PLAN

DOCHECK

ACT

– Allow team members to specify where ideas fit into the Allow team members to specify where ideas fit into the diagramdiagram

– Clarify the meaning of each idea using the group to refine Clarify the meaning of each idea using the group to refine the ideas. For example:the ideas. For example:

Cause-Effect DiagramCause-Effect Diagram

Materials

Incorrect Quantity

Incorrect BOL

Wrong Destination

Methods

Late Dispatch

Shipping DelaySpillage

EnvironmentShippingProblems

Traffic Delays

Weather

Equipment

Wrong Equipment

Dirty EquipmentBreakdown

People

Driver

AttitudeDispatcherWrong Directions

RELIABILITY :RELIABILITY :

It can be for individual components, It can be for individual components, subassemblies or complete productssubassemblies or complete products

It is the probability that a part/product will not It is the probability that a part/product will not fail in a given time period or number of trials fail in a given time period or number of trials under usual conditions of usageunder usual conditions of usage

Measured by Failure rates(FR), Component Measured by Failure rates(FR), Component Reliability(CR), Mean time between Reliability(CR), Mean time between failures(MTBF) & System reliability ( SR)failures(MTBF) & System reliability ( SR)

Reliability can be increased by Over design, Reliability can be increased by Over design, Design simplification & RedundancyDesign simplification & Redundancy

WAYS TO IMPROVE WAYS TO IMPROVE RELIABILITY :RELIABILITY :

1.1. OVER DESIGN COMPONENTSOVER DESIGN COMPONENTS

2.2. DESIGN SIMPLIFICATIONDESIGN SIMPLIFICATION

3.3. REDUNDANT COMPONENTSREDUNDANT COMPONENTS

RELIABILITY CALCULATIONRELIABILITY CALCULATION FORMULAE : FORMULAE :

FAILURE RATE = FRCOMPONENT RELIABILITY = CR = ( 1 – FR )

FR = No. OF FAILURES / Nos. TESTEDFR(n) = No. OF FAILURES / UNIT Hrs OF OPERATION

MEAN TIME BETWEEN FAILURES :( MTBF) = 1 / FR(n)

RELIABILITY CALCULATION RELIABILITY CALCULATION FORMULAE :FORMULAE :

COMBINED RELIABILITY OF ASSEMBLED COMPONENTS :System reliability ( SR) = CR 1 X CR 2 X CR 3

SYSTEM RELIABILITY WITH REDUNDANCY OF COMPONENTS :

SR = PROB OF + [ PROB OF BACK X PROB OF NEEDING ] PRIMARY UP COMPONENT BACK UP COMPONENT COMPONENT

DESIGNING BETTER PRODUCTION DESIGNING BETTER PRODUCTION PROCESSES :PROCESSES :

Reduce chances of Controllable factors which Reduce chances of Controllable factors which cause variation in production processcause variation in production process

Reduce uncontrollable factors which cause Reduce uncontrollable factors which cause variation in production process by redesigning variation in production process by redesigning machines/processmachines/process

Process capability is a production process’s ability Process capability is a production process’s ability to produce products within the desired to produce products within the desired expectations of customersexpectations of customers

Process Capability Index ( PCI) is useful for Process Capability Index ( PCI) is useful for determining if a production process has the ability determining if a production process has the ability to produce products within the desired to produce products within the desired expectations of customersexpectations of customers

PCI = (UL – LL) / 6 PCI = (UL – LL) / 6

PROCESS CAPABILITY INDEX (PCI) :PROCESS CAPABILITY INDEX (PCI) :

ULLL

PCI = 0.8

PCI = 1.0

PCI = 1.2

STATISTICAL STATISTICAL QUALITY CONTROL :QUALITY CONTROL :

a.) a.) SAMPLING PLANSSAMPLING PLANS

- Single sampling plan- Single sampling plan

- Double sampling plan- Double sampling plan

- Sequential sampling plan- Sequential sampling plan

b.) b.) CONTROL CHARTSCONTROL CHARTS

- P chart ( % defectives in sample lot- P chart ( % defectives in sample lot

- x chart (Avg value of variable )- x chart (Avg value of variable )

- R chart (Variation within sample lot)- R chart (Variation within sample lot)

SAMPLING PLANS :SAMPLING PLANS :

Materials produced / received in lotsMaterials produced / received in lots Random sampling done Random sampling done Samples are fully inspected against Samples are fully inspected against

standards ( Attributes or Variables )standards ( Attributes or Variables ) Decision to accept / reject entire lot taken Decision to accept / reject entire lot taken

based on sample inspection resultbased on sample inspection result Issues : Sample size ? ; Frequency of Issues : Sample size ? ; Frequency of

samples withdrawal in continuous samples withdrawal in continuous production runs ?production runs ?

