Chapter 4

Q4.1 Draw a workflow chart to show work from a request to

Completion & Explain each role as shown in the workflow chart from Q 4.1.

+----------------------+

| Request |

+----------------------+

+----------------------+

| Assess & Prioritize |

+----------------------+

+----------------------+

| Resource |

| Allocation |
+----------------------+

+----------------------+

| Schedule & |

| Plan Work |

+----------------------+

+----------------------+

| Communicate |

| and Coordinate |

+----------------------+

+----------------------+

| Execute Work |

+----------------------+

+----------------------+

| Monitor Progress |

+----------------------+
 |

+----------------------+

| Review & |

| Adjust Plan |

+----------------------+

+----------------------+

| Complete Work |

+----------------------+

Explanation of each step:

1. Request: The initial step where a work request is made, either by a client, a team
member, or through an internal process.
2. Assess & Prioritize: The request is assessed and prioritized based on factors such as
urgency, importance, available resources, and strategic goals.
3. Resource Allocation: The necessary resources, including personnel, equipment, and
materials, are allocated to the planned work based on availability and requirements.
4. Schedule & Plan Work: The work is scheduled and planned, taking into account the
allocated resources, dependencies, timelines, and any constraints or limitations.
5. Communicate and Coordinate: The schedule and plan are communicated to the relevant
stakeholders and teams involved. Coordination is established to ensure everyone is aware
of their roles, responsibilities, and timelines.
6. Execute Work: The actual execution of the planned work takes place, following the
established schedule and utilizing the allocated resources.
7. Monitor Progress: The progress of the work is monitored and tracked to ensure it is on
schedule and meeting the desired outcomes. This may involve regular check-ins,
reporting, and tracking of key performance indicators.
8. Review & Adjust Plan: Regular reviews are conducted to assess the progress, identify
any issues or changes, and make necessary adjustments to the plan if required. This step
ensures that the work remains aligned with the project goals and any evolving
requirements.
 9. Complete Work: Once the work is finished and meets the predefined criteria, it is marked
as completed, and any necessary documentation or deliverables are finalized.

This workflow chart provides an overview of the typical steps involved in work management for
scheduling and planning. However, pleas

OR

Priority codes allow ranking of work orders to get work accomplished

in order of importance. Too many organizations neglect the benefits
of a clearly-defined prioritization system. Organizational discipline
that comes through communication, education, and management support

is key to the correct usage of priority codes.

Q4: Why do we need to manage maintenance backlog? What

is a good benchmark?

Managing maintenance backlog is crucial for several reasons:

1. Asset performance: An organization's assets, such as equipment, machinery, or

infrastructure, require regular maintenance to ensure they operate efficiently and
effectively. Failure to address maintenance needs can result in decreased performance,
breakdowns, and increased downtime, leading to reduced productivity and higher costs.
2. Safety and reliability: Proper maintenance helps identify and address potential safety
hazards and ensures that assets operate reliably. Regular inspections and preventive
maintenance can prevent accidents, breakdowns, and failures that may endanger
employees, customers, or the public.
3. Cost control: Neglected maintenance can lead to larger repair costs and increased
expenses in the long run. Reactive maintenance, where repairs are performed only after
an issue occurs, is generally more expensive than preventive maintenance. By managing
maintenance backlog effectively, organizations can prioritize tasks, allocate resources
efficiently, and minimize unexpected costs.
4. Regulatory compliance: Many industries are subject to regulatory requirements related to
maintenance, safety, and environmental standards. Failure to manage maintenance
backlog can result in non-compliance, which may lead to legal issues, fines, and
reputational damage.

A good benchmark for managing maintenance backlog can vary depending on the industry and
organization. However, some common benchmarks include:
 1. Backlog size: The total number of pending maintenance tasks can serve as a benchmark.
It helps determine the workload and allows organizations to set targets for reducing the
backlog.
2. Backlog age: Tracking the age of maintenance backlog items provides insights into the
time it takes to address tasks. It helps identify bottlenecks in the maintenance process and
highlights areas for improvement.
3. Backlog turnover rate: This metric calculates the rate at which backlog items are resolved
compared to the rate at which new items are added. A high turnover rate indicates
efficient management of backlog, while a low rate may suggest challenges in keeping up
with maintenance demands.
4. Key performance indicators (KPIs): Organizations can establish specific KPIs to measure
the effectiveness of their maintenance backlog management. These may include metrics
like mean time to repair (MTTR), planned versus unplanned maintenance ratio, or asset
uptime percentage.

