Effective Maintenance Management
By V. Narayan
()
About this ebook
- Provides a risk reduction model which links maintenance to these risks.
- Enables readers to make the link between maintenance on one hand and safety, profitability, and asset life on the other.
- Examines risks faced during the life cycle of a process plant.
- Discusses a high cost, high downtime maintenance activity, namely plant shutdowns.
- Provides an in-depth look at qualitative and quantitative risks.
- Includes a table of codes that can be used directly or adapted for use in most maintenance management systems.
- Keeps mathematics to a minimum.
- Includes chapter previews and summaries, a list of acronyms, and a glossary of terms.
Providing readers with a clear rationale for doing maintenance, this completely updated edition and unique guide is written in a language and style that practicing engineers and managers can understand and apply easily. Effective Maintenance Management examines the role of maintenance in minimizing the risks relating to safety or environmental incidents, adverse publicity, and loss of profitability. In addition to discussing risk reduction tools, it explains their applicability to specific situations so the readers can select the tool that fits their requirements. Aiding to bridge the gap between designers/maintainers and reliability engineers, this guide is sure to help businesses utilize their assets effectively, safely, and profitably.
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Effective Maintenance Management - V. Narayan
Effective
Maintenance
Management
Risk and Reliability Strategies for
Optimizing Performance
Second Edition
V. Narayan
Industrial Press Inc.
New York
Copyright
Narayan, V. Effective maintenance management
second edtion
risk and reliability strategies for optimizing
performance / V. Narayan.
p. cm
ISBN 978-0-8311-3444-0
1. Plant maintenance—Management. 2.Reliability (Engineering).
3. Risk Management. I. Title.
A full catalog record for this book is available from the Library of Congress
Effective Maintenance Management
Second Edition
Interior Text and Cover Design: Janet Romano
Managing Editor: John Carleo
Copy Editor: Robert Weinstein
Industrial Press Inc.
989 Avenue of the Americas
New York, New York 10018
Copyright © 2012. Printed in the United States of America.
All rights reserved. This book or parts thereof may not be reproduced,
stored in a retrieval system or transmitted in any form without the
permission of the publisher.
10 9 8 7 6 5 4 3 2 1
Dedication
To the memory of my late parents Venkatraman
and Meenakshi, and my late parents-in-law Saraswathy
and Ramamurthy.
Foreword
Some years ago, I met the author at an international conference in Exeter. Over lunch, he outlined some of his ideas on risk management and system effectiveness —with a fork and a couple of knives as props. I found his approach refreshing, different, and worth pursuing. These were largely in line with my own views on System Operational Success, so I encouraged him to write this book.
As the author had many years of experience in the maintenance of refineries, gas plants, and offshore platforms, as well as engineering and pharmaceutical plants, I thought that the blend of theory and practice would be useful. The relevance of theory is brought home with a number of illustrative examples from industrial situations, so I feel my point is well made. His approach to maintenance is holistic and as such it could be applied to situations involving financial risk, public health or the maintenance of law and order.
He explains the raison d’être of maintenance; this should help maintenance managers justify their efforts rationally. The discussion on risk perceptions and why they are important may strike a chord with many of us. Knowing what tools to use and where to apply them is important as also how to manage data effectively.
The book will help maintenance managers, planners, and supervisors, as well as students, understand how best to reduce industrial risks. This should help them improve both technical and production integrity, leading to fewer safety, health, and environmental incidents while increasing the quality and production levels and reducing costs.
Dr. Jezdimir Knezevic
MIRCE Akademy
Acknowledgements
I have had the good fortune to work with talented and experienced people throughout my working life. In writing this book, I have used the knowledge gained from the interaction with the thinking and work of many colleagues, associates and friends. I hope I have done justice to all of them, and that readers, especially maintenance practitioners, apply the knowledge they gain, by improving the effectiveness of maintenance in their Industry.
I met Dr. Jezdemir Knezevic in 1998 by chance at a business party. In the course of a brief discussion, I realized that I had met a teacher who worked in the real world. His practical and yet mathematically sound approach was refreshing, and a friendship began almost immediately. He, in turn, encouraged me to write the first edition of this book. Once I completed the manuscript, he reviewed it critically and made a number of useful suggestions to improve both content and readability.
