Effects of Production Facilities Maintenance on Competitive Advantage of Selected Firms in Nigeria

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1 Effects of Production Facilities Maintenance on Competitive Advantage of Selected Firms in Nigeria Dr. Amaeshi Uzoma Francis 1, Dr. Okorocha K.A. 2, Jane C. Akujor 3 1,2 Department of Project Management Technology, Federal University of Technology, Owerri, Imo State, Nigeria. 3 Department of Financial Management, Federal University of Technology, Owerri, Imo State, Nigeria Corresponding author: Dr. Amaeshi Uzoma Francis 1 uzor1958@gmail.com 2 kevinokorocha@yahoo.com 3 janeakujor@yahoo.com Abstract This study examines the effects of production facilities maintenance on the competitive advantage of selected process manufacturing firms in Nigeria focusing on the reactive, preventive, predictive, reliability centre and total productive maintenance strategies and their relationship to cost of manufacturing operations, product quality, productivity target, on-time delivery and profitability. We adopted the descriptive survey method for the study wherein thirty copies of a structured questionnaire on five points Likert scale with Crombach alpha of.73 was used to obtain data from the study population of thirty (3)respondents across the various units in the study organizations and analyzed the data obtained with E-views software package in co-integration statistics. We found out that reactive maintenance strategy has direct and indirect cost implications on manufacturing operations; positive significant relationship exists between preventive maintenance strategy and product quality determination; predictive maintenance strategy exerts positive influence on productivity target; reliability centre maintenance significantly accounts for on-time delivery in meeting customers expectation and total productive maintenance was equally found out to have positive effect on profit contribution. The study therefore recommends that every manufacturing firm should integrate maintenance budgets into organizational objectives and have functional maintenance centres; Manufacturing firms should be committed to high maintenance culture to minimize production losses and wastes. Preventive maintenance education and training should be given to every machine operator on regular basis and implementation of preventive maintenance actions be monitored by the head of maintenance department to reduce the chances of machine breakdown. Keywords Production facilities maintenance; Competitive advantage I. INTRODUCTION Over the last decennia, maintenance function in manufacturing and production operations has evolved from non-issue into a strategic concern due to emergence of dynamic changes in the manufacturing industry across the globe, business process reengineering and the need to meet customers expectations to remain competitive [1]; [2]; [3]. The stringent competition in the manufacturing industry underlines the need for improvement in a manufacturing company s competitive advantages on the basis of cost, product quality, productivity target, on-time delivery and profitability. [4] note that due to intense global competition and in order to remain competitive, manufacturing firms are striving to improve and optimize their productivity through performance measurement systems that take into account different important elements of productivity in manufacturing processes. The competitiveness of manufacturing firms depends on the availability, reliability and productivity of their production facilities [5]. The need to improve the availability, reliability and operations of a manufacturing plant (production system) has brought maintenance function into the limelight. There is consensus among researchers that equipment maintenance and system reliability are important factors that affect manufacturing firms ability to provide quality and timely services to customers and to be ahead of competition [6]; [7]; [8]; [9]. The concept of maintenance in the industrial world evolved from Japan and it rests on the premise that no facility can operate at peak efficiency without being maintained. Today, maintenance function is developed on the basis of Japanese philosophy for /Copyright 215, IJRMST, December

2 machine availability, reliability and performance and is no longer seen as a necessary evil but as an integral part of production. [1] hold that the scope of maintenance management as well as machine performance evaluation, improvement and disposal cover every stage in the life cycle of a production system. Nigeria s manufacturing firms are faced with challenging needs to optimize their production systems. Increased competition in the manufacturing industry has emphasized the role of improved maintenance management towards enhancing organization s competitiveness. Survival therefore depends on their ability to compete effectively and by extension competitive advantage occurs when firms use available resources and capabilities to develop organizational competence that in turn create value for customers. Confronted with this reality, manufacturing organizations in Nigeria are under pressure to enhance their competence to create value for customers and to improve cost effectiveness, product quality, productivity target, on-time delivery, profitability and flexible manufacturing systems on a continuous basis through availability, reliability