Annexure A (Cover Page)

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Sikkim Manipal University Distance Education Centre
Mathura
and Code no.0079

By
(Pratap Singh Nigam)
A Project report submitted in partial fulfillment of the
requirements for the degree of Master of Business
Administration of Sikkim Manipal University,INDIA

Sikkim-Manipal University of Health, Medical and

Technological Sciences
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 Annexure B (Student Declaration)

I here by declare that the project report entitled

Submitted in partial fulfillment of the requirements for the

degree of Masters of Business Administration to Sikkim-
Manipal University for the award of any other degree,
diploma, fellowship, or any other similar title or prizes.

Place: (Pratap Singh Nigam)

Mathura
Date: Reg. No.520912890
 Annexure C (Examiner’s Certification)
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(Pratap Singh Nigam)

Is approved and is acceptable in quality and form

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 Annexure D (University Study Center Certificate)
This is to certify that the project report entitled

Submitted in partial fulfillment of the requirements for the

degree of Masters of Business Administration of Sikkim –
Manipal University of Health,Medical and Technological
Sciences

(Pratap Singh Nigam)

Has worked under my supervision and guidance and that
no part of this
report has been submitted for the award of any other
degree, Diploma,
Fellowship or other similar titles or prizes and that the
work has not been
published in any journal or Magazine.

(Reg. No.) Certified

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1. Introduction :
In this chapter the background and problem formulation with discussion for the case study will be
presented. Further on the limitations and purpose of the case study will be stated.

1.1. Background
With the start of the new century, the competition and pressure to perform
competitively have increased on the companies. This new age will be challenge for the companies to
provide new, exciting, innovative and cost effective products in the market. (Bean R. & Radford R.,
2000). Now the business has become globalize and competitive. To survive, a company has to offer
best prices to its customers with high quality, service and operate with lowest cost. It is only possible
for a company if all of its departments are well managed (Andersson D., 2005).

In today’s competitive environment, companies want to get the benefits of the

different techniques which are being used in the product processes. They have implemented total
quality management (TQM), just in time (JIT) manufacturing and total employee involvement (TEI).
Now many companies have shifted their focus to optimization of their assets. One of the main parts
of the company which has a strong influence on the assets is the maintenance department or the
employees responsible for maintenance (Wireman T.1998).the different concepts to meet the
requirements of the manufacturing plant are not successful without the support of the quality and
maintenance strategy. For example, JIT manufacturing concept demands for an effective and
efficient maintenance which can ensure smooth flow of production and ideally, cent percent quality
cost effectively. The maintenance adds to customer value in terms of profit, quality, time and service.
Therefore, the maintenance function has become important for a manufacturing company’s ability to
maintain its competitiveness. Without well maintained equipment; it will not be advantage in the
market that requires low cost products at a high quality to be delivered quickly. (Alsyouf I.2004)

There is no doubt that the maintenance has a vital role in the companies. Now a days
most of the companies are giving attention to this important function which is considered as the
necessary evil for the companies, i.e. an expense to the companies and a non value addition function.
The companies can not survive for long time without considering the maintenance as an important
function because they will be put out of the business by the companies that are considering the
maintenance as a competitive weapon. Now the companies are looking it as a way to reduce the cost
of producing their products. There is no doubt that it is another main area of cost. The cost reduction
of this area is not meaning the decrease in service or the quality of the service. It means that the good
control of the maintenance organization. The companies have used different organisational
structures, change reporting structures, upsizing, downsizing, contracting out, and empowered teams
for the purpose to control the maintenance. It has been realised that a typical developed system
consists not only of mechanical components but also other elements such as electronic, hydraulic,
electromechanical elements, software and human beings are involved in the system. This means that
the disturbance in the production process may occur due to different factors such as the failures of
the important components of equipments, the quality of the purchase materials and spare parts,
design, manufacturing process 1control, management systems and human error. (Tajiri M., Gotoh
F.,1992 ; Wireman T.1998)

The effectiveness of the manufacturing companies remains at the certain level. This is due to
improper maintenance and unavailability of the equipments. In most of the manufacturing plants, the
equipment is susceptible to failure through breakdown maintenance, deterioration in performance
through age and use and obsolescence due to improvements in the technology. Maintenance has a
strong effect on above mentioned areas. Also it can reduce the cost of the manufacturing process,
improve the quality and capability of the production process. These internal improvements of the
manufacturing system can be more profitable, improve the environment and safety. The unforeseen
stops, speed losses, and quality defects in the operating equipments reduce the working potential of
the manufacturing plant from twenty to seventy percent. These factors become the reason for the
production losses and other indirect hidden costs. Ultimately, it affects the overall performance of the
company. The interruptions are not only due to the maintenance but bad maintenance can be
important part of the causes of disturbances (Jonsson P., 1999). The importance of maintenance has
been increased than before, due to its role in maintaining and improving availability, performance
efficiency, and quality products, on time deliveries, the environment, safety requirements and overall
plant productivity at a high level.

1.2. Problem discussion

Nowadays many companies are interested to improve their maintenance system.
Because, they have come to know that this is the system through which companies can reduce the
cost of their products and can develop a reliable production process. A well designed maintenance
structure can be helpful for the companies to get the competitive advantages. But majority of
companies are not able to manage a maintenance system. The two main reasons for that are the lack
of proper measurement and the lack of control systems for maintenance. (Wireman T., 1998)

The main goal of the maintenance is to reduce the failures of the industrial plant,
machinery and equipments. This goal can be achieved by using different maintenance approaches
such as corrective maintenance and preventive maintenance e.t.c. A good maintenance approach and
schedule can not be 100 percent effective at all the time. Unforeseen equipment breakdowns and
requests reduce the efficiency of the plan. Even now a good maintenance schedule can get 70 to 90
percent efficiency (Wireman T., 1994).The detection and implementation of a suitable maintenance
approach makes the companies able to prevent the premature maintenance cost, maintain the stable
manufacturing capabilities and control the deterioration of the system. In other words, the company
can improve its performance if it implements a suitable maintenance approach for eliminating the
causes of production disturbances.

1.3 Presentation of problem

The idea with this project is to see the current situation of the company. Is the
company using its manufacturing equipments in a proper way to get the competitive advantages? If
not, then find out the main reason for that. Which kind of 2problem is there i.e. availability, quality
or performance efficiency? And what is the influence of these problems to achieve the goals of the
company. The company can not compete in the competitive market unless it uses it resource and
capabilities to the maximum level. The company must have to work to get rid of the problems to get
the competitive advantages with respect to cost, service, quality and on time delivery.
These issues do not allow the company to achieve its set goals.
1.4 Problem formulation
• To investigate the current situation of the production of the case company.
• To pick up the weakening in the production system those do not allow the company to achieve its
full capacity and meet the set goals.
• To suggest the ways to improve the situation.
1.5 Purpose
The purpose of this case study is to take a systematic and scientific way to analyse the
current situation and suggest the ways to improve it to achieve the set goals.

1.6 Relevance
Now a days companies are realising the importance of the maintenance in the
competitive environment. They are looking to get the benefits of the maintenance. They want to
make a reliable manufacturing system with minimum failures and to improve the production
capacity of their plants. This is the main focus of the maintenance. The overall equipment
effectiveness of the production process is the way of understanding the current situation and it gives
the direction to put forward an initiative to improve the situation. Because it makes the problems
clear and the effect of these problems on the company’s business can be seen easily. The value of this
can be increased with the help of the full participation of the employees from management to
workers and a maintenance system in the company. This study future will show the way the
company’s profitability can be improved and the set goals can be meet.

1.7 Limitations
The limitations of this case study are to study one manufacturing company and two
production processes because these are the main production lines of the case company and of the
time limitations. We are not able to study all the machines individually in selected work stations. We
use the average value of all the machines at a work station. All the calculations are based on one
year’s data (2006).

1.8 Timeframe
 2 Research methodology
Many definitions of Research have been given, as a systematic method of gaining new
knowledge or a way to answer the questions. (Gliner, Jeffrey A., Morgan, George A., 2000)
Research methodology is considered as a supporting subject. It is used to develop a variety of
research paradigms. These paradigms are varying in their contents and substance but their broader
approach to inquiry is the same. ’Although the basic logic of scientific methodology is the same in
all fields, its specific techniques and approaches will vary, depending on the subject matter’. There
are two basic steps in the research process. The first step is to decide the goal or research questions.
The second step is to find out the way to get the answers of the questions. The path to get the
answers of the questions is composed of the research methodology. The selection of suitable
methods, procedures and models are played an important role in each operational step of the research
process to get the objectives of the research. (Kumar R., 2005).

