GYAAN CAPSULE TPM, 5S, TOC & Inventory Management

AUGUST 1, 2014 SYSTEMS SOCIETY

FACULTY OF MANAGEMENT STUDIES, DELHI

TPM (Total Productive Maintenance)

Total Productive Maintenance (TPM) is a system of maintaining and improving the integrity of

production and quality-systems through the machines, equipment, processes and employees that

add business value to the organisation. It focusses on keeping all equipment in top working

condition to avoid breakdowns and delays in the manufacturing process.

It involves

Setting a goal to maximise equipment efficiency (overall efficiency).

Establishing a total system for Productive Maintenance for the entire life of equipment.

Participation by all departments, including equipment planning, operating and maintenance

departments.

Involving all personnel, including top personnel to first-line operators.

Achieving Zero losses through overlapping small groups

Benefits of TPM

Direct Benefit

1. Increase productivity and OPE (Overall Plant Efficiency) by 1.5 or 2 times.

2. Rectify customer complaints.

3. Reduce the manufacturing cost by 30%.

4. Satisfy the customers needs by 100 % (Delivering the right quantity at the right time, in the

required quality).

5. Reduce accidents.

6. Follow pollution control measures.

Indirect Benefit

1. Higher confidence level among the employees.

2. Keep the work place clean, neat and attractive.

3. Favourable change in the attitude of the operators.

4. Achieve goals by working as team.

5. Horizontal deployment of a new concept in all areas of the organization.

6. Share knowledge and experience.

7. The workers get a feeling of owning the machine.

Eight Pillars of TPM -

Autonomous Maintenance

Purpose:

Training of operators proficient in equipment

Protecting ones own equipment by ones staff

Activities:

Implementation of 7 steps

1. Initial clean-up

2. Countermeasures for the source of problems and measures for difficult-to- access locations

3. Creation of tentative autonomous maintenance standards

4. General inspection

5. Autonomous inspection

6. Standardization

7. All-out goals management

Focussed Improvement

Purpose:

Realize zero losses of all types, such as failure losses and defect losses

Demonstrate ultimate production efficiency improvement

Activities:

Understanding the 16 losses

Calculating and settling goals for overall equipment efficiency, productivity and production

subsidiary resources

Implementation of PM analysis

Thorough pursuit of equipment and production as it should be.

Planned Maintenance

Purpose:

Improving efficiency of maintenance departments to prevent 8 major losses

Activities:

Daily Maintenance

Time Based Maintenance

Condition Based Maintenance

Improvement for increasing the service life expectancy

Control of replacement parts

Failure analysis and prevention of recurrence.

Lubrication control

Quality Maintenance

Purpose:

Achieve zero defects by supporting and maintaining equipment conditions

Activities:

Verify quality characteristics standards; understand defect phenomena and performance

Investigating the conditions for building in quality, unit processes and raw materials,

equipment and methods

Investigating, analyzing and improving the conditions of malfunctions

Setting 3M conditions; setting standard values for inspection

Creation of standards that can be followed; trend management

Education and Training

Purpose:

Establishment of technical education for operations and maintenance workers

Activities:

Basic process of maintenance

Tightening nuts and bolts

Aligning keys

Maintenance of bearings

Maintenance of conductive parts

Prevention of leaks

Maintenance of oil pressure and air pressure equipment

Maintenance of electrical control equipment

Development Management

Purpose:

Reducing product development and prototyping time

Reducing the development, design and fabrication time of equipment

Improving 1-shot start-up stability of products and equipment

Activities:

Setting development and design goals

Ease of production

Ease of QA Implementation

Ease of use

Ease of maintenance

Reliability

Investigate LCC

Design release drawing

Production: Identify problems in the prototype, trial run and initial-phase mass production

control stages.

Safety, Health and Environment

Purpose:

Achievement and support of zero failures

Realization of a healthy and invigorating workplace that gives meaning to work

Activities:

Measures to improve equipment safety

Measures to improve work safety

Improvement of work environment (noise, vibration and odors)

Measures to prevent pollution

Creation of healthy employees

Promotion of invigorating activities

Office TPM

Purpose:

Achieve zero function losses

Creation of efficient offices

Implementation of service support functions for production departments

Activities:

Autonomous maintenance activities

1. Initial clean-up (personal space)

2. Work inventory

3. Countermeasure for problems

4. Standardization

5. Promotion of autonomous management activities of work

Individual improvement through project activities

1. Shortening of settlement schedule

2. Improvement of distribution

3. Improvement of purchasing and subcontracting

4. Reform of production control system

5S:

5S is a system to reduce waste and optimize productivity through maintaining an orderly

workplace and using visual cues to achieve more consistent operational results. Implementation

of this method "cleans up" and organizes the workplace basically in its existing configuration,

and it is typically the first lean method which organizations implement.

