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Maintenance and the industrial organization
1
Maintenance and the industrial organization
'Management means the substitution of thought for muscle, of knowledge for folklore, and of cooperation for force.' Peter Drucker
Maintenance task selection
and maintenance
bottom-up approach maintenance Controlling plant
4
Strategic Maintenance Planning
Key words
1.1 Introduction Etzioni defined organizations as groupings of human beings (of individuals and subgroups of individuals) constructed and reconstructed to seek specific goals [1]. Various material resources will also be needed, he said. A better understanding of organizations may be obtained through the so-called systems approach. In this, organizations can be viewed as open systems taking inputs from their environments and transforming them by a series of activities and with some objective in v i e w - into outputs (see Figure 1.1). Open system: An open system is in continua/interaction with its environment and achieves a steady state while still retaining the capacity for work (transformation). The system is open in the sense it can react not only to the direct qnputs and outputs" but also changes in the environment surrounding it.
Organizations can be categorized, on the basis of their objectives, into public and private enterprises. An industrial company exemplifies the latter and Riddell has pointed out that
External influences New technology |
Financial climate
i
'
Government
Inpt
Outputs
b,. r
• Raw material (meat, cereal, etc.) • Finance information Uni(
",,
, , |
", omers
" Demand for product
• Pet food (multi-tin size, multi-product) • Waste product • Safety •Variable market demand for each product
Skills availability
Figure 1.1 A n o r g a n i z a t i o n p r o d u c i n g pet f o o d , v i e w e d as an o p e n s y s t e m
Maintenance and the industrial organization
if it is to achieve its primary objective of maximizing its long-term profitability- while also providing an in-demand service - it will need to carry out two prime functions [2]: 1. The internal mechanisms of the industrial enterprise itself m u s t be made t o operate well. The right product must be made at the right time, by the right plant, using the right raw materials and employing the appropriate workforce. The physical assets must be carefully selected and properly maintained. Effective long-term research and development plans must be implemented and new capital investment generated. In short, the internal efficiency must be high. 2. The interaction with the outside world, with external influences and constraints, must be made to be co-operative and beneficial, rather than antagonistic and damaging, i.e. the overall, externally measured, efficiency must also be high. Riddell sees the role of management as being concerned with carrying o u t these functions in order to ensure the ongoing success (profit) of the organization. He sees management as the designer, constructor, director and controller of the organization so that it can achieve its objective. Several helpful approaches to carrying out this role have evolved (see Table 1.1). These, in particular the administrative and the human relations approaches, will be used in this book to develop a framework (or methodology) of maintenance management principles and procedures (see Chapter 3). Table 1.1 Summary of management theories
Mechanistic management: Monitors and controls the way the job is performed at shopfloor level; includes method, timing and direction. Administrative management: Applies universal management functions and structural principles to the design of an organization and to its operation. Human relations management: Studies characteristics and relationships of individuals and groups within an organization, and takes account of these factors when designing and administrating the organization. Decision management: Applies procedural and quantitative models to the solution of management problems. A theory for communications and decision-making in organizations. Systems management: Studies organizations as dynamic systems reacting with their environment. Analyses a system into its subsystems and takes account of behavioral, mechanistic, technologic and managerial aspects. Contingency management*: Takes the view that the characteristics of an organization must be matched to its internal and external environment. Since these environments can change it is important to view the organizational structure as dynamic. *Contingency (dictionary definition) is a thing contingent on an uncertain event. Contingency management is related to systems' theory. It emphasizes the complexity of organizations (see Figure 1.2) and attempts to understand how organizations operate under varying conditions and specific circumstances. The contingency theory of management is directed toward proposing organizational designs and management actions most appropriate for specific situations.
Review Question R1.1
Read through Case study 1 (Chapter 12) and identify where at least one of the management theories listed in Table 1.1 has been used to describe/ discuss/model the maintenance management procedures of Fertec Ltd.