My colleagues at work have helped shape my thinking. They are too numerous to name, so I will not attempt this task. One in particular, Greg Stockholm, of Shell Chemicals Inc., taught me the Root Cause Analysis process. While problem solving and failure analysis are essential skills for every maintainer, I had not realized till after Greg’s course that there was a structured and logical process available. I have, in turn, trained many others to use Root Cause Analysis and Reliability Centered Maintenance. The feedback and comments made by several hundred students from around the world have helped shape my ideas.
When working on the second edition, I received help from Remo van Namen, who has done a lot of good work on the importance of maintenance work compliance — Figure 12.12 is based on his field observations. Sourav Kumar Chatterjee, an authority on rotating machinery provided insights on vibration analysis, e.g., the information in Table 12-3.1.
Many friends, some in Academia and others in Industry or Consultancy firms have reviewed the first and/or second edition of this book. Their comments and advice have been invaluable. The reviewers include Paddy Kirrane, Jim Wardaugh, Nick Schulkins,Roger Peres, Rob Knotts, Mahen Das, Cor van Alphen, Jane Goodacre, and Dr. Helge Sandtorv. At his initiative, Dr. Sandtorv forwarded a copy to Prof. Marvin Rausand of the Norwegian University of Science and Technology. Dr. Rausand graciously reviewed the first six chapters, and provided detailed comments. My son Sharad, daughter Shweta, father-in-law Ramamurthy and a family friend Rajesh, reviewed it from the lay persons’ point of view. All the reviewers have been very constructive and assisted me greatly in bringing the book to print.
I offer my thanks to Shell U.K Exploration and Production, who allowed me to proceed with this effort while I was working with them.
Keith and Valerie Pottinger converted my sketches and charts into presentable material, corrected my grammar, paginated, and brought this book to its finished form. Notwithstanding many pressures on their time, they have juggled their schedules to help a friend. Sadly, Valerie passed away after the first edition was published, and I miss her cheerful support. My friend Richa Saxena used her graphic arts skills to draft several sample book cover designs.
My publishers, Industrial Press Inc., have been very helpful from the time I first made contact with them. I thank John Carleo, Janet Romano, and Patrick Hansard for their constructive and supportive approach. Working with the copy editor Robert Weinstein has been a delightful experience. He has a great eye for detail and a constructive approach. Throughout the time I was busy with the book, my wife Lata has been patient and considerate, thoughtful and helpful. I am sure I could not have made it without her love and support.
To all of them, I offer my gratitude.
Preface to the Second Edition
Since publication of the first edition in 2004, risk-based approaches to maintenance and reliability have moved firmly to the forefront of good practices. Two processes, Risk-Based Inspection and Instrumented Protective Functions, have been available for a number of years; they have been further developed and are now established as must use
techniques. Along with Reliability Centered Maintenance, they provide an integrated suite of readily usable and useful techniques for the maintainer.
Many maintainers find themselves in businesses where the assets are unreliable, profitability is poor, and budgets are under pressure. The financial crisis of 2008 and its aftermath have made matters much worse. In response, we have provided some recipes to address these issues in the form of a new chapter in this edition. New sections in Chapter 10 explain and give clear guidance on the two risk-based processes mentioned above.
In Chapter 8, we have added accounts of the Longford (1998), Columbia (2003) and Sayano-Shushenskaya (2009) disasters. These reinforce the evidence for the event escalation theory explained in Chapter 9.
As is the norm with new editions, we have taken the opportunity to do some housekeeping. Internet website references (URLs) seem volatile and a few of the earlier references are no longer valid. Some books references are also outdated, as new publishers have taken over and ISBNs have changed. These are now corrected.
There is one other significant change – the book summary has been expanded and has now become a new chapter. Apart from the usual corrections and additions, the remainder of the book remains largely faithful to the first edition.
