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Operations Management: Sustainability and Supply Chain Management

Third Canadian Edition

Chapter 17

Maintenance and Reliability

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Outline
Global Company Profile: Ontario Power Generation
The Strategic Importance of Maintenance and Reliability
Reliability
Maintenance
Total Productive Maintenance
Techniques for Enhancing Maintenance

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Copyright © 2020 Pearson Canada Inc.
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Learning Objectives (1 of 2)
When you complete this chapter you should be able to:
Describe how to improve system reliability
Determine system reliability
Determine mean time between failure (MTBF)

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Copyright © 2020 Pearson Canada Inc.
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Learning Objectives (2 of 2)
When you complete this chapter you should be able to:
Distinguish between preventive and breakdown maintenance
Describe how to improve maintenance
Compare preventive and breakdown maintenance costs
Define autonomous maintenance

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Copyright © 2020 Pearson Canada Inc.
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Ontario Power Generation (OPG) (1 of 2)
OPG operates the Pickering Nuclear Generating Station in Ontario
Supplies 13% of the province’s electricity supply
The Canadian Nuclear Safety Commission requires inspection at least every 10 years
Support from an additional 1900 extra staff is brought in to work with existing 2730 employees

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Copyright © 2020 Pearson Canada Inc.
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The Global Company Profile of the Ontario Power Generation provides a perfect lead-in to the power and importance of preventive maintenance. The risk for safety and electricity cut-offs is enormous without preventive maintenance. The costs would be staggering if there was a breakdown. Therefore careful planning to carry out preventive maintenance is crucial.
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Ontario Power Generation (OPG) (2 of 2)
40,000 tasks related to the facility’s inspection and maintenance have to be carried out
Shutdowns between six to eight weeks are rotated between the various units
This ensures that electricity is not shut down completely
The maintenance contributes to an excellent record of reliability in electricity generation

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Copyright © 2020 Pearson Canada Inc.
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Strategic Importance of Maintenance and Reliability (1 of 2)
The objective of maintenance and reliability is to maintain the capability of the system

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Strategic Importance of Maintenance and Reliability (2 of 2)
Failure has far reaching effects on a firm’s
Operation
Reputation
Profitability
Dissatisfied customers
Idle employees
Profits becoming losses
Reduced value of investment in plant and equipment

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This list is not in the text. It provides a nice summary of the potential far-reaching implications of a system failure. Another potential disastrous consequence would be a safety hazard, possibly damaging the environment or even causing injury or death to employees, customers, or surrounding residents.
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Maintenance and Reliability
Maintenance is all activities involved in keeping a system’s equipment in working order
Reliability is the probability that a machine will function properly for a specified time

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The respective definitions of maintenance and reliability are provided in this slide. Slide 10 identifies two primary tactics for both. Slide 11 (Figure 17.1) illustrates that good maintenance and reliability management requires employee involvement and good procedures, resulting in enhanced company performance. The interdependence of operator, machine, and mechanic is a hallmark of successful maintenance and reliability.
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Important Tactics
Reliability
Improving individual components
Providing redundancy
Maintenance
Implementing or improving preventive maintenance
Increasing repair capability or speed

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Copyright © 2020 Pearson Canada Inc.
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Maintenance Management

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Copyright © 2020 Pearson Canada Inc.
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Reliability
Improving individual components
Rs = R1 x R2 x R3 x … x Rn
where R1 = reliability of component 1
R2 = reliability of component 2
and so on

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LO 1: Describe how to improve system reliability.
Any component or system must have some probability of failure. If someone thinks it is 0%, then that person probably rounded too much. And while 99% reliability may sound like a high figure, it depends upon the context. If a 99% daily reliable dishwasher is run every day for a year, chances are that it will fail at least three times during the year—not very acceptable to most consumers. Furthermore, the cost of a failure should play a role in reliability. A manned rocket ship certainly needs to be more than 99% reliable, because the cost of a failure is catastrophic. Slide 12 presents the formula for the reliability of a system with n individual independent components that all must work in order for the system to work (referred to as components in series). (The independence assumption means that the probability of failure of one component has no correlation with the probability of failure of any of the other components—certainly true for some systems but not others.) The calculation is a simple multiplication of terms, but the implications may surprise students. As Slide 13 (Figure 17.2) graphically illustrates, the degradation can compound quickly. Here are three more examples: 10 parts at 90% reliability each would produce a 35% reliable system (0.9010); 100 parts at 99% reliability each would produce a 37% reliable system (.99100); and 1000 parts at 99% reliability each would produce a 0.004% reliable system (.991000) that essentially would never work at all (think about how many parts go into an airplane). This simple reliability formula has a clear implication for new product development. That is, try to limit the number of components in series in the product design (for example, consider a single molded interlocking part instead of using a hinge with four separate screws).
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Overall System Reliability

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Reliability Example
Reliability of the process is
Rs = R1 x R2 x R3 = .90 x .80 x .99 = .713 or 71.3%

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LO 2: Determine system reliability
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Product Failure Rate (FR)
Basic unit of measure for reliability

