notes chapter 6 improving the use of capital...

Productivity Management

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L E A R N I N G O U T C O M E S

After reading this chapter, you will be able to:

LO 6.1 Understand the waste reduction LO 6.2 Analyse the energy conservation programmeLO 6.3 Evaluate maintenance improvementLO 6.4 Explain improving productivity through quality

INTRODUCTION

Productivity improvement is associated with every aspect of the organisation. Significant productivity improvements generally come from the improvement of the use of capital resources which are mainly concerned with saving materials and energy. Practices that are not efficient, badly designed layout and storage area that is inadequate can aggravate problems in handling materials and lead to excessive movement. A significant objective of any productivity improvement programme should be to implement to improve the volume of production with reducing consumption of energy and materials, and optimal utilisation of resources. Here improving the use of capital resources can be discussed under following headings:

1. Waste reduction2. Energy conservation programme3. Maintenance improvement4. Improving productivity through quality

Learning OutcOme 6.1

WASTE REDUCTION

As in the production process, some parts of inputs may be converted into waste, it is, therefore, of utmost importance to reduce the waste generated during the process of productivity. In general, the waste produced is reciprocal to productivity. Hence

Wastivity = 1/Productivity

Another point of view of looking at productivity is to check the amount of wastage generated in the system. The wastage could be an unnecessary input, a defective output, idleness of the resources, etc. If we could measure these wastages, then it becomes a tool for measuring the efficiency of the inputs and is called wastivity. Examples of waste are:

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Improving the Use of Capital Resources

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● Production of defective goods and services, i.e. components of the product are not according to specification, poor quality of material used, poor methods of working, excessive maintenance, delays, etc.

● Idling of resources, i.e. materials waiting in the form of inventory in the stores, machines waiting to be loaded, job orders waiting to be processed, etc.

For effective and efficient production, wastages of all kinds must be eliminated or at least minimised.

Wastages in Operations

Wastages and scrap increase the cost of production. It needs to be controlled with first priority to meet competition. The following wastages occur in the operations of a business:

● Waste from overproduction: Many a time, products are produced in excess of order quantities and repeat orders are not received. So excess quantity becomes waste.

● Waste of waiting time: Due to heavy demand and excessively high numbers of orders, the production of a particular order has to be deferred or workers or machines have to wait in lean season.

● Transportation waste: Due to poor conditions of infrastructure or transport vehicle, finished goods or raw materials and components are broken or damaged.

● Inventory waste: Due to poor maintenance of inventory or stock yard, inventory becomes a waste. Many times, earlier received inventory is not issued, instead the late received components or materials are issued. So the earlier inventory becomes obsolete or outdated.

● Processing waste: The work in process is also scrapped due to poor condition of machinery, machining tools and die and carelessness of the operator.

● Waste due to excessive material handling: Products and components get damaged or the wastages of labour time due to unnecessary material handling.

● Waste due to product design: The design of the product may make the product difficult to be produced. In this process, right quality components are produced in low percentage.

If the above mentioned wastages are taken care, production cost can be reduced to a significant level.

Waste: Focused Factory Networks

Focused factory networks are small specialised plants that limit the range of products produced (sometimes only one type of product for an entire facility). Some plants in Japan have as few as 30 and as many as 1000 employees.

Illustration: Minimising Waste—Uniform Plant Loading (Heijunka)

Suppose we operate a production plant that produces a single product. The schedule of production for this product could be accomplished using either of the two plant loading schedules below:

Not uniform January February March TotalUnits 1,200 3,500 4,300 9,000Uniform January February March TotalUnits 3,000 3,000 3,000 9,000

In this way, we can save on labour cost by applying uniform loading and not deploying extra labour and other inputs during March period as we cannot remove labour or another inputs during January and February months.

Minimising Waste: Just-In-Time Production

Just-in-time reduces the waste of time, money and effort to a great extent. How it is done is explained below.

What it is? ● Management philosophy



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● “Pull” system through the plant ● Hydraulic push systems

What it does? ● Attacks waste ● Exposes problems and bottlenecks ● Achieves streamlined production

What it requires? ● Employee participation ● Industrial engineering/basics ● Continuing improvement ● Total quality control ● Small lot sizes

What it assumes? ● Stable environment

There are numerous reasons for this, and management can control it. Although the employees at the shop floor who control the utilisation of materials, energy and machines, managers, production engineers and quality assurance staff still have three important key area responsibilities in this field: 1. To make it physically possible for operators and foremen to reduce the waste that occurs at

their process from a very few known causes 2. To delegate responsibility so that operators and foremen can control the operations for which

they are responsible 3. To ensure that the results are being achieved

Check List of Measures to Improve Use of Materials

● At the design stage: ■ Ensure that the design is such that production requires the minimum use of materials ■ Ensuring minimum physical deterioration and depreciation of plant and equipment

● At the process or operation stage: ■ Ensure that the process used is the best one ■ Operators must be properly trained and motivated to carry out their functions effectively ■ Proper handling and storage at all stages from raw materials to finished products,

eliminating all unnecessary handling and movement ■ Proper packaging to avoid damage in transit to the customer ■ Proper use of scrap and other waste materials

An important measure to reduce waste in manufacturing systems is lean manufacturing systems.

Lean Manufacturing Systems

Lean manufacturing is the latest buzzword in manufacturing circles. Taylorism had accepted standardisation and the mass production theory. Japanese used mass production as a starting point for lean manufacturing, and evolved it further to TPS. The simple concept of lean manufacturing is that consider current manufacturing system is fat manufacturing system because it contains many types of waste. Lean manufacturing focuses to reduce these wastes to make manufacturing system leaner and leaner. As only wastes are reduce, manufacturing system efficiency remains same, hence productivity will increase in turn profitability will increase.

Lean Manufacturing is a unified, comprehensive set of philosophies, rules, guidelines, tools, and techniques for improving and optimising discrete processes.

Principles of Lean Manufacturing 1. Identifying value by eliminating waste: Identify the ways for creating value in manufacturing

process and products. Define the current system as FAT system, then by eliminating waste make it Lean.

Lean Manufacturing is a unified, comprehensive set of philosophies, rules, guidelines, tools, and techniques for improving and optimising discrete processes.


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2. Reduced Setup Times: Time required for setup is wasteful activity. Repetitive setup results in loss of production. The setups also engage labour and equipments. By using proper techniques, it can be reduced up to minimum level.

3. Small-Lot Production: Producing in small lots needs more setups while producing in mass needs huge inventory. In both the situations, the cost goes up. Hence Lean principle says produce variety of products in small lot, but at end of the day, total produced quantity should be huge so that benefits of mass production and batch production could be enjoyed at the same time.

4. Employee Empowerment: Lean manufacturing principles believe in working in teams called Lean Teams. Employees should be given proper training to do specialisations in their work. Employees should be empowered for processes on which they are working. It gives them a sense of responsibility to work in team for better results.

5. Total Quality Management: Lean principle works on TQM. Doing right the first time is a basic principle. To eliminate product defects, they must be discovered and corrected as soon as possible. Since workers are at the best position to discover a defect and to immediately fix it, they are assigned this responsibility.