I welcome feedback from everyone using this book. Please write to me at the publisher’s email address: info@industrialpress.com
V. Narayan
Aberdeen, Scotland
Preface to the First Edition
The traditional view of the general public towards maintenance is one of elegant simplicity. Their contact is often limited to automobile or appliance repair workshops. From this experience, maintenance appears to be an unavoidable activity that costs money and takes time. The view held in the board rooms of industry appears to match this perception.
Good news is generally not news at all, so people only tend to think of maintenance when things go badly wrong. The moment there is a major safety or environmental incident, the media come alive with news of the maintenance cutbacks, real or imaginary, that have allegedly contributed to the incident. Think of what you saw on TV or read in the newspapers after any of the airline, ferry or industrial disasters, and you will readily recognize this picture.
What do we actually do when we manage a business? In our view, we manage the risk—of safety and environmental incidents, adverse publicity, loss of efficiency or productivity, and loss of market share. A half century ago, Peter F. Drucker¹, a well known management guru, said:
It is an absolute necessity for a business enterprise to produce the profit required to cover its future risks, to enable it to stay in business and to maintain intact its wealth producing capacity.
This is as valid today as it was then. In the maintenance management context, the risks that are of concern to us relate to safety or environmental incidents, adverse publicity, and of loss of profitability or asset value.
We will examine the role of maintenance in minimizing these risks. The level and type of risks vary over the life of the business. Some risk reduction methods work better than others. The manager must know which ones to use, as the cost-effectiveness of the techniques differ. We will look at some of the risk reduction tools and techniques available to the maintainer, and discuss their applicability and effectiveness.
Risks can be quantitative or qualitative. We can usually find a solution when dealing with quantified risks, which relate to the probability and consequence of events. Qualitative risks are quite complex and more difficult to resolve, as they deal with human perceptions. These relate to peoples’ emotions and feelings and are difficult to predict or sometimes even understand.Decision-making requires that we evaluate risks, and both aspects are important. The relative importance of the qualitative and quantitative aspects of risk varies from case to case and person to person. Even the same person may use a different recipe each time. We should not categorize people or businesses as risk-seeking or risk-averse. It is not merely a mindset; the situation they face determines their attitude to risk. All these factors make the study of risk both interesting and challenging.
In this book, we set out to answer three questions:
Why do we do maintenance and how can we justify it?
What are the tasks we should do to minimize risks?
When should we do these tasks?
We have not devoted much time to the actual methods used in doing various maintenance tasks. There are many books dealing with the how-to aspects of subjects such as alignment, bearings,lubrication, or the application of Computerized Maintenance Management Systems. Other books deal with organizational matters or some specific techniques such as Reliability Centered Maintenance. We have concentrated on the risk management aspects and the answers to the above questions.
Throughout this book, we have kept the needs of the maintenance practitioner in mind. It is not necessary for the reader to have knowledge of systems and reliability engineering. We have devoted a chapter to develop these concepts from first principles,using tables and charts in preference to mathematical derivations. We hope that this will assist the reader in following subsequent discussions. Readers who wish to explore specific aspects can refer to the authors and publications listed at the end of each chapter. There is a glossary with definitions of terms used and a list of acronyms and abbreviations at the end of the book.
We believe that maintainers and designers can improve their contribution by using reliability engineering theory and the systems approach, in making their decisions. A large number of theoretical papers are available on this subject, but often they are abstract and difficult to apply. So these will remain learned papers, which practitioners do not understand or use. This is a pity because maintainers and designers can use the help which reliability engineers can provide. We hope that this book will help bridge the chasm between the designers and maintainers on the one hand, and the reliability engineers on the other. In doing so, we can help businesses utilize their assets effectively, safely, and profitably.
¹ The Practice of Management, page 38, first published by William Heinemann in 1955. Currentedition is published by HarperBusiness, 1993, ISBN 0887306136.
TABLE OF CONTENTS
Cover
Title Page
Copyright
Dedication
Foreword
Acknowledgments
Preface to the Second Edition
Preface to the First Edition
Abbreviations and Acronyms
1.The Production and Distribution Process
1.1Process Efficiency
1.2Work and Its Value
1.3Manufacturing and Service Industries
1.4The Systems Approach
1.5Impact of Efficiency on Resources
1.6Maintenance—The Questions to Address
1.7Chapter Summary
2.Process
2.1The Functional Approach
2.2Functional Block Diagrams (FBD)
2.3Failure Modes and Effects Analysis (FMEA)
2.4Effective Planning
2.5Prevention of Failures or Mitigation of Consequences?