SAMPLING PLANS :SAMPLING PLANS :

Typical sample size : 4 – 20 nos.Typical sample size : 4 – 20 nos. Trade off cost of testing Vs cost of Trade off cost of testing Vs cost of

Product FailureProduct Failure

Automation of testing process to Automation of testing process to reduce inspection costsreduce inspection costs

Certain products tested / inspected Certain products tested / inspected 100%100%

CENTRAL LIMIT THEORY :CENTRAL LIMIT THEORY :

POPULATION DISTRIBUTION

MEAN : STANDARD DEVIATION :X

SAMPLE DISTRIBUTIONSAMPLE SIZE = n

MEAN : x = STD DEVIATION : x = X / n

SAMPLE DISTRIBUTION IS NORMAL EVEN IF POPULATION DISTRIBUTION IS NOT NORMAL

OPERATING CHARACTERISTIC OPERATING CHARACTERISTIC CURVE (O.C)CURVE (O.C)

FOR n = 50C = 1AQL = 1%LTPD = 8%

0

10

91100 = 9%

9.2%

PROBOFACCE-PTINGLOT

1 8 (LTPD)

% DEFECTIVES IN LOTS AQL

OCC TERMS :OCC TERMS :

Acceptance plan: Sample size (n) & Max Acceptance plan: Sample size (n) & Max defectives (c)defectives (c)

AQL : Acceptable quality level - Good lotsAQL : Acceptable quality level - Good lots AOQ : Actual outgoing quality – Actual AOQ : Actual outgoing quality – Actual

defective %defective % AOQL: Average outgoing quality level – Max AOQL: Average outgoing quality level – Max

AOQ for a sampling planAOQ for a sampling plan Consumer’s risk (Consumer’s risk () : % Prob. of accepting a ) : % Prob. of accepting a

bad lot – Type 2 errorbad lot – Type 2 error Producer’s risk (Producer’s risk () : % Prob. of a good lot ) : % Prob. of a good lot

being rejected – Type 1 errorbeing rejected – Type 1 error

AVERAGE OUTGOING AVERAGE OUTGOING QUALITY CURVE :QUALITY CURVE :

0 1 2 3 4 …. % DEFECTIVES IN LOTS

AOQ% DEFEC-TIVES

DEFECTIVES BEYOND AOQL CAN GET DETECTED

AOQL1.5

1.0

FOR N = 50,C = 1

SINGLE SAMPLING PLANS :SINGLE SAMPLING PLANS :

LOT OF N ITEMS

N – nITEMS

INSPECT

RANDOMSAMPLE

OF n ITEMS

C defectives

Found inSample

Reject Lot Accept Lot

C DC > D

Replace defectives

N Nondefectives

DOUBLE SAMPLING PLANS :DOUBLE SAMPLING PLANS :LOT OF N ITEMS Draw Random

Sample of n1 items

INSPECT

ACCEPT LOTO.K

NOT O.K

Draw Random Sample on n2 items

INSPECT

ACCEPT LOTO.K NOT

O.K

REJECT LOT

WAYS TO REDUCE WAYS TO REDUCE DECISION ERRORS :DECISION ERRORS :

Take random samples for inspectionTake random samples for inspection

Increase sample sizeIncrease sample size

Increase frequency of samples being Increase frequency of samples being

drawn.drawn.

CONTROL CHARTS :CONTROL CHARTS :

For Attributes or VariablesFor Attributes or Variables

Form framework of chart by determining Form framework of chart by determining

Mean, Upper & Lower Control LimitsMean, Upper & Lower Control Limits

Plot the data obtained during inspection Plot the data obtained during inspection

of lot/sampleof lot/sample

Decide on whether the lot is acceptable / Decide on whether the lot is acceptable /

process under controlprocess under control

CONTROL CHARTS – P CHART :CONTROL CHARTS – P CHART :

For Attributes For Attributes P = % defectives in a sampleP = % defectives in a sample n = sample sizen = sample size P = % defectives across many samplesP = % defectives across many samples UCL ( 3UCL ( 3 ) = P + 3 ) = P + 3 P( 100-P)/ n P( 100-P)/ n

