UNIT V

CONTROLLING
CONTROLLING
DEFINITION
Control is the process through which managers assure
that actual activities conform to planned activities.
In the words of Koontz and O'Donnell - "Managerial
control implies measurement of accomplishment against
the standard and the correction of deviations to assure
attainment of objectives according to plans.“
According to Harold Koontz:
“Controlling is the measurement and correction of
performance in order to make sure that enterprise
objectives and the plans devised to attain them are
accomplished”.
Characteristics of Control:
Following characteristics of control can be identified:
1. Control is a Managerial Process:
 Management process comprises of five functions,
viz., planning, organizing, staffing, directing and
controlling.
 Thus, control is part of the process of management.
2. Control is forward looking:
 Whatever has happened has happened, and the
manager can take corrective action only of the
future operations.
 Past is relevant to suggest what has gone wrong
and how to correct the future.
3. Control exists at each level of Organization:
 Anyone who is a manager, has to involve into control – may be
Chairman, Managing Director, CEO, Departmental head, or first
line manager.
 However, at every level the control will differ –
 Top management would be involved in strategic control,
 Middle management into tactical control and
 Lower level into operational control.
4. Control is a Continuous Process:
 Controlling is not the last function of management but it is a
continuous process.
 Control is not a one-time activity, but a continuous process.
 The process of setting the standards needs constant analysis and
revision depending upon external forces, plans, and internal
performance.
5. Control is closely linked with Planning:
 Planning and controlling are closely linked.
 The two are rightly called as ‘Siamese twins’ of
management. “Every objective, every goal, every policy,
every procedure and every budget become standard
against which actual performance is compared.
 Once control process is over its findings are integrated into
planning to prescribe new standards for control.
6. Purpose of Controlling is Goal Oriented and hence
Positive:
 Control is there because without it the business may go
off the track.
 The controlling has positive purpose both for the
organization (to make things happen) and individuals (to
give up a part of their independence for the attainment of
organizational goals).
 CONTROL PROCESS
The basic control process involves mainly these steps as shown in
Figure
a) The Establishment of Standards:
 Because plans are the yardsticks against which controls must be revised,
it follows logically that the first step in the control process would be to
accomplish plans.
 Plans can be considered as the criterion or the standards against which
we compare the actual performance in order to figure out the deviations.

Examples for the standards

 Profitability standards: In general, these standards indicate how much
the company would like to make as profit over a given time period-
that is, its return on investment.
 Market position standards: These standards indicate the share of
total sales in a particular market that the company would like to have
relative to its competitors.
 Productivity standards: How much that various segments of the
organization should produce is the focus of these standards.
 Product leadership standards: These indicate what must be done to attain
such a position.
 Employee attitude standards: These standards indicate what types of
attitudes the company managers should strive to indicate in the company’s
employees.
 Social responsibility standards: Such as making contribution to the society.
Standards reflecting the relative balance between short and long range goals.

