guide to terotechnology 1

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Disclosure to Promote the Right To Information Whereas the Parliament of India has set out to provide a practical regime of right to information for citizens to secure access to information under the control of public authorities, in order to promote transparency and accountability in the working of every public authority, and whereas the attached publication of the Bureau of Indian Standards is of particular interest to the public, particularly disadvantaged communities and those engaged in the pursuit of education and knowledge, the attached public safety standard is made available to promote the timely dissemination of this information in an accurate manner to the public. इंटरनेट मानक !ान $ एक न’ भारत का +नम-णSatyanarayan Gangaram Pitroda “Invent a New India Using Knowledge” प0रा1 को छोड न’ 5 तरफJawaharlal Nehru “Step Out From the Old to the New” जान1 का अ+धकार, जी1 का अ+धकारMazdoor Kisan Shakti Sangathan “The Right to Information, The Right to Live” !ान एक ऐसा खजाना > जो कभी च0राया नहB जा सकता ह Bharthari—Nītiśatakam “Knowledge is such a treasure which cannot be stolen” IS 15363-1 (2003): Guide to Terotechnology, Part 1: Introduction to Terotechnology [MSD 4: Management and Productivity]

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  • Disclosure to Promote the Right To Information

    Whereas the Parliament of India has set out to provide a practical regime of right to information for citizens to secure access to information under the control of public authorities, in order to promote transparency and accountability in the working of every public authority, and whereas the attached publication of the Bureau of Indian Standards is of particular interest to the public, particularly disadvantaged communities and those engaged in the pursuit of education and knowledge, the attached public safety standard is made available to promote the timely dissemination of this information in an accurate manner to the public.

    ! $ ' +-Satyanarayan Gangaram Pitroda

    Invent a New India Using Knowledge

    01 ' 5 Jawaharlal Nehru

    Step Out From the Old to the New

    1 +, 1 +Mazdoor Kisan Shakti Sangathan

    The Right to Information, The Right to Live

    ! > 0 B BharthariNtiatakam

    Knowledge is such a treasure which cannot be stolen

    Invent a New India Using Knowledge

    IS 15363-1 (2003): Guide to Terotechnology, Part 1:Introduction to Terotechnology [MSD 4: Management andProductivity]

  • IS 15363 (Part 1) :2003

    ml&RmkaG#dhmmfl

    Indian StandardGUIDE TO TEROTECHNOLOGY

    PART 1 INTRODUCTION TO TEROTECHNOLOGY

    Ics 03.100.01

    0 BIS 2003

    BUREAU OF INDIAN STANDARDSMANAK BHAVAN, 9 BAHADUR SHAH ZAFAR MARG

    NEW DELHI 110002

    July 2003 Price Group 7

  • IOI{I:WORD

    1his Indian Standard ([art 1) was adopted by the BL]retIUof indian Standards, after the draft finalized by thehlanagcmcn( and lroductivity Sectional Co~lln~ittee had been approved by the Management and Systems Division~ouncil.

    Itl an> organization it is necessary to identify and then choose between the investment options open to it and tolnahc LIccisions on how best to invest the capital available. Once a decision has been made to make an investment)n $omc form of physical asset or project, then the application of tcrotechnolo:y should assist in the object of~c[[ill~ [he [?cst Va[Llefor money from that investment and thuSjuStify it.

    Icr(ltecllnology is a combination of management, financial, engineering, building and other practices applied toph} sical wsets in pusuit of economic life cycle costs. It is concerned with the specification and design for reliabilitya)ld tll:ii]lt:litl:ibility of physical assets such as plant, machinery, equipment, buildings and structures. The application()]tcrotechnology also takes into account the processes of installation, commissioning, operation, maintenance,]nodification and replacement. Decisions are influenced by feedback of information on design, performance andCO$(S.throughout the life cycle ofs project. 1[applies equally to both assets and products because the product ofone organization often becomes the asset of another. Even if the product is a simple consumer item its design andcus[onlcr appeal will beneht from terotechnology and this will reflect in improved mark& security for the producer.

    1cI-[)tccl)I]cJl[>gywas developed in the context of larger organizations, with the objective of making them moreeficicnt and competitive. Throughout this standard the applicability to a larger organization is used as a basis asthis \vill represent the more complex situations. However the objective of maximizing value for money spent andthe principles involved in achieving this, are equally applicable to small organizations. Small organizations faceproblems as nlLIch as those faced by the larger; more complex organizations. Their problems maybe simpler butthe principles of problem solving remain the same. The small organization can therefore benefit from this guidanceby selecting those parts of the decision-making process that can help them.

    1llisstandard sets out in detail all the activities that should be carried out to ensure that the organization, whichuses terotechnology, could compete successfully and, at the same time, achieve consumer satisfaction.

    1his standard is largely based on BS 3843 (Part 1) :1992 Guide to terotechnology (the economic management ofassc[s) : Part 1 Introduction to tero[echnology .

    in addition to this pw-t, this standard has the following two parts which are referred in the text:

    Part 2:2003 Introduction to the techniques and applications

    Part 3 Guide to the available techniques (Umerpreparatiw)

  • 1

    IS 15363 (Part 1) :2003

    Indian StandardGUIDE TO TEROTECI-INOLOGY

    PART 1 INTRODUCTION TO TEROTECHNOLOGY

    SECTION 1 GENERAL

    1 SCOPE

    This standard (Part 1) gives a general introduction tothe concepts of terotechnology. This standard describeshow the principles and use ofterotechnology can assistthe decision making processes, the benefits which canbe obtained from its adoption and the overall resourcesrequired for efficient implementation.

    2 REFERENCE

    The standard contains provision which, throughreference in this text, constitutes, provision of thisstandard. At the time of publication, the editionindicated was valid. All standards are subject to revisionand parties to agreements based on this standard areencouraged to investigate the possibility of applyingthe most recent edition of the standard indicated below:

    IS No, Title

    9990:1998 Glossary of terms in terotechnology(fht revision)

    3 DEFINITIONS

    For the purposes of this standard the definitions givenin IS 9990 shall apply:

    SECTION 2 CONCEPT OF TEROTECHNOLOGY

    4 OBJECTIVES OF TEROTECHNOLOGY

    4.1 Primary Objective4.1.1 Terotechnology is aimed at achieving the bestpossible value for money for a user from theprocurement and subsequent employment of a physicalasset. This may range from a complex building orengineering plant to a domestic appliance.Terotechnology can be applied with advantage byorganizations of any complexity or even individuals.

    4.1.2 A user would employ the principles ofterotechnology in the selection of the asset and then inthe subsequent management of it. A supplier, on theother hand, applies the principles in the design,manufacture and support for his product. This canachieve improved customer satisfaction generally. Itmay also act as a valuable incentive to potentialcustomer, especially if they, as prospective users, areselecting their assets on the basis of terotechnologyprinciples.

    4.1.3 There is a close interrelationship between asuppliers product and the users asset. A compatibilityof approach should therefore be feasible and practicable.

    4.1.4 An organization often acts both as a user and asa supplier. It acts as a user in respect to its acquisitionsof assets with which it produces its own output products,In supplying these products, which might be eitherfurther assets, materials or a service, to its customersthe organization is clearly acting as a supplier. It isessential that the organization gives till considerationto the acquisition and management of its own assets,using terotechnological principles. ]t is equallyimportant that it gives due consideration to its productsand how these will best satisfy the terotechnologicalneeds and aspirations of its customers. This is valideven when the customers for the products are the generalpublic or individual members of it. In such cases theorganization should make every effort to ascertain theterotechnological needs of its customers by marketresearch and(or any other appropriate means and thento meet these needs as far as possible.

