PRODUCTION & OPERATION

MANAGEMENT
UNIT 4
PLANT MAINTENANCE
• Plant maintenance is an important service function of an efficient
production system. It helps in maintaining and increasing the
operational efficiency of plant facilities and thus contributes revenue
by reducing costs and increasing the effectiveness of production.
Maintenance in any activity is designed to keep resources in good
working condition.

• Maintenance is defined as that function of production management

which is concerned with day-to-day problems of keeping physical
plant in good operating condition. Plant maintenance, thus may be
defined as a set of activities which are necessary to keep machinery,
parts and types of equipments in good condition. Its objective is to
minimise loss of production time due to equipment failure.
Maintenance may be a part of a planned programme or may have to be
carried out at short notice after a breakdown.
IMPORTANCE OF MAINTENANCE MANAGEMENT

• Good maintenance management is important for company's cost control. The

cost of idle time is higher as equipment becomes more high-tech and
expensive. To establish a competitive edge and to provide good customer
service, companies must have reliable equipments that will respond to
customer demand when needed.
• The importance of plant maintenance varies with the types of plant and its
production.
• Equipment breakdown leads to an equitable loss of production. If a piece of
equipment goes out of order in a flow production, the whole line will soon
come to a halt. Other production lines may also stop unless the initial fault is
cleared. This results in an immediate loss in production.
Plant maintenance plays a prominent role in production
management because plant breakdown creates problems such as:

1. Loss in production time.

2. Rescheduling of production.
3. Spoilt material (because sudden stoppage of process
damages in process BO material).
4. Failure to recover overheads (because of loss in
production hours).
5. Need for overtime.
6. Need for sub-contracting work.
7. Temporary work shortage-workers require alternative
work.
• Maintenance management is responsible for the smooth and efficient working of the
industrial plant and helps in improving the productivity. Thus, plant maintenance is an
important and inevitable service function of an efficient production system. The
importance of plant maintenance/maintenance management can be judged from the
following points:
1. It provides preventive maintenance with aim to minimise the possibility of unanticipated
production interruption.
2. It maintains the maintenance record for future reference.
3. It implements inventory and spare parts control system in the company.
4. It prepares plans for maintenance of plants and equipments.
5. It carries out technical/economic analysis of plant maintenance and machine availability.
6. Maintenance is an important factor in quality assurance.
7. It helps in controlling the costs.
8. It maintains equipments in good working condition.
FUNCTIONS OF MAINTENANACE MANAGEMENT
1. To develop maintenance policies, procedures and standards for plant maintenance system.
2. To schedule the maintenance work after due consultation with the production department.
3. To carry out repairs and rectify or overhaul planned equipments/facilities for achieving the
required level of operational efficiency.
4. To ensure scheduled inspection, lubrication oil checking and adjustment of plant and machinery
and equipments.
5. To document and maintain record of each maintenance activity (repairs, replacements,
overhauls, modifications and lubrication etc.).
6. To maintain and carry out repairs of building utilities, materials handling equipments and other
service facilities such as electrical installations, servers, central stores and roadways etc.
7. To carry out and facilitate periodic inspection of equipments and facilities to know their conditions
related to their failure and stoppage of production.
8. To prepare inventory list of spare parts and materials required for maintenance.
9. To ensure cost effective maintenance.
10. To forecast the maintenance expenditure and prepare a budget
and to ensure maintenance expenditure as per planned budget.
11. To recruit and train personnel to prepare the maintenance
workforce for effective and efficient plant maintenance.
12. To safety standards as required for the use of specific
equipment.
13. To monitor the equipment's condition at regular intervals.
14. To ensure proper inventory control of spare parts.
MAINTENANCE POLICY
• Maintenance is defined as a process in which condition of plant or machinery is maintained at
the optimum level as to give maximum output.
• Maintenance is done through repair, partial replacement and total replacement. Following is the
significance of maintenance policy:
1. Maintenance policy ensures that equipments are always in ready and reliable condition. This
ensures company is able to respond to any sudden change in the demand.
2. Maintenance policy ensures that equipments are always calibrated to provide good quality
products and competitive advantage. This ensures that there are no sudden and frequent
breakdowns and reduce production of defective products.
3. Maintenance policy ensures that there are no major breakdowns. This ensures that there is no
loss of inventory or market share for companies following JIT (Just-in-Time) philosophy.
4. Maintenance policy ensures that costs are always controlled.
5. Maintenance policy is particularly important in capital intensive industries.
 • If organisations are not able to implement an effective
maintenance policy, then it can result in the following
results :
i. Full capacity utilization may not be achieved.
ii. Increase in production cost as fixed labour cost can not
be reduced.
iii. Increase in maintenance cost as more spare parts are
required.
iv. Reduction in production quality and increase in wastage.
v. Safety of workers and operators in jeopardy.
TYPES OF MAINTENANCE

