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Relative loss analysis in small scale industries within the proposed

  1. 1. INTERNATIONAL Production Technology and ManagementTECHNOLOGY AND International Journal of JOURNAL OF PRODUCTION (IJPTM), ISSN 0976 – 6383 (Print), ISSN 0976 – 6391 (Online) Volume 4, Issue 1, January – April (2013), © IAEME MANAGEMENT (IJPTM)ISSN 0976- 6383 (Print)ISSN 0976 - 6391 (Online)Volume 4 Issue 1 (January - April 2013), pp. 01-10 IJPTM© IAEME: Impact Factor (2013): 4.3285 (Calculated by GISI) © RELATIVE LOSS ANALYSIS IN SMALL-SCALE INDUSTRIES WITHIN THE PROPOSED MARATHWADA AUTO CLUSTER IN INDIA 1 2 Abhay B. Kulkarni and Dr. B. M. Dabade 1 Assistant Professor, Jawaharlal Nehru Engineering College Aurangabad, India 2 Professor, S.G.G.S. Institute of Engineering and Technology, Nanded, ABSTRACT In today’s competitive manufacturing environment organizations focus on preventing all the 16 losses described in the total productive maintenance (TPM) philosophy. This paper aimsto provide some insights on the relative scale for assessment of these 16 lossesin the small-scale industries within the jurisdiction of the proposed Marathwada Auto Cluster in India. Using a case study based on survey methodology is this paper conductsrelative loss analysis in small-scale industries in order to aid improving the effectiveness and efficiency in proposed auto cluster. Specially, the insights gained from this study are expected to assist managements of manufacturing organizations in prioritizing training and other TPM issues. Keywords: Total productive maintenance, losses, survey, small-scale industries, automobile industry I. INTRODUCTION Total productive maintenance (TPM) can be described as management philosophy based on zero-loss concept. In 1961 Japan Management Association (JMA) established plant maintenance committee. In 1969 this plant maintenance department was dissolved and Japan Institute of Plant Engineers was (JIPE) was established [1], [2]. In 1971 concept of TPM is proclaimed [3]. In fact Nippon Denso Co. in Japan was the first company who implemented successful program of total productive maintenance in 1971. Seiichi Nakajima, that time vice-chairman of the Japanese Institute of Plant Engineers known as father of TPM promoted concept of TPM throughout Japan in those days.In 1981 Japan Institute of Plant Maintenance (JIPM) was established as charitable corporation [4], [5], [6]. TPM club of India was 1
  2. 2. International Journal of Production Technology and Management (IJPTM), ISSN 0976 – 6383(Print), ISSN 0976 – 6391 (Online) Volume 4, Issue 1, January – April (2013), © IAEMEestablished in 1998 as joint venture between JIPM and Confederation of Indian Industry(CII). In 2004 Japanese government passed new legislation regarding overseas operationsof non-profit corporations. In effect JIPM Solutions (JIPMS) a TPM consulting companywas born in a 2005 split of Japan Institute of Plant Maintenance under order of theMinistry of Economy, Trade and Industry, Japan. As a result consulting, publishing andseminar services are associated with JIPMS. Now obviously TPM club of India is jointventure of CII and JIPMS. In period of last decade and half TPM club of India has beenkey instrument to inculcate TPM philosophy in Indian industries. Though long way stillto go on implementation part of TPM in Indian industry but on awareness part it hasalready made significant impact on almost entire Indian industries. Most of the prominent automobile manufacturers and their primary vendors haveadopted the total productive maintenance (TPM) philosophy. In contrast thesemanufacturers’ secondary vendors, which are considered sub vendors in small-scaleindustries (SSIs) have only started or partially implemented TPM. This study performsrelative loss analysis in the jurisdiction of Marathwada Auto Cluster in India. This autocluster was recently (on 31st August 2012) established by Ministry of Commerce andIndustry in India in the Maharashtra under the Industrial Infrastructure Up-gradationScheme (IIUS) of the Department of Industrial Policy and Promotion.The primary objective of the IIUS is to improve the recognition and credibility ofdomestic manufacturers in international markets. The scheme will emphasizes conductingstrategic interventions to convert static local efficiency into dynamic competitivenessthrough the following ways-promoting innovation and collective learning-creating