2.1 Positivism and Hermeneutics

Positivism has the roots in empirical scientific tradition. The positivist considers the
complete knowledge while the hermeneutic is more understandable for the practical mind.
Positivism has the belief that human being can get the knowledge in only two ways i.e. what we can
sense (empirical knowledge) and what we can workout with our logical aptitude. Any one can find
the fact with the help of empirical knowledge. According to the positivism the logical truths have
nothing to do with observations from the reality, it has only to do with our intelligence and our way
to use the language. A person should be critical to study a statement or an observation and the study
should be based on the facts i.e. they can be used with out any hesitation. To be capable to make the
result from these facts, a logical analysis must be preferred. Positivistic community have normally a
critical view on the world around themselves. (Gliner, Jeffrey A., Morgan, George A., 2000)
Hermeneutic is a science of interpretation. It uses the interpretation of pre-understanding
type and learning of interpretation. Hermeneutic is about interpretation of meanings. It can be used
to interpret the context in words, symbols and experience e.t.c. the interpretation explain the sense
and relation which lie at the back of everything and can appear or which can be observed in the text,
conversation or an act. It is must for the person that makes the interpretation to choose a starting
point for the questions because the material will be based on it. The starting point consists of the
basic vision, assessments and interpretation. The hermeneutic research is subjective as compare to
the positivistic research. The hermeneutic researcher uses own assessments when doing the research.
The pre-understanding is represented by the researchers experience and knowledge. Hermeneutic can
also be observed as a common knowledge about communication and understanding. (Järvinen.P.,
2001)

2.2 Qualitative and Quantitative methods

The two main ways are used in the research called as quantitative or qualitative, which
will be used is based on the available information. The qualitative analysis is theoretical and less
nearer to the raw data as compare to the quantitative analysis. Word or sentences are used in the
qualitative method but mathematical figures 5 are used in quantitative method. Like as the terms
“less than” or “bigger than” can be used in qualitative method but the exact figures are used in the
case of quantitative method.

In the quantitative method, the researcher gathers the data and carefully examines it. The attempt is
made to find the relations between different sets of facts. The researchers calculate and use the
scientific technique to get the result. In the qualitative method, the researcher is more interested in
the knowledge of people. (Ingwald A., 2004)

2.3 Data collection technique

There are two types of data which are collected for the research purpose, primary data
and secondary data. Primary data mean new data. While secondary data mean the data which already
exist. The methods used to collect the new data are observations, interviews and experiments. There
are some problems to the use of the data. One problem is the compatibility and the other
trustworthiness. (Ingwald A., 2004)

2.4 Induction and Deduction

Induction and deduction are two different ways of making the decisions. Empirical facts
are the base for the conclusions in Induction approach. It is vital to understand that inductive
conclusion can not be hundred percent accurate. This is only because of the empirical material is the
base of the conclusion. It means that there is a probability of different results from different persons.
(Järvinen P., 2001)

Logic is used to make the conclusions in the deduction approach. The conclusions must
be reflected as valid, logically. On the opposite this conclusion need not be true according
to the reality. The conclusion can be ruled out due to the experience in the induction and
this is the main dissimilarity in the induction and deduction way of making conclusion.
(Järvinen P., 2001)

2.5 Research strategies

There are different research methods which can be useful when performing a
project. (Alsyouf I., 2001)

2.5.1 Experiment
The experiment method is divided into laboratory experiment, quasi experiment and
field experiment researches.
 The laboratory experiment is performed in the same environment conditions for each
object that takes part in the research. The basic parameters and variables are control in this type of
research.
The quasi experiment research is almost the same as laboratory research. But the
difference is that the research is done in the reality with out control on the variables.
In the field experiment research, the researcher has good chance to control the
variables as compare to the quasi experiment research. This method of research is also done in the
reality. (Dyer C., 1995)

2.5.2 Survey
The survey research uses the many basic research methods to get the data from
participants in their natural environments. The basic way to get information in this method is survey.
This survey is consisting of a set of one or more questions that ask the people about different issues.
Opposite to the experiment research, the survey researcher does not control the variables but does
inflict some constraints on the participants by using the survey tool. It is used to test the relationship
between different variables. (Graziano A. and Raulin M., 2000)

2.5.3 Interview
Researcher and interviewed persons are the requirement of this method. The researcher
must be talented to place one self in the current situation. The researcher must take the record on the
problem area that is discussed and the interviewed person must be capable to argument for the
researcher’s opinion. (Järvinen P., 2001)

2.5.4 Observations
This method is divided into two parts. These are named as participant and non-
participant observations. In the participant observation research method, the participators are alert
that they are under study. Non-participant observation research method is opposite to the open
research method. The participators do not have an idea that they are under observation. (Järvinen P.,
2001)

2.5.5 Case study

It consists of different kind of researches. It can be based on combinations of
quantitative and qualitative proof .it does not require always consisting of direct, detailed
observations as a proof. The researcher chooses the most suitable method for the specific case i.e.
interview or survey e.t.c. (Sekaran U., 2000). The main advantage of the case study is that the
researcher can focus on one exact thing or fact and then try to discover the affect of different factors
on it.

2.6 Validity and Reliability

Validity views the degree to which an observation measures what it claims to measure.
Validity is a theory, model, or concept which describes the reality exactly. Internal validity and
external validity are the main types of the validity. The external validity is about the theoretical part
of the research. While the internal validity deals with the project. It also deals with the connection
between the theoretical part and the empirical parts of the research. If the different portions of the
project are not able to get the required validity, it will also lead to unachieved validity for the whole
project. (Järvinen P., 2001)

Reliability views the degree to which observations by different researchers studying the
fact with same reason will get nearly the same results. (Gummeson E., 1988) There are three kinds
of reliability: quixotic, synchronic and diachronic. The quixotic reliability is the extent to which a
specific technique of observation generates an even measurement. The Synchronic reliability is the
extent to which observations within the same time interval are similar. The Diachronic reliability is
the extent to which a specific technique of observation generates the same measurements when
exposed to specific observable fact at different points in time. (Järvinen P., 2001)

2.7 Research Method Selection

The research strategy that is going to use in project is the case study. The case study
consists of the interviews and the observations. That is the reason that the both qualitative and
quantitative methods will be use in the project. The qualitative method is used when interviews are
conducted and the quantitative method is used when the data is collected and analyzed. The writer
will collect data by themselves and will receive from the company employees. In other words, the
primary and secondary data will be used. The deduction approach will be used in this case study
project. This approach is helpful when comparing the collected data with the theory. The purpose of
the data collection will be explained to the persons involved in the information so that a valid and
reliable data can be used in the project.

3. Theory
Nowadays the costumer’s demand is increasing. They want quality products at low cost
with high service level. This attitude of the market compels the companies to make research on their
production systems. Therefore every company wants to utilise their machines and equipments at the
highest possible extent. This is possible only if they have a good maintenance system which makes
the companies manufacturing equipments a best possible working condition. In this chapter, the
theory about the maintenance concept will be presented.

3.1 Maintenance:
Maintenance is a multidisciplinary area and it is hard to explain its different function. It
has been defined in Macmillan’s dictionary of production management and technology as “The care
and repair of equipment. There are several approaches to maintenance in manufacturing but in each
case, a more strategic view is generally taken today than previously. Many of new techniques (e.g.
JUST IN TIME) depend upon totally reliable equipment, and the term ‘TOTAL PLANNED
MAINTENANCE’ has coined to cover this …maintenance may be PLANNED or PREVENTIVE,
but some production plant is best maintained on a REACTIVE basis-having the ability to respond
very quickly to plant failure.” Maintenance management in the European standard is defined as:” All
activities of the management that determine the maintenance strategy, objectives and responsibilities
and implement them by means such as maintenance planning, maintenance control and supervision,
improvement of methods in the organisation including economical aspects”.
 The above definitions stress on the complicated role of maintenance. Various
maintenance methods concentrate on different aspects of maintenance. The strategic and integrated
maintenance is the demand for the Lean organisations. But reactive maintenance policies are reliable
for some other environments. The maintenance area covers equipment and technical systems as well
as organisational, human and economical aspects (Josson P., 1999)