b) Measurement of Performance:
 The measurement of performance against standards should be on a forward
looking basis so that deviations may be detected in advance by appropriate
actions.
 The degree of difficulty in measuring various types of organizational performance,
of course, is determined primarily by the activity being measured.
 Measurement technique may be personal observation, sample checking,
performance etc.
c) Comparing Measured Performance to Stated
Standards:
 When managers have taken a measure of
organizational performance, their next step in
controlling is to compare this measure against some
standard.
 A standard is the level of activity established to serve
as a model for evaluating organizational performance.
 The performance evaluated can be for the
organization as a whole or for some individuals
working within the organization.
 In essence, standards are the yardsticks that
determine whether organizational performance is
adequate or inadequate.
d) Finding out deviations:
An effective manager find out locating the
deviation points properly.
To find out the cause of deviations, the
manager will have to depend on proper
accurate and timely information.
The deviation between standard and actual
performance is beyond the prescribed limits,
an analysis of deviations is made to identify
the causes of deviation.
e) Taking Corrective Actions:
 After actual performance has been measured compared
with established performance standards, and finding out
the deviation, the next step in the controlling process is to
take corrective action, if necessary.
 Corrective action is managerial activity aimed at bringing
organizational performance up to the level of performance
standards.
 In other words, corrective action focuses on correcting
organizational mistakes that hinder organizational
performance.
 Before taking any corrective action, however, managers
should make sure that the standards they are using were
properly established and that their measurements of
organizational performance are valid and reliable.
 Deviations may be inaccurate forecast, poor
communication, defective machinery, lack of
motivation etc.
 For the correction of deviation, management
should take necessary actions and implement
them so that in future these deviations and
mistakes are minimized.
 If corrective action is not taken properly in time it
will lead to heavy loss.
 BARRIERS FOR CONTROLLING
There are many barriers, among the most important of
them:
 Control activities can create an undesirable overemphasis on
short-term production as opposed to long- term production.
 Control activities can increase employees' frustration with
their jobs and thereby reduce morale. This reaction tends to
occur primarily where management exerts too much
control.
 Control activities can encourage the falsification of reports.
 Control activities can cause the perspectives of organization
members to be too narrow for the good of the organization.
 Control activities can be perceived as the goals of the
control process rather than the means by which corrective
action is taken.
 REQUIREMENTS FOR EFFECTIVE CONTROL
The requirements for effective control are
a) Control should be tailored to plans and positions
 This means that, all control techniques and systems
should reflect the plans they are designed to follow.
 This is because every plan and every kind and phase of an
operation has its unique characteristics.
b) Control must be tailored to individual managers and
their responsibilities
 This means that controls must be tailored to the
personality of individual managers.
 This because control systems and information are
intended to help individual managers carry out their
function of control.
c) Control should point up exceptions as critical points
 Controls based on the time honored exception principle allow
managers to detect those places where their attention is required
and should be given.
 However, it is not enough to look at exceptions, because some
deviations from standards have little meaning and others have a
great deal of significance.
d) Control should be objective
 This is because when controls are subjective, a manager’s
personality may influence judgments of performance inaccuracy.
 Objective standards can be quantitative such as costs or man hours
per unit or date of job completion.
 They can also be qualitative in the case of training programs that
have specific characteristics and are designed to accomplish a
specific kind of upgrading of the quality of personnel.
e) Control should be flexible
 This means that controls should remain workable in the case of
changed plans, unforeseen circumstances, or outsight failures.
 Much flexibility in control can be provided by having alternative
plans for various probable situations.
f) Control should be economical
 This means that control must worth their cost.
 Although this requirement is simple, its practice is often complex.
 This is because a manager may find it difficult to know what a
particular system is worth, or to know what it costs.
g) Control should lead to corrective actions
 This is because a control system will be of little benefit if it does
not lead to corrective action.
 control is justified only if the indicated or experienced deviations
from plans are corrected through appropriate planning,
organizing, directing, and leading.
 TYPES OF CONTROL SYSTEMS
The control systems can be classified into three types namely feed
forward, concurrent and feedback control systems.
• Feed forward controls:
 They are preventive controls that try to anticipate problems
and take corrective action before they occur.
Example – a team leader checks the quality, completeness
and reliability of their tools prior to going to the site.
• Concurrent controls:
 They (sometimes called screening controls) occur while an
activity is taking place.
Example – the team leader checks the quality or
performance of his members while performing.
• Feedback controls:
 They measure activities that have already been completed.
Thus corrections can take place after performance is over.
Example – feedback from facilities engineers regarding the
completed job.
BUDGETARY & NON BUDGETARY CONTROL TECHNIQUES
 BUDGETARY & NON BUDGETARY CONTROL TECHNIQUES
BUDGETARY CONTROL TECHNIQUES:
The various types of budgets are as follows
i) Revenue and Expense Budgets:
 The most common budgets spell out plans for revenues and operating
expenses in rupee terms.
 The most basic of revenue budget is the sales budget which is a formal
and detailed expression of the sales forecast.
 The revenue from sales of products or services furnishes the principal
income to pay operating expenses and yield profits.
 Expense budgets may deal with individual items of expense.
(e.g) such as travel, data processing, entertainment, advertising,
telephone, and insurance.
ii) Time, Space, Material, and Product Budgets:
 Many budgets are better expressed in quantities rather than in monetary
terms.
e.g. direct-labor-hours, machine-hours, units of materials, square feet
allocated, and units produced.
 The Rupee cost would not accurately measure the resources used or the
results intended.
iii) Capital Expenditure Budgets:
 Capital expenditure, or CapEx, are funds used by a company to acquire
or upgrade physical assets such as property, industrial buildings or
equipment.
 It is often used to undertake new projects or investments by the firm.
 These budgets require care because they give definite form to plans for
spending the funds of an enterprise.
 Since a business takes a long time to recover its investment in plant and
equipment, (Payback period or gestation period) capital expenditure
budgets should usually be tied in with fairly long-range planning.
iv) Cash Budgets:
 Cash budget is an estimation of the cash inflows and outflows for a
business or individual for a specific period of time.
 Cash budgets are often used to assess whether the entity has
sufficient cash to fulfill regular operations and/or whether too
much cash is being left in unproductive capacities.
 The cash budget contains the following details:
1. It ensures sufficient cash for business requirements.
2. If there is any shortage of cost it can be adjusted through overdraft.
v) Variable Budget:
 The variable budget is based on an analysis of expense items to
determine how individual costs should vary with volume of
output.
(e.g) Among these are depreciation, property taxes and
insurance, maintenance of plant and equipment, and costs of
keeping a minimum staff of supervisory and other key
personnel.
 Costs that vary with volume of output range from those that are
completely variable to those that are only slightly variable.
 The task of variable budgeting involves selecting some unit of
measure that reflects volume; inspecting the various categories
of costs; and, by statistical studies, methods of engineering
analyses, and other means, determining how these costs
should vary with volume of output.
vi) Zero Based Budget:
 Zero-based budgeting (ZBB) is a method of budgeting in
which all expenses must be justified for each new
period. Zero-based budgeting starts from a "zero base"
and every function within an organization is analyzed for
its needs and costs.
 The idea behind this technique is to divide enterprise
programs into "packages" composed of goals, activities,
and needed resources and then to calculate costs for
each package from the ground up.
 By starting the budget of each package from base zero,
budgeters calculate costs afresh for each budget period;
thus they avoid the common tendency in budgeting of
looking only at changes from a previous period.
ADVANTAGES
There are a number of advantages of budgetary control:
 Compels management to think about the future, which is probably the most important
feature of a budgetary planning and control system.
 Forces management to look ahead, to set out detailed plans for achieving the targets for
each department, operation and (ideally) each manager, to anticipate and give the
organization purpose and direction.
 Promotes coordination and communication.
 Clearly defines areas of responsibility.
 Requires managers of budget centre’s to be made responsible for the achievement of
budget targets for the operations under their personal control.
 Provides a basis for performance appraisal (variance analysis).
 A budget is basically a yardstick against which actual performance is measured and
assessed.
 Control is provided by comparisons of actual results against budget plan.
 Departures from budget can then be investigated and the reasons for the differences can be
divided into controllable and non-controllable factors.
 Enables remedial action to be taken as variances emerge.
 Motivates employees by participating in the setting of budgets.
 Improves the allocation of scarce resources.