6. Total Productive Maintenance: Maintenance is not an expense but an investment. Proper maintenance ensures smooth flow of production system which results in higher productivity.

7. Creating value streams: Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value. Make the value-creating steps occur in tight sequence so that the product will flow smoothly toward the customer. As flow is introduced, it lets the customers pull value from the next upstream activity. Make the value flow from raw material to customer.

8. Pull Production: For reducing inventory carrying cost and lead time, a pull production method is developed, wherein material requirement is completely dependent on next stage requirements. The Kanban scheme coordinates the flow of small containers of materials between stages. This system is called JIT manufacturing.

9. Supplier Involvement: Lean manufacturing principles believe the supplier as an integrated part of business and treat the supplier as partner. Supplier is trained, developed, and supported to adopt lean manufacturing techniques to deliver quality parts at right quality at demanded time.

10. Strive for Perfection: The lean manufacturing principles focus on continuous improvement (Kaisen). It believes that there is always a scope for improvement, and the system needs to strive for perfection.

Tools and Techniques of Lean Manufacturing 1. Value Stream Mapping: Value Stream Mapping helps Lean Manufacturing achieve

significant improvements in the shipping receiving area. This single improvement removed a significant bottleneck on the entire manufacturing process, with significant savings in lead time, operating costs, and potential for operator error.

2. SMED: The concept Single Minute Exchange of Die (SMED) was developed in the late 1950s by Shigeo Shingo, chief engineer of Toyota. The basic aim of this technique is to reduce setup times to a single digit minute. Changeover is the total process of changing a line or machine from running one product to another.

3. Single Piece Flow: Single piece flow is the ideal state where parts are manufactured one at a time, and flow throughout the manufacturing and supply chain as single unit, transferred as customer’s order.

4. Kanban: Kanban is used in manufacturing to mean a visual signal that tells when it is time to get or make more of something. The Japanese refer to Kanban as a simple parts-movement system that depends on cards and to take parts from one work station to another on a production line.

5. Poka Yoke: Poka Yoke is a concept of mistake-proofing processes to result in zero defects. Poka Yoke is a quality assurance technique developed to eliminate defects in a product by preventing or correcting mistakes as early as possible.

6. 5S: 5S is the name of a workplace organisation methodology that uses a list of five Japanese words which are seiri (Sort - the first step in making things cleaned up and organised), seiton (Set In Order - organise, identify, and arrange everything in a work area), seiso (Shine



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- regular cleaning and maintenance), seiketsu (Standardise - make it easy to maintain; simplify and standardise), and shitsuke (Sustain - maintaining what has been accomplished).

7. Total Productive Maintenance (TPM): Total Productive Maintenance is a new technique in manufacturing management. TPM is new in operations management philosophy. It has changed business world views towards maintenance. It proves that maintenance is not an expense but an investment. It maximises machine productivity, in turn, plant’s effectiveness. In the traditional approach when machine fails, breakdown maintenance is carried out by replacing the defective items. In TPM, instead of waiting for a breakdown, a small group carries out preventive maintenance on a selective basis.

Eliminating Waste to Make System LeanIn the concept of Lean Manufacturing, it is considered that the current manufacturing system is fat manufacturing system because it contains many types of wastes. It is necessary to reduce these wastes to make manufacturing system leaner. Hence it is necessary to define and identify waste in manufacturing system. Even Taiichi Ohno, in the development of the TPS, focused on increasing production efficiency through consistently and thoroughly eliminating waste.

Womack et al (2003) define waste as any activity that consumes resource but adds no value as specified by the customer.

Waste is non-value adding activity. There are two types of wastes: 1. Avoidable waste 2. Non-avoidable waste 1. Avoidable waste: The avoidable wastes are normally produced due to some mistake or

adoption of wrong processes/activities. At end of process, these wastes are said that it could have been saved. The avoidable wastes are all those wastes which could have been saved if proper methods have been adopted. The waste of time, actions, movements, overproductions, etc. is termed as avoidable wastes. Taiichi Ohno had divided avoidable wastes into seven elements within manufacturing activities.

2. Non-avoidable waste: In the manufacturing process, whenever raw materials get converted into finished products, it is bound to produce some type of scrap. This scrap is called unavoidable waste. In manufacturing process one can reduce the scrap level to a minimum level, but cannot eradicate it.

Muri- Mura- MudaThe basic objective of Lean Manufacturing is to convert Fat Manufacturing system into Lean Manufacturing system by eliminating/minimising wastes. The TPS defined three broad types of waste: muri, mura, and muda.

Muri: The Muri is a Japanese word, which means unreasonable work. The TPS focuses on smoothness workflow by removing the variation. Muri is all the unreasonable work that management imposes on workers and machines because of poor organisation, wrong practices, and improper methods of work. Many times it is pushing a person or a machine beyond its natural limits. This unreasonable work is almost always a cause of multiple variations and results in breakdown of processes. Muri focuses on the preparation and planning of the process, or what work can be avoided proactively by design.

Mura: Mura means unevenness. The TPS focuses on smoothness work flow by removing the unevenness. Mura focuses on how the work design is implemented and the elimination of fluctuation at the scheduling or operations level, such as quality and volume.

Muda: The Muda is a Japanese word, which means waste. In Hindi, it is called as Kuda. The avoidable wastes can be eliminated, and unavoidable wastes can be reduced to a minimum level. As waste is eliminated/minimised, it results in improvement in quality and productivity. First Mura and Muri identified and eliminated, then Mudas are discovered after the process is in place, and is dealt with reactively. Elimination of Muda reduces production time and manufacturing cost. The TPS identifies originally seven mudas, which have now become nine as discussed below.

Womack et al (2003) define waste as any activity that consumes resource but adds no value as specified by the customer.


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18.5.5 Nine Deadly WastesThe TPS focuses on smoothness work flow by eliminating Muri, Mura, and Muda. Figure 6.1 shows nine deadly wastes. The wastes, when present in system, become Fat system. Hence it is necessary to eliminate it.

Transportation

Inventories

Process

Misusedresources

Untappedresources

Defectiveproducts

Motions

WasteBin

Delays(Waiting time)

Overproduction

Figure 6.1 Nine Deadly Wastes

1. Overproduction: Productions more than demand. This excess production takes time to get absorbed in the market. Till then it blocks money, storing space, and needs carrying cost.

2. Delays (waiting time): Delays are waiting for the next production step. It is consuming time which results in production loss.

3. Transportation: Transportation wastes are unnecessary movement of materials between processes. Many times moving products that are not actually required to perform the processing.

4. Process: Process wastes result from inappropriate processing of parts, due to poor tool and or product design.

5. Inventories: Inventory wastes are storing of all components, work in process, and finished product not being processed.

6. Motions: Motion wastes are unnecessary motions/movement of worker during the course of their work.

7. Defective products: Defective products wastes are production of defective parts, its accumulation, and the effort involved in inspecting, fixing defects.

8. Untapped resources: Untapped resources wastes are opportunity loss. Resources are available but not used is nothing but a waste.

9. Misused resources: Misused resources wastes are misuse of available resources which could have been used for productive purpose.