    4.2 Lowest Asset Costs Over Life Cycle

    4.2.1 Terotechnology is applied to the assessment ofthe total costs involved with the asset over its full lifecycle up to and including its disposal. This will includethe cost of financing as well as the initial capital costsand subsequent revenue or running costs. These willbe related to a defined level of performance and theexpected life cycle. This latter may be determined bythe perceived market for the product rather than thepracticable life of the asset itself.

    4.3 Approach to Objectives4.3.1 In most cases the life cycle cost assessment willbe influenced by the relationship between the producerof the product and the customer who acquires it. Thecustomer or client, who orders a product specificallydesigned to satisfy his particular requirements willusually have a close liaison with designer and producer.He will therefore have a direct interest in the cost ofownership of the asset he will be acquiring andconsequently in the life cycle costing implications ofthe different solutions which may satisfy hisrequirements. However, even a bespoke product mayincorporate sub-assemblies, equipment or articles whichare standard items and from which choices may bemade.

    4.3.2 On the other hand the manufacturer of a

    1

    -.

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    IS 15363 (Part l) :2003

    mass-produced item may have no direct personalinvolvement with the eventual purchaser. In order toestablish the best market for his product he maytherefore have to rely on techniques such as marketresearch to identify the life cycle costs and reliabilitywhich will ensure satisfactory value for money. Therewill also be variations between those two extremes.

    4.3.3 Nevertheless, in all cases there should be a needto identify the options which may be available in theprocurement of the asset so that the most economicsolution may be chosen which best fits the usersrequirement. This solution will largely depend on aprice/cost equation or a cost benefit analysis.

    4.3.4 The full terotechnology cycle begins at theinvestment appraisal stage and ends with the disposalof the asset, but the application of terotechnology canbe made at any stage in the life of a physical asset andcontinue for some or all of the remaining life cycleperiods until disposal or replacement.

    4.3.5 Maximum benefit will be obtained from applyingthe complete principles of terotechnology. However,many aspects of terotechnology are already being verysuccessful ly practiced by many organizations underdifferent names. The following list, which is notexhaustive, may help managers to identify those partsofterotechnology with which they are already familiar:

    a)

    b)c)d)e)f)!3)h)j)k)

    Asset management (including physical assetmanagement);Resource management;Life cycle costing;Cost of ownership;Total commitment for life;Womb to tomb costing;Cradle to grave management;Design for life costing;Life long care;Costs-in-use; and

    m) Through life costing.

    4.3.6. Terotechnology is concerned with helping tooptimize life cycle costs. In a case where the life cycleis short, the trade-off between initial and upkeep costsmight point towards buying an asset with the lowestpurchase price. This approach would obviously beundesirable where there was the possibility of retaining,for example, a plant for a longer period than originallyintended. Such a policy would almost certainly resultin unreliability and high unkeep costs, but the oppositedoes not necessarily follow.

    5 PRINCIPLES OF TEROTECHNOLOGY

    5.1 Scope of Terotechnology

    5.1.1 Terotechnology is essentially concerned with thefollowing:

    2

    a)

    b)

    c)

    d)

    5.1.2

    Selection and provision of permanent (that is,not consumable) physical resources used in theproduction of goods and services;

    Caring for those resources effectively andefficiently;

    Coordinating them to help achieve overallminimum costs over their life cycle; andFeeding back information to improve them.

    The successful application of terotechnolo.gydepends upon ability to-balance factors which a~euniquely important for a particular situation. R requiresan understanding of management and accountingsciences and a general knowledge of engineeringassociated with the technological expertize appropriateto a particular industry.

    5.1.3 In more specific terms, the application ofterotechnology brings together the whole or parts of anumber of techniques and disciplines. The blend anddepth required of each will depend on the particularcircumstances in which terotechnology is being applied.These techniques and disciplines include the following:

    a)b)c)d)e)8

    i%)h)j)k)

    m)n)P)q)

    5.1.4

    Investment appraisal;

    Operational research;Replacement analysis;

    Marketing;

    Purchasing;

    Accounting;

    Design for reliability and maintainability;

    Preparation of specifications;

    Installation;

    Commissioning;

    Maintenance procedures and technology;

    Information systems;

    Programming; and

    Technical communications.

    The life cycle and performance of a total assetwill be affected by the individual life cycles andperformance of its constituent parts.

    5.2 Participation of the Whole Organization

    5.2.1 It will be seen from the outline of the scope ofterotechnology given in 4.1 that it is essential that thewhole of an organization is involved.

    5.2.2 Terotechnology is essentially a multi-disciplinarycontribution to optimizing life cycle costs and theexperience and skills of a number of specialists arerequired for its implementation. The basic principlesof terotechnology can be applied within an enterprizewithout changing organizational structures (exceptwhere these are defective in themselves) and there isno need to create a new breed of specialist (a

  • i

    1

    terotechnologist). Save in exceptional circumstances,the range of skills and breadth of knowledge andexperience necessary for its full implementation isunlikely to be acquired by any one individual.

    5.2.3 Although terotechnology can be easilyunderstood and applied by line management, engineers,accountants and others, in their daily working lives,the subject can be applied successfully at company levelon Iy with the active participation and understandingof senior management.

    5.3 Interprofessional Cooperation

    5.3.1 The application of terotechnology demands thatall those involved have abroad recognition of their owncontribution together with that of their colleagues inother disciplines and its success is dependent uponeffective communication between all parties. It requiresan understanding of management and accounting andknowledge of the technology associated with theparticular industry or asset.

    The following are two examples which may help toillustrate this principle:

    a) The designer of a product should take intoaccount the feasibility of producing his designand its cost to the consumer in operation andmaintenance.

    b) When assessing the proposed design of a productthe management will require feedback data onthe price the market may be prepared to pay forthe product and the cost of producing it.

    5.3.2 However, it should be remembered that theseare only two examples of a wide range ofinterrelationships and each member of the team shouldendeavour to prepare his own list of the ways in whichhis role should interact with the whole team. This isdiscussed in more detail in Section 3.

    5.4 Interdepartmental Cooperation

    5.4.1 Itis common practice for senior management ofan organization to require individual departments tooptimize their individual activities. Unfortunately ifthis is taken as the primary objective of departments itcan result in a less than optimum performance of theorganization as a whole. This arises from the inevitableinteraction of decisions between departments.Examples of this are not hard to find. If a purchasingdepartment acquires the cheapest possible asset it isIikely that the operating and/or maintenance costs willtend to be higher. Similarly inadequate maintenance,to reduce maintenance costs, invariably results inpenalties in the cost of operation and/or a shorterworking life of the asset.

    5.4.2 Consequent upon the above, the primaryobjective of all departments working under theprinciples of terotechnology, is that their individual

    IS 15363 (Part 1) :2003

    decisions are made on the basis of achieving the bestbalance of cost and performance for the organizationas a whole.

    5.5 Collection and Analysis of Data

    5.5.1 To action the optimization objectives describedin 4.2 to 4.4, it will be clear that each individualdepartment will require suitable quantitative data fromall other interacting departments. These data need tube those required for the department to optimize its owndecisions in the overall interest of the organization as awhole.

    5.5.2 It is essential that there are communicationchannels between departments (see 4.3). It shou Id beemphasized that part of the communications throughthese channels needs to be the data needed by otherdepartments to carry out their own optimizationexercises, on an organization-wide basis.

    5.5.3 Furthermore, this can, and frequently does,require a department to collect data not required for itsown purposes but necessary for proper use by otherdepartments.

    5.5.4 This collection, analysis and dissemination ofdata does not necessarily remain within the organizationbut can and should extend to the suppliers of the assetsused by the organization. Only in this way, can thesupplier organization refine its designs in the overallinterests of its customer organizations.

