Lecture Principle of inventory and material management - Lecture 30

Lecture 30 - Total Quality Management (Continued). The contents of this chapter include all of the following: Variables and attributes, control charts for variables, parameters, control charts for attributes, tolerances, process capability, understanding continuous improvement, deming 14 points, TQM, seven quality tools, maintenance and reliability, reliability, product failure rate, providing redundancy, maintenance cost, total productive maintenance.

Total Quality Management (Continued)

Books

• Introduction to Materials Management, Sixth Edition, J. R. Tony Arnold, P.E., CFPIM, CIRM, Fleming  College, Emeritus, Stephen N. Chapman, Ph.D., CFPIM, North Carolina State University, Lloyd M.  Clive, P.E., CFPIM, Fleming College

• Operations Management for Competitive Advantage, 11th Edition, by Chase, Jacobs, and Aquilano, 2005,  N.Y.: McGraw­Hill/Irwin.

• Operations Management, 11/E, Jay Heizer, Texas Lutheran University, Barry Render, Graduate School of  Business, Rollins College, Prentice Hall

• Attributes data refers to quality characteristics that 

either conform to specification or do not (examples:  visual inspection for color, missing parts, scratches,  go­no­go gauging)  Either the part is within tolerance 

or it is not.  

• Variables data can be measured on a continuous scale 

(examples: weight, dimensions, pH, temperature, 

pressure, etc.)

ü What are the measures and processes?

Cycle for Learning and Improvement:

ü Plan a specific change that results

in improvement.

ü Test the change on a small scale.

ü Study and learn from the test results.

ü Act to implement the change.

Plan Act

Study Test Customer Need

Current Knowledge

“No manufacturer that I know of possesses

enough knowledge and manpower to workeffectively with more than one vendor for

any item.”

W. Edwards Deming, Out of the Crisis

Maintenance and Reliability

equipment

reliability is to maintain the capability

of the system while controlling costs

þ Maintenance is all activities involved in

keeping a system’s equipment in working order

þ Reliability is the probability that a

machine will function properly for a specified time

Clean and lubricate

Monitor and adjust

Make minor repair

Keep computerized records

Results Reduced inventory Improved quality Improved capacity Reputation for quality Continuous improvement Reduced variability

R3 99

R2 80

Number of unit-hours of operating time

Mean time between failures

MTBF = FR(N)1

Probability of needing second component

Probability

of second component working

= 8 + 16 = 96

713 to .94

þ Preventive maintenance – routine

inspection and servicing to keep facilities in good repair

þ Breakdown maintenance –

emergency or priority repairs on failed equipment

þ Need to know when a system requires

service or is likely to fail

þ High initial failure rates are known as infant

mortality

þ Once a product settles in, MTBF generally

follows a normal distribution

þ Good reporting and record keeping can aid

the decision on when preventive

maintenance should be performed

Output Reports

Inventory and purchasing reports

Equipment parts list

Equipment history reports

Cost analysis (Actual vs standard)

Work orders

– Preventive maintenan ce

– Scheduled downtime

– Emergency maintenan ce

balance preventive and breakdown maintenance costs

consider the true total cost of

breakdowns

þ Inventory

þ Employee morale

þ Schedule unreliability

Total costs

Breakdown maintenance costs

Optimal point (lowest

cost maintenance policy)

Should the firm contract for maintenance on their printers?

Number of Breakdowns Number of Months That Breakdowns Occurred

2. Compute the expected breakdown cost per

month with no preventive maintenance

Expected

breakdown cost = Expected number of breakdowns x Cost per breakdown

= (1.6)($300)

= $480 per month

Cost of service contract

= (1 breakdown/month)($300) + $150/month

= $450 per month

Hire the service firm; it is less expensive

1. Well-trained personnel

2. Adequate resources

3. Ability to establish repair plan and priorities

4. Ability and authority to do material planning

5. Ability to identify the cause of breakdowns

6. Ability to design ways to extend MTBF

Operator Maintenance department Manufacturer’s field service (return equipment)Depot service

Preventive

maintenance costs less and

is faster the more we move to the left

Competence is higher as we move to the right

operate, and easy to maintain

purchasing machines, so that service and

maintenance are included in the cost

utilize the best practices of operators,

maintenance departments, and depot service

machines

þ Computer analysis of complex

situations

þ Model maintenance programs before

they are implemented

þ Physical models can also be used

þ Computers help users identify

problems and select course of action

End of Lecture 30