2.6Chapter Summary
3.Reliability Engineering for the Maintenance Practitioner
3.1Failure Histograms
3.2Probability Density Function
3.3Mortality
3.4Hazard Rates and Failure Patterns
3.5The Trouble with Averages
3.6The Special Case of the Constant Hazard Rate
3.7Availability
3.8Mean Availability
3.9The Weibull Distribution
3.10Deterministic and Probabilistic Distributions
3.11Age-Exploration
3.12Chapte Summary
Appendix 3-1
Appendix 3-2
4.Failure, Its Nature and Characteristics
4.1Failure
4.2The Operating Context
4.3The Feedback Control Model
4.4Life Without Failure
4.5Capability and Expectation
4.6Incipiency
4.7Limits to the Application of Condition Monitoring
4.8Age Related Failure Distribution
4.9System Level Failures
4.10Human Failures
4.11Chapter Summary
Appendix 4-1
5.Life Cycle Aspects of Risks in Process Plants
5.1Design Quality
5.2Risks During Construction
5.3The Pre-Commissioning and Commissioning Phases
5.4Planning of Maintenance Work
5.5The Operational Phase
5.6Modifications to Plant and Change Control
5.7Maintenance Costs
5.8End of Life Activities
5.9Chapter Summary
6.Process Plant Shutdowns
6.1Factors Affecting Operating Run Lengths
6.2Risks Related to Planned Shutdowns
6.3Planning
6.4Safety and Environmental Hazards
6.5Work Scope and Associated Risks
6.6Quality
6.7Organization
6.8Execution
6.9Specialized Equipment Overhauls
6.10Cost Control
6.11Communication
6.12Contractors
6.13Shutdown Reports
6.14Post-Shutdown Review
6.15Chapter Summary
7.Facets of Risk
7.1Understanding Risk
7.2Descriptive or Qualitative Risk
7.3Factors Influencing Decision-Making
7.4The Quantitative Aspect of Risk
7.5Risk Management Standards
7.6Chapter Summary
8.The Escalation of Events
8.1Learning from Disasters
8.2Hindsight is 20-20 Vision
8.3Foresight—Can We Improve It?
8.4Event Escalation Model
8.5Damage Limitation Model
8.6Failure of Barriers
8.7Event Escalation Relationship
8.8Evaluating Test Frequencies
8.9Incipiency Period
8.10Chapter Summary
9.Maintenance
9.1Maintenance at the Activity Level—An Explanation of Terminology
9.2The Raison D’être of Maintenance
9.3The Continuous Improvement Cycle
9.4System Effectiveness and Maintenance
9.5Chapter Summary
Appendix 9.1
10.Risk Reduction
10.1Frequency or Severity?
10.2Reliability Block Diagrams and Mathematical Modeling
10.3Hazard and Operability Studies (HAZOP)
10.4Fault Tree Analysis (FTA)
10.5Root Cause Analysis (RCA)
10.6Total Productive Maintenance (TPM)
10.7Reliability Centered Maintenance (RCM)
10.8Risk Based Inspection (RBI)
10.9Instrumented Protective Function (IPF)
10.10Compliance and Risk
10.11Reducing Perceived Risks
10.12Chapter Summary
11.Information for Decision Making
11.1Work and the Generation of Data
11.2The Collection of Quantitative Data
11.3The Collection of Maintenance Data
11.4The Collection of Qualitative Data
11.5Errors in Data Collection
11.6Fixed Format Data Collection
11.7Obtaining Information from Data
11.8Decision Support
11.9Procedures
11.10Business Process Management
11.11Chapter Summary
Appendix 11-1
12.The Reliability Improvement Process (TRIP)
12.1The Asset Register
12.2Human Reliability
12.3Getting the Basics Right (GTBR)
12.4Failure Elimination
12.5Planning
12.6Scheduling
12.7Work Preparation
12.8Condition Based Maintenance (CBM)
12.9Compliance
12.10Chapter Summary
Appendix 12-1
Appenidx 12-2
Appendix 12-3
13.Improving System Effectiveness
13.1System Effectiveness
13.2Integrity and System Effectiveness
13.3Managing Hazards
13.4Reducing Risks—Some Practical Steps
13.5Communicating Risk Reduction Plans
13.6The Way Forward
13.7Bridging the Chasm Between Theory and Practice
13.8Maintenance as an Investment
13.9Chapter Summary
Appendix 13-1
14.Book Summary
Glossary
Index
Abbreviations & Acronyms
The following abbreviations and acronyms have been used in the book.
