Maintenance engineering and management (Ieng 5121)

5th Industrial Engineering

By G/M. T.

March , 2024

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 Chapter Six
Maintenance Planning

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 Introduction

❖Maintenance Planning is the advance preparation of selected jobs so that they can be executed

in an efficient and effective manner when the job is performed at some future date.

❖Maintenance Planning is a process of detailed analysis to first determine and then to describe the

work to be performed, by task sequence and methodology.

❖Maintenance Planning provides for the identification of all required resources, including skills,

crew size, labor-hours, spare parts and materials, special tools and equipment.

❖Maintenance Planning includes developing an estimate of total cost and encompasses essential

preparatory, post maintenance and restart efforts of both operations and maintenance

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 Maintenance Planning and control consists of:

✓ Anticipating future work

✓ Visualization of the nature and details of the work

✓ Determination of the best method to perform the work

✓ Arranging for the required materials

✓ scheduling maintenance to conform to production plans

✓ Allocation of work to individuals

✓ Instructing individuals about the schedules and methods

✓ Follow-up and monitoring the progress or work; and

✓ Evaluation of the work and performance.

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 Anticipation of maintenance work:

The most important function of maintenance is anticipation of future work.

This can be done by information provided by the following sources:
1. Instructions and guidance given by manufacturers
2.Technical knowledge of the maintenance and production personnel.
3. Knowledge of the degree of utilization of the machine.
4. Record of the behavior of the machine and work done on it.
5.Complaints and requests from production personnel on the basis of difficulties
experienced by them while operating the machines.
6. Examination of the state of the various parts of the machine during their life span

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 Visualization of the nature and details of work:
Planning for materials, human-powers, methods and time required for a job depends on
the nature and details of the job. Preparation of main List is necessary which contains:
1. Unit Number
2. Machine/Part of machine
3. Time Interval
4. Special /Routine
5. Category of workmen/Type of work
6. Maintenance Instructions
7. Activity Description
8. Routine List/PM Card No
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 Scheduling of work to specific time periods

✓ Scheduling of maintenance requires concurrence of production personnel to release the

machine during the specified time.
✓ Maintenance personnel can not expect to carry out their own plan and then to assume
that it will be acceptable to production people.
✓ Scheduling of maintenance work can be done on the basis of the importance of this
work in relation to production requirements and the duration of machine downtime and
its consequent effects on production and sales program.

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 Scheduling of work to specific time periods

✓ Scheduling of maintenance work require dovetailing (merging) of maintenance and

production schedules.
✓ For this purpose, it is necessary to involve production personnel in decisions regarding
the job to be carried out, priority of each job and the time when it should be undertaken.
✓ Maintenance department should for this reason prepare a tentative schedule of
maintenance work for at least two weeks and circulate it to production department and
then get their agreement.

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 Scheduling In The Long And Short Term

Long term:
1. Lubrication
2. Inspection
3. Overhauling
4. Cleaning of machine
5. Replacement of some items
Short term:
1. Repairs
2. Replacement

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 Work orders
▪ The individuals who are required to execute the work need to be instructed about:
✓ the work to be done,
✓ the method they should adopt,
✓ the time when they should commence work and
✓ the time at which they are expected to complete the job.
• One good way of passing on necessary information is the use of work orders.
✓ Work Orders are absolutely necessary to control the execution of the plan.

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 Work orders

❖The heart of maintenance planning beats only as strong and healthy as the

maintenance organization's work order system functions.

❖Knowledge and control of the tasks to be performed are essential to all functions.

❖For maintenance, the source of such knowledge and control is the work order.

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 Principles of Maintenance Planning:
✓ Understand the department's mission in relation to the objectives of the company;
✓ Always be aware of the magnitude and trend of backlog;
✓ Quantify the magnitude of the resources effectively available to apply toward relief of
the backlog;
✓ Establish a plan for the allocation of available resources to a balanced workweek,
considering both long-range importance and short-range necessity;
✓ Categorize work consistent with planned resource allocation categories;

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 Principles of Maintenance Planning:
✓ Assign a planning priority (within job priority and category) to each job;
✓ Break each job into logically sequenced tasks/activities;
✓ Prepare a "Planning Week" schedule by phases of work planning and by task to
determine progress toward completion of each week's work planning;
✓ Work to meet this schedule;
✓ Measure progress and contribution;