suitable, customized, infra structural support and service networks-promoting product design and development through focused support and partnershipwith specific R&D institutions-assisting manufacturers in setting up /or developing common facilities such as testing,design, information dissemination and-assisting appropriate technology transfer, information sharing and quality improvement. All the auto components manufacturers in this cluster as well as rubber andpolymer manufacturing associations have cooperated or expected to cooperate in thepromotion and development of this cluster. Renowned institutions including engineeringcolleges, R&D institutes, banks, financial Institutions and various government agenciesare also involved in IIUS. This paper estimates relative losses as defined in TPM way inSSIsin order to provide insights on how to minimize such losses.II. LITERATURE REVIEW TPM is basically maintenance, management, culture and improvement [7]. TPMfocus on self-managing abilities in people and practices. According to Ben-Daya andDuffuaa [8] TPM has identified strong link between quality and equipment maintenance.Aim of TPM is to increase profitability by elimination equipment breakdowns, by 2
  3. 3. International Journal of Production Technology and Management (IJPTM), ISSN 0976 – 6383(Print), ISSN 0976 – 6391 (Online) Volume 4, Issue 1, January – April (2013), © IAEMEreduction in setup times, by eliminating minor stoppages, up keeping the speeds andimproving the quality thus finally improving overall equipment effectiveness (OEE) [9].Frequent equipment failures, more idling of the instrument, minor stops are common inIndian manufacturing nvionment [10].To achieve overall equipment effectiveness, TPMworks to eliminate the “six big losses” defined by Nakajima [11], namely: a) equipmentfailure; b) setup and adjustment; c) idling and minor stoppages; d) reduced speed; e)process defects; f) reduced yield. However, in today’s competitive manufacturing environment, organizations as part ofTPM initiatives focus on reducing all the 16 types of losses, described as follows [12],[13]: 1. equipment failure losses: These are due to time lost in breakdown maintenance 2. set-up and adjustment losses: This is due to time lost in setting the machines 3. tool change losses: these are due to time lost in replacement of grinding wheels, press tools, cutting tools, milling cutters and similar reasons 4. start-up losses: it is due to time lost in stabilising the manufacturing processes to smooth production 5. minor stoppage losses: these due to small interruptions in the process such as limit switches not working, scrap stuck up in jaws or similar problems 6. speed losses: these are because of time lost as equipment not running as per standard speeds and feeds 7. defect losses: these are due to rejections and reworks of products 8. shutdown losses: these are due to time lost in preventive maintenance, planned maintenance and autonomous maintenance 9. management losses: these are due to time lost in getting material, tools, drawings, measuring instruments, work instructions 10. motion losses: these are losses due to avoidable movements; particularly of man and material 11. line organization losses: these are due to bottlenecks at some machines, time lost for waiting of next operation 12. line organization losses: these are losses due loading, unloading, shifting of the materials 13. measurement and adjustment losses: These are due to time lost in inspection of parts and necessary adjustments 14. yield losses: these are volume losses due to difference in weight of raw material and finished product 15. energy losses: these are due to input energy not used effectively, these are due to wastage of electricity, fuel 16. die/jig/tool losses: these are extra expenses needed for replacement of dies, jigs, tools that have broken or aged beyond service life or breakageIn Indian industries typically 8-pillar approach is used for planning and implementation ofTPM. Implementation of TPM process starts with Japanese 5Ss housekeepingprinciples.The five principles popularly known as 5S’s, come from the first five letters of 3