    5.5.5 Data may be required for central decision making.These may be central data or they maybe departmentaldata, but they should be collected in a form whichsatisfies both the central and the departmental needs.

    5.5.6 Experience to date has shown that in manyorganizations there is an advantage in appointing asenior person to oversee adoption of the principles ofterotechnology throughout the organization. Thisperson should be appointed by and be responsible to,the Board of Management. Ideally he should beindependent of any particular department, but in anycase he needs to be free to cut across departmentalboundaries.

    5.6 Minimum Activities Necessary for ImplementingTerotechnology

    5.6.1 The minimum activities necessary for theimplementation of terotechnology are the following

    a)

    b)

    c)

    3

    Decide what production and cost targets are tobe met;Decide what physical assets are needed and howto use them to achieve the targets over a specifiedperiod, taking into account their forecast cost ofownership and use;

    Specify the performance of the assets to beacquired;

  • IS 15363 (Part 1) :2003

    d) Acquire, install and commission those assets;e) Care for them;O Monitor their use; and

    g) Replace and improve the assets and improve theircare, using information from them to helpminimize total life cycle costs.

    6 BENEFITS FROM INTRODUCINGTEROTECHNOLOGY

    The benefits which may be gained by the use ofterotechnology maybe broadly described as:

    a) Improved control by the client or seniormanagement in the making of vital decisions;leading to;

    b) Better investment decisions arising from :1)

    2)

    3)

    4)

    Improved information regarding costs andperformance requirements; as related toparticular patterns of expenditure and designchoice.NOTE Performanceincludessuch things as:

    i) Reliability;ii) Durability and life expectancy/requirement;

    iii) Quality control;iv) How well the product does its job;v) Safety, including statutory liability and product

    liability;

    Improved client identification ofrequirements and development of a brief forthe asset acquisition;

    Information regarding the cost consequencesof the options under consideration;

    Better investment analysis of cost optionsavailable; leading to; and

    c) Better value for money from the final productandlor an improved market for the product.

    Other benefits may include:

    a)

    b)

    c)

    d)

    Increased profitability through a reduction in thetotal cost of ownership;

    Improved control of the product and theproduction process;

    As a result of common orientation on cost andperformance from the perspective of theorganization as whole, together with a morefrequent contact, an expectation that there willbe greater understanding between client or seniormanagement and other functions on how toachieve common goals; and

    The cross-fertilization of good ideas and dataacross traditional boundaries.

    For convenience, the benefits that can be derived fromthe use ofterotechnology are summarized in Annex A.

    4

    7 COSTS OF IMPLEMENTINGTEROTECHNOLOGY

    7.1 One of the principal obstacles to the implementationof terotechnology has been the lack of data. Data arean essential input for implementing terotechnology, andthis may include detailed cost, performance [see Noteto 6,1 (b)] and marketing information.

    7.2 The main costs associated with terotechnology dataare:

    a) Cost of collecting additional data, not alreadycollected for management purposes;

    b) Cost of making existing data compatible withthe needs of terotechnology;

    c) Cost of any additional analysis; andd) Cost of supplying feedback information or of

    processing feedback received.

    7.3 However, with the improvements in informationtechnology now taking place there is a vast increase indata availability and the cost of collecting andprocessing data is reducing dramatically as time goeson. Solutions to some of the other problems involvingthe implementation of terotechnology are dealt withinSection 3.

    SECTION 3 INTRODUCINGTEROTECHNOLOGY TO AN ORGANIZATION

    8 GENERAL

    8.1 Terotechnology requires no new techniques ordisciplines. It is essentially a new way of examining,and grouping some familiar activities and involves abringing-together of well tried methods in a new waywhich can be used to improve management of physicalassets in accordance with the objectives of an enterprize.

    8.2 Terotechnology is a combination of managementand technology and can be applied by both users andmanufacturers in industry, building and commerce. Itsbasic principles can be applied at company level andalso by management, engineers, accountant and otherspecialists in their day-to-day working lives.

    8.3 No matter what a company or undertaking designs,constructs, manufactures, processes or purchases,terotechnology has a vital effect upon efficiency, profitsand market share.

    9 MANAGEMENT PARTICIPATION

    9.1 For management, terotechnology is one of a numberof concepts which can contribute to the overallefficiency of an enterprise. Like others, it can be classedas common sense or simple when you know how, butrequires careful, thought and planning to realize thepotential benefits of its application.

    ..

  • TIS 15363 (Part l):2003

    9.2 The principal function of the chief executive inany organization is to examine investment options andto make choices between them. He needs to considerthe availability or cost of raising funds and the variousopportunity costs and make judgments on the bestcourses of action that are available. He needs toremember that the best economic solution may need tobe used. He maybe faced with conflicting advice fromvarious advisers and a decision has to be made.

    9.3 Senior managers have to consider and evaluate allthe various available options in acquisition, operation,maintenance and disposal of all assets. All the financialanswers need to be converted to a common base andany government or customer incentives or disincentivesevaluated. The results of all of the findings of seniormanagers have to be in a simple and consistent formatto enable the options to be evaluated in the light of theorganizations overall policy and strategy to come to adecision on the best course of action to follow. Moredetails of this are given in Part 2 of this standard.

    9A The role of the senior manager in an organizationseeking to apply terotechnology is fivefold as follows:

    a)

    b)

    c)

    d)

    e)

    To encourage departmental managers to worktogether, and provide each other with all theinformation that each requires;

    To foster friendly rivalry between departmentsand to encourage ideas on economies to comefrom the shop floor (possibly by incentiveschemes);To coordinate the departmental managers toarrive at a number of possible options (allprepared using the same ground rules to allowcorrect comparisons to be made);To decide on which option to adopt (see 4.1);and

    To ensure that the departmental managersimplement the decision which is made.

    10 ORGANIZATIONAL FRAMEWORK

    10.1 The introduction of terotechnology into anorganization does not require any significant changesin the organizations functional and departmentalframework. There will still be a need for the individualspecialized activities; all that will be changed will bethe basis of the primary objectives of the individualdepartments.

    10.2 The principal change will be in the extent andcontent of interdepartmental communications, and alsoin the relationship between the organization and thesuppliers of its principal assets, whether these bebuildings, plant or both.

    10.3 With the changes in internal and externalcommunications there will inevitably be somemodification to individual responsibilities and there

    need to be some changes in individuals attitudes totheir responsibilities. These changes should be towardsa more collective corporate attitude and away fromnarrow departmental or professional allegiances.

    11 INCORPORATION OF TEROTECHNOLOGYINTO ACTIVITIES

    11.1 Modification of and Additions to ExistingActivities in the Organization

    11.1.1 Terotechnology involves understanding andCO1Iaboration between functions to be effective. Anorganization will be said to be practicing terotechnologywhen it is consciously managing the cost of owning itsassets. The concepts of cost of ownership involvesthe appreciation oftrade-offs between acquisition costsand running costs. It is easy to understand, but notnecessarily easy to apply.

    11.1.2 The application of terotechnology requiressenior management to have a thorough understandingof each specialists role. This also means that specialistsneed to have a broad recognition of their owncontribution plus that of their colleagues in otherdisciplines. If senior management has to make decisionson the purchase : f new plant with little or noinformation on past performance and operating costs,this can lead to wasted resources, high costs, higherdowntime and lost orders. The till terotechnology cyclebegins at the investment appraisal stage and ends withthe disposal of the asset, but the circle can be entered atany point. For example, a company may decide toimprove maintenance and reduce downtime on existingplant; although the trade-off between initial capitalcosts and subsequent costs cannot be taken into account,the companys decision will have a very real effect onthe cost of ownership. The fact that terotechnologycannot be applied from the beginning of the life cycleof a piece of plant should not deter a company fromattempting to improve reliability, or to improve ordesign out maintenance.

