Maintenance impact on company´s profitability and competitiveness: Underhålls påverkan i företags lönsamhet och konkurrens

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Underhålls påverkan i företags lönsamhet

och konkurrens

Maintenance impact on company’s profitability and competitiveness

Växjö May 2007 Examensarbete nr: TD 041/2007 Avdelningen för system ekonomi Author: Hamid Al-najjar Subject: Maintenance design Institutionen för teknik och design, TD

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Organisation/ Organization Författare/Author(s) VÄXJÖ UNIVERSITET

Institutionen för teknik och design Hamid Al-najjar Växjö University

School of Technology and Design

Dokumenttyp/Type of document Handledare/tutor Examinator/examiner Magister examensarbete/ Master degreework Om Prakash Dr. Professor Basim Al-najjar Titel och undertitel/Title and subtitle

Maintenance impact on company’s profitability and competitiveness – Applied at Kongabruk plant in Småland Sammanfattning

Syftet med denna rapport är att visa hur viktigt och nödvändigt det är med att underhålla företagens maskiner och utrustningar, därför att det har stor påverkan på företagens lönsamhet och konkurrens och det skedde genom att analysera företagens produktions process, lista ut haverier och avbrott, hitta orsakerna som ligger bakom det, konvertera det till pengar och försöka lösa problemen genom att hitta den mesta lämpligaste underhåll strategi baserande på ekonomi och kvalitet. Enligt analysen som utfördes genom studiet, kapacitet verifiering data insamlingen som företaget gjorde under en slumpmässig arbetsdag skift och ett tekniskt fel lisat på eventuella avbrott och haverier. Det visade sig att det finns vissa stopp tider som har samband med management, operation, och logistik, men uppgiften är mer fokuserad på de tekniska problemen som har samband med underhåll. I resultatet ser man vilka tekniska och mekaniska problem som brukar angripa maskinerna, orsakerna som ligger bakom de, hur mycket det kostar företaget för varje maskin när den är ur funktionen, samt några förslag på eventuella lösningar och rekommendationer baserande på ekonomi och kvalitet.

Nyckelord

Underhåll, underhåll strategier, samband mellan underhåll och produktion kvalitet, produktion hasighet, operation, hantering och logistik, produktion process charaktaristisk, och lön samt underhåll

Abstract

The aim of this thesis is to show the company the importance and the necessity of the maintenance, trough highlighting its role and impact on company’s profitability and competitiveness, and that’s happened within the analysing of the plant to figure out the failures and short stoppages, find out the causes behind them, convert them into money and the last step is to find out the most suitable and cost effective maintenance strategy based on some important factors such as economy, and quality to probably eliminate or reduce the number of failures and short stoppages. According to the analysis, capacity verifying data collection which the company has done during a random working daily shift and a technical faults list about the possibly failures and short stoppages which occur during the operation, it shows that there are some downtime due to management, operation and logistic, but the main focus was on the technical faults which has correlation with maintenance. In the result it shows which technical and mechanical problems the machines usually faces, the causes behind them, how much it cost the company when they breaks down and finally some suggestions and

recommendations about how these problems can probably be solved based on economy and quality.

Key Words

Maintenance, Maintenance strategies, the relationship among maintenance, production quality, production rate, operation, management and logistic, Production process characteristics, and cost-effective maintenance Utgivningsår/Year of issue Språk/Language Antal sidor/Number of pages

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Acknowledgements

Thanks to…

… Dr Basim Al-najjar Professor on system economy and the examiner of this

thesis, and Om Prakast my supervisor, for their support and guidance to

accomplish this work and my teachers Mirka Kans, Inders Ingwald and the

opponent groups for their comments and opinions during the course and the

seminars

… Drift and maintenance manager Anders Linnartsoon, and production

manager Nils Holmqvist at the company (Kongabruk) for their cooperation and

kindness.

… My family and my best friend Salam for supporting me all the time.

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IV Table contents 1.Introduction ………… .……… 1 1.1 Back ground ……….……….. ………. 1 1.2 Problem discussion………. 2 1.3 Presentation of problem ………. 2 1.4 Problem formulation……….. 3 1.5 Purpose ………..………... 3 1.6 Relevance ………. 3 1.7 Limitations………. 3 1.8 Timeframe……….. 4 2. Research methodology………. 4

2.1Theory about the research method ……… ………. 4

2.1.1Qualitative research………. 4

2.1.2Mixed research……….……… 5

2.1.3Inductive method……….. 5

2.1.4Deductive method ..………. 5

2.2 Overview of reliability and validity………5

2.2.1 Reliability ………. 5

2.2.2Primary ways to measure reliability ...………..………. 6

2.2.3Validity ………..……… 6

2.2.4The usage of reliability and validity ……….. 6

3-Theory ………. 7 3.1 Maintenance ………. 7 3.2 Maintenance strategies ………. 7 3.2.1 Preventive maintenance ………. 7 3.2.2 Breakdown maintenance………. 8 3.2.3 Condition-based-maintenance ………. 8 3.2.3.1 Vibration monitoring ………... 8

3.2.3.2 Non-Destructive testing technique ………. 8

3.2.3.3 Displacement monitoring ………... 9

3.2.3.4 Sound monitoring ………. 9

3.2.4 Design-out-maintenance …………...………. 9

3.2.5 Total productive maintenance ………. 9

3.3 The relationship among……….. 9

3.4 Production process characteristics ……… ………. 10

3.5 Cost-effective-maintenance ……… 11

3.6 Maintenance strategy at the company ………… ……… 11

4-Empirical findings ………. 11

4.1 Short history about Kongabruk ………. 11

4.2 Location & reputation ……… ………. 12

4.3 Kongabruk customers ..……..………. 12

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4.5 Company’s structure hierarchy ……… 14

4.6 Description pf production process ………..…………. 14

4.7 Production process block ………. 15

4.8 Quality and environmental ………..………. 16

4.9 Involved machines or workstation ……….…………. 16

4.10 Data collections ……….………… 16 4.11 Possibly faults ……… 20 4.11.1 Example 4.1 ……….………. 20 4.11.2 Example 4.2 ………...………….………... 21 4.11.3 Example 4.3 ………..……….. 21 4.11.4 Example 4.4 ……….………... 21 4.12 Calculations formula ……… 22 5.Analysis ……… 22

