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Benefits of TPM Implementation

The literature documents dramatic tangible operational improvements resulting from successful TPM implementation. “Companies practicing TPM invariably achieve startling results, particularly in reducing equipment breakdowns, minimizing idling and minor stops (indispensable in unmanned plants), lessening quality defects and claims, boosting productivity, trimming labor and costs, shrinking inventory, cutting accidents, and promoting employee involvement (as shown bysubmission of improvement suggestions).” (Suzuki 1994 p. 3) He cites, for example, PQCDSM (Productivity, Quality, Cost, Delivery, Safety, Morale) improvements forearly TPM implementers in Japan.

• P – Productivity.
  Net productivity up by 1.5 to 2.0 times.
  Number of equipment breakdowns reduced by 1/10 to 1/250 of baseline.
  Overall plant effectiveness 1.5 to 2.0 times greater.
  
• Q – Quality.
  Process defect rate reduced by 90%.
  Customer returns/claims reduced by 75%.
  
• C – Cost: Production costs reduced by 30%.
• D – Delivery: Finished goods and Work in Progress (WIP) reduced by half.
• 
  S – Safety.
  Elimination of shutdown accidents.
  Elimination of pollution incidents.
• 
  M – Morale: Employee improvement suggestions up by 5 to 10 times.

Tajiri and Gotoh observe that, “The actual targets of TPM are fixed more concretely in terms of PQCDSM.” (Tajiri and Gotoh 1992 p. 72) Fairchild Semiconductor-Penang Malaysia utilizes TPM as an umbrella program to drivestrategic PQCDSM goals (20% OEE improvement on critical production equipment, $14 mil cost savings over five years, for example). (Tan, Hoh et al. 2003) Gardner provides an overview of TPM success at National Semiconductor that is typical of the benefits gained by many companies. “Hundreds of thousands of dollars are being saved each month in terms of reducing lost revenue or in terms of cost avoidance. More efficient equipment and processes means fewer new pieces of equipment need to be purchased to meet demand. Early detection of problems means less resources spent on major breakdowns and scrap. Clean, safe factories are more enjoyable towork in and impress external auditors and customers. Total workforce engagement using TPM methods is a very valuable way to reduce loss and improve profit.”(Gardner 2000 p. 4) Japanese firms that won the JIPM PM prize between 1984 and 1986 demonstrated similar improvements. (Patterson and Fredendall 1995)

• Equipment failures reduced from 1,000 per month to 20 per month.
  
• Quality defects reduced from 1.0% to 0.1%.
• 
  Warranty claims reduced by 25%.
• 
  Maintenance costs reduced by 30%.
  
• WIP decreased by 50%.
• 
  Productivity improved by 50%. 

Hartmann also finds tangible results for TPM initiatives in the Non-Japaneseplants. (Hartmann 1992)

• 
  Maintenance service calls reduced by 29%.
  
• Plant output increased by 40%.
• 
  Speed of manufacturing (cycle time) increased by 10%.
• 
  Defects reduced by 90%.
  Productivity increased by 50%.
  
• Maintenance costs reduced by 30%.
  
• Return on Investment improved by 262% to 500%.

Specific results for companies are frequently cited, as noted in the followingexamples.

• 
  Asten, Inc.
  ”While Asten instituted TPM in conjunction with other programs such as TQM…the operating managers give TPM much of the credit”. (Patterson,Fredendall et al. 1996 p. 35) Operational performance improvements arenoted below.

• Texas Instruments – Philippines (Mika 1999)
  The Texas Instruments – Philippines assembly plant was the first American semiconductor operation to win the JIPM TPM Prize. Highlights of their TPM-based improvement include the following.
  
  o Increased annual revenue from $350 M to >$1,000 M between 1992 and 1998 without adding people or expanding production floor space.
  o Increased productivity 25% annually to stay ahead of the annual Philippines inflation rate of 15% to 18%.
  o Reduced scrap by 90%.
  o Reduced cycle time by 50%.
  o Reduced quality defects from 4,000 ppm to 50 ppm.
  o Decreased production costs by 50%.

According to Plant Manager, Don Mika, “the first benefit of TPM implementation was that people could exercise their minds at work and feel pride in their efforts. Over time we could feel a change in attitude throughout the company”. (Mika 1999 p. 7)
 Eastman Chemical ”Eastman Chemical Company has effectively used Total Productive Maintenance (TPM) to reduce maintenance costs by $16 million per year and improve equipment uptime.” (McCloud 1998 p. 1)o Reduced requests for equipment energize/de-energize by 20,000 calls per year resulting in labor savings of $1.3 million.

• Eastman Chemical
  ”Eastman Chemical Company has effectively used Total Productive Maintenance (TPM) to reduce maintenance costs by $16 million per year and improve equipment uptime.” (McCloud 1998 p. 1)
  
  o Reduced requests for equipment energize/de-energize by 20,000 calls per year resulting in labor savings of $1.3 million.
  o Increased equipment uptime by 36,000 hours per year.
  o Reduced maintenance response time from 54 minutes to 18minutes as a result of improved equipment availability.
  o Zero maintenance accidents reported during TPM implementation.
  o Multi-skill training for operators resulted in $5 million laborsaving.

Intangible benefits of TPM implementation are also cited frequently in the literature. Suzuki, for example, identifies intangible results of TPM implementation that include self-management of shop-floor workers, improved confidence of production workers, clean up of production and administrative areas, and improved company image for customers. (Suzuki 1994) At Fairchild Semiconductor Tan notes that TPM is key to getting people together to own processes and performance of the machine and builds teamwork on the shop floor, leading to a standard and disciplined work culture, and improved engineering discipline. (Tan, Hoh et al. 2003) While TPM Program Manager for SEMATECH, Ames observed that the intangible benefits of TPM implementation in semiconductor operations included increased management involvement in day-to-day activities, higher level of shop floor employee involvement (team activities) in improvement activity, and greater employee empowerment. (Ames 2003)

[Original: Total Productive Maintenance (TPM) Concepts and Literature Review by Thomas R. Pomorski, Principal Consulting Engineer, Brooks Automation, Inc.]