GYAAN CAPSULE

TPM, 5S, TOC & Inventory Management

AUGUST 1, 2014
SYSTEMS SOCIETY
FACULTY OF MANAGEMENT STUDIES, DELHI

TPM (Total Productive Maintenance)

Total Productive Maintenance (TPM) is a system of maintaining and improving the integrity of
production and quality-systems through the machines, equipment, processes and employees that
add business value to the organisation. It focusses on keeping all equipment in top working
condition to avoid breakdowns and delays in the manufacturing process.
It involves

Setting a goal to maximise equipment efficiency (overall efficiency).

Establishing a total system for Productive Maintenance for the entire life of equipment.
Participation by all departments, including equipment planning, operating and maintenance
departments.
Involving all personnel, including top personnel to first-line operators.
Achieving Zero losses through overlapping small groups

Benefits of TPM
Direct Benefit
1.
2.
3.
4.

Increase productivity and OPE (Overall Plant Efficiency) by 1.5 or 2 times.

Rectify customer complaints.
Reduce the manufacturing cost by 30%.
Satisfy the customers needs by 100 % (Delivering the right quantity at the right time, in the
required quality).
5. Reduce accidents.
6. Follow pollution control measures.
Indirect Benefit
1.
2.
3.
4.
5.
6.
7.

Higher confidence level among the employees.

Keep the work place clean, neat and attractive.
Favourable change in the attitude of the operators.
Achieve goals by working as team.
Horizontal deployment of a new concept in all areas of the organization.
Share knowledge and experience.
The workers get a feeling of owning the machine.

Eight Pillars of TPM -

Autonomous Maintenance
Purpose:
Training of operators proficient in equipment
Protecting ones own equipment by ones staff
Activities:
Implementation of 7 steps
1. Initial clean-up
2. Countermeasures for the source of problems and measures for difficult-to- access locations
3. Creation of tentative autonomous maintenance standards
4. General inspection
5. Autonomous inspection
6. Standardization
7. All-out goals management

Focussed Improvement
Purpose:
Realize zero losses of all types, such as failure losses and defect losses
Demonstrate ultimate production efficiency improvement
Activities:
Understanding the 16 losses
Calculating and settling goals for overall equipment efficiency, productivity and production
subsidiary resources
Implementation of PM analysis
Thorough pursuit of equipment and production as it should be.

Planned Maintenance
Purpose:
Improving efficiency of maintenance departments to prevent 8 major losses
Activities:
Daily Maintenance
Time Based Maintenance
Condition Based Maintenance
Improvement for increasing the service life expectancy
Control of replacement parts
Failure analysis and prevention of recurrence.
Lubrication control
Quality Maintenance
Purpose:
Achieve zero defects by supporting and maintaining equipment conditions
Activities:
Verify quality characteristics standards; understand defect phenomena and performance
Investigating the conditions for building in quality, unit processes and raw materials,
equipment and methods
Investigating, analyzing and improving the conditions of malfunctions
Setting 3M conditions; setting standard values for inspection
Creation of standards that can be followed; trend management
Education and Training
Purpose:
Establishment of technical education for operations and maintenance workers
Activities:
Basic process of maintenance
Tightening nuts and bolts
Aligning keys
Maintenance of bearings
Maintenance of conductive parts
Prevention of leaks
Maintenance of oil pressure and air pressure equipment
Maintenance of electrical control equipment
Development Management
Purpose:
Reducing product development and prototyping time
Reducing the development, design and fabrication time of equipment
Improving 1-shot start-up stability of products and equipment
Activities:

Setting development and design goals

Ease of production

Ease of QA Implementation
Ease of use
Ease of maintenance
Reliability
Investigate LCC
Design release drawing
Production: Identify problems in the prototype, trial run and initial-phase mass production
control stages.
Safety, Health and Environment
Purpose:
Achievement and support of zero failures
Realization of a healthy and invigorating workplace that gives meaning to work
Activities:
Measures to improve equipment safety
Measures to improve work safety
Improvement of work environment (noise, vibration and odors)
Measures to prevent pollution
Creation of healthy employees
Promotion of invigorating activities
Office TPM
Purpose:
Achieve zero function losses
Creation of efficient offices
Implementation of service support functions for production departments
Activities:
Autonomous maintenance activities
1. Initial clean-up (personal space)
2. Work inventory
3. Countermeasure for problems
4. Standardization
5. Promotion of autonomous management activities of work

Individual improvement through project activities

1. Shortening of settlement schedule
2. Improvement of distribution
3. Improvement of purchasing and subcontracting
4. Reform of production control system

5S:

5S is a system to reduce waste and optimize productivity through maintaining an orderly

workplace and using visual cues to achieve more consistent operational results. Implementation
of this method "cleans up" and organizes the workplace basically in its existing configuration,
and it is typically the first lean method which organizations implement.
The 5S pillars:

Sort (Seiri)
Set in Order (Seiton)
Shine (Seiso)
Standardize (Seiketsu)
Sustain (Shitsuke)

These pillars provide a methodology for organizing, cleaning, developing, and sustaining a
productive work environment. In the daily work of a company, routines that maintain
organization and orderliness are essential to a smooth and efficient flow of activities. This lean
method encourages workers to improve their working conditions and helps them to learn to
reduce waste, unplanned downtime, and in-process inventory.