1. BREAKDOWN MAINTENANCE
2. PREVENTIVE MAINTENANCE
3. PREDICTIVE MAINTENANCE
4. ROUTINE MAINTENANCE
5. PLANNED MAINTENANCE
 1. BREAKDOWN MAINTENANCE
• This is also called as corrective maintenance. It occurs when work gets stopped because of a
machine breakdown. In this sense, maintenance becomes repair work. Repairs are made after
the equipment is out of order. For example, an electric motor will not start if the conveyor belt is
ripped or shaft has broken. In this case, maintenance department checks into difficulty and
makes necessary repairs.
• Causes of Breakdown-Breakdown may occur due to following reasons:
i. Failure to replace worn out parts.
ii. Lack of lubrication.
iii. Neglected cooling system.
iv. Indifference towards minor faults.
v. External factors such as too low or too high line voltage, wrong fuel, etc.
vi. Indifference towards equipment vibrations, unusual sounds coming out of rotating machine,
equipment getting too much heated, etc.
 • Disadvantages of Breakdown-Following are the
disadvantages of breakdown:
1. Breakdowns generally occurs at inappropriate times. This
leads to poor, hurried maintenance and excessive delays
in production.
2. Reduction in output.
3. Faster plant deterioration.
4. Increased chances of accidents and less safety to both
workers and machines.
5. More spoilt material.
6. Direct loss of profit.
 2. Preventive Maintenance
• In contrast to corrective maintenance, the preventive maintenance is undertaken before
the need arises. The main objective of preventive maintenance is to minimise the
possibility of unanticipated production interruption or major breakdown. Preventive
maintenance consists of:
i. Proper design and installation of equipments.
ii. Periodic inspection of plant and equipment.
iii. Repetitive servicing of machineries.
iv. Adequate lubrication, cleaning and painting of the building.
• Aspects of Preventive Maintenance-It includes the following:
1. Inspection-Inspection of critical parts will indicate the need for replacement or repair well
in advance of probable breakdown. Regular inspection by the inspector or operator is
most important.
2. Servicing - Routine cleaning, lubrication and adjustment may significantly wear and
hence prevent breakdowns.
 • Importance-Preventive maintenance is important such as:
1. It minimises the unplanned repair work.
2. It increases availability of equipment and machinery.
3. It lowers costs.
4. It reduces the risk of equipment failure.
5. It enhances the reliability of equipment.
Preventive maintenance is planned activity with people,
tools and time scheduled on a regular basis.
 3. Predictive Maintenance
• It is one of the newer type of maintenance that may be anticipated. It is gaining increasing
attention. In this, sensitive instruments are used to predicting trouble conditions. These
conditions can be measured on a continuous basis and this enables the maintenance people to
plan for an overhaul.
• Predictive maintenance is a technique to predict the future failure point of a machine component
so that the component can be replaced just before it fails. Thus, equipment downtime is
minimised and component life time is maximised
• Importance-Predictive maintenance is important on account of the following:
i. It allows manufacturers to lower maintenance costs.
ii. It extends equipment's life.
iii. It reduces downtime, and
iv. It improves production quality by addressing problems before they cause equipment failures.
v. It premises cost savings over routine or time based preventive maintenance.
4. Routine Maintenance
• Routine maintenance includes activities such as periodic inspection,
cleaning, lubricating and repair of production equipments. Routine
maintenance means maintenance activities that are scheduled in advance
and occur on a regular basis such as weekly, monthly, quarterly,
semi-annually or annually. Routine maintenance is the regular inspection and
servicing of machines and systems that keep operations running smoothly.
Routine maintenance tasks are small and simple in nature and only require
basic maintenance skills to perform well.

