PRODUCTIVITY AND QUALITY MANAGEMENT

BA 2204

Year II – Semester II

Higher National Diploma in Business Administration

10. PRODUCTIVITY IMPROVEMENT TECHNIQUES - II

10.3 Total Productivity Maintenance (TPM)

10.4 Statistical Quality Control (SQC)

10.5 Just In Time Systems (JIT)

Himali Jayawardhana

Visiting Lecturer

BA 2204 : Himali Jayawardhana – 07.07.2023

 (3) Total Productivity Maintenance (TPM)

Total Productive Maintenance (TPM) is a system of maintaining and improving the integrity
of production, safety and quality systems through the machines, equipment, processes,
and employees that add business value to an organization.

Getting operators involved in maintaining their own equipment, and emphasizing

proactive and preventive maintenance will lay a foundation for improved production
(fewer breakdowns, stops, and defects).

TPM (Total Productive Maintenance) is a holistic approach to equipment maintenance

that strives to achieve perfect production:

 No Breakdowns
 No Small Stops or Slow Running
 No Defects

TPM emphasizes proactive and preventative maintenance to maximize the

operational efficiency of equipment

(TPM) achieved in the following ways:

1. Autonomous maintenance

TPM assigns the responsibilities for routine maintenance in the hands of operators. This
may include lubrication, cleaning, and inspection. As a result, it increases employees'
knowledge of their equipment. This helps in the identification of any emergent issue and
frees maintenance staff for higher-level duties.

2. Planned maintenance

This is the scheduling of maintenance roles based on measured and/or predicted failure
rates. It reduces any instances of unplanned stoppage, allows for servicing plans during
off-work hours, and reduces inventory through enhanced control of failure.

BA 2204 : Himali Jayawardhana – 07.07.2023

3. Quality maintenance

It helps in the incorporation of error detection and prevention during production using
the Root Cause Analysis. It targets quality issues since the improvement projects usually
focus on eliminating the cause of defects.

4. Focused improvement

This is about having smaller groups of staff working together proactively towards
achieving systematic, incremental improvements in machine operation. Here, cross-
functional teams can identify and resolve recurring problems.

5. Early equipment management

The pillar directs understanding and practical knowledge of processing machines gained
through the TPM approach towards the improvement and designing of new equipment.

6. Education and training

It involves filling any knowledge gaps that prevent your business from achieving TPM
goals. It applies to managers, maintenance personnel, and operators. Managers train on
these principles, alongside staff development and coaching.

7. Safety, health, and the environment

This is about maintaining a healthy working environment that is also safe. It eliminates
any potential safety and health risk with the primary goal of achieving a workplace that is
free from accidents.

8. TPM in administration

This one involves the application of TPM techniques to the company's administrative
functions. It extends the benefits of the approach beyond the floor of the premises by
addressing any wasted administrative function.

BA 2204 : Himali Jayawardhana – 07.07.2023

Benefits of Total Productive Maintenance (TPM)

1. Safer work environments

TPM models are based on the 5S foundation: Sorting, Setting in order, Shining,
Standardizing, and Sustaining. All the S's point to the idea that keeping all equipment and
machinery clean, organized, and healthy could improve safety in the work environment.

2. Proven impact on efficiency

The major goal of the TPM approach is achieving 'perfect production.' Any manufacturer
considering TPM aims to achieve zero defects, breakdowns, or accidents.

3. Improved staff morale

To fully implement lean manufacturing, you need employees from all levels or
departments in the company to fully buy-in the idea. If it presents positive results, then
you may not experience staff resistance to the new changes.

4. Satisfaction
A safe workplace, employee morale, and efficient production all come with adopting
productive maintenance. However, most would argue that what matters most is
customer experience and satisfaction.

BA 2204 : Himali Jayawardhana – 07.07.2023

 (4) STATISTICAL QUALITY CONTROL – SQC
Statistical quality control, the use of statistical methods in the monitoring and
maintaining of the quality of products and services. One method, referred to as
acceptance sampling, can be used when a decision must be made to accept or reject
a group of parts or items based on the quality found in a sample.