5.1 First workstation Fr halvor ………. 22

5.2 Second workstation Svets + Stuk ……… 23

5.3 Third workstation Robot ……… 23

5.4 Fourth workstation Breschia ……… 23

5.5 Fifth workstation Mazak ………. 24

5.6 Sixth workstation Komplett ………24

5.7 Emergency maintenance calculations ……… 24

5.7.1Example 4.1 ……… 24 5.7.2 Example 4.2 ………. 26 5.7.3Example 4.3 ………. 27 5.7.4Example 4.4 ...………...……….. 27 6.Result. ………. 28 7.Conclusion ………29 8.Recommendations ……… 31 References ……… 32 Appendix ………33

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1. Introduction

To increase the competition among companies in the market creates a need to search a new ways that companies can differentiate themselves and gain more profit and better competitiveness position. The big role of maintenance or the other internal working areas such as production, quality, production cost, and working environment can influence strongly company’s effectiveness. (Basim Al, 2006)

This chapter includes the most important headlines, which can give the reader opportunity to understand the aim of conduction his report. By clarifying background and the reasons behind the accomplishment of this study, including objective problem discussion, problem presentation, problem formulation, purpose, limitation, timeframe and research methodology almost reflect a big part of the whole picture, and gives the reader a holistic view of this thesis.

1.1 Background

All industrial companies have almost common or similar goals, to achieve, and that can be expressed as maximum output, good product quality, delivery on time, society acceptance and market competition etc. One of the most important and significant reasons, which can affect the company to not reach the top of their plan, is the maintenance, due to its importance. The needed for maintenance arises because of two reasons. Firstly many of constituent components of the plant have been designed for economic and technological reasons for a life, which are longer than the production cycle life but less than the life of the plant itself. Secondly the components do fail even during their life cycle for many reasons therefore the maintenance is very important. The replacement of any units or maybe the whole plant happen when found strategically advantageous, through a corporate decision, because the responsibility lies on the top management. The decision could be influence by several numbers of factors, which are internal as well as external in nature. Externally factors are mostly long term for instant obsolescence of the plant or unit, product demand in the market, and the cost of the capital etc. The internal factors are mostly short term and these are cost of maintenance resources and unavailability cost, at the same time the maintenance department has responsibility to replace and repair of the machines, parts or components. If there is any needed to establish a maintenance plan its necessary to identify the parts of the plant which need maintenance, to determine the most suitable strategy for each machine/component, and then decide the procedures and the schedule for the plan. (Om Prakash, compendium)

Maintaining high quality product, reliable machine condition and cost-effectiveness production, which companies strives to reach are actually based on an effective participation personnel from different working areas and these are the most important achievements. The internal and external factors can usually impact the price of the product. The internal dominating factors influence the price of the product include raw material cost, machine and production station unavailability due to failures and disturbance, quality rate, machine condition, energy consumption, losses of raw material, assurance premium etc. The external

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factors are mainly dominated by the market demands, competition in the market, crises, wars and currency value. These factors have influential impact on the profit margin and consequently on the product price. . (Basim Al, 051011).

To improve the available technical knowledge concerning machine constriction, function, root causes behind failures improves the profitability of maintaining the condition of the machine and the tool at an acceptable level. At the same time reliable trainings program for the maintenance staff can improve the repeatability of the procedures of applying maintenance actions. This can be conducted by choosing the most suitable maintenance strategy. The suitable maintenance can be defined with respect to different aspects for different circumstances and companies. Some of the companies consider the safety more than other aspects, such as nuclear power stations, but there are some companies which consider the organizational or financial aspects such as paper mills and engineering manufacturing companies.(Basim AL,200508)

1.2 Problem discussion

All industrial companies now a day’s have to think and manage many significant factors such as location of the manufacturing, raw material, labour, customer needed, cost of the product, maintenance and the quality of the product etc, not only to gain but also to remain in the market due to the huge competition. The improving of these factors, which are mentioned above, due to their big role helps companies to survive all crises, which can be faced in the market, at the same time that leads to reducing of manufacturing costs, decreasing of product price, and enhancing of the quality of the product. Machines and equipments deteriorate during their life cycle and needs to be maintained to keep them operate at the desired level, because deteriorated machines/ components can impact among other things the quality of product, furthermore it would occur a lot of failures and short stoppages, and that leads to economic losses. The considering of maintenance on a proper way can avoid companies many problems such as reducing unplanned downtime, increasing of production rate, improving the quality of the product. That’s lead to reduce a part of manufacturing cost and increasing of company’s profitability and competitiveness.

Neglect maintenance partly or totally has a dangerous consequences, and that leads to a big economic losses, because as we mentioned above there is an indirectly or directly connections with many important factors such as safety, production, environment, quality, society etc. Now days the competition among industrial companies is very high because of the development of technology and the demand of the customer, that’s mean to stay in the market and to be one of the most famous industrial companies is not simple. To satisfy the customer and compete with the others companies maintenance must be considered, because companies can obtain their goals within it. Maintenance has strong relationship with many significant factors such, delivery on time, quality, production price, society acceptance, environment, safety etc. To produce defective items combined with delivery delay due to production disturbances increases production cost, reduces profit and increases the risk of losing market shares, which endangers the survival of the organization in the long term. Reducing production losses and enhancing product quality always yield more profit and improvement in the company’s competitiveness ( Basim Al, Alsyouf, 200304 )

1.3 Presentation of problem

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competitiveness through finding out the problems and the causes behind them. First of all is to find out what kind of problems the company has and categories those to be able to find the most suitable solution to solve it based on economy. What is the role of maintenance in this case? Is it possible that company’s profitability and competitiveness become well by the enhancing of maintenance?

1.4 Problem formulation

Is it possible to enhance company’s profitability and competitiveness through solving plants technical problems by using a better and cost-effective maintenance strategy with respect to quality, economy etc?

1.5 Purpose

The purpose of this study is to define the connection between company’s profitability, competitiveness and maintenance strategy. That can be conducted by finding out plants problems such as failures and short stoppages, and the causes behind them to clarify how much money the company losses yearly due to this problems, furthermore decide the most suitable maintenance strategy with respect to many important factors such as economy, quality etc. That can help the company to increase their revenue and minimize, manufacturing costs and improve their profitability and competitiveness.

