UNIVERSITI PUTRA MALAYSIA DEVELOPMENT OF INVENTORY .
UNIVERSITI PUTRA MALAYSIADEVELOPMENT OF INVENTORY MANAGEMENT SYSTEM IN ATOTAL PRODUCTIVE MAINTENANCE ENVIRONMENTBENEDICT LIM CHIN KHIAN.FK 2004 26
DEVELOPMENT OF INVENTORY MANAGEMENT SYSTEM IN ATOTAL PRODUCTIVE MAINTENANCE ENVIRONMENTBENEDICT LIM CHIN KHIANMASTER OF SCIENCEUNIVERSITI PUTRA MALAYSIAAugust 2004
DEVELOPMENT OF INVENTORY MANAGEMENT SYSTEM IN A TOTALPRODUCTIVE MAINTENANCE ENVIRONMENTBYBENEDICT LIM CHIN KHIANThesis Submitted to the School of Graduate Studies,Universiti Putra Malaysia, in Fulfilment of the Requirements for theDegree of Master of ScienceAugust 2004
Dedicated to all my family members', thanks for their support and understandingthroughout the years and their appreciation of knowledge.
Abstract of thesis presented to the Senate of Universiti Putra Malaysia in fulfilmentof the requirements for the degree of Master of ScienceDEVELOPMENT OF INVENTORY MANAGEMENT SYSTEM IN A TOTALPRODUCTIVE MAINTENANCE ENVIRONMENTBENEDICT LIM CHIN KHIANNovember 2003Chairman: Associate Professor Megat Mohamad Hamdan Megat Ahmad, Ph.D.Faculty: EngineeringImplementation of Total Productive Maintenance (TPM) is increasingly being seenas a suitable initiative or technique for effectively involving the workforce inmanufacturing based organizations to increase productivity with the support of botheffective and efficient maintenance works as well as inventory management system.The aim of this research is concerned with the development of a computerizeinventory management system using Microsoft Visual Basic 6.0. This improvementis to replace present manual paperwork procedure towards the implementation ofTPM and IS014000. The proposed system attempts to achieve this by providing adatabase for parts information storage with search function, ability to record eachinventory transactions in real time, calculating material requirement planning(MRP), create bill of materials (BOM) and making purchase order (PO). Thisresearch also includes the evaluation of the system on real data from the company.The data shows that this system produced correct result and reduce the time spend ondata searching by 80.4% or increase the manpower efficiency by 510%. These
results show that this system can lead to increase the controllability and monitoringof inventory, and increase manpower efficiency.
Abstrak tesis yang dikemukakan kepada Senat Universiti Putra Malaysiasebagai memenuhi keperluan untuk ijazah Master SainsPERKEMBANGAN SISTEM PENGURUSAN INVENTOR1 DALAMPERSEKITARAN TOTAL PRODUCTIVE MAINTENANCE (TPM)OlehBENEDICT LIM CHIN KHIANNovember 2003Pengerusi: Profesor Madya Megat Mohamad Hamdan Megat Ahmad, Ph.D.Fakulti: KejuruteraanPelaksanaan TPM yang semakin meningkat, merupakan langkah pertama atau teknikyang sesuai mendorong keberkesanannya dalam penglibatan kesemua ahli kerjadalam organisasiberasas pembuatan menyokong kedua-dua keberkesanan dankecekapan penyelenggaraan tugas kerja dan inventori untuk maningkatkanproduktivitinya. Penyelidikan ini bertujuan menghasilkan suatu sistem pengurusaninventori berasas komputer menggunakan Microsoft Visual Basic 6.0. Penukaran iniadalah untuk mampertingkatkan taraf kerja-kerja kertasnya yang dilaksanakansekarang menuju terhadap perlaksanaan TPM. Manujui pencapaian tujuan tersebut,sistem ini dilangkapi dengan fungsi pencarian untuk database penyimpananinforrnasi, penyimpanan rekod urusan inventori dalam masa yang sama, pengiraanMRP, pembentukkan BOM dan urusan pembelian (PO). Penyelidikan ini jugaterrnasuk penilaian sistem ini dengan penggunaan data sebenar dari syarikat itu.Data-data yang dikemukakan marnbuktikan bahawa system ini dapat mampamarkankeputusan yang sebenar dan mangurangkan masa untuk mancari data-data sebanyak80.4% atau meningkatkan keberkesanan pekerja sebanyak 510%. Keputusannya
membuktikan bahawa sistem ini dapat maningkatkan pengawalan dan pengesananinventori, dan meningkatkan keberkesanan pekerja.