• Companies that invest in routine maintenance can extend the life of their
assets, reduce emergency maintenance, and keep their production lines
running more consistently.
 • Routine maintenance can be classified into two types:
i. Running Maintenance-In this, the maintenance work is carried out while the equipment is in
the operating condition.
ii. Shutdown Maintenance-Here the maintenance work is carried out when the machine or
equipment is out of service.
• Benefits-Following are the benefits of routine maintenance:
1. It lengthen the life-span of equipment.
2. It prevents larger problems from occurring.
3. It reduces the need for emergency work orders.
4. It decreases downtime.
5. It facilitate resource allocation more efficiently.
6. It increases the performance of equipment.
5. Planned Maintenance
• Breakdown of a machine does not occur in a planned manner but
maintenance work can be planned well in advance. Planned maintenance is
also known as scheduled maintenance. It involves inspection of all plants and
equipments, machinery, building according to predetermined schedule. It is a
proactive approach to maintenance in which maintenance work is scheduled
to take place on a regular basis. The type of work to be done is based on the
equipment being maintained, and the environment in which it is operating.
The primary objective of planned maintenance is to maximise equipment
performance by keeping equipment running safely for as long as possible.
• Planned maintenance activities include any maintenance work scheduled in
advance. For example, changing the oil in a vehicle because oil light came on
the meter is not a planned maintenance. Changing the oil because the
vehicle had gone 5,000 miles would be a planned maintenance.
 • Benefits-Major benefits of planned maintenance are :
I. It reduces unplanned equipment downtime and improves overall performance of the
equipment.
II. It reduces repair costs because problems are fixed while they are minor.
III. It uses manpower and other resources more efficiently.
IV. It ensures better planning of spare parts.
V. It reduces overall maintenance costs.
Other secondary benefits of planned maintenance are:
1. Improved workplace safety.
2. Procedures are established to plan the use of, monitor, and control resources. maintenance
3. Improves communication between maintenance and operations.
4. Provides a daily plan for maintenance.
5. Establishes a performance monitoring system that allows maintenance activities to be better
evaluated and improved.
A successful implementation of planned maintenance requires the agreement and participation
of everyone. This includes the maintenance department, safety and possibly the instrument
shop.
Objectives of Plant Maintenance
1. To minimise the possibility of unanticipated production interruption or major breakdown by
locating or uncovering any condition which may lead to it.
2. To make plant equipment and machinery always available and ready for use.
3. To maintain the value of equipment and machinery by periodic inspections, repairs,
overhauls, etc.
4. To maintain optimum productive efficiency of the plant equipment and machinery.
5. To maintain operational accuracy of the plant equipment.
6. To reduce work content of maintenance jobs.
7. To achieve maximum production at minimum repair cost.
8. To ensure safety of life and limbs of the workmen.
9. To minimise loss of production time due to equipment failure.
10. To reduce loss due to production stoppage.
11. To improve the quality of product and to improve productivity.
12. To help in reducing the total maintenance cost of repair.
EMERGING CONCEPTS AND ISSUES IN
MANUFACTURING SYSTEMS
IT in PRODUCTION MANAGEMENT
• A huge amount of information is generated and used during the design,
manufacture and use of a product to satisfy customer needs and to meet
environmental requirements Thus, the use of IT can enable substantial
improvements in the operations, organisation and effectiveness of information
intensive manufacturing process and activities. Equipments in factories, entire
