Speaker Notes: Systems for Planning and Control in Manufacturing

Speaker Notes: Systems for Planning and Control in Manufacturing
Produced by and Copyright: DK Harrison and DJ Petty (2002) Supporting Slides X Systems for Planning & Control in Manufacturing: Systems and Management for Competitive Manufacture Professor David K Harrison Glasgow Caledonian University Dr David J Petty The University of Manchester Institute of Science and Technology ISBN 0000 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) MRPII 20 Widely Employed by Early 1980's ABCD Classification System <10% Achieved Class "A" Success of Japanese Manufacturers Re-evaluation of MRPII Widely Employed by Early 1980's. By the early 1980's, MRPII had been adopted by many manufacturing companies. The early success of organisations implementing MRPII, however, had not be emulated more widely. ABCD Classification System. One of the major figures in the development of MRPII was Oliver Wight. He developed a simple classification system to measure the effectiveness of MRPII. <10% Achieved Class "A“. Surveys suggested that only a very small proportion (<10%) achieved the highest grade on the classification system, class "A". Success of Japanese Manufacturers. At the same time, the spectacular success of Japanese manufacturing companies was becoming obvious in the West Re-evaluation of MRPII. These factors led to a re-evaluation of MRPII and its underpinning assumptions. These slides will review some of the manufacturing management techniques that originated in Japan and Toyota in particular. These ideas are often referred to as Just in Time (JIT) manufacturing. 2001 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Just-in-Time (JIT) 20 An Approach that Attempts to Systematically Eliminate Waste Downtime Delay Defects Inventory Paper The Five Zeros See Figure 20.1 in Book. It is dangerous to summarise JIT as a concept because of its breadth, but perhaps the most applicable definition is as follows:- "An Approach that Attempts to Systematically Eliminate Waste". Some authors have characterised JIT in terms of the so-called "five zeroes“. Downtime. There should no breakdowns Inventory. There should be not stock or work-in-process. Delay. Factories should be responsive to the needs of customer. Paper. Administration is a non-value adding activity and should be eliminated. Defects. Quality should be perfect. There should be no scrap. Japanese companies regard the above as targets to be strived towards. Because of this, JIT is often regarded as a journey rather than a destination. JIT is often thought of as a stock reduction technique and there is no doubt that Japanese companies often operate with low levels of inventory by western standards. The objectives of JIT, however, are much more far reaching. Unlike MRPII/ERP, JIT is an integrated approach which is more than a production planning and control technique. An Integrated Approach 2002 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Elements of JIT 20 Set-up Time Reduction Total Productive Maintenance (TPM) Total Quality Management (TQM) Use of Appropriate Plant Layout Supply Chain Management Use of "Pull" Control Systems Involvement of People Continuous Improvement (CI) JIT can be considered to have a number of elements:- Set-up Time Reduction. Many Japanese companies embraced the Single Minute Exchange of Dies (SMED) methodology (see section in the book). During the late 1970's, many western companies were astonished that changeovers that took them hours could be completed in Japan in minutes or in some cases, seconds. Total Productive Maintenance (TPM). Traditionally, the West has focused on fault correction rather than fixing breakdowns.(see section 22.4 in the book). Total Quality Management (TQM). Japanese companies have enthusiastically adopted the ideas of W.E.Deming. Statistical Process Control (SPC), for example, is employed widely in Japan (see section 21.4 in book). Use of Appropriate Plant Layout. Group Technology (GT) is often used in the planning the layout of Japanese factories (see section 1.11 in the book). Supply Chain Management. Japanese companies have adopted a less adversarial relationship with suppliers and have emphasised waste elimination. Use of "Pull" Control Systems. In the 1970's, Toyota pioneered the use of ?pull? control techniques, particularly the use of Kanban. Involvement of People. JIT needs an inclusive and cooperative working culture which has lead to new ways of working such as Quality Circles (see section ). Continuous Improvement (CI). All of the above is underpinned by the need for CI or Kaizan (see section 9.2 in the book). Kaizan is striving towards the five zeroes. 2003 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Push Vs Pull Systems 20 Push External Control Pull See Figure 20.2 in Book. JIT is an enormous subject and there is not time to discuss all of the aspects of this topic. As mentioned previously, JIT is more than a production planning and control technique. It is on this particular aspect, however, that the following slides will concentrate. In particular, Kanban systems will be discussed. "Kanban" is Japanese for card. It is a technique for building the control mechanism into the manufacturing system itself. This can be contrasted with SFC where control comes from outside. There are a number of Kanban techniques that can be employed. The simplest form is so-called Kanban Squares. Here squares are painted between the work centres for each item in production. When a downstream Kanban square is empty, this is the signal for material to be processed. The great virtue of this technique is simplicity as shown in the slide. Kanban Squares - Control Comes From Within the System 2004 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Two Card Kanban – Step 1 20 W Empty Container from Downstream Workcentre Input Queue Output Queue Machine W P Step 1 Withdrawal Kanban Production See Figure 20.3 in Book (Modified Form) <ANIMATION> There are several other methods of applying "pull" control in addition to Kanban Squares (e.g., Kanban cards are also widely applied). All of the techniques operate on the same principle, however: control is an integral part of the manufacturing system. In push systems (like MRPII/ERP), control is a separate entity. The Two Card Kanban technique is a more sophisticated approach. This technique depends on using production (P) and withdrawal (W) Kanban cards and standard containers. The kanbans contain simple information relating to the parts to be produced. The cycle can be represented as a five-stage procedure which is shown in the next three slides. 1. An empty container arrives at an output queue from a downstream work centre <Clk>. Attached to this container is a W Kanban. 2006 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Two Card Kanban – Steps 2 and 3
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Two Card Kanban – Steps 2 and 3 20 W P Step 2 P W Full Container Sent to Downstream Workcentre P Production Kanban Removed From Empty Container W P W Step 3 P See Figures 20.4 and 20.5 in Book (Modified Form). <ANIMATION> 2. The W Kanban authorises material withdrawal and a full container is sent to the workcentre downstream. The P Kanban attached authorises the workcentre to manufacture product. 3. The workcentre completes a batch of product <Clk>. The P Kanban is attached to the now full container in the output queue. P Production Kanban Removed From Empty Container W 2007 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Two Card Kanban – Steps 4 and 5
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Two Card Kanban – Steps 4 and 5 20 W W Step 4 P P W P P Empty Container Sent to Upstream Workcentre W P W Step 5 See Figures 20.6 and 20.7 in Book (Modified Form). <ANIMATION> 4. The empty container in the input queue is sent to the upstream workcentre along with its attached W Kanban. 5. The upstream work centre is authorised to send a full container. W Full Container From Upstream Workcentre 2008 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Two Card Kanban – Key Points