LCL ( -3LCL ( -3 ) = P - 3 ) = P - 3 P( 100-P)/ n P( 100-P)/ n

Mean = PMean = P

CONTROL CHARTS – X CHART :CONTROL CHARTS – X CHART :

For VariablesFor Variables

Mean = xMean = x

UCL = x + A RUCL = x + A R

LCL = x - A RLCL = x - A R

CONTROL CHARTS – R CHART :CONTROL CHARTS – R CHART :

For VariablesFor Variables

Mean = RMean = R

UCL = D2 RUCL = D2 R

LCL = D1 RLCL = D1 R

WHEN TO INSPECT ?WHEN TO INSPECT ?

After operation that is likely to produce After operation that is likely to produce defectsdefects

Before costly operationsBefore costly operations Before operations that cover up Before operations that cover up

defectsdefects Before assembly operations that Before assembly operations that

cannot be undonecannot be undone On automatic machines inspect 1On automatic machines inspect 1stst

piece, in between samples & last piecepiece, in between samples & last piece Finished productsFinished products

QUALITY CONTROL IN PRODUCTION SYSTEM :QUALITY CONTROL IN PRODUCTION SYSTEM :

RAW MATERIALS,PARTS, AND SUPPLIERS

INPUTS

PRODUCTIONPROCESSES

CONVERSION OUTPUTS

PRODUCTSAND

SERVICES

Sampling plans,Control Charts

And Acceptance

tests

Control Charts, Subassy

Control Charts and

Acceptance tests

QUALITYOF INPUTS

QUALITY OFSEMIFINISHED

PRODUCTS

QUALITYOF OUTPUTS

TQM CONCEPTS :TQM CONCEPTS :

1.1. TOP MANAGEMENT COMMITMENT & TOP MANAGEMENT COMMITMENT &

INVOLVEMENTINVOLVEMENT

2. CUSTOMER INVOLVEMENT2. CUSTOMER INVOLVEMENT

3. DESIGNING PRODUCTS FOR QUALITY3. DESIGNING PRODUCTS FOR QUALITY

4. ZERO DEFECTS4. ZERO DEFECTS

5. BENCH MARKING & CONTINOUS 5. BENCH MARKING & CONTINOUS

IMPROVEMENTIMPROVEMENT

TQM CONCEPTS :TQM CONCEPTS :

6.6. DESIGNING & CONTROLLING DESIGNING & CONTROLLING

PRODUCTION PROCESSPRODUCTION PROCESS

7. DEVELOPING SUPPLIER PARTNERSHIPS7. DEVELOPING SUPPLIER PARTNERSHIPS

8. BUILDING OF EMPOWERED EMPLOYEES8. BUILDING OF EMPOWERED EMPLOYEES

9. CULTURE OF MUTUAL TRUST9. CULTURE OF MUTUAL TRUST

TQM PROGRAMMES :TQM PROGRAMMES :

1.1. MOTOROLLA : SIX SIGMAMOTOROLLA : SIX SIGMA

2. XEROX : LEADERSHIP THROUGH 2. XEROX : LEADERSHIP THROUGH QUALITYQUALITY

3. INTEL : PERFECT DESIGN 3. INTEL : PERFECT DESIGN QUALITY (PDQ)QUALITY (PDQ)²²

4. H.P : TOTAL QUALITY 4. H.P : TOTAL QUALITY CONTROL(T.Q.C)CONTROL(T.Q.C)

QUALITY MANAGEMENT QUALITY MANAGEMENT RECOGNITION :RECOGNITION :

MALCOLM BALRIDGE NATIONAL MALCOLM BALRIDGE NATIONAL

QUALITY AWARDQUALITY AWARD

DEMING PRIZEDEMING PRIZE

CII AWARDS CII AWARDS

QUALITY CERTIFICATIONQUALITY CERTIFICATION

- ISO 9000:2000- ISO 9000:2000

- QS 9000- QS 9000

BENCH MARKING & CONTINOUS BENCH MARKING & CONTINOUS IMPROVEMENT :IMPROVEMENT :

