NOUN operations and quality management

BHM 677 OPERATIONS AND QUALITY MANAGEMENT COURSE GUIDE BHM 677 OPERATIONS AND QUALITY MANAGEMENT Course Developer Adeola Ayodeji Kupoluyi Course Editor Programme Leader Course Coordinator NATIONAL OPEN UNIVERSITY OF NIGERIA ii BHM 677 OPERATIONS AND QUALITY MANAGEMENT National Open University of Nigeria Headquarters 14/16 Ahmadu Bello Way Victoria Island Lagos Abuja Office No Dar es Salaam Street Off Aminu Kano Crescent Wuse II, Abuja Nigeria e-mail: centralinfo@nou.edu.ng URL: www.nou.edu.ng Published by National Open University of Nigeria Printed 2008 ISBN: 978-058-354-8 All Rights Reserved iii BHM 677 OPERATIONS AND QUALITY MANAGEMENT CONTENTS Introduction………………………………………………… Course Contents…………………………………… Course Aims………………………………………………… Course Objectives…………………………………………… Course Materials………………………………………….… Study Units……………………………………………….… Schedule of Assignment………………………………… … Tutor-Marked Assignment…………………………….…… Final Examination and Grading …………………………… Summary………………………………………… ………… PAGE 1 2 4 4 Introduction BHM 677: Operations and Quality Management is a two credit semester course It will be available to all students taking the MBA programme in the School of Business and Human Resources Management The course consists of 20 units involving Operations and Quality Management It will illustrate how operations management is put into practice, operations functions in an organisation, giving you a real inside look at all aspects of operations management and the importance of Quality Management to the growth of business organisation Course Contents The course contents are Introduction to Operations Management, Designing Operations, Managing Operations, Quantitative Modules, quality Approach to Quality Management, Quality and Global Competitiveness, Strategic Management, Quality Management, Ethics and Corporate Social Responsibility, Partnering and Strategic Alliances, Quality Culture Customer Satisfaction, Retention and Loyalty, Employee Empowerment, Leadership and Change, Team Building and Teamwork, Effective Communication, Education and Training, Overcoming Politics, Negativity and Confliction in the Workplace, and finally ISO 9000 and Total Quality Course Aim The aim of the course is to help expose you to Operations and Quality Management, to modern-day techniques in Operations Management, Quality Management for production, processing and services The course is also aimed at making you appreciate the importance of Operations and Quality Management to modern-day global competitiveness iv BHM 677 OPERATIONS AND QUALITY MANAGEMENT The aims will be achieved by: explaining operations and quality management identifying the importance of operations and quality management explaining the approaches to operation and quality management discussing the major contributors to operation and quality management citing examples where operations and quality management have been employed to the good of such organizations Course Objectives At the end of this course, you will be able to: explain the meaning of operations and Quality Management distinguish between Staff Management and Operations Management in their various organisations explain the various approaches to Operations and Quality Management appreciate the importance of Quality Management to the Growth and Global Competitiveness of their various organisations be equipped with the Tools and Techniques of Operations and Quality Management solve problems and make decisions using the skills acquired on the course establish a Quality Management Department in their organisation Course Materials Course guide Study Units Textbooks Assignment Guide Study Units There are 20 units of this course, and they are divided into four modules which should be studied carefully Module Unit Unit Unit Unit Operations and Productivity Operations Strategy in a Global Environment Project Management Forecasting v BHM 677 OPERATIONS AND QUALITY MANAGEMENT Module Unit Unit Unit Unit Unit Unit Unit Unit Module Designing of Goods and Services Managing Quality Process Strategy Capacity Planning Location Strategy Layout Strategy Human Resources and Job Design Work Measurement Unit Unit Unit Unit Unit Supply-Chain Management E-Commerce and Operations Management Inventory Management Aggregate Planning Material Requirements Planning (MRP) and Enterprise Resource Planning (ERP) Short-Term Scheduling Just-in-Time and Loan Production System Maintenance and Reliability Unit Unit Unit Each study unit will take at least two hours and it includes the Introduction, Objectives, Main Content, Exercise, Conclusion, Summary and References Others are the tutor marked questions You are expected to study the materials, reflect on them and the exercises Some of the exercises will necessitate visiting some business organisations You are advised to so in order to appreciate the importance of Operations