It is important for organizations to set their own benchmarks based on their unique needs,
industry standards, and goals. Regular review and adjustment of benchmarks can help drive
continuous improvement in managing maintenance backlog.

Q4.5 What are the symptoms of ineffective planning?

Symptoms of Ineffective Planning

The following are some symptoms of ineffective planning:
• Maintenance people standing around waiting on parts
• High rework
• Poor work performance
• High stockout in the storeroom
• Planners being used to expedite parts
• Maintenance personnel arriving at the job site and waiting for
the asset / system to be shut down (wait is over 15min.)
• Frequent trips to storeroom by maintenance personnel
• Production downtime always more than estimated

Q4.6 Should planners help schedulers or craft supervisors during an

emergency? If yes, explain.
Q5.1 Inventories into a plant are generally classified in what categories?

 Materials: Basic materials and components that have not undergone significant
transformation yet, such as wood, metals, plastics, and chemicals.

 Work-in-Progress (WIP): Partially completed products in various stages of the production

process, representing the value of materials, labor, and overhead costs incurred.

 Finished Goods: Final products that have completed the manufacturing process and are ready
for sale or distribution to customers.

 Maintenance, Repair, and Operations (MRO) Supplies: Inventories of materials and supplies
necessary for the maintenance, repair, and operation of the plant or equipment, such as spare
parts, lubricants, and cleaning supplies.

 Packaging Materials: Materials used for packaging finished goods, including boxes, labels,
containers, and wrapping materials.

 Consumables: Items consumed in the production process but not becoming part of the final
product, such as fuel, lubricants, solvents, and cleaning chemicals.

 Goods in Transit: Inventories that are in the process of being delivered, either from suppliers
to the plant or from the plant to customers, but have not yet reached their final destination.

Q5.2 What is meant by ABC classification as related to inventory?

ABC classification is a technique used in inventory management to categorize items based on their
relative importance and value. It is a method of classifying inventory items into groups to prioritize their
management and control efforts. The classification is typically based on the Pareto principle, also known
as the 80/20 rule, which suggests that a small percentage of items contribute to a large percentage of
the total value or impact.

ABC classification is a method of categorizing inventory items based on their value or

importance. It divides items into three groups:

1. Group A (High-value): Items with the highest value or impact, requiring close monitoring
and tighter controls.
2. Group B (Medium-value): Items of moderate importance, falling between Group A and
Group C in terms of value.
3. Group C (Low-value): Items with relatively low value or impact, constituting a large
portion of the inventory but individually contributing less to the overall value.
The classification helps prioritize management efforts and allocate resources effectively for
inventory control.

Q5.3 Discuss how the cost of inventory can be optimized.

To optimize the cost of inventory:

1. Accurate demand forecasting helps determine the right inventory levels.

2. Just-in-Time (JIT) strategy minimizes holding costs by receiving inventory when needed.
3. Economic Order Quantity (EOQ) finds the optimal order quantity to minimize costs.
4. Safety stock is optimized by analyzing demand and lead time variability.
5. Strong supplier relationships and collaboration improve inventory management.
6. Efficient inventory tracking systems provide real-time visibility and data-driven
decisions.
7. Aligning inventory with product lifecycle reduces holding costs for slow-moving or
obsolete items.
8. Continuous improvement and data analysis identify areas for optimization.

Implementing these strategies can lead to effective inventory cost management.

Q5.4 How you will organize a store room? Discuss the key features of a small
store room you have been asked to design.
To organize a small store room effectively, consider these key features:

1. Clear categorization: Divide the space into sections for different item types.
2. Utilize shelving and storage units: Maximize vertical space with adjustable
shelves and use containers for smaller items.
3. Ensure accessibility: Keep frequently used items easily reachable and use rolling
shelves or carts.
4. Prioritize safety: Store hazardous items securely and follow safety regulations.
5. Implement inventory management: Track and manage inventory using labels or
software.
6. Adequate lighting: Install proper lighting for visibility.
7. Maintain cleanliness: Regularly clean and declutter the store room.
8. Consider security: Add locks or cameras for valuable or sensitive items.
9. Organize documentation: Keep important records easily accessible.
10. Allow flexibility: Design for future changes or expansion with adjustable storage
options.

These features will help create an efficient and well-organized store room.
Q5.5 Why is inventory accuracy important? What will you do to improve it?
Inventory accuracy is important for cost control, customer satisfaction, operational
efficiency, and financial management. To improve accuracy:

1. Implement regular cycle counting.

 2. Utilize automation and technology.
3. Standardize processes and train staff.
4. Conduct regular reconciliations.
5. Prioritize high-value or high-demand items.
6. Collaborate with suppliers.
7. Continuously review and improve.