KAIZEN Vs INNOVATIONKAIZEN Vs INNOVATION

TRACKING PROGRESSTRACKING PROGRESS

BENCH MARKING PERFORMANCEBENCH MARKING PERFORMANCE

NEED FOR SYSTEMS TO CONTINUOUSLY NEED FOR SYSTEMS TO CONTINUOUSLY

BENCHMARKBENCHMARK

BENCHMARKING AGAINST OWN BENCHMARKING AGAINST OWN

PERFORMANCE PERFORMANCE

SUPPLIER DEVELOPMENT & SUPPLIER DEVELOPMENT & PARTNERSHIP :PARTNERSHIP :

Supplier developmentSupplier development

Involvement in TQM activitiesInvolvement in TQM activities

Quality certification – ISO 9000/QS 9000Quality certification – ISO 9000/QS 9000

Joint product developmentJoint product development

Long term contractsLong term contracts

Transparent dealings, sharing of Transparent dealings, sharing of forecast informationforecast information

JIT & quality of productsJIT & quality of products

No dictating of termsNo dictating of terms

ASPECTS FOR ASPECTS FOR SERVICE SECTOR :SERVICE SECTOR :

Difficult to determine qualityDifficult to determine quality

Measuring Customer SatisfactionMeasuring Customer Satisfaction

‘ ‘ Perceived Quality ‘ – influence of ambiencePerceived Quality ‘ – influence of ambience

Services intangibleServices intangible

TQM Culture , employee selectionTQM Culture , employee selection

Mystery shoppers, Customer surveysMystery shoppers, Customer surveys

SQC methods for monitoringSQC methods for monitoring

Dealing with dissatisfied customers – service Dealing with dissatisfied customers – service recoveryrecovery

CHARACTERISTICS OF WORLD CHARACTERISTICS OF WORLD CLASS COMPANIES:CLASS COMPANIES:

Aim for best-in-class product quality Aim for best-in-class product quality rating by customersrating by customers

Relentless drive towards Zero defectsRelentless drive towards Zero defects Organization wide movement by involving Organization wide movement by involving

all employees in quality improvement all employees in quality improvement programsprograms

Does not differentiate between Does not differentiate between Productivity improvements & Quality Productivity improvements & Quality improvementsimprovements

Does not rely on inspection to detect Does not rely on inspection to detect defectsdefects

CHARACTERISTICS OF WORLD CHARACTERISTICS OF WORLD CLASS COMPANIES:CLASS COMPANIES:

Emphasis on root cause analysis & permanent Emphasis on root cause analysis & permanent solutions to problems noticedsolutions to problems noticed

Employs product standardization, automated Employs product standardization, automated equipments, JIT manufacturing & Preventive equipments, JIT manufacturing & Preventive maintenance of equipmentsmaintenance of equipments

Implement TQM programsImplement TQM programs Strive to get recognition for qualityStrive to get recognition for quality Use mathematical techniques like Control Use mathematical techniques like Control

Charts extensively to monitor processCharts extensively to monitor process Use Sampling techniques for Large lot Use Sampling techniques for Large lot

inspection or else automate inspection whereby inspection or else automate inspection whereby 100% inspection can be done100% inspection can be done

CONTENTSCONTENTS ON ON MAINTENANCE MAINTENANCE MANAGEMENT:MANAGEMENT:

1.1. IMPORTANCE OF M/C MAINTENANCEIMPORTANCE OF M/C MAINTENANCE

2.2. REPAIR PROGRAMMESREPAIR PROGRAMMES

3.3. MACHINE RELIABILITYMACHINE RELIABILITY

4. PREVENTIVE MAINTENANCE SCHEDULING4. PREVENTIVE MAINTENANCE SCHEDULING

5. SPARE PARTS ORDERING & STOCKING5. SPARE PARTS ORDERING & STOCKING

6. MAINTENANCE OF SERVICES, WAREHOUSE 6. MAINTENANCE OF SERVICES, WAREHOUSE

FACILITIESFACILITIES

MAINTENANCE :MAINTENANCE :

IT CONCERNS THE IT CONCERNS THE

REPAIR REPAIR AND AND UPKEEPUPKEEP

OF ALL OF ALL

PRODUCTIONPRODUCTION & &

COMPANY ASSETSCOMPANY ASSETS

MAINTENANCE / REPAIR MAINTENANCE / REPAIR OF WHAT ?OF WHAT ?