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Two Card Kanban – Key Points 20 System Always Returns to Original State True Pull System Cards Control Queues Advantages Over Kanban Squares No Need for Line of Sight Easy to Modify Queue Sizes Easy Introduction of New Products System Always Returns to Original State. After the cycle is complete, the system returns to the original state. True Pull System. Two card Kanban is a true pull system. No external scheduling is required. Cards Control Queues. The number of Kanban cards in the system controls the size of the input and output queues. Advantages Over Kanban Squares. Kanban squares is a simple technique. Kanban cards, however, has the following advantages. No Need for Line of Sight. Kanban squares trigger production because of an empty square.This means an upstream workcentre needs to be able to physically see the immediate downstream workcentre. Because Kanban cards can be periodically collected, in principle workcentres can be in different buildings. Easy to Modify Queue Sizes. With Kanban squares, it is necessary to physically erase or paint squares to control the size of the queues. With Kanban cards, queues are controlled by simply issuing or removing cards. Easy Introduction of New Products. When new products are introduced, there is no need to paint new squares. It is a simple matter of issuing new cards. 2009 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

One Card Kanban – Steps 1, 2 and 3
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) One Card Kanban – Steps 1, 2 and 3 20 W Step 1 W Empty Container Sent from Downstream Workcentre Full Container Sent to Downstream Workcentre W W Step 2 W See Figure 20.8 in Book (Modified Form) <ANIMATION> The Single Card Kanban technique is simpler in that only withdrawal kanbans are used. The five stage cycle is as shown in the next two slides. The process is similar to two card Kanban except production is controlled externally. This approach can be considered to be a hybrid push-pull system. Again, an empty container arrives with a W kanban. A full container is sent to the downstream workcentre. Note: no further activity is triggered automatically at this point <Clk>. Production at the work centre is triggered by some external control system (e.g., MRPII/ERP). W Step 3: Production Triggered by External Control 2010 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

One Card Kanban – Steps 4 and 5
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) One Card Kanban – Steps 4 and 5 20 W W Step 4 W Empty Container Sent to Upstream Workcentre W W Step 5 See Figure 20.8 in Book (Modified Form). The process then simply follows the Two Card Kanban method. 4. The empty container is sent to the immediate upstream workcentre along with its W Kanban. 5. The upstream work centre responds by sending a full container of parts. W Full Container From Upstream Workcentre 2011 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

One Card Kanban – Key Points
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) One Card Kanban – Key Points 20 Requires an External Control System Hybrid Push-Pull System No Production Kanbans Only Controls the Input Queue Requires an External Control System. One card Kanban needs an external control system Hybrid Push-Pull System. Because of point one, it is not a true pull system. No Production Kanbans. There are no P Kanbans. Only Controls the Input Queue. Only the input queue is controlled by the Kanbans. 2012 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Other Kanban Techniques
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Other Kanban Techniques 20 Part Number: DP1035 Description: Disk Brake Pad Box Capacity: 20 Box Type: A Issue Level: 3 Kanban Racks Signal Kanbans From: Pressing Cells 1-6 To: Heat Treat Example Card Number of Kanbans N =Number of Kanbans Ad = Average Demand Over Unit Time Lt = Lead-Time Ss =Safety Stock C = Container Size Signal Transmission Lights Flags Golf Balls See Figures 20.9 and in Book <ANIMATION> An example of a Kanban card is shown in the top left hand corner of the slide <Clk>. There are a number of other techniques available for implementing a pull system:- Where there is restricted space, racks have been applied (Kanban racks). When the quantity falls below a defined level, replenishment is triggered <Clk> . Some companies have used so-called signal Kanbans. Here, when inventory reaches a pre-determined level, a Kanban is hung on a signal post where it is highly visible <Clk>. Finally, some companies have developed methods for transmitting the production signal to a remote location. This can be accomplished in a variety of ways; lights, semaphore (flags) and even rolling coloured golf balls down transparent tubing <Clk>. Kanban is actually a variant of Re-Order Point (ROP) control. There is no fundamental difference between the two techniques. Rather, they are distinguished by the way in which they are applied. The size of a Kanban can be calculated using the formula at the bottom right hand corner of the slide. All of the parameters above need to be stated in consistent units. Typically, Ss is stated in terms of a percentage of the average demand during the lead-time. Sometimes, however, Ss is calculated using ROP methods by taking into account variation in demand (see section 16.6 in book). 2013 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Model for JIT Use within MRPII/ERP
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Model for JIT Use within MRPII/ERP 20 Financial Systems Supplier Schedules Customer Schedules Purch Order Processing Sales Order Processing Payments ERP Invoices Inventory Control Using Kanban and Enterprise Resource Planning (ERP) is not mutually exclusive. Many companies successfully combine the two. A typical model for this type of approach is shown on the slide. ERP controls the commercial aspects of the system. Sales Order Processing is used to collect customer demand and generate invoices. Note that in a JIT environment, customer demand will normally be defined by rolling schedules rather than discrete orders. Purchase Order Processing creates demand on suppliers (normally in the form of schedules rather than discrete orders) and controls payments. Flow between the individual workcentres (W/C) within the manufacturing system itself, however, is moderated by Kanban Control. The Inventory Management module of ERP is only updated when materials are launched into the manufacturing system and when finished products are received. The ERP system handles all of the financial management requirements of the organisation. Raw Material Finished Product W/C 1 W/C 2 W/C 3 W/C 4 W/C 5 W/C 6 Kanban Control 2014 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

JIT Extensions in ERP Packages
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) JIT Extensions in ERP Packages 20 Smoothing/Rate Levelling Facilities Simplified Order Systems, Including Electronic Data Interchange (EDI) Repetitive Manufacturing (No Works Orders) Provision for Backflushing Receipt/Issue STK STK Transaction Launch Due Date Date Process Process Process RM FGI 1 2 3 See Figure in Book. The Just-in-Time philosophy has a direct influence on the design of Enterprise Resource Planning (ERP) software packages. Smoothing/Rate Levelling Facilities. It is common for ERP packages to include modules for rate levelling. That is to say, the package allows peak demand to be spread over a production period. This is sometimes called Hijunka (pronounced High-Jun-Ka). Simplified Order Systems, Including Electronic Data Interchange (EDI). Simplified methods for exchanging information between customer and suppliers have also been developed. These systems often utilise Electronic Data Interchange (EDI), especially in the automotive sector. Web based systems are also accomodated. Repetitive Manufacturing (No Works Orders). Many software houses have also added repetitive manufacturing modules to their packages. These modules permit works orders to be handled more easily (no paper work is generated). Provision for Backflushing. ERP have been designed to allow backflushing (see bottom of slide). This is a