Relative loss analysis in small scale industries within the proposed

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
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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

International Journal of Production Technology and Management (IJPTM), ISSN 0976 – 6383

established in 1998 as joint venture between JIPM and Confederation of Indian Industry
(CII). In 2004 Japanese government passed new legislation regarding overseas operations
of non-profit corporations. In effect JIPM Solutions (JIPMS) a TPM consulting company
was born in a 2005 split of Japan Institute of Plant Maintenance under order of the
Ministry of Economy, Trade and Industry, Japan. As a result consulting, publishing and
seminar services are associated with JIPMS. Now obviously TPM club of India is joint
venture of CII and JIPMS. In period of last decade and half TPM club of India has been
key instrument to inculcate TPM philosophy in Indian industries. Though long way still
to go on implementation part of TPM in Indian industry but on awareness part it has
already made significant impact on almost entire Indian industries.

Most of the prominent automobile manufacturers and their primary vendors have
adopted the total productive maintenance (TPM) philosophy. In contrast these
manufacturers’ secondary vendors, which are considered sub vendors in small-scale
industries (SSIs) have only started or partially implemented TPM. This study performs
relative loss analysis in the jurisdiction of Marathwada Auto Cluster in India. This auto
cluster was recently (on 31st August 2012) established by Ministry of Commerce and
Industry in India in the Maharashtra under the Industrial Infrastructure Up-gradation
Scheme (IIUS) of the Department of Industrial Policy and Promotion.
The primary objective of the IIUS is to improve the recognition and credibility of
domestic manufacturers in international markets. The scheme will emphasizes conducting
strategic interventions to convert static local efficiency into dynamic competitiveness
through 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 partnership
with 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 and
polymer manufacturing associations have cooperated or expected to cooperate in the
promotion and development of this cluster. Renowned institutions including engineering
colleges, R&D institutes, banks, financial Institutions and various government agencies
are also involved in IIUS. This paper estimates relative losses as defined in TPM way in
SSIsin order to provide insights on how to minimize such losses.

II. LITERATURE REVIEW

TPM is basically maintenance, management, culture and improvement [7]. TPM
focus on self-managing abilities in people and practices. According to Ben-Daya and
Duffuaa [8] TPM has identified strong link between quality and equipment maintenance.
Aim of TPM is to increase profitability by elimination equipment breakdowns, by

2


reduction in setup times, by eliminating minor stoppages, up keeping the speeds and
improving the quality thus finally improving overall equipment effectiveness (OEE) [9].
Frequent equipment failures, more idling of the instrument, minor stops are common in
Indian manufacturing nvionment [10].To achieve overall equipment effectiveness, TPM
works to eliminate the “six big losses” defined by Nakajima [11], namely: a) equipment
failure; 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 of
TPM 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 breakage

In Indian industries typically 8-pillar approach is used for planning and implementation of
TPM. Implementation of TPM process starts with Japanese 5Ss housekeeping
principles.The five principles popularly known as 5S’s, come from the first five letters of

3


the five Japanese terms, namely Seiri(organisation), Seiton(neatnes), Seiso(cleaning),
Seiketsu( standerdisation), and Shitsuke( discipline). All the TPM pillars are on the firm
base 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 environment

A KK committee is formed with plant head as chairman and 5-8 members representing
different department heads. Number of members in the committee may vary as per size of
the organisation. This KK committee considers all the 16 losses as discussed above and
prepares or estimates entire loss structure in the company. Generally equipment failure
loss is worked out in PM pillar and defect loss is monitored in QM pillars. All other
losses are monitored in KK pillar with systematic efforts for elimination or reduction.
Losses are further specified machine wise; department wise etc. and further to those
priorities 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


Figure-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 16
losses is of prime importance as a part of implementation of TPM. Given the significant
amount of expertise involved in TPM activities, training initiatives in SSIs are important. For
these training initiatives and further implementation of TPM in SSIs loss-related data are
needed.

III. RESEARCH METHODOLOGY

In the prevailing highly competitive business environment, manufacturers are more
quality conscious and thus more concerned about quality losses than other equipment-related
losses 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 broad
categories [8]. It was observed that most of them were mainly took care for reducing defect
losses. However a very little initiative was observed towards the recording and reduction of
other 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 are
not aware of and do not address for performance losses [15].