Problems in budgeting
Whilst budgets may be an essential part of any marketing activity they do
have a number of disadvantages, particularly in perception terms.:-
 Budgets can be seen as pressure devices imposed by management, thus
resulting in:
 bad labour relations
 inaccurate record-keeping.
 Departmental conflict arises due to:
 disputes over resource allocation
 departments blaming each other if targets are not attained.
 It is difficult to reconcile personal/individual and corporate goals.
 Waste may arise as managers adopt the view.
 Responsibility versus controlling,
i.e. some costs are under the influence of more than one person,
e.g. power costs.
 Managers may overestimate costs so that they will not be blamed in the
future should they overspend.
NON-BUDGETARY CONTROL TECHNIQUES
 There are, of course, many traditional control devices not
connected with budgets, although some may be related
to, and used with, budgetary controls.
 Among the most important of these are: statistical data,
special reports and analysis, analysis of break- even
points, the operational audit, and the personal
observation.
i) Statistical data:
 For effective management control the various statistical
data and reports can be used in every organization.
 Tables , charts, graphs are examples of statistical data.
 Statistical data may be also in the form off ratios,
diagrams, average, percentages.
 The prepared report are submitted to the supervisors and
they can analyze to control process.
STATISTICAL DATA
ii) Break- even point analysis:
 An interesting control device is the break even chart.
 This chart depicts the relationship of sales and expenses
in such a way as to show at what volume revenues
exactly cover expenses.
iii) Operational audit:
 Another effective tool of managerial control is the internal
audit
 Internal audits another name is called operational audit.
 Operational auditing, in its broadest sense, is the regular
and independent appraisal, by a staff of internal auditors of
the accounting, financial, and other operations of a
business.
iv) Personal observation:
 It is a direct tool of control.
 It is time consuming process.
 Personal observation helps the managers to measure their
subordinates characteristics and attitude, skill to their job.
 This method helps to increase the sincerity of the workers
due to observation by their supervisors.
v) PERT AND CPM:
PERT
 The Program (or Project) Evaluation and Review Technique, commonly
abbreviated PERT, is a is a method to analyze the involved tasks in
completing a given project, especially the time needed to complete each
task, and identifying the minimum time needed to complete the total
project.
 These tools are widely being used in construction industry, planning
and launching a new projects, scheduling ship construction etc.
 It ensures improved management of resources by facilitating better
decision making.
 It aims to have future oriented control mechanism for the organization.
CPM (Critical Path Method):
 The Critical Path Method (CPM) is one of several related
techniques for doing project planning.
 CPM is for projects that are made up of a number of individual
"activities.”
 Longest sequence of activities in a project plan which must be
completed on time for the project to complete on due date.
 An activity on the critical path cannot be started until its
predecessor activity is complete; if it is delayed for a day, the
entire project will be delayed for a day unless the activity following
the delayed activity is completed a day earlier.
vi) GANTT CHART:
 A Gantt chart is a type of bar chart that illustrates a
project schedule.
 Gantt charts illustrate the start and finish dates of the
terminal elements and summary elements of a project.
 Terminal elements and summary elements comprise the
work breakdown structure of the project.
 Some Gantt charts also show the dependency (i.e.,
precedence network) relationships between activities.
PRODUCTIVITY
Productivity: Definition
Productivity is the relationship between the
outputs generated from a system and the inputs
that are used to create those outputs.
Mathematically