    11.1.3 Experience to date has shown that in manyorganizations there is an advantage in appointing asenior person to oversee adoption of the principles ofterotechnology throughout the organization. Thisperson should be appointed by and be responsible to,the Board of Management. Preferably he shou!d beindependent of any particular department, thus beingcapable of cutting across departmental boundarieswithout bias.

    11.2 Modification to Customer/SupplierRelationship

    11.2.1 Many of the problems which arise at a late stagein the life of physical assets stem from inadequatespecification of requirements and poor communicationbetween customer and supplier. It is important todistinguish between specification for function and

    5

    ,,.

  • 7IS 15363 (Part 1) :2003

    specification of reliability, maintainability andcontinuity of optimum performance of the assets inquestion.

    11.2.2 Terotechnology is not concerned with the first(for example, the process), but it does include the latter.This is a fundamental distinction which helps toillustrate the relationship between terotechnology andother management techniques.

    11.2.3 Only the user is able to specify the overallrequirement but the supplier can and should haveresponsibility for much of the detail. Equipmentsuppliers make an important contribution to theefficiency of industry because they determine thereliability and fitness for purpose; of the assets theysupply and management in this area has a particularresponsibility to ensure that the customer takes deliveryof plant which meets his requirements, both in terms oftechnical parameters and predicted life cycle costs.

    11.2.4 In certain industries, there has developed anunderstanding that the customer/supplier relationshiphas a very real effect on the efficiency and prosperityof all concerned. In such cases there is a deeperappreciation of each others role and requirements thanwould be the case with purely formal and proceduralrelationships.

    11.2.5 Not only are the customer and supplier betterable to plan their respective operations, but the earlyand crucial stages in the life of a plant develop moresmoothly and logically than would otherwise be thecase. Benefits resulting from a closer customer/supplierrelationship are as follows:

    a) Planning made easier and with a better chanceof success;

    b) Easier transition from specification toproduction;

    c) Production schedules more readily met; andd) Increased company effectiveness and greater

    chance of meeting market requirements.

    11.2.6 This situation may not come about if thecustomer does not know how to specify exactly whathe wants, and the supplier does not feel it is hisresponsibility to rkk for a precise specification or theremay be complete ignorance of the fact that there is acommunication gap. Equipment is sometimes boughtand modified by the customer who, perhaps becauseof fear of disclosing commercial secrets, does notinform the supplier, with the result that more plant ofthe same type will be designed and built with the sameshortcomings.

    11.3 Example of Application of Terotechnology inDifferent Project Phases in a User Organization11.3.1 Concept and Investment Appraisal Phase

    11.3.1.1 Initially the organization will have to establish

    its own objectives and a plant to meet these, brokendown into a series of individual projects. The steps inthe process are as follows:

    a)

    b)

    c)

    d)

    Identify each project including the total marketdemand for the product or service and thenational target share of this demand to be metby the organization. Both of these aspects needto be determined against a time scale.

    Identify the scenario against which these marketpredictions are being made.

    Identify and agree the probable ranges ofvariations in this scenario and both theprobabilities of such variations and theconsequences on the national output and timesensitivities on the project objectives.Identi& any performance requirements such asavailability or reliability of output and anyproduct quality targets and the consequences(including penalties) of not meeting theserequirements.

    The second part of this phase involves the identificationand selection of a specific asset plant proposal. Thesteps are as follows:

    a) Identify the technically feasible way of meetingthe project targets, within any restraints, financialor otherwise.

    b) Estimate outline costs of alternatives (life timecosts).

    c) Estimate cost variations within the identifiedranges of scenarios.

    d) Select best option or options for further detailedstudy after taking into account the assessedprobabilities and risks.

    e) Refine assessments to reduce best options to asingle proposal and communicate this in fulldetail.

    11.3.2 Acquisition Phase

    11.3.2.1 In this phase the first task is to specify theassets needed for the project. The steps include thefollowing:

    a) Obtain inputs from all parts of the organization

    b)

    c)

    d)

    6

    regarding the assets needed and the probablefuture resource needs during the project lifetime. .Identify and evaluate potential trade-offs, forexample, automation versus manpower, inherent~eliability versus maintenance.

    Either specify assessed optimum of trade-offsor demand information in tenders on which todetermine the optimum.

    Fully specify requirements in all particularsincluding contract documentation, manuals andsupport during the life cycle of the asset.

  • 1

    IS 15363 (Part l) :2003

    e) Finally issue the enquiry specification to allviable tenders.

    11.3.2.2 When tenders have been received, these willhave to be assessed and compared. The essentialelements of the assessment to be included areas follows:

    a)

    b)

    c)

    d)

    Ensure all specification requirements, includingdata, have been met.

    Identify shortcomings or alternatives andestilmate the consequential penalties to the userorganization.

    Identify options offered, then determine andselect best option for the user.

    Identify further pothtial shortcomings (notnecessary outside-specification) and evaluate areasonable notional penalty based upon risk andconsequence estimates.

    e) Identify guarantees being offered.

    11.3.2.3 Competitive tenders should be compared andtenders then selected for all the contracts for the variousassets in the total project. Before proceeding it will ofcourse be necessary to check that the tendered data doesnot invalidate the chosen asset plan or the originalmarket plan proposals. Finally contracts are let ororders placed for the assets needed.

    11.3.3 Commissioning Stage

    During the commissioning stage of the assets furtherdetailed examination needs to be given to all the optionsregarding policies, strategies and the support resourcesneeded for operation and maintenance of the assets.The objective is to identify the optimum positionviewed overall with respect to the project targets.Further refinement should be made of estimates ofresources needed for operation and maintenance duringthe asset life cycle particularly in the light of anyvariations within the scenario ranges agreed, from timeto time, by senior management.

    11.3.4 Useful Life Phase11.3.4.1 During the useful life phase, in whichoperation and maintenance are the primary activities,the policies and strategies, initially forecast during thecommissioning stage, will be reviewed and modifiedin the light of experience and circumstances, As timeprogresses, reviews need to be held inter alia to clearly

    define the project targets, particularly regarding theduration of the life cycle and the associated costs inrespect of disposal of the assets and/or their replacementif this is appropriate.

    Routinely, the performance of the asset and associatedcosts should be reviewed and be improved if this ispossible.

    11.3.4.2 A major feature of this phase will however bethe collection and analysis of data not only for use in

    the operation and maintenance of the current assets butalso for use by the users planning and project staff infuture projects. To this should be added such datawhich, when fed back to the manufacturers or suppliers,enables them to improve their performance in servingthe terotechnological needs of future users.

    11.3.5 Disposal Phase

    This terminal phase of the life cycle will have to beoptimized as part of the life cycle management.Therefore, the data and costs associated with this phaseshould be considered for use in the studies of futureprojects.11.4 Effect on Supplier Organizations

    11.4.1 In so far as supplier will normally also be a userof assets acquired from another supplier, he will havean interest in terotechnology applied to his own assets.But his consideration should also extend to the assetshe is supplying to his customers. To do this he needsto consider in his own operations the terotechnologyneeds of his customers, as users, by viewing mattersfrom their points of view.

    11.4.2 In particular his designs for assets to be suppliedto a customer should make the users terotechnologyneeds the priority consideration. Having done so, itwill be equally essential that the supplier markets hisproduct with due emphasis on how the customersterotechnology needs have been considered and cateredfor. This aspect goes beyond the design of the productand extends to both contractual conditions (guarantees,etc) and support for the service phase. This latter couldinclude both spares and specialist advisory services.