ACKNOWLEDGEMENTSA number of individuals have contributed to the success of this program softwareand it is a pleasure to acknowledge their contribution.I wish to express my deepest gratitude and appreciation to my project supervisors,Associate Professor Dr. Megat Mohamad Hamdan Megat Ahmad, AssociateProfessor Ir. Dr. Md Yusof Ismail, Associate Professor Dr. Shamsuddin Sulaiman.and Associate Professor Dr. Napsiah Ismail.I would also like to acknowledge the help of my team-mates Wang Chia Wu and LeePang Seng for the co-operation and teamwork spirit.Moreover, I would like to thank my family, friends, colleagues and also myhousemates for their encouragement and understanding given either directly orindirectly, which has helped me in completing this study. I also wish to thanksincerely all those concerned, in particular my girlfriend Miss Hii Chee Feen.Without her support, this project would not have been completed.Your support, understanding and effort have changed and lead my life to a moresuccessful path.Thank you.
1 certify that an Examination Committee has met on 7 7,JUN 2004 to conductthe final examination of Benedict Lirn Chin Khian on his Master of Science thesisentitled "Development of a production planning and control software in a TotalProductive Maintenance environment" in accordance with Universiti PertanianMalaysia (Higher Degree) Act 1980 and Universiti Pertanian Malaysia (HigherDegree) Regulations 1981. The Committee recommended that the candidate beawarded the relevant degree. The Committee Members for the candidate are asfollows:CHAIRMAN, Ph.D.Professor,Faculty of Graduate Studies,Universiti Putra Malaysia.(Chairman)MEGAT MOHAMAD HAMDAN MEGAT AHMAD, Ph.D.Associate Professor,Faculty of Engineering,Universiti Putra Malaysia.(Member)MD. YUSOF ISMAIL, Ph.D.Associate Professor,Faculty of Engineering,Universiti Putra Malaysia.(Member)SHAMSUDDIN SULAIMAN, Ph.D.Associate Professor,Faculty of Engineering,Universiti Putra Malaysia.(Member)NAPSIAH ISMAIL, Ph.D.Associate Professor,Faculty of Engineering,Universiti Putra Malaysia.(Member)School of Graduate fudies,Universiti Putra Malaysia.
