Development of maintenance function performance measurement framework and indicators

The performance and competitiveness of manufacturing companies is dependent on the reliability, availability and productivity of their production facilities. To ensure the plant achieves the desired performance, maintenance managers need a good track of performance on maintenance process and maintenance results. This can be attained through development and implementation of a rigorously defined performance measurement framework and indicators that are able to measure important elements of maintenance function performance. The purpose of this paper is to demonstrate that performance indicators are not defined in isolation, but should be the result of a careful analysis of the interaction of the maintenance function with other organisational functions, most evidently with the production function. In this paper, a conceptual framework that provide guidelines for choosing maintenance function performance indicators is proposed. It seeks to align maintenance objectives with manufacturing and corporate objectives, and provides a link between the maintenance objectives, maintenance process/efforts and maintenance results. Based on this conceptual framework, performance indicators of the maintenance process and maintenance results are identified for each category.     

Revenue management for make-to-order manufacturing systems with a real-life application

Abstract

Due to successful applications of revenue management in the airline industry, in recent years, there has been a growing interest to adopt revenue management in make-to-order (MTO) manufacturing systems. Several interrelated decision problems such as order acceptance/rejection, short-term capacity planning, due date assignment, and order scheduling need to be studied simultaneously in order to manage revenues effectively in MTO manufacturing systems. Both the producer’s and customer’s requirements need to be taken into account through some negotiation mechanisms that are sensitive to the service-level reputation of the manufacturing companies. In this article, we propose a new dynamic bid price–based revenue management model that considers all of the aforementioned decision problems simultaneously. A simulation optimization approach is utilized in order to determine the best possible values of control parameters for bid price, due date assignment, and price increment/reduction mechanisms. The performance of the proposed integrated revenue management model is tested on both a hypothetical example and a real problem of a bridal gown company. The computational results show that the proposed model provides significant improvements in total revenue compared to other static and dynamic bid price policies.     

Do it separately or simultaneously—An empirical analysis of a conjoint implementation of TQM and TPM on plant performance

Over the last decades, Total Quality Management (TQM) and Total Productive Maintenance (TPM) have become key concepts for improving production. The majority of modern manufacturing companies has implemented at least one of these improvement programs or even both of them. The common ground of TQM and TPM is the focus on human resources. In this paper, the impact of TQM and TPM on plant performance and especially the supporting role of employee involvement practices is investigated empirically using multiple regression analysis and structural equation modeling. The data used for conducting the analyses is taken from the international research project High Performance Manufacturing that contains the data of 238 plants. The results indicate that TQM and TPM, supported by HR practices, have a significant potential to improve plant performance. However, a simultaneous implementation of both concepts does not necessarily lead to superior performance. As potential reason for this, human resources are regarded as limiting factor both improvement programs draw on. Accordingly, this scarce resource is identified as crucial element with respect to performance when implementing TQM and TPM simultaneously.     

Lockout/tagout and operational risks in the production control of manufacturing systems with passive redundancy

This paper addresses problems associated with production control and occupational safety in a manufacturing system prone to failure involving two machines working in passive redundancy. Machines turning out one part experience two modes of failure and repair: firstly, where failure occurs when a machine remains in fair condition; and, secondly, where such failure results in outright breakdown. Accordingly, we examine both modes of failure for their impact on a flexible manufacturing system (FMS) with respect to production control in terms of costs associated with lockout/tagout procedures and corrective maintenance. This study seeks to identify optimal costs related to backlogs, inventories and maintenance over an infinite planning horizon, along with levels of occupational risk where production control includes efficient planning of lockouts/tagouts. Our study offers numerical methods which may be employed to achieve optimal conditions in setting control policies. A numerical example and sensitivity analysis support this approach.     