O
P =
I
Units produced
Productivity =
Input used
 Productivity Calculations
Labor Productivity
Units produced
Productivity =
Labor-hours used

1,000
= = 4 units/labor-hour
250

One resource input  single-factor productivity

 Multi-Factor Productivity
Output
Productivity =
Labor + Material + Energy
+ Capital + Miscellaneous
 Also known as total factor productivity
 Output and inputs are often expressed
in dollars

Multiple resource inputs  multi-factor productivity

Typical Productivity Calculations
The three common approaches to defining productivity based on
the model are referred to as physical, functional, and economic
productivity.
a) Physical Productivity
Physical productivity is the quantity of output produced by
one unit of production input in a unit of time.
For example, a certain equipment can produce 10 tons of
output per hour.
 This is a ratio of the amount of product to the resources
consumed (usually effort).
 Typically, effort is measured in terms of staff hours, days, or
months.
 The physical size also may be used to estimate software
performance factors (e.g., memory utilization as a function of
lines of code).
b) Functional Productivity
 This is a ratio of the amount of the functionality delivered to the
resources consumed (usually effort).
 Functionality may be measured in terms of use cases,
requirements, features, or function points (as appropriate to the
nature of the software and the development method).
 Typically, effort is measured in terms of staff hours, days, or
months.
 Traditional measures of Function Points work best with
information processing systems.
 The effort involved in embedded and scientific software is likely
to be underestimated with these measures, although several
variations of Function Points have been developed that attempt
to deal with this issue.
c) Economic Productivity
 This is a ratio of the value of the product produced to the cost of the
resources used to produce it.
 Outputs and inputs are defined in the total productivity measure as
their economic values.
 Economic productivity helps to evaluate the economic efficiency of an
organization.
 Economic productivity usually is not used to predict project cost
because the outcome can be affected by many factors outside the
control of the project, such as sales volume, inflation, interest rates,
and substitutions in resources or materials, as well as all the other
factors that affect physical and functional measures of productivity.
 However, understanding economic productivity is essential to making
good decisions about outsourcing and subcontracting.