1.6 Relevance

According to the dynamic the things get older during the year of their life, and their functions become weaker due to the age. When we talking about the needed of maintenance we mean the life design of machine and component. The machine and component have designed for finite life, because everything in nature deteriorates with time and therefore the manufacturing designed the machines and components initial inbuilt or capability stronger than the required performance level. Deterioration occurrence is allowed in some cases, because in the final the failed components will be changed to perform its desired function. In other cases the machines and components are designed in such way that they need regular maintenance actions to predict the deteriorations, that’s mean the design life of these elements and machine is precondition to such required actions, and these actions have a needed to be maintained regularly to keep its desired level. Maintenance can keep the required performance of a machine element, which is mentioned above only if the initial or inbuilt capability of the item is more than it. In this case called the asset maintainable, but if the initial or inbuilt capability of the item is less than the desired performance level then the asset is called non- maintainable, because maintenance can not raise the built in capability. It quite important to consider this fact to distinguish among the machine element, which has a needed to be maintained regularly and those, which has not. (Om Prakash compendium)

Our case company Kongabruk has faced some technical problems such as failures and short stoppages which means the current maintenance strategy is does not work as they wish. That leads to impact their profitability and competitiveness. To avoid these problems the company has consider maintenance and try to find out how to maintain the plant or some part of it on a proper way, and this would be accomplished by the aid of this study.

1.7 Limitations

Actually this study could not be broader and more comprehensive than this due to the limitations such as the time of eight weeks according to the scheduled time from Växjö

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University, and the difficulties to analyze all company’s production process, due to the lack of the time, inaccessibility of the data required for many machines, and the size of the thesis, because this is only ten point thesis.

1.8 Time frame Activities Weeks 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Project start Chap.1 Chap2 Chap.3 Sub.Date Semi.1 Chap.4 Chap.5 Sub.Date Semi.2 Chap.6 Chap.7 Chap.8 Sub.Date sub.Date & final Rep Final Semi

2. Research methodology

To accomplish this study on proper way a qualitative research method has been used to ensure the analyzing from any mistakes by using a qualitative and quantitative data, and this happened through interviewing the drift and maintenance manager and production manager at the company, studying and analyzing the critical workstations, collecting the date required about how often the failures and short stoppages occurs, additionally analyzing the causes behind these problems, and that’s happened by broken down the problem to find out the root to be able to decide the best action which would be taken later, to minimize or reduce the number of these problems.

2.1 Theory about the research method which be used to conduct this study 2.1.1 Qualitative research

Qualitative research means to rely on the collection of qualitative data. There are five types methods of qualitative research and these are phenomenology, ethnography, case study research, grounded theory and historical research

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2.1.2 Mixed research

Mixed research means to involve the mixing of quantitative and qualitative methods or paradigm characteristics, and it’s a general type of research.

( Bruke Johnson, Larry Christensen)

2.1.3 Inductive method

Inductive method consists of three steps and these are: 1- Observe the world

2- Search for a pattern in what is observed. 3- Make a generalization about what is occurring ( Bruke Johnson, Larry Christensen)

2.1.4 Deductive method

Deductive method consists also of three steps, and these are: 1- State the hypothesis based on theory or research literature. 2- Collect data to test the hypothesis.

3- Make decision to accept or reject the hypothesis. (Bruke Johnson, Larry Christensen).

2.2 Overview of reliability and validity

The relationship between validity and reliability and how they are related:

The reliability refers to the consistency or stability of test scores. Validity refers to the accuracy of the inferences or interpretations we make from test scores. Reliability is a necessary but not sufficient condition for validity (i.e., if you are going to have validity, you must have reliability but reliability in and of itself is not enough to ensure validity. You can see the example whish is shown below:

Assume you weigh 125 pounds. If you weigh yourself five times and get 135, 134, 134, 135, 136 then your scales are reliable but not valid. The scores were consistent but wrong! Again, you want your scales to be both reliable and valid.

( Bruke Johnson, Larry Christensen) 2.2.1 Reliability

Reliability refers to consistency or stability. In psychological and educational testing, it refers to the consistency or stability of the scores that we get from a test or assessment procedure. Reliability is usually determined using a correlation coefficient, which called a reliability coefficient in the context. Correlation coefficient is a measure of relationship that varies from -1 to 0 to 1 and the farther the number is from zero, the stronger the correlation. For example, minus one (-1.00) indicates a perfect negative correlation, zero indicates no correlation at all, and positive one (+1.00) indicates a perfect positive correlation. Regarding strength, -.85 is stronger than +.55, and +.75 is stronger than +.35.

When you have a negative correlation, the variables move in opposite directions and that called poor diet and life expectancy. When you have a positive correlation, the variables move in the same direction and that called education and income. When looking at reliability coefficients we are interested in the values ranging from 0 to 1.That is, we are only interested

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in positive correlations. Note that zero means no reliability, and +1.00 means perfect reliability. Reliability coefficients of .70 or higher are generally considered to be acceptable for research purposes. Reliability coefficients of .90 or higher are needed to make decisions that have impacts on people's lives (e.g., the clinical uses of tests). Reliability is empirically determined; that is, we must check the reliability of test scores with specific sets of people. That is, we must obtain the reliability coefficients of interest to us.

( Bruke Johnson, Larry Christensen)

2.2.2 Primary ways to measure reliability

1-The first type of reliability is called test-retest reliability.

2-The second type of reliability is called equivalent forms reliability. 3-The third type of reliability is called internal consistency reliability.

4-The fourth and last major type of reliability is called inter-scorer reliability. ( Bruke Johnson, Larry Christensen)

2.2.3 Validity

Validity is refers to the accuracy of the inferences, interpretations, or actions made on the basis of test scores. Technically speaking; it is incorrect to say that a test is valid or invalid. It is the interpretations and actions taken based on the test scores that are valid or invalid. All of the ways of collecting validity evidence are really forms of what used to be called construct validity. All that means is that in testing and assessment, we are always measuring something, such as gender, age, depression and self-efficacy. That means validation refers to gathering evidence supporting some inference made on the basis of test scores, and there are three main methods of collecting validity evidence and these are as shown below:

1. Evidence Based on Content

2. Evidence Based on Internal Structure

3-Evidence Based on Relations to Other Variables ( Bruke Johnson, Larry Christensen)

2.2.4 The usage of reliability and validity information

There are some important factors, which must be considered when using of reliability and validity information. For example with standardized tests, the reported validity and reliability data are typically based on a norming group (which is an actual group of people). If the people with whom you intend to use a test are very different from those in the norming group, then the validity and reliability evidence provided with the test become questionable. Remember that what you need to know is whether a test will work with the people in your classroom or in your research study or maybe when reading journal articles, you should view an article positively to the degree that the researchers provide reliability and validity evidence for the measures that they use. Two related questions to ask when reading and evaluating an empirical research article are “It this research study based on good measurement?” and “Do I believe that these researchers used good measures?” If the answers are yes, then give the article high marks for measurement. If the answers are no, then you should invoke the GIGO principle

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3. Theory

3.1 Maintenance

Maintenance is defined as “the combination of all technical and administrative actions, including supervision actions, intended to monitor, control and retain an item, machine, or process in, or restore it to, a state in which it can perform a required function” (Al-Najjar 2004).