5


The measurement inconsistencies in the context of our study are worse than those in
above mentioned previous studies. Companies within SSIs work with many contract workers
and are run in a proprietary way. Consequently we encountered significant difficulty in
obtaining data on the 16 losses for these SSI companies. Similarly such data for many of the
companies in medium and large scale industries are not available. Therefore we decided to
collect the required data using survey questionnaire where respondents answer questions
using a Likert-type scale (1= minimum relative loss to 5 = maximum relative loss).This
questionnaire was developed following our discussions with entrepreneurs (CEOs of SSI) and
industry experts. To reach more number of respondents in short time we decided to collect
the data through e-mails. To ease the respondents to reply a template containing the
questionnaire was sent as attachment to the e-mail. In the covering note written in e-mail the
research purpose was clearly mentioned and the process of replying the mail using template
was described. The list of SSIs for data collection was obtained from source at Marathwada
association of small scale industries and agriculture. (MASSIA)
We used a grounded theory approach in this study. A grounded theory project
typically does not begin with a theory from which hypotheses are deducted rather, it starts
with a field of study or a research question and what is relevant to this field or question
emerges during the research process [16]. We also constructivism approach which falls under
the broader interpretative perspective. Constructivism examines the meanings individuals
create to describe the world around them. Meaning occurs as a result of the individual’s
interaction with the world and particular biases of that individual [17].
In developing the survey questionnaire, which contained both open-ended and close-ended
questions, we conducted an extensive literature study sought the advice of two industry
experts. The questionnaire was consisting broadly five sections. First section was related to
primary information regarding the respondent and his SSI. Second closed-ended question was
to get data regarding number of machines and duration of use. The third section was related
to number of modifications in the equipment or machine done. The fourth section was related
to this study regarding the losses and last section was consisting open-ended question related
to details of modifications of equipment or machine.From the responses to section one, two
and three we could judge the reliability and validity of the data in qualitative manner. The
questions in section four measured the 16 losses through a Likert-type scale (1 = minimum
relative loss to 5 = maximum relative loss). Since the scope of study was limited a specific
geographic area, under Marathwada Auto Clusterwe mailed the questionnaires to the various
SSIs in the area. However, in order to richer data, we also mailed the questionnaires to SSIs
from nearby areas of Maharashtra state (in the cities Pune and Nasik) comprising10% of our
sample. We have two main reasons for selecting a small sample for our study. First, a small
sample that has been systematically selected for typicality and relative homogeneity provides
far more confidence that the conclusions adequately represent the average members of the
population than does a sample of the same size that incorporates substantial random or
accidental variation. Second, purposeful sampling can be used to adequately capture the
heterogeneity in the population [18].
We mailed the surveys to a total of 53 SSIs, of which 4 declined to participate for a
reason. Through reminders and follow-ups by mail and phone from the remaining 22 out of
the 49 remaining SSIs eventually returned the completed questionnaires by e-mail ., yielding
a response rate of 44.9%, which is slightly less than adequate rate of 50% [19]. A few
questionnaires were incomplete, and the unanswered data was confirmed. As mentioned

6


earlier, 10% of the respondents were taken from surrounding the auto cluster. Figure- 2
shows the result of this survey.
Reliability
We tested the reliability of the instrument’s internal consistency. The Cronbach’s alpha was
0.98, 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 sufficiently
reliable.

Content validity
The general idea of validity allows for gradations in the confidence readers can have on
proposed knowledge claims [21]. The determination of content validity is subjective. Since
we developed the questionnaire based on an extensive literature survey and following our
discussion with industry experts we consider the survey questionnaire content to be
sufficiently valid.

A theory must be tested by replicating the findings in a second or even a third
neighbourhood, where the theory has specified that the same results should occur. Once such
direct replications have been made, results might be accepted as providing strong support for
the theory [21]. Hence, we replicated the survey among working professionals in the medium
and 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 plant
head.In this second survey, the questionnaire was mailed to 67 respondents, 8 of whom
informed us either by phone or by mail of their inability to participate in the survey due to
professional and other reasons. Out of the remaining 59 participants, 23 eventually
responded, 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 quite
good. Out of the 23 responses, three 3 were eliminated due to incompleteness and other
reasons.
The respondents in this survey were professionals from in various positions, from engineers
to general manager in from different departments in different companies in different regions
in India. Although the majority were from the automotive sectors, 10% were from other
industries. About 80–90% of the respondents’ organizations have adopted TPM.
The results of this second survey differed according to the working environment, and
geographic locations. We conducted this survey in order to validate the first survey. The
importance of this second survey is that most of the respondents worked for original
equipment 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 an
extensive literature survey and following a discussion with industry experts, we consider the
survey 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 because
minor stoppages are not accounted for separately in SSI companies. This finding is consistent
with that of Ljungberg [15]. In addition, the slight variation in terms of yield loss may be
because the respondents in the second survey were sub -vendors of OEMs. Generally it is
observed that while assigning the work to sub-vendors, many parameters are closely
monitored hence probability reduction in yield loss is more.

7


IV. RESULTS AND DISCUSSION

The survey results for the survey on the SSI companies in the proposed
Marathwada Auto Cluster and on the medium and large scale industry companies in the
surrounding areas are shown in Figures 2 and 3, respectively. From these two figures, we
can 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 organization
losses, and measurement and adjustment losses. This finding is useful for determining
priorities of training initiatives, assisting appropriate technology transfer, and developing
common facilities for TPM implementation in SSI companies in the region. Similar
results were obtained in the survey of medium and large scale industry companies, and
thus, the results may be generalizable to other industries in India. However, further
research is required to confirm this generalizability. For SSIs due to many constraints
such as manpower there is little scope for data collection for all the losses hence one of
the loss can be measured and with the help of these results other losses can be
approximated adequately.

ACKNOWLEDGEMENTS

The authors would like to thank the professionals in the Marathwada Auto Cluster
and nearby areas who participated in survey, as well as to the entrepreneurs and industry
experts for their valuable inputs to the survey questionnaire.

Figure-2Relative loss analysis of 16 losses in small-scale industries

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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 industries

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