Material Management

Question 2: What is an inventory control? Discuss various techniques of inventory control. Give examples of any five items in a 500 bed hospital? Definition :- Inventory control is a supervision of the supply and storage and accessibility of items in order to insure an adequate supply without excessive oversupply It can also be referred as internal control - an accounting procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error etc Techniques :There are several techniques a person can use to increase profitability and streamline workflow via proper inventory control. Through research, competitive analysis and experience, an effective business leader can balance costs versus benefits to storing and ordering the necessary supplies to ensure business vitality. The supply chain is made of all materials that help you to produce, market and supply your product. Inventory control means that you have identified every facet of your supply chain and its logistics. FIFO 1. If you deal in perishable items, FIFO (first in, first out) is an important concept to understand and maintain throughout the supply chain. If a grocery store did not rotate their stock, new stock coming in would get taken immediately and older stock would expire, causing great loss. Stock must be arranged by date received. Cutting Edge Control 2. For a great deal of stock that needs constant management, consider bar codes or RFID (radio frequency identification) where hand-held readers can immediately tell you where valuable merchandise is. Many IT inventory programs on the market provide a wealth of features including tie-ins to USPS, Fed-Ex and/or UPS to track merchandise and provide real-time logistics. Costs versus Convenience 3. A Business owner must balance space available for extra stock versus speed of product turnover, fees for storage, cost in bulk versus regular ordering, and whether clients/end users would be willing to wait. Stock Levels 4. Defining your minimum stock level will allow you to set up regular inspections and reordering of supplies. Take into account emergencies and vendors taking longer than average to replenish stock. This will aid you in arriving at JIT (just in time) ordering, where

stock is held for a minimum amount of time before moving on to the next stage in the supply chain. Security 5. Stock security is a necessary cost. Many experts recommend separating staff that is responsible for stock management from staff that has financial responsibility. Many times, shoplifting and thievery is committed by employees rather than a stranger. Security guards, cameras, bar codes and security devices are used by most businesses since the cost of security is minimal compared to the millions of dollars that U.S. businesses lose each year to stolen goods. Training staff in identifying potential security issues and having a clear method of reporting violations is important in reducing crime. Often, shoplifters and thieves use standard techniques to distract employees and take stock. Stock on Hand 6. Having a great deal of stock on hand has both positive and negative consequences. Having an immediate supply means that end users get their product that much sooner. Speed and immediate gratification for a client can make the difference not only in a sale, but recommendations, repeat business and client loyalty. In the modern business environment where every business is a global business, an emergency or unforeseen circumstance anywhere in the world can render competition without resources you have on hand. Of course, one must take into account using capital in bulk buys, management and insurance costs as well as goods perishing or becoming obsolete

The aim of inventory control in hospital is to:a. Maintain availability of item anywhere anytime in the hospital at optimum cost b. Optimize cost by analyzing holding cost, ordering cost and stock out cost to have minimum cost of inventory. c. Minimize dead stock and obsolesce. The whole principle is availability of items keeping cost to minimum; hence type of inventory cost is to be understood by all students. Process for keeping track of objects or materials. In common usage, the term may also refer to just the software components. Modern inventory control systems rely upon barcodes, and potentially RFID tags, to provide automatic identification of inventory objects. In an academic study[1] performed at Wal-Mart, RFID reduced Out of Stocks by 30 percent for products selling between 0.1 and 15 units a day. Inventory objects could include any kind of physical asset: merchandise, consumables, fixed assets, circulating tools, library books, or capital equipment. To record an inventory transaction, the system uses a barcode scanner or RFID reader to automatically identify the inventory object, and then collects additional information from the operators via fixed terminals (workstations), or mobile computers.

Applications of Inventory System :An inventory control system may be used to automate a sales order fulfillment process. Such a system contains a list of order to be filled, and then prompts workers to pick the necessary items, and provides them with packaging and shipping information. Real time inventory control systems use wireless, mobile terminals to record inventory transactions at the moment they occur. A wireless LAN transmits the transaction information to a central database. Physical inventory counting and cycle counting are features of many inventory control systems which can enhance the organization.