and Quality Management to the Growth and Global Competitiveness of an organisation in modern-day economy There are also textbooks, under references for further reading They are to give you additional information Practice the tutormarked assignment for additional and greater understanding and by so doing the stated learning objectives will be achieved The Modules The course is divided into modules: The first module has four units; the second module has eight units while the third has eight units also vi BHM 677 OPERATIONS AND QUALITY MANAGEMENT The first module treats Introduction to Operational Management The second module covers Designing Operation and Managing Quality The third links the second, covering Managing Operation Schedule of Assignment There will be five assignments and you are expected to all the assignments by following the schedule presented below: Introduction to Operational Management (Units 1, 2, and 4) Managing Quality (Module 2, Units and 2) Designing Operations and Quality (Module 2, Units 3, 4, 5, 6, and 8) Managing Operation (Module 3, Units 1, 2, 3, 4, 5, 6, and 8) Tutor-Marked Assignment In doing the Tutor-Marked Assignment, you are expected to apply what you have learnt in the contents of the study units These assignments, which are five in number, are expected to be submitted in to your tutor for grading They constitute 40% of the total score Final Examination and Grading At the end of the course, you will write the final examination This will attract the remaining 60% This makes a total final score of 100% Summary Course BHM 677 (Operations and Quality Management) will equip you with an indepth knowledge and appreciation of the importance of Operations and Quality Management to the success of modern-day Production, Processing and Services Organisations On completion of the course, you would have been armed with all the necessary skills in this field to effectively manage any business organisation vii BHM 677 OPERATIONS AND QUALITY MANAGEMENT Course Code BHM 677 Course Title Operations and Quality Management Course Developer Adeola Ayodeji Kupoluyi Course Editor Programme Leader Course Coordinator viii BHM 677 OPERATIONS AND QUALITY MANAGEMENT NATIONAL OPEN UNIVERSITY OF NIGERIA National Open University of Nigeria Headquarters 14/16 Ahmadu Bello Way Victoria Island Lagos Abuja Office No Dar es Salaam Street Off Aminu Kano Crescent Wuse II, Abuja Nigeria e-mail: centralinfo@nou.edu.ng URL: www.nou.edu.ng Published by National Open University of Nigeria Printed 2008 ISBN: 978-058-354-8 All Rights Reserved ix BHM 677 OPERATIONS AND QUALITY MANAGEMENT CONTENTS PAGE Module ……………………………………………… Unit Unit Unit Unit Introduction to Operations Management …… Operations Strategy in a Global Environment 14 Project Management ………………………… 23 Forecasting…………………………………… 35 Module ………………………………………………… 49 Unit Design of Goods and Services ……………… 49 Unit Managing Quality …………………………… 61 Unit Process Strategy ……………………………… 74 Unit Capacity Planning …………………………… 84 Unit Location Strategy …………………………… 95 Unit Layout Strategy …………………………… 107 Unit Human Resources and Job Design ………… 119 Unit Work Measurement ………………………… 136 Module ……………………………………………… 151 Unit Supply-Chain Management ……………….… 151 Unit E-Commerce and Operations Management… 174 Unit Inventory Management …………………….…186 Unit Aggregate Planning ………………………… 217 Unit Material Requirements Planning (MRP) and Enterprise Resource Planning (ERP) ……… 230 Unit Short-Term Scheduling ……………………… 244 Unit Just-in-Time and Loan Production System … 259 Unit Maintenance and Reliability ………………… 274 x BHM 677 OPERATIONS AND QUALITY MANAGEMENT • Standardize-remove variations from the process by developing standard operating procedures and checklists; good standards make the abnormal obvious Standardize equipment and tooling so that cross-training time and cost are reduced Train and retrain the work team so when deviations occur they are readily apparent to all • Sustain/self-discipline-review periodically to recognize efforts and to motivate to sustain progress Use visuals wherever possible to communicate and sustain progress U.S managers often add two additional Ss that contribute to establishing and maintaining a lean workplace • • Safety-build good safety practices into the above activities Support/maintenance-reduce variability, unplanned downtime, and costs Integrate daily shine tasks with preventive maintenance The Ss provide a vehicle for continuous improvement with which all employees can identify Operations managers need think only of the examples set by a well-run hospital emergency room or the spit and polish of a fire department for a benchmark Offices and retail stores, as well as manufacturers, have also successfully used the 5Ss in their respective efforts to move to lean operations 3.7.3 Seven Wastes Traditional producers have limited goals-accepting, for instance, the