Chapter 1 Maintenance Organization

JJ616 MAINTENANCE MANAGEMENT
CHAPTER 1: MAINTENANCE ORGANIZATION
MAINTENANCE
ORGANIZATION
1

COURSE LEARNING OUTCOME (CLO)
1. Point out the concepts of maintenance

organization and strategies that increases
productivity by increase availability and
capacity at reduced cost.

DEFINITION
MAINTENANCE
Activities required or undertaken to conserve as nearly,
and as long, as possible the original condition of an asset

or resource while compensating for normal wear and tear.
Actions necessary for retaining or restoring a piece of
equipment, machine, or system to the specified operable

condition to achieve its maximum useful life. It includes
corrective maintenance and preventive maintenance.

DEFINITION
ORGANIZATION
A means for making people productive in working
together and arranging resources (people, materials,
technology, etc).
A social unit of people that is structured and
managed to meet a need or to pursue collective
goals. All organizations have a management structure
that determines relationships between the different
activities and the members, and subdivides and assigns
roles, responsibilities, and authority to carry out different
tasks. Organizations are open systems--they affect and
are affected by their environment.
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DEFINITION
MANAGEMENT
The organization and coordination of the activities in
order to achieve defined objectives. Management is often
included as a factor of production along with machines,
materials, and money.
Management consists of the interlocking functions of
creating corporate policy and organizing, planning,
controlling, and implementing an organization's
resources in order to achieve the objectives of that policy.

OBJECTIVE OF MAINTENANCE MANAGEMENT

The main objectives of having maintenance management
are to make sure a business doesn't stop producing, and if it
does, to rectify the situation in the safest and most expedient
way possible.
In addition, improperly maintained equipment can lead to
safety hazards, employee abuse and misuse of machines
that will lead to increased overhead costs and potential
liability.
Costs of new equipment must be budgeted. Maintenance
factors are part of the calculations done to consider return on
investment when comparing costs and risks.
6


Optimize the use of available funds, personnel, facilities,
and equipment through effective maintenance
management methods.
Provide accurate data for maintenance and construction
program decision making.
Systematically identify maintenance needs or deficiencies
and capital improvement needs at all field stations.
Enable preparation of service maintenance and
construction budget requests using systematic,
standardized procedures.
Monitor and document corrective actions, project
expenditures, and accomplishments.
7


Keeping assets and equipment in good condition, well
configured and safe to perform their intended functions.
Perform all maintenance activities including preventive,
predictive; corrective, overhauls, design modification and
emergency maintenance in an efficient and effective
manner.
Conserve and control the use of spare parts and material.

Commission new plants and plant expansions; and
Operate utilities and conserve energy.

BENEFITS OF MAINTENANCE MANAGEMENT

Manages Control
One of the most significant advantages of maintenance
management is the management of control. Maintenance
can be planned and serves a pre-active instead of a reactive
(be put to action after an event has come to pass).
Management control ensures timely schedules, well-defined
job descriptions and the availability of standby equipment in
times of disaster.


Reduces Overtime
Maintenance management reduces and even eliminates
overtime by reducing the chance of surprises. It ensures all
loose ends are tied and enough contingency planning is
done to manage operations in case of undesirable
circumstances and situations.
Management defines tasks and allocates resources
effectively, ensuring that all objectives are met in a timely
and orderly fashion.
10


Improves Quality
Effective maintenance management improves output and
ensures quality. It gives a small amount of leeway to
tolerances but within well established control limits.
Employee productivity improves, improving the overall
productivity of individual and collective processes. Investing
in maintenance management pays off for a company by
increasing its revenues.
11


Ensures Better Support & Service
A well established and documented maintenance
management system provides ample support to production
managers, equipment operators, and other personnel and
users. An effective maintenance management program
needs to be made public (and/or published) for the benefit of
everyone involved. End users can benefit from a better level
of support provided by maintenance management. It allows
for reliable, on time, and quality service.
12


Allows Easy Error Spotting
Since maintenance management details the goals and
objectives of departments and employees, it make it easier
for managers to spot errors and deviations from established
and desired outcomes.
Reduces Resource Waste
Maintenance management ensures that labor, materials and
equipment are well utilized, which reduces waste of allocated
resources. Utility costs are lowered and the production of
hazardous waste material is decreased with managed effort.
13


Improves Safety
Maintenance management promotes safety and health. It
ensures everyone involved knows safety procedures in case
of a minor or major disaster. A well-implemented
management program examines the risk of potential hazards
and finds ways of addressing them before they pose a risk.
Regular housekeeping programs promote fire prevention and
safety measures.
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TYPES OF MAINTENANCE ORGANIZATION

Centralized Maintenance
All crafts and related maintenance functions report to a central
maintenance manager.
The strengths of this structure are:
allows economies of scale;
enables in-depth skill development; and
enables departments (i.e., a maintenance department) to
accomplish their functional goals (not the overall organizational
goals).
Best suited for small to medium size organizations.
The weaknesses of this structure are:
it has slow response time to environmental changes;
may cause delays in decision making and hence longer
response time;
leads to poor horizontal coordination among departments and
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involves a restricted view of organizational goals.