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 Maintenance Planning Aids:
The informational sources required for efficient maintenance planning can be fall into the
following categories:
✓ Material Libraries
✓ Labor Libraries
✓ Equipment Records
✓ Prints, Drawings and Sketches
✓ Purchasing/Stores Catalogs
✓ Standard Operating Procedures (SOPs)
✓ Labor Estimating System

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 Maintenance Planning Aids:
✓ Planning Package File
✓ Parts List
✓ Experience of Supervisors, Mechanics and Operators
✓ Equipment History

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 Maintenance Planning Procedures:

The following outline describes the procedure for work order planning in detail:
1. Make a decision whether the work order requires planning.
2. Analyze the work requested:
✓ Is the information complete and adequate?
✓ Is the work needed?
✓ Why is the work needed?
✓ Can anything be done to avoid recurrence in the future?

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 Maintenance Planning Procedures:

The following outline describes the procedure for work order planning in detail:
3. Determine the basic approach to be followed:
✓ What is the priority of the work?
✓ What effect will it have on operating?
✓ What are the future plans for the equipment?
✓ Is the equipment scheduled to be overhauled, replaced, or phased out?
✓ Can repair provide the same reliability as a replacement at a lower cost?
✓ Make sketches as required.

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 Maintenance Planning Procedures:
4. Identify special considerations, needs, and conditions:
✓ Is production assistance required
5. Identify need for engineering:
✓ If required, notify engineering or have the appropriate person do so.
6. Identify need for contract service:
✓ If required, contact or have the appropriate person do so.
7. Assure whether maintenance involved. If maintenance is involved, coordinate job.

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 Maintenance Planning Procedures:
8. Identify work for the maintenance department.
9. Identify information needed.
10. Identify instructions required:
✓ If description of work does not clearly state what work is to be done, provide
instructions.
11. Identify manpower required.
12. Estimate man-hours required.

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 Planning of spares stock
• “Spare parts” refer to the requirements of parts for keeping owned equipment in healthy
operating condition, by meeting repair and replacement needs imposed by
breakdown, preventive and predictive maintenance.
• These materials are utilized in the manufacturing and service process but do not
become a part of the end product.
• Demand of these materials does not vary with the demand for the final products in
direct proportion.
• Spare Parts consist of components of machines and equipment that wear out with
use and time and need replacement.
• Supplies consist of lubricants, coolants, cutting tools, cleaning agents etc.
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 Planning of spares stock
• poor spare parts control and planning can lead to inefficient inventory storage and a
shortage of parts when you need them most, which causes unplanned downtime
and unforeseen costs.
▪ Therefore, for the overall success of your business, it’s in your best interest to invest
in optimized spare parts inventory management.

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Planning of spares stock

Objectives of planning spares stock

• Ensure availability
• Determine requirements
• Define source of supply
• Finalize ordering option
• Anticipate needs

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 Planning of spares stock

Common problems in spares management:

• Erratic demand for spares
• Long lead time
• Disproportionately high costs
• Spares are available in plenty when not needed and are not available when direly
needed

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 Planning of spares stock

Business units supplying capital goods have to decide:

• Whether to supply the machine spares with the original equipment at the time of
sale itself, with the costs included in the base price of the equipment Or at extra cost
to the customer.

• It should be clarified to the customers that if they do not buy spares with the
equipment, it might not be possible for them to supply spares at a later date.

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 Planning of spares stock
Spare parts planning depends on:

• Location of the business unit

• Indigenous or imported spare parts

• Sophistication of industry and degree of automation

• Service level desired

• Relevant costs: spares that have high ordering costs or high stock out costs have to
be held generously.

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 Planning of spares stock
Methods used by business for spar part planning
1. Many times the demand for spare parts follow poison distribution and it is useful to
determine the usage.
2. Failure rate history of the life cycle of the equipment.

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 Methods used by business units for planning of spare parts:

3. For planning rotatable spares, queuing theory is applicable

4. For insurance or capital spares, cost benefit analysis is relevant

5. Forecasting methods like moving averages or exponential smoothing are also used in
spare parts planning

6. When new machine or equipment is being purchased, check with the OEM for
suggested spare parts that would be required during the working life of the asset.
This list is a useful document in planning for spares.