Techniques of Inventory Control in Hospital :The inventory control is a scientific system by which to decide as to how much to order, when to order and how often to order ensuring availability of vital and essential drugs all the time but keeping cost minimum. The basic technique to calculate it are ABC, VED and EOQ which are discussed as follows:1. ABC analysis This is based on Paretos Law where 20% items may be accounting for 80% of total cost annually. The analysis focuses on cost of items and need to control these items. There are significant few require most attention. The ABC analysis states:a. 10% of drugs would cost 70% of the total of drugs b. 20% of drugs would cost 20% of total drug cost c. 70% of drugs would cost 10% of total cost (Group A) (Group B) ( Group C)

The figure shows percentage of inventory items and percentage of average inventory usage value. The demand multiplied by unit price giving inventory worth of annual consumption. It can be seen from the figure 10% items are consuming 70% of annual usage value which are A class items(significant few) another 20% of items account for 20% annual usage value and another 70% items account for 10% expenditure on material consumption which constitute insignificant money are called C items. To prepare ABC analysis we may follow following steps:a. Calculate annual usage value of each drugs.( Annual usages value = Annual demand X unit cost) b. Keep in order according to annual usage value. That means most expensive items to be kept at top and cheapest at bottom c. A cut off point where there is perceptible sudden change of cost which can also be found out by a graph and it would approximately be at 10% items,20% items are where change can be observed, however there may be variation of up to 5%.

Let us imagine medical store of a small hospital has 100 items on its inventory and the total annual expenditure is Rs. 10, 00,000. The items can be arranged in the descending value of their annual cost in the following manner:-

Sr.No.

Name of the Items Inj. Ampicillin Inj. Ciprofloxacin Inj. Dextrose 5% 540 ml Inj. Normal saline 540 ml Inj. Cefatoxim 1 gm Inj. Streptokinase Tab Ciproflaxacin Inj. Haemaccel Fluothane Inj. Dexamethasone 2 ml --------------Inj. Urograffin Acriflavine

1. 2. 3. 4. 5. 6 7 8 9 10

Annual Consumption in Rs. 91000 89000 83000 81000 71000 65000 63000 63000 51000 47000

Cumulative Total in Rs. 91000 180000 263000 344000 415000 480000 543000 543000 653000 700000

Cumulative Percentage 9.1 18 26.3 34.4 41.5 48 54.3 54.3 65.3 70

Category

A(70%)

11 12 30 100

---------------------------300

----------------900000 1000000

------------90 100

B( 20%) C( 10%)

The idea of doing ABC analysis is to keep strict financial control and it implies that A items have to be under strict control of higher management since it consume 70% of consumption cost its safety stocks to be low and need high turn over and frequent procurement and requirement of these items need to audited. B items fall in between A and C items and need moderate control by middle management since consumption cost is 20% C items are consuming 10% of cost hence need control by lower management, can have high safety stock and procurement could be less frequent.

Statement showing one month analysis of items for a 500 bedded hospital

Item Code

Item Name Face Mask-Sterile [1x50] Adrenor Inj. Three Way[Polymed] Intracath No- 22 [Poly] Pentowok Inj

UOM Issue

Qty Sold

Total Sale

Net Amt

Total Cost

Profit

Profit(%)

SD001304 DM003129

Number Number

821 296

8210 38480

8210 38480

1403.65 7696

6806.35 30784

83 80

SD000766

Number

581

34860

34860

4166.35

30693.65

88

SD000591 DM007361

Number Number

10 114

750 7125

750 7125

77 1926.6

673 5198.4

90 73

Answer 6:

Lead timeA lead time is the latency (delay) between the initiation and execution of a process. For example, the lead time for ordering a new car from a manufacturer may be anywhere from 2 weeks to 6 months. In industry, lead time reduction is an important part of lean manufacturing. Journalism Lead time in publishing describes the amount of time that a journalist has between receiving a writing assignment, and submitting the completed piece. Depending on the publication, lead times can be anything from a couple of hours to many months. Supply chain management A more conventional definition of lead time in the supply chain management realm is the time from the moment the customer places an order to the moment it is received by the customer. In the absence of finished goods or intermediate (work in progress) inventoryit is the time it takes to actually manufacture the order without any inventory other than raw material Manufacturing In the manufacturing environment, lead time has the same definition as that of Supply Chain Management, but it includes the time required to ship the parts from the supplier. The shipping time is included because the manufacturing company needs to know when the parts will be available for material requirements planning. It is also possible for lead time to include the time it takes for a company to process and have the part ready for manufacturing once it has been received. The time it takes a company to unload a product from a truck, inspect it, and move it into storage is non-trivial. With tight manufacturing constraints or when a company is using Just In Time manufacturing it is important for supply chain to know how long their own internal processes take. Example Company A needs a part that can be manufactured in two days once Company B has received an order. It takes three days for company A to receive the part once shipped, and one additional day before the part is ready to go into manufacturing.y y y

If Company A's Supply Chain calls Company B they will be quoted a lead time of 2 days for the part. If Company A's Manufacturing division asks the Supply Chain division what the lead time is, they will be quoted 5 days since shipping will be included. If a line worker asks the Manufacturing Division boss what the lead time is before the part is ready to be used, it will be 6 days because setup time will be included.

