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MAINTENANCE

Objectives
1. Able to define maintenance. 2. Able to describe two types of maintenance. 3. Able to identify the costs of maintenance. 4. Able to understand the concept of Total Productive Maintenance.

DEFINITION
Activities

relating to keeping facilities and equipments in good working condition including repairing breakdown when it occurs at minimal cost.
Activities

relating to keeping the entire production/operations system facilities or specific equipment in the system in operating condition. It concerned with avoiding or minimizing downtime or avoid undesirable results due to system failure.

IMPORTANCE OF MAINTENANCE
1. Avoid production or service disruptions. 2. Not adding costs due to neglected maintenance work. 3. Maintain high quality product and process. 4. Avoid missed delivery date.

1. Breakdown Maintenance - breakdown maintenance is when an equipment malfunctions or damaged and immediate repairs are needed to put it back to working condition. (includes repairs, replacement of parts, or even overhaul to ensure the machines is put back in operating) 2. Preventive Maintenance - involves performing routine inspections and servicing and keeping facilities in good repair. These activities are intended to build a system that will find potential failures and makes changes or repairs that will prevent failure.

Reactive option. Due to its irregularity, possible approaches:

Effective option for non-critical equipment.

1. Keeping standby equipments 2. Keeping spare parts to avoid lead time due to ordering or buffer stock to continue other processes. 3. Having labour who can work on minor repair. 4. Having a well trained and readily available repair person to dignose and repair equipments.

Proactive option carried out on a regular basis. Lubricate, adjust, clean, inspect, replace. To reduce breakdown and To reduce associated costs:

Idle time,schedule disruption, injuries, loss of output

Frequency of occurrence = Number of Breakdown


The total Period of Breakdown

Expected number of breakdowns = Number of breakdowns x frequency of occurence Expected Cost for breakdown = expected no of breakdown X cost of each breakdown Expected cost for preventive maintenance =
cost of preventive maintenance + (cost of breakdown X average no of breakdown)

Andersen and Associates is a CPA firm specializing in company tax preparation. One of the firms valuable assets is a high-speed photocopy machine which has been used to make copies of taxation assessments to be sent to the Inland Revenue. The machine has been in the firm possession for almost 3 years. Over the past 18 months, the machine has been continuously giving problem to the firm and the breakdown figures are shown below:

Number of breakdowns

Number of months that breakdown occured

Each time the machine breakdown, the firm has to pay an average of RM600 for the Service expenses. Recently, one of the Senior Partners has been approached by PM Enterprise who made an offer to provide preventive maintenance with free breakdown service, which will cost Andersen and Associates RM1,200 per month. You are requested to help the partner to decide whether the contract of preventive maintenance should be accepted.

a. b.

Compute the Frequency of Occurrence Compute the Expected Number of Breakdown


Number of breakdowns Number of the breakdowns occured

Step 1 (a)
Frequency of occurence = Number of breakdown The total Period of breakdwon

Step 2 (b)
Expected number of breakdowns = (Number of breakdowns x frequency of occurence)

0 1

2 2

2/18 = 0.1111 2/18 = 0.1111 6/18 = 0.3333 8/18 = 0.4444

0 X 0.1111 = 0 1 X 0.1111 = 0.1111

2
3

6
8
= 18

2 X 0.3333 = 0.6666
3 X 0.4444 = 1.3333 = 2.111 times per month

Step 3 c. Breakdown cost = 2.111 x RM600 = RM1,266.60 per month

Step 4 d. Preventive Maintenance cost = RM1,200 per month Decision : Accept the preventive maintenance offer because of RM1,266.60 RM1,200 = RM66.60 cost saving.

e. The offer is to provide preventive maintenance


that cost Andersen and Associates RM1,200 per month but there will still be one (1) Breakdown every month.

Preventive Maintenance cost = RM1,200 + RM600(1 breakdown) = RM1,800 per month


Decision : Retain the breakdown maintenance policy because of (RM1800-RM1266.600) RM533.40 cost saving.

Good Manufacturing, a firm specializing in production of modular components. The firm has been successful in automating much of its work. The computerized approach, however has problems. Over the past 20 months, the machines have broken down at the rate indicated in the following table:
Number of breakdowns Number of the breakdowns occured

0 1 2 3 4

4 2 5 4 5

Each time the machines breakdown, Good Manufacturing estimates that it loses an average of RM400 in time and service expenses. One alternative is to purchase a service contract for preventive maintenance. Even if Good Manufacturing contracts for preventive maintenance, there will still be breakdowns, averaging one breakdown per months. Give your recommendations whether Good Manufacturing should contract for preventive maintenance or maintain with current breakdown policy.

a. Compute the Frequency of Occurrence b. Compute the Expected Number of Breakdown

c. Compute the expected costs for breakdown


d. Compute the expected cost for preventive maintenance e. Compare the two options and select the one that will cost less

Gemilang Group's computer system has been down several times over the past twelve months, as shown below: Number of breakdowns Frequency of occurrence
0 0.45 1 0.10 2 0.10 3 0.20 4 0.05

Each time the system is down, the firm loses an average of RM4,000 in time and service expenses. They are considering signing a contract for preventive maintenance. With preventive maintenance, the system would be serviced on average twice a month with zero breakdowns. The preventive maintenance costs would be RM200 per service. Which is cheaper, breakdown or preventive maintenance?

1. Compute the Frequency of Occurance No calculation is needed because they are already in the question. 2. Compute the Expected Number of Breakdown
Expected number of B/down

0 x 0.45 =0

1 x 0.10 = 0.1

2 x 0.10 = 0.2

3 x 0.20 = 0.6

4 x 0.05 = 0.2

= 0 + 0.1 + 0.2 + 0.6 + 0.2 = 1.1 times per month

3. Breakdown cost = RM4,000 per year 4. Preventive Maintenance cost = RM200 per service x 2 times x 12 months = RM4,800 per year Decision : Breakdown cost is cheaper because it gives a cost saving of RM800.

Costs

Total costs of maintenance

Full cost of breakdown

PM cost

Maintenance Commitment

The concept of employee involvement and excellent maintenace record. TPM includes:1. Designing a reliable, easy to operate and maintain machine 2. Maintenance and service costs are included in the agreement of purchasing the machine. 3. Train employees to operate and maintain any worn out machines.

Oct 2012 (A5) Apr 2011(A5) Oct 2010 (Nil) Apr 2010 (B3) Oct 2009 (Nil) Apr 2009 (B4) Oct 2008 (A5) Apr 2008 (B6) Oct 2007 (A5) Apr 2007 (A5 - as seen) Oct 2006 (B5)