CHAPTER 1 : MAINTENANCE ORGANIZATION

Centralized Maintenance
16


Decentralized Maintenance
All crafts and maintenance craft support staff report to
operations or area maintenance.
The strengths of this structure are :
it allows the organization to achieve adaptability and
coordination in production units and efficiency in a centralized
overhaul group
facilitates effective coordination both within and between
maintenance and other departments.
The weaknesses of this structure are that it has potential for
excessive administrative overheads and may lead to conflict
between departments.
17


Decentralized Maintenance
18


Matrix Structure Maintenance
A form of a hybrid structure. Crafts are allocated in some
proportion to production units or area maintenance and to a
central maintenance function that supports the whole plant.
The strengths are:
it allows the organization to achieve coordination necessary to
meet dual demands from the environment and flexible sharing of
human resources.
The weaknesses are:
it causes maintenance employees to experience dual authority
which can be frustrating and confusing;
it is time consuming and requires frequent meetings and conflict
resolution sessions.
To remedy the weaknesses of this structure a management with
good interpersonal skills and extensive training is required.
19


Matrix Structure Maintenance
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ROLES IN MAINTENANCE MANAGEMENT ORGANIZATION
A maintenance organization and its position in the

plant/whole organization is heavily impacted by the following
elements or factors:
Type of business ( whether it is high tech, labor intensive,
production or service )
Objectives ( may include profit maximization, increasing
market share and other social objectives )
Size and structure of the organization
Culture of the organization
Range of responsibility assigned to maintenance.
21

ROLES IN MAINTENANCE MANAGEMENT ORGANIZATION
22

TYPES OF MAINTENANCE COST

Total Cost
Maintenance cost (RM)
Preventive
maintenance
cost
Breakdown
maintenance
cost
Optimum
23

COST OF MAINTENANCE
Spare parts
Labor
Down time (production loss)
Overhead
Consumables
Hand tools, power tools and equipment
24

WHO WILL DO MAINTENANCE?
In-house
Outsourcing
25

DECISION TO OUTSOURCE
Lack of expertise
Too hazardous
No experience
Bound by contract
Top management policy
26

NEED TO CONSIDER
Customer service
Loss of production
Loss of customer goodwill, reputation
Machine life
Availability of spare parts and expertise
Safety to the user / customer
Environmental problem (pollutant discharge etc.)
27
Example
The record of computer breakdown for
Company PCK for the past 20 months is
shown below.
# of breakdown
# of months breakdown occurs
0
1
2
3
4
8
6
2
Total
20
Each time computer breakdown estimated
loss is RM300
Contract preventive maintenance by
company DK RM220 per month
Should PCK contract out preventive
maintenance to DK?
Solution
Step 1
Calculate expected number of breakdown
(based on past records) if the company
continue without service contract.
Step 2
Compute expected breakdown cost per
month with no preventive maintenance
contract
Step 3
Compute the cost of preventive maintenance
Solution
Step 4
Compare the two options and select the one
which cost less
Solution
# of breakdown Frequency
0
1
2
3
4/20 = 0.2
8/20 = 0.4
6/20 = 0.3
2/20 = 0.1
Step 1
Expected # of breakdowns = (# of breakdown) x (frequency)
= (0)(0.2)+(1)(0.4)+(2)(0.3)+(3)(0.1)
= 1.3 breakdown per month
Solution
Step 2
Expected breakdown cost = (expected # of breakdown) x
(cost per breakdown)
= (1.3) x (300)
= RM390 per month
Solution
Step 3 Calculate Preventive Maintenance Cost
= cost of expected breakdown + cost of service contract
= (1 breakdown per month x 300) + RM220 per month
= RM520 per month
Step 4 Compare
Less expensive to suffer breakdown without service contract.
Breakdown = RM390
Service contract = RM520
Therefore, continue present policy.

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JJ616 MAINTENANCE MANAGEMENT