Research on Equipment and Spare Parts Management Based on Theory of Constraints

Transcription

1 The Fourh Inernaional Conference on Elecronic Business (ICEB2004) / Beijing 581 Research on Equipmen and Spare Pars Managemen Based on Theory of Consrains Yan Ye Docoral candidae, Deparmen of Indusrial Engineering and Managemen, Shanghai Jiao Tong Universiy, Shanghai , China Insiue of Indusrial Engineering, Zhejiang Universiy of Technology, Hangzhou , China yeyna@sju.edu.cn ABSTRACT On he basis of analyzing he relaionship beween he equipmen sysem and spare pars invenory, his paper proposes wo-level equipmen and spare pars sysem managemen based on he Theory of Consrains. From he sysem poin of view and according o he Theory of Consrains, he manufacuring organizaion idenifies boleneck equipmens in equipmen sysem and makes he boleneck equipmens operae coninuously and effecively on he basis of wo imporan aspecs of maerials supply and spare pars supply. Finally, he spare pars ABCD-TOC invenory classificaion and conrol mehod based on he Theory of Consrains is inroduced. This mehod classifies spare pars according o differen demands of boleneck and non-boleneck equipmens, echnical rules of spare pars failure and wase and purchase characerisics. Then he suiable conrol sraegies for each class are adoped o focus on boleneck equipmens wihou sacrificing he spare pars supply for non-boleneck equipmens, as well as o reduce invenory invesmen. Key words: Theory of consrains, Equipmen managemen, Spare pars managemen, Invenory 1. INTRODCUTION During he pas wo decades, as a resul of serious global compeiion, he modern company depends on he high-effecive equipmens increasingly o srenghen is compeiive capaciy. And along wih he developmen and progress of science and echnology, equipmens end o he large-scale, high precision and complexiy and heir auomaion degree has enhanced. The mainenance expenses and faul loss of equipmens accoun for an increasing fracion of he producion coss. I has a grea effec on he compeiive abiliy ha companies keep and improve equipmen uilizaion. Bu equipmen uilizaion is decided no only by is reliabiliy and mainainabiliy bu also by spare pars supply which is he essenial physical foundaion [1]. The spare pars managemen also is an imporan par in managemen aciviies of company equipmen. Spare pars invenories differ from oher manufacuring invenories in several ways. Firs, he funcions are differen. Raw maerial invenories exis o offer he required raw maerials for producion. Work-in-process (WIP) invenories exis in order o smooh ou irregulariies in producion flow. Finished produc invenories exis o provide a source of producs for delivery o cusomers and are designed o proec agains irregulariies in differences in qualiy levels, scheduling problems, and oher well-known producion characerisics. The funcion of spare pars invenories, however, is o assis a mainenance saff in keeping equipmen in operaing condiion and promoing coninuous producion process. Second, WIP and final produc invenories can be increased or decreased by changing producion raes and schedules, improving qualiy, ec. Spare pars invenory levels, however, are largely a funcion of how equipmen is used and how i is mainained. Therefore he spare pars invenory and he saus of equipmens promoe muually [2]. For avoiding excessively long equipmen downime due o lack of spare pars required and corresponding loss of ime, oupu and profi, companies always prepare adequae spare pars o promply supply. However, invenory is expensive especially when spare pars are socked oo much and he oal invesmen in spare pars is very large. Therefore here is he conflic of spare pars invenories, equipmen operaion and invesmens for he goals of enhancing compeiive abiliy and realizing high profiabiliy (see Fig.1). Managing and conrolling effecively equipmen and spare pars sysem may be of vial significance o balance hese goals of mainaining high equipmen availabiliy, minimizing invenory invesmen and aaining high profiabiliy. Objecive High Profiabiliy Mainain high equipmen availabiliy Minimize invenory invesmen Conflic High spare pars invenory Low spare pars invenory Fig. 1. Relaionship beween spare pars invenory and equipmen sysem The Theory of Consrains (TOC) on a basis of