One important decision that must be considered before doing maintenance, either to discard the assembly or repair it so, to illustrate this decision let us consider for example the spark plug of a car, it can be repairable by sand blasting of the electrodes and re-set the gap, but the cost of paying to the technician several times would be the same cost of new plug. Accordingly, there are several maintenance strategies, which can be used in the plant, but the selection between these strategies depends on some important factors such as the structure of the plant, production, management, operators, economic, organization, environment etc. Application of different maintenance strategies has to consider several factors before its implementation. A focus should be done on the company’s overall objective. Productivity, safety of the workers and the environment, its affect on quality, and profitability of its application should be taken into consideration before it is chosen. Maintenance costs begin from what it costs to establish such strategy, to the continuous costs of instruments, spare parts and tools. Since maintenance tries to prevent failure through early detection, the consequences of said failures should be considered. Deterioration can affect the quality of the product as well. Any stoppages due to breakdowns affect productivity of the plant, causing downtime. All these can affect the productivity and the competitiveness of the company. (Saranga. H,el al., 2006)

3.2 Maintenance Strategies:

Maintenance Strategy is defined as “a long-term plan, covering all aspects of maintenance management, sets the direction for maintenance management, and contains firm action plans for achieving a desired future state for the maintenance function. Through time, the application of maintenance has changed, according to the focus of the company or the situation that has been presented (Dunn, 2006). Maintenance has becomes a strategic issue of management and equipment, where the attention of many researchers attracted to such issue, in order to achieve minimum life cycle cost in many types of industries and organizations etc. Considering the equipment such as the commercial aircraft is, the cost of maintenance as high as $200 million and an additional $2 billion toward operation, so 80% - 85% of the total LCC for most of the equipment is spent during the operation and maintenance of equipments. (Saranga. H,el al., 2006)

3.2.1 Preventive maintenance

Preventive maintenance can be defined as “the planned strategy of cost effective treatments that are applied at the proper time to keep the machine or equipment in good condition and to avoid more expensive costs in the future” (Hong el al 2006) it is used at a fix time interval and it’s planned before the failure occur and the mean of the usage is to reduce the probability of failure or performance degradation of a machine/component. Sometimes the interval is an amount of output for example they usually do maintenance after every 1000 tons of their production. (Gerry Trodd, Millar Western, 2005)

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3.2.2 Break down maintenance

Breakdown maintenance is unplanned maintenance, or simple maintenance, which is called also operate to failure, corrective maintenance and emergency maintenance. It means that the machine turn until it breaks down and can not operate any more. The maintenance conducts after that the machine get stop, and sometime the failure can cause the whole plant outage, because failure occur without any warning and at random. This kind of stoppages is unplanned and in several cases its expensive especially when the company is not prepared for example spare parts, personnel, machines, tools etc. (Om Prakash, compendium)

3.2.3 Condition-based maintenance

Condition based maintenance can be also called predictive maintenance, diagnostic maintenance, condition based preventive maintenance. In this maintenance strategy actually the timing of the maintenance is based on the condition or performance of the machine/component. If the staff of maintenance department could specify the nature of deterioration, then the right decision could be taken, at the same time maintenance resources could act to do what its needed to minimize the failures as much as possible. Further the maintenance can be planned and its efficiency can be increased and unavailability reduced. Most important thing in condition-based maintenance is condition monitoring. It’s to monitor either directly/indirectly, continuously/ interval the deterioration in the machine/component. There are some methods, which usually used to monitor the condition of machines/components, but it depends on the type machines/components. Visual monitoring is one type that is used in a lot of manufacturing, and that means the human sensors such as ear, eyes, nose, skin, can be useful. But sometimes it’s not enough with this type of monitoring, because in same cases you need the accurate date to Asses the currant condition of the machines/component and then you need to use some advanced methods/parameters, which can be more reliable. That can help the responsible of maintenance to make the right decision. These objectives methods are vibration monitoring, wear debris/lubricant monitoring, temperature monitoring, performance monitoring etc. (Om Prakash, compendium)

3.2.3.1 Vibration monitoring (VBM)

VBM monitor the vibrations, variation with time of the magnitude of a quantity that is descriptive of the motion or position of a mechanical system, when the magnitude is alternatively greater than and smaller than some average value or reference. (Glossary of Terms relating to mechanical vibration and shock, 2006-10-18).

When the machinery breaks down, leads to unplanned plant stoppage and the cost of lost production can be extremely high. The applying of managed vibration monitoring system is probably highly cost-effective to minimize maintenance downtime, on the other hand it’s to provide advance warning and lead time in which to prepare for action. That’s lead to more assurance that the plant and machinery do not deteriorate to a condition where emergence action is required. (Ralph A. Collacott, 1979)

3.2.3.2 Non-Destructive testing technique

The visual examination is an important method to evaluate the condition of critical surfaces for which optical aids have been evolved. (Chap man and Hall, 1977)

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3.2.3.3 Displacement monitoring

To monitor the rotor assembly and axial rotary movements the non-constructive displacement measuring transducers can be used through mount it to a suitable surface on the rotor. The signal from the transducers are converted by the electronic modules into readily interpreted data relating to either radial vibration or axial movements of the rotor relative to the machine stator assembly. The monitoring gives information’s if there is any changing in the vibration level or displacement due to such factors as bearing deterioration or increased out of balance. (Chap man and Hall, 1977)

3.2.3.4 Sound monitoring

Human operators can detect the sudden change of sound due to defects on components, because they normally have high senses. The losing of components either as a result of wear or the slackening of fastenings is particularly to such forms of monitoring. (Chap man and Hall, 1977)

3.2.4 Design-out- maintenance

Design-out-maintenance can be considered when the consequences of the failures and its subsequent maintenance costs are high. The purpose is that to eliminate the cost of maintenance, by modifying the design, it is an engineering design problem. (Om Prakash, Compendium)

3.2.5 Total productive maintenance

This maintenance strategy involves the participation of everybody in an organization or from top management until the workers on the floor. The complete definition of TPM includes these five points is aims at maximizing equipments overall effectiveness, establishes a thorough system of preventive maintenance for the equipments entire life span, implemented by various department such as engineering, operating and maintenance, involves every single employee from top management to the workers on the floor, is based on the promotion of preventive maintenance through motivation management such as small group activities. There are many studies about TPM and its implementation.(Articles on Total Productive Maintenance TPM,2006)