technique that allows all of the inventory transactions associated with a works order to be completed at the point of receipt. This uses the bill of material to calculate the consumption of components for a particular works order, thus eliminating clerical effort. In complex assembled items that are manufactured repetitively (e.g., cars and televisions), this saving can be very significant. It should be noted, however, that backflushing is only appropriate where manufacturing lead times are very short. Due Due Work in Process Date Date SO PO Receipt Lead Time (Lt ) Despatch Lt Must be Short 2015 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) JIT Pre-Requisites 20 Repetitive Manufacture Machine Layout Small Lot Sizes Reliability Multi-skilled Environment Stable MPS Kanban is a very simple yet efficient means of control. There are, however, a number of pre-requisites before Kanban can be employed as the sole means of control. Repetitive Manufacture. Kanban cannot be used in an engineer to order environment. Machine Layout. Kanban cannot be used in a functional layout. Small lot sizes. In practice, for Kanban to be successful it is essential that lot sizes are small. As has been seen earlier, this implies short changeover times. Reliability. Because of the high degree of inter-dependence between processes, it is essential that there are few disturbances to flow. This is why Total Productive Maintenance (TPM) and Total Quality Management (TQM) are considered to be so fundamental to JIT. Multi-skilled Environment. This is not strictly a pre-requisite, but in practice the ability to move labour between processes makes it easier to manage capacity. Stable Demand. Kanban cannot respond to highly fluctuating schedules (hence the need for rate-levelling or Hijunka). Even where Kanban is not (or cannot) be employed, JIT has been very influential. Early MRPII application was undertaken in isolation. Fundamental business issues would be addressed by use of safety stocks and/or sophisticated planning techniques. The JIT philosophy is to attack the problems themselves. The JIT philosophy of simplification, elimination of waste and continual improvement is often applied even if Kanban is not the most appropriate scheduling technique. The JIT Philosophy Can be Applied Even if Kanban is Inappropriate 2016 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Effect of Lead-Time and Lot-Size (1)
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Effect of Lead-Time and Lot-Size (1) 20 22 23 24 25 26 27 28 A Stk. = 0 Orders 15 20 L = 2 Wks t A Gross Req. 15 20 1 Stk. = 5 B L = 30 s Net Req. 10 20 2 D B 2-Off L = 2 Wks t Order 30 3 4 D C 5 Gross Req. 30 Stk. = 0 C 6 Pur L = 30 s Net Req. 30 L = 3 Wks t 7 Pur Order 30 See Figures and in Book <ANIMATION> Because of the emphasis on simplification and involvement of people at all levels, JIT has led to the adoption of de-centralised control strategies. Traditionally, company management structures have been centralised and run on a functional basis. In a JIT environment, many functions (such as planning and control) are carried out by production personnel. Finally, JIT emphasises short lead times and small lot sizes and this has enormous benefits for MRP. Consider the example product on the left of the slide. The MRP tables on the right of the slide show how demand is projected down through the Bill of Material. <Clk> to move through the MRP calculation. Note:- 1. Supply and demand are in balance. 2. At the bottom of the calculation, a single order for 100 units of “D” is required. 8 Pur Gross Req. 30 30 40 Stk. = 10 D L = 100 Net Req. 20 s 30 40 L = Wks t Order 100 2017 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Effect of Lead-Time and Lot-Size (2)
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Effect of Lead-Time and Lot-Size (2) 20 22 23 24 25 26 27 28 A Stk. = 0 Orders Demand 16 20 OEM L = 2 Wks t Gross Req. 16 20 Stk. = 5 B L = 30 s Net Req. 11 20 Time L = 2 Wks t Order 30 30 Demand 1st Tier Supplier Gross Req. 30 30 Stk. = 0 C L = 30 Net Req. s 30 30 L = 3 Wks t Time Order 30 30 See Figure in Book <ANIMATION> The MRP tables on the left of the slide shows the same situation as the previous slide except that a single additional requirement for “A”has been introduced. <Clk> to undertake the calculation progressively. Because of the lot sizes and lead times in place, this causes large, new demands. If a closed loop MRP system was in place, this would create an avalanche of action messages. Often, this instability is blamed on the MRP logic. In reality, the fundamental issue is that the business is insufficiently responsive and the output from the system is merely a reflection of this fact. In particular, note the new order for 100 additional units of “D” in week 26. This extra demand for 100 units was caused by the addition of a single unit of “A”. This magnification of changes in demand down the Bill of Material is the result of lot-sizing and is sometimes called the “bullwhip effect”. The bullwhip effect can be observed in the way demand is passed down a supply chain. This can be seen in a variety of industries, but the best known example is the automotive supply chain. Consider the diagram on the right of the slide. An Original Equipment Manufacturer (OEM) such as Ford, General Motors or Volkswagen experience small fluctuations in demand <Clk>. These fluctuations are magnified as the demand is passed to a first-tier supplier (e.g., a brake assembly manufacturer) <Clk>. The demand variability is further magnified as demand is passed to a third-tier supplier such as a disc brake pad manufacturer. Demand 2nd Tier Supplier Gross Req. 30 62 40 Stk. = 10 D L = 100 Net Req. 20 30 40 s L = Wks t Order 100 100 Time 2018 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Classical Approach 20 x = Inventory Level Ss= Safety Stock x 1 x + Ss 2 See Figure in Book. Traditionally, in the West, problems have been seen as something to be avoided. In factories, problems such as poor quality, unreliability of machines etc, have been addressed by the use of safety stocks. Sophisticated techniques have been developed to determine the appropriate level of these stocks. In addition to this, companies have invested in complex computer systems for planning and control that help to avoid such problems in manufacturing. This approach is sometimes likened to a ship negotiating a river (the so-called river and rocks analogy). The Western approach is to increase the level of water to allow the ship to pass. Where some obstacles (by analogy, poor quality, unreliability etc.) are too large to be covered, radar is used to avoid the problems. 2019 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) JIT Approach 20 y = Inventory Level y 1 y - Reduction 2 See Figure in Book. The JIT approach is fundamentally different. Here, the root causes of the problems are attacked using a variety of techniques (e.g. TQM, TPM and SMED). Then, stock levels are reduced and this reveals other problems which themselves are attacked as depicted in the slide. Note: the stock is reduced to deliberately provoke problems. This process is repeated indefinitely, leading to continuous improvement (or Kaizan). 2020 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Traditional Purchasing Philosophy