Benefits of Lean ManufacturingFollowing are the benefits of lean manufacturing:

● Eliminates wastes from the manufacturing processes. ● Reduces manufacturing costs without hampering quality. ● Helps to improve quality of process and products. ● Maximises profits. ● The lead time is reduced by considerable amount. ● Focuss on maximum and proper utilisation of resources. ● It puts up proper discipline in manufacturing process.



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ENERGy CONSERvATION PROGRAMMES

Most of the energy used in industrial production and services finally escapes into the atmosphere. The success of any conservation programme depends largely on the commitment of everyone within an organisation, and on the habits and lifestyles of its managers and workers. People, therefore, are the key to an effective conservation programme. Since workers take their cue from management, management must initiate energy conservation efforts.

The organisation’s policy on energy conservation should be based on: ● Proper organisational set-up ● Staff training ● Collection and analysis of operational data on energy ● Setting up of energy conservation targets by the manager responsible.

Managers should communicate regularly with staff on energy conservation problems, spell out their policies and procedures, announce the launching of the programme, check and monitor the programme’s status and investigate why certain targets are not being attained. Managers should also support the programme by personally displaying energy conservation efforts.


MAINTENANCE IMPROvEMENT PROGRAMME

Maintenance is defined as the restoring of an item to its original condition or to working order. This can be achieved by repair, replacement of parts or total replacement of the item. Facilities Management makes the choice between these alternative measures based on practical and economic grounds.

Maintenance Chronology ● 1960s: Breakdown maintenance ● 1970s: Preventive maintenance ● 1980s: Computerised maintenance management systems ● 1990s: RCM and total productive maintenance ● 2000s: Systems approach in maintenance management

Significance of Maintenance

Maintenance is an important function in many ways:

● The company can respond to the customer’s demand quickly and on time, when the equipment to produce the goods or services is reliable and always in good condition. And this is the function of maintenance.

● Proper maintenance can ensure good quality of products to provide competitive edge. Equipment with sudden and frequent breakdowns can produce defective products. The equipment should not only prevent breakdowns, but also be working within given specifications to produce consistent quality of goods or services.

● In case of heavy breakdown, the company working with JIT inventory levels can lose the customer orders and market share. Only proper maintenance can save the facility from breakdowns.

● Good maintenance system can control cost. It becomes even more important that the equipment work within process parameters. Idle time can only be reduced by proper maintenance.

● Many major industries have bigger investment in plant and machinery. So, in this case, maintenance becomes even more important.

Check Your Progress

Discuss how any manufacturing firm can increase productivity through waste reduction and energy conser-vation.

Check Your Progress


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Effects of Poor Maintenance

Poor maintenance can result in breakdown or failure of machines. This has the following effects:

● Full capacity utilisation may not be achieved. ● Production costs will raise as other costs like labour cannot be reduced. ● Maintenance costs will be higher to repair the equipment as more spares, inspections, repair

facilities will be required. ● The quality of product or service produced will be lowered down due to unreliable and

frequently failing equipment. ● The safety of operators and workers will be in danger. ● The customers can also be injured while using these types of products produced by defective

machinery.

All the above will lead to untimely deliveries, that too of poor quality, which will be at the cost of customer satisfaction.

Economic Level of Maintenance

As maintenance involves high cost, it should be well supervised and there has to be a balance between preventive and breakdown maintenance as shown in Fig. 6.2.

Figure 6.2 Economics of maintenance

The risk and probability of breakdown and its impact in terms of cost and opportunity loss is to be balanced against planned and preventive maintenance. Similarly, the personnel involved and their cost under maintenance head also affect the economics of maintenance and can be depicted in the same way as in Fig. 6.2.

Maintenance Management

Maintenance management is the organisation and use of available resources in such a manner that the facility performs to the specified level up to its useful life, i.e., production is supported by this function to keep the machinery, equipment and related services in complete operating condition.

Maintenance management involves planning, scheduling and execution activities related to keeping the whole facility fully operative with the production output at specified level at minimum cost.



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Objectives of Maintenance ManagementMaintenance is very critical to use the facility in an optimum manner with the following objectives:

● Minimum level of breakdown and minimum loss of productive time due to machinery failure.

● Minimum time and cost involved in repair. ● Minimum scrap generated due to breakdown. ● Optimum use of maintenance equipment and personnel. ● Minimum degree of wear and tear keeping all productive machinery in operating condition. ● Minimize accidents through preventive and regular inspection. ● Quality of products to be improved. ● Thus, maximum productivity through proper maintenance.

Maintenance Policy of an OrganisationMaintenance policy deals with the level and scope of activities and the number of personnel involved in maintenance department, their skill level related to education, training and experience of people handling the maintenance activities ranging from simple repair and replacement of parts and components to all big and major non-production engineering activities.

The major issue governed by maintenance policy is which type of maintenance programme is to be established in the facility, i.e., breakdown, preventive, predictive or routine maintenance. Sometimes, it is also a matter of policy to decide whether maintenance work is to be organised by regular in-house department or to be sub-contracted. It is also a matter of policy to defer the maintenance activity for the lean or slack period so as not to disturb the production activity in peak season. But again, it is a major decision to trade-off the balance between the risk of breakdown and cost of interrupting the production activity. Whether the machines, equipment, parts and components are to be replaced or to be carried with the repairs only is another major concern of maintenance policy. Major points to be decided by the maintenance policy are:

● Level of preventive and other types of maintenance. ● Keeping standby machines to reduce wear and tear. ● Training to enhance the skill-level of manpower to take care of and to maintain machinery. ● Maintain higher supply of spare parts and in process inventory. ● Taking extra care of machinery while in use. ● To replace the machinery, parts and components.

Example: Facilities Management receives a maintenance allowance each year from the University and allocates these funds according to the greatest need. University maintenance funds are used to greatest advantage to achieve the greatest possible benefit for University buildings and infrastructure. Choosing between the many competing demands on these maintenance funds is a difficult and demanding task, especially in a climate of increasing costs and decreasing funds. University funds are designed to cover the maintenance of the building fabric and services of all buildings or parts of buildings occupied by academic departments as well as the general distribution of services that form the campus infrastructure.

The maintenance of University investment properties is not covered by these funds and is administered by Accounting and Investment Services. Special arrangements exist for the maintenance of buildings or parts of buildings that are occupied by commercial organisations, or University departments or bodies who have a revenue-producing ability (refer to Special Maintenance Agreements).

Planning and Scheduling of Maintenance

It is the duty of the maintenance department to identify which type (s) of maintenance is/are appropriate in a particular type of organisation. After this decision, the next issue is to plan and schedule the maintenance activities to maintain the tool equipment and machinery in proper and productive condition. The following are the key points to plan maintenance:

● Which maintenance activities? ● What procedure to be followed? ● On which machines and equipment is maintenance required?


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● How frequent maintenance should be? ● To identify the basic purpose and cost of those activities.

Plan of MaintenanceThe following plans are to be worked out:

● Identify the equipment for maintenance and the technique of maintenance. ● Categorize maintenance into routine, priority and emergency maintenance. ● How to carry out the maintenance work under the constraints of time, space, cost, technique,

skill and facilities. ● Develop the maintenance plan in the light of equipment manufacturer’s recommendation,

expertise, age of machinery, urgency of production and innovative and available techniques. ● Plan out the required materials, tools and spares for maintenance. ● Estimate the time and money required. ● Arrange the necessary safety devices and study the safety instructions.