Mean time between failures

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LO3: Determine mean time between failures (MTBF).
The basic unit of measure for reliability is the product failure rate (FR). It can be described as the percentage of failures among the total number of products tested (FR(%)) or as the number of failures during a period of time (FR(N)). Firms producing high-technology equipment often provide failure-rate data on their products. Perhaps the most common term in reliability analysis is the mean time between failures (MTBF), which is the reciprocal of FR(N). This slide provides the formulas for all three measures. Slide 16 presents Example 2 from the text illustrating all three measures. Notice how the Operating time in the FR(N) calculation subtracts out the downtime during the two failures that occurred. Slide 17 converts the FR(N) value into a failure rate per trip, by multiplying the operating hourly failure rate by the length of a trip (24 hours times 6 days).
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Failure Rate Example (1 of 2)
20 air conditioning units designed for use in NASA space shuttles operated for 1000 hours One failed after 200 hours and one after 600 hours

Failure rate per trip
FR = FR(N)(24 hrs)(6 days/trip)
FR = (.000106)(24)(6)
FR = .153 failures per trip

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Providing Redundancy
Provide backup components to increase reliability

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While it may be possible to increase the reliability of individual components, a more cost-effective approach may be to provide a backup for certain components. This is called redundancy, and the components are said to be operating in parallel. Interestingly, the reliability of the backup does not even need to be particularly high (say 50%) to improve overall component reliability substantially. Slide 18 provides the formula along with a sample problem. (Note that for this example, even if the backup had been only 50% reliable, the new reliability with redundancy would still have jumped from 80% to 90%.) Slide 19 (Example 3) provides a reliability example that combines components in series with components in parallel. Perform all of the backup calculations first for each component; then multiply all of the revised component reliabilities together.
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Redundancy Example
A redundant process is installed to support the earlier example where Rs = .713
Reliability has increased from .713 to .94
= [.9 + .9(1 − .9)] × [.8 + .8(1 – .8)] × .99
= [.9 + (.9)(.1)] × [.8 + (.8)(.2)] × .99
= .99 × .96 × .99 = .94

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Slide 19 (Example 3) provides a reliability example that combines components in series with components in parallel. Perform all of the backup calculations first for each component; then multiply all of the revised component reliabilities together.
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Maintenance
Two types of maintenance
Preventive maintenance – routine inspection and servicing to keep facilities in good repair
Breakdown maintenance – emergency or priority repairs on failed equipment

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This slide describes the two basic types of maintenance. Performing more of the first usually mean having to perform less of the second.
LO 4: Distinguish between preventive and breakdown maintenance.
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Implementing Preventive Maintenance
Need to know when a system requires service or is likely to fail
High initial failure rates are known as infant mortality
Once a product settles in, MTBF generally follows a normal distribution
Good reporting and record keeping can aid the decision on when preventive maintenance should be performed

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Slide 21 identifies issues surrounding the implementation of preventive maintenance. Reliability and maintenance are of such importance that most systems are now computerized. Slide 22 (Figure 17.3) presents a schematic of a computerized maintenance system.
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Computerized Maintenance System
Figure 17.3

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Maintenance Costs (1 of 3)
The traditional view attempted to balance preventive and breakdown maintenance costs
Typically this approach failed to consider the true total cost of breakdowns
Inventory
Employee morale
Schedule unreliability

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These slides address the traditional vs. an enlightened view regarding the amount of preventive maintenance to perform. Since the full cost of a breakdown may involve so much more than the repair cost itself (e.g., extra safety stock, safety, morale, customer relations, etc.), the implication is that the cost curve looks more like Slide 25 than Slide 24, implying that sufficient preventive maintenance should be performed to ensure that the system almost never breaks down.
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Maintenance Costs (2 of 3)
Figure 17.4a

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LO 6: Compare preventive and breakdown maintenance costs.
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Maintenance Costs (3 of 3)
Figure 17.4b

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Maintenance Cost Example (1 of 4)
Should the firm contract for maintenance on their printers?
Number of Breakdowns Number of Months That Breakdowns Occurred

0 Blank 2
1 Blank 8
2 Blank 6
3 Blank 4
Blank Total : 20

Average cost of breakdown = $300

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These slides (Example 4) illustrate a cost analysis for preventive maintenance. No preventive maintenance would cost the firm $480 per month in breakdown costs. Purchasing a service contract for preventive maintenance would reduce the expected number of breakdowns per month from 1.6 to 1. Even after adding the cost of the service contract, the preventive maintenance option in this example was more cost effective, saving an estimated $30 per month.
LO 6: Compare preventive and breakdown maintenance costs.
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Maintenance Cost Example (2 of 4)
Compute the expected number of breakdowns
Number of Breakdowns Frequency Number of Breakdowns Frequency
0 2/20 = .1 2 6/20 = .3
1 8/20 = .4 3 4/20 = .2

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Maintenance Cost Example (3 of 4)
Compute the expected breakdown cost per month with no preventive maintenance

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Maintenance Cost Example (4 of 4)
Compute the cost of preventive maintenance