production of some defective parts and inventory Lean producers set their sights on perfection: no bad parts, no inventory, only value-added activities, and no waste Taiichi Ohno, noted for his work on the Toyota Production System, identified seven categories of waste These categories have become popular in lean organizations and cover many of the ways organizations waste or lose money The customer defines the value of the product If production performs an activity that does not add value in the eyes of the customer, then it is a waste If the customer does not want it or will not pay for it, it is a waste Ohno's seven wastes are: Overproduction - producing more than the customer orders or producing early (before it is demanded) is waste Inventory of any kind is usually a waste Queues - idle time, storage, and waiting are wastes (they add no value) 271 BHM 677 OPERATIONS AND QUALITY MANAGEMENT Transportation - moving material between plants, between work centers, and handling more than once is waste Inventory - unnecessary raw material, work-in-process (WIP), finished goods, and excess operating supplies add no value Motion-movement of equipment or people that adds no value is waste Overprocessing - work performed on the product that adds no value is waste Defective product-returns, warranty claims, rework, and scrap are a waste A broader perspective-one that goes beyond immediate productionsuggests that other resources, such as energy, water, and air are often wasted, but should not be Efficient, ethical, socially responsible production minimizes inputs and maximizes outputs, wasting nothing SELF ASSESSMENT EXERCISE What is JIT? What is a “Lean Producer”? 4.0 CONCLUSION JIT and lean production are philosophies of continuous improvement Lean production begins with a focus on customer desires, but both concepts focus on driving all waste out of the production process Because waste is found in anything that does not add value, JIT and lean organizations are adding value more efficiently than other firms 5.0 SUMMARY Waste occurs when defects are produced within the production process or by outside suppliers JIT and lean production attack wasted space because of a less-than-optimal layout; they attack wasted time because of poor scheduling; they attack waste in idle inventory; they attack waste from poorly maintained machinery and equipment The expectation is that committed, empowered employees work with committed management and suppliers to build systems that respond to customers with ever lower cost and higher 272 BHM 677 OPERATIONS AND QUALITY MANAGEMENT 6.0 TUTOR-MARKED ASSIGNMENT What are three ways in which JIT and quality are related? How does JIT contribute to competitive advantage? 7.0 REFERENCES/FURTHER READINGS Goetsch, David L and Davies, Stanley B (2006) Quality Management, New Jersey: Pearson Education Inc Heizer Jay and Render Barry, Operations Management Adeola A Kupoluyi, Question and Answer on Operation and Quality Management UNIT MAINTENANCE AND RELIABILITY CONTENTS 1.0 2.0 3.0 4.0 5.0 6.0 Introduction Objectives Main Content 3.1 The Strategic Importance of Maintenance and Reliability 3.2 Reliability 3.2.1 Improving Individual Components 3.2.2 Providing Redundancy 3.3 Maintenance 3.3.1 Implementing Preventive Maintenance 3.3.2 Increasing Repair Capabilities 3.4 Total Productive Maintenance 3.5 Techniques for Establishing Maintenance Policies Conclusion Summary Tutor marked assignment 273 BHM 677 OPERATIONS AND QUALITY MANAGEMENT 7.0 References /Further Readings 1.0 INTRODUCTION A good maintenance and reliability strategy protects both a firm's performance and its investment The objective of maintenance and reliability is to maintain the capability of the system while controlling costs Good maintenance drives out system variability Systems must be designed and maintained to reach expected performance and quality standards Maintenance includes all activities involved in keeping a system's equipment in working order Reliability is the probability that a machine part or product will function properly for a specified time under stated conditions 2.0 OBJECTIVES At the end of this unit, you will be able to Identify and Define: • Maintenance • Mean time between failures • Redundancy • Preventive maintenance • Breakdown maintenance • Infant mortality Describe or Explain • How to measure system reliability • How to improve maintenance • How to evaluate maintenance performance 3.1 The Strategic Importance of Maintenance and Reliability The interdependency of operator, machine, and mechanic is a hallmark of successful maintenance and reliability In this unit, we examine four important tactics for improving the reliability and maintenance not only of products and equipment but also of the systems that produce them The four tactics are organized around reliability and maintenance The reliability tactics are: Improving