2 582 The Fourh Inernaional Conference on Elecronic Business (ICEB2004) / Beijing Opimized Producion Technology (OPT) was expounded by Israeli physicis Eliyahu M. Goldra (1986), which was developed from iniial manufacuring managemen principle o Thinking Process of solving problems logically and sysemaically. The heory was applied o many fields beyond producion managemen [3]. The organizaion of his paper is as follows. The basic concep of TOC is skeched in Secion 2. Nex, Secion 3 proposes wo-level equipmen and spare pars sysem managemen based on he Theory of Consrains. On a basis of analyzing wo imporan supporing resources for equipmen operaion, he spare pars ABCD-TOC invenory classificaion and conrol mehod is inroduced. A summary and concluding remark is given in he final secion. 2. BASIC PRINCIPLE OF TOC The Theory of Consrains considers he producion and operaions of manufacuring organizaions from he enire sysem poin of view. Goldra argues ha he goal of a company is o make money and develops a differen se of measuremens which express he goal: hroughpu, invenory and operaional expense. They are defined as follows. Throughpu is he rae a which he sysem generaes money hrough sales. Invenory is all he money ha he sysem has invesed in purchasing hings which i inends o sell. Operaional expense is all he money he sysem spends in order o urn invenory ino hroughpu [4]. In any sysem, if any link oupu is decided by he oupus of one or several sages before i, he link wih he leas oupu deermines he oupu level of he whole sysem, ha is, he srengh of a chain is deermined by he weakes link. The link is called a consrain and also a boleneck. TOC is he managemen idea and principle ha help companies o idenify, exploi and eliminae consrains and hen o maximize hroughpu and reduce invenory and operaional expense. Companies can apply he Theory of Consrains hrough five-sep focusing process as follows [4] : (1) Idenify he sysem s consrain(s); (2) Decide how o exploi he sysem s consrain(s); (3) Subordinae everyhing else o he above decision; (4) Elevae he sysem s consrain(s); (5) If in he previous seps a consrain has been broken, go back o sep 1, bu do no allow ineria o cause a sysem s consrain. The process of implemening hese five seps is also hree seps hinking process: wha o change?, wha o change o? and how o cause he change?. Then, companies can achieve heir goal by focusing on he key poin-he consrain and can promoe coninuous improvemen because he consrain is no saic bu dynamic and changing. 3. TWO-LEVEL EQUIPMENT AND SPARE PARTS SYSTEM MANAGEMENT BASED ON TOC 3.1 General Framework Marke compeiion is more and more fierce and cusomers demands for diversified producs end o enhance, which cause shorer produc life cycle and decrease produc quaniies of each order [5]. For absaining from risks, companies do no purchase or updae expensive producion resources easily and exploi he uilizaion of exising equipmens as far as possible. So he overall produciviy appears insufficien in he growing and maure period of produc life cycle. According o TOC, we regard several or a se of equipmens producing one kind of produc or a series of producs as an equipmen sysem. In his sysem if any segmen (he equipmen or equipmen group) hinders he overall sysem o increase hroughpu or decrease invenory and operaional expense, he segmen is a consrain, ha is, he boleneck equipmen. The boleneck equipmen whose capaciies are no sufficien resrics he sysem hroughpu and decides he degree of oher non-boleneck resources uilizaion. As he physical base of equipmen sysem, he main ask of spare pars invenory is o assure all equipmens in good condiion. A spare par, especially for boleneck equipmens, is called he boleneck spare par so long as i affecs he sysem hroughpu, which is he imporan poin of he spare pars managemen. The srucure of wo-level TOC-based equipmen and spare pars sysem managemen is depiced in Fig. 2. Equipmen sysem Non-boleneck equipmen Boleneck equipmen Non-boleneck equipmen Spare pars for boleneck Spare pars for nonboleneck Spare pars sysem Spare pars ABCD-TOC invenory classificaion and conrol Fig. 2. Two-level equipmen and spare pars sysem managemen based on TOC 3.2 TOC-based equipmen sysem managemen The fundamenal ask of TOC-based equipmen sysem managemen is o idenify he boleneck of he enire sysem and manage he boleneck and resources before

3 The Fourh Inernaional Conference on Elecronic Business (ICEB2004) / Beijing 583 and afer i o maximize sysem hroughou. The boleneck equipmen of he equipmen sysem is he equipmen or equipmen group whose acual capaciies are smaller han or equal o producion loads (demands), ha is, he sysem s consrain is he equipmen experiencing he highes load rae. The equipmen load rae is defined as is duy o is available capaciy during he plan period, which is given by equaion (1). Q S L = 100% (1) TA Where L is he equipmen load rae over he plan period. Q represens quaniies of each produc ha he equipmen should produce during. S is defined as he planned ime sandard of each produce. T indicaes he insiuional ime of he equipmen during. A is he probabiliy of equipmen availabiliy which comprehensively reflecs reliabiliy and mainainabiliy. Afer he boleneck equipmen is idenified, how o make full use of he equipmen is he firs problem ha needs o be solved. Considering he direc resources