The 5S pillars:

Sort (Seiri)

Set in Order (Seiton)

Shine (Seiso)

Standardize (Seiketsu)

Sustain (Shitsuke)

These pillars provide a methodology for organizing, cleaning, developing, and sustaining a

productive work environment. In the daily work of a company, routines that maintain

organization and orderliness are essential to a smooth and efficient flow of activities. This lean

method encourages workers to improve their working conditions and helps them to learn to

reduce waste, unplanned downtime, and in-process inventory.

Theory of Constraints

The Theory of Constraints states that every system must have at least one constraint limiting its output. This was developed by Dr. Eliyahu M. Goldratt. A constraint is -

A process or process step that limits throughput.

Anything that limits a system from achieving higher performance versus its goal. A constraint is a factor that limits the system from getting more of whatever it

strives. Consequences of the Theory: 1. The more complex the system, the less independent process paths exist, so the lower the number of constraints. (Usually, complex systems have only one constraint at a given time.) 2. A system of optimum processes cant be an optimum system. 3. An optimum system runs the constraint (or bottleneck) at optimum capacity (focused on the goal of the system), and all other process steps must have excess capacity TOC postulates that the goal is to make (more) money. It describes three avenues to this goal:

Increase Throughput

Reduce Inventory

Reduce Operating Expense

In order to achieve the goal, there are also 5 Focusing Steps:

Identify the constraints

Exploit the constraint

Subordinate and synchronise to the

constraint

Elevate performance of the constraint

Repeat the process

Advantages:

Potential for tremendous increases in productivity with minimal changes to operations.

Most powerful and cost effective tool for increasing production capacity.

Very simple to communicate and apply, making it ideal for shop floor teams.

Great for fostering teamwork as different areas become aware of the constraint and the

need to work together to assist the constraint process.

Great process for kick starting improvement efforts as it provides immediate and very

tangible benefits.

Allows growth of turnover/productivity without the need for additional space or staff.

Provides a means to evaluate the true value of changes, and utilize this to select the best

options, and drive the right behaviour/decisions.

Disadvantages:

Can be difficult to apply if the constraint process is constantly moving (for example if

the nature of the work sees dramatically different and difficult to predict demands on

various production resources).

Can be difficult to apply in a jobbing environment (however it is still very applicable)

Example To better understand the theory of constraints and non-constraints, consider a production system that runs raw materials through three component processes and then turns them into a finished product.

Within this system, each process is equivalent to a link in the production chain. Where is the constraint in this chain? Process B is the weakest link: Process B produces the least at only six units per day. Process A and C are the non-constraints. Imagine that the manufacturer improves process B until it can produce 18 units per day. Now, process C becomes the system constraint while the non-constraints are everywhere else. If process improvements continue until all processes are producing 18 units/day or higher, the system constraint becomes the marketplace, which can accept only 15 units per day. At this point, internal constraints have been replaced by an external constraint. Overall, the theory of constraints emphasizes fixing the weakest link in

the chainthe system constraintand temporarily ignoring the non-constraints. In this way, the theory has a profound impact on process improvement.

Logistics Management

It is planning, implementing, and controlling the physical flows of materials and finished goods from point of origin to point of use to meet the customers need at a profit. Some excellent examples of value adding logistics services are: Dabbawalas of Mumbai: Reliable, fool proof logistics system of delivering lunch boxes to over 5,00,000 office goers every day without letting the wrong lunch box reaching the wrong office and also ensuring the boxes reach on time. The Indian Postal Services: One of the largest logistics network in the world today, which delivers letters in the most cost effective manner across six lakh villages, one hundred and twenty cities and several thousand of towns covering the length and breadth of the country within twenty-four to forty-eight hours and serving more than hundred and seventy countries with Indian source stations/ customers and/or destinations as mentioned earlier. Purpose

1. Reduction of inventory 2. Economy of freight 3. Reliability and consistency in delivery performance 4. Minimum damage to products 5. Quicker and faster response

Functions

1. Order processing 2. Inventory planning and management 3. Warehousing 4. Transportation 5. Packaging

How does Logistic add Value? Logistics delivers value to the customer through three main phases:

1. Inbound logistics: These are the operations, which precede manufacturing. These include the movement of raw materials, and components for processing from suppliers.

2. Process logistics: These are the operations, which are directly related to processing. These include activities like storage and movement of raw materials, components within the manufacturing premises.

3. Outbound logistics: These are the operations, which follow the production process, i.e. movement of finished goods to customers.