Semiconductor industry

About Lead time as per company rules In very complex manufacturing environment, like the manufacture of microprocessors, a usual Lead Time may be between 57 weeks. This is due to the sequence of operations, where there are multiple very similar steps repeated, and none can be skipped. If a manufacture of a CPU requires 35 exposure masks, that translates approximately into 35 x ( photoresist coating, exposure, development, main process step (like etching, diffusion, metal filling), photoresist stripping and/or polishing + other possible steps ) plus additional steps before and after all processing. There are wait times not only associated with scheduling a product into production, since the product lines are busy, but also a beginning run of production goes to scrap (plus tool change and alignment takes time), and there are possible wait times of batches being processed during the production. (Not all machinery works at the same speed, or requires maintenance steps, tool change, plus there is the time it takes to physically transport the silicon wafers from one processing machinery to another in small transport batches.) Project management In project management lead time is the time it takes to complete a task or a set of interdependent tasks. The lead of the entire project would be the overall duration of the critical path for the project. Lead time is also the saved time by starting an activity before its predecessor is completed. According to the PMI (2008), lead is a dependency between two activities (p. 140) [1]. An example would be scheduling the start of a 2 week activity dependent with the finish of the successor activity with a lead of 2 weeks so they will finish at the same time.

Safety stockSafety stock (also called buffer stock) is a term used by logisticians to describe a level of extra stock that is maintained to mitigate risk of stockouts (shortfall in raw material or packaging) due to uncertainties in supply and demand. Adequate safety stock levels permit business operations to proceed according to their plans. Safety stock is held when there is uncertainty in the demand level or lead time for the product; it serves as an insurance against stockouts. With a new product, safety stock can be utilized as a strategic tool until the company can judge how accurate their forecast is after the first few years, especially when used with a material requirements planning worksheet. The less accurate the forecast, the more safety stock is required. With a material requirements planning (MRP) worksheet a company can judge how much they will need to produce to meet their forecasted sales demand without relying on safety stock. However, a common strategy is to try and reduce the level of safety stock to help keep inventory costs low once the product demand becomes more predictable. This can be extremely important for companies with a smaller financial cushion or those trying to run on lean manufacturing, which is aimed towards eliminating waste throughout the production process. The amount of safety stock an organization chooses to keep on hand can dramatically affect their business. Too much safety stock can result in high holding costs of inventory. In addition, products which are stored for too long a time can spoil, expire, or break during the warehousing process. Too little safety stock can result in lost sales and, thus, a higher rate of customer turnover. As a result, finding the right balance between too much and too little safety stock is essential. Reasons for safety stock Safety stocks enable organizations to satisfy customer demand in the event of these possibilities:y y y y y y y

Supplier may deliver their product late or not at all The warehouse may be on strike A number of items at the warehouse may be of poor quality and replacements are still on order A competitor may be sold out on a product, which is increasing the demand for your products Random demand (in reality, random events occur.) Machinery breakdown Unexpected increase in demand

Reducing safety stock Safety stock is used as a buffer to protect organizations from stockouts caused by inaccurate planning or poor schedule adherence by suppliers. As such, its cost (in both material and management) is often seen as a drain on financial resources which results in reduction initiatives. In addition, time sensitive goods such as food, drink, and other perishable items could spoil and go to waste if held as safety stock for too long.[2] Various methods exist to reduce safety stock, these include better use of technology, increased collaboration with suppliers, and more accurate forecasting [3][4] In a lean supply environment, lead times are reduced which can help minimize