Simulation optimization-based decision support tool for steel manufacturing

To buffer against increasing global competition and variability in the price of raw materials, steel manufacturers continuously strive to improve operations and lower costs. In this research, we employ a simulation optimization approach to develop a decision support tool to aid in strategic and operational decision-making. Specifically, we investigate work-in-process inventory levels and potential manufacturing process modifications to reduce utilization costs. A simulation model captures the complex nature of the system while an optimizer searches the solution space and sends trial solutions to the simulation for evaluation. Experimentation suggests that significant daily cost savings are possible by modifying current inventory practices and production process capabilities. Overall, the work demonstrates the ability of the solution approach to analyze complex industrial systems and identify potential improvements in a short time frame.     

Common due-window assignment and scheduling of linear time-dependent deteriorating jobs and a deteriorating maintenance activity

Due-window assignment and production scheduling are important issues in operations management. In this study we investigate the problem of common due-window assignment and scheduling of deteriorating jobs and a maintenance activity simultaneously on a single-machine. We assume that the maintenance duration depends on its starting time. We provide polynomial time solutions for the problem and some of its special cases, where the objective is to simultaneously minimize the earliness, tardiness, due-window starting time, and due-window size costs.     

Simultaneous control of production, repair/replacement and preventive maintenance of deteriorating manufacturing systems

This paper presents a method to find the optimal production, repair/replacement and preventive maintenance policies for a degraded manufacturing system. The system is subject to random machine failures and repairs. The status of the system is deemed to degrade with repair activities. When a failure occurs, the machine is either repaired or replaced, and a replacement action renews the machine, while a repair action brings it to a degraded operational state, with the next repair time increasing as the number of repairs increases as well. A preventive maintenance action is considered in order to improve the reliability of the machine, thereby reducing the amount of disruptions caused by machine failures. The decision variables are the production rate, the preventive maintenance rate and the repair/replacement switching policy upon machine failure. The objective of the study is to find the decision variables that minimize the overall cost, including repair, replacement, preventive maintenance, inventory holding and backlog costs over an infinite planning horizon. The proposed model is based on a semi-Markov decision process, and the stochastic dynamic programming method is used to obtain the optimality conditions. A numerical example is given to illustrate the proposed model, and a sensitivity analysis is considered in order to confirm the structure of the control policy and to illustrate the usefulness of the proposed approach.     

REAL OPTION MODELS FOR MANAGING MANUFACTURING SYSTEM CHANGES IN THE NEW ECONOMY

The manufacturing environment is becoming increasingly dynamic with upsurges in electronic-commerce, supply chain management, forecasting, and procurement and resource planning. It also includes trends toward more process data acquisition and analysis, shorter production runs, and more stringent quality requirements. These drivers lead to an opportunity for companies to collect and use information to identify changes that will affect their manufacturing systems. In conjunction with an industry partner who produces home fashion products, we developed a case-study that highlights four major manufacturing transitions: new product introduction; moving a product from research and development (R&D) to commercialization: new plant location; and starting or restarting production of existing products. These types of changes cross many levels of the operation - including the product level, plant level, and organizational level - and typically present significant operational challenges. We use this case-study to motivate the theoretical and applied research needed to support a real option framework for system changes in manufacturing. The key elements of our framework are to quantify manufacturing changes, develop a real option model for these activities, value the options to identify the best scenarios, and integrate these elements so that we can monitor and manage the overall process. The advantage of this approach is that it allows us to directly incorporate a market driven perspective, tying the manufacturing operations with the organizational economic goals.     

Linking maintenance strategies to performance

In order to achieve world-class performance, more and more companies are replacing their reactive, fire-fighting strategies for maintenance with proactive strategies like preventive and predictive maintenance and aggressive strategies like total productive maintenance (TPM). While these newer maintenance strategies require increased commitments to training, resources and integration, they also promise to improve performance. This paper reports the results of a study of the relationship between maintenance strategies and performance. Based on the responses from a survey of plant managers and maintenance managers, the analysis shows strong positive relationships between proactive and aggressive maintenance strategies and performance.     