Proper Scheduling of MaintenanceScheduling refers to the decision of finalising the sequence and timing of which maintenance work to be carried out. This also involves the decision about who will do the maintenance activity. Maintenance activities including repair, cleaning, servicing, lubricating and impacting the part of machinery and tools are to be scheduled in a regular manner to avoid any possible breakdown. The main purpose of scheduling maintenance is to effectively utilize the maintenance personnel and machinery and to enable smooth production during peak season.

Why Should We Schedule Maintenance?The reason for scheduling maintenance in any manufacturing or service organisation is, if we do not schedule maintenance work, a sudden failure of machinery will hamper the production work, may be in peak season. Thus, not only the timely execution of orders may be hampered, but also the goodwill of the company. A few more reasons for maintenance scheduling are:

● To utilize equipment, tools and machinery with better efficiency. ● To utilize maintenance personnel with better efficiency by proper scheduling. ● For smooth flow of production in peak timing and maintenance in lean period.

Problems and Constraints in Maintenance SchedulingThe scheduling of maintenance faces many problems and has to be organised under the following constraints:

● Availability of skilled maintenance personnel. ● Heavy load of maintenance work. ● The operating condition of machinery or equipment is too poor. ● Timing of peak season for production. ● Proper tooling, testing devices and techniques may not be available easily. ● Availability of information about the previous maintenance history is difficult.

Maintenance is a tough job as the personnel have to operate under unlimited constraints, and tremendous pressure of production loss and cost of maintenance.

Areas of Maintenance

Maintenance is required in the following major areas: 1. Civil maintenance Renovation and maintenance of buildings of factory and offices useful for water, gas, steam

or air supplies. General house-keeping, maintenance of roads, fencing, scrap disposal, gardening, drainage, lawns, parks, etc. come under civil maintenance.

2. Electrical maintenance The maintenance of generators, transformers, electric cables, motors, electric panels, fans,

lighting, coolers, batteries, etc. constitutes electric maintenance.



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3. Mechanical Maintenance Repair and maintenance of machines, vehicles, materials handling and movement equipment,

boilers, compressors, furnaces and lubrication are the major parts of mechanical maintenance.

Types of Maintenance

The various types of maintenance are discussed in the following sections.

Corrective Maintenance

Corrective maintenance can be defined as the maintenance which is required when an item has failed or worn out to bring it back to working order. It is carried out on all items where the consequences of failure or wearing out are not significant and the cost of corrective maintenance is not greater than preventative maintenance. Corrective maintenance may or may not be programmed.

Preventive Maintenance Preventive maintenance is the maintenance which is carried out to prevent an item from failing or wearing out by providing systematic inspection, detection and prevention of incipient failure. Preventive maintenance is usually programmed. In line with Facilities Management’s policy on obtaining the best value from the maintenance funds, preventative maintenance is carried out only on those items where a failure would have expensive or unacceptable consequences, e.g. lifts, fire alarms, electricity supply and gas supply. Many of these items are also subject to statutory requirement for inspection and preventive maintenance.

Routine MaintenanceDay-to-day operational activities to keep the plant operating (viz. replacement of light bulbs, cleaning of drains, repairing leaks) which include preventive maintenance and form part of the annual operating budget.

Statutory MaintenanceThe maintenance that must be carried out to meet the statutory requirements falls in the category of statutory maintenance.

Deferred MaintenanceThe maintenance which is due to be carried out in the current financial year but which will not be carried out because of shortage of funds or unavailability of parts is termed deferred maintenance. Such maintenance should be added to the backlog of maintenance items awaiting attention.

Backlog MaintenanceThe maintenance which has not been carried out but which is necessary to prevent the deterioration of an asset or its function is known as backlog maintenance.

Other Terms Used in Maintenance and Repairs

Cleaning Reducing contamination to an acceptable degree.

Estimate A cost amount given to the customer as a “ball park” figure to complete the work described. The goal is for the estimate to be within 25% of the quote or ‘final cost’ of the project.

Quote A firm amount to be paid to the service provider to accomplish (1) the work shown on the approved plans or (2) an agreed scope of work.

Variation A change in the original scope of work that will either increase or decrease the financial obligation of the customer or the time span of the project.

Modern maintenance technologies provide organisations with great opportunities to optimise performance of their systems and equipment to achieve maximum Return on Investment (ROI) by


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reducing costs and downtime, while achieving high levels of safety and quality. However, with the rapid pace of change in maintenance and the emergence of many new concepts, methods and technologies, it is often difficult for managers with maintenance responsibilities to judge which of these new technologies are most appropriate to their specific needs, and which will provide them with the greatest benefits in practice. This course provides an overview of a number of these modern maintenance technologies associated with equipment, systems, people and management. It describes both the background to each technology, and also its practical application so as to achieve the best bottom-line results. The course looks which areas of the maintenance manager’s responsibilities will benefit from individual technologies. It also shows how they can be integrated to support each other, how to choose an appropriate selection of technologies, and how to develop an action plan for their implementation. Facilities Management is responsible for maintaining the University’s buildings, utilities and grounds. See below for the general types of maintenance work provided, who pays for these services and who to contact regarding questions on these services.

Maintenance Services

In any facility, maintenance services are divided into the following two types.

Renovation/Construction Services Renovation service is all the work that is new. Here are some examples of renovation/construction versus maintenance:

● New shelving is construction. ● Repairing existing shelving is maintenance. ● Replacing an existing window is maintenance if it is replaced by a matching size even if it is

replaced with upgraded glazing and sash material. ● Replacing an existing window that is larger than the existing wall penetration is construction.

Machinery Maintenance Services

Ordinary maintenance or machinery maintenance is typically funded through operating budgets and includes the following types:

Preventive Maintenance ● A programme of scheduled inspection activities to extend the life of a building component

or equipment and reduce service disruptions covers the broad perspective of preventive maintenance. This includes a system of monitoring and analysis of conditions on a regular basis. The inspections are intended to trigger required reactive and corrective maintenance. Academic facility preventive maintenance is currently limited to regulatory and some critical due to funding limitations.

● Regulatory: Compliance is mandated by some regulatory agency. Examples include: backflow prevention devices, fire alarms, confidence testing of fire suppression systems and portable fire extinguishers.

● Critical: All labour and materials to inspect and ensure equipment that must be functional for the operation of campus. This equipment cannot be shut down without significant notification procedures due to its impacts on campus operations. Examples include: Standby generators, the air conditioning for the campus servers at the 32nd Street Administrative Services Building, air handlers in the Chemistry Building and high pressure steam lines.

● Operational: All labour and materials to inspect and ensure equipment required for routine campus operations. This equipment can be shut down or out of service without significant notification or impact on campus operations. Examples include: Painting or staining of all university components, vandalism repair/replacement, regular checks for leaks in all equipment, appliances, piping, steam lines, solenoid valves and related connections, fans and pumps.

● Economy and efficiency measures: All other PM work. Examples include: The maintenance of insulation on hot water or cool air conduct pipes to minimize heat loss, the selection of water efficient models when purchasing new equipment, appliance, fixtures, and irrigation systems.