safety stock levels thus reducing the likelihood and impact of stockouts. Due to the cost of safety stock, many organizations opt for a service level led safety stock calculation; for example, a 95% service level could result in stockouts, but is at a level which is satisfactory to the company. The lower the service level, the lower the requirement for safety stock. An Enterprise Resource Planning system (ERP system) can also help an organization reduce its level of safety stock. Most ERP systems provide a type of Production Planning module. An ERP module such as this can help a company develop highly accurate and dynamic sales forecasts and sales and operations plans. By creating more accurate and dynamic forecasts, a company reduces their chance of producing insufficient inventory for a given period and, thus, should be able to reduce the amount of safety stock which they require. In addition, ERP systems use established formulas to help calculate appropriate levels of safety stock based on the previously developed production plans. While an ERP system aids an organization in estimating a reasonable amount of safety stock, the ERP module must be set up to plan requirements effectively. Inventory policy The size of the safety stock depends on the type of inventory policy that is in effect. An inventory node is supplied from a "source" which fulfills orders for the considered product after a certain replenishment lead time. In a "periodic review" inventory policy the inventory level is checked periodically (such as once a month) and an order is placed at that time if necessary; in this case the risk period is equal to the time until the next review plus the replenishment lead time. On the other hand, if the inventory policy is a "continuous review" policy (such as an Order point-Order Quantity policy or an Order Point-Order Up To policy) the inventory level is being check continuously and orders can be placed immediately, so the risk period is just the replenishment lead time. Therefore "continuous review" inventory policies can make do with a smaller safety stock.

Re-order Level or Ordering Point or Ordering Level:Definition and explanation:This is that level of materials at which a new order for supply of materials is to be placed. In other words, at this level a purchase requisition is made out. This level is fixed somewhere between maximum and minimum levels. Order points are based on usage during time necessary to requisition order, and receive materials, plus an allowance for protection against stock out. The order point is reached when inventory on hand and quantities due in are equal to the lead time usage quantity plus the safety stock quantity.

Formula of Re-order Level or Ordering Point:The following two formulas are used for the calculation of reorder level or point. [ Ordering point or re-order level = Maximum daily or weekly or monthly usage Lead time ] The above formula is used when usage and lead time are known with certainty; therefore, no safety stock is provided. When safety stock is provided then the following formula will be applicable: [ Ordering point or re-order level = Maximum daily or weekly or monthly usage Lead time + Safety stock ]

Examples:Example 1:Minimum daily requirement Time required to receive emergency supplies Average daily requirement Minimum daily requirement Time required for refresh supplies 800 units 4 days 700 units 600 units One month (30 days)

Calculate ordering point or re-order level

Calculation:Ordering point = Ordering point or re-order level = Maximum daily or weekly or monthly usage Lead time = 800 30 = 24,000 units

Example 2:Tow types of materials are used as follows: Minimum usage Maximum usage Normal usage Re-order period or Lead time Material A: Material B 20 units per week each 40 units per week each 60 units per week each

3 to 5 weeks 2 to 4 weeks

Calculate re order point for two types of materials

Calculation:Ordering point or re-order level = Maximum daily or weekly or monthly usage Maximum re-order period A: 60 5 = 300 units B: 60 4 = 240 units

Economic order quantityEconomic order quantity is the level of inventory that minimizes the total inventory holding costs and ordering costs. It is one of the oldest classical production scheduling models. The framework used to determine this order quantity is also known as Wilson EOQ Model or Wilson Formula. The model was developed by F. W. Harris in 1913, but R. H. Wilson, a consultant who applied it extensively, is given credit for his early in-depth analysis of it.[1] Overview EOQ only applies where the demand for a product is constant over the year and that each new order is delivered in full when the inventory reaches zero. There is a fixed cost charged for each order placed, regardless of the number of units ordered. There is also a holding or storage cost for each unit held in storage (sometimes expressed as a percentage of the purchase cost of the item). We want to determine the optimal number of units of the product to order so that we minimize the total cost associated with the purchase, delivery and storage of the product The required parameters to the solution are the total demand for the year, the purchase cost for each item, the fixed cost to place the order and the storage cost for each item per year. Note that the number of times an order is placed will also affect the total cost, however, this number can be determined from the other parameters Underlying assumptions1. 2. 3. 4. 5. The ordering cost is constant. The rate of demand is constant The lead time is fixed The purchase price of the item is constant i.e no discount is available The replenishment is made instantaneously, the whole batch is delivered at once.