manufacturing enterprises and network of suppliers, partners and customers
located throughout the world can be effectively connected and integrated through
IT.
• IT can provide the tools to help enterprises achieve goals widely regarded as
critical to the future of manufacturing, including:
1. Rapid shifts in production, from one product to another product.
2. Faster implementation of new concept in products.
3. Faster delivery of products to customers.
4. Fuller utilisation of capital and human resources.
IMPACT of IT on PRODUCTION & OPERATION
MANAGEMENT
1. Reduction in costs
2. Customer Relations Management
3. Supply Chain Management
4. Decision making
5. Globalisation
6. New Business Processes
SUPPLY CHAIN MANAGEMENT
• Concept of Supply Chain Supply chain consists of all activities associated with the
flow of information and goods and services from the raw-material stage to the end
user (customer). The chain begins with suppliers of the raw materials, parts and
components, the producers of the products and services, the distributors and
retailers, and the customers. Four main processes involved are:
❖ Getting customer orders.
❖ Procuring materials.
❖ Transforming materials to produce goods and services.
❖ Delivering the goods and services to customers to satisfy their needs.
It is imperative that all the processes be well integrated and work in concept if we are
to satisfy the customer's need in an efficient and effective manner at the lowest cost.
Information flow through the system is vital. The supply chain is shown dramatically in
the following figure:
• Supply chain management focuses on the flow of goods and services and
information through the supply chain in order to make it more responsible to
customer needs at lower total costs. This involves synchronisation of all activities
in the chain. With the advent of information technology, it is now possible to share
informations instantaneously with all components of the supply chain.
• According to the Council of Supply Chain Management Professionals, a
professional association gave the definition in 2004, "Supply Chain Management
encompasses the planning and management of all activities involved in sourcing
and procurement, conversion, and all logistics management activities. Importantly,
it also includes coordination with all channel partners, which can be suppliers,
intermediaries third party service providers, and customers. In essence, "Supply
Chain Management integrates supply and demand management within the across
companies."
• The keys to effective supply chain management are information, communication,
co-operation and trust. In practice supply chain management involves decisions on
inventory, transportation facilities like warehouses and other storage facilities, and
Objectives of Supply Chain Management
• Main objectives of supply chain management are to improve the overall organisational
performance and customer satisfaction by improving product and service delivery to
customer. A well designed supply chain is expected to support the strategic objectives of:
1. Solving supplier's problem.
2. Customer service performance improvement.
3. Reduction of pre and post production in inventory.
4. Minimising variance by means of activities like standardisation, variety reduction, etc.
5. Minimum total cost of operation and procurement.
6. Product quality control.
7. Achieving maximum efficiency in using labour, capital and plant through the company.
8. Flexible planning and control procedure.
Other objectives are:
• To maintain customer service and thus minimising costs.
• To manage the Purchasing, Receipt and Distribution of
products and services in most optimal way.
• To achieve strategic fit between Business Model and
Supply Chain Strategy of the company.
• To improve the overall organisational performance and
customer satisfaction. •
• To reduce cost while maintaining quality and timely
management of different business activities.
FUNCTIONS OF SUPPLY CHAIN MANAGEMENT