  4. 4. International Journal of Production Technology and Management (IJPTM), ISSN 0976 – 6383(Print), ISSN 0976 – 6391 (Online) Volume 4, Issue 1, January – April (2013), © IAEMEthe five Japanese terms, namely Seiri(organisation), Seiton(neatnes), Seiso(cleaning),Seiketsu( standerdisation), and Shitsuke( discipline). All the TPM pillars are on the firmbase of 5Ss.The 8-pillars and their objectives in implementation of TPM are as follows: 1) Kobetsu Kaizen or Focused Improvements ( KK ) : To monitor and reduce losses resulting in effective utilisation of machines, men, material, energy 2) Jishu-Hozen or Autonomous Maintenance (JH): To take care of machines /by operators themselves, to inculcate culture of clean, lubricate, inspect and retighten ( CLIRt) in the shop, to bring ownership of machine operator 3) Planned Maintenance (PM): To ensure the equipment function at its optimum level To plan for preventive maintenance and to ensure equipment condition at its best at minimum cost 4) Quality Maintenance (QM): To produce defect free product and install sustainable systems for defect prevention 5) Development Management (DM): a) New product development in minimum lead time with goal of the product should be OK ; right at first time. b) To develop new machine free from losses, defects and unnecessary cost 6) Education and Training (ET a) To plan and prepare training matrix for all the employee b) To identify needs of training c) To train staff and workers to nurture attitude and improve the skills needed 7) Office TPM (OTPM): To implement five s and TPM in all the departments so that synergistic results are obtained. 8) Safety, Health and Environment (SHE): a) To reduce number of accidents b) To create safe, healthy, fearless working conditions c) To ensure clean and green working environmentA KK committee is formed with plant head as chairman and 5-8 members representingdifferent department heads. Number of members in the committee may vary as per size ofthe organisation. This KK committee considers all the 16 losses as discussed above andprepares or estimates entire loss structure in the company. Generally equipment failureloss is worked out in PM pillar and defect loss is monitored in QM pillars. All otherlosses are monitored in KK pillar with systematic efforts for elimination or reduction.Losses are further specified machine wise; department wise etc. and further to thosepriorities are decided. Accordingly project teams are assigned to work on specific losses.Remaining losses may be addressed by KK committee.The KK committee has following tasks: a) recording, categorizing and analysing 16 losses machine-wise, department-wise, unit-wise and company-wise b) calculation and analysis of overall equipment effectiveness (OEE) c) based on business needs set priorities for losses d) develop master plan for KK pillar e) select Kaizen ( continuous improvement) themes based on lossesmonitor the Kaizen and OEE 4
  5. 5. International Journal of Production Technology and Management (IJPTM), ISSN 0976 – 6383(Print), ISSN 0976 – 6391 (Online) Volume 4, Issue 1, January – April (2013), © IAEMEFigure-1 A typical 8-pillar approach for implementation of TPM (as suggested by JIPM and TPM club of India) Hence it is quite evident that estimation, analysis and reduction or elimination of 16losses is of prime importance as a part of implementation of TPM. Given the significantamount of expertise involved in TPM activities, training initiatives in SSIs are important. Forthese training initiatives and further implementation of TPM in SSIs loss-related data areneeded.III. RESEARCH METHODOLOGY In the prevailing highly competitive business environment, manufacturers are morequality conscious and thus more concerned about quality losses than other equipment-relatedlosses or defects. This tendency was observed in the response of small and medium industry(SMI) manufacturers when they were asked to classify their equipment losses into six broadcategories [8]. It was observed that most of them were mainly took care for reducing defectlosses. However a very little initiative was observed towards the recording and reduction ofother losses [14]. Many enterprises measure downtime in one way or another. In most cases,downtime is measured in an ad hoc and is often recorded as repair time. Minor stoppages are,in many cases, not considered and neither are speed losses. Furthermore many companies arenot aware of and do not address for performance losses [15]. 5
