Operation Management-ICAI-Inter-Maintenance Management

3.0 Obsolescence, Replacement of Machinery
Wear and obsolescence are the two main causes for replacement of machinery in every aspect of life. The
reduction of wear is therefore a primary concern when designing appliances. Wear and tear due to passage
of time and/or normal usage of plant and machinery is an accepted fact. Technological obsolescence is a
major danger which business firms face in modern era. With the development of new and better techniques
or equipment of performing a particular function, existing equipment and machines become uneconomical.
Whenever a firm decides to switch over to new machines or improved product designs, existing machine
designs are said to be obsolete. Hence, obsolescence is a major issue in the procurement and installation of
machinery and equipment. A machine is technically obsolete when another machine can do the same job
more efficiently, with reduced time and also at a lower cost. Technological obsolescence arises due to
continuous improvements in the methods and techniques of production and sometime the rate of
improvement is so fast that it becomes economical to replace the machinery before its expected life. A
machine may be replaced to reduce the running costs of the concerned machine and the new machines
productivity will be more. In replacement decisions, the basic problem is to decide whether to replace a
machine or equipment at present or at a future date. It is, therefore, necessary to determine whether
obsolescence or deterioration has reached the point where the reduction in operating costs expected from
replacement justifies the net capital expenditure involved in installing the new machine and disposing of
the old one.
Any function aimed at brining back or restore an item to its original or acceptable position or to keep it and
retain its healthy, workable position is known as Maintenance.
Objectives of Maintenance:
The objectives of maintenance are : (i) To keep all the production facilities and other allied facilities such as
building and premises, power supply system, etc in an optimum working condition, (ii) To ensure specified
accuracy to products and time schedule of delivery to customers, (iii) To keep the down time of the machine
at minimum, so that the production program is not disturbed, (iv) To keep the production cycle with in the
stipulated range, (v) To modify the machine tools to meet the augmented need for production, (vi) To
improve productivity of existing machine tools and to avoid sinking of additional capital, (vii) To keep the
maintenance cost at a minimum as far as possible, there by keeping the factory Overheads at minimum,
(viii) To extend the useful life of plant and machinery, without sacrificing the level of performance.
3.1 Break Down Maintenance, Preventive Maintenance, Routine Maintenance – Break
down maintenance
Here the production facility is run without much routine maintenance until it breakdown. Once the 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
hence the productivity is reduced. 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 break down 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.
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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 unanticipated
breakdowns, increases the availability of the equipment, maintain optimum productive efficiency of
equipment and machinery reduces the work content of maintenance job, 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 (both labour, materials used and spares used) and a valuation of the work done by the
department will show us 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 = 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 break downs = (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 are (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.
Routine Maintenance:
It includes lubrication, cleaning, periodic overhaul; etc. This is done while the equipment is running or
during pre-planned shut-downs. Running maintenance is the work which can be carried out while the
facility is in service.
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3.2 Maintenance Techniques
It can be discussed as under:
In some cases the loss and inconvenience due to breakdown of equipment is so high that standby equipment
is kept. As soon as the original equipment fails, the standby facility is employed to avoid interruption and
downtime. Standby machines are often kept to reduce the loss due to the breakdown of a key machine.
Breakdown maintenance also requires use of standby machines. The main question here is how many
standby machines to keep and for how long. In order to decide this, a cost benefit analysis of standby
machines should be made. There are various costs involved in standby machines. First, there is interest
cost on capital investment. Secondly, space is needed to keep standby machines. Thirdly, there is depreciation
in the value of standby machines. Fourthly, periodic checking and servicing is necessary to keep the standby
machines in new condition. The benefits of standby machines consist of protection against a complete
shutdown or shut down of operations. It avoids loss of production and, therefore, it is necessary to estimate
loss of future failures a table of expected costs and benefits can be prepared.