3.2 Maintenance Objectives

Maintenance is vital for the process industry .this fact was recognised and raised with the
development of the Japanese’s industry. The strengthening, year by year, of maintenance
management in the process industry occurred for different reasons. In the industry, production relies
heavily on the plant itself, so that the most of the factors like productivity, quality, safety, pollution,
and production costs depend on the condition of the plant. Also most of the industry production is of
the continuous, integrated type, so plant and equipment problems generate enormous financial
losses. The primary objectives of maintenance are:
• To extend equipment life.
• To keep the plant and equipment in the optimal condition for production or service and secure
maximum return on the investment.
• To constantly maintain the ability to cope with emergencies.
• To assure safety. (Suzuki T., 1992)

3.3 Maintenance management:

The aim of the maintenance management was kept maintenance program operating
efficiently toward the objectives of the maintenance.
Once the equipment is assembled and fitted, test operations are completed and the
equipment is handed over to the company and started up. At this point, the maintenance management
step begins, covering the life cycle of the equipment. Maintenance management deals with the
maintenance of equipment in various technical ways by using the different maintenance approaches.
(Suzuki T., 1992)

3.4 Maintenance strategies:

In maintenance different strategies are used. But it depends on the failure modes and
their behaviour in time. The different maintenance strategies to meet the failures are as follow.
• Preventive maintenance
• Predictive maintenance
• Breakdown maintenance
• Bad actor management

3.4.1 Preventive maintenance:

The term “Preventive maintenance” means “Periodic maintenance” and is known as all
over the world. Preventive maintenance in this sense is a periodic or scheduled activity, which has as
its objective the direct prevention of failure modes or defects. In its simplest form this activity
consists of the periodic lubrication, coating, or cleaning of the machinery components to increase the
useful life duration.
 Periodic preventive maintenance is very useful in case of some failure modes but it is not
effective for all kind of failure modes. Moreover, quite often deterioration cannot be completely
abolished even in those failure modes that do respond to preventive maintenance. For example, by
periodically renewing the lube oil in a pump bearing, it does not mean that the deterioration of the
bearings will be finished by this activity. Because there are so many other factors which are involved
in the deterioration. The quality of the oil itself may be the reason of the deterioration. So the wear of
the bearings can be reduced but can not be finished. (Bloch Heinz P., Geitner Fred K., 1999)

3.4.2 Predictive maintenance:

Predictive maintenance is periodic inspection activity. If any defect is deducted during
inspection, it may be the replacement or overhauling of the machine parts, this maintenance activity
performs its role to remove the problem of the machine. These actions of predictive maintenance do
not directly reduce the deterioration rate but indirectly control the chance and cost of the accidents,
breakdowns, malfunctions, and general trouble. This maintenance activity is referred as the
predictive maintenance. The preventive maintenance looks mainly the time-dependent failure modes
and predictive maintenance deals with the randomly and suddenly happening failure modes as far as
possible by searching for them and by effecting timely repairs. With the implementation of this
maintenance technique, the expectations to prevent the failures are not high and are not possible to
control the failures completely. But the influence on the consequences of the unexpectedly occurring
defects can be reduced with this technique. Predictive maintenance strategy point out a continuous
search for defects is required and in other words a continuous monitoring of the machinery
condition and performance is necessary with the continuous feedback. This type of maintenance
highly depends on the vigilant operators and the maintenance people as well as the type of the plant
under consideration. In reality, the majority of the activities in the predictive maintenance are some
how periodic and depend on the observer’s sense of seeing, hearing, feeling and smell. (Bloch Heinz
P., Geitner Fred K., 1999)

3.4.3 Breakdown maintenance:

Some people are optimistic about the possibilities of machinery preventive
maintenance. This ability of some people can not be the parameter for the breakdown maintenance.
But there are several limitations to machinery preventive maintenance concepts.
• The limitations set by random failure events. But random machinery failures are not happened
after equal time intervals and form this reason, predictive maintenance is preferred in industry over
breakdown maintenance. Continues inspections are the only solution of this kind of problems.
• The life dispersion of the machinery components. The time-dependent failures are not predictable
at all yet. They are not occurring after the same time intervals. There can be different reasons for
that. For example, the life dispersion of the mechanical gear couplings on process compressors.
There is no doubt that they are components going to wear with time. If it can be assume that mean
time between failures or the mean time between reaching of defect is 7.5 years. But it can be
happened that the failure become after 3 years or after 15 years. This can be happened due to the
misalignment, lubrication losses e.t.c.
• The third limitation of preventive maintenance in machinery is that in order to inspect we have to
shut down and open up. It is a risky procedure.
We conclude from this that certain breakdown maintenance of our machinery
will always be necessary. This maintenance activity brings back the machinery equipment to
service
after failure modes developed that were:

Preventable but not prevented.

Predictable but not predicted.
Predicted but not acted open.
Not preventable or predictable.
(Bloch Heinz P., Geitner Fred K., 1999)

3.4.4 Design out maintenance

This type of maintenance is different from the other types of maintenance.The aim of this
maintenance type is also to minimise the failures with to minimisations of the reasons of the
maintenance. Obviously, this is an engineering problem but its responsibility is also on the
maintenance department. This maintenance is considered for the items of high maintenance cost
which is may be due to poor maintenance, poor design or operation outside the design specifications.
Some times, the design out maintenance 11has the purpose to work on an item which does not
require maintenance. Therefore, this kind of policy can be apply effectively if an information system
exists which gives the service in the identification of such items. The decision is made in between to
bear the cost of the redesign of the item or the cost of the repeated maintenance. (Kelly A., 1984)

3.5 Maintenance techniques:

Maintenance methods and diagnostic techniques are different according to the technical
category of the equipment dealt with, whether it consist of fixed vessels such as towers, tanks, heat
exchanger, or rotating machines such as compressors, motors, pumps, speed reducers or furnaces,
instrumentation, piping and so on. It depends on the management of each company to which method
they use in maintenance. (Suzuki T., 1992)

3.6 Maintenance and Production relationship

Maintenance has an important place in any organization and it is to be positioned as a
sub process or integrated part of the overall production process. The relation between maintenance
and production can be shown in the figure 3.1 below. The primary inputs to production process are
material, energy and manpower .These primary inputs are then transformed into primary output i.e.
the final product. This transformation of primary inputs to primary output leads to a secondary
production output that is the maintenance demand. Maintenance affects the potential production
capacity of the plant and is necessary to keep the potential production capacity of the plant on the
maximum level. In other words, it is the secondary input of the production process. (Josson P.,
1999).

Primary Input Production Process Primary Output

 Maintenance

Figure:3.1 Production Maintenance Processes

3.7 Competitive advantages through efficient maintenance

The efficient maintenance influences the productivity, competitiveness and profitability
of the manufacturing process because it has the direct impact on the quality, efficiency and
effectiveness of the production process. In an organisation, the operation function has the
responsibility to produce the goods or provide the service to the costumers of the company. In any
manufacturing company, the company consists of many departments like engineering, planning,
purchasing, manufacturing, quality, maintenance, despatch, e.t.c. but the operations function has
relatively high budget as compared to the all other departments and consists of the largest part of the
company’s budget. The main reason for that is to manage the manufacturing activities effectively,
efficiently, and with high quality. The most cost effective maintenance approach has the influence on
the performance of the business and on the performance of the maintenance itself. The maintenance
has directly influence on the quality of the operations. On there hand, the operation quality and
maintenance efficiency has the influence on the effectiveness and efficiency of the operations
processes. There is no doubt that the result of a good quality, efficiency, and effectiveness of the
operations processes comes in the form of productivity advantages i.e. lower cost, and value
advantages(in terms of good image and reputation in the market).This leads a company towards the
competitive advantages (Figure 3.2).(Alsyouf I., 2001)

Competitive advantages

Profitability

Productivity Value Advantages

Advantages
 Opeations Opeations Opeations
Effectiveness Quality Efficiency

Efficient Maintenance

Figure 3.2 How does the maintenance influence the company’s competitive advantages?
3.8 Introduction and history of Total productive maintenance
TPM methodology was started in Japan in 1971.The concept of this methodology was
come from USA. (Nakajima S., 1988).In those days the Japanese’s industry was in critical economic
situation due to the oil crises and was searching the effective measures to survive in the worldwide
market. They took the basic idea of the productive maintenance (PM) from united state and modified
it by the Japan institute of plant maintenance to TPM system. This system was develop step by step
in small group activities (Tajiri M.,Gotoh F.,1992).Therefore, TPM is an American style of
productive maintenance which has been modified and improved to fit it in the Japanese industrial
environment. Now it is normal in Japanese industry and becoming popular in other western countries
(Nakajima S., 1988).