  6. 6. International Journal of Production Technology and Management (IJPTM), ISSN 0976 – 6383(Print), ISSN 0976 – 6391 (Online) Volume 4, Issue 1, January – April (2013), © IAEME The measurement inconsistencies in the context of our study are worse than those inabove mentioned previous studies. Companies within SSIs work with many contract workersand are run in a proprietary way. Consequently we encountered significant difficulty inobtaining data on the 16 losses for these SSI companies. Similarly such data for many of thecompanies in medium and large scale industries are not available. Therefore we decided tocollect the required data using survey questionnaire where respondents answer questionsusing a Likert-type scale (1= minimum relative loss to 5 = maximum relative loss).Thisquestionnaire was developed following our discussions with entrepreneurs (CEOs of SSI) andindustry experts. To reach more number of respondents in short time we decided to collectthe data through e-mails. To ease the respondents to reply a template containing thequestionnaire was sent as attachment to the e-mail. In the covering note written in e-mail theresearch purpose was clearly mentioned and the process of replying the mail using templatewas described. The list of SSIs for data collection was obtained from source at Marathwadaassociation of small scale industries and agriculture. (MASSIA) We used a grounded theory approach in this study. A grounded theory projecttypically does not begin with a theory from which hypotheses are deducted rather, it startswith a field of study or a research question and what is relevant to this field or questionemerges during the research process [16]. We also constructivism approach which falls underthe broader interpretative perspective. Constructivism examines the meanings individualscreate to describe the world around them. Meaning occurs as a result of the individual’sinteraction with the world and particular biases of that individual [17].In developing the survey questionnaire, which contained both open-ended and close-endedquestions, we conducted an extensive literature study sought the advice of two industryexperts. The questionnaire was consisting broadly five sections. First section was related toprimary information regarding the respondent and his SSI. Second closed-ended question wasto get data regarding number of machines and duration of use. The third section was relatedto number of modifications in the equipment or machine done. The fourth section was relatedto this study regarding the losses and last section was consisting open-ended question relatedto details of modifications of equipment or machine.From the responses to section one, twoand three we could judge the reliability and validity of the data in qualitative manner. Thequestions in section four measured the 16 losses through a Likert-type scale (1 = minimumrelative loss to 5 = maximum relative loss). Since the scope of study was limited a specificgeographic area, under Marathwada Auto Clusterwe mailed the questionnaires to the variousSSIs in the area. However, in order to richer data, we also mailed the questionnaires to SSIsfrom nearby areas of Maharashtra state (in the cities Pune and Nasik) comprising10% of oursample. We have two main reasons for selecting a small sample for our study. First, a smallsample that has been systematically selected for typicality and relative homogeneity providesfar more confidence that the conclusions adequately represent the average members of thepopulation than does a sample of the same size that incorporates substantial random oraccidental variation. Second, purposeful sampling can be used to adequately capture theheterogeneity in the population [18]. We mailed the surveys to a total of 53 SSIs, of which 4 declined to participate for areason. Through reminders and follow-ups by mail and phone from the remaining 22 out ofthe 49 remaining SSIs eventually returned the completed questionnaires by e-mail ., yieldinga response rate of 44.9%, which is slightly less than adequate rate of 50% [19]. A fewquestionnaires were incomplete, and the unanswered data was confirmed. As mentioned 6