The basic calculation of economic productivity is as follows:

Economic Productivity = Value/Cost
Application of Productivity Measures
• Individual level
• Group level
• Department level
• Corporate level
• National level
• Global level
COST CONTROL
 COST CONTROL

 Cost control is a series of steps that a business

uses to maintain proper control over its costs.
 Implementing this level of control can have a
profound positive impact on profits over the long
term.
 Cost control by management means a search for
better and more economical ways of completing
each operation.
 Cost control is simply the prevention of waste
within the existing environment.
 Steps involved in designing process of cost control system:
(i) Planning (or) Establishing norms:
 To exercise cost control it is essential to establish norms, targets or
parameters which may serve as yardsticks to achieve the ultimate
objective.
 Initially a plan or set of targets is established in the form of budgets,
standards or estimates.
(ii) Communication:
 The next step is to communicate the plan to those whose
responsibility is to implement the plan.
(iii) Evaluation of the Performance :
 After the plan is put into action, evaluation of the performance
starts.
 Costs are ascertained and information about achievements is
collected and reputed.
 The fact that the costs are being reported for evaluating
performance acts as a prompting force.
(iv) Appraisal:
 Comparison has to be made with the predetermined targets and
actual performance.
 Deficiencies are noted and discussion is started to overcome
deficiencies.
(v) Decision-making:
 Finally, the reported variances are received.
 Corrective actions and remedial measures are taken or the set of
targets is revised, depending upon the administration’s
understanding of the problem.
 Materials are wasted in a number of ways such as effluents,
breakage, contamination, inefficient storage, poor workmanship,
low quality, pilfering and obsolescence.
 All these contribute to significantly increased material costs and all
can be controlled by efficient working methods and effective
control.
Advantages of cost control
 Better utilization of resources
 To prepare for meeting a future competitive position.
 Reasonable price for the customers
 Improved methods of production and use of latest manufacturing
techniques which have the effect of rising productivity and minimizing
cost.
 By a continuous search for improvement creates proper climate for the
increase efficiency.
 Improves the image of company for long-term benefits.
 Improve the rate of return on investment.
 It helps the firm to improve its profitability and competitiveness.
 In the absence of cost control, profits may be drastically reduced despite a
large and increasing sales volume.
 It is indispensable for achieving greater productivity.
 Cost control may also help a firm in reducing its costs and thus reduce its
BUDGETARY CONTROL TECHNIQUE
 BUDGETARY CONTROL
 Budgetary control refers to how well managers utilize budgets to monitor
and control costs and operations in a given accounting period.
 In other words, budgetary control is a process for managers to set financial and
performance goals with budgets, compare the actual results, and adjust performance,
as it is needed.
Salient features:
 Objectives: Determining the objectives to be achieved, over the budget period, and
the policy(ies) that might be adopted for the achievement of these ends.
 Activities: Determining the variety of activities that should be undertaken for
achievement of the objectives.
 Plans: Drawing up a plan or a scheme of operation in respect of each class of
activity, in physical a well as monetary terms for the full budget period and its parts.
 Performance Evaluation: Laying out a system of comparison of actual performance
by each person section or department with the relevant budget and determination
of causes for the discrepancies, if any.
 Control Action: Ensuring that when the plans are not achieved, corrective actions
are taken; and when corrective actions are not possible, ensuring that the plans are
revised and objective achieved
 CLASSIFICATION OF BUDGETS
Budgets may be classified on the following bases –
BASED ON TIME PERIOD:
Long Term Budget
 Budgets which are prepared for periods longer than a year are called Long Term
Budgets.
 Such Budgets are helpful in business forecasting and forward planning.
Eg: Capital Expenditure Budget and R&D Budget.
Short Term Budget
 Budgets which are prepared for periods less than a year are known as Short Term
Budgets.
 Such Budgets are prepared in cases where a specific action has to be immediately
taken to bring any variation under control.
Eg: Cash Budget.
BASED ON CONDITION:
Basic Budget
 A Budget, which remains unaltered over a long period of time, is called Basic
Budget.
Current Budget
 A Budget, which is established for use over a short period of time and is related to
the current conditions, is called Current Budget.
BASED ON CAPACITY:
Fixed Budget
 It is a Budget designed to remain unchanged irrespective of the level of activity actually
attained.
 It operates on one level of activity and less than one set of conditions.
 It assumes that there will be no change in the prevailing conditions, which is unrealistic.
Flexible Budget
 It is a Budget, which by recognizing the difference between fixed, semi variable and
variable costs is designed to change in relation to level of activity attained.
 It consists of various budgets for different levels of activity
BASED ON COVERAGE:
Functional Budget
 Budgets, which relate to the individual functions in an organization, are known as
Functional Budgets,
e.g. purchase Budget, Sales Budget, Production Budget, plant Utilization Budget and Cash
Budget.
Master Budget
 It is a consolidated summary of the various functional budgets.
 It serves as the basis upon which budgeted Profit & Loss Account and forecasted Balance
Sheet are built up.
PURCHASE CONTROL
 PURCHASE CONTROL
 Purchase control is an element of material control.
 Material procurement is known as the purchase function.