5
6
Strategic Maintenance Planning
1.2 A systems view of maintenance management Several writers have modeled the industrial organization as a socio-technical system comprising various subsystems. For example, Kast and Rosenzweig saw it as an open, sociotechnical system (see Figure 1.2) with the following five subsystems, each with its own input--conversion-output process related to, and interacting with, the other subsystems [3]: A goal-oriented arrangement: people with a purpose. A technical subsystem: people using knowledge, techniques, equipment and facilities. A structural subsystem: people working together on integrated activities. A psychosocial subsystem: people in social relationships, co-ordinated by a managerial subsystem. (v) A managerial subsystem: planning and controlling the overall endeavor, i.e. ensuring that the activities of the organization as a whole are directed toward the accomplishment of its objectives.
(i) (ii) (iii) (iv)
The author prefers to view the industrial organization as an open system, converting raw material or information into finished products of a higher value. It can be considered to be made up of many interacting subsystems (e.g. maintenance, production,
Environmental system
Figure 1.2 The organizational system
Maintenance and the industrial organization
stores, capital asset acquisition, safety, design, finance, corporate finance), each carrying out distinct organizational functions: • The function of corporate management (the master subsystem) is to set the organizational goal and strategy and direct, co-ordinate and control the other subsystems to achieve the set goal. • The function of capital asset acquisition is to select, buy, install and commission physical assets, a function which is carried out through the combined efforts of a number of other subsystems (e.g. design, finance, projects). • The function of maintenance is to sustain the integrity of physical assets by repairing, modifying or replacing them as necessary. Each such subsystem requires inputs of information and resources from one or more of the other subsystems and/or the external environment in order to perform its function. The output from one subsystem can be an input to another or an output to the external environment (see Figure 1.3), e.g. maintenance management uses information from production management on the way the physical assets are going to be operated (the operating pattern: 15 shifts week) and the availability they require to meet the output. Similarly, production management needs information from the marketing/sales management on the demand for the product(s) which allows them to determine the production schedule.
Inputs
Maintenance subsystem
Outputs
Finance
,!nfor_mation .... .
"'
,
InfoEmatLon-....... /
~
/
from other systems ~ for control and decision-making
,,"" to other
\
systems
Plant output Plant safety Plant condition Product quality
Figure 1.3 The function of the maintenance system
Review Questions R1.2 R1.3
How does the maintenance system influence the production system? Identify the essential information the maintenance system requires from the production system if it is going to operate well?
7
8
Strategic Maintenance Planning
This systems' view of an organization shows that the maintenance subsystem influences, and is influenced by, many of the other subsystems. Two aspects of this are of particular importance: (i) Because the asset acquisition function, which influences reliability and maintainability, has a considerable effect on the maintenance function, a necessary preliminary to developing the main arguments of this book to clarify the nature of the relationship between them (see Chapter 2). (ii) The relationships between maintenance and the other organizational subsystems, e.g. production, must also be clarified, and must form part of any description of the operation of the maintenance subsystem or of any of its parts (see Chapter 3). Review Question R1.4 Outline the main ways in which plant procurement (asset acquisition) can adversely affect the operation of the maintenance department.
References 1. Etzioni, A., Modern Organisations, Prentice Hall, Englewood Cliffs, NJ, USA, 1964. 2. Riddell, H.S., Lecture notes on engineering management, University of Manchester, School of Engineering, Manchester, 1994. 3. Kast, F.E. and Rosenzweig, J.E., Organisations a n d Management (3rd Ed), McGraw Hill, Singapore, 1974. Review Questions Guidelines R1.1 Decision management: see point (iii) on page 229 of Case study 1 of Chapter 12 regarding the operating period of the ammonia plant. R1.2 The main outputs from the maintenance system are plant availability, plant performance, plant condition for longevity and safety. All of these factors are essential for the effective operation of the production department. R1.3 The long- and short-term production plan for the manufacturing equipment. This is influenced by many factors to include the market demand for the product, production maintenance (e.g. catalyst changes), plant-production rate, inter-stage storage and plant structure (redundant plant units).This information is essential for long- and short-term maintenance planning. R1.4 The plant acquisition procedure should ensure that the selected equipment can carry out the required production specified performance over the required life cycle at minimum maintenance cost. The selection of the wrong equipment can result in poor performance, low availability and high maintenance costs.