Shifting production during breakdown. Under this method spare capacity is maintained not in the form of
standby machines but by allowing rest to running machines at intervals and by rotation. If one machine in
a production line requires shutdown, the output is maintained by shifting to under uitilised machines in
other lines. For such application, the capacities of different machines must be properly matched.
3.3 Maintenance Organization
At least 50 to 60 percent of investment of any organization is spent on Building and Production facilities.
Hence, it is worthwhile to give due consideration for effective maintenance of these items. The maintenance
department will looks after the upkeep of equipments, buildings and other. For effective contribution of its
work, the maintenance department must have proper place in the organization and it must also have a
good organizational structure. While organizing a maintenance department one must remember that there
should be clear division of authority with little or no overlap. Vertical lines of authority and responsibility
must be kept as short as possible. Keep the span of control to an extent of 3 to 6 for a manager. The
organizational structure should be flexible. The structure should be designed to suit the types of maintenance
work involved. Depending on the need, the maintenance activity may be centralized or decentralized.
Chief Plant Engineer
Works &
Service
Maintenance
Workshop
Safety
Engineering
Maintenance
Engineering
Maintenance Stores
& Spares
Management
Works &
Service
Works &
Service
Works &
Service
Maintenance
contracts
Planning
Services
Shops
Operation Maintenance Break Down Preventive
Overhauls Planning &
Drawing Office
Spare
Fabrication
Electrical
Repair shop
Figure. Outline of a maintenance department of a large company
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Organizing Maintenance Work
In order to facilitate proper control of maintenance work; we must enforce three rules as below.
Maintenance Request
This must be made in writing to a central point in the organization. No work should be carried out without
the knowledge and approval of maintenance supervision - if this discipline is not followed by the
organization, it leads to wastage of skilled manpower and inability of the maintenance personnel to schedule
essential maintenance work.
Maintenance Stores
Non-availability of vital spare parts when required to meet an emergency like breakdown, may lead to
excessive shutdown of the plant and equipment. A large number of items or materials are required to be
stored and it involves investing valuable funds from the working capital. A proper stores management is
essential as a backup service of good maintenance.
Records of Maintenance Work Done
Paper work for maintenance is crucial for establishing a good maintenance organization and is often
neglected. The records of maintenance work carried out from time to time have to be kept equipment wise.
History cards or logbooks of all the plants and equipment must be compiled meticulously giving details of
materials used, components replaced and time spent by the workforce.
Creation and maintaining this database is essential for proper planning and control, which alone will lead
to effective and efficient maintenance.
To get the full benefits of effective maintenance the following requirement is to be fulfilled:
(i) Good Supervision and administration of maintenance department, (ii) Good and clear instructions to be
given to maintenance crew regarding the repair, (iii) Proper control of work in coordination with production
department, (iv) Good training should be given to the maintenance personnel, (v) Good scheduled
maintenance program should be chalked out, (vi) Proper maintenance record keeping is a must, (vii) There
should be adequate stock of spare parts, particularly insurance spares.
3.4 Maintenance Problem
The main problem in maintenance analysis is to minimise the overall cost of maintenance without sacrificing
the objectives. There are two alternatives before management. One is to repair a machine or equipment
only when it breaks down. This will save expense of inspection and replacement of a part before its lifetime
ends. The other alternative is to replace the equipment before the expiry of its working life. This will
involve cost of periodic shutdown for check up and repairs. However, it will avoid the loss due to sudden
failure or breakdown.
The two types of cost - cost of premature replacement and cost of breakdown - need to be balanced. The
objective is to minimise total maintenance cost and downtime. Economic analysis is helpful in finding a
judicious combination of two types of maintenance. The relationship between preventive maintenance
time and repair time is also significant. Preventive maintenance policy is justified only when the average
downtime and its cost is less than the average time taken to carry out breakdown repairs. If the machine
happens to be part of production line, the breakdown of a machine would throw the entire production line
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Maintenance Management
out of gear while a preventive maintenance schedule might enable the repair to be performed during a
scheduled idle time of the line.