  7. 7. International Journal of Production Technology and Management (IJPTM), ISSN 0976 – 6383(Print), ISSN 0976 – 6391 (Online) Volume 4, Issue 1, January – April (2013), © IAEMEearlier, 10% of the respondents were taken from surrounding the auto cluster. Figure- 2shows the result of this survey.ReliabilityWe tested the reliability of the instrument’s internal consistency. The Cronbach’s alpha was0.98, which is far better than minimum level of 0.60 [20]. Furthermore, the split-half (odd-even) correlation was 0.90. These results show that the survey instrument is sufficientlyreliable.Content validityThe general idea of validity allows for gradations in the confidence readers can have onproposed knowledge claims [21]. The determination of content validity is subjective. Sincewe developed the questionnaire based on an extensive literature survey and following ourdiscussion with industry experts we consider the survey questionnaire content to besufficiently valid. A theory must be tested by replicating the findings in a second or even a thirdneighbourhood, where the theory has specified that the same results should occur. Once suchdirect replications have been made, results might be accepted as providing strong support forthe theory [21]. Hence, we replicated the survey among working professionals in the mediumand large-scale industries and who were referred to as "units-in-charge" in the present study.Unit In-charge is general common phrase used for section head, department head or planthead.In this second survey, the questionnaire was mailed to 67 respondents, 8 of whominformed us either by phone or by mail of their inability to participate in the survey due toprofessional and other reasons. Out of the remaining 59 participants, 23 eventuallyresponded, response rate of 39 %, which is lower than the acceptable 50%. However,considering the professional scenario in the private sector in India, this response rate is quitegood. Out of the 23 responses, three 3 were eliminated due to incompleteness and otherreasons.The respondents in this survey were professionals from in various positions, from engineersto general manager in from different departments in different companies in different regionsin India. Although the majority were from the automotive sectors, 10% were from otherindustries. About 80–90% of the respondents’ organizations have adopted TPM.The results of this second survey differed according to the working environment, andgeographic locations. We conducted this survey in order to validate the first survey. Theimportance of this second survey is that most of the respondents worked for originalequipment manufacturers- (OEMs) that have been implementing TPM for the past few years.In this survey, the Cronbach’s alpha and the split-half (odd-even) correlation were both 0.90,reliability. Since we used the same questionnaire, which was developed based on anextensive literature survey and following a discussion with industry experts, we consider thesurvey questionnaire content to be valid. The results of this survey are shown in Figure- 3.We observed similar trends in the graphs of the results from the two surveys (Figure- 4)indicating validity. The slight variation in terms of minor stoppage loss may be becauseminor stoppages are not accounted for separately in SSI companies. This finding is consistentwith that of Ljungberg [15]. In addition, the slight variation in terms of yield loss may bebecause the respondents in the second survey were sub -vendors of OEMs. Generally it isobserved that while assigning the work to sub-vendors, many parameters are closelymonitored hence probability reduction in yield loss is more. 7
  8. 8. International Journal of Production Technology and Management (IJPTM), ISSN 0976 – 6383(Print), ISSN 0976 – 6391 (Online) Volume 4, Issue 1, January – April (2013), © IAEMEIV. RESULTS AND DISCUSSION The survey results for the survey on the SSI companies in the proposedMarathwada Auto Cluster and on the medium and large scale industry companies in thesurrounding areas are shown in Figures 2 and 3, respectively. From these two figures, wecan directly compare the results for the two broad industry classifications.V. CONCLUSION The survey results for SSI companies in the proposed Marathwada Auto Cluster,in India revealed that out of the 16 losses encountered during the implementation of TPM,the most significant are speed losses, defect losses, management losses, line organizationlosses, and measurement and adjustment losses. This finding is useful for determiningpriorities of training initiatives, assisting appropriate technology transfer, and developingcommon facilities for TPM implementation in SSI companies in the region. Similarresults were obtained in the survey of medium and large scale industry companies, andthus, the results may be generalizable to other industries in India. However, furtherresearch is required to confirm this generalizability. For SSIs due to many constraintssuch as manpower there is little scope for data collection for all the losses hence one ofthe loss can be measured and with the help of these results other losses can beapproximated adequately.ACKNOWLEDGEMENTS The authors would like to thank the professionals in the Marathwada Auto Clusterand nearby areas who participated in survey, as well as to the entrepreneurs and industryexperts for their valuable inputs to the survey questionnaire. Figure-2Relative loss analysis of 16 losses in small-scale industries 8