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Reactive Maintenance

● This is unscheduled repairs or replacements of a building component or equipment because of unforeseen failure. This usually requires immediate action to restore service.

Corrective Maintenance

● Scheduled repairs or replacements of a building component or equipment.

Possible Deficiencies in Maintenance ● Maintenance organisation needs restructuring ● Lack of maintenance workshop space ● Lack of parts storage space ● Lack of parts storage control ● Satellite inventory problem ● No equipment numbering system ● No work order system ● No planning/scheduling ● No historic data ● Preventive/predictive maintenance needs refining and commitment ● Lack of priority system ● Current maintenance environment too “reactive” ● Manufacturing/Stores/Purchasing/Maintenance should be a team

Control Process in Maintenance Management

The cost and time involved in maintenance activity are of high level. So, obviously, the control activity gains high importance in maintenance management. Control involves the following:

● Maintenance must be supervised by an accounting in-charge. ● Maintenance materials must only be issued against authorised steps. ● Proper schedule related to time and personnel must be prepared beforehand. ● Budgets should be prepared and actual expenses must be within the limits. ● Equipment and machine maintenance records be maintained properly and it should be a

regular feature. ● Maintenance costs must be looked after on the issues of level of maintenance, number of

people required, possibility of sub-contracting, use of information technology and computers to record and audit the cost factors.

Prerequisites of Preventive Maintenance

Preventive maintenance can bring good results only if the following requirements are met with: 1. Strict vigil and supervision. 2. A maintenance schedule to be planned and adhered to. 3. Instruction and guidelines must be clear and without ambiguity. 4. A good coordination with production personnel. 5. Maintaining proper records of schedules and actual maintenance and history of past

breakdowns. 6. Sufficient spares, parts and components to be stocked in case of breakdowns. 7. Proper and periodic training to maintenance team. 8. Sufficient space to repair the machine around the equipment should be available. 9. Emphasis should be to find out the problem area and its real cause to rectify the problem.

If all the above points are taken care, successful preventive maintenance can be implemented.

Essential Elements of Preventive Maintenance

The basic elements which constitute the preventive maintenance system are listed below.

● The required inventory in the plant.


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● ABC analysis of equipment with highest priority categorised as A. Least priority is assigned to C and B items which are of moderate importance for the purpose of planned and preventive maintenance.

● Regular inspection system to be designed. ● Regular and frequent maintenance schedule consisting of cleaning, lubricating and servicing. ● Record updating of maintenance work history regularly. ● Regular control of spares, parts and other inventory for maintenance. ● Designing the organisation structure of maintenance department. ● Regular and timely replacement of worn-out or damaged parts which cannot be repaired

before the actual failure. ● Enough standby machines for critical work operations.

These elements cannot be ignored for the design and operation of fully developed maintenance system.

Merits and Demerits of Preventive Maintenance

Preventive maintenance has certain merits and demerits.Merits are as under:

● Enhanced life of equipment. ● Less number of breakdown and repairs. ● Higher efficiency and productivity. ● Production function becomes more reliable. ● Better worker and equipment safety. ● Less costly and time-consuming as compared to breakdown maintenance. ● Less number or no standby equipment is required. ● Less work-in-progress inventory as no production hold-ups. ● Less rejection or scrap and better quality products.

Demerits are:

● More expensive initially, when working capital available is less. ● Regular maintenance stops the production schedule and in peak season, it becomes difficult

to meet targets, at the least in the short run. ● Careful inspection system has to be designed, which consumes more time and efforts. ● More manpower is to be assigned.

In spite of a few demerits, preventive maintenance is very useful and important for regular production with less cost, efforts and time consumption.

Total Productive Maintenance (TPM)

TPM is basically a philosophy like Total Quality Management (TQM). TPM is basically a combination of preventive maintenance and TQM. It is concerned with the employee attitude to maintain the place, machinery and equipment to reduce the inconsistency of performance and output and ultimately to achieve its main objective of zero breakdown and thus zero down-time. Here, TPM aims to eliminate losses due to breakdown. TPM requires the following: 1. Frequent and regular maintenance to maintain the performance like new equipment. 2. The operator himself responsible for maintenance of his own machine and workplace, where

he works. 3. The prime responsibility of TPM to train the workforce for achieving TPM targets. 4. To make understand the effectiveness of preventive, planned and predictive maintenance.

Like TQM, TPM also requires total employee involvement to achieve total machine performance without any breakdown by performing total maintenance of machinery and workcentre. In totality, the operator and maintenance personnel help each other to achieve the objective of zero breakdown. Both are responsible for preventive maintenance and process improvement.

Process of TPMThe process of TPM consists of three major steps as listed below:



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● Preparation ■ Announcement ■ Launch ■ Create organisational structure ■ Establish policies and goals ■ Form a master plan

● Implementation ■ Improve critical equipment effectiveness ■ Set up and implement autonomous maintenance ■ Establish planned maintenance system ■ Provide training ■ Develop early equipment management

● Stabilize ■ Re-measure ■ Start over-work towards ideal state

Instruction for TPM ImplementationNecessary instructions and guidelines to be followed to achieve the objectives of TPM are:

● Maximum performance to be achieved by zero down time. ● Install effective preventive maintenance system regularly. ● Employee or operator should feel a sense of responsibility for the purpose. ● All concerned must participate in designing TPM system. ● All operators in an assembly line or in a workstation should be made responsible. ● Like quality circles, maintenance groups could be formulated to discuss maintenance

problems in a regular way. ● Workplace must not be crowded and be very clean. ● All operating and maintenance procedures must be followed without any short-cuts. ● Easy detection of possible failures or breakdowns of machinery and equipment. ● If there is any weak area in machinery, working or manpower, that should be tried to

improve. ● With proper training, the manpower must be kept updated for regular maintenance.

Total productive maintenance is sometimes also known as total preventive maintenance with extra emphasis on cleanliness, housekeeping, pre-failure maintenance or replacement and immediate improvement of unsafe, unhygienic and haphazard conditions. Total preventive maintenance can only ensure the total achievement of production targets with total productive maintenance.

Planned Maintenance Technique (PMT)

PMT is a system of activities in which all employees work to improve up-time, quality of output and reduce maintenance costs through the continuous improvement of equipment operation which includes preventative and predictive scheduled maintenance programmes.The goal of PMT is to achieve the absolute minimum amount of time needed for effective maintenance.The process of PMT is as follows:

● A plant improvement methodology ■ Improve management of plant assets

● Enables continuous and rapid improvement ■ Speed of the rabbit, perseverance of the tortoise

The benefits of PMT are as follows:

● Maintain the quality of the product ● Increase production up-time ● Reduce costs of operations ● Reduce amount and complexity of machinery required ● Ensure equipment capability


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The breakdown causes are as follows:

● Basic conditions neglected ● Inadequate skills ● Operating standards not followed ● Deterioration unchecked ● Inherent design weakness

Maintenance, Repair and Operations or Overhaul (MRO)

Maintenance, Repair and Operations or Overhaul (MRO) is fixing any sort of mechanical or electrical device should it get out of order or broken (repair) as well as performing the routine actions which keep the device in working order (maintenance) or prevent trouble from arising (preventive maintenance).