    12 MODIFICATIONS TO INDIVIDUALFUNCTIONAL ACTIVITIES

    12.1 Management

    12.1.1 The decisions made by management can onlybe as good as the information which is made availableto them. At management level the primary function ofterotechnology is as an information and control systemand as an aid to communication and appraisal.Information fedback from all functions within theorganization will enable better evaluation of theperformance of physical assets and so improvecorporate planning and forecasting.

    12.1.2 Management style is important in theapplication of terotechnology and a policy whichencourages communication and information exchangewill facilitate this. The acquisition, processing andtransmission of relevant data is a fundamental requisitefor the full practice of terotechnology and although thismay sometimes call for sophisticated data systems basedon computers, this should not automatically be assumedto be the case. The type of information required shouldbe specified first, and then the methods of recording it.

    I

    ,-.

  • IS 15363 (Part l): 2003

    Care needs to be taken to ensure that cost of gatheringand evaluating the information does not out weigh itsusefulness.

    12.2 Accountants

    The accountant should have the responsibility to:

    a)

    b)

    c)

    Develop effective communication withcolleagues in design, manufacturing,maintenance and marketing to assist the flow ofinformation on all aspects of cost, particularlyto enable a proper examination of the relationshipbetween the initial purchase cost of an asset andthe total life cycle cost;

    Insist that departmental managers feed him costdata in a form that can be used in wider decisionprocesses of life cycle costing, includingoptimization of policies;

    Make available cost and performanceinformation to assist in making investmentproposals, which in turn will lead to improvedinvestment appraisals and better investmentdecisions.

    12.3 Designers and Project EngineersThe designer and project engineer should have theresponsibility to:

    a) Ensure the availability of feedback informationfrom users on such items as:

    1) Cost of installation and commissioning;2) Reliability;3) Maintainability;4) Functional performance including numbers

    and types of failure or malfunction; and5) Consequences of failure and use of failure

    b)

    c)

    d)

    e)

    modes, effects and criticality analysis.

    Enable the whole life cycle costs includingmanufacture, installation, commissioning,operation, overhaul, repair and disposal to beconsidered at the design and development stage;

    Become more fully aware of the costimplications of their design decisions;

    Facilitate the preparation and presentation oftechnical manuals and brochures on the product;and

    Show, if required, the need for specialistpersonnel and their required skills, and identifyhow these can be employed. Decide on howthis need can be satisfied by the time these skillsare required and consider recruitment or training.

    12.4 Purchasing Executives

    The purchasing executive should have the responsibilityto strengthen communication bridges with the suppliers:

    a) Internally by:

    8

    1)

    2)

    Identifying for any new acquisition the fullrequirements of the user groups in theorganization; and

    Providing to those involved in determiningacquisitions the information necessary toassist in making correct purchasing decisionsand help to ensure that initial cost is not usedas the sole criterion.

    b) Externally by:1)

    2)

    Fully communicating the requirements ofthe user groups to suppliers; and

    Making available to suppliers adequate dataon the relevant aspects of the required lifecycle performance of physical assets beingconsidered for acquisition, including initialcost, installation and commissioning,performance, life, reliability andmaintainability and thereby assisting inpreparing an adequate specification of thecompanys requirements.

    12.5 Production Managers and Engineers

    12.5.1 The production manager and engineer shouldhave the responsibility to:

    a)

    b)

    c)

    d)

    e)

    Provide information on reliability,maintainability, safety, costs and failure ormalfunction, etc, of plant and equipment in use;Provide the relevant information enabling clearand complete specifications of requirements tobe prepared when consideration is being givento the purchase of new or replacement assets;

    Make available relevant data when consideringproduction programmed and how they would beaffected by maintenance schedules;

    Receive and act on feedback of information fromthe users of the product on failures, reliability,maintainability and safety; and

    Assist in the preparation of valid estimates ofdelivery time and price when responding to aprospective purchasers enquiry.

    12.5.2 The better information and cooperation resultingfrom the use of terotechnology will often result in anoverall improvement in costs and efficiency.

    12.6 Maintenance Managers and Plant Engineers

    The maintenance manager and plant engineer shouldhave the responsibility to:

    a)

    b)

    c)

    Encourage the provision of proper maintenanceschedules;Provide a fault recording and analyzing systemas part of a maintenance strategy, givinginformation on spares requirements, reliability,maintainability, maintenance costs, safety, etc;

    Make available information on the total costs of

  • d)

    e)

    f)

    maintenance including both direct and indirectcosts, which would assis~ in assessing the righttime for equipment replacement;

    Provide the means of checking that forecastreliability and maintainability figures areachieved in practice;Evaluate condition-based maintenancetechniques as part of terotechnology to optimizemaintenance costs and improve plantavailability; and

    Highlight to top management how poor~rinadequate maintenance can result in poordelivery performance, and consequentlydissatisfied customers and lost markets.

    12.7 Marketing Executives

    The marketing executive should have the responsibilityto:

    a)

    b)

    c)

    Provide information to enable the competitivefeatures of the product to be presented to theprospective purchaser and particularly the trade-off between initial cost and total life cycle costs;

    Consider such factors as delivery, performance,price quality, reliability, maintainability, after-sales service, spares availability, the quality oftechnical manuals, etc, and whether:

    1) he is fully equipped to respond to thecustomers requirements;

    2) he has information to assist in detailedcomparisons with rival products; and

    Establish feedback from customers on productperformance

    12.8 Effect on Training

    To achieve the maximum benefits from terotechnologyit will be necessary to introduce the concept into thestaff training of the organization. This should lead, inturn, to a level of training sufficient to allow eachparticipant to understand his own contribution and thecontribution to be expected or required from all othermembers of the organization. The greater appreciationby individuals of the work and contributions of othersshould lead to smoother relationships within theorganization, less friction and disturbances and a greateridentification of each individual with the corporateentity of the organization.

    13 PROBLEMS EXPERIENCED ININTRODUCING TEROTECHNOLOGY ANDSOLUTIONS FOUND EFFECTIVE

    13.1 General

    13.1.1 Those considering the introduction ofterotechnology may find themselves faced with anumber of difficulties. Some of the common problems

    IS 15363 (Part 1) :2003

    are identified and some solutions to them suggestedin 13.2 to 13.5.

    13.1.2 The problems discussed may be divided intofour broad categories:

    a) Concept;b) Technical and economic;c) Management organization; andd) Personnel management.

    13.2 Concept

    13.2.1 A reluctance to accept the concept ofterotechnology is often a problem within anorganization for a variety of reasons. In order to dealwith the problem these reasons shobld bd identified.Depending on the cause of the problem considerationshould be given to the following suggested solutions:

    a) Where the problem is due to a lack ofunderstanding of the meaning of the termterotechnology a solution may be found inseeking forms of the term which are familiar andtherefot-e meaningful to the person(s) concerned.The list given in 4.3.5 maybe helpful.

    b) Where there is doubt regarding the benefits tobe gained from the adoption of terotechnology,it may be profitable to undertake some back ofan envelope sensitivity analysis beforeembarking on an in-depth investigation. it isoften surprising how valuable such anintroductory exercise can be and what it leadsto.

    c) Where there are no specific reasons for theproblem other than the natural reluctance toaccept change, a trial in one trade-off situationcan often be convincing as It will demonstratehow using terotechnology leads to moreinformed decision making.

    13.2.2 Whilst the concept of terotechnology may beacceptable in an organization there may be oppositionto the implementation of terotechnology in theorganization because the costs are thought to beprohibitively high.

    However, much of the data required in the applicationof terotechnology can be derived from data whichshould already be collected for normal managementpurposes and the analysis of the data can use the existingfacilities. The solution to the problem therefore is toconvince the objectors that the additional cost to anefficient organization will be minimal.