EOQ is the quantity to order, so that ordering cost + carrying cost finds its minimum. (A common misunderstanding is that the formula tries to find when these are equal.) Variablesy y y y y

Q = order quantity Q * = optimal order quantity D = annual demand quantity of the product P = purchase cost per unit S = fixed cost per order (not per unit, in addition to unit cost)

y

H = annual holding cost per unit (also known as carrying cost or storage cost) (warehouse space, refrigeration, insurance, etc. usually not related to the unit cost)

The Total Cost function The single-item EOQ formula finds the minimum point of the following cost function: Total Cost = purchase cost + ordering cost + holding cost - Purchase cost: This is the variable cost of goods: purchase unit price annual demand quantity. This is PD - Ordering cost: This is the cost of placing orders: each order has a fixed cost S, and we need to order D/Q times per year. This is S D/Q - Holding cost: the average quantity in stock (between fully replenished and empty) is Q/2, so this cost is H Q/2

. To determine the minimum point of the total cost curve, set the ordering cost equal to the holding cost:

Solving for Q gives Q* (the optimal order quantity):

Therefore:

.

Note that interestingly, Q* is independent of P; it is a function of only S, D, H. Extensions Several extensions can be made to the EOQ model, including backordering costs and multiple items. Additionally, the economic order interval can be determined from the EOQ and the

economic production quantity model (which determines the optimal production quantity) can be determined in a similar fashion. A version of the model, the Baumol-Tobin model, has also been used to determine the money demand function, where a person's holdings of money balances can be seen in a way parallel to a firm's holdings of inventory. Exampley y y y y

Suppose annual requirement (AR) = 10000 units Cost per order (CO) = $2 Cost per unit (CU)= $8 Carrying cost %age (%age of CU) = 0.02 Carrying cost Per unit = $0.16

Economic order quantity = Economic order quantity = 500 units

Number of order per year (based on EOQ) Number of order per year (based on EOQ) = 20 Total cost = CU * AR + CO(AR / EOQ) + CC(EOQ / 2) Total cost = 8 * 10000 + 2(10000 / 500) + 0.16(500 / 2) Total cost = $80080 If we check the total cost for any order quantity other than 500(=EOQ), we will see that the cost is higher. For instance, supposing 600 units per order, then Total cost = 8 * 10000 + 2(10000 / 600) + 0.16(600 / 2) Total cost = $80081 Similarly, if we choose 300 for the order quantity then Total cost = 8 * 10000 + 2(10000 / 300) + 0.16(300 / 2) Total cost = $80091 This illustrates that the Economic Order Quantity is always in the best interests of the entity.

Answer 4:

Maintenance Procedures Management characterises the process of leading and directing all or part of an organization, often a business one, through the deployment and manipulation of resources (human, financial, material, intellectual or intangible). One can also think of management functionally as the action of measuring a quantity on a regular basis and adjusting an initial plan and the actions taken to reach one's intended goal. This applies even in situations where planning does not take place. Situational management may precede and subsume purposive management. Maintenance management will therefore characterise the process of leading and directing the maintenance organization. Before describing this process, let us make sure that we understand what a maintenance organization, with the resources belonging to it, is pursuing. Maintenance is defined as the combination of all technical, administrative and managerial actions during the life cycle of an item intended to retain it in, or restore it to, a state in which it can perform the required function (function or a combination of functions of an item which are considered necessary to provide a given service). This definition clarifies the objective of maintenance and can help us to understand what part of an organization is, somehow, devoted to maintenance. we can define maintenance management as follows : "All the activities of the management that determine the maintenance objectives or priorities (defined as targets assigned and accepted by the management and maintenance department), strategies (defined as a management method in order to achieve maintenance objectives), and responsibilities and implement them by means such as maintenance planning, maintenance control and supervision, and several improving methods including economical aspects in the organization." the objectives of the MMS A. Optimize the use of available funds, personnel, and facilities and equipment through effective

maintenance management methods. B. Provide accurate data for maintenance and construction program decisionmaking. C. Systematically identify maintenance needs and deficiencies and capital improvement needs at all field stations. D. Determine the unfunded maintenance backlog for the Service. E. Establish field station, Regional, and national maintenance and construction project priorities. F. Enable preparation of Service maintenance and construction budget requests using systematic, standardized procedures. G. Monitor and document corrective actions, project expenditures, and accomplishments. H. Conduct comprehensive condition assessments of all Service real property and personal property valued at $50,000 or greater. ======================================================= Various types of maintenance strategies 1. Reactive Maintenance Reactive maintenance is basically the "run it till it breaks" maintenance mode. No actions or efforts are taken to maintain the equipment as the designer originally intended to ensure design life is reached. Advantages to reactive maintenance can be viewed as a double-edged sword. If we are dealing with new equipment, we can expect minimal incidents of failure. If our maintenance program is purely reactive, we will not expend manpower dollars or incur capitol cost until something breaks. Advantages Low cost. Less staff. Disadvantages Increased cost due to unplanned downtime of equipment. Increased labor cost, especially if overtime is needed. Cost involved with repair or replacement of equipment. Possible secondary equipment or process damage from equipment failure. Inefficient use of staff resources