Objective of Statistical Quality Control

Quality control includes service quality given to customer, company management
leadership, commitment of management, continuous improvement, fast response,
actions based on facts, employee participation and a quality driven culture.
The main objectives of the quality control module are to control of material
reception, internal rejections, clients, claims, providers and evaluations of the same
corrective actions are related to their follow-up.
These systems and methods guide all quality activities. The development and use of
performance indicators is linked, directly or indirectly, to customer requirements
and satisfaction, and to management.

Basic Categories of Statistical Quality Control (S.Q.C):

All the tools of SQC are helpful in evaluating the quality of services. SQC uses different tools
to analyze quality problem.

1. Descriptive Statistics
2. Statistical Process Control (SPC)
3. Acceptance Sampling
4.
1. Descriptive Statistics:
Descriptive Statistics involves describing quality characteristics and relationships.

2. Statistical process control (SPC):

The application of statistical techniques to determine whether a process is functioning as
desired

3. Acceptance Sampling:
The application of statistical techniques to determine whether a population of items should
be accepted or rejected based on inspection of a sample of those items.

BA 2204 : Himali Jayawardhana – 07.07.2023

Characteristics of SQC
1. It is designed to control the quality standard of goods produced for marketing.
2. It is exercise by the producers during the production process
3. It is carried out with the help of certain statistical tools.
4. It is designed to determine the variations in quality of the goods .
5. It aims to ascertain whether the production process is in control or not, and whether
the products are of specified quality.
6. It is an economical measure of assessing the quality standard of goods through
statistical experiments without checking every product in detail.

Advantages of SQC
1. It provides a means of detecting error at inspection.
2. It revels whether the production process is in control or not.
3. It leads to more uniform quality of production.
4. It improves the relationship with the customer, reduced customer complaints
Reduction of Scrap.
5. It reduces the number of rejects and saves the cost of material.
6. It reduces inspection costs.
7. It leads to more uniform quality of product

Limitations of SQC
1. It cannot be applies indiscriminately as a solution to all the quality evils
2. It leads to a false sense of security in the absence of general quality awareness.
3. It provides only an information service, and it can not reduce the managers responsibility,
4. It cannot be applied mechanically to all production process without studying their
peculiar environments.
5. It involves mathematical and statistical problems in the process of analysis.

BA 2204 : Himali Jayawardhana – 07.07.2023

 (5) JUST IN TIME (JIT)
The just-in-time (JIT) inventory system is a management strategy that minimizes
inventory and increases efficiency. Just-in-time (JIT) manufacturing is also known as
the Toyota Production System (TPS) because the car manufacturer Toyota adopted
the system in the 1970s.

How Just-in-Time (JIT) Works

One example of a JIT inventory system is a car manufacturer that operates with low
inventory levels but heavily relies on its supply chain to deliver the parts it requires to build
cars, on an as-needed basis. Consequently, the manufacturer orders the parts required to
assemble the cars, only after an order is received.

JIT inventory - Advantages & Disadvantages

 Lower inventory holding costs – with  Problems with order fulfillment – if a

inventory purchased or produced at short customer orders a product and you
notice there’s no need to have unsold don’t yet have it in stock, you run the
inventory taking up valuable warehouse risk of not being able to fulfill the
space. order in a timely fashion.

 Improved cash flow – without the need to  Little room for error – doing JIT right
store large volumes of inventory at all means having accurate demand
times, capital expenditure is reduced, and forecasts and insights into customers’
cash can be invested elsewhere. buying habits at all times. Any
miscalculation could have a
significant negative impact on
business operations.

 Less dead stock – because inventory levels
rely on customer demand, there’s less risk
of unwanted stock left sitting in your
warehouse.
 Price shocks – with a Just in Time
system, you don’t have the luxury of
waiting around for the best prices on
goods. When prices go up, profit
margins go down.

BA 2204 : Himali Jayawardhana – 07.07.2023

 Benefits of Just-in-Time Manufacturing

 Reduction in inventory

 Reduction in labor costs

 Reduction in space needed to operate

 Increase in production

 Improvements in product quality (lower rates of defects)

 Reduction of throughput time

 Reduction of standard hours

 Increase in number of shipments

BA 2204 : Himali Jayawardhana – 07.07.2023