and optimum performance of manufacturing plant. Manufacturing organizations that want to survive in today s highly competitive environment must address the need for cost effective maintenance in manufacturing and production operations. A. Statement of the Problem Nigerian manufacturing firms are challenged by poor maintenance culture over production facilities, which results in loss of competitive advantage. Over half of the manufacturing firms that have maintenance department do not receive adequate management attention, owing to the fact that management often look at maintenance as a necessary evil and not as a means to have competitive advantages with respect to service, cost, quality, productivity target, on-time delivery, profitability and flexible manufacturing systems. B. Objectives of the Study Our study is guided by the following objectives: 1. To find out whether reactive maintenance of machines will lead to reduced cost of manufacturing operations in Nigeria. 2. To ascertain how preventive maintenance of machines can improve product quality of firms. 3. To find out whether the relationship between preventive maintenance of production machines and product quality determination will significantly affect productivity targets of firms in Nigeria. 4. To determine how reliability centre maintenance of production machines can account for on-time delivery in meeting customers expectation. 5. To investigate the effect of total productive maintenance on contribution margins of Nigerian manufacturing firms. C. Research Questions To direct the study, the following research questions are formulated: 1. To what extent can reactive maintenance of machines lead to reduced cost of manufacturing operations in Nigeria? 2. How can preventive maintenance of machines improve product quality of firms? 3. Can the relationship between preventive maintenance of production machines and product quality determination significantly affect productivity targets of firms in Nigeria? 4. To determine how reliability centre maintenance of production machines can account for on-time delivery in meeting customers expectation. 5. How does total productive maintenance affect the contribution margins of Nigerian Manufacturing firms? D. Research Hypotheses The study seeks to validate the following research hypotheses: 1. Reactive maintenance of machines will not lead to reduced cost of manufacturing operations in Nigeria. 2. Preventive maintenance of machines cannot improve product quality of firms. 3. The relationship between preventive maintenance of production machines and product quality determination cannot significantly affect productivity targets of firms in Nigeria. 4. Reliability centre maintenance of production machines cannot account for on-time delivery in meeting customers expectation. 5. Total productive maintenance does not affect the contribution margins of Nigerian manufacturing firms. II. REVIEW OF RELATED LITERATURE A. Theoretical Framework We anchored this study on constraints as well as lean manufacturing theories. The theory of constraints was conceived by [11] whereas the lean manufacturing theory was developed by [12]. Today, these two theories are applied for business process reengineering in the world of manufacturing processes. The theory of constraints states that every system no matter how well it performs has at least one /Copyright 215, IJRMST, December

3 constraint that limits its performance. It focuses on the need to identify the bottleneck in a system that determines the performance of the system and to develop means to improve performance.[13] opines that internal constraints of a business organization are made of three elements people, policy and equipment and that the theory of constraints is a methodology for managing production planning and scheduling. [14] defines constraint as anything that limits the system for achieving higher performance relative to its purpose. Therefore, applying the theory of constraints to a manufacturing system that has multiple linked activities, both in the short and long run, constraint to overall equipment effectiveness affects its objective functions as well as the operational performance of that firm. [15] notes that objective functions of a business are cost minimization and profit maximization and they are subject to constraints. The theory of lean manufacturing states that production and manufacturing is process-oriented in which the flow of the entire production and manufacturing process is continuous to create value for customers by eliminating activities that are considered waste; to increase efficiency of the production and manufacturing systems for competitive advantage [16]. This theory hinges on the flexibility of a manufacturing system to increase efficiency, product quality, on-time delivery, continuous improvement and elimination of waste that do not add value to end products. [17] hold that in lean manufacturing, emphasis is placed on elimination of waste from inventories, product defect and machine processing time. The movement toward lean manufacturing, just-in-time and agile production is meant to minimize waste caused by bad inventory management, product defect, processing time and to increase operational performance in terms of cost, quality, productivity target, on-time delivery and flexibility in manufacturing operations through overall equipment effectiveness brought