1. Purchasing
2. Operations
3. Transprtation
4. Facilities
5. Information
Role of Information Technology in Supply Chain

• Information is the vital link in all supply chain activities. Computers and
information technology allow real time on-line communications throughout the
supply chain. Information is the most important enabler in the supply chain.
The information must be timely and accurate. Information technology
improves supply chain management by providing the following functions:
1. Integration of ordering, production transportation and distribution.
2. Locating and tracking every item in the supply chain.
3. Access to domestic and global transportation and distribution system.
4. Consolidation of purchases from suppliers.
5. Access to information within the organisation and sharing of information
between companies.
6. Acquisition of data at the point of sale. 7. Instantaneous updating of inventory
status.
 • Information technology has some shortcomings such as:
1. It involves installation of expensive hardware and software and requires
trained personnel.
2. If improperly designed, web sites tend to crash with overload.
3. Security issues are also involved in it such as-data on the nets has to be
encrypted properly so that its security is maintained.
4. Data has to be protected against loss due to natural calamities or due to
hacking.
5. Generally data has to be duplicated and maintained at alternative sites,
which adds to the cost. The above points should be kept in mind when
designing supply chain information system.
CAD/ CAM SYSTEM
• The use of computers in manufacturing sector has increased in recent years due to
various reasons. One of the main reasons for this is high demand for manufactured
products and the requirement of on time delivery of quality product. Most of the
manufactures have turned to Computer-Integrated Manufacturing (CIM) or
Computer Aided Manufacturing (CAM) to improve efficiency, quality and reduce
cost, lead time and process time of the product. Computers are today applied in all
the aspects of manufacturing operations including, planning, control, scheduling,
designing, distribution, processing, marketing, production etc.
• Computer-Integrated Manufacturing (CIM) centers around a shared data base for
four primary manufacturing functions:
1. Engineering design
2. Manufacturing engineering
3. Factory production, and
4. Information management.
Computer-Aided Design (CAD)
• The design process for new products and components traditionally has been an interative one in
which product specifications are refined in successive stages based upon the designer's
experience, computations, sketches, and drawings. Computer-Aided Design (CAD) is the use of
computers to aid in creation of modification, analysis, or optimisation of a design. CAD software
is used to increase the productivity of the designer, improve the quality of design, improve
communications through documentation, and to create a database manufacturing. Once a
design is satisfactory, it is stored in the database and can be transmitted electronically to
manufacturing engineering, production and purchasing.

• What does CAD accomplish? Generally, drafting productivity improves by a factor of three or
more, and engineering lead time reduces. For example, At General Motors, the design time for a
new automobile was reduced from 24 months to 14 months. A manufacturer of molds for plastic
parts increased annual output from 30 molds to 140, solely because of the increased efficiency
afforded by CAD. Similar savings in time and gains in productivity are common in other
manufacturing settings.
Advantages-
1. The ability to producing very accurate designs.
2. Drawings can be created in 2D or 3D and rotated.
3. Other computer programmes can be linked to the design
software.

• In the engineering world, CAD is extremely important and

widely used to design and develop products to be used by
consumers. CAD allows for easier development of
products and product management integration.
• CAD allows for ability to conduct Computer Aided
Manufacturing (CAM).
Computer-Aided Manufacturing (CAM)

• Computer-aided manufacturing systems control the machine tools on the shop floor. The machines typically
perform a variety of operations, not just one, and the machine receives instructions from a computer on the
sequence and specifications of its operations. The computer programme can be stored in the manufacturing
database, retrieved, updated and revised as components are added or redesigned.
• Siemens says, "Computer aided manufacturing (CAM) commonly refers to the use of Numerical Control (NC)
computer software applications to create detailed instructions (G-code) that drive computer numerical control
(CNC) machine tools for manufacturing in a variety of industries depend on the capabibilities of CAM to
produce high quality parts."ong of berimpen nolismoni
• A broader and simple definition would be: any manufacturing process that uses computer software to facilitate,
assist or automate parts of the manufacturing process.
• Benefits-CAM offers several production benefits:
1. Instructions from a computer are usually more reliable than those from a skilled operator.
2. Product quality is more consistent from unit to unit.
3. Closer tolerances can be obtained, and
4. Labour costs are lower because less operator time is needed.
These benefits, of course, do not come cost-free. Engineers must create the equipment and software that govern
machine operation.
ENTERPRISE ESOURCE PLANNING
• ERP is a computer based information system extending across all functions
of the organisation. The system functions on the basis of an enterprise wide
integrated database. Prior to evolution of ERP, programmers wrote individual
modules covering various functions. ERP cuts across functional boundaries
and addresses business processes instead of functions.
• For example, a sales transaction is immediately reflected in accounts
payable, the inventory status is also updated, the transaction is also reflected
to the manufacturing and procurement departments for their action. ERP also
cuts across organisational barriers and may incorporate suppliers and
customers in the system through, Supply Chain Management (SCM) and
Customer Relations Management (CRM) information systems.
Characteristics of ERP-Some of the characteristics of ERP
are:
1. ERP applications address a business process.
2. ERP applications are modular.
3. ERP applications are integrated.
4. ERP applications include a company's reach beyond its
walls-to its suppliers, customers and partners.
5. The entire ERP suite addresses all areas (or the great
majority) of a company's business functions.
 1. Business Process-A business process crosses multiple functions in an enterprise. For example,
we may have a department called accounting or we may have a function. called payroll. Although
each function involves businesses processes, these functions themselves are not process based.
Business process may include the procurement, manufacture, distribution, invoicing, transportation,
and accounting.
2. Modularity-ERP is modular in nature. The ERP system designed by SAP AG Software Solutions
of Germany has four major modules-
a) Financial accounting
b) Human resources
c) Manufacturing and logistics, and
d) Sales and distribution.
• The system operates in a three tier client/server configuration. The core of the system is made
up of a network of high-speed database servers.
3. Integration-ERP integrates accounting, sales and distribution, manufacturing,
planning, procurement, human resources and other transactions into a single
application software. By integrating the database, the data is entered only once.
Inconsistencies that may arise because of entering the same data differently in
individual applications are avoided. For example, the customer's identity may be
reflected as IBM in one application and as International Business Machines in
another. When data is integrated, such inconsistency does not occur because there is
only one transaction entry.