Theory of Constraints
The Theory of Constraints states that every
system must have at least one constraint limiting
its output. This was developed by Dr. Eliyahu M.
Goldratt.
A constraint is A process or process step that limits
throughput.
Anything that limits a system from achieving higher performance versus its goal.
A constraint is a factor that limits the system from getting more of whatever it
strives.
Consequences of the Theory:
1. The more complex the system, the less independent process paths exist, so the lower the
number of constraints. (Usually, complex systems have only one constraint at a given time.)
2. A system of optimum processes cant be an optimum system.
3. An optimum system runs the constraint (or bottleneck) at optimum capacity (focused on
the goal of the system), and all other process steps must have excess capacity
TOC postulates that the goal is to make (more) money. It describes three avenues to this
goal:
Increase Throughput
Reduce Inventory
Reduce Operating Expense
In order to achieve the goal, there are also 5 Focusing Steps:

Identify the
constraints

Repeat the process

Elevate
performance of
the constraint

Exploit the
constraint

Subordinate and
synchronise to the
constraint

Advantages:

Potential for tremendous increases in productivity with minimal changes to operations.

Most powerful and cost effective tool for increasing production capacity.
Very simple to communicate and apply, making it ideal for shop floor teams.
Great for fostering teamwork as different areas become aware of the constraint and the
need to work together to assist the constraint process.
Great process for kick starting improvement efforts as it provides immediate and very
tangible benefits.
Allows growth of turnover/productivity without the need for additional space or staff.
Provides a means to evaluate the true value of changes, and utilize this to select the best
options, and drive the right behaviour/decisions.
Disadvantages:
Can be difficult to apply if the constraint process is constantly moving (for example if
the nature of the work sees dramatically different and difficult to predict demands on
various production resources).
Can be difficult to apply in a jobbing environment (however it is still very applicable)

Example
To better understand the theory of constraints and non-constraints, consider a production
system that runs raw materials through three component processes and then turns them
into a finished product.

Within this system, each process is equivalent to a link in the production chain. Where is the
constraint in this chain?
Process B is the weakest link: Process B produces the least at only six units per day. Process
A and C are the non-constraints. Imagine that the manufacturer improves process B until it
can produce 18 units per day. Now, process C becomes the system constraint while the nonconstraints are everywhere else. If process improvements continue until all processes are
producing 18 units/day or higher, the system constraint becomes the marketplace, which
can accept only 15 units per day. At this point, internal constraints have been replaced by an
external constraint. Overall, the theory of constraints emphasizes fixing the weakest link in

the chainthe system constraintand temporarily ignoring the non-constraints. In this

way, the theory has a profound impact on process improvement.

Logistics Management
It is planning, implementing, and controlling the physical flows of materials and finished
goods from point of origin to point of use to meet the customers need at a profit.
Some excellent examples of value adding logistics services are:
Dabbawalas of Mumbai: Reliable, fool proof logistics
system of delivering lunch boxes to over 5,00,000 office
goers every day without letting the wrong lunch box
reaching the wrong office and also ensuring the boxes
reach on time.
The Indian Postal Services: One of the largest logistics
network in the world today, which delivers letters in the most cost effective manner across
six lakh villages, one hundred and twenty cities and several thousand of towns covering the
length and breadth of the country within twenty-four to forty-eight hours and serving more
than hundred and seventy countries with Indian source stations/ customers and/or
destinations as mentioned earlier.
Purpose
1. Reduction of inventory
2. Economy of freight
3. Reliability and consistency in delivery performance
4. Minimum damage to products
5. Quicker and faster response
Functions
1. Order processing
2. Inventory planning and management
3. Warehousing
4. Transportation
5. Packaging
How does Logistic add Value?
Logistics delivers value to the customer through three main phases:
1. Inbound logistics: These are the operations, which precede manufacturing. These
include the movement of raw materials, and components for processing from
suppliers.
2. Process logistics: These are the operations, which are directly related to processing.
These include activities like storage and movement of raw materials, components
within the manufacturing premises.
3. Outbound logistics: These are the operations, which follow the production process,
i.e. movement of finished goods to customers.
Various Logistics service providers
1. First Party Logistics Companies which do their own logistics activities
2. Second Party Logistics Companies which provide their own assets, such as truck
owners, warehouse operators, etc.