BUILDINGS & ESTATE

MACHINES

UTILITIES

OFFICE EQUIPMENTS

VEHICLES

IMPORTANCE OF M/C IMPORTANCE OF M/C MAINTENANCE :MAINTENANCE :

a)a) PRODUCTION CAPACITYPRODUCTION CAPACITY

b)b) PRODUCTION COSTSPRODUCTION COSTS

c)c) PRODUCT & SERVICE QUALITYPRODUCT & SERVICE QUALITY

d)d) EMPLOYEE / CUSTOMER SAFETYEMPLOYEE / CUSTOMER SAFETY

e)e) CUSTOMER SATISFACTIONCUSTOMER SATISFACTION

REPAIR PROGRAMMES :REPAIR PROGRAMMES :

REPAIRS :REPAIRS :

-- After breakdown occursAfter breakdown occurs

-- UnpredictableUnpredictable

-- High pressure to put assets High pressure to put assets back intoback into useuse

-- Standby machines/spare Standby machines/spare partsparts

REPAIR PROGRAMMES :REPAIR PROGRAMMES :

PREVENTIVE MAINTENANCE :PREVENTIVE MAINTENANCE :

-- Scheduled activitiesScheduled activities

-- Before breakdown occursBefore breakdown occurs

-- Carried out when the asset Carried out when the asset usage is not needed or usage is not needed or

alternatives are arrangedalternatives are arranged

REPAIR PROGRAMMES :REPAIR PROGRAMMES :

ANNUAL SHUTDOWNS :ANNUAL SHUTDOWNS :

-- Scheduled activitiesScheduled activities

-- Major repairs carried out by Major repairs carried out by total total shut down of all shut down of all production production activitiesactivities

-- Planned when machine Planned when machine breakdowns are not acceptablebreakdowns are not acceptable

-- Major overall/ parts Major overall/ parts replacement required for replacement required for machinesmachines

EQUIPMENT BREAKDOWNSEQUIPMENT BREAKDOWNSCALL FOR :CALL FOR :

QUICK REPAIR OF MALFUNCTIONQUICK REPAIR OF MALFUNCTION

STUDY & ELIMINATION OF CAUSE OF STUDY & ELIMINATION OF CAUSE OF

MALFUNCTIONMALFUNCTION

OBJECTIVE OF REPAIR OBJECTIVE OF REPAIR PROGRAMMES :PROGRAMMES :

REDUCE DOWN TIMESREDUCE DOWN TIMES REDUCE MAINTENANCE COSTREDUCE MAINTENANCE COST

-- Labor – Normal + O.TLabor – Normal + O.T

-- Spare partsSpare parts HAVE FEWER STANDBY MACHINESHAVE FEWER STANDBY MACHINES DECIDE ON QUICK REMEDIES Vs MAJOR DECIDE ON QUICK REMEDIES Vs MAJOR

OVERALLSOVERALLS

As high as 20 % of production costAs high as 20 % of production cost

ANALYSIS OF MAINTENANCE ANALYSIS OF MAINTENANCE COSTS :COSTS :

ANNUALCOST

DEGREE OF PREVENTIVE MAINTENANCE

TOTAL MAINTENANCE COST

PREVENTIVEMAINTENANCE

COST

BREAKDOWN &REPAIR COST

MIN. TOTALMAINTENANCE

COST

MAINTENANCE STRATEGY:MAINTENANCE STRATEGY:

IS PART OF COMPANY’SIS PART OF COMPANY’S

OPERATIONS STRATEGYOPERATIONS STRATEGY

( very imp for Product &( very imp for Product &

Cellular layouts )Cellular layouts )

ANALYSIS OF REPAIR COSTS & ANALYSIS OF REPAIR COSTS & COST OF INTERRUPTIONS :COST OF INTERRUPTIONS :

COST

SPEED OF MAKING REPAIRS

OPTIMALTOTAL COSTOF REPAIRS

COST OF REPAIR,SPARES, SPARE

MACHINES

COST OF INTERRUPTIONS TO PRODUCTION

PARTS REPLACEMENTPARTS REPLACEMENTPOLICIES :POLICIES :

DO JUST ENOUGH MINOR REPAIRSDO JUST ENOUGH MINOR REPAIRS

REPAIR MALFUNCTION – REPLACE OTHER REPAIR MALFUNCTION – REPLACE OTHER

WORNOUT PARTSWORNOUT PARTS

PERFORM MAJOR OVERALL OF MACHINEPERFORM MAJOR OVERALL OF MACHINE

REPLACE MACHINEREPLACE MACHINE

STOCKING POLICY FOR SPARE PARTSSTOCKING POLICY FOR SPARE PARTS

* * PARTS REPLACEMENT POLICY BASED ON PAST PARTS REPLACEMENT POLICY BASED ON PAST

BREAKDOWN DATABREAKDOWN DATA

MACHINE RELIABILITY :MACHINE RELIABILITY :