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Traditional Purchasing Philosophy 20 Labour Most Significant Time Spent on Expediting Emphasis on Price Adversarial Relationship Formal Relationship Expediting Administration 60% 30% Sourcing 10% Purchase Order Purchasing Department Sales Department See Figure in Book. Labour Most Significant. Traditionally, purchasing has been regarded as separate from the overall manufacturing system. Production Planning and Control would generate requisitions and these would be converted by purchasing into orders. One reason for this was labour was normally the most significant factor influencing cost. Time Spent on Expediting. Typically, the majority of purchasing effort was spent on expediting overdue orders (See pie chart on left). This is often due to an absence of overall planning systems to realistically determine purchase requirements. Relatively little time is spent on sourcing (choosing suppliers). Emphasis on Price Purchasing normally focused on price. Adversarial Relationship. As a result of the point above, supplier-customer relationships were adversarial. Large numbers of suppliers were perceived as a good thing. This allowed purchasing to apply pressure during price negotiations. Formal Relationship. The relationship between customers and suppliers was formal. The customer’s Production and Inventory Control (PIC) Department would identify demand for materials and pass this in the form of requisitions to their Purchasing Department. The Purchasing Department would raise a Purchase Order and Send this to the Sales Department of the supplier. The supplier’s Sales Department would create a sales order. This sales order would be converted into a planned works order which would be issued to production by their PIC Department. Requisition Planned Works Order Production and Inventory Control Department Production and Inventory Control Department Customer Supplier 2021 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

JIT Purchasing Philosophy
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) JIT Purchasing Philosophy 20 Labour Only One Factor Price Only One Factor More Time Spent on Sourcing Cooperative Relationship Direct PIC Relationship Expediting 10% Administration 20% Sourcing 70% Blanket Purchase Order Purchasing Sales See Figure in Book. Labour Only One Factor. Ideally, purchasing will be part of the manufacturing management system. Indeed, suppliers will also be considered an integral element in the manufacturing system. This is particularly important in manufacturing today where material makes up a significant part of overall product cost. Price Only One Factor. Low cost, but low quality materials are generally not economic. Also, as buffer stocks are removed in a JIT environment, the consequences of late delivery of purchase parts becomes more significant. More Time Spent on Sourcing. Because of the above and the fact that Japanese customers tend to have relatively few suppliers means that more time is spent on sourcing (see pie chart). Less time needs to be spent on expediting and administration because planning and purchasing systems are more effective. Cooperative Relationship. The influence of Japanese manufacturers has led to a more co-operative relationship. Overall, the emphasis on minimising cost across the entire supply chain, rather than focusing on the purchase price of individual items. Direct PIC Relationship. Recently, it has become common for the the PIC depts. of customer and supplier to communicate directly. The customer PIC Dept. directly calls-off product delivery from the supplier PIC Dept. This is vital as lead times are reduced. The Purchasing Dept. (customer) negotiates with the Sales Dept. on issues such as price and overall anticipated volumes and creates blanket purchase orders to cover a significant period of time. This leads to a change in the role of purchasing: increasingly, they are concerned with strategic objectives such as supplier base rationalisation. Anticipated Volumes Anticipated Volumes PIC PIC Customer Supplier Call-Off 2022 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) JIT Summary 20 No Universal Definition -Elimination of Waste Decentralised Approach Some Companies Apply Selectively Can be Used with Other Approaches Most Influential Idea in Manufacturing No Universal Definition - Elimination of Waste. While there is no generally accepted definition of JIT, it is best thought of as an approach that attempts to eliminate waste. Decentralised Approach. It is a decentralised approach that means people at all levels in the organisation are involved in decision-making. Control is not centrallised as in the MRPII/ERP philosophy. Some Companies Apply Selectively. While many companies have embraced these ideas, in some cases the application has been selective. JIT, for example, emphases the involvement of people at all levels. Some companies have misinterpreted the JIT philosophy and have simply forced staff to undertake a wider range of tasks. Similarly, JIT encourages customer-supplier partnership. There are examples, however, of suppliers being forced to supply "JIT" with no assistance or support. Can be Used with Other Approaches. It is also now being recognised that traditional techniques also have their virtues and can also be employed. Many companies use JIT techniques in conjunction with ERP systems. Most Influential Idea in Manufacturing.There is no doubt, however, that JIT is the most influential idea in industry in the West over the last twenty years. It is a philosophy that requires changes not only to plant and its layout, but also attitudes throughout organisations. Where JIT principles have been applied enthusiastically and comprehensively, great benefits have resulted. 2023 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Comparison of Approaches
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Comparison of Approaches 20 Technique Principles Infinite Capacity MRPII/ERP Data Accuracy Planning Set-up Time JIT Kanban Control Reduction Forward Finite Focus on OPT At this point, it is worth comparing the three main planning and control philosophies (MRP/ERP, JIT and OPT). It is important to distinguish between these philosophies in two ways:- Technique. This relates to the mechanics of the technique. These underpin the operation of the particular philosophy. As such, they are mutually exclusive (though this does not mean that a technique needs to be applied exclusively throughout an organisation). Principles. These are the underlying concepts. These can be applied in any manufacturing organisation. For example, the importance of data accuracy is emphasised in MRPII/ERP. It is of course, essential for any formal manufacturing control system. Similarly, any organisation (even if they use ERP) will benefit from reduced set-up times. Finally, an understanding of bottlenecks will be useful for any organisation. Scheduling Bottleneck 2024 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Planning and Control - Summary
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Planning and Control - Summary 20 Great Attention on Planning and Control Vigourous Promotion Cannot Solve All Problems One Way of Gaining Competitive Advantage Intrinsic Part of the Operation of the Business To summarise:- Great Attention on Planning and Control. Planning and control has been the subject of great attention on the part of academics, practitioners and consultants over the last forty years. Vigourous Promotion. The various techniques that have been discussed have all been promoted vigourously at different times. Cannot Solve All Problems. It must be recognised, however, that planning and control systems cannot solve all of the problems of a manufacturing organisation. One Way of Gaining Competitive Advantage. There is no doubt, however, that excellence in planning and control is one way a business can gain competitive advantage. Intrinsic Part of the Operation of the Business. Finally, planning and control must be considered as an intrinsic and inseparable part of a manufacturing organisation. The operation of planning and control systems cannot be sub-contracted to a group of specialist professionals. Finally, none of the techniques discussed is a panacea. It is essential that practitioners in industry understand the different approaches available and apply them in the context of the particular needs of the organisation concerned. No Technique is a Panacea 2025 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Quality Management 21 Development of Quality Statistical Basis of Quality Human Factors Quality Costs TQM Certification The next set of slides will give a brief overview of Quality Management concepts. In particular, the following will be covered:- Development of Quality. The main principles of Quality and historical development. Statistical Basis of Quality. A brief discussion of Statistical Process Control (SPC). Human Factors. Crucial to quality management are human factors; that is to say, how are people managed and motivated. Quality Costs. A discussion of the costs associated with quality. TQM. Total Quality Management is one of the most commonly used buzzwords in manufacturing. Certification. BS5750 and ISO9000 will be briefly discussed. 