3. Third Party Logistics (3PL) Companies which provide logistics services on behalf on
another company. 3PL's typically can provide transportation, warehousing, pool
distribution, management consulting, logistics optimization, freight forwarding,
transportation management, rate negotiations, cost evaluations, and contract
management services.
4. Fourth Party Logistics (4PL) companies provide logistics solutions built around the
domain knowledge provided by third party logistics companies. Thus 4 PLs have
emerged out of the vacuum created by 3PLs. A 4PL is a supply chain manager &
enabler who assemblies and manages resources, build capabilities and technology
with those of complimentary service providers. They act as the first point for
delivering unique and comprehensive supply chain solutions. 4PL leverages
combined capabilities of management consulting and 3PLs. They act as an integrator
assembling the resources, capabilities, and technology of their own organization and
other organizations to design, build and run comprehensive supply chain solutions. 4
PL is an emerging trend and it is a complex model and offers greater benefits in
terms of economies of scale.

Evolution of Operations Management

Before 1750 production took place in homes, cottages and workshops of

independently trading craftsmen, and was characterised by direct contact
between producers and consumers, little mechanization, and products were
customized.
The industrial revolution began in England in 1700s. This was characterised by
o Substitution of machine for
human power Invention of
machines gave rise to
process school. Foremost
among this being James
Watts steam engine in
1764, Hargreaves spinning
jenny, Cartwrights power
loom, and Maudsleys screw
cutting lathe.
o Division and specialization of labours Production was broken into small,
specialised tasks assigned to workers through the manufacturing process,
as opposed to craftsmans make-complete approach.
These led to the widespread establishment of the factory system with increased
capital intensity, mechanization, new ways of planning and control.
In the nineteenth century,
o Concept of interchangeability in
1790, Eli Whitney, a manufacturer
of rifles for US, designed and built
parts to tight tolerances enabling
every part to fit right first time.
Previously parts were hand crafted
or sorted from large batches to find
components that fitted together
neatly or with minor modifications.
o By 1850, the cottage industry was
almost completely replaced by factory.
Around 1900 Scientific Management approach was developed. It was based on
the works of Frederick Winslow Taylor (1856-1915). Works of Taylor, Lilian, Frank
Gilberth, and Henry Gantt stressed the need for development of standards for
work and improved efficiency. But there was little consideration of human
feelings and operators were viewed as mere extensions of their machines
working within a wider, controlled system.
Number of ideas, including piecework payment system, time motion study,
principles of efficiency, standards and management by exception, were
introduced.
These culminated into opening of Ford Motor Companys Rouge plant in Detroit
for production of Model-T. So around 1920s was born the era of mass
manufacture and standardized, low variety products.

In 1930s, an opposing view to scientific management began to emerge in which

behavioural issues were identified as being important to productivity. Works of
Maslow, McGregor, Likert, and Herzberg added to this behaviourist theories
and practical approaches.
The team work approach to flow line assembly at Philips, Eindhoven, and Volvo
stresses the need for parallel development of social and technical systems for the
success of manufacturing operations. Also need for flexible labour to cope with
changes in the market and environment was identified.
Atkinsons model (1984) of the Flexible Firm was developed as an expansion of
flexible organisation. This argued that the era of mass production is over with
more flexible and less rigid work structures and a revival of craft-forms of
production and need for multi-skilling in the workforce.
In the 1940s, in the military and defence organizations of Britain and USA,
Operational Research (OR) originated to help solve problems of civilian defence,
bombing strategies, transportation and military logistics. OR turned to business
and industry, and included new quantitative techniques for stock control,
scheduling, forecasting, project management, quality control, simulation and
linear programming, to name only a few. OR seeks to replace intuitive decision
making for large complex problems with approaches that identify optimal
solutions through analysis.
Computers are now a highly cost effective and efficient means of managing and
distributing information required to plan and operate production and service
systems. Control offered by computer technology has made possible the
manufacture of products in mass volumes, but in a wide variety and configured
to suit individual customer requirements.
Around 1960s, manufacturers and service operators have come to realise that
they have a considerable amount to learn from one another and that there are
innumerable areas of similarity in the management of their operators.
The economic expansion of Asia, and most notably of Japan, since 1960s has
stimulated development of alternative operations theory and practice, such as
Just-in-Time, TQM, Kaizen and encapsulating these into lean operations were
involved.
Operations Management has been emerging over the last 200-300 years. In 1800s,
the prime focus was management of the factory, but as scientific management
practices became widespread the discipline changed from general factory
management to production management. The wider operational perspective
brought in by OR plus the growing need to incorporate and learn from service
operations has further broadened the discipline. Now, subject to influence of
computer developments and Japanese approaches continues to develop under the
influence of a number of different, and often conflicting, schools and paradigms.