    13.2.3 The application ofterotechnology calls for multi-disciplinary cooperation. However, the sectionalinterests of the different professions and educationalinstitutions are not conductive to promoting thiscooperation. The lack of appreciation of the need for

    -4

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  • IS 15363 (Part 1) :2003

    cooperation amongst me]mbers of the organization willimpede the effective application ofterotechnology.

    This problem is gradually disappearing because of thefollowing:

    a)

    b)

    Terotechnology, often under the guise of othernames, is accepted by the professions and is nowbeing taught by many technical colleges,polytechnics, etc. [n-house training can alsobe effective in further eliminating the problem.

    In many organizations today it is recognized thatliaison and cooperation between the differentprofessions is @sential for the efficient runningof the business and this can easily be extendedto the application of terotechnology.

    13.3 Technical and Economic Problems

    13.3.1 The most common problem in this area is thatthere is an apparent non-availability of data in a formsuitable for use in terotechnology.

    This problem is less serious today than in earlier timesit should gradually disappear for two reasons:

    a)

    b)

    Recent explosive developments in informationtechnology allow the derivation of data suitablefor terotechnological purposes.

    Efficient management now recognizes the needfor data to allow the preparation of programmed,control budgets and the monitoring ofperformance. It is not difficult for such data tobe collected in a form which will also allow themto be used for terotechnology. The wideravailability of personal computers in offices ofall sizes makes this collection of data possible.In some cases the required data can be derivedfrom hypotheses and/or published information.

    13.3.2 Another problem which has discouraged theuse of terotechnology is the belief that there are nosuitable techniques for the processing of data.

    This is not the case. The normal techniques used forinvestment appraisal can be used, including statisticalanalysis and discounted cash flow techniques. The skilllies in applying these techniques to terotechnologicalproblems and interpreting the results.

    13.3.3 A problem to be faced in the application ofterotechnology is how to deal with uncertainties aboutthe future.

    In order to deal with uncg-tainties, assumptions aboutthe future have to be made. Every form of investmentanalysis is based on such assumptions. Interotechnology these may include the likely life of theproduct, the rate of inflation, the discount rate to beused, and tax incentives. These aspects are dealt within some detail in Parts 2 and 3 of this standard. Thereare well-tried techniques available for choosing the best

    assumptions. In case of doubt it will be wise to applysensitivity analysis to establish the degree of accuracyrequired of the data and the extent to which anyassumption will affect the solution.

    13.3.4 Certain external constraints may affect thesolution to a terotechnology problem and a sub-optionalsolution may have to be adopted in preference to theideal solution (In this context, external constraints areconstraints imposed by the organizations policies andmay include the cost of initial financing, the impositionof cost limits or a requirement to accept the lowesttender).

    The great merit of terotechnology is that it identifiesthe benefits that may be gained. These may producepowerful arguments for revising the constraintsimposed and certainly allow more informed decisionsto be taken.

    13.3.5 When compared with the life of the productionrun, the duration of the promotional advertising of aproduct may be relatively short. If the degree of successis appraised at the end of the advertising period the fullbenefits ofterotechnology maybe underestimated.

    Since it obviously takes time for clients and customersto assess the benefits of total life costs, the mll benefitswill normally only materialize in the Iongerterm. Thisaspect should be borne in mind in setting up thepromotional programme; in subsequent promotionsresults can be quoted.

    13.4 Management Organization

    13.4.1 Terolechnology requires inputs from a numberof different disciplines which may be located indifferent functional divisions within an organization.This may create a problem. Normally the problem doesnot apply to small organizations or to largerorganizations which are split up into small groupingsby region or type of operation. Nonetheless, in manycases some overall guidance may be essential.

    The problem has to be solved by identifying andeliminating the root cause, such as the following:

    a) In some cases different departments or differentdisciplines in an organiza~ion find it difficult tocooperate for the common good due to the factthat the departments are considered to beseparate accounting units, each of which has toshow a profit. In such cases it should be madeclear that each department should consider allthe options open to it and take into account theeffect these will have on other departments.Someone should then be appointed to considerall the options and to recommend to the seniormanager the solution most beneficial to theorganization as a whole.

    b) Departments may not recognize that some oftheir data have the potential of serving the needs

    10

  • . .

    1IS 15363 (Part l) :2003

    of other departments. Everybody needs to be may concern possible loss of status if not loss ofmade aware that information is available in the employment altogether. Management generally mustvarious departments. In order to make this ensure that they recognize when or where such concernsinformation useful to other departments it will are arising and take such steps as are necessary tobe necessary to open up and maintain counter them. These fears may concern possibleinterdepartmental channels of communication. misapplication and consequent loss of status.

    13.5 Personnel Management Acknowledgement and due recognition of both

    13.5.1 The introduction of terotechnology has asignit~cant impact on man management. Senior andmiddle mangers in particular need to develop toappropriate levels their knowledge of

    a) Multi-disciplinary skills involved;b) lntemction between these skills; andc) Language and jargon used in each interacting

    discipline in the terotechnology concept.

    [n addition, departmental isolation and loyalties haveto be redirected to secure the wider aims ofterotecbnology. However, this objective should notprevail to the extent that specialist skills become toodilute, resulting in a staff knowing a little abouteverything but nothing in depth.

    13.5.2 For most organizations staff represent theirmost valuable resource and organizations which fail torecognize this, and do not strive constantly to enhancetheir quality, rarely prosper.

    The introduction of terotechnology demands re-education and restraining of personnel throughout theorganization and career development alongterotechnology lines needs to form an integral part ofthe personnel management policy.

    Care needs to be taken to update specialist knowledgeand staff need to be encouraged to absorb all thetechnological changes witbin their own specialism.The career development strategy of the organizationshould be to overlay management training and multi-disciplinary awareness on in-depth specialistknowledge. Senior management needs to be trained inthe necessary corporate decision-making skills.

    Top management will need to delegate specialist tasksand require constituent branches of the organization topresent progress reports, financial information, etc,using the techniques in Part 3 of this standard, in sucha form that corporate decisions can easily be made,justified and explained.The acquisition of staff can be treated to some extentlike the acquisition of other assets. A similar life cycle/cost approach can be taken and career management andprogression are in many respects sim ilar to the processesoutlined for maintenance and improved of other assets.

    13.5.3 in certain circumstances specialists may fearthe implications of revealing their special skills tocolleagues outside their own discipline. These fears

    specialist skills and cooperative efforts should help inthis respect as well as appropriately structured trainingwhich explains and promotes the value ofinterdisciplinary cooperation. The formation ofinterdisciplinary teams to tackle selected tasks ratherthan the maintenance of single disciplinary linemanagements throughout the organization may alsoassist in allaying fears and demonstrating the value ofinterdisciplinary contacts to staff at an early stage.

    Monetary incentives for specialist skills may beappropriate and a sharing in the increased profitabilityor savings maybe the best method of applying incentivefor cooperative efforts. However, a sense of personappreciation may be even more important.

    14 APPLICATION OF PROCEDURES ANDTECHNIQUES14.1 General

    The application of terotechnology demands that allthose involved have a broad recognition of their owncontribution together with that of their colleagues inother disciplines and its success is dependent uponeffective communications between all parties. Itrequires an understanding of management andaccounting and a knowledge of the engineeringassociated with the particular industry or asset.

    The full terotechnology cycle begins. at the investmentappraisal stage and ends with the disposal of the asset,but the application of terotechnology can be made atany stage in the life of a physical asset and continue forsome or all of the remaining life cycle periods untildisposal or replacement.

    14.2 Procedures and Techniques

    The procedures and techniques available for theimplementation ofterotechnology are many and varied.Some examples of these techniques in relation to lifecycle cost functions are given in Table 1. For full detailsof these techniques and their application see Parts 2and 3 of this standard.

