Chapter 1

MAINTENANCE ENGINEERING &
MANAGEMENT
DJJ 50212
CHAPTER 1.0
MAINTENANCE ORGANIZATION
QUESTION???
MAINTENANCE works:
1 Why do we need maintenance?
2 What are the costs of doing

maintenance?
3 What are the costs of not doing

maintenance?
4 What are the benefits of

maintenance?
5 .
How can maintenance increase
profitability of company?
.
DEFINITION
1 MAINTENANCE 2 ORGANIZATION 3 MANAGEMENT

Maintenance is a set of A means for making The organization and
organized activities that people productive in coordination of the
are carried out in order working together and activities in order to
to keep an item in its arranging resources achieve defined
best operational (people, materials, objectives. Management
condition with minimum technology, etc). is often included as a
cost required. factor of production
along with‚ machines,
materials, and money.
OBJECTIVE OF MAINTENANCE MANAGEMENT
The main objectives of having maintenance management are to make

sure a business doesn't stop producing, and if it does, to rectify the
situation in the safest and most expedient way possible.
In addition, improperly maintained equipment can lead to safety hazards,

employee abuse and misuse of machines that will lead to increased
overhead costs and potential liability.
Costs of new equipment must be budgeted. Maintenance factors are part

of the calculations done to consider return on investment when comparing
costs and risks.
BENEFITS OF MAINTENANCE MANAGEMENT
1 Manages Control
2 Reduces Overtime
3 Improves Quality
4 Ensures Better Support & Service

.
5 Allows Easy Error Spotting

.
6 Reduces Resource Waste

.
7 Improves Safety
.
BASIC TYPES OF MAINTENANCE ORGANIZATION
1 Centralized 2 Decentralized 3 Matrix Structure

Maintenance Maintenance Maintenance
Centralized Maintenance
 All crafts and related maintenance functions report to a central

maintenance manager.
 Best suited for small to medium size organizations.
 Advantages:
a. Provides more flexibility and improves utilization of
resources such highly skilled crafts in various field.
b. Allows economies of scale
 Disadvantages:
a. slow response time for getting to and from jobs due to less
manpower.
b. Less specialization on complex field.
Decentralized Maintenance
 All crafts and maintenance craft support staff report to operations or
specific area maintenance.
 The maintenance organization works under the direct control of a chief
engineer in-charge of production.
 This tends to reduce the flexibility of the maintenance system as a whole.
 Advantages:
a. achieve adaptability and coordination in production units and
efficiency.
b. Speedy decisions.
c. Better training at the workers’ level(specialist).
 Disadvantages:
a. excessive administrative overheads
b. conflict between departments.
Matrix Structure Maintenance
 A form of a hybrid structure.
 Crafts are allocated in some proportion to production units or
area maintenance and to a central maintenance function that
supports the whole plant.
 Advantages:
a. it allows the organization to achieve coordination necessary
to meet dual demands from the environment and flexible
sharing of human resources.
 Disadvantages:
a. employees to experience dual authority which can be frustrating
and confusing.
ROLES IN MAINTENANCE
MANAGEMENT ORGANIZATION
Instruction:
Develop a group.
Create a Cooperate Video by your
own company.
Contents;
 Company names.
Role’s in organization.
Bussiness selection.
Mision and vision.
Duration: 1 minute to 2 minutes
only
ROLES IN MAINTENANCE MANAGEMENT ORGANIZATION
COST OF MAINTENANCE
“Maintenance cost can be a significant factor in an organization’s
profitability”.
Among the factors associated with the maintenance expenditure are:-

Spare parts
Maintenance labor (i.e., operator expertise and experience)
Down time (production loss)
Overhead
Consumables
Hand tools, power tools and equipment
Idle equipment or personnel due to equipment breakdown
Missed delivery dates of equipment (including out of stock)
Transportation due to remoteness of some of the maintenance work
Asset condition (i.e., age, type, and condition)
Losses due to inefficient operations of machines
Capital requirement for replacement of machines
JJ616 MAINTENANCE MANAGEMENT
CHAPTER 1 : MAINTENANCE ORGANIZATION
TYPES OF MAINTENANCE COST
Downtime
“A period during which an
equipment or machine is not
functional or cannot work”.
Relationship between quantity of maintenance and various costs 13