The development of TPM is usually divided into four main development stages and these are as:
• Breakdown maintenance
• Preventive maintenance
• Productive maintenance
• Total productive maintenance(TPM)
(Nakajima S., 1988).

3.9 Definition of TPM

Total productive maintenance is also known as the productive maintenance
with everyone’s participation. It can be defined as including the following goals:

1. The TPM is concentrate to maximize the overall equipment effectiveness.

2. The TPM has the aim to establish a comprehensive preventive maintenance system for the whole
life span of the equipment.
3. The TPM involve all departments which make planes, use and maintain the equipment.
4. TPM makes the participation of all employees from top management to workers.
5. TPM promotes the preventive maintenance through motivation management i.e through
autonomous small group activities. (Suzuki T., 1992)

TPM has the main goal to maximize the overall equipment effectiveness. So to achieve
its goal, TPM try to reduce the six big losses that are the main problems to get the high equipment
effectiveness. The link of the losses and the effectiveness in TPM is defined in terms of both the
quality of the product and the equipment availability. On the base of the detail study of the factors
involve in the reduction of the equipment effectiveness are divided into six main types.

3.9.1 Down time losses

• Breakdown losses
These kinds of losses are due to the defects of the equipment which need any kind of
repair or maintenance. These kinds of losses consist of downtime along with the labour and the spare
parts required fixing the problem. The amount of these losses is calculated in the form of downtime.

• Setup and adjustment losses

These losses are due to the changes in the operating conditions, like the start of the
production or the start of the different shifts, changes in products and condition of the operation. The
main examples of this kind of losses are equipments changeovers, exchange of dies, jigs and tools.
These losses consist of setup, start-up and adjustment down times. The amount of these losses is
calculated in the form of downtime.

3.9.2 Speed losses

• Minor stoppage losses
These losses are due to the reason of machine halting, jamming, and idling.
Many companies are considering these minor stoppages as the breakdowns in order to
give importance to this problem.

• Speed losses
These losses are due to the reduction in speed of the equipment. In other
words the machine is not working at the original or theoretical speed. If the quality defect
and minor stoppages occurs regularly then the machine is run at low speed to cover the
problems. These losses are measured in the term of theoretical to the actual operating
speed ratio.

3.9.3 Defect or Quality losses

• Quality defect and rework losses
These losses are due to the defective products during the routine production.
These products are not according to the specifications. So that rework is done to remove
the defects or make a scrap of these products. Labour is required to make a rework which
is the cost for the company and material become a scrap is also another loss for the
company. The amount of these losses is calculated by the ratio of the quality products to
the total production.

• Yield losses
 These losses are due to wasted raw materials .The yield losses are split into
two groups. The first one is the raw materials losses which are due to the product design,
manufacturing method e.t.c. The other group is the adjustment losses due to the quality
defects of the products which are produced at the start of the production process,
changeovers e.t.c.
These six big losses indicate the three main topics which are the availability,
performance rate and total yield rate (quality rate). These three topics are the base for the
overall equipment effectiveness calculations.

O.E.E = Availability * Performance rate * Quality rate

• Breakdown losses • Minor stoppage losses •Breakdown losses

• Setup and adjustment losses • Setup and adjustment losses • Setup and adjustment losses

3.10 Overall equipment effectiveness (O.E.E)

The overall equipment effectiveness is the main goal of the TPM system. It is the
benchmark of the any TPM process and is used to measure the equipment effectiveness. The formula
for equipment effectiveness measures the availability, the rate of performance, and the quality rate. It
can be done with the involvement of all departments to measure the equipment effectiveness .The
formula of the overall equipment effectiveness is as follows

O.E.E = Availability * Performance rate * Quality rate

(Mobley R.K., 2002)

1. Availability
The availability is calculated as the required availability minus the downtime and then
divided by the required availability. This can be written in the form of formula as

Availability = Required availability – Downtime * 100

Required availability

The required availability can be defined as the time of production to operate the equipment
minus the other planned downtime like breaks, meetings e.t.c. The down time can be defined as the
actual time for which the equipment is down for repairs or changeovers. This time is also some times
known as the breakdown time. The out put of this formula gives the true availability of the
equipment. Then further this figure is used in the overall equipment effectiveness formula to measure
the effectiveness of the equipment.

2. Performance rate
The performance rate can be defined as the ideal or design cycle time to produce the item
multiplied by the output of the equipment and then divided by the operating time. This will give the
performance rate of the equipment. The formula to calculate the performance rate can be expressed
as

Performance rate = design cycle time * output * 100

Operating time

The design cycle time or the production output will be in the unit of production, like parts per
hour and the output will be the total output in the given time period interval. The operating time will
be the availability value of the availability formula. The result of this formula will be in the
percentage of the performance of the
equipment.

3. Quality rate
The quality rate can be expressed as the production input into the process or equipment
minus the volume or number of quality defects then divided by the production input. The quality rate
can be expressed in a formula as

Quality rate = production input – quality defects * 100

Production input

The production input mean that the unit of product being feed into the production process. The
quality defects mean the amount of products which are below the quality standards i.e. the rejected
items after the production process. This formula is very helpful to calculate the quality problems in
the production process. (Mobley R.K., 2002)
 4. Empirical findings
This chapter is on the empirical findings of the case company situated in
Ljungby. Lars Kinnby is the chief of production and we got the all data and information
about the company through him.

4.1 Henjo Plåtteknik AB Ljungby

Henjo Plåtteknik AB is the name of the case company.

4.2 Introduction
Henjo Plåtteknik AB was established in 1945 in ljungby. The founder of this company
was Henry Johansson. The Company is not a large one, has only one unite which is in Ljungby with
8000m2 areas. The company has only 74 employees with 13 officers. This company is ISO 9001 and
ISO 14001 certified. It is fabricating company which is producing different sheet metal products
according to the orders of its customers. It is working as subcontractor because it has no its own
product. It is producing different parts as the requirement of its customers. The company has 150
customers and 10 of them are the main customers of the company which give 80% of the total
business of the company. The turn over of the company is increasing almost every year, this shows
that the business of the company is increasing continuously. The turn over of the company is 92
Swedish MKr in 2010 (Figure 4.1). The most important customers of the company are Kalmar
industries, Electrolux, Wascator, Burtech, Dynapac, Svetruck, Ljungby Maskin, SMV Konecranes,
and Rapid Granulator. The order average per month of the company in 2010 is 1510. The company
on time delivery average percentage is 82 and 25 percent of this 82 percent on time deliver of the
orders is for those orders which are delivered on the same day (see Appendix#1).
Figure 4.1 Turnover of the company from 1995 to 2006

4.3Organizational plan of the company

The organizational plane is showing that all the working areas are working directly
under the C.E.O. (Figure 4.2). All working areas are responsible of their works according to their
duties and are answerable to the C.E.O. of the company.
4.4 Company working style and different processes
The following layout is showing the company’s working style (Figure 4.3). When
company receive an order from the customer, it first comes in the production planning section. This
section makes the plane for the order i.e. when and how much to produce these products according
to the customer requirement and according to the resources. The next section is of construction. This
section makes the plane about the production method should be used in the manufacturing of the
required items. It selects the line and the production machines for the particular items. The purchase
section is the responsible to purchase the required items for the production and to provide on time to
the production section. The production section is the responsible to produce the products according
the planes and specifications receives from the planning section and construction section. These are
the four main working processes which are directly involved in the production of the required items.
At the end, products are delivered to the customers. There are two supporting processes that are IT
and maintenance. These two processes help to make the smooth production. There is another process
which makes the measurements and analysis after getting feed back from different sections and from
the customers. It is the management process. The management is the responsible to provide
the sources for the production.
4.5 Products of Henjo Plåtteknik AB
Henjo Plåtteknik AB is producing 5000 different types of products. But these
entire products are fabricating from the sheet metals of different sizes as per specifications
of the customers. There are some pictures of the products to understand the company’s
business (Figures 4.4, 4.5, 4.6, 4.7, 4.8).

4.6 Description of the production section activities

The company is working to produce different kinds of products as the demand of its
customers. This demand varies a lot .That is the main reason that company has a flexible production
system. The different activities of the production section have the capacity to work with the different
requirements. The most important activities are laser cutting, bending, welding, punching, rolling,
painting and assembling. There are many machines are involve in these activities.