    14.3 Terotechnology Checklists

    Terotechnology checklists have been prepared for useby various functions within organizations. As anexample, the checklist aimed at managers in userorganizations is included as Annex B. The full set ofchecklists is reproduced in Part 3 of this standard.

    II

  • Table 1 Some Examples of Relationships Between Life Cycle Functions and Relevant Techniques(Clause 14.2)

    F Nlaintcnance ReplacementAssessfutureperformanceneed

    sl;0.

    O

    ii)

    PlantOperation

    Life Cycle Functions SystemSpecification

    PlantDesign

    Assessperformanceto specificationand reliability

    Task Defineparametersfor technicalperformance

    Balanceperformanceagainsttime and cost

    Techniques Environ-mentalplanning

    Performanceevaluation

    Assessinfluence ofmaintenanceon quality

    Corrosion.tirbology.sampling

    Determinefuturequalityneed

    Set quality Commissionlimits and test to

    quality limits

    Check qualityto specification

    Carry out valueengineering study

    Task

    Quality Qualityassurance,sampling

    Marketingfactors

    Probabilitytheory;sensitivityanalysis

    Qualityassurance.valueengineering

    Techniques

    Task Maintainto scheduleand assessreliability

    Preventivemaintenance.probabilityanalysis

    Determinefuturereliability

    Speci&realisticlimits

    Testreliability

    Setmaintenanceschedule

    Assessfailureprobabilities

    Value Value Forecastingengineering, engineeringsimulation

    iii)

    iv)

    v)

    .

    ReliabilityTechniques Marketing

    forecasts

    Assess Snags Snagsmaintenance carried carriedneed in Iight forward forwardof specification

    Control Control Pre-plarmingdesign. manufacture implementedschedule, schedule. controltime and time, cost schedulecost and quality and cost

    Network Networkanalysis analysis

    Downtime Evaluateprogressivefuturedowntime

    Collectdata frompreviousplant records

    Establishactualdowntime

    Task

    Controlcost andprogress

    Controlmaintenancecycle andcost

    Collatelife cyclecost forappraisal

    Task Evaluateproject,set controlparametersand reporting

    Linearprogramming

    Networkanalysis

    Projectevaluation

    Techniques Projectappraisal

    . d

  • la ble 1 (Cone/zf&C/).

    ~

    SI I Life Cycle Functions S}stem Plant Plant Commission,No.

    PlantSpecification

    llainterran~e ReplaccmcntDesign }Ianufacture InsPall Operation

    Task Calculate .Allocate Allocate Allocate Assesscost of Assess Assesswhole life design manufacture installation operation cost ofcycle cost

    aod etaloatecosts

    vi) cost. set pricecost cost and downtime maintenance economicsTechniques Life cycle Finance. Cost and Programme Cost and Marginal cost

    costing. cost management evaluationinvestment

    management costing forecasting.accounting. accounting and review

    appraisal.accounting Discounted

    management technique cash flow.sensitivity accounting (cost) investmentanalysis appraisal.

    Cost-BenefitAnal}sis

    Task Request schedule Producemanufacture Set work flow Install Set work Set Scheduleas part of and installation based on schedule based on flow for maintenance replacement

    vii) Scheduling quotation schedules schedule production scheduleTechniques

    phasePlanning Resource Work study. Work study, Work study. Work study.

    scheduling resource resource resource materials resourcescheduling. scheduling, handling linear scheduling.materials materials programminghandling handling

    materialshandling

    Task Set design utilize Work study Value of Investigate Evaluate Determineplan feedback to production long-term economic maintenance

    reduce designeconomic

    process commissioning runstime

    load life,iii) Time

    Techniques Marketing Critical path Critical path Critical pathfactors analysis analysis analysis

    Task Carry out Use Test

    feasibility feasibilityAssess

    operationstudy to set study feasibility

    projectfeasibility

    ix) specification dataFeasibility Techniques Probability Probability Modelling, Simulationtheory theory

    Cost-Benefitsynthesis Analysis

    Task Speci& records Determine Maintain process Keep Keep production. Keepto be kept future records

    ColIageand manufacture commission- downtirne.

    (up to delivery)maintenance records

    x) Records needed records ing log cost records recordsTechniques Information System Automatic Network .4utomatic

    systems, infor-Automatic

    analysis data analysis data datamation theory processing processing processing

    Tasli Keep Modi@ Feedback Feedback Feedback to Feedback tospecification design in design

    Feedbackto design purchasing previous

    up-to-date light ofto all

    and sales and design stagesfeedback

    previousxi) Feedback stages

    Techniques Information Behaviourtheory science

    .,_.

  • IS 15363 (Part 1) :2003

    ANNEX A

    (Clause 6)SUMMARY OF THE BENEFITS FROM USING TEROTECHNOLOGY

    A- I The use of terotechnology can provide benefits in A-2 The use of terotechnology can have the followingthe following areas: beneficial results:

    1)

    2)

    3)

    Reduction in total cost of ownership ofphysical asset and hence increasedprofitability;Demonstrable balance between long andshort term profit goals; andIdentifies future penalties associated withexpedient short term actions.

    b) Communications and Control:1)

    2)

    3)

    4)

    5)

    6)

    Improved understanding between seniormanagement and other business functions(on topic of asset management) usingcommon language of total cost of ownership;

    Cross-fertilization of good ideas and dataacross traditional functional boundaries;

    Greater scope for delegation of assetmanagement tasks to junior staf~ leavingtime for more important decision making.Emphasis on more coherent inputs frombelow (less risk, time saving);Provides common goals and language forall functions within the business;

    Encourages a multi-disciplinary approach tomanagement which develops healthyattitudes in respect ofi

    i) Inter-functional relationships;ii) Short versus long term effects;Provides a rational approach to assetmanagement which will allow seniormanagers to make decisions on the basis ofa lower volume of more meaningfulinformation.

    c) Management Development:I ) Disciplines junior management to develop

    appropriate balance between immediategoals and future penalties or benefits; and

    2) Encourages a multi-disciplinary approach,helping to reduce the negative effects ofinter-fuilctional tension.

    d) Profitahilily:I) Reduction of the total costs of physical assets

    and hence increased profitability; and

    2) Achievement of an appropriate balancebetween long and short term goals.

    14

    a)

    b)

    c)

    Improved profitability, with appropriate balancebetween short and long term goals;

    Improved communications and sense ofcommon purpose between company functionsenabling greater delegati& of asset managementtasks, encouraging junior management todevelop healthy attitudes;Reduction in time spent on asset managementby senior managers, whilst, demonstrablyimproving control and asset managementactivities; and

    d) Lower development and production coststhrough:

    1)

    2)3)4)5)

    6)7)

    Limited performance improvementobjectivesElimination of non-essential functions;

    Design simplicity;

    Greater use of design inheritance;Greater use of standard and commercialproducts;

    Use of high volume production parts; andDesigning to facilitate multiple sourcecompetition.

    e) Improved reliability through:1)2)3)4)5)

    6)

    7)

    Greater use of proven design;Greater attention to non-random failures;

    Simplified design;

    Improved quality control;

    More efficient development and testprocedures;

    More representative and stringentenvironmental tests; andTimely elimination of software errors.

    f) Improved maintainability through:1)2)3)4)5)6)

    7)

    More design attention to maintainability;

    Improved test equipment and procedures;

    Improved accessibility;

    Improved reliability of test equipment;

    Greater support equipment standardization;

    Use of standard components in supportequipment; and

    Built-in self-test capabilities.

    ,.