IMPORTANCE OF PURCHASE CONTROL:-

 Purchasing is an important function of materials management
because in purchase of materials, a substantial portion of the
company's finance is committed which affects cash flow position of
the company.
 Success of a business is to a large extent influenced by the efficiency
of its purchase organization.

According to Walters, purchasing function means ‘the procurement

by purchase of the proper materials, machinery, equipment and
supplies for stores, used in the manufacture of a product, adopted
to marketing in the proper quality and quantity at the proper time
and at the lowest price, consistent with quality desired.”
 The advantages derived from a good and adequate
system of the purchase control are as follows:
Continuous availability of materials:
 It ensures the continuous flow of materials. so
production work may not be held up for want of
materials.
 A manufacturer can complete schedule of production in
time.
Purchasing of right quantity:
 Purchase of right quantity of materials avoids locking up
of working capital.
 It minimizes risk of surplus and obsolete stores. It means
there should not be possibility of overstocking and under
stocking.
Purchasing of right quality:
 Purchase of materials of proper quality and specification avoids
waste of materials and loss in production.
 Effective purchase control prevents wastes and losses of materials
right from the purchase till their consumptions.
 It enables the management to reduce cost of production.
Economy in purchasing:
 The purchasing of materials is a highly specialized function.
 By purchasing materials at reasonable prices, the efficient
purchaser is able to make a valuable contribution to the success of
a business.
Works as information centre:
 It serves as a function centre on the materials knowledge relating
to prices, sources of supply, specifications, mode of delivery, etc.
 By providing continuous information to the management it is
possible to prepare planning for production.
Development of business relationship:
 Purchasing of materials from the best market and from reliable
suppliers develops business relationships.
 The result is that there may be smooth supply of materials in time
and so it avoid disputes and financial losses.
Finding of alternative source of supply:
 If a particular supplier fails to supply the materials in time, it is
possible to develop alternate sources of supply.
 The effect of this is that the production work is not disturbed.
Fixing responsibilities:
 Effective purchase control fix the responsibilities of operating units
and individuals connected with the purchase, storage and handling
of materials.
 In short, the basic objective of the effective purchase control is
To ensure continuity of supply of requisite quantity of material,
To avoid held up of production and loss in production and at the
same time reduces the ultimate cost of the finished products.
MAINTENANCE CONTROL
 MAINTENANCE CONTROL
MAINTENANCE :
 All actions necessary for retaining an item or
restoring to it a serviceable condition include
servicing, repair, modification, overhaul,
inspection and condition verification
 Increase availability of a system
 Keep system’s equipment in working order
Purpose of Maintenance
• Attempt to maximize performance of production
equipment efficiently and regularly prevent breakdown
or failures
• Minimize production loss from failures
• Increase reliability of the operating systems
Principle Objectives in Maintenance
• To achieve product quality and customer satisfaction
through adjusted and serviced equipment
• Maximize useful life of equipment
• Keep equipment safe and prevent safety hazards
• Minimize frequency and severity of interruptions
• Maximize production capacity – through high utilization
of facility
Types of Maintenance
Maintenance may be classified into four categories:
• Corrective or Breakdown maintenance
• Scheduled maintenance
• Preventive maintenance
• Predictive (Condition-based) maintenance