COST ANALYSIS METHOD
“It is an excellent tool for comparing the cost of competing
projects, controlling program costs, selecting among competing
contractors, making decisions associated with equipment
replacement, reducing total cost, and conducting planning and
budgeting”.
Example
Problem Statement.
The record of computer breakdown for Company PCK for the past 20 months is shown in Figure 1
below. Each time computer breakdown the company loss at RM300. So the company take an action
planning to limit the cost of maintenance. So its can be increase company profits. There are two
solutions can be done by the company, either hired a contract with third party for the preventive
maintenance or do as usual breakdown maintenance in house. Contract preventive maintenance by
third party cost RM200 per month plus RM 300 by estimation cost for breakdown. So, PCK should
decide either contract out preventive maintenance to third party or do breakdown in house only?
Record Of Computer Breakdown For
Company PCK For The Past 20 Months
NO. MONTH QUANTITY OF BREAKDOWN
1 Jan-18 0
2 Feb-18 0
3 Mar-18 0
4 Apr-18 0
5 May-18 1
6 Jun-18 2
7 Jul-18 1
8 Aug-18 2
Figure 1. 9 Sep-18 1
10 Oct-18 1
11 Nov-18 3
12 Dec-18 2
13 Jan-19 1
14 Feb-19 3
15 Mar-19 1
16 Apr-19 1
17 May-19 2
18 Jun-19 1
19 Jul-19 2
20 Aug-19 2
Example Cost Analysis
Step 1.
Calculate expected
# OF MONTHS BREAKDOWN
# OF BREAKDOWN (BD)
(BD) OCCURS
number of breakdown
(based on past records) if 0 4
the company continue

1 8
2 6
without service contract. 3 2
TOTAL 20
Step 2.
Calculate the FREQUENCY of breakdown #FREQUENCY

# OF MONTHS BREAKDOWN (MONTH BD
# OF BREAKDOWN (BD)
occurs.
(BD) OCCURS OCCURS/TOTAL
MONTH)
0 4 4/20= 0.2
1 8 8/20= 0.4
Formulas:
2 6 6/20= 0.3
3 2 2/20= 0.1
TOTAL 20
MONTH BREAKDOWN (BD) OCCURS

TOTAL MONTH
Step 3.
Calculate the EXPECTED OF #FREQUENCY

EXPECTED OF BREAKDOWNS
BREAKDOWNS occurs.
# OF BREAKDOWN (BD) # OF MONTHS BREAKDOWN (BD) OCCURS (MONTH BD OCCURS/TOTAL
Ʃ[(# of BD) x (frequency)]
MONTH)
0 4 0
Formulas:
4/20= 0.2
1 8 0.4
8/20= 0.4
2 6 0.6
6/20= 0.3
Ʃ[(# of BD) x (frequency)] 3 2

2/20= 0.1
0.3
TOTAL 20 1.3
Expected # of breakdowns = [(# of breakdown) x (frequency)]

= (0)(0.2)+(1)(0.4)+(2)(0.3)+(3)(0.1)
= 1.3 breakdown per month
Step 4. (Analysis to Choose either hired contract or without hired)
i. Cost Without Hired Third Party.
Expected breakdown cost = (expected # of breakdown) x (cost per breakdown)
= (1.3) x (300)
= RM390 per month
ii. Cost Hired Third Party.

Preventive Maintenance Cost = cost of expected breakdown + cost of service contract
= (1 breakdown per month x 300) + RM200 per month
= RM500 per month
Step 5. (Selection the best Planning)
Less expensive to suffer breakdown without service contract.
Breakdown = RM390
Preventive maintenance Service contract = RM500
Therefore, continue present policy which is the breakdown maintenance
because its less expensive.
NEXT:
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MAINTENANCE ENGINEERING &

2 What are the costs of doing

3 What are the costs of not doing

4 What are the benefits of

1 MAINTENANCE 2 ORGANIZATION 3 MANAGEMENT

The main objectives of having maintenance management are to make

In addition, improperly maintained equipment can lead to safety hazards,

Costs of new equipment must be budgeted. Maintenance factors are part

4 Ensures Better Support & Service

5 Allows Easy Error Spotting

6 Reduces Resource Waste

1 Centralized 2 Decentralized 3 Matrix Structure

 All crafts and related maintenance functions report to a central

Among the factors associated with the maintenance expenditure are:-

TYPES OF MAINTENANCE COST

Relationship between quantity of maintenance and various costs 13

the company continue

Calculate the FREQUENCY of breakdown #FREQUENCY

MONTH BREAKDOWN (BD) OCCURS

Calculate the EXPECTED OF #FREQUENCY

Ʃ[(# of BD) x (frequency)] 3 2

Expected # of breakdowns = [(# of breakdown) x (frequency)]

ii. Cost Hired Third Party.

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