individual components 274 BHM 677 OPERATIONS AND QUALITY MANAGEMENT Providing redundancy The maintenance tactics are: Implementing or improving preventive maintenance Increasing repair capabilities or speed Figure 1: Good Maintenance and Reliability Strategy Requires Employee Involvement and Good Procedures Employee Involvement Information sharing Skill training Reward system Power sharing Maintenance and Reliability Procedures Clean and lubricate Monitor and adjust Make minor repairs Keep computerized records Results Reduced inventory Improved quality Improved capacity Reputation for quality Continuous improvement Reduced variability Variability corrupts processes and creates waste The operations manager must drive out variability: Designing for reliability and managing for maintenance are crucial ingredients for doing so 3.2 Reliability Systems are composed of a series of individual interrelated components, each performing a specific job If anyone component fails to perform, for whatever reason, the overall system (for example, an airplane or machine) can fail 3.2.1 Improving Individual Components Because failures occur in the real world, understanding their occurrence is an important reliability concept We now examine the impact of failure in a series Figure shows that as the number of components in a series increases, the reliability of the whole system declines very quickly A system of n = 50 interacting parts, each of which has a 99.5% reliability, has an overall reliability of 78% If the system or machine has 100 interacting parts, each with an individual reliability of 99.5%, the overall reliability will be only about 60% 275 BHM 677 OPERATIONS AND QUALITY MANAGEMENT To measure reliability in a system in which each individual part or component may have its own unique rate of reliability, we cannot use the reliability curve in Figure 17.2 However, the method of computing system reliability (Rs) is simple It consists of finding the product of individual reliabilities as follows: where Rs = R1 x R2 x R3 x …x Rn R1 = reliability of component R2 = reliability of component an so on Equation (17-1) assumes that the reliability of an individual component does not depend on the reliability of other components (that is, each component is independent) Additionally, in this equation as in most reliability discussions, reliabilities are presented as probabilities, Thus, a 90 reliability means that the unit will perform as intended 90% of the time It also means that it will fail I - 90 = 10 = 10% of the time We can use this method to evaluate the reliability of a service or a product, such as the one we examine in Example Figure 2: Overall System Reliability as a Function of Number of Components and Component Reliability with Components in a Series 276 BHM 677 OPERATIONS AND QUALITY MANAGEMENT Example 1: Reliability in a series The National Bank of Greeley, Colorado, processes loan applications through three clerks set up in series: If the clerks have reliabilities of 90, 80, 99, then the reliability of the loan process is RS = R1 X R2 X R3 = (.90)(.80)(.99) = 713, or 71.3% Component reliability is often a design or specification issue for which engineering design personnel may be responsible However, supplychain personnel may be able to improve components of systems by staying abreast of suppliers' products and research efforts Supply-chain personnel can also contribute directly to the evaluation of supplier performance The basic unit of measure for reliability is the product failure rate (FR) Firms producing high technology equipment often provide failure-rate data on their products As shown in Equations (17-2) and (17-3), the failure rate measures the percent of failures among the total number of products tested, FR(%), or a number of failures during a period of time, FR(N): FR(%) = Number of failures x 100% Number of units tested FR(N) = Number of failures Number of unit-hours of operating time Perhaps the most common term in reliability analysis is the mean time between failures (MTBF), which is the reciprocal of FR(N): MTBF = FR(N) In Example 2, we compute the percentage of failure FR(%), number of failures FR(N), and mean time between failures (MTBF) Twenty air-conditioning systems designed for use by astronauts in NASA space shuttles were operated for 1,000 hours at NASA’s Huntsville, Alabama, test facility Two of the systems failed during the test – one after 200 hours and the other after 600 hours To compute the percentage of failures, we use the following equation: 277 BHM 677 OPERATIONS AND QUALITY MANAGEMENT FR(%) Number of failures = Number of units tested = (100%) = 10% 20 Next we compute the number of failures per operating hour: FR(N) = Number of failures Operating time Where Total time = = Non-operating time = = Operating time = FR(N) = (1,000hrs)(20 units) 20,000 unit-hour 800hr for 1st failure + 400hr