1. Corrective or Breakdown Maintenance

• Corrective or Breakdown maintenance implies that
repairs are made after the equipment is failed and can
not perform its normal function anymore
• Quite justified in small factories where:
– Repair costs are less than other type of maintenance
– Financial justification for scheduling are not felt
Disadvantages of Corrective Maintenance
• Breakdown generally occurs in appropriate times leading
to poor and hurried maintenance
• Excessive delay in production & reduces output
• Faster plant deterioration (சரிவு)
• Increases chances of accidents and less safety for both
workers and machines
• More spoilt materials
• Direct loss of profit
• Cannot be employed for equipments regulated by
statutory provisions e.g. cranes, lift and hoists (ropes and
pulleys) etc.
2. Scheduled Maintenance
• Scheduled maintenance is a stitch-in-time
procedure and incorporates
– inspection
– lubrication
– repair and overhaul of equipments
• If neglected can result in breakdown
• Generally followed for:
– overhauling of machines
– changing of heavy equipment oils
– cleaning of water and other tanks etc.
3.Preventive (தடுக்கும்) Maintenance (PM)
• Principle – “Prevention is better than cure”
• Procedure - Stitch-in-time
• It
– locates weak spots of machinery and equipments
– provides them periodic/scheduled inspections and minor repairs to
reduce the danger of unanticipated breakdowns
Advantages of PM
• Advantages:
– Reduces break down and thereby down time
– Lass odd-time repair and reduces over time of crews
– Greater safety of workers
– Lower maintenance and repair costs
– Less stand-by equipments and spare parts
– Better product quality and fewer reworks and scraps
– Increases plant life
– Increases chances to get production incentive bonus
4.Predictive (முன்னறிவிக்கும்) Maintenance
• In predictive maintenance, machinery conditions are
periodically monitored and this enables the maintenance
crews to take timely actions, such as machine adjustment,
repair or overhaul
• It makes use of human sense and other sensitive
instruments, such as
–audio gauge, vibration analyzer, amplitude meter,
pressure, temperature and resistance strain gauges etc.
• Unusual sounds coming out of a rotating equipment
predicts a trouble
• An excessively hot electric cable predicts a trouble
• Simple hand touch can point out many unusual
equipment conditions and thus predicts a trouble
POINTS TO BE CONSIDERED FOR EFFECTIVE MAINTENANCE CONTROL
Maintenance department has to exercise effective cost control, to
carry out the maintenance functions in a pre-specified budget,
which is possible only through the following measures:
 The objective of the management can be met without extra
expenditure on maintenance functions
 A monthly review of the budget provisions and expenditures
actually incurred in respect of each center/shop will provide
guidelines to the departmental head to exercise better cost
control.
 The total expenditure to be incurred can be uniformly spread over
the year for better budgetary control. however, the same may not
be true in all cases particularly where overhauling of equipment
has to be carried out due to unforeseen breakdowns.
 some budgetary provisions must be set aside, to meet out
unforeseen exigencies.
 The controllable elements of cost such as manpower cost and material
cost can be discussed with the concerned personnel, which may help
in reducing the total cost of maintenance.
 Emphasis should be given to reduce the overhead expenditures, as
other expenditures cannot be compromised.
 It is observed through studies that the manpower cost is normally
fixed, but the same way increase due to overtime cost.
 However, the material cost, which is the prime factor in maintenance
cost, can be reduced by timely inspections designed, to detect failures.
 If the inspection is carried out as per schedule, the total failure of
parts may be avoided, which otherwise would increase the
maintenance cost.
 The proper handling of the equipment by the operators also reduces
the frequency of repair and material requirements.
 Operators, who check their equipment regularly and use it within the
operating limits, can help avoid many unwanted repairs.
 In the same way a good record of equipment failures/ maintenance
would indicate the nature of failures, which can then be corrected
even permanently.
QUALITY CONTROL
 QUALITY CONTROL
 Quality is fitness for use.
 Quality control (QC) is a procedure or set of procedures
intended to ensure that a manufactured product or performed
service adheres to a defined set of quality criteria or meets
the requirements of the client or customer.
Quality control activities:
 Quality control (QC) includes the activities from the suppliers,
through production, and to the customers.
 Incoming materials are examined to make sure they meet the
appropriate specifications.
 The quality of partially completed products are analyzed to
determine if production processes are functioning properly.
 Finished goods and services are studied to determine if they
meet customer expectations.
QC Throughout Production Systems
Inputs Conversion Outputs
Raw Materials,
Production Products and
Parts, and
Processes Services
Supplies