LIKELYHOOD OF A M/C NOT LIKELYHOOD OF A M/C NOT

BREAKING DOWNBREAKING DOWN

SIMILAR CONCEPTS AS QUALITY SIMILAR CONCEPTS AS QUALITY

APPLICABLE APPLICABLE

-- Over designOver design

-- Design simplification, reduce Design simplification, reduce

partsparts

-- Redundant design, back upsRedundant design, back ups

AUTOMATION & RELIABILITYAUTOMATION & RELIABILITY

PREVENTIVE MAINTENANCE :PREVENTIVE MAINTENANCE :

Reduces frequency & severity of Reduces frequency & severity of

B.Ds B.Ds

Extends useful life of machinesExtends useful life of machines

Reduces Total Cost of Reduces Total Cost of

maintenancemaintenance

Improves Safety at work placeImproves Safety at work place

Improves product quality, Keeps Improves product quality, Keeps

process under controlprocess under control

PREVENTIVE MAINTENANCE :PREVENTIVE MAINTENANCE :

Automation & P.M Automation & P.M

Scheduling P.M activitiesScheduling P.M activities

P.M data base requirementsP.M data base requirements

Modern approaches to P.MModern approaches to P.M

-- JITJIT

-- TPMTPM

-- Quality circlesQuality circles

RECENT TRENDS IN AUTONOMOUS RECENT TRENDS IN AUTONOMOUS MAINTENANCE OF M/Cs :MAINTENANCE OF M/Cs :

Worker prideWorker pride

Prevents equipment abusePrevents equipment abuse

Quick repairsQuick repairs

Prevents major B.DsPrevents major B.Ds

No separation of job responsibilities No separation of job responsibilities

with regards to Production & M/C with regards to Production & M/C

maintenancemaintenance

DETERMINING SIZE OF REPAIRDETERMINING SIZE OF REPAIRCREWS :CREWS :

M/C breakdown rateM/C breakdown rate

M/C repair rateM/C repair rate

time for repairing M/C time for repairing M/C

* BY QUEUING MODEL METHOD

SPARE PARTS PLANNING SPARE PARTS PLANNING FOR MAINTENANCE :FOR MAINTENANCE :

PLANNED

Use MRP typeLogic for

Procurement &

Storage of Spare parts

UNPLANNED

Stock itemsAccording to

Payoff analysis

MAINTENANCE OF SERVICE,MAINTENANCE OF SERVICE,WAREHOUSE FACILITIES :WAREHOUSE FACILITIES :

Extremely critical for service companies to Extremely critical for service companies to

maintain delivery date/timemaintain delivery date/time

Decision on preventive maintenance critical, Decision on preventive maintenance critical,

discipline to be maintained discipline to be maintained

Stocking decision for spares to be decided based Stocking decision for spares to be decided based

on past dataon past data

Standby alternatives, quick repair methods etc to Standby alternatives, quick repair methods etc to

be worked out.be worked out.

Fire fighting equipments, safety arrangements Fire fighting equipments, safety arrangements

etc to be worked outetc to be worked out

SECONDARY RESPONSIBILITIES SECONDARY RESPONSIBILITIES OF MAINTENANCE DEPT :OF MAINTENANCE DEPT :

House keepingHouse keeping New projectsNew projects Incremental automationIncremental automation Safety at workplaceSafety at workplace Waste disposalWaste disposal Pollution control aspectsPollution control aspects Equipment selectionEquipment selection Building maintenanceBuilding maintenance

CHARACTERISTICS OF WORLD CHARACTERISTICS OF WORLD CLASS COMPANIES:CLASS COMPANIES:

Involve workmen in machine Involve workmen in machine

maintenance; machine ownershipmaintenance; machine ownership

Strict adherence to P.M schedulesStrict adherence to P.M schedules

Train workmen to diagnose problems in Train workmen to diagnose problems in

initial stage itselfinitial stage itself

Highly reliable machine / process Highly reliable machine / process

necessary for JIT systemsnecessary for JIT systems

Failure sensing equipment design & usage Failure sensing equipment design & usage

growinggrowing

END OF SESSION 5END OF SESSION 5