Problems and Solutions
Problem: 1
A workshop has 20 nos. of identical machines. The failure pattern of the machine is given below:-
It costs Rs. 150 to attend a failed machine and rectify the same. Compute the yearly cost of servicing the
broken down machines.
Solution:
Expected time before failure.
= 0.20×1+0.15×2+0.15×3+0.15×4+0.15×5+0.15×6 =3.5 months
Therefore number or repair/machine/annum = 12/3.5
Considering 20 machines and Rs. 150 to attend a failed machine the yearly cost of servicing
= 12/3.5×20×150 = Rs.10286.
Problem: 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:
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:
Converting the frequencies to a probability distribution and determining the expected cost/month of
breakdowns we get:
Elapsed time after
Maintenance attention
(in month)
Probability of failure
1 0.20
2 0.15
3 0.15
4 0.15
5 0.15
6 0.20
Number of breakdowns 0 1 2 3 4
Number of months this occurred 2 8 10 3 1
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Breakdown cost per month; Expected cost = 1.710×Rs.2800 = Rs.4788.
Preventive maintenance cost per month: -
Average cost of one breakdown/month = Rs.2, 800
Maintenance contract cost/month = Rs. 1,500
Total = Rs. 4,300.
Thus, preventive maintenance policy is suitable for the firm.
Problem: 3
Indian Electronics, manufactures TV sets and carries out the picture tube testing for 2000 hours. A sample
of 100 tubes was put through this quality test during which two tubes failed. If the average usage of TV by
the customer is 4 hours/day and if 10,000 TV sets were sold, then in one year how many tubes were
expected to fail and what is the mean time between failures for these tubes?
Solution:
The total test time = (100 tubes) × 2000 hours = 200,000 tube-hours.
There are two tubes which have failed and hence the total time is to be adjusted for the number of hours
lost due to the failures during the testing.
The lost hours are computed as = 2 × 2000
2
= 2000 hours.
The assumption is made here is that each of the failed tubes have lasted an average of half of the test
period.
Therefore, the test shows that there are two failures during (2,00,000 – 2000) = 1,98,000 tube hours of
testing.
During 365 days a year (four hours a day) for 10,000 tubes the number of expected failures
1,98,000
2
×10,000 ×365 × 4 = 147.47 =148 tubes approximately.
Mean time between failures =
2 failures
1,98,000 tubes hrs. of testing
= 99,000 tubes hours per failure =
4 365
99,000
× = 67.8 tubes year per failure
No. of
breakdowns
Frequency in
months
Frequency in per cent Expected
Value
0 2 0.083 0.000
1 8 0.333 0.333
2 10 0.417 0.834
3 3 0.125 0.375
4 1 0.042 0.168
Total 1.710
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Problem: 4
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, by month:
Solution:
The mean time before failure is 5.4 months and the expected cost with no preventive maintenance
would be 100 x
5.4
50
= Rs. 925.93 per month. The following calculations show Bj, the expected number
of breakdowns between preventive maintenance intervals, for the possible intervals, that may be
considered.
B1 = MP1 =50 (0.10) = 5
B2 = m (P1+ P2) + B1P1= 50(0.10+0.05) +5(0.10) = 8
B3= 50 (0.10 + 0.05 + 0.05) + 8 (0.10) + 5 (0.05) = 11.05
Accordingly, B4 = 16.75, B5 = 25.63, B6 = 35.5, B7 = 48.72, B8 = 63.46.
Months after servicing that
breakdown occurs (i)
Probability that breakdown
will occur (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
1.00 5.40
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The costs of various preventive maintenance intervals are summarised in the table below :
Cost of alternative preventive maintenance intervals –
A policy of performing preventive maintenance every 4 months results in the lowest average cost, about
Rs. 669. This amount is Rs. 257 per month less than the Rs. 926 expected cost without preventive maintenance.
This policy would reduce the costs by (257 ÷ 926) × 100 = 27.75% below the cost of repairing the machines
only when they breakdown.