3.3 The relationship among maintenance, production quality, production rate, operation, management and logistic

The changing of some particular working areas such as operation, quality or maintenance can influence other closely related working areas due to their internal interactions. Not only the type of production machinery and maintenance policy can usually influence product quality, production cost, and machine condition and its life length, but also the quality of involved input elements of productions process such as raw material, production tools, methods and procedures, operating and maintenance staff competence and operating conditions. In many cases a bad raw material or badly trained operating and maintenance staff lay behind the initiation or development of damage in the component, equipment or cutting tool which can lead finally to production/financial losses. (Basim Al, 051011)

Quality is one of the most significant reasons for any enterprise to become competitive and stay so in the market. Increasing of the automation of the machines increases the role of machines affecting on the product quality, and that leads to increase the role of maintenance in the production of the quality products, as shown in the figure below. (Om, Prakash, compendium)

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Figure 3.1

According to the description in the figure, we regard that the product as the primary output of the production system and the secondary output is the need and the demand for maintenance. The maintenance demand in the input to the maintenance department and maintenance becomes in turn the secondary input to production in the form of production capacity. The maintenance produces the capacity of production, while the production manufactures the product (Om, Prakash, compendium)

3.4 Production process characteristics

There is a correlation among machine condition, its technical specifications and maintenance policy and that can be seen from the daily experience. Maintenance and quality can in general influence production process input characteristics, such as the condition and reliability of producing assets and production procedures. For example, old and deteriorated machinery induces many unscheduled stoppages and causes production time losses, which in turn demands more maintenance work. The lack of, or ineffective maintenance strategy generate causes for faster and severe deterioration. For instant, when the operator did not lubricate the bearing or in opposite when he pumped more than it is required, that’s lead to rapid and severe wear and consequently failure will be expected. (Basim Al, D. Andersson and M. Jacobsson, 200612) Maintenance Demand for maintenance Production Primary

production input Product

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3.5 cost-effective maintenance

To gain the highest profit in easy way required accessibility and selection of the best combined of high quality data, with respect to the criteria and the procedures of this selection, as well as for the data collection according to some important reasons. Firstly, the selection of maintenance strategy should not be based only on, technical, organizational feasibility or cost minimization, but also should be based on cost-effectiveness. The most cost-effective maintenance strategy that gives highest benefit per amount of resource invested. Secondly. To make the right maintenance decision should be based on facts, because without a high quality relevant data it would be impossible to achieve cost-effective decision. The performance of the process and the type of inputs quality will directly affect the quality of the outputs. The way to assure the quality of input data and of the decision-making process itself gives the opportunity to assure cost-effective maintenance decision. It’s necessary that the maintenance decision be related with corporate goals and strategy, because the optimization of the production process with respect to only one or two of the process essential subsystems or elements such as maintenance or quality can in many cases be misleading. (Basim AL, Mirka Kans, 200603).

3.6 Maintenance strategy at the company

According to the data and the interview with the responsible of drift and maintenance department the company uses preventive maintenance strategy at the current situation, by using some methods such as visual monitoring, and time interval to replace and maintain their machines and components.

4. Empirical findings

To answer why I choose this company Kongabruk to apply the idea, there are some important reasons behind it. During the researching to find a suitable industrial company, I have actually found two industrial companies, which were interested to cooperate with me to conduct this report. To select between these two companies the decision was based on the comparing among some important factors such as, the number of employees, the size of the company, their products, their customers, turn over, and their reputation in the market, but due to the lack of the exactly data such as the number of employees, turn over, customer etc which belong the second company which called Henjo, I have made an assumption according to what I have seen in Henjo´s home page that the first company Kongabruk is the best choice, and the most suitable one to apply the idea.

4.1 Short history about Kongabruk

Its 264 years of Swedish industry history. The name konga or kurunga is belong meddle time, and since 1742 has been the center of the heavy industry. It’s started with blast furnace blowing and casting. During the time and with aid of some factors such as hydroelectric power, foresters and labours etc could Kongabruk change the direction of their activities, as we see today. The company is one of the most famous companies in vehicle industry branch. From 1942- 1888 the activities have been started and consisted of blats furnace blowing and casting and during 1888 – 1943 Konga AB started produce paper pulp and some other products. 1943-1957 the company started to produce boxes and later during 1945 they began to produce and assembly finished wood houses, then the company has been sold to many owners and get several names during these years, such as 1957-1969 Swedish steel pressing AB, 1969-1988 AB Volvo, 1988-1991 Swepart, 1991-1998 Trustor (united part), 1998-2001 Raufoss, 2001-2004 Ferruform Components (SCANIA), and the last is during 2004- Konga Bruk.

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4.2 Location & Reputation

Kongabruk situated in the most important part of the Swedish industry region, and that’s located at the border between Småland and Blekinge which is very close to their customer which are located in Sweden and in Europe. The company established as a blue chip and innovative industrial company from their customers, employees and partners point of view. This gives the company a strongly opportunity for a new place in the market, which can lead to more creation to solve more problems according to the market and customers demand. Kongabruk is a subcontractor for vehicle industry and they have about 130 employees with 200 million Swedish crowns as turn over.

4.3 Kongabruk Customers

Kongabruk lives in a strong market demanding which consist of such kind of customers that continuously minimize production cost, production weigh, increase driving comfort, and improvement of the safety, at the same time adapt to the changing which occurs in the vehicles industry. That’s put a harder demand on the subcontractors such as Kongabruk, which can lead the company to always develop the material, production methods and personnel competence to survive and stay in the market with a good reputation. The company tries all the time to listen to the demand and the wishes form their customers and the market. This strategy gives the company opportunity to improve their quality and gives their customer the possibilities to become successful.

4.4 Some of Kongabruk customers Figure 4.1

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13 Figure 4.2

Some of Kongabruk products

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4.5 Company’s structure hierarchy

Figure 4.4

4.6 Description of production process

Kongabruk produces many types of products, and this lie outside the considered plan in order to write about all these types of products On the other hand I have chosen one of these products to write about and to apply my idea and that was based on its importance. This product is the race axle, which is uses for busses, and lorry, trucks that Volvo Company

VD

Development/prototyp

Management support

Market/Business Development

Purchasing Production / Logistic

Drift/Maintenance/Loc ations environment Quality/Environment Economy/Personnel/I T Technique

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produces. There are three types of race axles, which the company produces and they called Tag axel, single axle, and double and steered axle. The selection was based on, first of all, this product is one the most significant products which the company produces and the second reason was due to the machines which are used to produce this type of product, because these machines have some problems such as failures and short stoppages. This block shows a short description of the production process, because it’s difficult to draw all the details here, whereas there is an explanation about what happened in each block.