Maintenance and the industrial organization
'Management means the substitution of thought for muscle, of knowledge for folklore, and of cooperation for force.' Peter Drucker
Maintenance task selection
and maintenance
bottom-up approach maintenance Controlling plant
4
Strategic Maintenance Planning
Key words
1.1 Introduction Etzioni defined organizations as groupings of human beings (of individuals and subgroups of individuals) constructed and reconstructed to seek specific goals [1]. Various material resources will also be needed, he said. A better understanding of organizations may be obtained through the so-called systems approach. In this, organizations can be viewed as open systems taking inputs from their environments and transforming them by a series of activities and with some objective in v i e w - into outputs (see Figure 1.1). Open system: An open system is in continua/interaction with its environment and achieves a steady state while still retaining the capacity for work (transformation). The system is open in the sense it can react not only to the direct qnputs and outputs" but also changes in the environment surrounding it.
Organizations can be categorized, on the basis of their objectives, into public and private enterprises. An industrial company exemplifies the latter and Riddell has pointed out that
External influences New technology |
Financial climate
i
'
Government
Inpt
Outputs
b,. r
• Raw material (meat, cereal, etc.) • Finance information Uni(
",,
, , |
", omers
" Demand for product
• Pet food (multi-tin size, multi-product) • Waste product • Safety •Variable market demand for each product
Skills availability
Figure 1.1 A n o r g a n i z a t i o n p r o d u c i n g pet f o o d , v i e w e d as an o p e n s y s t e m
Maintenance and the industrial organization
if it is to achieve its primary objective of maximizing its long-term profitability- while also providing an in-demand service - it will need to carry out two prime functions [2]: 1. The internal mechanisms of the industrial enterprise itself m u s t be made t o operate well. The right product must be made at the right time, by the right plant, using the right raw materials and employing the appropriate workforce. The physical assets must be carefully selected and properly maintained. Effective long-term research and development plans must be implemented and new capital investment generated. In short, the internal efficiency must be high. 2. The interaction with the outside world, with external influences and constraints, must be made to be co-operative and beneficial, rather than antagonistic and damaging, i.e. the overall, externally measured, efficiency must also be high. Riddell sees the role of management as being concerned with carrying o u t these functions in order to ensure the ongoing success (profit) of the organization. He sees management as the designer, constructor, director and controller of the organization so that it can achieve its objective. Several helpful approaches to carrying out this role have evolved (see Table 1.1). These, in particular the administrative and the human relations approaches, will be used in this book to develop a framework (or methodology) of maintenance management principles and procedures (see Chapter 3). Table 1.1 Summary of management theories
Mechanistic management: Monitors and controls the way the job is performed at shopfloor level; includes method, timing and direction. Administrative management: Applies universal management functions and structural principles to the design of an organization and to its operation. Human relations management: Studies characteristics and relationships of individuals and groups within an organization, and takes account of these factors when designing and administrating the organization. Decision management: Applies procedural and quantitative models to the solution of management problems. A theory for communications and decision-making in organizations. Systems management: Studies organizations as dynamic systems reacting with their environment. Analyses a system into its subsystems and takes account of behavioral, mechanistic, technologic and managerial aspects. Contingency management*: Takes the view that the characteristics of an organization must be matched to its internal and external environment. Since these environments can change it is important to view the organizational structure as dynamic. *Contingency (dictionary definition) is a thing contingent on an uncertain event. Contingency management is related to systems' theory. It emphasizes the complexity of organizations (see Figure 1.2) and attempts to understand how organizations operate under varying conditions and specific circumstances. The contingency theory of management is directed toward proposing organizational designs and management actions most appropriate for specific situations.
Review Question R1.1
Read through Case study 1 (Chapter 12) and identify where at least one of the management theories listed in Table 1.1 has been used to describe/ discuss/model the maintenance management procedures of Fertec Ltd.