The main crux of maintenance is that all actions have an objective to retain an item in or restore it to a state in which it can perform the required function. The actions include the combination of all technical and corresponding administrative, managerial, and supervision actions.

For example, in telecommunication, the term ’maintenance’ has the following meanings: 1. Any activity, such as tests, measurements, replacements, adjustments and repairs are

intended to restore or retain a functional unit in a specified state in which the unit can perform its required functions.

2. All actions are taken to retain material in a serviceable condition or to restore it to serviceability. It includes inspection, testing, servicing and classification as to serviceability, repair, rebuilding and reclamation.

3. All supply and repair actions should be taken to keep a force in condition to carry out its mission.

4. The routine recurring work is required to keep a facility (plant, building, structure, ground facility, utility system, or other real property) in such condition that it may be continuously used, at its original or designed capacity and efficiency for its intended purpose.

MRO Software In many organisations because of the number of devices or products that need to be maintained or the complexity of those systems, there is a need to manage the information with software packages. This is particularly the case with aerospace (e.g. airline fleets), military installation, large plants (e.g. manufacturing, power generation, petrochemical) and ships. These software tools aim to help engineers and technicians in increasing the availability of system and reducing costs and repair times as well as help to reduce material supply time and increase material availability by improving the supplier chain communication. As MRO involves working with products, an organisation’s resources, supplier and customers, MRO packages have to interface with many enterprise’s business software systems (PLM, ERP, SCM, and CRM). One of the functions of such software is the configuration of bill of material, taking the components parts list from engineering (eBOM) and manufacturing (mBOM) and updating to “as delivered” through “as maintained” to “as used”. Another is project planning logistics, for example, identifying the critical path on the list of task to be carried out (inspection, diagnose, locate/order parts and service) to calculate turnaround times (TAT). Other tasks that software can perform:

● Planning operations ● Managing execution of events ● Management of asset, parts, tools and equipment inventories ● Knowledge base data on:

■ Maintenance service history ■ Serial numbered parts ■ Reliability data ■ MTBF rate, MTTB, MTBR (mean time between repair) ■ Maintenance and repair documentation and best practices ■ Warranty, guarantee documents

Check Your Progress

Discuss the different types of maintenance improvement programme needed in any textile industry to improve productivity.

Check Your Progress



Notes



QUALITy AND PRODUCTIvITy

The field of quality has emerged from agriculture. In Britain, R.A. Fisher conducted statistical research to assist farmers in analysing how to optimally plant and rotate crops for better quality. After this, Walter Shewhart at Bell Laboratories and W. Edward Deming contributed to the teaching and improvement of quality methods. Deming has become the best-known ‘guru’ of quality. In Japan, Deming and J.M. Juran worked as consultants to ‘spread the word’ about quality. The Japanese fully embraced quality ideas and methodologies and integrated the concepts into their industrial base. They lead to improvement in the quality of products.

The term ’quality’ has different meanings to different people. For example, a quality automobile may be the one which has no defects and works properly. In general, the definition would fit with the concept of quality as explained by J.M Juran (1988), that is, quality is fitness for use. Quality is conformance to specifications. Quality involves the expectations that a product or service exceeds the expectations of the customer. Also, quality is a judgment by users for a product or service. For quality, products and services should:

● Satisfy customer standards. ● Fulfil customer needs. ● Meet customer expectations. ● Satisfy unanticipated future needs and aspirations.

Definitions of Quality from Different Perspectives

Quality has different meanings to different users and different angles as shown in Table 6.1.

Table 6.1 Quality Definition from Different Perspectives

S. No.

Bases Definitions

1 Customer-based Fitness for use, meeting customer expectations.

2 Manufacturing-based Conforming to design, specifications or requirements, having no defects.

3 Product-based The product has something that other similar products do not have that additional value.

4 Value-based The product is the best combination of price and features.

5 Transcendent It is not clear what it is, but it is something good...

Terminology for Quality

In Table 6.2, some of the terms are listed that are related to quality. The terms listed here are widely used in the quality industry.

Table 6.2 Quality Terminology and Concepts

S. No. Term Definitions

1 Benchmarking Comparing your product to the best competitor.

2 World-Class The best in the world.

3 Six-Sigma Quality Meaning 99.9999966% perfect; only 3.4 defects in a million.

4 SPC Statistical process control used for measuring the conformance of a product to specifications.

5 Total Quality Control (TQC)

Controlling everything about a process.

6 A Process What is actually done to create a product?

7 Design The creation of a specification from concepts.


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8 Manufacturing Creating a product from specifications.

9 Test Finding the product for defects.

10 Concurrent or Simultaneous Engineering

Integrating the design, manufacturing, and test processes.

11 Continuous Improvement

The process of iteration, which results in improving a product.

12 Business Process Reengineering

Redesigning afresh of business processes to achieve steep improvements in critical performance parameters such as Quality, Service, Speed and Cost.

13 Customer Satisfaction ‘Just what the term says...’

14 Quality Tools Tools used to measure and observe every aspect of the creation of a product.

15 Quality Circle A small group of employees meeting voluntarily, undertaking work related issues to improve working conditions, mutual self-development and of the company by using Quality Control Tools.

16 Metrics Ways to measure: for example, time, cost, customer satisfaction, quality.

17 Flow Charting Creating a ‘map’ of the operations of a process.

18 Value Addition Adding something that was not there before that the customer wants.

19 ‘Bring to the Table’ Refers to what each individual in a meeting can contribute to a meeting, for example, a design or brainstorming meetings.

20 Inspection Verification of actual characteristics in conformance to designed specifications.

Meaning of Quality in Different Areas

The meaning of quality will vary depending on the domain under consideration. In Table 6.3, there are several different areas given related to quality.

Table 6.3 Quality Meaning in Different Areas

S. No. Area Meaning of Quality

1 Airlines On-time, comfortable, low-cost and time saving service.

2 Health Care Correct diagnoses, minimum wait time, lower cost, security.

3 Food Services Good product, fast delivery, good environment.

4 Postal Service Fast delivery, correct delivery, cost containment.

5 Academia Proper preparation for future, on-time knowledge delivery.

6 Consumer Products Properly made, defect-free, cost-effective

7 Insurance Payoff on time, reasonable cost.

8 Military Rapid deployment, decreased wages, no graft.

9 Automotive Defect-free.

10 Communications Clearer, faster, cheaper service.

11 Railways On-time, low cost, security and safety.

From the above table, it is clear that in almost all areas, quality can be explained in terms of four basic parameters, i.e. cost, time, customer satisfaction and defects.

Process Management to Achieve Quality

It is always the endeavour of an organisation to achieve excellence in its products, which is possible only by achieving perfection in its processes to produce the products. Excellence and perfection is achieved by proper planning and administering the activities to secure high level



Notes


performance. It is the management of process to identify the possible areas to improve quality to satisfy the products. Process management involves design, conformance, control, performance and, ultimately, the improvement in processes as shown in Table 6.4. Process to be managed by:

● Proper design process: Designing both product and production ● Process design: The fool proof conversion process. ● Supporting functions: To streamline all the supporting functions such as purchase, stores,

quality control, materials handling, maintenance, finance, human resources, marketing and feedback system.