about by maintenance culture. Thus, the theory of lean manufacturing is directed towards improving the entire production and manufacturing process. B. Conceptual Review [18] view maintenance as the combination of all technical and associated administrative actions intended to retain an item in, or restore it to, a state in which it can perform its required function. This means that maintenance is a series of actions necessary to restore or maintain an asset or equipment item in an efficient operational state. It means upkeep of equipment in operational condition or to repair it to its operational mode. Maintenance acts as a support for the production process where the production input is converted into specified production output [19]. Therefore maintenance is an important organizational function that support production related processes. [2] argue that the effectiveness of a manufacturing firm is sub-optimized at the instance of poor maintenance culture. According to [21] the reliability of production system and overall equipment effectiveness are the premises around which maintenance management revolves. [22] posit that maintenance goes hand in hand with production system availability, reliability and safety alongside competitive advantages with respect to cost, product quality, quantity, on-time delivery and flexibility in manufacturing operations. [22] note that due to production system or machine failure manufacturing firms incur cost as a result of loss of operation, as well as product defect, late time delivery. All these affect their profit margin. The concept of overall equipment effectiveness is old in the discourse of zero waste and optimization of manufacturing operations. To meet up with the challenges of world-class manufacturing, the concept of overall equipment effectiveness becomes critical in the pursuit of systematic approach to maintenance management, operations and equipment management. To [23], overall equipment effectiveness is the total productive maintenance metric for measuring equipment effectiveness or productivity. The optimization of equipment, productivity and continuous improvement of equipment in manufacturing process is what [24] describes as overall equipment effectiveness. [25] view overall equipment effectiveness as a metric that is a function of equipment availability, equipment performance efficiency and quality rate. [26] see overall equipment effectiveness as one of the lean manufacturing tools and as a metric for evaluating the success of total productive maintenance programme. [27] note that overall equipment effectiveness is central to the formulation and implementation of maintenance management strategy and it measures the effectiveness of planned production schedules. [28] postulate that overall equipment effectiveness is a productivity improvement process that starts with management support and cross functional commitment within a manufacturing organization for equipment problem solving. The concept of overall equipment effectiveness is complimentary to the concept of total productive maintenance that has three basic goals of zero product defects, zero breakdowns and zero accident and it is an aid to lean manufacturing, just-in-time manufacturing and total quality management. [29] define the three elements of overall equipment effectiveness thus: Availability is the effectiveness of the operation to make equipment available to perform production activity; performance is the effectiveness of an operation to execute production activity during the period of time that the equipment is available and /Copyright 215, IJRMST, December

4 able to perform manufacturing activity; quality is the effectiveness of an operation to produce units that meet production quality specification during the period of time in which equipment is performing production activity. Therefore, availability is a measure of how long (time) an asset is running out of the total time it would be able to use; performance efficiency is the amount of products produced within a given time compared to the expected amount of products it would have produced while quality describes amount of products not required rework. The availability of equipment is the portion of the equation that measures the percentage of time equipment or operation is running compared to the available time. For example, if a machine meant to run for 1 hours runs for 8 hours, then the availability is 8% (i.e. 8/1 x 1). The performance efficiency of equipment is the portion of the equation that measures the running speed of manufacturing operations compared to its maximum capability (speed rate). For instance, if a machine produced 75 products per hour while running but the capability of the machine is 1 products per hour, performance efficiency is 75% (i.e. 75/1 x 1). The quality rate is the portion of the equation that measures the number of quality products produced compared to the total number of products made. For example if 5 products are made and 45 are good quality, the quality is 9% (i.e. 45/5 x 1). From the examples given, overall equipment effectiveness (OEE) = 8% x 75% x 9% = 54%. Each component points to an aspect of the process that can be targeted for improvement. Frequent machine breakdown and low plant availability are threats to a manufacturing concern as it affects the chances of meeting customers requirements via cost of operations, product