Observation the original one is in the appendix.

4.7 Production process block

The original data is enclosed in the appendix page 35,36,37. Figure 4.5

First of all I will explain what Op is. According to the information I got from the company its mean operation, or step. In Op (010) the raw material brings inside of the block by the truck. Some parts of the axle produced in Kongabruk, but not all of them. The company uses different size of plate, and this depends on the product. The plate brings by the truck to first workstation to be pressed as half pipes (cutting from the length) then send them to the robot to weld the axel tap, the brake hold for single and double axles on the half pipes, later sends the half pipes to another machine to be hissed. If the welding and the hiss are ok sends the half pipes to another workstation in the same block to weld the ABC holder by another type of welding which called (Luciakrona), and that means the welding become double, then the half pipes will grinded, but if they find any fault during the control, the half pipe must be revised again. After the revising the half pipes sends by truck to the next block. When the half pipes arrived in to the step, or Op (020) a control must be done to check them before they begin with next assignment. If the control approves from the previous block the next job is to traverse, and sprain the half pipes, at the same check the straightness, direction, and the mask of them, and sends them further by truck to the next block, otherwise the half pipes will sends to revising at the same block. The next step is Op (030), the half pipes will be painted and sends to the control in the same block before they stored, if the half pipes approves by the control they will sends to the store room, otherwise the half pipes must be revised at he same block. - Pressing - Welding - Hissing - Control - Revising -

– traverse & Sprain – check

straightness, direction & mask – Control

– Revising

-Painting -Control

Op 010 Op 020 Op 030

Truck Truck Truck

Raw material

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4.8 Quality and environmental

According to ISO/TS 16949 the company works, and that lead to specify the quality

requirement, which can be applied globally in the automation industry in the future. The aim of this technical specification is to improve the product and its process quality, at the same time to obtain customers satisfaction and confidence. The company uses ISO 14001 to ensure that the environmental programme is consistent, and credible structured. The target of applying this programme is to reduce and minimize environmental load. The environmental policy and the quality system have some relationship and they applied parallel at the company. (Original data in appendix page 47)

4.9 Involved Machines or workstations in race axel production

The main focus was at the most significant and unavoidable machines, workstations that are involved to produce the race axle, further these machines faces some problems such as failures and short stoppages. Here I will mention their names and their functions and in the next chapter we will analyze what we found and how is the situation now at the company. I use the same name of these machines/ workstations according to the names, which the company already used, for more understanding and to match the data, which we enclose in appendix. The first machine is Fr halvor, and its function is to hiss the half pipes. The second one is Svets + Stuking, and its function is to sprain the half pipes plus to weld them by the robot. The third one is the Robot, and its function is to weld. The fourth one is Breschia, and its function is to hiss and revise the half pipes. The fifth one is Mazack and is function is to hiss the half pipes the last one is the Komplett and its function is to revise the half pipes. 4.10 Data collections

According to the Capacity verifying data collection, which the company did during one daily shift to monitor the working capacity and to figure out the type of failures, technical

stoppages and other stoppages in six significant machines. In this measurement test they have calculated the down time that the machines did not operate, due to several reasons, and we can see all the details as shown below in the tables:

First workstation Fr halvor:

Start Finish Type of short

stoppages

Minutes

06 00 06 10 Starts late 10

07 42 07 50 Waiting for operator 8

07 56 08 08 Replace knife 14

08 31 08 49 Break 18

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12 00 12 30 Lunch

13 24 14 00 Cleaning 36

Sum 145

The original data is enclosed in the appendix page 41. Figure 4.6 Second workstation Svets + Stuk.

stoppages

Minutes

06 00 06 09 Starts late 9

07 13 07 18 Bringing raw material 5

07 40 07 41 Break 1 07 51 07 52 Break 1 08 30 08 50 Break 20 10 31 10 50 Break 19 11 57 12 00 Finished earlier 3 12 00 12 30 Lunch 12 30 12 35 Starts late 5 13 39 14 00 Cleaning 21 Sum 84

The original data is enclosed in the appendix page 42. Figure 4.7

Third workstation Robot

stoppages Minutes 06 00 06 07 Starts late 7 08 30 08 50 Break 20 09 15 09 22 Robot adjustments 7 10 31 10 50 Break 19 11 57 12 00 Finish earlier 3 12 00 12 30 Lunch 12 30 12 35 Starts late 5 13 32 12 35 Robot adjustments 3 13 54 14 00 Cleaning 6 Sum 70

Fourth workstation Breschia

stoppages

Minutes

06 00 06 10 Starts late 10

07 42 07 46 Replace knife 4

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18 07 58 08 10 Replace knife 12 08 35 08 49 Break 14 09 45 09 49 Waiting operator 3 09 49 09 53 Replace knife 4 10 04 10 06 Replace knife 2 10 20 10 24 Break 4 10 41 10 48 Replace knife 7 11 24 11 26 Waiting operator 2 11 29 11 33 Tools 4 11 43 11 45 Tools 2 12 00 12 30 Lunch 12 30 12 44 Break 14 13 26 14 00 Cleaning 34 Sum 118

The original data is enclosed in the appendix page 44. Figure 4.9 Fifth workstation Mazak

stoppages Minutes 06 00 06 10 Starts late 10 06 10 06 18 Start problem 8 06 20 06 29 Machine stop 9 06 44 06 55 Replacement of tools 11 06 57 06 59 Machine stop 2 07 17 07 21 Replacement of tools 4 08 00 08 07 Changing of operator 7 08 15 08 16 OPK 1 08 35 08 49 Break 14 09 18 09 23 Replacement of tools 5 09 34 09 43 Break 9 10 49 10 57 Truck driving 8 11 04 11 06 Machine stop 2 11 28 11 49 Tools reparation 21 12 00 12 30 Lunch 12 30 12 45 Break 15 12 57 12 58 Machine stop 1 13 26 13 41 Machine stop 15 13 48 14 00 Cleaning 12 Sum 144

Sixth workstation Komplett

stoppages

Minutes

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06 09 08 10

08 30 08 50 Break 20

09 15 09 19 Adjustment 4

09 24 09 30 Brings raw material 6

09 42 09 56 Truck driving 14 09 56 10 18 Production test 22 10 33 10 50 Break 17 11 08 11 14 Truck driving 6 11 40 11 54 Stop due to information 14 11 57 12 00 Finish earlier 3 12 00 12 30 Lunch 12 30 12 33 Starts late 3 12 33 13 02 Adjustment of production 29 13 45 14 00 Cleaning 15 Sum 129

This table shows the real total processed cycle time to produce one piece for each involved machine.