2. Preventive Maintenance Preventive maintenance can be defined as follows: Actions performed on a time- or machine-run-based schedule that detect, preclude, or mitigate degradation of a component or system with the aim of sustaining or extending its useful life through controlling degradation to an acceptable level. Advantages Cost effective in many capital intensive processes. Flexibility allows for the adjustment of maintenance periodicity. Increased component life cycle. Energy savings. Reduced equipment or process failure. Estimated 12% to 18% cost savings over reactive maintenance program. Disadvantages Catastrophic failures still likely to occur. Labor intensive. Includes performance of unneeded maintenance. Potential for incidental damage to components in conducting unneeded maintenance.

3. Predictive Maintenance Predictive maintenance can be defined as follows: Measurements that detect the onset of a degradation mechanism, thereby allowing causal stressors to be eliminated or controlled prior to any significant deterioration in the component physical state. Results indicate current and future functional capability. Basically, predictive maintenance differs from preventive maintenance by basing maintenance need on the actual condition of the machine rather than on some preset schedule. You will recall that preventive maintenance is time-based. Activities such as changing lubricant are

based on time, like calendar time or equipment run time. For example, most people change the oil in their vehicles every 3,000 to 5,000 miles traveled. This is effectively basing the oil change needs on equipment run time. No concern is given to the actual condition and performance capability of the oil. It is changed because it is time. This methodology would be analogous to a preventive maintenance task. If, on the other hand, the operator of the car discounted the vehicle run time and had the oil analyzed at some periodicity to determine its actual condition and lubrication properties, he/she may be able to extend the oil change until the vehicle had traveled 10,000 miles. This is the fundamental difference between predictive maintenance and preventive maintenance, whereby predictive maintenance is used to define needed maintenance task based on quantified material/equipment condition. The advantages of predictive maintenance are many. A well-orchestrated predictive maintenance program will all but eliminate catastrophic equipment failures. We will be able to schedule maintenance activities to minimize or delete overtime cost. We will be able to minimize inventory and order parts, as required, well ahead of time to support the downstream maintenance needs. We can optimize the operation of the equipment, saving energy cost and increasing plant reliability. Past Advantages Increased component operational life/availability. Allows for preemptive corrective actions. Decrease in equipment or process downtime. Decrease in costs for parts and labor. Better product quality. Improved worker and environmental safety. Improved worker moral. Energy savings. Estimated 8% to 12% cost savings over preventive maintenance program. Disadvantages Increased investment in diagnostic equipment. Increased investment in staff training. Savings potential not readily seen by management.

4.Reliability Centered Maintenance RCM: "a process used to determine the maintenance requirements of any physical asset in its operating context." Basically, RCM methodology deals with some key issues not dealt with by other maintenance programs. It recognizes that all equipment in a facility is not of equal importance to either the process or facility safety. It recognizes that equipment design and operation differs and that different equipment will have a higher probability to undergo failures from different degradation mechanisms than others. It also approaches the structuring of a maintenance program recognizing that a facility does not have unlimited financial and personnel resources and that the use of both need to be prioritized and optimized. In a nutshell, RCM is a systematic approach to evaluate a facility's equipment and resources to best mate the two and result in a high degree of facility reliability and cost-effectiveness. RCM is highly reliant on predictive maintenance but also recognizes that maintenance activities on equipment that is inexpensive and unimportant to facility reliability may best be left to a reactive maintenance approach. The following maintenance program breakdowns of Advantages Can be the most efficient maintenance program. Lower costs by eliminating unnecessary maintenance or overhauls. Minimize frequency of overhauls. Reduced probability of sudden equipment failures. Able to focus maintenance activities on critical components. Increased component reliability. Incorporates root cause analysis.