● Supply functions: To improve both inbound and outbound supplies. In this, the vendors are made fully devoted to the company for their capacity, prompt supplies and services and, similarly, timely deliveries to its customers.

Table 6.4 Aspects of Quality in Services

S. No. Manufacturing Organisations Service Organisations

1 Conformance to specifications Intangible factors

2 Performance Consistency

3 Reliability Responsiveness to customer needs

4 Features Courtesy/friendliness

5 Durability Timeliness/promptness

6 Serviceability Atmosphere

To achieve better performance in its processes and deliver quality products, the different measures have to be taken as listed below:

● Reduce process cycle time. ● Try to achieve zero defects. ● Better methods and technologies. ● Minimize scrap, repair and rework. ● Improve product and process design. ● Provide better working conditions and boost employee morale. ● Better man-machine utilisation.

Brainstorming (5W 2H) ApproachTo improve quality and for better process management, a critical analysis of the process is conducted by putting the questions to each and every aspect of the process:

● What is being done? ● Why it is done? ● How it is being done? ● Who is doing? ● When it is done? ● How much it is to be produced and how much does it cost? ● Where is it being done?

Methods to Improve the ProcessFollowing are the methods to improve the process:

● Work simplification and standardisation ● Job enrichment and diversification ● Changing methods to improve efficiency and performance

Total Quality Management (TQM)

Total Quality Management is a well-known “quality management” concept. But, it is much more than product or service quality. TQM is basically a business philosophy, i.e. a way of doing


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business. It is concerned with ways to managing people and business processes to ensure total customer satisfaction at each and every stage. TQM means doing the right things right, first time. It views “quality” from the point of view of “the customer”. All businesses have different types of customers, viz. “internal” to the business (e.g. a production employee working at the end of the production line) and “external” to the business (e.g. a company buys products from various manufacturers). The meanings of different terms are as below: Total = Quality involves everyone and all activities in the organisation. Quality = Conformance to customer requirements. Management = Quality can and must be managed.

Hence, TQM is a continuous process for managing quality and a philosophy of continuous improvement in everything we do. TQM focuses on the ways in which processes that enable customer requirements to be met can be managed—with two prime objectives:

● 100% customer satisfaction ● Zero defects

Essential Focus of TQM

TQM has its own focus and lays emphasis basically on the following issues:

● Quality policy and planning. ● Employee involvement and belongingness to the programme. ● Customer satisfaction to the maximum. ● Leadership is the requirement to produce quality. ● Quality costs must be recognised and should be minimised. ● Supplier selection is the key area. ● The organisation structure that must enhance TQM as philosophy. ● All quality suggestions and initiatives must be rewarded.

TQM must focus on these areas to make a business organisation successful.

Scope of TQM Activities

It is very important that any organisation must try to inculcate the philosophy of TQM. The organisation should build TQM culture by deploying the concept in the following areas:

● The organisational resources including infrastructure must be integrated to have synergy effect.

● The management practices and decisions must follow the path to inculcate TQM in each and every action.

● TQM tools, techniques and processes must be implemented, but before that, a conducive environment must be created.

Quality Chains

The relationship between customers (internal and external) and suppliers has great importance in TQM. Such relationships are known as “quality chains” and can be broken at any point by one person or one piece of equipment for not meeting the requirements of the customer. In the case of failure to meet the requirements in any part of a quality chain has a way of multiplying. This creates problems elsewhere, leading to yet more failure and problems, and the situation gets complicated. The ability to meet customers’ (external and internal) requirements is very crucial. To achieve quality throughout a business, the following aspects should be considered:

Customers ● Type of customers. ● Their real needs and expectations. ● Measurement of ability and capability to meet their needs and expectations. ● Monitoring changes in their needs and expectations.

Suppliers ● Analysis of internal suppliers.



Notes


● Actual needs and expectations of the organisation. ● Communication of needs and expectations to suppliers. ● Suppliers’ capability to measure and meet these needs and expectations. ● Conveying changes in needs and expectations to suppliers.

Continuous Improvement (KAIZEN)

Continuous improvement, also known as Kaizen, is basically an improvement strategy involving small steps. Continual improvement can be achieved through a continuing series of small changes. In the case of big innovative changes also, it is supplemented by continuing small step changes.

The Way of Using Kaizen

The term ’Kaizen’ originated in Japan and is used throughout the world to enable organisations to continually improve the processes with the help of small scale changes. For continuous improvement, there should be an opportunity for everyone to be involved, with cross-functional teams all working with a common interest.

Traditional systems are based on the assumption that once a company achieved quality, then it needed no further improvements. The Japanese believe that the best and most lasting changes come from gradual improvements. For perfection, there is a need to evaluate performance and take measures to improve it. There are various approaches for continuous improvement:

● Quality Circle ● Plan–do–study–act (PDSA) cycle ● Plan–do–check–act(PDCA) cycle ● Benchmarking.

Quality Circles (QC)The philosophy of TQM has its roots in quality circles. QC has its origins in Japan and in India, it has started from Bharat Heavy Electricals Limited. Quality circle is a volunteer group of workers and employees, who owns the responsibility of fixing the problems, finding the causes and then solutions and ultimately present the suggestions and recommendations to the management for necessary implementation. The Japanese Union of Scientists and Engineers (JUSE) defines quality circle as a small group that voluntarily performs quality control activities within the shop, where its members work as a part of company-wide quality control programme along with self and mutual development for continuous improvement. They communicate with each other, solve problems, share the suggestions, with other quality circles. Quality circle deals with not only quality related issues but also with individual and group development. The prime objectives of quality circle are:

● To develop the quality in the product ● To produce quality in the process ● To produce quality of life ● To adopt the quality as a philosophy at shop floor.

The support and approval of top management is necessary for the success of quality circle. The top management has to facilitate quality circles by providing steering committee vested with the required authority, facilitators and circle leaders.

In general, a quality circle has 5 to 8 members; interact twice a week after the day within the shop, discuss the problems about the quality related issues and find out the solutions by active participation of each member. Quality circle members have access to other quality circles not only in the company itself but also in other companies. Lots of companies, not only in Japan but throughout the world including India, are having quality circles. In India, quality circles are available in BHEL, Shri Ram Group, L&T, HMT, BEL, TELCO, ESSAR Group, etc.

Plan–Do–Study–Act Cycle

PSDA is a cycle which describes the activities required in order to incorporate continuous improvement. As shown in Fig. 6.3, it is also referred to as the Shewhart cycle or the Deming wheel. This aspect of this cycle shows that continuous improvement is a never-ending process. The specific steps in the cycle, as shown in Fig. 6.3, are explained here.


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Figure 6.3 PDSA cycle

● Plan It is the first step in the PDSA cycle. For this, managers must evaluate the current process

and make plans based on occurred problems. In such a case, there is a need to document all current procedures, collect data, and identify problems to develop a plan for improvement as well as specific measures to evaluate performance.

● Do It is about implementing the plan (do). For this, managers should document all changes

made and collect data for evaluation. ● Study

The next step is to study the data collected. The data are analysed to check whether the plan is achieving the goals established.

● Act The last phase of the cycle is to act on the basis of the results of the first three phases. As it

is a cycle, the next step is to plan again.