Fr halvor Svets+ Stuk

Robot Breschia Mazak Komplett Total time sec. Time per

piece sec.

692,5 645,88 1425,0 796,80 1110,0 909,47 5579,65 The original data is enclosed in the appendix page 39,40. Figure 4.12

This table shows the possibly technical faults, which occur during the operations for the involved machines. The original data is enclosed in the appendix page 32,33. Figure4.13 Machines Fr halvor Svets +stuk Robot Breschia Mazak Komplett Fault description Electric fault and the digital scale does not work The ring, which is used for sprain, is worn, so the pipe gets stuck. Non fault has been registered at closely time Revising can only works on one direction Coolant pump does not work Non fault has been registered at closely time

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This table shows the causes, which are behind the failures. The original data is enclosed in the appendix page 33,34. Figure 4.14.

Machines Fr halvor of Fila

Svets +stuk

Breschia Mazak The causes The cause

behind the digital scale is not working is unknown yet. A fault search needs. Bad quality of the rings or an overload puts on the ring. According to the diagnoses, measurement of x-scale the result shows that there is dirt inside of the machine, which caused that the belt of the engine gets broken. Coolant pump has been broken 4.11 Possibly faults

According to the data from the company there are some examples about the possibly faults, or emergence maintenance, which occur during the operation. The table above gives a briefly description of the faults, but in the tables below you can find more details about the labour cost, time delay, downtime for each involved machine and the formula which have been used to calculate these examples.

4.11.1 Example 4.1 Breschia machine

This table shows the activities about three scenarios that the revising machine Breschia faces, when the machine operates only on one direction. The original data is enclosed in the

appendix page 34. Figure 4.15.

Breschia

Activities Case1 Case2 Case3

Time to find the fault (own repairman)

4 hours 4 hours

Time to find the fault (external repairman)

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Time to fix the fault (own repairman) 2 hours 2 hours Labour cost (own repairman) 220kr/h 220kr /h 220kr/h Total downtime for the machine

6 hours 22 hours 24 hours

Time to order the spear parts and bring it home 16 hours 16 hours Labour cost (external reppaimar) 500kr/h 4.11.2 Example 4.2

This table shows the activities when the revising machine Fr halvor or Fila has electric fault and the digital scale does not work. The original data is enclosed in the appendix page 33. Figure 4.16.

Fr halvor or Fila Activates

Time to find the fault (own repairman) 1 hour

Labour cost (own repairman) 220kr/h

Time to fix the fault (own repairman) 1 hour Time to order the spare part and bring it home 16 hours Total downtime for the machine 18 hours

4.11.3 Example 4.3

This table shows the activities when the revising machine Mazak gets stop due to the coolant pump. The original data is enclosed in the appendix page 33. Figure 4.17.

Mazak Activates

Time to find the fault (own repairman) 6 hour Time to fix the fault (external repairman) 3 hours Labour cost (own repairman) 220kr/h Labour cost (external repairman) 500kr/ h Total downtime for the machine 9 hours

4.11.4 Example 4.4

This table shows the activities when the sprain machine gets stop due to the ring was worn and the pipe gets stuck. The original data is enclosed in the appendix page 33. Figure 4.18.

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Stuk Activites

Time to find the fault (own repairman 2 hours Labour cost (own repairman) 220kr/h Total downtime for the machine 2 hours

Calculation result per piece product.

Manufacturing cost 4277,23 kr

Selling price 4 566,00 kr

Figure 4.14. The original data is enclosed in the appendix page 38.

4.12 Calculations Formula:

To calculate the down time, the labour cost and how much it will cost the company according to emergency maintenance examples and the capacity verifying data collection test the fowling formula has been used:

1-Manufacturing price per piece – Selling price per piece = Profit.

2-The proportion time percentage for each machine = the time to produce one piece for each machine / the real total processed cycle time to produce one piece.

3-Machine contribution on the total profit margin = proportion time percentage * Profit margin.

4- the time to produce one piece in second / 60 = total time in min per piece. 5- Down time * 60 / total time in min per piece = number of lost pieces

6- Machine contributing on the total profit margin * Number of lost pieces = lost money due to down time.

7-Number of working hour for the repairman * salary per hour = labour cost. 5. Analysis

In this chapter the focus will be mostly on the information, and the data that have a correlation with maintenance, to be able to make the suitable calculations. On the other hand a briefly explanation will be done about the other reasons for more understanding.

5.1 First workstation Fr halvor:

As shown in the table (4.6 in chap. 4) is not all the downtime has connection with maintenance but also due to some another reasons. For example 67 min due to operator delay, 10 min due to starting late, and the remaining is due to either lunch or break, but there is only 14 min due to replacing the knifes, which has a correlation with maintenance. A calculation will be done that to know how much money this will cost the company.

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Calculation:

Manufacturing cost /piece = 4277,23 kr Selling price /piece = 4566 kr

Profit / piece = 4566 - 4277,23 = 288,77 kr /piece

-The real total processed cycle time to produce one piece is 5579,65 sec.

-The real total processed cycle time for this machine to produce one piece = 692,5 sec. -The proportion time percentage 692,5/5579,65 = 0,124 (its equal to 12,4 % of the total time). -The profit is 288,77 = 100 %.

-Machine’s proportion of the profit margin 0,124 * 288,77 =35,81 kr. -Time to produce one piece 692,5 / 60 = 11,54 (min/piece).

-Total down time / total time to produce one piece 14 / 11,54 = 1,2 (lost pieces). Total:

1,2 * 35,81 = 42,972 kr (lost money due to 14 min the machine did not operate). 5.2 Second workstation Svets + Stuk.

As shown in the table (4.7 in chap.4) there is no any downtime has a correlation with maintenance in this workstation, but also due to some another reasons, such as management, operation and maybe logistic.

5.3 Third workstation Robot

As shown in the table (4.8 in chap.4) there is only 10 min downtime due to the adjustment of the robot. The remaining are due to some another reasons such as operation etc.

Calculations:

-The real total processed cycle time for this machine to produce one piece= 1425 sec. -The proportion time percentage, 1425/5579,65 = 0,255(its equal to 25,5 % of the total time). -The profit is, 288,77 = 100 %.

-Machine’s proportion of the profit margin, 0,255* 288,77 =73,636 kr. -Time to produce one piece, 1425/60 = 23,75(min/piece).

