Operations Management - Maintenance and Spare Parts Management

 

Operations Management

Maintenance and Spare Parts Management

 

Part A: Discussion of basic theories of (i) maintenance of plant and machineries in a factory (manufacturing unit) and (ii) spare parts management w.r.t. a manufacturing unit from the point of view of operational optimisation.

Part B: 6 Illustrations with solutions.

Part A

Maintenance

Basically, there are two types of maintenance carried out in a factory (manufacturing unit) for the plant and machinery installed and used therein. These are:

1.   Breakdown maintenance, and

2.   Preventive maintenance.

 

Breakdown maintenance

In this case the production facility is run without much routine maintenance until there is breakdown. Once there is a machine breakdown it is taken for repair and inspected to find out the defects. After identifying the defect, the required repair is planned and the spares are procured to repair the machine. As the breakdowns are random in nature and the machine cannot be used during the repair period, production hours are lost and hence the productivity is reduced. Breakdown repair maintenance is not a recommended practice, in general, but many a time many organizations prefer this, because they do not want to keep the machine idle for maintenance. But they ignore the fact that the breakdown repair costs more than the regular maintenance practice. It is however, an economical way of maintaining certain non-critical items whose repair and down time costs are less this way than with any other system of maintenance.

 

Preventive maintenance

A system of scheduled, planned or preventive maintenance tries to minimize the problems of breakdown maintenance. It locates weak parts in all equipments, provides them regular inspection and minor repairs thereby reducing the danger of unanticipated breakdowns. The underlying principle of preventive maintenance is that prevention is better than cure. It involves periodic inspection of equipment and machinery to uncover conditions that lead to production breakdown and harmful depreciation. The system of preventive maintenance varies from plant to plant depending on the requirement of the plant. Any company, adopting the preventive maintenance should keep the record of failure of various components and equipment, which help the maintenance department to statistically analyze the failure pattern and replace the item before it fails, so that the breakdown can be eliminated. This reduces the number of unanticipated breakdowns, increases the availability of the equipment for production purpose, and maintains optimum productive efficiency of equipment and machinery. This also reduces the work content of maintenance job, and increases productivity and safety of life of worker.

 

Production department or maintenance department depending on the size of the plant generally takes up preventive maintenance work. As the preventive maintenance is a costly affair, it is better to maintain records of cost (labour, materials used and spares used) and do the valuation of the work done by the maintenance department so that it can be analysed what benefits are derived from preventive maintenance. The analytical approach to evaluate the work done by preventive maintenance is:-

i.         [(Inspections incomplete) / (Inspections scheduled) × 100] should be less than 10%.

ii.        [(Hours worked for maintenance) / (Scheduled hours) × 100] = Performance of the department.

iii.      Down time to be given as a ratio of the available hours and to be compared against a standard to be worked out for each company or against a figure of the past. The ratio is given as:

= Down time in hours / Available hours (where Available Hours = working days × hours per day × number of machines). Here down time is the total time of stoppage of the machine for scheduled and unscheduled maintenance work.

iv.        Frequency of breakdowns = (Number of break downs) / (Available machine hours)

v.       Effectiveness of planning = (Labour hours on scheduled maintenance) / (Total labour hours spent on maintenance).

OR

= (Down time due to scheduled maintenance) / (Down time due to total maintenance work)

 

Advantages of preventive maintenance:

      i.        Reduced breakdowns and downtime,

     ii.        Greater safety to workers,

    iii.        Fewer large scale repairs,

    iv.        Less standby or reserve equipment or spares,

     v.        Lower unit cost of the product manufactured,

    vi.        Better product quality,

   vii.        Increased equipments life, and

  viii.        Better industrial relations.

 

Spare Parts Management

In manufacturing plants that own a huge number of equipment and machineries, supervising the spare parts correctly and in a timely manner is a difficult task. Usually, spare parts are categorized into two main groups

• Fast moving parts, and

• Slow moving parts.

 

Fast moving spares are those that are usually required quite frequently, and slow moving spares are those that are hardly ever required. The managers come across difficulties in keeping track of the spare parts used and in determining their future demand manually. The main objective of this project is to create a database management system that will help the managers with the process of supervising spare parts. The system should be designed in such a way that it will be able to

(a)       Keep record of the spare parts required for a particular type of maintenance;

(b)      Keep record of the spare parts received and used in the past;

(c)       Schedule forthcoming major maintenance services;

(d)      Keep record of spare parts vendors;

(e)    Forecast future demand for fast moving spare parts based on past consumptions; etc.

 

Preventive maintenance is very important but failures cannot be eliminated completely. To avoid and minimise the occurrence of failures spare parts management play a vital role. Failure statistics are useful in calculating spare parts requirements for preventive maintenance as well as breakdown maintenance.