  • IS 15363 (Part l) :2003

    g) lmproveds upporto perationsthrough: 4) Use of common support equipment;1)2)~)

    Reduced proliferation of sub-systems; 5) Reduced special training;Reduced proliferation of parts; 6) Reduced logistics pipeline time; andReduced maintenance skill and manpower 7) Reduced scheduled maintenance require-requirelments; ments.

    ANNEX B

    (Clause 14.3)EXAMPLE OF A TEROTECHNOLOGY CHECKLIST

    B-O GENERAL

    This checklist is intended to help organizations in theapplication of terotechnology. Tick those items on thecheck list for which yes is appropriate or mark those towhich, perhaps for organizational reasons, only anegative answer can be given; in this way one shouldbe able to highlight areas where improvements couldbe made.

    B-1 TEROTECHNOLOGY CHECKLIST FOROVERALL MANAGEMENT OF A USERORGAN1ZATION

    B-1.l

    a)

    b)

    GeneralEnsure that there is effective two-waycommunication between the organization andsuppliers of plant, machinery, equipment,buildings, structures or other physical assets.

    Check that this includes quantitative informationon the following:

    1)2)

    3)4)5)

    6)

    7)c)

    d)

    Functional utility;

    Health and safety in all phases, includingdisposal;

    Reliability;Maintainability;Types (and man-hour costs) of malfunctionor failure;

    Man-hour costs of maintenance (includingoverhaul and repair); andEnvironmental compatibility.

    Ensure that there is an efficient system formonitoring, recording and analyzing theperforlnance aqd life cycle costs of the physicalassets used by the organization.Are the following being considered:

    I ) Condition monitoring?2) Trends in quality and quantity of the output

    or service obtained from the unit in question?and

    3) Trends in the costs of use and maintenance?e) Encourage those responsible for purchasing to:

    1) Maintain interest in the physical assets ofthe organization;

    2) Make a positive contribution to decisionsaffecting the acquisition; and

    3) Take full account of life cycle criteria whenrecommending or selecting a supplier ofbought-in components or assemblies.

    f) Check that manuals and other support literature:1)

    2)

    Are acceptable to those in the organizationwho install, operate and maintain the unitsin their care; and

    Permit the preparation of life cycle plans,including financial provisioning.

    B-1.2 When Making Decisions on Acquisition of aNew Physictil Asset

    a) Ensure that the investment appraisal:1)2)

    3)

    4)

    is based on a life cycle plan;

    has taken account of, and displays, thebalance between initial cost and total lifecycle costs;

    compares the estimated life cycle costs andperformance of the proposed acquisitionwith those of refurbishing and re-commissioning units already in service; and

    recognizes the full implications of qualityassurance.

    b) Before making or confirming the decision toacquire a new asset consult the concernedpersons responsible for:

    1) Finance;2) Marketing;

    15

    -.

  • 1S 15363 (Part 1) :2003

    .J) Production;4) Maintenance;5) Quality; and6) Safety.

    c) Ensure that the statement of your requirements:

    d)

    e)

    f)

    @

    h)

    j)

    k)

    Ill)

    n)

    1) is unambiguous; and2) covers all relevant aspects of life cycle

    performance.

    Check that it will permit intending suppliers to:

    1) prepare without delay a specification forcomment or agreement; or

    2) submit proposals for modifications whichthey consider will make the asset feasible ormore acceptable on grounds of performanceor costs.

    Ensure that proposals for modification arecommunicated to and acted upon without delayby those who wi II be responsible for installing,operating and maintaining the unit.

    Ensure that the proposals for modifications madeby the organization are kept to the necessaryminimum and can be justified.Check that the effects on cost and delivery ofmodifications to the asset in question are fullycommunicated.

    Ensure that decisions on proposals formodifications are communicated without delayto the potential supplier.

    Review terms of warranties offered by intendingsuppliers when placing the order. Assess theirpotential value and take this into account ineconomic assessments.

    Ensure that the purchasing specification hasbeen agreed by al I those who were consulted onacquisition of the unit in question.

    Ensure that the purchasing specification includesadequate data on all aspects of life cycleperformance.

    Ask for confirmation of warranties, price anddelivery.

    P)

    q)

    r)

    Use the life cycle plan to monitor and recordprogress and costs starting from the time whenacquisition was first considered.

    Inform all concerned that changes in thepurchasing specification after the order is placedwill be prevented.

    Ensure that there is a formal procedure fordealing with proposals for modifications whichmay result from:

    1) problems in design and manufacture orconstruction; and

    2) unavoidable changes in requirements.

    B-1.3 After Delivery

    a) Check that those who will be responsible foroperating and maintaining the unit are satisfiedwith:

    1)2)3)

    4)5)

    Its testing;

    Its installation;

    Availability of documentsimanuals foroperation and maintenance;

    Its performance; and

    Their relationship with the supplier.

    b)

    c)

    Ensure that all legal, regulatory and commercialformalities are completed correctly (for example,those relating to safety and warranties).Review how promises, estimates or forecasts ofi

    1) Functional performance;2) Spares;3) Reliability;4) Maintainability; and5) costs;

    have been substantiated or modified betweenplacing the order and acceptance of the unit.

    d) Consult with those in the organization who areresponsible for Finance, Marketing, Production,Maintenance, Purchasing and Quality on howthis review will affect the organizations futureplans.

    16

  • Bureau of Indian Standards

    BISisastatutory institution established under tile Bureau oJ/ndian Standards Act, 1986 to promote harmoniousdevelopment of the activities of standardization, marking and quality certification of goods and attending toconnected matters in the country.

    Copyright

    BIS has the copyright of all its publications. No part of these publications may be reproduced in any formwithout the prior permission in writing of BIS. This does not preclude the free use, in the course of implementingthe standard, of necessary details, such as symbols and sizes, type or grade designations. Enquiries relating tocopyright be addressed to the Director (Publication), BIS.

    Review of Indian Standards

    Amendments are issued to standards as the need arises on the basis of comments. Standards are also reviewedperiodically; a standard along with amendments is reaffirmed when such review indicates that no changes areneeded; if the review indicates that changes are needed, it is taken up for revision. Users of Indian Standardsshould ascertain that they are in possession of the latest amendments or edition by referring to the latest issue ofBIS Catalogue and Standards: Monthly Additions.

    This Indian Standard has been developed from Dot: No. MSD 4 (223).

    i

    ,-

    Amendments Issued Since Publication

    Amend No. Date of Issue Text Affected

    BUREAU OF INDIAN STANDARDSHeadquarters:

    Manak Bhavan, 9 Bahadur Shah Zafar Marg, New Delhi 110002 Telegrams: ManaksansthaTelephones: 23230131,23233375,2323 9402 (Common to all offices)Regional Offices: Telephone

    Central :

    Eastern :

    Northern :

    Southern :

    Western :

    Branches :

    Manak Bhavan, 9 Bahadur Shah Zafar Marg{

    23237617NEW DELHI 110002 23233841

    1/14 C.I.T. Scheme VII M, V.I.P. Road, Kankurgachi{

    23378499,23378561KOLKATA 700054 23378626,23379120

    SCO 335-336, Sector 34-A, CHANDIGARH 160022{

    603843609285

    C.I.T. Campus, IV Cross Road, CHENNAI 600113{

    22541216,2254144222542519,22542315

    Manakalaya, E9 MlDC, Marol, Andheri (East){

    28329295,28327858MUMBA1 400093 28327891,28327892

    AHMEDABAD. BANGALORE. BHOPAL. BHUBANESHWAR. COIMBATORE. FARIDABAD.GHAZIABAD. GUWAHAT1. HYDERABAD. JAIPUR. KANPUR. LUCKNOW. NAGPUR.NALAGARH. PATNA. PUNE. RAJKOT. THIRUVANANTHAPURAM. VISAKHAPATNAM.

    Printed at Simco Printing Press, Delhi