2101 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Quality Development 21 Quality is Conformance to Requirements 1920 Quality Assurance and SPC 1950 Introduction into Japan 1970 Just-in-Time 1980 TQM and Certification 1990 Extended use of TQM Quality is an essential element of the JIT philosophy. Like JIT, there is no universal definition, but perhaps the best was proposed by Philip Crosby:- "Quality is Conformance to Requirements" 1920s. Quality Assurance and SPC. The term "quality assurance" dates back to the 1920's and was coined by a small group, including the statistician Walter Sheward, working at the Bell Telephone Laboratories. They developed a number of techniques including Statistical Process Control (SPC). 1950s. Introduction into Japan. Most significantly, W Edwards Deming (who collaborated with Sheward at the Bell Laboratories) visited Japan in the 1950s and gave a series of lectures on quality. 1970s. Just-in-Time. The developments in quality management were crucial in the context of the JIT philosophy. 1980s. TQM and Certification. In the 1980’s, Total Quality Management (TQM) came into existance. In europe, certification schemes such as BS5750 and ISO9000 started to be introduced. 1990. Extended use of TQM. By the 1990’s, application of quality techniques extended beyond manufacturing. It is now employed in organisations as diverse as hotels, retailers and software houses. 2102 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) SPC 21 Size Diagram A Deviations Upper Limit Mean Special Causes Random Variations Lower Limit Batch Size Size Diagram B Diagram C Upper Limit Upper Limit See Figures 21.1, 21.2 and 21.3 in Book. SPC was devised for use in manufacturing, though it has now been more widely applied. Fundamental to SPC is the idea that deviations can arise in two ways:- Random Variation. Most manufacturing processes are stochastic - that is to say, they are subject to random variation to a greater or lesser extent. They cannot, therefore, be defined by a single value and a probability distribution is required. Special Causes. Here some event has occurred that has led to a deviation. Sheward (and later Deming) realised that these two types of deviation needed to be treated differently. In the case of a special cause, then a corrective adjustment would need to be made. If, however, the deviation was the result of random variation, then the only solution would be to improve the process capability (i.e., reduce the range of process deviation). The question naturally arises, how can these types of deviation be distinguished? The solution is to consider the problem statistically. Consider diagram A. This shows the diameter of a component. On some occasions, the component is outside limits, on others inside. Notice, however, that there is no particular trend in the data. In this case, it is pointless making an adjustment. In Diagram B, note that the component is within tolerance on each occasion. It might be inferred therefore that there are no problems and no adjustment is required. There is clearly a trend, however, and if no action is taken, future components will be outside limits. In both of these cases, the process is out of control. A process is said to be in control (as shown in Diagram C). Mean Mean Lower Limit Lower Limit Batch Batch 2103 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Processes in Control 21 Size Diagram C Batch Most points are close to the mean and few near to the limits Comparable numbers of points are above and below the mean No pattern in the data exists (e.g., no trend up or down) Upper Limit Mean Lower Limit Batch Quality Management’s Objective is to Check the Process, Not the Product Quality Cannot be Inspected into a Product or Service See Figure 21.3 in Book. The criteria for a process to be in control are as follows:- Most points are close to the mean and few near to the limits. Comparable numbers of points are above and below the mean. No pattern in the data exists (e.g., no trend up or down). When processes are out of control it is necessary to mass inspect, as it is impossible to predict whether a particular component will be outside limits. The first step in improving any process therefore (whether manufacturing or otherwise) is to bring it under control. Once processes are in control, it is only necessary to sample inspect. Deming makes the point that the purpose of quality management is to check the process, not the product (customers will check the product). Furthermore, he also states that quality cannot be inspected into a product. SPC shows that simply employing more inspectors alone cannot improve quality. 2104 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Fourteen Points 21 1. Create a constancy of purpose 2. Adopt a philosophy of preventing poor-quality products 3. Eliminate the need for inspection 4. Select a few suppliers 5. Constantly improve the production process 6. Institute worker training that focuses on the prevention of quality problems and SPC 7. Instill leadership among supervisors to help workers perform better 8. Encourage employee involvement by eliminating the fear of reprisal 9. Eliminate barriers between departments 10. Eliminate slogans and numerical targets 11. Eliminate numerical quotas 12. Enhance worker pride, artisanry (craftsmanship) and self-esteem 13. Institute vigorous education and training programs in methods of quality improvement 14. Develop a commitment from top management to implement the previous thirteen points. It might be thought that SPC is purely a technical approach to improving quality. As Deming has pointed out, however, it has implications for work practice and the way in which people are managed. If a process is out of control, there is no point in penalising an operator for scrap or providing incentives for the converse. From these principals, Deming produced his so-called fourteen points for management. These are presented in the slide. 2105 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Quality Costs 21 See Table 21.1 in Book. There are two types of cost associated with quality. First, the Cost of Conformance (COC); the cost of ensuring goods or services conform to specification. Second the Cost of Non-Conformance (CONC). These costs can be further sub-divided as shown in the Table. Cost of Conformance (COC) Cost of Non-Conformance (CONC) 2106 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Quality Cost Trade Off 21 Minimum Cost is the Acceptable Quality Level (AQL) COC Overestimated CONC Underestimated See Figures 21.4 and 21.5 in Book. Traditionally, manufacturers took a view that some defects were acceptable (the so-called, "acceptable quality level" or AQL). The reason for this was because it would cost too much to eliminate all defects (see graph on left). In recent years, however, this belief has been challenged. This is for two reasons:- COC Over Estimated. COC is lower than previously thought. Many of the ways in which quality can be improved are simple. For example, if processes are designed such that it is difficult for operators to make mistakes, this can greatly reduce defects. In Japan, this approach is called Poke-Yoke or fool proofing. CONC Under Estimated. CONC is much higher that previously thought. The impact of poor quality on customers is very high (especially today). Defects will almost certainly cause customers to defect to other suppliers. Compared with the graph on the left, it is more realistic to draw the quality-cost trade-off curve as shown in the graph on the right. AQLs Now Generally Discredited. AQL has been superseded by the concept of Zero Defects (ZD). Here, the goal is to eliminate all defects. Some Companies Have PPM Defects. In some world-class manufacturing companies, defects are measured in Parts Per Million (PPM). These companies are still trying to reduce defects