quality, quantity and on-time delivery, which are the baseline for profit determination. Overall equipment effectiveness has key objective of eliminating or minimizing losses in a production system arising from machine failure. As many manufacturing organizations focus on minimization of losses resulting from planned downtime for scheduled maintenance activities, as well as unplanned down time affecting production schedules, the need for overall equipment effectiveness becomes intense. This means that overall equipment effectiveness is a method to understand the performance of manufacturing areas, to identify possible limitations in the use of production facilities for manufacturing operational performance. In manufacturing operations, it is obvious that system interruptions result from equipment failure and it is necessitated by poor maintenance culture. Many reactive and proactive maintenance strategies have evolved over time to keep manufacturing systems operating at peak efficiency. A list of reactive maintenance includes breakdown maintenance and corrective maintenance, while proactive maintenance consists of preventive maintenance, maintenance prevention, predictive/condition based maintenance, reliability centred maintenance and total productive maintenance. [3] posits breakdown maintenance to be a corrective maintenance strategy, where repair is done after the equipment failure or upon occurrence of severe performance decline. [31] hold that corrective maintenance is a breakdown maintenance that is carried out on a system or machine that has failed. These authors further opine that corrective maintenance actions are in contrast to preventive maintenance actions. To [32], corrective maintenance is a policy that focuses on performing repair/maintenance work after a system or component failure has occurred. This type of maintenance policy is not concerned with scheduling inspections or service routines on deteriorating components. Breakdown or corrective maintenance implies that repairs are made after the equipment failed and cannot perform its normal function anymore, thus it a reactive maintenance strategy. In the view of [33], it is more costly to carry out maintenance on a failed system than to prevent the system from failing. Corrective maintenance can as well give rise to poor and hurried maintenance, delay in production, plant deterioration, increased chances of accidents and less safety for both workers and machines spoil of materials, loss of customers to competitors and direct loss of profit. Thus, the application of breakdown or corrective maintenance strategy alone does not suit large production or manufacturing operations because of the critical downtimes. In the case of small manufacturing outfits where down times are not critical and repair cost is less than other type of maintenance and financial justification for scheduling is not felt, breakdown or corrective maintenance may be more beneficial. [34] view maintenance cost associated with reactive maintenance from two perspectives - direct and indirect costs. They agreed with [33] in their own studies and concluded that direct and indirect costs include costs connected with in-house and out-house (outsourcing) maintenance activities. [35] further refer to direct maintenance cost as cost associated directly with the maintenance activities, which includes the internal costs that are required to carry out the maintenance functions such as labour, tools, spare parts, training and other maintenance expenses that are directly related. Indirect costs on the other hand include costs indirectly related or associated with maintenance, which can be attributed to issues like loss due to production losses resulting from planned and unplanned downtime of equipment, loss of customer, loss of market share as a result of maintenance related factors, performance inefficiency cost, idle fixed cost resources (idle machine and idle worker costs during breakdown), late time delivery, poor product quality /Copyright 215, IJRMST, December

5 Preventive maintenance concept was introduced in This form of maintenance is a proactive maintenance strategy; it is a physical check-up of the equipment to prevent equipment breakdown and to prolong equipment service life. Preventive maintenance is a type of maintenance activity that is undertaken after a specified period of time or amount of machine use. Preventive maintenance relies on the estimated probability that the equipment will breakdown or experience deterioration in performance at a specified interval. Preventive maintenance focuses on equipment inspection, lubrication, cleaning, and replacement of sub-components, tightening and adjustment. [36] assert that business organizations that use preventive maintenance do plan regular maintenance inspection so that any issue that may occur with a piece of equipment can be identified before a critical failure occurs; that preventive maintenance ensures that critical parts are replaced before they fail and consumer able items such as oil and lubricants are changed regularly. [37] describe preventive maintenance as a maintenance strategy that reduces the frequency and sporadic failure by performing planned repairs, replacement, overhauling, lubricating, cleaning and inspecting at specific time interval. The intent of the preventive maintenance strategy is to minimize the probability of equipment failure