5
6
Strategic Maintenance Planning
1.2 A systems view of maintenance management Several writers have modeled the industrial organization as a socio-technical system comprising various subsystems. For example, Kast and Rosenzweig saw it as an open, sociotechnical system (see Figure 1.2) with the following five subsystems, each with its own input--conversion-output process related to, and interacting with, the other subsystems [3]: A goal-oriented arrangement: people with a purpose. A technical subsystem: people using knowledge, techniques, equipment and facilities. A structural subsystem: people working together on integrated activities. A psychosocial subsystem: people in social relationships, co-ordinated by a managerial subsystem. (v) A managerial subsystem: planning and controlling the overall endeavor, i.e. ensuring that the activities of the organization as a whole are directed toward the accomplishment of its objectives.
(i) (ii) (iii) (iv)
The author prefers to view the industrial organization as an open system, converting raw material or information into finished products of a higher value. It can be considered to be made up of many interacting subsystems (e.g. maintenance, production,
Environmental system
Figure 1.2 The organizational system
Maintenance and the industrial organization
stores, capital asset acquisition, safety, design, finance, corporate finance), each carrying out distinct organizational functions: • The function of corporate management (the master subsystem) is to set the organizational goal and strategy and direct, co-ordinate and control the other subsystems to achieve the set goal. • The function of capital asset acquisition is to select, buy, install and commission physical assets, a function which is carried out through the combined efforts of a number of other subsystems (e.g. design, finance, projects). • The function of maintenance is to sustain the integrity of physical assets by repairing, modifying or replacing them as necessary. Each such subsystem requires inputs of information and resources from one or more of the other subsystems and/or the external environment in order to perform its function. The output from one subsystem can be an input to another or an output to the external environment (see Figure 1.3), e.g. maintenance management uses information from production management on the way the physical assets are going to be operated (the operating pattern: 15 shifts week) and the availability they require to meet the output. Similarly, production management needs information from the marketing/sales management on the demand for the product(s) which allows them to determine the production schedule.
Inputs
Maintenance subsystem
Outputs
Finance
,!nfor_mation .... .
"'
,
InfoEmatLon-....... /
~
/
from other systems ~ for control and decision-making
,,"" to other
\
systems
Plant output Plant safety Plant condition Product quality
Figure 1.3 The function of the maintenance system
Review Questions R1.2 R1.3
How does the maintenance system influence the production system? Identify the essential information the maintenance system requires from the production system if it is going to operate well?
7
8
Strategic Maintenance Planning
This systems' view of an organization shows that the maintenance subsystem influences, and is influenced by, many of the other subsystems. Two aspects of this are of particular importance: (i) Because the asset acquisition function, which influences reliability and maintainability, has a considerable effect on the maintenance function, a necessary preliminary to developing the main arguments of this book to clarify the nature of the relationship between them (see Chapter 2). (ii) The relationships between maintenance and the other organizational subsystems, e.g. production, must also be clarified, and must form part of any description of the operation of the maintenance subsystem or of any of its parts (see Chapter 3). Review Question R1.4 Outline the main ways in which plant procurement (asset acquisition) can adversely affect the operation of the maintenance department.
References 1. Etzioni, A., Modern Organisations, Prentice Hall, Englewood Cliffs, NJ, USA, 1964. 2. Riddell, H.S., Lecture notes on engineering management, University of Manchester, School of Engineering, Manchester, 1994. 3. Kast, F.E. and Rosenzweig, J.E., Organisations a n d Management (3rd Ed), McGraw Hill, Singapore, 1974. Review Questions Guidelines R1.1 Decision management: see point (iii) on page 229 of Case study 1 of Chapter 12 regarding the operating period of the ammonia plant. R1.2 The main outputs from the maintenance system are plant availability, plant performance, plant condition for longevity and safety. All of these factors are essential for the effective operation of the production department. R1.3 The long- and short-term production plan for the manufacturing equipment. This is influenced by many factors to include the market demand for the product, production maintenance (e.g. catalyst changes), plant-production rate, inter-stage storage and plant structure (redundant plant units).This information is essential for long- and short-term maintenance planning. R1.4 The plant acquisition procedure should ensure that the selected equipment can carry out the required production specified performance over the required life cycle at minimum maintenance cost. The selection of the wrong equipment can result in poor performance, low availability and high maintenance costs.