This thesis submitted to the Senate of Universiti Putra Malaysia has been accepted asfulfilment of the requirements for the degree of Master of Science. The members ofthe Supervisory Committee are as follows :MEGAT MOHAMAD HAMDAN MEGAT AHMAD, Ph.D.Associate Professor,Faculty of Engineering,Universiti Putra Malaysia.(Chairman)MD. YUSOF ISMAIL, Ph.D.Associate Professor,Faculty of Engineering,Universiti Putra Malaysia.(Member)SHAMSUDDIN SULAIMAN, Ph.D.Associate Professor,Faculty of Engineering,Universiti Putra Malaysia.(Member)NAPSIAH ISMAIL, Ph.D.Associate Professor,Faculty of Engineering,Universiti Putra Malaysia.(Member)AINl IDERIS, Ph.D.ProfessorIDean,School of Graduate Studies,Universiti Putra MalaysiaDate:0 9 NOV 2004.Vlll
DECLARATIONI hereby declare that the thesis is based on my original work except for quotationsand citations which have been duly acknowledged. I also declare that it has not beenpreviously or concurrently submitted for any other degree at UPM or otherinstitutions.BENEDICT LIM CHIN KHIANDate:*-2)
TABLE OF NTSAPPROVALDECLARATIONLIST OF FIGURESLIST OF ABBREVIATIONS/NOTATIONS/GLOSSARYOF TERMCHAPTERINTRODUCTION1.1Total Productive Maintenance1.2Inventory Management System1.3Problem Statement1.4Scope of study1.5Objective1.6Thesis layoutLITERATURE REVIEW2.1Introduction2.2Studies on Total Productive Maintenance2.3Studies on Inventory Management System2.4Relationship between TPM and Inventory Management System2.5Related Software terature Review3.3Operation Flow3.4Flow Chart Drafting3.5Program Creation3.6Test Run3.7Result and VerificationSOFTWARE DEVELOPMENT4.1Introduction4.2Planning4.3System Software4.3.1Microsoft Visual Basic 6.0 Enterprise Edition4.3.2Microsoft Access 974.3.3Microsoft Excel 974.3.4Photoshop 5.0Software Programming4.4.1Login Module4.4.2Administrative Module4.4.3Input Parts Information 35373738393941414243434446
VVI4.4.4Input Stock Information Module4.4.5Search Module4.4.6Part Requisition Module4.4.7Parts Requisition Approval Module4.4.8History Record Module4.4.9Material Requirements Planning (MRP) Module4.4.10Input Bill-of-material (BOM) Module4.4.1 1Bill-of-material Search Module4.4.12Purchasing Module4.4.13Purchase Order (PO) List Module4.4.14Receiving ModuleRESULTS AND DISCUSSION5.1Main Page5.2Inventory Module5.2.1Part Information Section5.2.2Stock Information Section5.2.3Part Requisition Section5.2.4Part Request History Section5.2.5Material Requirement Planning Section5.2.6Bill of Material SectionPurchasing Module5.3.1Purchase Order Section5.3.2Purchase Order History Section5.3.3Receiving Section5.4Case Study5.4.1Tools and Techniques5.4.2System Test5.4.3Conventional System versus Software System5.4.4Similar ApplicationCONCLUSIONREFERENCESAPPENDIX IAPPENDIX I1APPENDIX I11BIODATA OF THE AUTHOR
LIST OF FIGURESPageFigure2.1Module Arrangement of Commercial Business ApplicationSoftware System2.2Areas of Accuware that support Manage 20003.1Flow chart of the overall project.3.2Operation flow of parts supply.3.3Preventive and predictive maintenance flow chart4.1.Login module.4.2.Administrator module4.3.Flow chart of Input Part Information module.4.4.Input stock information module.4.5.Search module.4.6.Part requisition module.4.7Parts requisition approval module.4.8.Part requisition history module4.9.Material Requirement Planning module.4.10. Bill-of-material input module.4.1 1. BOM search function module.4.12. Purchasing module flow chart.4.13. Purchase Order list.4.14Receiving module flow chart.5.1.Front page of the program.5.2.Login page24
5.3.An example of administration function.5.4Input parts information section.5.5.Part's search function.5.6Input Stock Information section.5.7.Stock Search section.5.8Requisition can be made through this screen.5.9.New Part Request Approval window.5.10. Example of requisition history that recorded in the database.5.1 1. Requisition data report5.12MRP window.5.13. An example of BOM input window.5.14. Example of Purchase order window.5.15Small window appear when search button being clicked5.16. Purchase order history window.5.17. Example of Receiving window.
