MET ICS PGDM BATCH 2012-14

SESSION #19

Operations Management
(MR.Shashank Tilak)

Session no. 19

Dated: 22/10/2012 Topic: PRODUCTION MANAGEMENT

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Notes Compiled by:

AKSHAY ANKALIKAR...94 OMKAR VARTAK89 MONIL DAGLI..91 SAGAR KHATRI.114

Notes Critiqued by:

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PRODUCTION MANAGEMENT
Need/Objective of Maintenance: The purpose of maintenance is to attempt to maximize the performance of equipment by ensuring that such equipment performs regularly and efficiently, by attempting to prevent breakdowns or failures, and by minimizing the losses resulting from breakdowns or failures. In fact it is the objective of the maintenance function to maintain or increase the reliability of the operating system as a whole. Maintenance can be a necessary evil also because: Its present in every operation It is unreliable and causes wastage It also results in losing customers due to variation in products and delay in supply chain Maintenance is like a soft spot where you can get hurt again and again. Therefore, it is necessary to prevent it, endure it or handle it in a discreet manner. Service Industry Maintenance (e.g.: BFSI, IT, ITES, BPO): Customer requirement change: Customer may change their requirement time and again and the service provider must be able

to provide the service in this changing environment. It relates to: Discovering what customers want. Identifying pressures for change e.g. government campaigns, health education initiatives.
Responding to changes in the market place. Technology and Visibility raise expectations: The service industry should be very quick to adopt the newer technologies that are coming up in the market/industry to provide better services to its customers. If it maintains this it will be able to cater and reach more customers and also providing them with faster, more reliable services.

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Global Competition:
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Competitiveness can be defined as the degree to which a nation can, under free and fair market conditions, produce goods and services that meet the test of international markets while at the same time maintaining or expanding the real incomes of its citizens. Due to increased competition there is a race to reach the top and whoever is on the top enjoys the best profits, market share, turnover etc. Due to this competition everyone is trying to be the best in the industry which in turn gives a choice to the consumer to choose the best service provider out there. A service-level agreement (SLA) is a part of a service contract where the level of service is formally defined. In practice, the term SLA is sometimes used to refer to the contracted delivery time (of the service) or performance.

Service Level Agreement:

As an example, internet service providers will commonly include service level agreements within the terms of their contracts with customers to define the level(s) of service being sold in plain language terms. In this case the SLA will typically have a technical definition in terms of mean time between failures (MTBF), mean time to repair or mean time to recovery (MTTR), various data rates, throughput; jitter, or similar measurable details. Types of Maintenance: 1) Breakdown Maintenance: The definition of Breakdown Maintenance is quite simple, being, let the machine run its course to the point of not being able to function properly and then fix it. Opposed to preventive maintenance in which a maintenance schedule is assigned to a machine before a breakdown ever occurs, preventing future delays in production. There is then also, predictive maintenance in which you base the maintenance schedule on the history of past failures, preventing these failures or breakdowns just before they are predicted to occur. It leads to worst variations loss of profits and opportunities. It leads to the complete stoppage of plant and machinery. It also leads to up/down steam closures, collateral damage and forces us to replace parts and sub-assemblies. It may also involve in wasted materials. It almost always leads to poor quality, half processed discards and requires re-setting of production controls. Also, workers and departments usually want to finish their work as soon as possible without any stoppages and thus they do not opt for maintenance most of the times. It is mostly unpredictable and it may occur at any odd hour and would almost always require emergency organising of labour (skilled/unskilled/expert), material purchase (spares and components), organising emergency transport and mobilization, emergency arrangements of cranes/lift etc. In short it would mean extended hours and emergency actions which would in turn increase the cost of resuming operations. It needs an understanding and analysis. It also means monitoring current operations which mean correlating current process readings, running time (laps and total) and condition during last check-up. In this it is important to understand the reasons for failure, identify leading indicatorswarning. It also requires updating the knowledge continuously. Examples of Breakdown Maintenance: An air plane - Preventive, and periodic maintenance is applied throughout, never in an airplane do they allow a system to simply breakdown before they decide to replace, or maintain it Vehicle Tires Usually, in the name of safety, a person applies periodic maintenance to such an object. You do not want to apply breakdown maintenance, as driving until your tire blows, and fails could put your life in jeopardy. It is much more appropriate to assess the tire periodically for wear, and replace it when needed, before the point of breaking down.
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2) Predictive Maintenance: Predictive maintenance techniques help determines the condition of in-service equipment in order to predict when maintenance should be performed. This approach offers cost savings over routine or time-based preventive maintenance, because tasks are performed only when warranted. The main value of Predicted Maintenance is to allow convenient scheduling of corrective maintenance, and to prevent unexpected equipment failures. The key is "the right information in the right time". By knowing which equipment needs maintenance, maintenance work can be better planned (spare parts, people etc.) and what would have been "unplanned stops" are transformed to shorter and fewer "planned stops", thus increasing plant availability. Other advantages include increased equipment lifetime, increased plant safety, fewer accidents with negative impact on environment, and optimised spare parts handling. The purpose of predictive maintenance should be to anticipate the problem.In case of predictive maintenance, emphasis should be made to reduce stress of the employees. No employee should be made to work for more than two hours on one machine and not more than four hours overall without a break so as to improve productivity and efficiency of the worker and the machine. Predictive maintenance is dependent on the output, that is, how bad is output due to bad maintenance. An example of this is a spark plug that needs to be charged every 7500 kms. 3) Scheduled Maintenance: Scheduled Maintenance is done to make sure that an item of equipment or the equipment itself is operating correctly and to therefore avoid any unscheduled breakdown and downtime. A good example of a Scheduled Maintenance program is car maintenance, where time and distance determine fluid change requirements. Steps to be taken for scheduled maintenance: Identify the number of days after which the machine requires maintenance Keep files for each machine so that in case of a large number of machines, the manager can mark the days when each machine requires maintenance. So, when he picks a day for maintenance all the machines that require maintenance come up. Advantages: Easier planning of maintenance and ordering spares. Costs are distributed more evenly. No initial costs for instruments for supervision of equipment. Disadvantages: Less reliable than equipment with fault reporting associated with CBM. More expensive due to more frequent parts change. Requires training investment and on-going labour costs.
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4) Preventive Maintenance: Preventive or preventative maintenance is routine maintenance which is designed to prevent the need for more costly repairs. By regularly engaging in activities which contribute to the upkeep of a home, a homeowner may be able to sidestep serious problems which arise as a result of neglect, and more expensive maintenance can be delayed. Many people regard preventive maintenance as a critical part of caring for a home and this practice is generally viewed as cost effective, sound, and highly advisable for homeowners. Evidence of
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regular maintenance can also increase the resale value of a home, by assuring buyers that the home was well cared-for. Any number of things can fall under preventive maintenance. On the outside of the home, things like cleaning the gutters, oiling decks, re-painting a home and trim regularly, clearing brush and plants away from the side of the home, and checking the condition of drains and vents could all be considered preventive maintenance. Each of these activities is designed to reduce the risk of damage to a home, keeping the home in good condition. Keeping your running in top form requires regular service. The manufacturers recommend certain services to be done at specified mileage intervals. Through extensive testing and experience, they know how long or how many miles certain car systems can go without service. We follow the same factory guidelines and all the work we do will support your vehicle's warranty. It is important to change the fluids, timing belt, filters, plugs, wires, etc. at the specified interval to maximize performance and gas mileage.

PM systems also include Maintaining a record keeping system to track PM, failures, and equipment utilization. Creating baselines for other analysis activity. All types of predictive activities, including inspection, taking measurements, inspecting parts for quality, and analysing oil, temperature, and vibration. Recording all data from predictive activity for trend analysis. Short or minor repairs up to 30 minutes in length. This activity is a great boost to productivity because no additional travel time is required. Writing up conditions that require attention (conditions that will lead or potentially lead to a failure). Write-ups of machine condition. Scheduling and actually doing repairs written up by PM inspectors. Using the frequency and severity of failures to refine the PM task list. Continual training and upgrading of inspectors' skills, improvements to PM technology. One point that is commonly missed is that PM is a way station to the ultimate goal of maintainability improvement. PM can be an expensive option because it requires constant inputs of labor, materials, and downtime. The ultimate goal of maintenance is high reliability without the inputs. Schedule and preventive maintenance is based on a time element while preventive maintenance is based on an event element. Fault tree Analysis: Fault Tree Analysis (FTA) was originally developed in 1962 at Bell Laboratories by H.A. Watson, under a U.S. Air Force Ballistics Systems Division contract to evaluate the Intercontinental (ICBM) Launch Control System and was later adopted by Boeing and Nuclear industry. Fault tree analysis (FTA) is a top down, deductive failure analysis in which an undesired state of a system is analysed using Boolean to combine a series of lower-level events. This analysis method is mainly used in the field of safety engineering and Reliability engineering to determine the probability of a safety accident or a particular system level (functional) failure. In Aerospace the more general term "system Failure Condition" is used for the "undesired state" / Top event of the fault tree. These conditions are classified by the severity of their effects. The most severe conditions require the most extensive fault tree analysis.
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These "system Failure Conditions" and their classification are often previously determined in the functional Hazard analysis. It is applied mainly to complex systems like aerospace, nuclear, and defence. Methodology: Since no system is perfect, dealing with a subsystem fault is a necessity, and any working system eventually will have a fault in some place. However, the probability for a complete or partial success is greater than the probability of a complete failure or partial failure. Assembling a FTA is thus not as tedious as assembling a success tree which can turn out to be very time consuming. Because assembling a FTA can be a costly and cumbersome experience, the perfect method is to consider subsystems. In this way dealing with smaller systems can assure less error work probability, less system analysis. Afterward, the subsystems integrate to form the well analysed big system. An undesired effect is taken as the root ('top event') of a tree of logic. The logic to get to the right top events can be diverse. One type of analysis that can help with this is called the functional hazard analysis, based on Aerospace Recommended Practise. There should be only one Top Event and all concerns must tree down from it. Then, each situation that could cause that effect is added to the tree as a series of logic expressions. When fault trees are labelled with actual numbers about failure probabilities (which are often in practice unavailable because of the expense of testing), computer programs can calculate failure probabilities from fault trees.