for 2nd failure 1,200 unit-hour Total time – Non-operating time 2 = 20,000 − 1,200 18,800 = 000106 failure/unit-hour FR( N ) MTBF = = 9,434hr 000106 And because MTBF = If the typical space shuttle trip lasts 60 days, NASA may be interested in the failure rate per trip: Failure rate = (failures/unit-hr)(24hr/day)(60 days/trip) = (.000106)(24)(600) = 153 failure/trip Because the NASA will components, conditioning redundancy failure rate recorded in Example is probably too high, have to either increase the reliability of individual and thus of the system, or else install several backup airunits on each space shuttle Backup units provide 3.2.2 Providing Redundancy To increase the reliability of systems, redundancy is added The technique here is to "back up" components with additional components This is known as putting units in parallel and is a standard operations management tactic Redundancy is provided to ensure that if one component fails, the system has recourse to another For instance, say that reliability of a component is 80 and we back it up with another component with reliability of 80 The resulting reliability is the probability of the first component working plus the probability of the backup (or parallel) component working multiplied by the probability of needing the backup component (1 - = 2) Therefore: Probability of first 278component working (.8) + Probability of second component working (.8) x Probability of needing second component (1 - 8) = = + 16 = 96 BHM 677 OPERATIONS AND QUALITY MANAGEMENT Example shows how redundancy can improve the reliability of the loan process presented in Example The National Bank is disturbed that its loan-application process has a reliability of only 713 (see Example 1) Therefore, the bank decides to provide redundancy for the two least reliable clerks This procedure results in the following system: 3.3 R1 R2 0.90 0.8 0.90 0.8 R3 0.99 = = = [.9 + 9(1 – 9)] x [.8 + 8(1 – 8)] x 99 [.9 + (.9)(.1)] x [.8 + (.8)(.2)] x 99 99 x 96 x 99 = 94 Maintenance There are two types of maintenance: preventive maintenance and breakdown maintenance Preventive maintenance involves performing routine inspections and servicing and keeping facilities in good repair These activities are intended to build a system that will find potential failures and make changes or repairs that will prevent failure Preventive maintenance is much more than just keeping machinery and equipment running It also involves designing technical and human systems that will keep the productive process working within tolerance; it allows the system to perform The emphasis of preventive maintenance is on understanding the process and keeping it working without interruption Breakdown maintenance occurs when equipment fails and must be repaired on an emergency or priority basis 3.3.1 Implementing Preventive Maintenance Preventive maintenance implies that we can determine when a system needs service or will need repair Therefore, to perform preventive maintenance, we must know when a system requires service or when it is likely to fail Failures occur at different rates during the life of a product A high initial failure rate, known as infant mortality, may exist for many products.' This is why many electronic firms "burn in" their products prior to shipment: That is to say, they execute a variety of tests (such as a full wash cycle at Maytag) to detect "start-up" problems prior to shipment Firms may also provide 90-day warranties We should note that many infant mortality failures are not product failures per se, but rather failure due to improper use This fact points up the importance in many industries of operations management's building an after-sales service system that includes installing and training 279 BHM 677 OPERATIONS AND QUALITY MANAGEMENT Once the product, machine, or process "settles in," a study can be made of the MTBF (mean time between failure) distribution Such distributions often follow a normal curve When these distributions exhibit small standard deviations, then we know we have a candidate for preventive maintenance, even if the maintenance is expensive Once our firm has a candidate for preventive maintenance, we want to determine when preventive maintenance is economical Typically, the more expensive the maintenance, the narrower must be the MTBF distribution (that is, have a small standard deviation) Additionally, if the process is no more expensive to repair when it breaks down than the cost of preventive maintenance, perhaps we should let the process break down and then the repair However, the consequence of the breakdown must be fully considered Even some relatively minor breakdowns have catastrophic consequences At the other extreme, preventive maintenance costs may be so incidental that preventive maintenance is appropriate even if the MTBF distribution is rather flat (that is, it has a large standard