4. Suppliers, Customers and Partners-Business involves more than internal

operations. The reasons for existence of any organisation lies outside it as its basic
opurpose is to satisfy customers' needs. Customers are therefore, an important part
of the business. Similarly suppliers from whom parts, components, and materials are
procured are vital to the efficient functioning of the organisation. ERP handles supply
chain management and customer relations management.
ERP IMPLEMENTATION
• ERP offers the advantage of integration. It can result in cost savings in the
long run. However, ERP implementation is a difficult and expensive project.
ERP vendors claim that the business processes incorporated in their
packages conform to the industry's best practices. However, these may not
suit an individual organisation. Let us examine and discuss the issues
involved in implementing ERP.
1. Investment-ERP implementation involves considerable investment in the form
of time and money. It requires involvement of the entire organisation-different
functions, people, organisation culture, procedures-resulting in a
comprehensive change in the organisation. Managing this change is not an
easy task. ERP involves high initial investment and is costly to implement.
Organisation may opt to implement ERP in a phased manner.
2. Functionality-The business processes incorporated in the
package should be compatible with the business processes
being followed by the organisation. The customisation of the
ERP package is time consuming and costly. Any business
process reengineering required should be carried out and
tested before implementing ERP.
3. Technology-The package selected should be scalable
and should support open and non-proprietary technology
standards. The package should be flexible enough for use
with future changes to business processes.
4. Implementability-The package should be easy to
configure, implement and use.
Stages in Implementation/Methodology
• The various stages in implementation of ERP are described as under:
1. Identify Need-The first step is to identify the need for ERP. The organisation must carry out an
analysis of its needs and then examine how ERP will fulfil these needs.
2. Evaluate Current Situation-The next step is to evaluate the existing situation. The existing
business processes should be identified and recorded to establish information flows and the time
taken to complete processes. Bottlenecks in the system can be identified through the analysis of the
existing system.
3. Evaluation of ERP Packages-The next step involves an evaluation of available ERP packages
to check which one would be most suitable for the organisation. This will involve a technical as well
as economic evaluation.
4. Installation of Requisite Hardware and Networks-Once the package has been selected, the
necessary hardware must be considered. This includes servers, work stations, network equipments
and so on.
5. Implementation-After selecting ERP packaging and installing the necessary handware and
networks, the task of actual implementations of the ERP system begins. It is best to entrust this to a
selected team. The team should be given adequate authority so that it can discharge its
responsibilities. The team should be trained adequately and should be familiarised with the working
of the ERP system.
THANK YOU