LIST OF ABBREVIATIONSINOTATION/GLOSSARYOF TERMSAutonomous MaintenanceBIBusiness IntelligenceBOMBill Of MaterialsCDCompact DiskCD-ROMCompact Disk-Read Only MemoryCRMCustomer Relationship ManagementCRTCathode Ray TubeEOQEconomic Order QuantityERPEnterprise Resource PlanningFIFOFirst In First OutJIPEJapan Institute of Plant EngineersJITJust In TimeL4LLot for LotMBNQAMalcolm Baldrige National Quality AwardMISManagement Information SystemMOQMinimum Order QuantityMRPMaterial Requirement PlanningNPCNational Productivity CorporationOEEOverall Equipment e MaintenancePOPurchase Order
POQPeriod Order QuantityPPCProduction Planning and ControlMPSMaster Production SchedulingQuality ControlRAMRandom Access MemoryRFRadio FrequencyROLRe-order LevelROPReorder Point SystemSCMSupply Chain ManagementSGASmall Group ActivitiesSSSafety StockTCTTotal Cycle TimeTGIThomas Group InternationalTPMTotal Productive MaintenanceTQTotal QualityTQCTotal Quality ControlTQMTotal Quality ManagementTQSRTotal Quality System ReviewUSAUnited States of America
CHAPTER IINTRODUCTION1.1Total Productive MaintenanceTotal Productive Maintenance (TPM) was first brought from the United States in the1950's. It is a kind of marriage between Preventive Maintenance (PM) and TotalQuality Management (TQM) [I]. Before TPM started, the types of maintenancebegin practiced are Preventive Maintenance (PM), Predictive Maintenance andCondition-based maintenance.According to the Japan Institute of Plant Engineers (JIPE) TPM is a system ofmaintenance covering the entire life of the equipment in every division, includingplanning, manufacturing, maintenance, and all other division, involving everyonefrom the top executives to the shop floor workers and promoting productivemaintenance through morale-building management and small-group activities in aneffort to maximize equipment efficiency [2].Edward Willmott, a pioneer of TPM in United Kingdom defined TPM as seeks toengender a company-wide approach towards achieving a standard of performance inmanufacturing, in term of the overall effectiveness of equipment, machines andprocesses, which is truly world class [3].Edward Hartmann, president of the International TPM Institute Inc., who isrecognised by Nakajima as the father of TPM in the USA, also provides a definition
that is suggested as being more readily adopted by Western companies: totalproductive maintenance permanently improves the overall effectiveness ofequipment with the active involvement of operators [4].Another US advocate of TPM, Wireman suggests that TPM is maintenance thatinvolves all employees in the organization and accordingly includes everyone fromtop management to the line employee and indicates TPM encompasses alldepartments including, maintenance, operations, facilities, design engineering,project engineering, instruction engineering, inventory and stores, purchasing,accounting finances, plant /site management [ 5 ] .From the definition given, it can be summarized that Total Productive Maintenance(TPM) is a manufacturing program designed primarily to maximize the effectivenessof equipment throughout its entire life by the participation and motivation of theentire workforce of the company [ 6 ] .1.2Inventory Management System in TPMOther than having good maintenance awareness to take good care of all equipmentsby each department, there is a divisionldepartment, which plays a very importantrole in TPM, which is inventory management. It can determine the success or failurein a company.