deviation) In any event, consistent with job enrichment practices machine operators must be held responsible for preventive maintenance of their own equipment and tools With good reporting techniques, firms can maintain records of individual processes, machines, or equipment Such records can provide a profile of both the kinds of maintenance required and the timing of maintenance needed Maintaining equipment history is an important part of a preventive maintenance system, as is a record of the time and cost to make the repair Such records can also contribute to similar information about the family of equipment as well as suppliers Record keeping is of such importance that most good maintenance systems are now computerized Allocating more resources to preventive maintenance will reduce the number of breakdowns At some point, however, the decrease in breakdown maintenance costs may be less than the increase in preventive maintenance costs At this point, the total cost curve begins to rise Beyond this optimal point, the firm will be better off waiting for breakdowns to occur and repairing them when they Unfortunately, cost curves seldom consider the full costs of a breakdown Many costs are ignored because they are not directly related to the immediate breakdown For instance, the cost of inventory maintained to compensate for downtime is not typically considered Moreover, downtime can have a devastating effect on morale: Employees may begin to believe that performance to standard and maintaining equipment are not important Finally, downtime adversely 280 BHM 677 OPERATIONS AND QUALITY MANAGEMENT affects delivery schedules, destroying customer relations and future sales Assuming that all potential costs associated with downtime have been identified, the operations staff can compute the optimal level of maintenance activity on a theoretical basis Such analysis, of course, also requires accurate historical data on maintenance costs, breakdown probabilities, and repair times Example shows how to compare preventive and breakdown maintenance costs to select the least expensive maintenance policy Through variations of the technique shown in Example 4, operations managers can examine maintenance policies Farlen & Halikman is a CPA firm specializing in payroll preparation The firm has been successful in automating much of its work, using high-speed printers for check processing and report preparation The computerized approach, however, has problems Over the past 20 months, the printers have broken down at the rate indicated in the following table: Number of Breakdowns Number of Months that Breakdowns Occurred Total: 20 Each time the printers break down, Farlen & Halikman estimates that it loses an average of N300 in time and service expenses One alternative is to purchase a service contract for preventive maintenance Even if Farlen & Halikman contracts for preventive maintenance, there will still be breakdowns, averaging one breakdown per month The price for this service is 150 per month To decide whether the CPA firm should contract for preventive maintenance, we follow a 4-step approach: Step 1: Step 2: Step 3: Step 4: Computer the expected number of breakdowns (based on past history) if the firm continues as is, without the service contract Compute the expected breakdown cost per month with no preventive maintenance contract Compute the cost of preventive maintenance Compare the two options and select the one that will cost less 281 BHM 677 OPERATIONS AND QUALITY MANAGEMENT Number of Breakdowns Number of Breakdowns Frequency 2/20 = 8/20 =  Expected number   =  of breakdowns    ∑ Frequency 6/20 = 0.3 4/20 = 0.2   Number of   Corresponding    x        breakdowns   frequency   = (0)(.1) + (1)(4) + (2)(.3) + (3)(.2) = + + + = 1.6 breakdowns/month  Expected number   Cost per   x    breakdown  of breakdowns     Expected breakdown cost =  = = (1.6)(N300) N480/month  Costofexpected    Cost of   Preventive      =  breakdowns if service  +   maintenance cost     service contract       contract signed  = (1 breakdown/month)($300) + N150/month = N450/month Because it is less expensive overall to hire a maintenance service firm (N450) than to not so (480), Farlen & Halikman should hire the service firm 3.3.2 Increasing Repair Capabilities Because reliability and preventive maintenance are seldom perfect, most firms opt for some level of repair capability Enlarging or improving repair facilities can get the system back in operation faster A good maintenance facility should have these six features: Well-trained personnel Adequate resources Ability to establish a repair plan and priorities Ability and authority to material planning Ability to identify the cause of breakdowns Ability to design ways to extend MTBF However, not all repairs can be done in the firm's facility Managers must, therefore, decide where repairs are to be performed Consistent