Disadvantages Can have significant startup cost, training, equipment, etc. Savings potential not readily seen by management. How Tero-technology is related to maintenance management, Discuss The term "technology" to refer to the study of the costs associated with an asset throughout its life cycle - from acquisition to disposal. The goals of this approach are to reduce the different costs incurred at the various stages of the asset's life and to develop methods that will help extend the asset's life span. Terotechnology uses tools such as -net present value, -internal rate of return and -discounted cash flow in an attempt to minimize the costs associated with the asset in the future. These costs can include engineering, maintenance, wages payable to operate the equipment, operating costs and even disposal costs. Also known as "life-cycle costing". For example, let's say an oil company is attempting to map out the costs of an offshore oil platform. They would use terotechnology to map out the exact costs associated with assembly, transportation, maintenance and dismantling of the platform, and finally a calculation of salvage value. This study is not an exact science: there are many different variables that need to be estimated and approximated. However, a company that does not use this kind of study may be worse off than one that approaches an asset's life cycle in a more ad hoc manner. THIS APPROACH HELPS TO OBTAINING MAXIMUM BENEFIT FROM THE PHYSICAL ASSETS. THIS INVOLVES -systematic application of engineering, -financial and management expertise in the assessment of the life cycle impact of an acquisition [ plant/equipment/machines etc ] on the revenues and expenses of the acquiring organization. PRACTICE OF of terotechnology is a continuous CYCLE that begins with the DESIGN and SELECTION of the REQUIRED item, follows through with its

INSTALLATION,COMMISSIONING ,OPERATION , and MAINTENANCE until the item's REMOVAL and DISPOSAL and then restarts with its REPLACEMENT .

Answer 5: The life cycle of equipment is fairly simple, but one process that seems to cause problems is deciding when to condemn and how to dispose of equipment. When looking at condemnation and disposal, the engineer in charge of the department should have the experience, knowledge, and authority to decide when a piece of equipment should be scrapped and removed from use. The reasons for condemning equipment will usually be:y

y y

y

Beyond economical repair - Where equipment comes in and the cost of repairing it is considered too high after looking at the current value (taking depreciation into account), and the age of the equipment. Technically obsolete - Parts and service support are no longer available. Clinically obsolete - The clinician using the device (or manufacturer) recommend replacement for clinical reasons. (Diagnostic ultrasound imaging usually becomes clinically obsolete after 5 years due to the rapid improvements in imaging technology, but can still be used and supported by the supplier.) Equipment that has been damaged by contamination.

The information supplied to the user must include the date of condemnation, whom the equipment belongs to and who authorised the condemnation. This would usually be the EBME Manager on a condemnation form. When sending out the notification of condemnation copies should be sent to senior managers responsible for procurement, and users of the equipment. An equipment condemning note/memo should be individually numbered and logged onto the equipment database with an individual job number, equipment description, including the make, model, serial number, control (asset) number, purchase date (age), reason for condemning and any additional information. You should also state the equipment location (Dept / Ward) and at which Hospital. If the manager/user requires further information, contact details must be added, such as your telephone, e-mail, fax, etc.

Finally, the EBME manager should sign off the condemnation letter. If a replacement is required the cost for new equipment needs to be included in the capital bids processes (where the equipment is over 5000) giving financial priority to the most urgent purchase based on need and risk. A record of all condemnations should be kept on the database. Disposal Once the equipment has been condemned it should be quarantined or thrown away. To quarantine the equipment means removing it from clinical use and putting it somewhere it cannot be used which is allocated as an area for scrapped equipment. There may be an alternative use for this equipment:y y y y

Third world charity Research project Training Sold on to vetinary practice, etc.

If there is an alternative use, the equipment may be held in the quarantine area until it can be handed over. Whoever takes the equipment must sign a form agreeing that the equipment is 'taken as seen'. All service and inventory labels must be removed, and all patient information deleted (where the device has IT storage capability) The equipment that cannot be found an alternative use must be disposed of safely. This will usually include:y y y y y y

Removal of lead acid, Nickel Cadmium or other alkaline batteries for separate disposal in line with trust policies. Evacuation of Cathode ray tubes to prevent the risk of implosion (Usually by breaking off the nipple at the back of the tube). Removal of in line fuses. Cleaning and decontamination. Removal of all means to power up the device. (i.e. On hard wired devices the mains cable should be cut off.) Removal of all hoses able to pressurise a device (if driven by gases)

Once these precautions have been taken, the equipment may be thrown in the skip to be taken to the local landfill site, or incinerated where appropriate.