Laser cutting
Three machines are involved in this activity. These machines are computerized
and working according to the cutting programme. Different cutting programmes can be feed in these
machines as the requirement of the products. These machines can cut the metal sheets up to 20 mm
thickness. The average set up time of each machine per day is 8.57 min. and the number of failures
per month of each machine are two. The time to restart the machine is 34 (10hr fault fixing + 24hr
technician arriving time) hours after each failure of these machines. The short stoppages of the each
Figure4.9 leaser cutting machine machine are 975 per year. Each short stoppage takes 20 min. Eight
employees are working in this activity. This working station works 24 hours a day and 7 days a
week. It means this is much busy. There are total three working shifts in a day. One shift is

consisting of eight hours. Forty minute break is there in each working shift. Two workers are
working in each shift every day. The eight workers are mobilised in each shift of the whole week. In
other worlds, two workers are remain on standby and can be used in case of emergency. The out put
of this work station is 491 products per week. The machine cuts the 1 metre metal sheet in 2.8
minutes. But the machine is cutting 1 metre of the metal sheet in 3.2 minutes. There is no time
wastage between the replacement of the metal sheets for the continue work. The rejected products of
this work station were 1334 in year 2006.

Bending
There are five machines which are involved in this activity. The capacity of these machines is
different. They have the capacity from 85 tones to 230 tones. The average set up time of each
machine is 25 minutes per day. Each machine stops once a month due to failure. The time to restart
the machine is one day and four hours. The short stoppages of each machine per year are twenty.
The time for each short stoppage is 20 minutes. Ten employees are working in this work station.
These employees work in one working shifts each day. There is a break for coffee of 40 minutes.
Only five day per week work is done in this work station. The production capacity of this work
station is to produce 266 products per week. The machine ideal cycle time is 6.6 sec (0.11 minutes)
i.e. it can make a bend in this time. But the average time between two strokes of the machine is 0.65
minutes. The total 2035 products of this work station were rejected due to the quality problems in
year 2006.
Punching
For this activity, there is only one machine. This machine is also computerized and
working according to the punching programme which is feed to it for the particular job. This
machine can hold ten different punching tools at a time and can use them one by one as the
requirement of the item. The set up time of this machine is 30 minutes per day. This machine fails
three times in a month. The time require to restart the machine is twenty four plus eight hours (i.e.
one day production time 8hr + next day 8 hr will be lost ) after each failure. The short stoppages of
this machine per year are 90 and each short stoppage consumes 20 minutes. The working
specification of the machine is 2000*1000*6 mm. one employee is working and handles the whole
work of this work station. The only one working shift is there for this activity per day and it works
five days a week. The 40 minutes coffee break is included in the shift time. This work station
produces 24 products per week. The machine ideal capacity is to punch a metal sheet of size 600
mm*280mm in 7 minutes. But the average time to punch this size of sheet is taking 12.21 minutes.
Only 9 products of this work station were rejected due to the quality problem in whole year.

Welding

Figure4.11 welding machine

Robot welding machines are used in this activity. There are two robot welding machines. A
welding programme is feed to these machines and then they work as the instructions of the
programme. This work station works in one shift per day and 45 minutes coffee break is also
included in the working shift time. This work station work five days a week. The set up time for each
machine is 30 minutes per day. Once a month each machine fails. Time to recover the fault and
restart the machine is twenty four plus two hours (i.e. one day production time 8hr + next day 2 hr
will be lost ). The short stoppages of each machine per year are 20 and each short stoppage take 20
minutes. Four employees are involved in this welding work. Fourteen Hands welding employees are
also involve in this activity. They make the semi welded object. This work station produces 77
products per week. The robot welding machine can weld a metal product with the ideal speed of 300
mm in 10 sec. but average time which machine is taking to weld 300 mm is 39.68 sec. the rejected
products of this work station in whole year were 486 products.

Rolling
There are two rolling machines to perform the rolling work on the metal sheets. The roll’s
length of one of the machines is 1000mm and other machine has the roll length of 2000mm.the speed
of these machines is controlled through the control panels of the machines. The set up time of each
machine per day is 15 minutes. These machines fail once in two months and this failure takes twenty
four plus four hours to restart the machine again. The number of short stoppages of each machine
per year is 20 and time which is consumed in each short stoppage is 15 minutes. This data is of these
machines of early years when the machines were working with full capacity. Now a day, these
machines are working one or two times in a week. There is only one person to handle the entire load
of this work station. This work station is available for one shift to work. The break time of this work
station is 40 minutes in the working shift. This work station is producing 31 products per week.

Painting
The company has a system for the paint of its products. For this purpose, the company has
a good automatic paint plant. There are many steps are involved in this plant. The set up time of this
plant is two hours. The plant fails once a month. The time to finish the problem and to start the plant
once again is twenty four plus four hours. The short stoppages of this plant per year are 18 and each
stoppage takes the 30 minutes. The six employees are working in paint shop. This work station has
only one working shift with 45 minutes coffee break. This working shift also depends on the
products available for the paints. The paint shop is painting 128 products per week. In the whole
year, 126 products were rejected of this work station.

Assembling
The last activity of the production process is the assembling of the different parts of the
products. The three employees are involved in this activity in one working shift of the production.
The employees has 45 minutes coffee break during the working shift. Different tools (hammer, screw
drivers e.t.c.) are used to assemble the parts and to give them the final product shape. The assembling
area’s employees assemble 24 products per week. But some times, the employees do mistake in
assembling the different parts. So due the assembling problem, the 28 products were rejected in the
whole year.

4.7 Production process

The production process of the company is complicated and consists of different
production lines (see Figure 4.12). This is only due to the big variation of the product’s demand of
its customers. Production process starts from the main store. The metal sheets are issued for the work
as the requirement of the order to the work stations i.e. Laser cutting or punching. These two work
station are at the start of all the production lines. When metal sheets reach in the laser cutting work
station with job plan and specification then operator takes the metal sheet and put it on the plate form
of the mention machine for the laser cutting. After fixing the metal sheet on the plate form of the
machine, operator starts the machine and machine starts its work according to the cutting programme
which is already feed in its operating device. Before starting, operator sets the laser intensity of the
laser beam. When machine starts, the plat form of the machine with metal sheet moves in side of the
machine and reaches at a fixed point (zero position). After cutting the whole cut metal sheet comes
out from the machine and at the other metal sheet moves inside of the machine for the cutting. There
are two plate forms of the machine which work alternatively i.e. one goes inside of the machine and
other is ready for the loading of the next metal sheet. Operator takes the cut metal pieces and checks
the quality of them and goes to the next work station with these metal pieces to hand over them for
the next operation. What will be the next operation it depends on the specification. The next station
can be bending, welding, painting or assembling after the laser cutting work station.

Let’s consider the next work station is bending. It works according to the instructions as
the laser cutting work station works. Operator sets the plate form of the machine according to the
specification of the job before starting the machine. After adjustment of the machine, two operators
put the metal piece or metal sheet on the plate form of the machine between the edges, which they
have fixed on the plate form to get the require result. Then one of the operators starts the machine for
the stroke to make a bend. 23After stroke the machine head goes back and operator pick up the
piece with bend. They check the bend according to the requirement if they find some problem in the
bend then they put this piece once again in the machine for the same operation or some times they
use hammer to get the require results. They make many bends on the piece according to the
specifications or drawing. They hand over the bended pieces to the next work station for its operation
after bending some pieces.

If the metal pieces or metal sheet comes in the welding work station, there are robot
welding machines. But before robot welding of the different pieces, the manual welding is done to
make a semi welded object. The Operators see the job instructions and put the semi welded metal
object on the machine plate form. These welding machines are computerized and works according to
the operating programme which is already feed in it. The operator set the plate form of the machine
before putting the object on it according to the welding operation programme of the machine. They
use the electric hoist to put and to remove the object from the plate form of the machine. The
operators have the responsibility to check the quality of the weld. After inspection, they keep the
object one side and put another semi welded object on the plate form of the welding machine.
They hand over their welded objects to the next work station for its operation after welding some
objects.
There is a work station which is for paints. When the metal pieces or objects comes in
the paint shop for painting, the operator of this paint shop checks the instructions and hang the
objects on the moving belt of the plant which is used to carry the objects in and out purpose through
the plant. Before the painting process, the operator checks the right quantity of the paint powder and
other chemicals which are used in the painting. Operator checks the quality of the paint on the
objects after painting and hands over to the next station which is of the assembling of different parts
or just for store as the finish product. In the assembling, the employees of this station read the
instructions and see the drawing and assemble the different parts to make the final product.