Hire the service firm; it is less expensive

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Increasing Repair Capabilities
Well-trained personnel
Adequate resources
Ability to establish repair plan and priorities
Ability and authority to do material planning
Ability to identify the cause of breakdowns
Ability to design ways to extend MTBF

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A good maintenance facility should have the six features identified in this slide.
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How Maintenance is Performed
Figure 17.5

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Since not all repairs can be performed in the firm’s facility, managers must decide where repairs are to be performed. This slide (Figure 17.5) provides a continuum of options and how they rate in terms of speed, cost, and competence. Moving to the right may improve the competence of the repair work, but at the same time it increases costs and replacement time.
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Autonomous Maintenance
Employees accept responsibility for
Observe
Check
Adjust
Clean
Notify
Predict failures, prevent breakdowns, prolong equipment life

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Autonomous maintenance is consistent with employee empowerment (Chapters 6 and 10). System performance is enhanced when operators take ownership in their equipment and help to prevent breakdowns.
LO 7: Define autonomous maintenance.
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Total Productive Maintenance (TPM)
(1 of 2)
Designing machines that are reliable, easy to operate, and easy to maintain
Emphasizing total cost of ownership when purchasing machines, so that service and maintenance are included in the cost

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Many firms have moved to bring total quality management concepts to the practice of preventive maintenance with an approach known as total productive maintenance (TPM). This strategic view of maintenance includes the points described on these two slides.
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Total Productive Maintenance (TPM)
(2 of 2)
Developing preventive maintenance plans that utilize the best practices of operators, maintenance departments, and depot service
Training for autonomous maintenance so operators maintain their own machines and partner with maintenance personnel

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Techniques for Enhancing Maintenance (1 of 2)
Simulation
Computer analysis of complex situations
Model maintenance programs before they are implemented
Physical models can also be used

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The techniques described in this slide have proven beneficial to effective maintenance. An example of a physical simulation model would be vibrating an airplane to simulate thousands of hours of flight time to evaluate maintenance needs.
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Techniques for Enhancing Maintenance (2 of 2)
Expert systems
Computers help users identify problems and select course of action
Automated sensors
Warn when production machinery is about to fail or is becoming damaged
The goals are to avoid failures and perform preventive maintenance before machines are damaged

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Summary
Reliability improvements can be made through the use of preventive maintenance
Firms should give employees “ownership” of their equipment to enhance preventive maintenance
Reliability of equipment will drive out variability of systems and leads to that customers can rely on products and services to be carried out to specifications and on time

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Name: Chandra Sekhar Reddy (1910097)

Week Six Reflection on Decision-Making Tools

Decision-making is an everyday part of our life because to perform any task or to plane any work, we use decision making to sort our time and to achieve better results without any clashes between our works. In operations management, decision-making tools are essential because it helps to maintain and run various operation successfully. Decision- making tools help to take actions strategically so that any operation manager can plan and execute their operation in a way that leads to most profitability. As we make decisions from our day to day life on what to eat or what to do as well as in operation management, we construct a decision tree in which we start with the best alternative from which we can get different possible alternatives. From each alternative, we will get a different state of nature, which will lead to various probabilities from which we can choose a better decision plan. For example, in daily life, we pick a better alternative to complete a task such as if we are late for work, we might take a car instead of a bus so that this alternative will save some time. Decision-making environments are the different environments in which we make decisions such as decision making under uncertainty, decision-making under risk, and decision-making under certainty.

Decision making under uncertainty is an environment in which we have complete uncertainty of which state of nature occurs. In uncertainty, there are different types of environments such as Maximax, maximin, and equally likely. In maximax uncertainty, we have to pick the maximum possible gain as possible so that we can avoid the uncertainty. In maximin, we have to pick the least possible losses that we can loose as least as possible rather than losing the maximum loss. In the final equally likely uncertainty, we have to choose the highest alternative to achieve a maximum average outcome. To explain uncertainty with a real-life example, while our teammates were discussing the online and in-person classes advantages and disadvantages we understand that both of the classes have their benefits, so all our team was in an uncertain environment, so we decided to choose a specific type of classes with the help of maximax uncertainty. Decision-making under risk is another environment where we have a state of nature with maximum risk probability. In this risk decision-making, we calculate the Expected Monetary Value(EMV) of each alternative to chose a better alternative to avoid maximum loss. Certainty is another decision-making environment in which we gather the information that leads to the exact result of the chosen alternative. To achieve this information, we calculate the Expected Value of Perfect Information(EVPI). EVPI is calculated with expected value with perfect information minus maximum EMV. Decision trees are a graphical representation of decision processes in which we indicate various alternatives, state of nature, and respective probabilities along with the respective payoffs of the decisions taken. Decision trees are vital because they help to organize the probabilities that we have and to make a better final decision, which has a higher chance of success. Decision tree in ethical decision-making helps operation managers to make decisions that are ethical and will result in maximizing the shareholder’s value by keeping a good relationship with them. By making decisions ethical, we can improve the standards of the company in public and also the operations sectors.