Various Logistics service providers

1. First Party Logistics Companies which do their own logistics activities 2. Second Party Logistics Companies which provide their own assets, such as truck

owners, warehouse operators, etc.

3. Third Party Logistics (3PL) Companies which provide logistics services on behalf on another company. 3PL's typically can provide transportation, warehousing, pool distribution, management consulting, logistics optimization, freight forwarding, transportation management, rate negotiations, cost evaluations, and contract management services.

4. Fourth Party Logistics (4PL) companies provide logistics solutions built around the domain knowledge provided by third party logistics companies. Thus 4 PLs have emerged out of the vacuum created by 3PLs. A 4PL is a supply chain manager & enabler who assemblies and manages resources, build capabilities and technology with those of complimentary service providers. They act as the first point for delivering unique and comprehensive supply chain solutions. 4PL leverages combined capabilities of management consulting and 3PLs. They act as an integrator assembling the resources, capabilities, and technology of their own organization and other organizations to design, build and run comprehensive supply chain solutions. 4 PL is an emerging trend and it is a complex model and offers greater benefits in terms of economies of scale.

Evolution of Operations Management

Before 1750 production took place in homes, cottages and workshops of independently trading craftsmen, and was characterised by direct contact between producers and consumers, little mechanization, and products were customized.

The industrial revolution began in England in 1700s. This was characterised by o Substitution of machine for

human power Invention of machines gave rise to process school. Foremost among this being James Watts steam engine in 1764, Hargreaves spinning jenny, Cartwrights power loom, and Maudsleys screw cutting lathe.

o Division and specialization of labours Production was broken into small, specialised tasks assigned to workers through the manufacturing process, as opposed to craftsmans make-complete approach.

These led to the widespread establishment of the factory system with increased capital intensity, mechanization, new ways of planning and control.

In the nineteenth century, o Concept of interchangeability in

1790, Eli Whitney, a manufacturer of rifles for US, designed and built parts to tight tolerances enabling every part to fit right first time. Previously parts were hand crafted or sorted from large batches to find components that fitted together neatly or with minor modifications.

o By 1850, the cottage industry was almost completely replaced by factory.

Around 1900 Scientific Management approach was developed. It was based on the works of Frederick Winslow Taylor (1856-1915). Works of Taylor, Lilian, Frank Gilberth, and Henry Gantt stressed the need for development of standards for work and improved efficiency. But there was little consideration of human feelings and operators were viewed as mere extensions of their machines working within a wider, controlled system. Number of ideas, including piecework payment system, time motion study, principles of efficiency, standards and management by exception, were introduced. These culminated into opening of Ford Motor Companys Rouge plant in Detroit for production of Model-T. So around 1920s was born the era of mass manufacture and standardized, low variety products.

In 1930s, an opposing view to scientific management began to emerge in which behavioural issues were identified as being important to productivity. Works of Maslow, McGregor, Likert, and Herzberg added to this behaviourist theories and practical approaches.

The team work approach to flow line assembly at Philips, Eindhoven, and Volvo stresses the need for parallel development of social and technical systems for the success of manufacturing operations. Also need for flexible labour to cope with changes in the market and environment was identified.

Atkinsons model (1984) of the Flexible Firm was developed as an expansion of flexible organisation. This argued that the era of mass production is over with more flexible and less rigid work structures and a revival of craft-forms of production and need for multi-skilling in the workforce.

In the 1940s, in the military and defence organizations of Britain and USA, Operational Research (OR) originated to help solve problems of civilian defence, bombing strategies, transportation and military logistics. OR turned to business and industry, and included new quantitative techniques for stock control, scheduling, forecasting, project management, quality control, simulation and linear programming, to name only a few. OR seeks to replace intuitive decision making for large complex problems with approaches that identify optimal solutions through analysis.

Computers are now a highly cost effective and efficient means of managing and distributing information required to plan and operate production and service systems. Control offered by computer technology has made possible the manufacture of products in mass volumes, but in a wide variety and configured to suit individual customer requirements.

Around 1960s, manufacturers and service operators have come to realise that they have a considerable amount to learn from one another and that there are innumerable areas of similarity in the management of their operators.

The economic expansion of Asia, and most notably of Japan, since 1960s has stimulated development of alternative operations theory and practice, such as Just-in-Time, TQM, Kaizen and encapsulating these into lean operations were involved.

Operations Management has been emerging over the last 200-300 years. In 1800s, the prime focus was management of the factory, but as scientific management practices became widespread the discipline changed from general factory management to production management. The wider operational perspective brought in by OR plus the growing need to incorporate and learn from service operations has further broadened the discipline. Now, subject to influence of computer developments and Japanese approaches continues to develop under the influence of a number of different, and often conflicting, schools and paradigms.