by conducting maintenance before the failure of the equipment. This form of maintenance would be more effective with the support of a computerized system, such as computerized maintenance management systems [38]. As manufacturers are faced with stiff pressure to control and improve productivity, preventive maintenance emerged as an essential capability. Preventive maintenance is one of the most popular maintenance policies that improve equipment life span, its availability and reliability for optimum operational performance. It focuses on scheduling routine inspections and performing necessary upkeep and service on components in order to prevent and fix problems before failure occurs. In preventive maintenance, equipment is repaired and serviced before failure occurs. The frequency of maintenance activities is pre-determined by schedule and is aimed at improving the overall reliability and availability of a system. Preventive maintenance maximizes the efficiency and availability of critical tools, equipment and avoids unplanned stoppages. When operating a lean manufacturing philosophy, it is very important to ensure that manufacturing equipment does not break down; otherwise everything quickly comes to a standstill especially where there is no buffer stock in the production system. Hence, effective preventive maintenance becomes critical. [39]; [4]; [41]; [42] in their works describe predictive maintenance as condition based maintenance (CBM). Predictive maintenance is a maintenance philosophy which uses the actual operating condition of equipment and systems within a plant to optimize total operation of the plant. The conditions that can cause deterioration and that can lead to failure are searched for in predictive maintenance. This is a maintenance technique that determines the condition of in-service equipment in order to predict when maintenance should be performed. This maintenance approach allows convenient scheduling of corrective maintenance and it prevents unexpected equipment failures. Predictive maintenance determines which equipment needs maintenance, maintenance work to be done and the maintenance plan to be implemented, thus increasing plant availability. [43] opine that condition-based maintenance (CBM) is a maintenance system that observes and collects information concerning the condition and health of equipment to prevent unexpected failure and to determine optimum maintenance schedule. Predictive maintenance refers to maintenance based on the actual condition of a component, that is, maintenance not performed according to fixed preventive schedules but when certain changes in characteristics are noted instead. Diagnostic information on the condition of a system or component plays an important role in this maintenance strategy. Predictive maintenance evaluates the condition of equipment by performing periodic or continuous equipment condition monitoring to determine the trend of deterioration process and failure rate/level for appropriate maintenance actions to be taken. Condition based maintenance utilizes condition monitoring (CM) information to schedule maintenance routines. The ultimate goal of predictive maintenance strategy is to perform maintenance at a scheduled point in time when the maintenance activity is most cost-effective and before the equipment loses performance within a threshold. [44] postulate that condition based maintenance reduces rate of equipment failure, makes maintenance activities to be appropriate and minimizes inventory of spare parts because of anticipated maintenance needs. Condition based maintenance manages equipment trend value by measuring and analyzing data about deterioration through a surveillance system. The service life of equipment is predicted based on diagnosis. In predictive maintenance, machine condition is periodically monitored and this enables the maintenance crew to take timely actions, such as machine adjustment, repair or overhaul. It makes use of human sense and other sensitive instruments, such as audio gauge, vibration analyzer, amplitude meter, pressure, and temperature and resistance strain gauges. However, an unusual noise, vibration, change in temperature, linkage or shortage of oil and excessive hotness of equipment predict trouble. Condition based maintenance is a maintenance that is performed after one or more aforesaid indicators show that equipment is going to fail or that equipment performance is deteriorating. This type of /Copyright 215, IJRMST, December

6 maintenance is based on real-time data to prioritize and optimize maintenance resources. The state of a manufacturing system is observed (condition monitoring) to determine the equipment's health and act only when maintenance is actually necessary. Recent developments have allowed extensive instrumentation of equipment and tools for analyzing condition data to minimize spare parts cost, system downtime and time spent on maintenance. The objectives of Condition Based Maintenance (CBM) is to detect failures before they occur, to carry out maintenance only when required, to reduce the maintenance cost and down time cost. [45] and [46] highlight other benefits associated with condition based maintenance to include improved system reliability and safety, decreased maintenance cost and decreased number of maintenance operations which reduces human error influences. They further observe that very many