further. Also True in Service Industries. Note that ZD is now widely employed in service organisations. AQLs Now Generally Discredited Some Companies Have PPM Defects Also True in Service Industries 2107 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) TQM - Key Points 21 Customers Define Quality Senior Management Provides Quality Leadership Quality is a Strategic Issue Quality is the Responsibility of All Continuous Quality Improvement is Crucial Cooperative Effort is Crucial Statistical Methods are Key Education/training are Essential for all Personnel The culmination of many of the ideas discussed previously is TQM. The basic idea behind TQM is that all employees in the company are responsible for quality, with senior management taking the lead. This is in contrast to the traditional approach where quality was the responsibility of a specialist department. Furthermore, TQM aims for zero defects. Because elimination of all defects is impossible, some authors have remarked that TQM is a journey, not a destination. Thus continuous improvement is a crucial element of the concept. The key elements of TQM are:- Customers define quality. Customer requirements are paramount. Senior management provides quality leadership. A commitment to quality must start at the top. Quality is a strategic issue. Quality is the key focus for strategic planning. Quality is the responsibility of all. Not just quality specialists. Continuous quality improvement is key. All company functions must focus on this to meet objectives. Cooperative effort is crucial. All employees must be involved in solving problems. Statistical Methods are key. These are the basis of problem solving and continuous improvement. Education/training are essential for all personal. This is a prerequisite for continuous improvement. 2108 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Human Factors 21 Organisation: people, Common area, supervisor as moderator Training: Group processes, data collection, analysis techniques Employee Involvement (EI) Crucial Circles Less Successful in USA and Europe Circles Have Worked Well in Service Industries Problem Identification: List alternatives, consensus, brainstorming Quality Circles Problem Analysis: Cause and effect, data collection/analysis See Figures 21.6 in Book. Employee Involvement (EI) Crucial. Because TQM rejects the notion that quality is the responsibility of specialists, human factors are extremely important. Employee Involvement (EI) is crucial to the process. Note that this is in contrast to the ideas of scientific management, where individual workers were expected to simply follow instructions. One concept that many companies have employed successfully is quality circles. This is a small, voluntary group of employees (in Japan, personnel typically receive no extra pay for this activity), who work together to solve problems. The operation of quality circles is summarised in the flow chart on the left. Circles Less Successful in USA and Europe. Quality circles have been extremely successful in Japan, though less so in the West. Circles Have Worked Well in Service Industries. It is interesting to note that in the USA, quality circles have been most successful in non-manufacturing companies. Solution: Problem, results Presentation: Implementation, monitoring of results 2109 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Certification 21 70’s: BS Standard for Procedural Integrity International Standard - ISO9000 Independent Auditors Common Condition of Business Not a Quality Standard Can be Over-Rated 70’s: BS Standard for Procedural Integrity. In the 1970's, it was recognised in Britain that standards were required for quality. This led the British Standards Institute (BSI) to formulate BS5750: a standard whereby companies could be certified for procedural integrity. International Standard - ISO9000. The BS5750 standard was adopted by the International Standards Organisation (ISO). The resulting standard was denoted ISO9000. Independent Auditors. Companies can pay for independent auditors to check their documentation and if this is adequate, they receive certification. Common Condition of Business. It is now common in the UK for customers to refuse to do business with suppliers who are not ISO9000 certified. Not a Quality Standard. The ISO9000 standard does not itself relate to quality; it simply outlines a systematic approach to documentation. Can be Over-Rated. Thus, there is a danger that companies who have been certified to ISO9000 believe they have good quality by definition. This is not true; ISO9000 accreditation simply means that the company concerned has a comprehensive and consistent set of documents outlining business practices. It does not mean these practices are optimal or even effective. 2110 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Quality – Summary 21 Revolution in Quality Management Philosophy but Based on Statistics Certification Now Common in Business Wide Application Revolution in Quality. Quality has undergone a revolution in recent years and TQM has gained widespread acceptance. Management Philosophy but Based on Statistics. It should be recognised that while TQM is a management philosophy, its roots are in hard statistics. Certification Now Common in Business. In recent years, certification has become common and ISO9000 is often a prerequisite for doing business. Wide Application. Finally, all of these quality concepts have been developed from a manufacturing base. They are now employed, however, across virtually all enterprises. 2201 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Management of Plant and Machinery
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Management of Plant and Machinery 22 The Growing Importance of Maintenance Overall Equipment Effectiveness Maintenance Strategies Application of Computers Total Productive Maintenance Importance of Rapid Set-up The next set of slides will address the issue of maintenance. The following topics will be discussed:- The Growing Importance of Maintenance. Plant management has been one of the less glamorous functions in industry. Yet failure of plant is inevitably disruptive and today, more than ever, can have a serious negative effect on business performance. Maintenance is now recognised by many companies as being of crucial importance. Overall Equipment Effectiveness (OEE). A key measure for manufacturing organisations. Maintenance Strategies. The three fundamental maintenance strategies. Application of Computers. How IT/IS can be applied to maintenance. In particular, the use of Computer Maintenance Management Systems (CMMS). Total Productive Maintenance (TPM). This is a key component of the JIT philosophy. Importance of Rapid Set-up. Finally set-up time reduction through the Single Minute Exchange of Dies (SMED) methodology will be described. This section will review some of the basic techniques for managing manufacturing plant. 2101 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Management of Plant and Machinery