Chapter 1
The Production and
Distribution Process
This book deals with the management of risks through the life cycle of a process plant. We will address the question of why we do maintenance, what tasks we actually need to do, and when we should do them, so as to reduce these risks to a tolerable level and an acceptable cost. We will examine the role of maintenance in obtaining the desired level of system effectiveness, and begin this chapter with a discussion of the production and distribution process. After going through this chapter, the reader should have a better appreciation of the following:
•The production and distribution process and its role in creating value as goods and services;
•Difficulties in measuring efficiency and costs; understanding why distortions occur;
•Determination of value and sources of error in measuring
•Reasons for the rapid growth in both manufacturing and
•Understanding the systems approach; similarities in the manufacturing and service industries;
•Impact of efficiency on the use of resources;
•Maintenance and the efficient use of resources;
•Maintenance—the questions to address.
We need goods and services for our existence and comfort; this is, therefore, the focus of our efforts. We change raw materials into products that are more useful. We make, for example, furniture from wood or process data to obtain useful information. By doing so, we add value to the raw materials, thereby creating products that others need. We can also add value without any physical material being used. Thus, when a nurse takes a patient’s temperature, this information helps in the diagnosis of the illness, or in monitoring the line of treatment.
Another instance of adding value is by bringing a product to the market at the right time. Supermarkets serve their customers by stocking their shelves adequately with food (and other goods). They will not be willing to carry excessive stocks as there will be wastage of perishable goods. Overstocking will also cost the supermarket in terms of working capital, and therefore reduce profit margins. By moving goods to the shelves in time, supermarkets and their customers benefit, so we conclude that their actions have added value. The term distribution describes this process of movement of goods. It adds value by increasing consumer access.
Production processes include the extraction of raw materials by mining, and their conversion into useful products by manufacturing.If the main resource used is physical or intellectual energy,with a minimum of raw materials, we call it a service. The word process describes the flow of work, which enables production of goods or provision of services. In every commercial or industrial venture there is a flow of work, or Business Process. The business can vary widely; from a firm of accountants to a manufacturer of chemicals to a courier service.
In the case of many service industries, the output is information.Lawyers and financial analysts apply their knowledge, intellect, and specialized experience to process data and advise their clients. Management consultants advise businesses, and travel agents provide itinerary information, tickets, and hotel reservations. In all these cases, the output is information that is of value to the customer.
1.1 PROCESS EFFICIENCY
1.1.1 Criteria for assessing efficiency
In any process, we can obtain the end result in one or more ways. When one method needs less energy or raw materials than another, we say it is more efficient. For a given output of a specified quality, the process that needs the least inputs is the most efficient. The process can be efficient in respect of energy usage, materials usage, human effort, or other selected criteria. Potential damage to the environment is a matter of increasing concern, so this is an additional criterion to consider.
If we try to include all these criteria in defining efficiency, we face some practical difficulties. We can measure the cost of inputs such as materials or labor, but measuring environmental cost is not easy. The agency responsible for producing some of the waste products will not always bear the cost of minimizing their effects. In practical terms, efficiency improvements relate to those elements of cost that we can measure and record. It follows that such incomplete records are the basis of some efficiency improvement claims.