organizations do not use condition based maintenance for less important parts of machinery despite obvious advantages due to cost. However, over times, it will be applied more widely because of its increased reliability and safety. [47] argues that predictive maintenance allows for overall effectiveness of production and manufacturing plant for improved product quality and productivity target. Innovation, technology, quality assurance, cost reduction and downsizing initiatives are stringent challenges confronting today s manufacturing and service organizations. [48]; [49] and [5] opine that one such innovation that has made use of technology to drive quality management is reliability centred maintenance. These authors see reliability centred maintenance as a process that identifies the maintenance requirements of physical assets and productivity to complement the operational goals of the organization. They argue that this maintenance approach results in optimum performance of the equipment on the premises that reliability centred maintenance examines the function of the asset and understands the productivity goals of the asset; it explore causes of failure and the impacts of failure on the systems and subsystems and that reliability centred maintenance develops mitigation strategies that can be implemented against potential failure. Reliability centered maintenance directs maintenance efforts at the equipment and systems where reliability is critical in order to ensure the highest level of facility effectiveness. To [49], reliability centre maintenance is a systematic and highly structured approach to maximize safety and function of equipment or asset. It uses a rigorous framework for identifying potential ways at which an asset can fail to perform its intended function and the consequences of that failure. It is a new way of thinking about maintenance. It combines all the techniques of reactive maintenance, preventive maintenance, predictive maintenance (conditionbased) and failure finding to optimize equipment reliability in the most economical way. Reliability centred maintenance (RCM) involves the establishment or improvement of a maintenance programme in the most cost-effective and technically feasible manner. [5] opines that reliability centered maintenance provides manufacturing organizations with safety and system reliability, prevention and mitigation of the consequences of equipment failure and maintenance cost effectiveness. [51] conducted a descriptive case study to examine the trend and perspectives in industrial maintenance management of three manufacturing companies (A, B and C) in different industries that have different manufacturing processes also having different products. The case study organizations were from electronics, tractor (mobile hydraulic/mechanical) and health services industries. The results of the case study companies showed that company A had poor maintenance culture over its production facilities as evident in the poor coordination between maintenance unit and production department; maintenance of production machines only at the instance of breakdown and failure; long maintenance lead time and poor maintenance records, which in turn negatively impact on production target, delivery time, use of modern manufacturing techniques (lean, agile, just-in-time), market share and competitive advantages. Company B which is sub-supplier to assembly factories within the tractor industry had good maintenance culture that focused on optimum capacity utilization of production equipment for high operational performance. It was found out that the company has high flexibility in manufacturing operations and uses modern production philosophies to meet customers just-in-time demand order given to their assembly plant. The maintenance function was built on statistical process control to measure the machine conditions and the need for preventive maintenance or major overhaul. In company C, the management focused on maintenance as the production equipment is complex and sensible to quality, process parameters and tolerances. The study disclosed that preventive maintenance was above 8% and it was carried out on regular basis to enable the company meet up with pull-oriented demand of its numerous customers while corrective maintenance exercise was less than 2% and it was done only at the instance of machine breakdown. The maintenance function of company C featured high as integral part of production centre. Computer-based programmes were used in planning preventive maintenance and the result of the finding also showed formal documentation of maintenance activities of company C. Preventive maintenance education and training were often given to the production and machine operators by the maintenance staff to enable them carry out daily maintenance tasks in each production centre for production machine availability, reliability and performance. Again, [51] carried out a study on Maintenance practice in Swedish industries. The study was done by /Copyright 215, IJRMST, December