with the advantages of employee empowerment, a strong case can be made for employees' maintaining their own equipment This approach, however, may also be the weakest link in the repair chain because not every employee can be trained in all aspects of equipment repair However, preventive maintenance policies and techniques must include an emphasis on employees accepting responsibility for the maintenance they are capable of doing Employee maintenance may be only of the 282 BHM 677 OPERATIONS AND QUALITY MANAGEMENT "clean, check, and observe" variety, but if each operator performs those activities within his or her capability, the manager has made a step toward both employee empowerment 3.4 Total Productive Maintenance 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) It involves the concept of reducing variability through employee involvement and excellent maintenance records In addition, total productive maintenance includes: •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 •Developing preventive maintenance plans that utilize the best practices of operators, maintenance departments, and depot service •Training workers to operate and maintain their own machines •High utilization of facilities, tight scheduling, low inventory, and consistent quality demand reliability Total productive maintenance is the key to reducing variability and improving reliability 3.5 Techniques for Establishing Maintenance Policies Two other OM techniques have proven beneficial to effective maintenance: simulation and expert systems Simulation Because of the complexity of some maintenance decisions, computer simulation is a good tool for evaluating the impact of various policies For instance, operations personnel can decide whether to add more staff by determining the trade-offs between machine downtime costs and the costs of additional labor Management can also simulate the replacement of parts that have not yet failed as a way of preventing future breakdowns Simulation via physical models can also be useful For example, a physical model can vibrate an airplane to simulate thousands of hours of flight time to evaluate maintenance needs Expert Systems OM managers use expert systems (that is, computer programs that mimic human logic) to assist staff in isolating and repairing various faults in machinery and equipment SELF ASSESSMENT EXERCISE What is the objective of maintenance and reliability? How does one identify a candidate for preventive maintenance? 4.0 CONCLUSION 283 BHM 677 OPERATIONS AND QUALITY MANAGEMENT Operations managers focus on design improvements and backup components to improve reliability Reliability improvements also can be obtained through the use of preventive maintenance and excellent repair facilities Some firms use automated sensors and other controls to warn when production machinery is about to fail or is becoming damaged by heat, vibration, or fluid leaks The goal of such procedures is not only to avoid failures but also to perform preventive maintenance before machines are damaged 5.0 SUMMARY Finally, many firms give employees a sense of "ownership" of their equipment When workers repair or preventive maintenance on their own machines, breakdowns are less common Well-trained and empowered employees ensure reliable systems through preventive maintenance In turn, reliable, well-maintained equipment not only provides higher utilization but also improves quality and performance to schedule Top firms build and maintain systems so that customers can count on products and services that are produced to specifications and on time 6.0 TUTOR-MARKED ASSIGNMENT The semiconductor used in the Sullivan Wrist Calculator has five parts, each of which has its own reliability rate Component I has a reliability of 90; component 2, 95; component 3, 98; component 4, 90; and component 5, 99 What is the reliability of one semiconductor? Explain the notion of “infant mortality” in the context of product reliability 7.0 REFERENCES/FURTHER READINGS Goetsch, David L and Davies, Stanley B (2006) Quality Management, New Jersey: Pearson Education Inc Heizer Jay and Render Barry, Operations Management Adeola A Kupoluyi, Question and Answer on Operation and Quality Management 284 BHM 677 OPERATIONS AND QUALITY MANAGEMENT 285 ... importance of Operations and Quality Management to modern-day global competitiveness iv BHM 677 OPERATIONS AND QUALITY MANAGEMENT The aims will be achieved by: explaining operations and quality management. .. Designing Operations, Managing Operations, Quantitative Modules, quality Approach to Quality Management, Quality and Global Competitiveness, Strategic Management, Quality Management, Ethics and Corporate... of operations and quality management explaining the approaches to operation and quality management discussing the major contributors to operation and quality management citing examples where operations