Cost Accounting and Performance Measurement in a Just-in-Time Production Environment

There are normative statements in the literature, backed up by case observations and anecdotal evidence, which indicate that manufacturing companies operating just-in-time (JIT) production management systems should also change their cost accounting systems and place greater reliance on non-financial performance indicators. This study provides empirical evidence suggesting that JIT manufacturing companies which have made some degree of modification to their costing system demonstrate higher performance than JIT companies which have not made changes. The results also suggest that greater use of non-financial performance indicators is associated with higher performance irrespective of the production management system adopted.     

Production planning of a hybrid manufacturing-remanufacturing system under uncertainty within a closed-loop supply chain

This paper deals with the production planning and control of a single product involving combined manufacturing and remanufacturing operations within a closed-loop reverse logistics network with machines subject to random failures and repairs. While consumers traditionally dispose of products at the end of their life cycle, recovery of the used products may be economically more attractive than disposal, while remanufacturing of the products also pursues sustainable development goals. Three types of inventories are involved in this network. The manufactured and remanufactured items are stored in the first and second inventories. The returned products are collected in the third inventory and then remanufactured or disposed of. The objective of this research is to propose a manufacturing/remanufacturing policy that would minimize the sum of the holding and backlog costs for manufacturing and remanufacturing products. The decision variables are the production rates of the manufacturing and the remanufacturing machines. The optimality conditions are developed using the optimal control theory based on stochastic dynamic programming. A computational algorithm, based on numerical methods, is used for solving the optimal control problem. Finally, a numerical example and a sensitivity analysis are presented to illustrate the usefulness of the proposed approach. The structure of the optimal control policy is discussed depending on the value of costs and parameters and extensions to more complex reverse logistics networks are discussed.     

Corporate ownership and managerial short-termism: Results from a Finnish study of management perceptions

Increased media exposure to layoffs and corporate quarterly financial reporting have created arguable a common perception—especially favored by the media itself—that the companies have been forced to improve their financial performance from quarter to quarter. Academically, the relevant question is whether companies themselves feel that they are exposed to short-term pressure to perform even if it means that they have to compromise company's long-term future. This paper studies this issue using results from a survey conducted among the 500 largest companies in Finland. The results indicate that companies in general feel moderate short-term pressure, with reasonable dispersion across firms. There seems to be a link between the degree of pressure felt, and the firm's ownership structure, i.e. we find some support for the existence of potentially short-term versus long-term owners. We also find significant ownership related differences, in line with expectations, in how such short-term pressure is reflected in actual decision variables such as the investment criteria used.     

Cell Production and Workplace Innovation in Japan: Toward a New Model for Japanese Manufacturing?

This article investigates the current trend toward cell production and other workplace innovations in Japan using a large–scale sampling survey of manufacturing firms and in–depth interviews with four leading electrical and electronic establishments. The quantitative analysis reveals the correlation between the use of cell production and the ratio of female to male workers and production strategy variables, as well as the positive effect of cell production on operating profit rates and ordinary profit rates. The case studies reveal the following points: First, processes and organizations have been decentralized to the degree that individual workshops move toward taking primary responsibility for customer relations, production decisions, and delivery. Corporate headquarters increasingly play a coordinating rather than decision–making role. Second, firms have steadily implemented make–to–order systems by tightening links to suppliers and customers and developing new inventory and cost–control systems. Third, firms have started to implement more performance–based personnel practices. However, considerable variance among firms is observed in complementary changes, particularly personnel innovations.     

Approximation approach for the performance analysis of production lines under a kanban discipline

In a JIT production environment, pull-type control systems are usually implemented to reduce the lead time and to synchronize the production rate with the demand rate. The design of an effective production control system requires easy and reliable approaches for evaluating the effect of the major system parameters on its performance.In this paper we model the kanban control system of a manufacturing line as a Markov process. In addition, we develop an approximation approach to the model that permits reliable evaluation of manufacturing system performance in terms of throughput time and work-in-process. The validation of the approach is implemented by comparing the exact results (based on discrete event simulation) and the approximated results.A good approximation is observed for a large range of conditions.     