required o produce producs, we may esablish he maerial buffer o make equipmen run coninuously. The buffer is ofen classified ino invenory buffer and ime buffer. Invenory buffer is a kind of insurance Work-in-processes. Time buffer is required maerials handed over advancing a period of ime from he planned ime o eliminae influences of sochasic flucuaion in producion processing, which is measured by processing ime lengh of boleneck. On he oher hand, from he echnical resources supporing equipmen sysem viewpoin, we should increase he overall equipmen effeciveness (OEE) and reduce unscheduled downime especially caused by equipmen failure as far as possible, which depends on mainenance resources such as mainenance men, mainenance ools and supply of spare pars. However, compared wih he service men and ools, spare pars invesmen is higher and lack of spare pars is he mos main influence facor frequenly. Thus, his paper inroduces TOC-based spare pars invenory managemen o keep equipmen, especially boleneck equipmens, run well and mainenance efficiency as well as reduce coss. 3.3 TOC-based spare pars invenory managemen Generally companies have large quaniies of and many ypes or specificaions of spare pars invenories. To manage invenories hrough Sockaking, placing and acceping orders endlessly would be ime-consuming. Then companies manage spare pars invenories hrough classificaion. Dickie proposed ABC classificaion mehod [6] in The purpose of his mehod is o measure and classify he degree of imporance and concenraion of invenory iems in erms of he value of iems and Pareo principle. The mehod is simple and wieldy and so is adoped by many companies for a long ime. However, he value of spare pars has no ineviable relaions wih heir influences on he equipmens and producion. In accordance wih he special characerisics of spare [7] pars invenory, 3A invenory conrol mehod classifies spare pars ino 27 differen kinds of rank from AAA o CCC according o he imporan degree of spare pars o equipmens. Considering acual operaions condiions of equipmens, he mehod decides essenialiy and specific rank and order of each spare par according o hree aspecs: equipmen and is componens belonging o, producion load enduring and is effec on produc qualiy. Then he mehod adops he corresponding conrol mehod. Guo Zhimin e al. [7] offer ABCD invenory conrol mehod in erms of several crierions such as influence of spare pars on producive condiion, he rules of faul and wasing, and agiliy of supply channels. Dekker e al. [8] classify demand for spare pars ino criical and non-criical demands according o he influence caused by he disabled equipmen ha a spare par is insalled. In his paper we analyze classificaion and conrol mehods of spare pars from he sysem poin of view, no only from single equipmen viewpoin, and according o he Theory of Consrains ha o our knowledge have no been discussed in he lieraure so far. The mehod is called spare pars ABCD-TOC invenory classificaion and conrol mehod which classified spare pars ino four classes. A class includes special spare pars ha are insalled o he boleneck equipmens and can no be checked in advance or heir failure and wear ime can no be forecas, and ha are insalled o he non-boleneck equipmens and supplied by few providers and/or wih long purchase lead ime (such as purchased from abroad). Because an hour los a he disabled boleneck equipmen is an hour ou of he enire sysem and par of hese spare pars are only used by he boleneck equipmen, his ype is very imporan. Compared o he boleneck equipmen, non-boleneck equipmen always has idle ime. Bu if purchasing ime exceeds idle ime, non-boleneck equipmen will affec producion sysem hroughpu. Thus, his class may be called he boleneck spare pars and is conrolled by an (S-1,S) policy, or equivalenly, by a base sock policy [2]. The base sock S is defined as maximal possible consumpion during an order lead ime. Concreely, i can be calculaed hrough adding hisorical average consumpion over an order lead ime o a suiable safey quaniy. The safey quaniy is achieved by muliplying flucuaion average of hisorical consumpion by cerain safe facor as a kind of buffer which is considered comprehensively according o producion ask, usage years of equipmens, ec. Sock level will be inspeced and checked afer spare pars are used or coninuously. When he acual valid invenory level is lower han S,