Control Charts Control Charts

and Control Charts and
Acceptance Tests Acceptance Tests

Quality of Quality of Quality of

Inputs Partially Completed Outputs
Products
The steps involved in quality control process are
 Determine what parameter is to be controlled.
 Establish its criticality and whether you need to control before,
during or after results are produced.
 Establish a specification for the parameter to be controlled which
provides limits of acceptability and units of measure.
 Produce plans for control which specify the means by which the
characteristics will be achieved and variation detected and
removed.
 Organize resources to implement the plans for quality control.
 Install a sensor at an appropriate point in the process to sense
variance from specification.
 Collect and transmit data to a place for analysis.
 Verify the results and diagnose the cause of variance.
 Propose remedies and decide on the action needed to restore the
status quo.
 Take the agreed action and check that the variance has been
corrected.
Advantages and disadvantages
 Advantages include better products and services
ultimately establishing a good reputation for a company
and higher revenue from having more satisfied
customers.
 Disadvantages include needing more man
power/operations to maintain quality control and adding
more time to the initial process.
EXAMPLE FOR CONTROL IN APPLE COMPUTER, INC.,
 Apple computer, Inc., enjoyed a phenomenal early
success after It was incorporated as Apple Computer,
Inc. on January 3, 1977 by Steve Wozniak, the
technical expert, and Ronald Wayne
 However, success did not last for very long, partly
because of the introduction of the IBM Personal
Computer.
 In the early 1980s, in the view of some observers,
Apple needed tighter control and a more professional
approach to managing.
 John Sculley was lured (வரப்பட்டார்) from the Pepsi-
Cola Company to give Apple a new direction.
 To bring the company under control, Sculley employed cost-cutting
measures to improve its profitability.
 At the same time, however, research and development expenditures
were increased so that the company could remain a technological
leader in the field.
 The firm was also reorganized to reduce duplication of efforts, to lower
the break even point, and to reduce friction among the departments.
 To improve its effectiveness and efficiency, Apple introduced new
reporting procedures.
 Furthermore, considerable efforts were made to control the inventory
level, which is a serious problem in the personal-computer industry.
 These measures, combined with a successful strategy and helped by
the popularity of desktop publishing, resulted in an increase of over
150% in earnings in the 1986 fiscal year.
Difference between Quality Control and Quality Assurance?
Sometimes, QC is confused with the QA. Quality control is to
examine the product or service and check for the result.
Quality assurance is to examine the processes and make
changes to the processes which led to the end-product.
Examples of QC and QA activities are as follows:
Quality Control Activities Quality Assurance Activities
Walkthrough Quality Audit
Testing Defining Process
Inspection Tool Identification and
selection
Checkpoint review Training of Quality Standards
and Processes