A fault tree diagram The Tree is usually written out using conventional logic gate symbols. The route through a tree between an event and an initiator in the tree is called a Cut Set. The shortest credible way through the tree from fault to initiating event is called a Minimal Cut Set. Some industries use both fault trees and event trees (see Probabilistic Risk Assessment). An Event Tree starts from an undesired initiator (loss of critical supply, component failure etc.) and follows possible further system events through to a series of final consequences. As each new event is considered, a new node on the tree is added with a split of probabilities of taking either branch. The probabilities of a range of 'top events' arising from the initial event can then be seen. FTA can be used to: Understand the logic leading to the top event / undesired state. Show compliance with the (input) system safety / reliability requirements.

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Prioritize the contributors leading to the top event - Creating the Critical Equipment/Parts/Events lists for different importance measures. Monitor and control the safety performance of the complex system (e.g. Is it still safe to fly an Aircraft if fuel valve x is not "working"? For how long is it allowed to fly with this valve stuck closed?) Minimize and optimize resources. Assist in designing a system. The FTA can be used as a design tool that helps to create (output / lower level) requirements. Function as a diagnostic tool to identify and correct causes of the top event. It can help with the creation of diagnostic manuals / processes.

Operational Risk Management (ORM) Humans have been managing risk ever since they were capable of coherent thought weighing up the risks of attacking large animals against the reward of tasty food; investing in the planting of crops for the reward of the harvest; sacrificing to the gods in expectation of reward in the afterlife. Taking the opportunity out of risk and taking the risk out of opportunity is natural. However, making that process explicit, systematic and logical risk management only really began with the coming of probability mathematics. Since then areas and industries lending themselves to quantitative analysis have devised increasingly sophisticated mathematics and methodologies to determine the likelihood, impact and exposure to risks. Where data is available the results have been largely successful, but by definition the outcome of risk management is uncertain. Where relevant data is incomplete or unable to be collated into useful information, judgement is involved. The decision-maker has to form an opinion about the situation and evaluate the costs and benefits of various action or inaction. ORM is a decision-making tool to systematically help identify operational risks and benefits and determine the best courses of action for any given situation. ORM is performed during operational use. For example, an ORM might be performed before each flight. This risk management process, as other safety risk management processes is designed to minimize risks in order to reduce mishaps, preserve assets, and safeguard the health and welfare. Risk management is pre-emptive rather than reactive. The approach is based on the philosophy that it is irresponsible and wasteful to wait for an accident to happen, then figuring out how to prevent it from happening again. We manage risk whenever we modify the way we do something to make our chances of success as great as possible, while making our chances of failure, injury or loss as small as possible. Its a common sense approach to balancing the risks against the benefits to be gained in a situation and then choosing the most effective course of action. Steps in Operational Risk Management:

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Step 1: Identify the Hazard A hazard is defined as any real or potential condition that can cause degradation, injury, illness, death or damage to or loss of equipment or property. Experience, common sense, and specific analytical tools help identify risks. Step 2: Assess the Risk The assessment step is the application of quantitative and qualitative measures to determine the level of risk associated with specific hazards. This process defines the probability and severity of an accident that could result from the hazards based upon the exposure of humans or assets to the hazards. Step 3: Analyse Risk Control Measures Investigate specific strategies and tools that reduce, mitigate, or eliminate the risk. All risks have three components: probability of occurrence, severity of the hazard, and the exposure of people and equipment to the risk. Effective control measures reduce or eliminate at least one of these. The analysis must take into account the overall costs and benefits of remedial actions, providing alternative choices if possible. Step 4: Make Control Decisions Identify the appropriate decision-maker. That decision-maker must choose the best control or combination of controls, based on the analysis of step 3. Step 5: Implement Risk Controls Management must formulate a plan for applying the controls that have been selected, then provide the time, materials and personnel needed to put these measures in place. Step 6: Supervise and Review Once controls are in place, the process must be periodically re-evaluated to ensure their effectiveness. Workers and managers at every level must fulfil their respective roles to assure
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that the controls are maintained over time. The risk management process continues throughout the life cycle of the system, mission or activity

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