4 584 The Fourh Inernaional Conference on Elecronic Business (ICEB2004) / Beijing one purchase order should be placed wih he order quaniies which is decided by subracing he curren sock level from S. B class includes spare pars wih predicable replacemen ime used by boleneck and/or non-boleneck equipmens. Companies can forecas he ime when need o replace his ype spare pars hrough checking in advance, racking and analyzing heir condiions in ime. Or hey rack daily usage of hese spare pars in a long ime and saisically analyze he rule of heir faul and wase o esimae heir replacemen ime cycle. When companies have prediced he replacemen need during equipmen operaing period, hey should esimae he earlies ime and advance several days according o specific siuaions of he ime and hen order ahead of purchase lead ime. Thus companies can supply required spare pars imely while reduce occupied ime and fund of invenory. C class is he special spare pars wih many supply channels and/or shor purchase lead ime which can be sucked by idle ime of equipmens. For avoiding depleion in sock and reducing invesmen, his ype can be conrolled by zero invenory policy, ha is, hese spare pars are no socked. When producion deparmen demands he spare pars, i applies for he purchase immediaely. Then purchase deparmen orders immediaely from suppliers. Afer spare pars arrive, purchase deparmen checks and acceps and warehouse regisers. The spare pars are sen o he producion cener direcly. All general spare pars fall ino D ype. The general spare pars are insalled a some even all equipmens, so heir reflecions of producion and mainenance change are no obvious. When a general spare par is requesed by boleneck and non-boleneck equipmens synchronously, i mus mee boleneck firs ha helps o assure and increase sysem hroughpu. This ype has many kinds of spare pars whose usages and invesmens are large. The class can be conrolled by periodic review (, s, S)invenory policy [9] where presens fixed review period, s reorder poin, S maximum sock level. We esimae s by compuing consumpion of each spare par during purchase lead ime afer examining is daily average usage over a long period of ime, and ake S as hree or four imes of s. Suiable can be se according o he spare par wih he fases consumpion rae in his ype as long as all spare pars of he ype are no shor during he period. Invenory levels of hese spare pars are checked and compared o s every oher. If invenory level is lower han s, he spare par would be ordered and order quaniy is he balance of S and curren level. If he level is larger han s, here is no any order. This ype of periodic review reduces massive work as a resul of coninuous review and keeps proper invenory level wihou shor of spare pars and wih lower invesmen. I is worh explaining ha he classificaion of A, B, C and D classes is no always changeless bu dynamically adjused and ransformed one anoher. For example, afer some measures for improving equipmens capaciy are aken consanly, some boleneck equipmens change o non-bolenecks and hen some spare pars of A class are ransformed ino C class. When more advanced saisical analysis echnology make he faul and wase rule of equipmen and spare pars learned, some A class spare pars may be classified ino B class. 4. CONCLUSION This paper analyzes he relaionship beween he equipmen sysem and spare pars invenory and proposes wo-level equipmen and spare pars sysem managemen based on he Theory of Consrains. From he sysem poin of view and according o he Theory of Consrains, he company idenifies boleneck equipmens in equipmen sysem and makes he boleneck equipmens operae coninuously and effecively. Companies can ake measures such as buffers o supply enough maerials. However, he same imporan hing ha companies should do is o supply enough spare pars imely. So he spare pars ABCD-TOC invenory classificaion and conrol mehod based on he Theory of Consrains is inroduced. This mehod classifies he spare pars according o differen demands of boleneck and non-boleneck equipmens, echnical rules of spare pars failure and wasing and purchase characerisics. Then he suiable conrol sraegies for each class are adoped o focus on geing boleneck equipmen operae wihou sacrificing he spare pars supply for non-boleneck equipmens, as well as o reduce he occupied fund of invenory. This paper explores he managemen of equipmen sysem and spare pars invenory from he enire sysem viewpoin and i provides he heory and applicaion values for modern companies. REFERENCES [1] J.W. Ruserburg, Li Peiran (ranslaing), Applicaion and economic significance of sysem approach for spare pars managemen, Equipmen Managemen and Mainenance, 2003(12): pp42-43(in Chinese) [2] W.J. Kennedy, J. Wayne Paerson, Lawrence D. Fredendall, An overview of recen lieraure on spare pars invenories, Inernaional Journal of Producion Economics 76 (2002) pp [3] Wang Yurong, Boleneck managemen (TOC), Beijing: China Machine Press, 2002(in Chinese) [4] Eliyahu M. Goldra, Jeff Cox, The goal: A process of ongoing improvemen, New York: Norh River Press, 1992 [5] Daniel Sipper, Rober L. Bulfin, Producion: planning, conrol and inegraion, The McGraw-Hill Companies, Inc., 1997

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