1.1.2 Improving efficiency
Businesses try to become more efficient by technological innovation,business process re-engineering, or restructuring. Efficiency improvements that are achieved by reducing energy inputs can impact both the costs and undesirable by-products. In this case, the visible inputs and the undesirable outputs decrease,so the outcome is an overall gain. A similar situation arises when it comes to reducing the input volume of the raw materials or the level of rejections.
When businesses make efficiency improvements through workforce reductions, complex secondary effects can take place. If the economy is buoyant, there may be no adverse effect, as those laid-off are likely to find work elsewhere. When the economy is not healthy, prevailing high unemployment levels will rise further. This could perhaps result in social problems, such as an increase in crime levels. The fact that workforce reductions may sometimes be essential for the survival of the business complicates this further. There may be social legislation in place preventing job losses,and as a result, the firm itself may go out of business.
1.1.3 Cost measurement and pitfalls
There are some difficulties in identifying the true cost of inputs. What is the cost of an uncut piece of diamond or a barrel of crude oil? The cost of mining the product is all that is visible, so this is what we usually understand as the cost of the item. We can add the cost of restoring the mine or reservoir to its original state, after extracting the ores that are of interest, and recalculate the cost of the item. We do not calculate the cost of replenishing the ore itself, which we consider as free.
Let us turn to the way in which errors can occur in recording costs. With direct or activity-based costing, we require the cost of all the inputs. This could be a time-consuming task, and can result in delays in decision making. In order to control costs, we have to make the decisions in time.
Good accounting practice mandates accuracy and, if for this purpose it takes more time, it is a price worth paying. Accounting systems fulfill their role, which is to calculate profits, and determine tax liabilities accurately. However, they take time, making day-to-day management difficult. Overhead accounting systems get around this problem by using a system of allocation of costs. These systems are cheaper and easier to administer.However, any allocation is only valid at the time it is made, and not for all time. The bases of allocation or underlying assumption schange over time, so errors are unavoidable. This distorts the cost picture and incorrect cost allocations are not easy to find or correct.
Subsidies, duty drawbacks, tax rebates, and other incentives introduce other distortions. The effect of these adjustments is to reduce the visible capital and revenue expenditures, making an otherwise inefficient industry viable. From an overall economic and political perspective, this may be acceptable or even desirable. It can help distribute business activity more evenly and relieve overcrowding and strain on public services. However, it can distort the cost picture considerably and prevent the application of market forces.
We have to recognize these sources of errors in measuring costs. In this book we will use the concept of cost as we measure it currently, knowing that there can be some distortions.
1.2 WORK AND ITS VALUE
1.2.1 Mechanization and productivity
When we carry out some part of the production or distribution process, we are adding value by creating something that people want.We have to measure this value first if we want to maximize it. Let us examine some of the relevant issues.
In the days before the steam engine, we used human or animal power to carry out work. The steam engine brought additional machine power, enabling one person to do the work that previously required several people. As a result each worker’s output rose dramatically. The value of a worker’s contribution, as measured by the number of items or widgets produced per hour, grew significantly. The wages and bonuses of the workers kept pace with these productivity gains.
1.2.2 Value added and its measurement
We use the cost of inputs as a measure of the value added, but this approach has some short comings. Consider ‘wages’ as one example of the inputs. We have to include the wages of the people who produced the widgets, and that of the truck driver who brought them to the shop. Next we include the wages of the attendant who stored them, the salesperson who sold them, and the store manager who supervised all this activity. Some of the inputs can be common to several products, adding further complexity. For example, the store manager’s contribution is common to all the products sold; it is not practical to measure the element of these costs chargeable to the widgets under consideration. We have to distribute the store manager’s wages equitably among the various products, but such a system is not readily available. This example illustrates the difficulty in identifying the contribution of wages to the cost. Similarly, it is difficult to apportion the cost of other inputs such as heating, lighting,or ventilation.
We can also consider ‘value’ from the point of view of the customers. First, observe the competition, and see what they are able to do. If they can produce comparable goods or services at a lower price than we can, customers will switch their loyalty. From their point of view, the value is what they are willing to pay. The question is: how much of their own work are they willing to barter for the work we put into making the widgets? Pure competition will drive producers to find ways to improve their efficiency, and drive prices downward. Thus, another way is to look at the share of the market we are able to corner.Using this approach, one could say that Company A, which commands a larger share of the market than Company B, adds more value. Some lawyers, doctors, and consultants command a high fee rate because the customer perceives their service to be of greater value.