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Management of Plant and Machinery 22 Failure Rate Early Failure Wear-Out Failure Plant Subject to Failure Maximising ROI Development of Terotechnology Emphasis in Japan Growth of TPM Normal Operation Time See Figure 22.1 in Book. Plant Subject to Failure. All plant is subject to failure. Failure of equipment can be represented by failure curves. The failure curve shown on the slide is one commonly used. The premise is that in the short term, there will be a relatively large failure rate due to problems present at start-up. This will be followed by a long period of stability. Finally, as the plant wears, failure rates increase dramatically. In practice, the shape of the failure curve will vary depending on the nature of the plant. Failure rate may be expressed in terms of time or usage as defined by equations A and B. Development of Terotechnology. All plant is subject to failure and organisations need to provide suitable infrastructure to address this issue. The discipline of plant management is referred to as Terotechnology. This is defined as follows:- "A combination of management, financial, engineering, building and other practices applied to physical assets in pursuit of economic life-cycle costs." Maximising ROI. As equipment has become more costly, maintenance has increased in importance. At a purely financial level, the greater the cost, the greater the importance of ensuring plant provides a good Return on Investment (ROI). Emphasis in Japan. Perhaps the most significant factor, however, in the growing recognition of the importance of plant management is the high priority given to maintenance by Japanese companies. Growth of TPM. During the 1960s and 1970s in Japan, Total Productive Maintenance (TPM) was developed. TPM is now widely practiced in world-class organisations (this will be discussed later in this chapter) 2102 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) OEE 22 2 Hours Breakdown, Lack of Parts, Set-up, Lack of Services, No Operator, Etc. 1 Hour = 50% Engineers need to justify expenditure on plant and equipment (see section 3.5 in the book). Once plant has been purchased, however, it is essential that it operates effectively. A key measure that can be applied to manufacturing plant is Overall Equipment Effectiveness (OEE). This is defined in equations on the slide. Typically, OEE is expressed as a percentage. The equations above can be understood by considering a machine running for two hours. If there is one hour of downtime, there will be only 50% of the time available for useful production (i.e., availability = 50%). Downtime can arise for a variety of reasons. There may be a physical reason (e.g., machine set-up or breakdown). Alternatively, downtime may arise because of a logistical deficiency (e.g., an operator is not available) <Clk>. Of this 50%, if the machine is running below the theoretical operating speed this will further reduce effectiveness. Thus if a machine operates for one hour and in this time produces 45 products, that nominally should be produced with a cycle time (Tc) of 1 minute per unit, this will give a performance rate of 75% <Clk>. Finally, if 9 of the 45 products are scrapped, this will yield a quality rate of 80%. Thus OEE = 50% x 75% x 80% = 30%. Thus in two hours, only 30% of the theoretical production of 120 units (30% x 120 = 36) is actually achieved. Slow Running Only 45 Made (Tc = 1min/unit) = 75% Scrap 6 Scrapped = 80% 2103 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Fundamental Maintenance Strategies
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Fundamental Maintenance Strategies 22 Repairs are Undertaken in Response to Problems Breakdown Preventative Predictive Maintenance is Undertaken Routinely Based Upon Usage or Elapsed Time Fundamentally, there are three different maintenance strategies:- Breakdown Maintenance. Here, maintenance is undertaken in response to a problem that has been detected during use of equipment. Preventative Maintenance. Here, maintenance is undertaken at routine intervals. These intervals may be determined by elapsed time or time of in-service use of equipment. Predictive Maintenance. In this case, equipment is routinely inspected (e.g., vibration levels may be monitored). Based on this inspection, maintenance activities may be triggered. Plant is Monitored and Maintenance takes Place When Certain Conditions are Detected dB f 2104 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Prevention Vs Breakdown
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Prevention Vs Breakdown 22 Traditional Maintenance –Breakdown Cost Trade-Off Modified Maintenance –Breakdown Cost Trade-Off Total Cost Total Cost Cost Cost Breakdown Cost Breakdown Cost Maintenance Cost Maintenance Cost Low Medium High Low Medium High Level of Preventative Maintenance Level of Preventative Maintenance See Figures 21.4 and 21.5 in Book. The traditional approach to maintenance was to trade-off the benefits of undertaking preventative maintenance against its cost. The premise was that there was an optimum level of preventative maintenance as shown in the graph on the left. As more preventative maintenance is undertaken, the cost of breakdowns will fall. The cost of carrying out the preventative maintenance will of course increase. In this model, a certain level of breakdowns is acceptable (there is a strong analogy with quality costs as discussed in section 21.3 in the book) Breakdown Costs Often Underestimated.The problem with this model is that the cost of breakdown is difficult to quantify. Traditionally, the costs have been defined in terms of the number of hours of lost production. In practice, however, the real cost is much higher. For example, a breakdown might cause an order to be supplied late causing dissatisfaction and potentially, the loss of a customer to a competitor. Preventative Maintenance Costs Often Overestimated. The costs of preventative maintenance are not as high as might be first thought. A more realistic representation of the situation is shown on the right. Breakdowns are More Serious in a JIT Environment. In practice, breakdowns are more serious in a Just-in-Time (JIT) environment as large inventories of products are not available to provide a buffer against unreliable plant. Many Companies Have a Downtime Target of Zero. Many Japanese companies have a target of zero breakdowns, even though their OEE is extremely high by Western standards. Breakdown Costs Often Underestimated Preventative Maintenance Costs Often Overestimated Breakdowns are More Serious in a JIT Environment Many Companies Have a Downtime Target of Zero 2105 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Basic CMMS Package Structure
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Basic CMMS Package Structure 22 Now in Common Use Can Reduce Admin Can be Part of an ERP System Plant Register Preventative Maintenance Schedules Work Order Processing Purchasing Inventory Control Costing See Figure 22.4 in Book. Computer Maintenance Management Systems (CMMS) are in common industrial use. These are computer packages that automate some of thre administration associated with maintenance activities. CMMS packages can be highly sophisticated and complex (some ERP packages, such as SAP, incorporate CMMS). The basic structure of such systems, however, is relatively simple. CMMS packages consist of a number of modules as described below. Plant Register. The module allows all plant items to be logged. Preventative Maintenance Schedules. This module allows maintenance schedules to be defined. These can be linked to particular plant items. Work Order Processing. This module allows work orders to be created. Work orders can be created manually in response to breakdowns or automatically as a result of a preventative maintenance schedule. Inventory Control. Spare parts may need to be issued to a particular works order. Inventory control keeps track of stock levels of spares. This module will also recommend that parts are ordered when stock levels fall below a defined re-order point. Purchasing. This module allows spare parts to be ordered and received. Maintenance Costing. This module allows maintenance costs (labour and spares) to be collated and attributed to particular machines or groups of machines. 2106 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Problems with CMMS 22 Lack of Commitment A Breakdown Culture Lack of Skills Excessively Detailed Schedules Implementing a CMMS package in itself does not improve maintenance; it simply automates administrative activities. Many companies have experienced difficulties when implementing CMMS packages. There are several causes, including:- Lack of Commitment. The benefits of avoiding breakdowns are well recognised by most companies. These benefits, however, lag the effort required to apply preventative or predictive techniques (i.e., there is a lag before the new methods take effect). Some companies are therefore overwhelmed by breakdowns. One way to alleviate this is to implement the new techniques in stages. This also has the effect of demonstrating the benefits of modern maintenance methods. A Breakdown Culture. This is related to the point above. The personnel in many maintenance departments are experienced in breakdown maintenance. They are not accustomed to working on machines that apparently are working perfectly well. A further problem is that production may be unwilling to release machines for maintenance activities (unless forced to do so by breakdowns). Lack of Skills. The skills required for preventative or predictive maintenance are more analytical in nature than those traditionally needed for handling breakdowns. Unless preventative maintenance schedules are continually reviewed, based on the performance of the equipment, the full benefits of the approach cannot be obtained. Excessively Detailed Maintenance Schedules. A common problem when implementing CMMS packages is that preventative maintenance schedules are too detailed. Each time a work order is created for a preventative maintenance task it needs to be printed and subsequently closed. One way round this problem is to make operators responsible for low complexity, high frequency maintenance tasks and not use the CMMS package in these cases. 2107 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Total Productive Maintenance (TPM)