PDCA CyclePDCA improves the process in a systematic manner by critically analysing the improvement activities in all the four phases of planning, doing, checking and taking action as shown in Table 6.5.

Table 6.5 TQM Process Improvement and Problem Solving Sequence

Plan (Plan a Change)

Do (Implement the

Change)

Check(Observe

the Effects)

Act (Embed the

Fix into the Process

for Good)

Define the Problem

Identify Possible Causes

Evaluate Possible Causes

Make a Change

Test the Change

Take Permanent

Action

1. Recognize that what you are doing as a “PROCESS”

6. “BRAINSTORM” what is causing the problem?

8. Determine the relation-ship between cause and effect

10. Determine what change would help

• Your knowledge of the process

• Scatter diagrams

2. Identify the commodity being processed.

• Process inference

7. Determine what past data shows.

• Frequency distribution

• Pareto charts

• Control charts sampling

• Scatter diagrams

• Regression analysis

• Control Charts-sampling

• Pareto analysis

• Then make the change.



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3. Define some measurable characteristics of value to the commodity.

9. Determine what the process is doing now

• Control charts-sampling

4. Describe the “PROCESS”

• Process flow analysis

• Flow charts

• List of steps

5. Identify the “Big” problem

• Brainstorming

• Checklists

• Pareto analysis

Benchmarking Continuous improvement can also be achieved by studying business practices of companies considered “best in class”, which is called benchmarking. The benchmark company does not have to be in the same business, like many companies have used Lands’ End to benchmark catalog distribution and order filling. Similarly, many companies have used American Express to benchmark conflict resolution.

Benchmarking is categorised in three classes listed as under:

● Performance with respect to pricing, technology, product, reliability and features. ● Process must be simple, easy and proper training to achieve process benchmarking. ● The strategies, policies and plans must be to meet the competition and secure maximum

market share.

The following benchmarking process is underlined:

● Identify the product, process or system to be benchmarked. ● Select the best companies to be compared with. ● Collect the data and information through their employees, websites or survey. ● Analyse critically that information. ● Formulate action plan to implement those standards. ● Re-identify the gap if any and re-measure the benchmarked product, process or system. ● After completion of the process, identify another product, process or system.

Business Process Re-engineering (BPR)

The process of continuous improvement brings changes continuously, consistently but slowly. The pace of improvement, many a time, is not sufficient to meet the requirements. The rethinking and redesign process has to be revolutionary to meet the expectations with respect to quality, service sensitivity and cost. A successful implementation of BPR requires the following:

● Basics of the process are to be understood well. ● Revolutionary thought process to switch over altogether to the new. ● Making acceptable the new process before implementation. ● Making use of better technology, particularly information technology.


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Process of BPRThe following sequential process is adopted in BPR:

● Identify the process where revolutionary change is required. ● Find out exactly, what change is required. ● What and who can bring about re-engineering such as technology and skill level of people. ● Design the new process not depending upon the existing one. ● Find out the acceptability of the new process. ● Implement the new design. ● Have the proper feedback and change the design according to feedback.

Key Terms

Maintenance: It can be explained as the restoring of an item to its original condition or to working order.

Maintenance management: It is the organisation and use of available resources in such a manner that the facility performs to the specified level upto its useful life, i.e. production is supported by this function to keep the machinery, equipment and related services in complete operating condition.

Corrective maintenance: It is the maintenance which is required when an item has failed or worn out to bring it back to working order.

Preventive maintenance: It is the maintenance which is carried out to prevent an item from failing or wearing out. It can be achieved by implementing systematic inspection, detection and prevention of incipient failure.

Backlog maintenance: The maintenance which has been pending but which is necessary to prevent the deterioration of a resource is known as backlog maintenance.

Planned maintenance technique: It is a procedure wherein all employees work to improve up-time, quality of output and reduce maintenance costs.

In Review

Productivity improvement is associated with every aspect of the organisation. Significant productivity improvements generally come from the improvement of the use of capital resources which are mainly concerned with saving materials and energy.

There are numerous reasons for waste and management control. This can be done through the operators and foremen who actually control the utilisation of materials, energy and machines.

Most of the energy used in industrial production and services finally escapes into the atmosphere. The success of any conservation programme depends largely on the commitment of everyone within an organisation, and on the habits and lifestyles of its managers and workers. People, therefore, are the key to an effective conservation programme. Since workers take their cue from management, management must initiate energy conservation efforts.

The amount of maintenance required by the machine must be considered by IE before the machine is put into the system.

Mult ip le Choice Quest ions

1. The waste produced is ________ to productivity. (a) Same (b) Reciprocal (c) Mutual (d) All of these (e) None of these



Notes


2. The measures to improve the use of materials include: (a) Proper handling and storage at all stages from raw materials to finished products (b) Proper packaging to avoid damage in transit to the customer (c) Proper use of scrap and other waste materials. (d) All of these (e) None of these 3. Maintenance management includes: (a) Planning activities (b) Scheduling activities (c) Execution activities (d) All of these (e) None of these 4. Objectives of maintenance management includes: (a) Maximum time (b) Maximum scrap (c) Maximum productivity (d) All of these (e) None of these 5. TPM stands for ________. (a) Total productive management (b) Total productive maintenance (c) Total product management (d) All of these (e) None of these 6. TPM is a combination of ________ and TQM. (a) Preventive maintenance (b) Corrective maintenance (c) Backlog maintenance (d) All of these (e) None of these 7. PMT stands for: (a) Planned maintenance technique (b) Product management technique (c) Production management technique (d) All of these (e) None of these 8. The field of quality has emerged from ________. (a) Agriculture (b) Horticulture (c) Service industry (d) All of these (e) None of these 9. Continuous improvement is also known as ________. (a) Benchmark (b) Kaizen (c) PMT (d) All of these (e) None of these 10. The term Kaizen originated in ________. (a) Thailand (b) Japan (c) India (d) All of these (e) None of these

Key to MCQs

1. (b) 2. (d) 3. (d) 4. (c) 5. (b) 6. (a) 7. (a) 8. (a)

9. (b) 10. (b)

Concept Quest ions

1. How the waste can be reduced to improve productivity? Discuss. 2. The energy conservation programmes are necessary to improve productivity in every

organisation. Comment.


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3. How the maintenance can be managed to improve the productivity? 4. Quality management and productivity go hand-in-hand. Discuss. 5. What are the quality circles? Discuss their role in increasing productivity.

References

David Hutchins, Quality Circles Handbook (London, Pitman, 1985), pp. 1 and 10. E.E. Lawler and S. A. Mohrman, “Quality circles after the fad”, in Harvard Business Review

(Boston, Massachusetts), Jan. 1985, pp. 65–71. P. Hughes, “Quality assurance”, in Trevor J. Bentley (ed.): The Management Services Handbook

(London, Holt, Rinehart and Winston, 1984), Ch. 25.Prokopenko, J, Productivity Management, ILO, Geneva, 1992.Ryoji Takahashi: Energy Management Fundamental Course Lecture Text Book, ILO/UNDP proj-

ect BGD/83/001 (Geneva, ILO, 1984-85), pp. 1–13. W J P and D T Jones, Lean Thinking (Free Press, 2003)


notes chapter 6 improving the use of capital...

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