 

Types of Spare Parts

• Regular spares

These spare parts are required regularly and in substantial number. Both reliability and per unit cost of these items are less.

 

• Insurance spares

An insurance spare is a spare part that is held in spare parts inventory that would not be expected to be used in the normal life of the plant and equipment but if not available when needed it would result in significant losses.

 

• Capital spares

Capital spares are spare parts which, although acknowledged to have a long life or a small chance of failure, would cause a long shutdown of equipment because it would take a long time to get a replacement for them.

 

• Rotable spares

Rotable items are generally thought of as items of plant or assets that periodically are changed out for repair or overall. The management of rotable items and repairable spare parts is different to the management of other inventory items and proper control requires greater cooperation between maintenance and stores/inventory management. The successful management of these items is far more active than other spare parts as maintenance and store / inventory personnel must work together to ensure that there is visibility of the status of items.

Part B

 

Illustration: 1

A workshop has 20 nos. of identical machines. The failure pattern of the machine is given below:-

Number of months	Probability of one breakdown of a machine
1	0.20
2	0.15
3	0.15
4	0.15
5	0.15
6	0.20

 

It costs Rs 150 to attend a failed machine and rectify the same. Compute the yearly cost of servicing the broken down machines.

Solution: 1

Illustration: 2

A Public transport system is experiencing the following number of breakdowns for months over the past 2 years in their new fleet of vehicles:-

Number of breakdowns per month	0	1	2	3	4
Number of months this occurred	2	8	10	3	1

 

Each break down costs the firm an average of Rs 2,800. For a cost of Rs 1,500 per month, preventive maintenance can be carried out to limit the breakdowns to an average of one per month. Which policy is suitable for the firm?

 

 Solution: 2

Illustration: 3

A company has 50 identical machines in its facilities. The cost of preventive servicing (CP) is Rs 20, and the cost of repair after breakdown (CR) is Rs 100. The company seeks the minimum cost preventive servicing frequency and has collected the data on breakdown probabilities in the following table:

                Probabilities of machine breakdown

                     After months after servicing:

Months after servicing          (i)	Probability of breakdown (Pi)	i × Pi
1	0.10	0.10
2	0.05	0.10
3	0.05	0.15
4	0.10	0.40
5	0.15	0.75
6	0.15	0.90
7	0.20	1.40
8	0.20	1.60
å	1.00	5.40

Comment about the appropriate maintenance policy in terms of the mix of  preventive maintenance and breakdown maintenance.

Solution: 3

Illustration: 4

A large computer installation contains 2,000 components of identical nature which are subject to failure as per probability distribution that follows:

 

Month end:	1	2	3	4	5
% Failure to date:	10	25	50	80	100

 

Components which fail have to be replaced for efficient functioning of the system. If they are replaced as and when failures occur, the cost of replacement per unit is Rs 3. Alternatively, if all components are replaced in one lot at periodical intervals and individually replace only such failures as occur between group replacements, the cost of component replaced is Rs 1.

Required:

(a)    Assess which policy of replacement would be economical.

(b)      If group replacement is economical at current costs, then assess the cost of individual replacement that would make group replacement uneconomical.

(c)      Assess how much high can be the cost per unit in group replacement to make a preference for individual replacement policy.

 

Solution: 4

Illustration: 5

An electric company which generates and distributes electricity conducted a study on the life of poles. The repatriate life data are given in the following table:

Life data of electric poles

	1	2	3	4	5	6	7	8	9	10
	1	2	3	5	7	12	20	30	16	4

 

Required:

1.    If the company now installs 5,000 poles and follows a policy of replacing poles only when they fail, how many poles are expected to be replaced each year during the next ten years? To simplify the computation assume that failures occur and replacements are made only at the end of a year.

2.    If the cost of replacing individually is Rs 160 per pole and if we have a common group replacement policy and it costs Rs 80 per pole, find out the optimal period for group replacement.

 

Solution: 5

Illustration: 6

Maharashtra Trucking Company (MTC) has a fleet of 50 trucks. The past data on the breakdown of the trucks shows the following probability distribution (for a new truck as well as for one which has been repaired after a breakdown).

Months after Maintenance	Probability of Breakdown
1	0.10
2	0.20
3	0.30
4	0.40

 

Each breakdown costs Rs 3,000 on an average; which includes cost of time lost and cost of materials and manpower.

 

The manager of MTC knows the importance of preventive maintenance. He estimates the costs of the preventive maintenance to be Rs 500 per such preventive action. What should be the appropriate maintenance policy in terms of the mix of preventive maintenance and breakdown maintenance?

Solution: 6