If we see the right side of figure 4.12, there is a punching work station. When pieces
reach in this work station, the operator sees the instructions and drawing and then fixes the different
punching tools in the machine. This machine use the require tool according to the punching
programme, which is feed in the machine memory. Operator initializes and fixes the space for metal
piece on the plate form of the machine before starting it for the punching operation. After punching,
operator checks the quality of the punches and then puts other metal piece on the plate form of the
machine for the punching operation. After punching some pieces, he gives them to other work
station for the other operation. Other work station is for the rolling purpose. The operator of these
machines fellow the instructions and drawing to roll the object. He just takes the object and put it in
the rolls of the machine. Before putting the object in the machine, he sets the speed of the rolls and
the gap between them. Operator checks the rolling quality as per drawing. He has the responsibility
to give the rolling object according to the drawing. He gives the rolled object to the next work station
for its operation on the object. All production lines end at the assembly and final product store area.
The final products to the customers are delivered from this area.

Production process flow diagram

4.8 Quality
The company is facing the quality problems. The company paid 818182 SEK due to the
quality problems in 2006 (see Appendix#2). This amount is 0.89% of the turnover of the company.
The operators has the responsibility of good quality and they are themselves checks the quality of the
products. There are no special quality checkers in the production area. The company has a section
for checking the quality of the products. But this section just checks the quality of the first piece of
the production daily. The other all production quality depends on the operators.

4.9 Maintenance
The company has the preventive maintenance strategy for the all machines in the
company. They have the contract with the machines manufacturing companies for preventive
maintenance. This maintenance plan is different for different machines. One week per year is 25the
plane preventive maintenance for each Laser cutting machine. For the other each machine like
punching, a robot welding, bending machine has one day plane preventive maintenance per year.
Each Rolling machine has half day and paint plant has two days plane preventive maintenance per
year. The operators have the duty to keep their machines clean and lubricate the different parts of the
machines when ever they feel the need for lubrication. Company has a computer technician who is
also involve in the maintenance process. When ever a failure is occur, he tries to recover the fault. If
he could not fix the problem then he asks to the management for calling the machine manufacturing
company’s technician. The machine manufacturing company technician arrives after the company
management call but he takes twenty four hours. The company does not have any spare part of the
machines in its store. The company buys the spare parts from the machine manufacturing companies
when ever the need the spare parts.

4.10 Goals of the company

The company has set its goals for the year 2007.these goals are as

1. An increase in profit of min. 10%

2. Increase in delivery of orders on time to min. 95% to the customers (average 82% for
2010).
3. Decrease in Cost due to lack of quality to 0.3% of the turnover (0.89% in 2010).

5. Analysis
In this chapter data and information obtained from the case company are analysed.
It will lay the foundation for the recommendations to the case company for improvements.
For this purpose, the authors selected two production lines (Figures 5.1A&5.1B).

These production lines are the main production lines of the company’s production because
most of the products of the company go through these two lines and the work stations of these two
lines participate in whole production of the company alone or with the other work stations. Line 1
consists of laser cutting, bending and welding work stations. The line 2 consists of punching and
welding work stations. So the current situation of the production lines will be clear with the
individual situation of the work stations. The authors use the overall equipment effectiveness
method to see the current situation of the production lines as well as the work stations. For this
purpose, the average values of the data are used in the calculation of the O.E.E.

5.1. O.E.E calculation of Laser cutting work station

5.2. O.E.E. calculation of Bending work station
5.3. O.E.E. calculation of Punching work station
5.4. O.E.E. calculation of Robot Welding work station
5.5 Production line 1 & 2
The overall equipment effectiveness of the production line 1 and production line 2 are
calculated as from the above data. The O.E.E. of the four work stations i.e.laser cutting,bending,
punching and robot welding are 70.97%, 12.91%, 35.74%, 20.23% respectively (Figure 5.2A).

However, in the absence of data of each production line’s share of using welding work
station; it has been assume that this work station is fully used by one production line at a time
5.5.1 O.E.E. calculation of Line 1
O.E.E. OF LINE 1 = O.E.E. of Laser cutting work station*O.E.E. of bending work
station*O.E.E. of welding work station
O.E.E. OF LINE 1 = 70.97%*12.91%*20.23% = 1.85%

5.5.2 O.E.E. calculation of Line 2

O.E.E. OF LINE 2 =O.E.E. of punching work station*O.E.E. of welding work station
O.E.E. OF LINE 2 = 35.74%* 20.23% = 7.23%

The value of O.E.E. of the production lines 1 and 2 are 1.85%and 7.23% respectively
after multiplying the O.E.E. values of work stations of these production lines (Figure 5.2B).

Bending machine
The bending work station’s O.E.E. is the lowest as compare to the other work
stations (see Figure 5.2A). The bending machine work station is the big work station.
There are ten employees are involved in the work with five bending machines. But when
we see the availability, quality rate, and performance efficiency of the machines are
90.87%, 84.02% and 16.92% respectively (See Figure5.3). The performance efficiency of
the machine is very low which is 16.92%.
This factor has the heavy impact on the overall equipment effectiveness of this work station. In the
calculation of this factor the ideal cycle time for one output result is 6.6 sec. this speed is the actual
capacity of the machines as mentioned by the manufacturer of these machines. But according to
calculations which are made on the machine the average cycle time for one stroke of the machine is
39 sec in the current situation. The calculation of the number of strokes per day from this time of
one cycle stroke is become easy. The numbers of stroke per day are obtained by dividing the
operation time for one day with the average cycle time for one stroke. This gives us the 577.43
stroke per day for one machine. So the operation time which is available for one machine every day
is important to calculate the number of strokes per day and the availability of the machines too. To
calculate the operation time the plan down time and unplanned down time are considered first. The
plane down time for each machine of this work station is consisting of setup 34time, coffee break
and preventive maintenance time. One year has been considered as it is consist of 12 months and in
each month there are 4 weeks. Because this work station works five days in a week, so to convert the
one day preventive maintenance per year to the time of the preventive maintenance per day the per
week maintenance time is divided with the number 5. So the plane down time of this work station is
67 minutes per day. The unplanned down time for this work station is consisting of the number of
failures and the short stoppages of the machines. The failure time of the month is divided with the
numbers of the working days per month to calculate the time for failures from per month in terms of
per day. The time for the short stoppages of the year is converted into per day by dividing the total
days of the year i.e. 12 months, 4 week and 5 days. The total number of short stoppages is multiplied
with the time for each short stoppage to calculate the total time for short stoppages per year. So at the
end we found unplanned down time for each machine is 37.67 minutes per day. Then the loading
time has been calculated. Thesubtraction of the plan down time from the total time for one day gives
the loading time for the machine. The loading time for the bending machine comes out as 413
minutes per day. This loading time is then future used to calculate the operation time for the
machine. The subtraction of the unplanned down time from the loading time give the operation time
of the machine. The operation time of the bending machine in the bending work station is 375.33
minutes per day.
The second important factor in the O.E.E. calculations is the availability of the machine. The
availability of the bending machines is 90.87% in the current situation. This is obtained by dividing
the operation time of the machine with the loading time of the machine.

The quality rate is the third important part of the O.E.E. the total number of products
produce in a certain period of time and the number of rejected products in that certain period of time
are used to calculate the quality rate of the machine. The rejected products are subtracted from the
total produced products then the answer is divided with the produced products and this gives the
quality rate of the machine. There were 266 products are produced per day but to get the production
of the machines per day then the 266 is divided with the number of days per week. This gives the
53.2 products per day. The rejection of these machines is 2035 products per year but to get the
rejection to per day the total amount of the rejected products are divided in to 240 working day of the
year. The amount of the rejected products comes out 8.5 products per day. The quality rate of the
bending work station is which is appeared at the end is 84.02%.
 So at the end, the different factors i.e. availability, quality rate and performance efficiency of
the machine is multiplied with each other to get the O.E.E. of the machines of the work station and
this value become 12.91%.

Welding machine
The O.E.E. value of welding work station is better than bending work station (see the
Figure 5.2A). Welding machine work station is consisting of two robot welding machines. This is
also a big work station with eighteen employees. Four of them are working on the robot welding
machines. The O.E.E. of this work station is 20.23%. The performance efficiency is also low which
is calculated as 25.23%. The figure5.4 shows the availability, quality rate, and performance
efficiency of the welding machines.