Assigning a value to work is not a simple task of adding up prices or costs. We must recognize that there will be simplifications in any method used, and that we have to make some adjustments to compensate for them. Efficiency improvements justified on cost savings need careful checking—are the underlying assumptions and simplifications acceptable?
1.3 MANUFACTURING AND SERVICE INDUSTRIES
1.3.1 Conversion processes
We have defined manufacturing as the process of converting raw materials into useful products. Conversion processes can take various forms. For example, an automobile manufacturer uses mainly physical processes, while a pharmaceutical manufacturer primarily uses chemical or biological processes. Power generation companies that use fossil fuel use a chemical process of combustion and a physical process of conversion of mechanical energy into electrical energy. Manufacturers add value, using appropriate conversion processes.
1.3.2 Factors influencing the efficiency of industries
Since the invention of the steam engine, the productivity of human labor has increased steadily. Some of the efficiency gains are due to improvements in the production process itself. Inventions, discoveries, and philosophies have helped the process. For example, modern power generation plants use a combined-cycle process. They use gas turbines to drive alternators. The hot exhaust gases from the gas turbines help raise high-pressure steam that provides energy to steam turbines. These drive other alternators to generate additional electrical power. Thus, we can recover a large part of the waste heat, thereby reducing the consumption of fuel.
A very significant improvement in productivity has occurred in the last quarter of the twentieth century due to the widespread use of computers. With the use of computers, the required information is readily available, thereby improving the quality and timeliness of decisions.
1.3.3 Factors affecting demand
The demand for services has grown rapidly since World War II. Due to the rise in living standards of a growing population, the number of people who can afford services has grown dramatically. As a result of the larger demand and the effects of economies of scale, unit prices have kept falling. These effects, in turn, stimulate demand, accounting for rapid growth of the services sector. In the case of the manufacturing sector, however, better, longer lasting goods have reduced demand somewhat.
Demographic shifts have also taken place, and in many countries there is a large aging population. This has increased the demand for health care, creating a wide range of new service industries. Similarly, concern for the environment has led to the creation and rapid growth of the recycling industry.
1.4 THE SYSTEMS APPROACH
Some of the characteristics of the manufacturing and service industries are very similar. This is true whether the process is one of production or distribution. We will consider a few examples to illustrate these similarities.
A machinist producing a part on an automatic lathe has to meet certain quality standards, such as dimensional accuracy and surface finish. During the machining operation, the tool tip will lose its sharpness. The machine itself will wear out slightly, and some of its internal components will go out of alignment. The result will be that each new part is slightly different in dimensions and finish from the previous one. The parts are acceptable as long as the dimensions and finish fall within a tolerance band. However, the part produced will eventually fall outside this band. At this point, the process has gone out of control, so we need corrective action. The machinist will have to replace the tool and reset the machine, to bring the process back in control. This is illustrated in Figure 1.1.
In a chemical process plant, we use control systems to adjust the flow, pressure, temperature, or level of the fluids. Consider a level-controller on a vessel. The level is held constant, within a tolerance band, using this controller. Referring to Figure 1.2, the valve will open more if the level reaches the upper control setting, allowing a larger outward flow. It will close to reduce flow, when the liquid reaches the lower control setting. As in the earlier example, here the level-controller helps keep the process in control by adjusting the valve position.
Consider now a supermarket that has a policy of ensuring that customers do not have to wait for more than 5 minutes to reach the check-out counter. Only a few check-out counters will be open during slack periods. Whenever the queues get too long, the manager will open additional check-out counters. This is similar to the control action in the earlier examples.
Companies use internal audits to check that the staff observes the controls set out in their policies and procedures. Let us say that invoice processing periods are being audited. The auditor will look for deviations from norms set for this purpose. If the majority of the invoices take longer to process than expected, the process is not in control. A root cause analysis of the problem will