Inventory management is an important concern for managers in all types of business.For a company with low profit margins, poor inventory management can seriouslyundermine the business [7]. The challenge is not to scale down inventories to thebone to reduce cost or to have plenty around to satisfy all demands, but to have theright amount to achieve the competitive priorities for the business most effectively.Because inventory is so important, many companies specialize in consultation ofhow to handle inventory.Inventory is a process in which a requirement is generated, has to be authorizedbefore starting the material procurement process. Based on this authorization,material is ordered. When the material comes in, there is another process involvedwhere procurement is checked and depending again upon the original order placed,the quality of material received, and some other factors material is accepted andstored. Then again, material is issued internally for further processing orconsumption [8].Inventory is created as a buffer to hedge against differences in rates and timingbetween supply and demand which are caused by four factors; economies of scale,operations smoothing, customer service and uncertainty [9]. There are three basicdecisions in managing inventory; quantity decisions, timing decisions and controldecisions. The reasons why companies should keep a supply of inventory on handare in order to maintain the ability of independence of operation, qualify to meetvariation in product demand, to be flexible enough in production scheduling, toprovide a safeguard for variation in raw material delivery time and economicpurchase-order size preferred in a company [lo]. There are many different types of
inventory. The types of inventory include raw materials, the finished product,component parts, and supplies1.3Problem StatementAs mentioned in module 1.2, TPM is primarily to maximize the effectiveness ofequipment throughout its entire life by the participation and motivation of the entireworkforce of a company. In that respect, the maintenance will not only require partsto be repaired but also need to be replaced whenever necessary. Parts need to beavailable whenever it is required. As such the inventory management systemavailable needs to be able to fulfill the requirements.At present, no studies have been found which relates between inventory managementsystem and TPM. Studies that have been carried out only focused on either inventorymanagement system or TPM. This study therefore is to look at the benefits that willbe obtained in implementing a good inventory management system in a TPMenvironment.1.4Scope of StudyA local company, which in the process of practicing TPM has been selected for thisstudy. Since its operation in 1995, there has been an increased in its product rejectiondue to poor quality. As a consequence, products need to be reproduced whichresulted in severe raw material shortage. Short fall of parts and raw materials for a
week is as high as 100 types which estimates additional cost of RM6,000 whilewaiting period to replenish the stock that according to plan is as long as 2 weeks.Another main concerned was that, some of the finished goods and raw materialswere found to be missing. This missing amount may be due to human error whilemanually filling records or data being changed intentionally. These problems haveslowed down the daily production operation as well as increasing the estimate cost ofRM2,000 for materials per week. It has also affected the TPM implementation.An inventory management system was thereby developed in this study to overcomethe above problem. By using this software, it is hope that it will improve on the TPMimplementation, and will bring a lot of convenience and effectiveness to the manageras well as the supervisor because monitoring and controlling inventory is centralizedin one place. The data will automatically update in the system if any transaction isdone and approved and even the purchaser from purchasing department can easilycheck on the parts or raw material quantity before making any purchase order tosupplier.With this system, the manager and supervisor can easily monitor the inventory levelfrom time to time as well as all transaction that has been made to the internal orexternal supplier and customer through the software in real time.1.5ObjectiveBased on the problem statements stated above, the objectives of the study are:
i.To develop an inventory management software for controlling andmonitoring inventory.11.To increase manpower efficiency as a result of using the software.It is hoped that with better inventory management and manpower efficiency willimprove further the implementation of TPM.1.6Thesis LayoutIn this thesis, it contained six chapters, which includes introduction, literaturereview, methodology, system design, result and discussion, and conclusion. Inchapter one, it discussed on the introduction of Total Productive Maintenance andInventory Management System and the relationship of these two issues. The problemstatement of this thesis also has been discussed as well as the main objective.Literature review was discussed in chapter two. This was followed by Methodologyin Chapter 3 where it discussed on the planning for the project and preparations ofthe software making. Chapter 4 discussed on the system design procedure of eachsteps involved in order to create the software successfully.Chapter five discussed on the result of each section of the created software as well asthe discussion on the advantages and disadvantages of the software. Lastly is theconclusion and recommendation chapter, which gives the overall results of thesoftware and recommendations for further improvement.
CHAPTER I1LITERATURE REVIEW2.1IntroductionThis chapter reviews the studies that have been carried out on the development of aninventory management system in Total Productive Maintenance (TPM) environment.The review will begin with studies that have been done on TPM. This will befollowed by related studies on inv
UNIVERSITI PUTRA MALAYSIA DEVELOPMENT OF INVENTORY MANAGEMENT SYSTEM IN A . sistem ini dilangkapi dengan fungsi pencarian untuk database penyimpanan inforrnasi, penyimpanan rekod urusan inventori dalam masa yang sama, pengiraan . 80.4% atau meningkatkan keberkesanan pekerja sebanyak 510%. Keputusannya .
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