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 Identification of spares

• Listing and codifying spares

• Standardizing spare parts

• Analyzing spare parts

• Establishing sources for supply

• Determining requirements

• Forming stocking policies

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 Listing and codifying spares
Proposed codification system: Example Ball bearing

main group (code -1 for mechanical spares)

sub- group (code -02 for bearings)

sub-sub- group (code -5 for ball bearings)

1 02 5 350 450 30 5 6
Check Digit Computed By Computer

Code For Special Characteristics

Thickness (30 Mm)

Outside Diameter (450 Mm)

Inside Diameter 350 Mm)

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 Identification of spares
• In addition to codifying the spare part, it will be of immense benefit to codify the location of spare parts.

• Relevant codes and stock location numbers in the form of spare parts catalogue as follows:

✓ Spare parts codification plan

✓ Specific spare part codes

✓ Spare parts description with complete specifications

✓ Drawing number

✓ Manufacturer’s code and part number

✓ Stock location number

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 Identification of spares

Standardizing spare parts

• We should decide to buy capital equipment from one or two manufacturers.

• The distributor can suggest us, as to which and how new additions will match our
existing assets.

• Reduce the variety by using 5 S process.

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Classification of spares on other characteristics
Capital spares:
These are vital spares for critical equipment.

• The stock out cost for such spares is very high and the unit cost is also very high.

• The number of items consumed during entire lifetime of the equipment may not
exceed three.

• The decision has to be made considering ordering and carrying cost of say 3 parts and
cost of stock out if no stocks are maintained.

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Classification of spares on other characteristics
Insurance spares:

• Any spare part that will be used to replace a failed identical part in operating

equipment whose penalty cost for downtime is very high but probability of it being

used is very low is classified as insurance spare part.

• These spares are normally procured along with equipment and are quite costly.

• Maximum 1 or 2 units are held in inventory.

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Classification of spares on other characteristics:
Overhaul spares:

• These are spare parts which must be replaced every time the equipment is dis-
assembled and re-assembled.

• This exercise has to be carried out because after use over a certain period of time,
the machine loses its service level.

• Also when the machine is being reconditioned or overhauled, certain components

are to be replaced based on manufacturer’s recommendations.

• These are fast moving spares required repetitively and are not very costly.

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Classification of spares on other characteristics:
Rotatable spares

• These spare parts when replaced from fresh stocks, can be repaired and rectified and put in stores for
re-use.

• These are costly spare parts like pumps, electric motors, turbines, compressors etc.

Wear and Tear Spares:

• Spare parts which have regular wear and tear in the course of operation of the equipment and need to
be replaced after definite number of hours of equipment operation.

Consumable spares:

• These are regularly used items such as fasteners, seals, bearings etc. These are to be stored by the
materials department.
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Classification of spares on other characteristics:

Obsolete Spares

• Obsolete spares are those which are in good working condition but which are no

longer useful for the company’s operations because of replacement of machines and

equipment by other machines and equipment of different designs or technology.

• or modification in the design of equipment or machines because of changes in the

manufacturing processes or materials used or changes in the products manufactured.

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 Noticeable Features of Spare Parts
• It is claimed that 10% of the value of a machine is invested in spare parts at any point of
time.

• About 40% of the total working capital is tied up in spare parts inventory.

• About one-third of spare parts inventory is non- moving or obsolete.

• Inventory carrying cost of spares is 30% of value of inventory.

• Lead times are long and prices are excessive.

• Many times equipment has to be scrapped as spares are not available.

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 Analyzing spare parts

Commonly used inventory analyses are:

FSN ANALYSIS
ABC ANALYSIS
VED ANALYSIS
SDE ANALYSIS
HML ANALYSIS

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 FSN ANALYSIS
Fast Moving F Items that are frequently issued say, more than once a
month

Slow Moving S Items that are issued less than once a month

Non- moving N Items that are not issued or not used for more than 2 to 5
years

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15
 SDE ANALYSIS
Scarce S Items which are imported and also those local spare parts
which require more than 6 months lead time for purchase

Difficult D Items that require lead time more than a fortnight but less
than six months

Easily E Items that easily available in local markets within lead

available time of a fortnight

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16
 VED ANALYSIS
VITAL V The items if not available, there will be very high loss due to
production downtime, or a very high cost has to be paid if it is
procured on emergency basis. E.g. bearings for kiln in cement plant