This machine can weld a metal of 300mm in 10 sec. This is the ideal capacity of the machine
as given by the manufacturer of this machine. So in other words, this machine takes 0.556 minutes to
weld a 1 meter metal. The actual output of the machine is 39.68 sec to weld a 300mm metal. i.e.
0.661 minutes are used to weld the metal of 300 mm length in the current situation. From this time
calculation the output of the machine in the operating time is calculate by multiplying the 300mm
with the operating time in minutes and then dividing with the 0.661 minutes and which is 168.53
meter/day. But for the operating time is calculate by considering the plan down time and unplanned
down time. The plane down time is 77 minutes per day which is consisting of the coffee break time,
setup time and the preventive maintenance time. The preventive maintenance is calculated with the
same procedure as calculate for the bending machine preventive maintenance. Then the unplanned
down time is 31.67 minutes per day for each welding machine. This is calculated by adding the
failures per day and the short stoppages per day. To calculate the failure time per day, first the total
time of the failure in a month is converted into the minutes by multiplying with the 60. Then this
time is divided with the number of days per month. This unplanned down time is 30 minutes per day
of each machine. The unplanned down time due to short stoppages of the one machine per year is
calculated by multiplying the total short stoppages with the time of the each stop and then dividing
with the working day of the year are 240. The unplanned down time due to short stoppages is 1.67
minutes per day comes out after calculations. The loading time for each machine is calculated by
subtracting the plane down time from the total time for one day production. The loading time from
this calculation becomes 403 minutes per day. Now the operating time is calculated by subtracting
the unplanned down time from the loading time. So the operating time for one welding machine is
371.33 per day.

The availability of the welding machines is 92.14% which is the second factor in the
calculation of the O.E.E. This is calculated by dividing the operation time with the loading time. The
month of calculation of these two times has been described in above paragraph.

The third important part of the O.E.E. is the quality rate. The quality rate of the
welding machines is 87.01%. The total products of the week are divided with the number of the
working days of the week to get the per day production. The per day production after is calculation is
15.4 products of the welding work station. The rejection of this work station is 486 products per year.
But to calculate this rejection per day is divided with the total working days of the year of 240. This
calculation gives the rejection of the welding work station which is 2 products. The same is used,
which is described in 36the calculation of the quality rate of the bending machine, to find out the
quality rate of the welding work station.

Punching machine
In the case of the punching work station, there is only one machine with one
employee. The O.E.E. value of this work station is higher then robot welding work station’s value of
O.E.E. (see Figure 5.2A). The O.E.E. of this work station is 35.74%. The O.E.E. consists of
availability, performance efficency and the quality rate of the machine. The figure5.5 shows the
availability, quality rate, and performance efficiency of the punching machine.

The performance efficiency is calculated with the help of the ideal time to punch a metal
sheet and the actual time which is being used to punch the same the size of the metal sheet. The ideal
time to punch a metal sheet of 600mm * 280mm is 7 minutes which is mentioned by the
manufacturer of the machine. But it is taking 12.21 minutes to punch the same size of the metal
sheet. This time helps to calculate the total number of the sheets which are punched in one day by
dividing the operating time with the time spend on one sheet to punch. This calculation shows that
this machine is punching 21 sheets a day. Now these 21 sheets are multiplied with the ideal cycle
time to punch the one sheet which is 7 and then is divided with the operation time of the machine in
one day to calculate the performance efficiency of the machine. The performance efficiency of the
punching mach is equal to 57.30%. The operation time of this machine is also consisting of coffee
break time, set time and preventive maintenance. The method to calculate is the same as described
above in the case of bending machine. The operation time for the punching machine is calculated as
256.5 minutes per day.

The availability of the machine is 62.86% which is getting by dividing the operation time
with the loading time i.e. 408 minutes per day of the machine.

The quality rate of the punching machine is obtained by the same formula which is used in
the calculation of the quality rate of the bending machines as well as the welding machines. The
total products of the week are divided by the number of the working days to get the products per day
which are 4.8. The rejection products of this work station per day are calculated by dividing the total
rejected products in the year with the working days of the year which is 0.0375. By applying the
formula as described above, the quality rate of the punching machine is 99.22%.

Laser cutting machine

The O.E.E. value of this work station is the highest as compare to the others (see Figure
5.2A). The laser cutting work station’s O.E.E. is also calculated with the same procedure as above.
The difference between this work station and the other work stations is that it is working 24 hours in
a day. So the working days of this work station are 365 instead of 240. The figure5.6 shows the
availability, quality rate, and performance efficiency of the laser cutting machines.

The performance efficiency of the laser cutting machines is calculated with the same procedure as
described above. The machine can cut 1 meter metal sheet in 2.8 minutes and this is ideal speed of
the machine to cut the metal sheet as given by the supplier of the machine. The average time which
the machine is used to cut the 1 meter metal sheet is 3.2 minutes. Then the out put of the machine in
one day is calculated by dividing the operation time with the 3.2 minutes of the time of one meter
cutting. This out put is 341.875 meter per day i.e. the machine is cutting 341.875 meters of the metal
sheet in one day. To get the performance efficiency, 342.875 meter is multiplied with the ideal
cutting time of one meter which is 2.8 minutes and then divided with the operation time
1094.43minutes. The performance efficiency of the laser cutting work station is get 87.5%. The
operation time is consisting of the same factors as the other machines. But there are three working
shifts in this station. So the total time is consisting of 24 hours i.e. 1440 minutes per day. The loading
time is found to be 1283.83 minutes per day and the operation time is found to be 1094.43 minutes
per day for each machine by applying the same formula as mentioned above. The availability of the
laser machines is calculated by dividing the operation time of the machine with the loading time of
the machine and this is found to be 85.24%.
 The total products per day of the laser cutting are obtained by dividing the one week
production which is 491products with the number of working days which are 7. The one day
production of the laser cutting machine is become 70.14 products after calculations. The total
rejection of the whole one year is 1334 of one machine is divided with the number of the working
days 365 to get the rejection of the day. This becomes 3.65 products per day. So after applying the
formula as described above, the quality rate of the laser cutting machines is 95.16%. the O.E.E. of
the laser cutting work station is get after multiplying the availability, quality rate and the
performance efficiency of the machines and is become 70.97% of the laser cutting machines.

6 Results and discussion

We can see from the analysis the overall equipment effectiveness of the production line 1
is 1.85% and is smaller than the O.E.E. 7.23 % of the production line 2. The basic reason of this
difference is due to the bending work station’s O.E.E. which is 12.91%. Then the welding work
station comes with 20.23% O.E.E. But the bending work station is the main reason of the lower
O.E.E. of the production line 1. This work station is needed to be focused on the first priority to
increase the overall equipment effectiveness of the production line 1. When the overall equipment
effectiveness of this work station becomes equal to the overall equipment effectiveness of the
welding work station, then the second priority will start and that will be the welding work station
along with the bending work station. The welding work station is the common work station of the
selected production lines 1 and 2. It means that it has the impact on both the selected production
lines. Then third and final priority will be considered.