  9. 9. International Journal of Production Technology and Management (IJPTM), ISSN 0976 – 6383(Print), ISSN 0976 – 6391 (Online) Volume 4, Issue 1, January – April (2013), © IAEME Figure-3Relative loss analysis of 16 losses in medium and large scale Industries Figure-4 Comparative study of 16 losses in SSIs and medium and large scale industriesREFERENCES[1]. Kathleen E. McKone, Roger G. Schroeder and Kristy O. Cua, Total productive maintenance: a contextual view, Journal of Operations Management, 17, 1999, pp. 123- 144.[2]. Kathleen E. McKone, Roger G. Schroeder and Kristy O. Cua, The impact of total productive maintenance practices on manufacturing performance, Journal of Operations Management, 19, 2001, pp. 39-58.[3]. David Hutchins, Introducing TPM, Manufacturing Engineer, February, 1998, pp. 34-36.[4]. Hongyi Sun, Richard Yam and Ng Wai-Keung, The implementation and evaluation of Total Productive Maintenance (TPM)-an action case study in a Hong Kong, The International Journal of Advanced Manufacturing Technology, 22,2003, pp. 224-228. 9
  10. 10. International Journal of Production Technology and Management (IJPTM), ISSN 0976 – 6383(Print), ISSN 0976 – 6391 (Online) Volume 4, Issue 1, January – April (2013), © IAEME[5]. Marcelo Rodrigues and Kazuo Hatakeyama, Analysis of the fall of TPM in companies, Journal of Materials Processing Technology, 179, 2006, pp. 276-279.[6]. Dr. Nguyen Dang Minh, Practical application of total productive maintenance in Japanese industrial manufacturing plants, VNU Journal of Science, Economics and Business, 27(5E), 2011, pp. 53‐65.[7]. Abhay B. Kulkarni and B. M. Dabade, Investigation for development of new tool in DFX shell through literature survey: Design for TPM, International Journal of Design and Manufacturing Technology (IJDMT), 4(1), 2013, pp. 14-29.[8]. M. Ben-Daya and S.O. Duffuaa, Maintenance and quality: the missing link, Journal of Quality in Maintenance Engineering, 1(1), 1995, pp. 20-26.[9]. Peter Willmott, Total quality with teeth, The TQM Magazine, 6(4), 1994, pp. 48-50.[10]. Gaurav Gera, Gurpreet Saini, Rajender Kumar and S. K. Gupta, Improvement of operational efficiency of equipment through TPM: A case study, International Journal of Industrial Engineering Research and Development (IJIERD), 3(1), 2012, pp. 67-73.[11]. Seiichi Nakajima, Introduction to TPM, Productivity Press, 1989.[12]. Kobetsu Kaizen Manual. Available from:http:// /pdfs/Manual% 204% 20-Kobetsu Kaizen.pdf[13]. I.P.S. Ahuja, J.S. Khamba, Total productive maintenance: literature review and directions, International Journal of Quality and Reliability Management, 25(7), 2008, 709-756.[14]. Shamsuddin Ahmed, MasjukiHj. Hassan and ZahariTaha, State of implementation of TPM in SMIs: a survey study in Malaysia, Journal of Quality in Maintenance Engineering, 10(2), 2004, 93-106.[15]. Orjan Ljungberg, Measurement of overall equipment effectiveness as a basis for TPM activities, International Journal of Operations and Production Management,18(5), 1998, pp. 495-507.[16]. Vera Bitsch, Qualitative research: A grounded theory example and evaluation criteria, Journal of Agribusiness, 23(1), 2005, pp. 75-91.[17]. Nancy Van Note Chism, Elliot Douglas, Wayne J. Hilson, Jr., Qualitative research basics: A guide for engineering educators, Rigorous Research in Engineering Education, 2010.[18]. Joseph Maxwell, Designing a qualitative study, In: BickmanL, Rog DJ. Editors. The SAGE Handbook of Applied Social Research Methods, 2nd Ed, SAGE publications, 2008.[19]. Yehuda Baruch, Books C. Holtom, Survey response rate levels and trends in organizational research, Human Relations, 61(8), 2008, pp. 1139-1160.[20]. Dinesh Seth and Deepak Tripathi, Relationship between TQM and TPM implementation factors and business performance of manufacturing industry in Indian Context, International Journal of Quality and Reliability Management, 22(3), 2005, pp. 256-277.[21]. Robert K. Yin, Case Study Research Design and Methods, 3rd Ed, SAGE publications, 2003. 10