ESSENTIAL E The items if not available, there will be moderate loss due to
production downtime.
E.g. bearings of motors of auxiliary pumps

DESIRABLE D The items if not available, there will not be significant loss due to
production downtime.
E.g. gaskets for piping connection

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ABC ANALYSIS

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18
HML ANALYSIS
High cost H Item whose unit value is very high, say more than Rs.
1000

Medium cost M Item whose unit value is medium, say between

Rs. 100 and Rs. 1000

Low Cost L Item whose unit value is low, say, less than Rs. 100

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For procuring the required spare part there are four options available:

1. Repair the spare part which has failed.

2. Manufacture fresh spare part in its workshop.

3. Locate a local supplier who has the spare part and buy.

4. Approach the OEM to procure the spare.

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Costs associated with procuring and maintaining spare parts:
• Cost of capital
• Ordering cost
• Holding cost
• Material handling cost
• Security cost
• Human resources cost
• Information systems

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 Inventory control system
• There are many types of inventory.

• The commonly identified types include raw materials inventory, finished goods
inventory, supplies inventory, work-in-process (WIP) inventory, transportation inventory,
and replacement parts inventory.

• The replacement parts inventory is concerned with maintaining items for the
replacement of other items in the company or its customer equipment/systems as they
wear out.

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 Inventory control system
Purpose of inventory

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 Inventory control system
Maintenance management personnel make decisions on basic areas with respect to
inventory.

• Items/materials to be stored: Decisions require consideration of factors such as ability

of the vendor to supply at the moment of need, cost, and the degree of deterioration in
storage.

• Amount of items/materials to be stored: Decisions are made by considering factors

such as degree of usage and delivery lead time.

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 Inventory control system
• Item/material suppliers: Decisions on suppliers of items/materials are made by
considering factors such as price, delivery, quality, and service.

• Highest supply levels: As time-to-time supply usage rate drops, the decisions on the
highest supply levels are made by keeping in mind factors such as past ordering
experience and peak vacation period.

• Time to buy and pay: Decisions on these two items are often interlocked. Such
decisions are made by considering factors such as vendor announcements about special
discounts, past purchasing records, and store withdrawals and equipment repair
histories.
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 Inventory control system
• Place to keep items/materials: As location control is crucial to a productive
maintenance department, decisions concerning storage of items/materials are made by
keeping in mind that they can be effectively retrieved. Past experience indicates that a
single physical location for each item is the best.

• Appropriate price to pay: Pricing is of continuous concern, and decisions concerning it

are primarily governed by perceived, not actual, supply and demand.

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 ABC Classification Approach For Maintenance Inventory Control

➢ In any maintenance inventory control system, parts/materials required for routine

maintenance should be readily available.
➢ In the case of no routine maintenance, items must be controlled in such a way that the
capital inventory investment is most effective.
➢ In controlling inventory, one must seek information on areas such as
✓ Importance of the inventory item
✓ The way it should be controlled
✓ Quantity to be ordered at one time
✓ Specific point in time to place an order
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 ABC Classification Approach For Maintenance Inventory Control

• The ABC classification approach provides information for routine and no routine
maintenance.
• Consequently, it allows different levels of control based on the item’s relative
importance.
• The ABC approach is based on the reasoning that a small percentage of items usually
dictates the results achieved under any condition.
• The ABC approach classifies in-house inventory into three categories (i.e., A, B, and C)
based on annual dollar volume.

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ABC Classification Approach For Maintenance Inventory Control

• The following approximate relationship between the percentage of inventory

items and the percentage of annual dollar usage is observed:
✓ A:Of the items, 20% are responsible for 80% of the dollar usage.
✓ B: Of the items, 30% are responsible for 15% of the dollar usage.
✓ C: Of the items, 50% are responsible for 5% of the dollar usage.

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ABC Classification Approach For Maintenance Inventory Control

• The following three steps are associated with the ABC classification approach:
1. Determine the item characteristics that can influence inventory management
results. Often, this is the annual dollar usage.
2. Group items based on the criteria established above.
3. Practice control relative to the group importance.
Factors such as annual dollar usage, material scarcity, and unit cost affect the
importance of an item.