“Salesforce deployment analysis”

An approach to designing a decision support system for salesforce deployment analysis is developed and illustrated with an application example. The approach incorporates research findings from salesforce decision modeling over the last decade. The features and limitations of decision models and methods of analysis are discussed. Guidelines are presented for each stage of decision support system development, while the possibility of expanding a basic deployment analysis system into a more comprehensive sales management decision support system is suggested.     

Polychronicity in top management teams: The impact on strategic decision processes and performance of new technology ventures

This study focuses on polychronicity as a cultural dimension of top management teams (TMTs). TMT polychronicity is the extent to which team members mutually prefer and tend to engage in multiple tasks simultaneously or intermittently instead of one at a time and believe that this is the best way of doing things. We explore the impact of TMT polychronicity on strategic decision speed and comprehensiveness and, subsequently, its effect on new venture financial performance. Contrary to popular time‐management principles advocating task prioritization and focused sequential execution, we found that TMT polychronicity has a positive effect on firm performance in the context of dynamic unanalyzable environments. This effect is partially mediated by strategic decision speed and comprehensiveness. Our study contributes to research on strategic leadership by focusing on a novel value‐based characteristic of the TMT (polychronicity) and by untangling the decision‐making processes that relate TMT characteristics and firm performance. It also contributes to the attention‐based view of the firm by positioning polychronicity as a new type of attention structure. Copyright © 2010 John Wiley & Sons, Ltd.     

The design of an integrated group decision support system for technology assessment

Responding to the challenges of the marketplace compels firms to employ new production methods to improve product quality and delivery reliability, to reduce costs, and above all, to achieve greater flexibility. This paper outlines the system design of a group decision support system, developed to guide management through the process of new technology evaluation and adoption. The advantages of the proposed architecture include the opportunity to integrate a variety of independently developed components, the localisation of components (which leads to simplified maintenance) and the flexibility in the future for expanding and modifying the system.     

Development of a Network-location-model for the Economic Optimization of Local Heating Systems in Urban Chile

Cogeneration of heat and electricity is an important pillar of energy and climate policy. To plan the production and distribution system of combined heat and power (CHP) systems for residential heating, suitable methods for decision support are needed. For a comprehensive feasibility analysis, the integration of the location and capacity planning of the power plants, the choice of customers, and the network planning of the heating network into one optimization model are necessary. Thus, we develop an optimization model for electricity generation and heat supply. This mixed integer linear program (MILP) is based on graph theory for network flow problems. We apply the network location model for the optimization of district heating systems in the City of Osorno in Chile, which exhibits the “checkerboard layout” typically found in many South American cities. The network location model can support the strategic planning of investments in renewable energy projects because it permits the analysis of changing energy prices, calculation of break-even prices for heat and electricity, and estimation of greenhouse gas emission savings.     

资源环境视角下的企业清洁生产体系研究

在简要回顾清洁生产提出背景和研究现状的基础上,提出基于企业生产构成要件的清洁生产体系,包括技术体系、组织和管理体系、产品体系、外部支持体系,以及针对清洁生产的运行质量和政府政策绩效的资源环境评价体系和政策绩效评估体系。以此促进相应的市场机制建设、政府政策措施以及科学考评机制等关系现有生产方式变革的重点难点问题的解决。     

Scheduling a maintenance activity and due-window assignment based on common flow allowance

We study a due-window assignment problem on a single machine. The job-dependent due-windows are obtained by the common flow allowance criterion. The scheduler has the option to perform a maintenance activity which is rate modifying, i.e., improves the processing times of the following jobs. We consider a number of versions of this setting: (i) The maintenance requires a constant time, (ii) The maintenance duration is an increasing function of its starting time (linear deterioration), and (iii) The maintenance duration is position-dependent (general deterioration). We study the standard setting of regular job processing times, and investigate also the extension to position-dependent processing times. The set of potential optimal positions for the maintenance activity is fully characterized. Consequently, the problems based on all the combinations of these settings are shown to be solved in polynomial time.