The bending work station has low O.E.E. mainly due to the low performance efficiency
of the machine which is 16.92%. The reason of this low performance efficiency is the huge
difference in the ideal cycle time and the actual cycle time of one stroke of the machine. The 6.6 sec
ideal cycle time for one stroke is working as 39 sec in the actual working conditions. This difference
in the stroke’s time is due to the losses in the working speed of the machine and the loading and
unloading of the object on the plate form of the machine. The material handing also is the part of this
low efficiency because the operator has the responsibility to handed over the finished work piece to
the next work station. He also has the responsibility to check the quality of each piece and to make
each piece according to the requirement of the job. Lot of time is wasted in theses activities. This
time wastage of the operator appears in the form of low performance efficiency of the machine as
during this time machine is waiting for the new work. So this area is needed to be the main focus to
improve the O.E.E. of the bending machines. The performance efficiency of other work station’s
machines like robot welding, punching and laser cutting are 25.23%, 57.30% and 87.5% respectively
with the same problems as for the bending machine work station to achieve the high performance
efficiency i.e. the difference between the ideal cycle time and the actual cycle time and more than
one responsibilities of the operator are the same problems of all work stations. The other factor in
the O.E.E. calculations is the quality rate which is 84.02% i.e. there are 15.98% products that are
rejected due to quality problems from this work station.
This problem is due to the operator and the condition of the machine. The operator makes the
adjustments in the machine to get the products according to the specifications and with good quality.
Because the operator is the responsible for the quality and he checks the quality of the products
himself, so the skill of the operator is most important. There is no department of maintenance for
checking the conditions of the machines. So this responsibility is also on the shoulders of the
operators. This is the second important factor which requires attention to increase the O.E.E. of the
bending machines. The robot welding, punching and laser cutting work stations are also facing the
quality problems. The 12.99% of the products of the robot welding work station are rejected in the
last year 2006 due to the quality problems. As the punching and laser cutting work stations rejection
of products are 0.78% and 4.84% respectively in the previous year. The reasons of the quality
problem are the same of the bending work station i.e.the whole responsibility of the quality depends
on the skill of operator to adjust the machine and to check the quality of the products as well as the
machine’s condition plays an important role. The third important factor of O.E.E.calculations is the
availability of the machine for production. The availability of the bending machines is 90.87% and
the availability for production of the robot welding, punching and laser cutting work stations are
92.14%, 62.86% and 85.24% respectively. But there are still chances to improve the availability of
the machines by minimizing the unplanned down time of the machines. This is possible with a good
maintenance policy for the machine’s maintenance. Once a machine fails, lot of time is consumed to
restart it because of the maintenance system of the company. First the operator himself checks and
then calls the computer technician who is participating in the maintenance work. Then he decides to
fix the problem by himself or call the machine’s manufacturer technician for the maintenance of the
machine. Manufacturer technician takes at least one day to come in the company to fix the problem.
During this time machine is not available for the production and is only waiting for maintenance.
Next day he fixes the problem of the machine or waits for the spare parts if the company does not
have the required spare parts it also takes time. In case of bending machine the twelve hours of the
working time per month are wasted due to this maintenance procedure. In other words the company
is not able to produce its products on this machine during this time which is the loss of the company.
Ten working hours are wasted due to the maintenance procedure in the case of robot welding when
the machine stops due to problem. For the sixteen working hours the punching machine is not able to
produce the products in the case of a failure. The laser cutting machine is not available for
production for thirty four working hours when it stops due to the problem. These machines are much
busy machines. This can be seen that these machines are working twenty four hours a day through
out the year. All these time losses can be improve with the good maintenance system.

There are different views to see the satisfactory level of the O.E.E. but the target of the
best satisfactory level of the value of O.E.E. is 85% with the availability more than 90%,
performance efficiency more than 95% and quality rate more than 99% (Nakajima S., 1988). In the
case company the O.E.E. of bending, robot welding, punching and laser cutting work stations are
12.91%, 20.23%, 35.74% and 70.97% respectively and are not at the satisfactory level. It means lot
of work is required to achieve the satisfactory level of the O.E.E. The individual conditions of the
factors of O.E.E. are like as the quality rate of the punching is at the satisfactory level which is
99.22%. But the other work stations are not at the satisfactory level according to the current situation
of the production work stations. The performance efficiency of all the work stations is under the
satisfactory level. The availability of the bending and robot welding work stations are on the
satisfactory level but the laser cutting and punching work station’s machines availability is under the
satisfactory level. So a priority to focus on a particular work station can be set on the basis of the
lower O.E.E. and ways for the improvement can be considered and implemented.

The company was not able to deliver some of its orders on the delivery dates in the last
year 2006. Eighteen percent of the orders were late due to the current situation. This low value of
O.E.E. makes the picture clear. It shows the problem and gives the direction to work to solve it. The
good maintenance system has the ability to improve the O.E.E. of the machines to the certain level.
This year in 2007, the company wants to increase the delivery to 95%. This is the reason that the
company wants to take some steps to reach this goal.

The O.E.E. value and the availability of the machines and quality rate of the work
stations show that the current maintenance is not enough for the machines for achieving the goals of
the company. The company has the preventive maintenance plan for the all machines. Each machine
is shut down every year for the preventive maintenance. The number of failures and short stoppages
make it clear that the preventive maintenance plan needs some improvements to make the machines
on the optimal conditions. In the case of break down, the maintenance task is time taking and
lengthy. Much is consumed in to clear the problem and to 40make a decision to call the technician
from the machine supplier. Because the company do not have any spare parts in its store, some times
the spare parts become the problem and much time is wasted to buy and receiving them. The
machine operators check and clean their machines daily before they start work. But they do not have
any plan to lubricate the different parts of the machines. They do this job when ever they feel to
lubricate the parts. So in general, an updated maintenance plan is the need of the system which can
help to increase the overall equipment effectiveness of the equipments.

The quality system of the company is also not working in an effective way. This is
clear from costumer’s complaints and the transportation cost which the company bears (see
appendix#2). The company bears the product’s cost as well as the transportation cost of the products
due to the quality problems. The total quality problem cost is 818182 SEK in last year. This cost is
the 0.89% of the total cost. The company has the goal to reduce this cost to 0.3% this year.

The company third goal is to increase the profit to 10% from the previous year. This
goal can be achieved by increasing the productivity of the product or by increasing the sales of its
products and by minimizing the cost.
The value of O.E.E. of the current situation gives the clear map to the
management to take steps to improve the current situation and to achieve the goals of the
company.
 7 Conclusions
The value of O.E.E. shows that the company has the production system to produce the
products in more quantity in the same production time by improving the current situation i.e by
improving the availability, quality rate and performance efficiency. These three factors indicate all
flaws in the production system. The O.E.E. of the bending work station is the lowest as compared to
the others. So to increase the production, the O.E.E. values of all work stations indicate the bending
work station is the key point to start the improvements. Future, the performance efficiency value of
this work station is the lowest as compare to the other factors i.e. availability and quality rate. This
indicates the exact point to start the improvements in the current production system of the company.
The improvement of the performance efficiency of the bending machine will increase the value of
the O.E.E. of the bending work station. This increase of the value of the O.E.E. of the bending work
station will increase the O.E.E. value of the production line 1. Then the robot welding work station’s
value of O.E.E. will become important for the both selected production lines. This way of
improvements in the current system will lead the company’s production system towards the
satisfactory level slowly and slowly and to develop a good production systems. The role of the
maintenance to develop a good production system and to improve the O.E.E. value of the production
machines can not be ignored but it is not the main problem of the case company. The lower
performance efficiency of the work stations shows that there is a problem of the man power
management. The machines are waiting for the work in the production time. This is because of the
more than one responsibility of the operators. Most of their time is wasted in quality checking and
material handling. During this time machines are available for the production but remain idle as the
operator is busy doing something else.

The maintenance is the parts of the production system. Every system needs
maintenance for attaining its best position for the production otherwise the problems of quality, short
stops and failures become more and more which lead the company towards the losses. The
maintenance has the direct contact with the production system to keep the production machines as
much as possible to the best conditions to minimize the disturbance in the production and as a result
the production will be more with high quality. The other advantage of the maintenance will be
appearing in the form to establish a more reliable and stable production system. Then the production
of the orders and delivery to customers will be on time which will increase the satisfaction level of
the customer. This more production and the satisfaction of the customers are the benefits for the
company to increase the sales of the products and to make the more profits for the company.

Thus the O.E.E. is the tool for the company to asses the current situation and to start to
make the improvements from particular point. The maintenance is the sporting activity which helps
to make the improvements in the current condition and to improve the value of O.E.E. The start of
the improvement in the value of O.E.E. and the development of the preventive maintenance plan for
the machines will be the first step for the company towards the implementation of the TPM. Because
these factors are the main objectives of the TPM.
 8 Recommendations
We would like to give the some recommendations to our case company which will be
helpful for the company to develop a good and reliable production system for to get the competitive
advantages. Our recommendations for the case company as fellow
• The company should use the O.E.E. as the tool to asses the current situation and to find out the
starting point for the improvement process.

• The company should have to modify the current preventive maintenance plane for the all machines
which will be able to decrease the failures and short stoppages and keeping the machines in the best
conditions for production.

• Some times, the time is wasted due to the spare parts .i.e. the time is consumed in the waiting of
the spare parts. So the company should keep the frequently problem creative parts in the store so that
they can be used in the case of need.

• The company has the quality problems in the last year and much of money wasted due to the
quality problems. So the company should activate its quality system to reduce these problems i.e.
only operator is checking the quality of the products and wasted the time which gives its impact in
form of lower performance efficiency. The company has the quality system and the department for to
insure the quality. The need is to make it active and make a plane for that system.

• The operators are the key persons in the production system. So to get the maximum out put with
high quality products, it is necessary that they have the good skills as according to their job. So our
suggestion is that the company should arrange some training for them time to time to keep them
updated and motivated.
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