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ABC Classification Approach For Maintenance Inventory Control

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ABC Classification Approach For Maintenance Inventory Control
Control Policies For A, B, and C Classification Items
After the classification of inventory items, control policies can be established.
Some of these policies associated with each classification are as follows:
• Classification A items: These are high-priority items.
✓ Practice tight control including:
• frequent review of demand forecasts,
• complete accurate records,
• periodic and frequent review by management,
• close follow-up, and
• expediting to minimize lead time.
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ABC Classification Approach For Maintenance Inventory Control
CONTROL POLICIES FOR A, B, AND C CLASSIFICATION ITEMS
Classification B items: These are medium-priority items.
✓ Practice regular controls including:
• good records,
• regular processing, and normal attention.
Classification C items: These are low-priority items.
• Practice simple controls, but ensure they are sufficient to meet demand.
▪ Keep plenty of low-cost items, and use the money and control effort saved to
minimize inventory of high-cost items.

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INVENTORY CONTROL MODELS

• Various mathematical inventory control models have been developed, many of which
can be applied to maintenance inventory control.
• These models are based on the assumption that demand for an individual item can
be either independent of or dependent on the demand for other items.
• Before we describe these models, let us first examine the following types of costs
associated with the models:

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 INVENTORY CONTROL MODELS

➢ Holding cost: This is associated with holding or carrying inventory over time. It also

includes elements such as cost of insurance, extra staffing, and interest payments.

➢ Ordering cost: This is associated with order processing, clerical support, forms,

supplies, etc.

➢ Setup/ordering cost: This is associated with the preparation of an

equipment/machine or process for manufacturing an order

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INVENTORY CONTROL MODELS
Economic Order Quantity Model
• The economic order quantity model is one of the most widely known inventory
control methods.
• Some assumptions associated with the model are as follows:
✓ Constant and known demand
✓ Instantaneous receipt of inventory
✓ Constant and known time between order placement and receipt of the order
✓ Infeasible quantity discounts
✓ Stock outs can be avoided by placing orders at the right time
✓ Two variable costs: holding cost and ordering or setup cost
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INVENTORY CONTROL MODELS
ECONOMIC ORDER QUANTITY MODEL
The annual setup cost (SUC) is given by

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INVENTORY CONTROL MODELS
ECONOMIC ORDER QUANTITY MODEL
The annual inventory holding cost (AHC) is expressed by

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INVENTORY CONTROL MODELS
ECONOMIC ORDER QUANTITY MODEL

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INVENTORY CONTROL MODELS
ECONOMIC ORDER QUANTITY MODEL

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INVENTORY CONTROL MODELS
ECONOMIC ORDER QUANTITY MODEL

Example 7.2
A maintenance engineering department annually uses 600 units of a certain
engineering part and the yearly holding cost per unit is $1.20 along with the setup or
ordering cost of $5 per order. Calculate the following:
• Optimal number of units per order
• Expected number of orders per year
• Expected time between orders

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INVENTORY CONTROL MODELS
ECONOMIC ORDER QUANTITY MODEL

Solution

The above value and the given data in equation yields n = 600/71 =8 orders per year.
Assuming 250 working days per year and the above calculated value, from Eq. we get
ETBO = 250/8 =31 days between orders.
It means, there will be approximately 71 units per order, 8 orders per year, and 31
working days between each order
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INVENTORY CONTROL MODELS

Reading assignment
PRODUCTION ORDER QUANTITY MODEL
QUANTITY DISCOUNT MODEL

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INVENTORY CONTROL MODELS
Spare Part Quantity Estimation Model
• In maintenance activity, it is important to estimate the number of spare parts required for a
system/equipment.
• This need directly influences the maintenance inventory.
• Over the years various approaches have been used to determine the spare part quantity.
• Determination of spare part quantity depends on factors such as the reliability of the item under
consideration, the number of items used in the system, and the probability of having a spare available
when required.
• Often, the following equation, based on the Poisson distribution, is used to determine the spare part
quantity

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 INVENTORY CONTROL MODELS
SPARE PART QUANTITY ESTIMATION MODEL
•

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INVENTORY CONTROL MODELS
Spare Part Quantity Estimation Model

• Time to time Ps is also referred to as the safety factor.

• It indicates the desired level of protection in estimating the need for spares.

• By examining the higher the value of Ps, the greater the quantity of spares

required and, in turn, the higher the purchasing and inventory maintenance costs.

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End of chapter 6

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