-Total down time / total time to produce one piece, 73,636 / 23,75 = 3,1 (lost pieces). Total:

3,1 * 10 = 31 kr (lost money due to 10 min downtime of the Robot).

5.4 Fourth workstation Breschia

As shown in the table (4.9 chap.4) there is only 37 min downtime due to the replacing of the knifes and tools, which has a correlation with maintenance, but the remaining downtime due to something else such as operation etc.

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Calculations:

-The real total processed cycle time for this machine to produce one piece = 796,8 sec. -The proportion time percentage 796,8 /5579,65 = 0,143 (its equal to 14,3 % of the total time).

-The profit is 288,77 = 100 %.

- Machine’s proportion of the profit margin 0,143* 288,77 =41,29 kr. -Time to produce one-piece 796,8/60 = 13,28(min/piece).

-Total down time / total time to produce one piece 37 / 13,28 = 2,786 (lost piece). Total:

2,786 * 41,29 = 115,03 kr (lost money due to 37 min downtime of the Robot).

5.5 Fifth workstation Mazak

As shown in the table (4.10 chap.4) there is 78 min downtime due to the replacing of the tools and short stoppages, which has a correlation with maintenance, but the remaining downtime is due to something else such as operation, management etc.

Calculations:

-The real total processed cycle time for this machine to produce one piece = 1110,0 sec. -The proportion time percentage1110.0 /5579,65 = 0,199(its equal to 19,9 % of the total time).

-The profit is 288,77 = 100 %.

-Machine’s proportion of the profit margin 0,199* 288,77 =57,44 kr. -Time to produce one piece, 1110 / 60 = 18,5 (min / piece).

-Total down time / total time to produce one piece, 78 / 18,5 = 4,2 (lost pieces). Total:

4,2 * 57,44 = 241,27 kr (lost money due to 78 min downtime). 5.6 Sixth workstation Komplett

As shown in the table (4.11 chap.4) there is only 4 min downtime due to adjustment, which has a correlation with maintenance, and the remaining is due to some another reasons such as operation, logistic, management etc.

-The real total processed cycle time for this machine to produce one piece = 909,47 sec. -The proportion time percentage, 909,47 /5579,65 = 0,163(its equal to 16,3 % of the total time).

-The profit is 288,77 = 100 %.

-Machine’s proportion of the profit margin, 0,163* 288,77 =47,069 kr -Time to produce one piece, 909,47 / 60 = 15,157 (min / piece).

-Total down time / total time to produce one piece, 4 / 15,157 = 0,26 (lost pieces). Total:

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0,26 * 47,069 = 12,42 kr (lost money due to 4 min downtime)

OBS: To replace the tools and knifes is a normal action according to the drift and

maintenance manager, but is calculated here for its importance and to be considered by the company for the reasons which will be mentioned and explained in the next chapter. 5.7 Emergency maintenance calculations (four examples)

In this section a calculation will be done to show how much money it’s cost for each machine which are shown in the chapter 4 and the calculation as shown below:

5.7.1 Example 4.1. The machine, which called Breschia -Manufacturing cost /piece = 4277,23 kr

-Selling price /piece = 4566 kr

-Profit / piece = 4566 - 4277,23 = 288,77 kr /piece -The profit is 288,77 = 100 %.

-The real total processed cycle time for Breschia to produce one piece = 796,80sec. -Machine’s proportion time of the total cycle time is 796,80/ 5579,65 = 0,143 (its equal to 14,3 % of the real total processed cycle time to produce one piece)

- The proportion of Breschia converted in to money is 0,143 * 288,77 = 41,29 kr/piece Case No1:

Own repairman and the spare part are available at the storeroom. Time to find the fault = 4 hours.

Time to repair = 2 hours.

1 hour /repairman salary = 220 kr. Down time = 6 hours.

The sum:

Repairman salary, 6 * 220 = 1320 kr.

Time to produce one piece, 796,80 / 60 = 13,82 min.

Number of hours * 60min/ time to produce one piece, 6 * 60 / 13,82 = 26,049 (lost pieces). Lost pieces* proportion of money = 26,049 * 41,29 = 1075,57 kr (lost money due to down time).

Total:

1320 + 1075,57 = 2395,57 kr. Case No2:

Own repairman but there is no spare part in the storeroom. Time to find the fault = 4 hours.

Time to order the belt and bring it home = 16 hours. Time to repair = 2 hours.

1 hour / repairman salary = 220 kr. Down time for the machine = 22 hours.

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26 The sum:

6 * 220 = 1320 kr (repairman salary).

Time to produce one piece, 796,80 / 60 = 13,82 min.

Number of hours * 60min/ time to produce one piece, 22 * 60 / 13,82 = 95,51 (lost pieces). Lost pieces* proportion of money, 95,51 * 41,29 = 4100,56 kr (lost money due to down time).

Total:

1320 + 4100,56 = 5420,56 kr. Case No3:

The repairman and the pare part are not available at the company. Time to find the fault (external repairman) = 6 hours.

Time to order the belt and bring it home = 16 hours. Time to repair (own repairman) = 2 hours.

1 hour work / repairman salary = 220/hour kr.

1 hour work / expert repairman salary which the company hired = 500/hour kr. Down time for the machine = 24 hours.

The sum:

Repairman salary that is belong the company, 2 * 220 = 440 kr. The expert repairman salary 6 * 500 = 3000 kr.

Time to produce one piece = 796,80 / 60 = 13,82 min.

Number of hours * 60min/ time to produce one piece= 24 * 60 / 13,82 = 104,19 (lost pieces). Lost pieces* proportion of money =104,19 * 41,29 = 4302.00 kr (lost money due to stop time).

Total:

440 + 3000 + 4302,00 = 7742 kr.

5.7.2 Example 4.2.The machine, which called Fr halvor or Fila -Manufacturing cost /piece = 4277,23 kr.

-Selling price /piece = 4566 kr.

-Profit / piece = 4566 - 4277,23 = 288,77 kr /piece. -The profit is 288,77 = 100 %.

-The real total processed cycle time for Fr halvor of Fila to produce one piece = 692,5 sec. -Machine’s proportion time of the total cycle time is 692,5 / 5579,65 = 0,173 (its equal to 17,3 % of the real total processed cycle time to produce one piece).

-The proportion of this machine converted in to money is 0,173* 288,77 = 49,957 kr/piece. -Fault search by own repairman = 1 hour.

-Assembly the spare part = 1 hour.

-Time to bring the spare part to the company = 16 hours. -Down time for the machine = 18 hours.

-Labour cost for 1 hour = 220 kr. .