These actions will enhance inventory accuracy and drive better business results.

Q5.6 What are key factors used in calculating EOQ?

The key factors used in calculating EOQ (Economic Order Quantity) are:

 Annual demand: Total quantity of units demanded in a year.

 Ordering cost: Cost associated with placing an order.
 Holding cost: Cost of holding inventory.
 Unit cost: Cost of each unit of the item being ordered.

Using the EOQ formula, businesses can determine the optimal order quantity that
minimizes total inventory costs.

Q5.7 Explain the benefits of using RFID technology to label stock items –
material?
Using RFID technology to label stock items offers benefits such as improved accuracy,
real-time tracking, enhanced efficiency, automation, theft prevention, and improved
visibility for better analytics and decision-making.

Q5.8 Explain inventory turnover ratio. What are the benefits of tracking this ratio?

The inventory turnover ratio is a measure of how quickly a company sells and
replenishes its inventory. It is calculated by dividing the cost of goods sold by the
average inventory value.
Tracking this ratio has several benefits:

 Efficient inventory management: It shows how well a company manages its

inventory. A higher ratio means inventory is sold quickly, reducing the risk of
excess or obsolete inventory.

 Optimized working capital: Monitoring the ratio helps free up capital tied up in
inventory, allowing funds to be used for other business needs.
 Identifying slow-moving inventory: A low ratio indicates items that are not selling
quickly. This helps identify slow-moving or obsolete inventory, enabling
appropriate actions to be taken.

 Improved demand forecasting: Analyzing the ratio over time provides insights
into demand patterns, enhancing forecasting accuracy for better planning.
  Identifying operational inefficiencies: A declining or consistently low ratio may
indicate inefficiencies, such as poor inventory control or inaccurate forecasting. It
helps identify areas for improvement.
 Benchmarking and comparison: The ratio allows benchmarking against industry
averages or competitors, aiding in evaluating inventory management practices.
 Decision-making support: It supports decisions on optimal inventory levels,
pricing, procurement strategies, and inventory management initiatives.

In summary, tracking the inventory turnover ratio helps businesses manage inventory
efficiently, optimize working capital, identify slow-moving items, improve forecasting,
identify inefficiencies, benchmark performance, and make informed decisions.

Q5.9 Identify three key performance measures that can be used to manage MRO store
effectively.

To manage an MRO store effectively, consider these three key performance measures:

 Stockout Rate: This measures how often requested items are not available in the MRO
store. High stockout rates can disrupt maintenance activities. Keeping track of and
reducing stockouts ensures that essential items are readily accessible when needed.

 Inventory Turnover: This indicates how quickly MRO items are being used and
replenished. High inventory turnover means efficient inventory management, avoiding
excessive stock. It helps optimize working capital and ensures the store has the right
items in the right quantities.

 Fill Rate: This measures the percentage of MRO item requests that can be immediately
fulfilled from the store's inventory. A high fill rate means the store is well-stocked and can
promptly meet maintenance needs. Improving the fill rate enhances operational
efficiency and reduces downtime.

By focusing on these performance measures, MRO stores can identify areas for improvement,

maintain optimal inventory levels, reduce stockouts, and ensure efficient management of MRO

supplies.

Q5.10 What is meant by shelf life? What should be done to improve it?
Shelf life refers to how long a product can be stored without spoiling or losing its quality.
To improve shelf life:

 Store products properly: Keep them in the right conditions, like temperature and
humidity, as recommended by manufacturers or industry guidelines.

 Rotate inventory: Use a first-in, first-out (FIFO) system to ensure older products
are used or sold first, reducing the risk of expiration.
  Use suitable packaging: Use appropriate containers and packaging materials to
protect products from air, moisture, and other factors that can degrade their
quality.

 Test product quality: Regularly check the quality of products throughout their
shelf life to identify any issues early and take necessary actions.
 Choose reliable suppliers: Work with suppliers who maintain high-quality
standards and provide products with longer shelf life.

 Handle and transport products properly: Ensure proper handling and
transportation practices to avoid exposing products to unfavorable conditions.
 Optimize inventory management: Forecast demand accurately and manage
inventory levels to avoid overstocking and minimize the risk of products expiring
before they are sold.

By following these steps, businesses can extend the shelf life of their products, reduce
waste, and ensure customers receive high-quality items.