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Total Productive Maintenance (TPM) 22 120 Crucial to JIT and Strongly Related to TQM Whole Company Philosophy Emphasis on Reliability Not Repair Designing-Out Problems A Cultural Change Involves Operators TPM is a vast subject and can only be touched upon here. Crucial to JIT and Strongly Related to TQM. TPM It is an integral part of the JIT philosophy and is strongly related to Total Quality Management (TQM). Whole Company Philosophy. The traditional Western approach is that maintenance is the responsibility of a specialist function within the organisation. The TPM philosophy is that maintenance is the responsibility of the whole company, from senior management to machine operators. Emphasis on Reliability Not Repair. TPM promotes the use of preventative and predictive maintenance techniques, but also stresses the importance of the involvement of machine operators. Designing-Out Problems. TPM also emphasises the importance of applying techniques such as FMEA to design-out potential problems with plant. A Cultural Change. Overall, TPM requires an enormous cultural change for an organisation. Involves Operators. TPM emphasises the importance of involving machine operators in maintenance. As previously mentioned, involving operators is also highly beneficial when implementing a CMMS package. 2108 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Five S 22 Seiri (Sort) Seiton (Straighten) Seiso (Sweep and Clean) Seiketsu (Standardise) Shitsuke (Sustain) Crucial to TPM is order and tidiness in the work environment. TPM promotes the use of so-called 5S activities. The term 5S is derived from the five Japanese words listed below:-. Seiri (Sort). Separating that which is necessary from that which is not and dispensing with the latter. Seiton (Straighten). Arranging and identifying things for ease of use. Seiso (Sweep and Clean). Cleaning and tidying the work area. Seiketsu (Standardise). Defining routine procedures to maintain the above processes. Shitsuke (Sustain). Ensuring an appropriate culture is in place to support the other four rules. These activities will benefit any organisation, whether the organisation is adopting the TPM philosophy. 2109 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) The SMED Approach 22 Set-up Time Reduction Improves OEE and is Crucial for Small Lot Sizes Set-up Time Reduction Programmes are Common Single Minute Exchange of Dies (SMED) SMED is the Best Known Set-up Time Reduction Methodology Step 1 Step 2 Step 3 Step 4 Separate internal and external operations Convert internal operations to external Analyse current changeovers Streamline set-up Set-up time is defined as the time taken to change a machine from producing one type of product to another. Long set-up times reduce OEE, but more important, they force companies to manufacture in large lots. Small lot sizes are also important in minimising stock levels. If lot size is reduced (without first reducing set-up time), however, this can have negative consequences. In particular, small lot sizes will mean too much time is spent setting-up and in effect, starve the organisation of capacity. Thus, many companies are engaged in set-up time reduction exercises. The best-known approach for set-up time reduction is Single Minute Exchange of Dies (SMED). While this approach was originally devised for die changeover, it can be applied in a wide range of circumstances. The methodology has four steps:- 1. Analyse current changeovers. It is first necessary to understand how the existing set-up is undertaken. There are a number of techniques for achieving this, but one of the most effective is to use a camcorder. 2. Separate internal and external operations. Internal operations are those that can only occur while a machine has stopped. External operations can be carried out while a machine is running. 3. Convert internal operations to external. The best-known example of this is pre-heating in the case of die casting operations. In many companies, however, major benefits can be obtained simply by better organisation and ensuring all of the necessary tooling and information is available at the time of the set-up. 4. Streamline all aspects of the set-up. Only when steps 1-3 have been completed should the set-up itself be examined. This is discussed on the next slide. Next Slide 2110 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Streamlining Set-ups 22 Be Critical of the Existing Process Be Cautious About Adding New Elements Think Laterally About the Process It is often the case that expensive and sophisticated technology is not required. Many of the best ideas for process improvement originate from operators and are extremely simple. One obvious avenue of attack is to eliminate adjustments: these invariably waste time and often lead to "first-off" scrap. There is no formula for set-up reduction, but the following are useful guidelines:- Be critical of the existing process. Are all of the existing processes required? Be cautious about adding new elements to the process. Simplification is the aim. Think laterally about the process. Brainstorming is an excellent technique in this area if the right people are involved. 2111 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Plant Management – Summary
Speaker Notes: Systems for Planning and Control in Manufacturing Produced by and Copyright: DK Harrison and DJ Petty (2002) Plant Management – Summary 22 Maintenance Now Recognised as Being Crucial Reliability Crucial to Supporting JIT Breakdown Maintenance is Widely Discredited TPM is more than Preventative Maintenance Many Companies Have Not Changed Culture Maintenance Now Recognised as Being Crucial. Effective plant management is now recognised as being crucial to the success of any organisation. Breakdown Maintenance is Widely Discredited. The philosophy of breakdown-orientated maintenance is now generally discredited. Reliability Crucial to Supporting JIT. Reliability, particularly in a JIT environment, is now recognised as being crucial. TPM is more than Preventative Maintenance. A key feature of TPM is prevention of breakdowns. It goes beyond, however, preventative Maintenance and is a complete philosophy. Many Companies Have Not Changed Culture. Many companies have attempted to adopt TPM principles. Because TPM requires a cultural change, however, adoption has proved a significant challenge in most Western organisations. 2112 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Produced by and Copyright: DK Harrison and DJ Petty (2002) Course Book X Systems for Planning & Control in Manufacturing: Systems and Management for Competitive Manufacture Professor David K Harrison Dr David J Petty ISBN 0000 To be used in Conjunction with “Systems for Planning and Control in Manufacturing” by DK Harrison and DJ Petty, published by Butterworth-Heineman, ISBN

Speaker Notes: Systems for Planning and Control in Manufacturing

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