7 conducting a cross sectional survey within Swedish firms that have at least one hundred (1) employees. The results from the study shows that there is a poor maintenance of facilities among the manufacturing firms in Sweden; the role of maintenance function was poorly appreciated as most of the firms viewed maintenance cost as unnecessary; ineffective use of maintenance techniques such as preventive maintenance, predictive maintenance, reliability centre maintenance (RCM) and total productive maintenance (TPM); poor maintenance planning, scheduling and control affected the availability, reliability and operational efficiency of their manufacturing systems, thus preventing the firms from maximizing business profits and gaining competitive advantages on the ground of operational efficiency, operational quality and operational effectiveness. [29] carried out a descriptive survey in Zimbabwe. The result of the study depicted that breakdown of machine during production process affect process continuity, product quality, production target, on-time delivery, profitability, as well as cost of production. The study also disclosed that breakdown of production machines was frequent and that after carrying out maintenance on production facilities, the machines often experienced start-up failure, thus affecting availability of production machines, which in turn results in poor operational performance. The study also pointed out that machine downtime results from ineffective maintenance planning, strategies, ineffective maintenance management system and poor maintenance culture. With a field survey of five selected manufacturing firms in Nigeria [12] found out that there is high poor maintenance culture among the manufacturing firms as evident in frequent machine breakdown, nonoptimum production capacity, non-availability of spare parts and inadequate maintenance personnel, no proper maintenance documentation, lack of maintenance programme, frequent production shut down, high loss of production due to non-availability and reliability of production machines, loss of customers and sales. The study also revealed the extent of relationship between equipment performance standard and operational efficiency of manufacturing firms to be inverse correlation. [46] examined Total productive maintenance: A case study in manufacturing industry. The study was carried out to evaluate the contributions of total productive maintenance (TPM) initiatives towards improving manufacturing performance in Ethiopian malt manufacturing industry through a descriptive survey research design. The data used for the study were primary data from the company s total productive maintenance documentary source for a six month period (January 211-June 211) and analysed with Overall Equipment Effectiveness Model of machine availability rate, machine performance rate and product quality rate. The results of the study showed 91%, 84% and 92% machine availability rate, machine performance rate and product quality rate respectively. The calculated Overall Equipment Effectiveness (OEE) value of 7.35% was far less than the world class manufacturing Overall Equipment Effectiveness value of 85% by 14.65%. The gap between the actual and achieved Overall Equipment Effectiveness (OEE) was accounted for by poor maintenance culture of production facilities of the case study organization. However, this is an indication that continuous improvement of production facilities through maintenance management is required if producers of malt drink in Ethiopia must remain competitive in the industry by way of optimum operational performance on the basis of cost, product quality, productivity target (quantity), ontime-delivery, profitability and flexibility in manufacturing operations. [14] studied Total productive maintenance review and overall equipment effectiveness measurement. The study was done in Jordan with particular reference to Jordan Steel Company as a case study. The research design adopted was a descriptive survey. The data used for the study were extracted from the company s records on the performance of production machines used in producing steel in three main work stations (oven, dies/cutting and cooling bed) on the basis of machine availability rate, machine performance rate and product quality rate for fifteen (15) operating days in September 27 for the three (3) work stations and analysed with Overall Equipment Effectiveness Model to ascertain the contributions of machine availability rate, performance rate and product quality rate towards the operational performance of the case study organization. The study results indicated that machine availability rate, performance rate and product quality rate were 76%, 72% and 99.6% respectively. The study result also showed that Overall Equipment Effectiveness of Jordan Steel Company was 55% as against the Overall Equipment Effectiveness of the world class manufacturing (85%). The maintenance culture s negative influence on production facilities accounted for the difference between the actual (85%) and achieved (55%) overall equipment effectiveness, which affected the operational performance of the company under review by 3% in terms of cost, quality, productivity, on-time delivery, profitability and flexibility in manufacturing operations. [52] adopted a survey design using RASCH model analysis to examine the influence of organizational culture on the implementation of total productive maintenance and operational performance of 63 manufacturing companies. The study revealed that the relationship between total productive maintenance and operational performance (cost, product quality, productivity, product delivery and flexibility in the use of modern manufacturing strategies) is positive with effective organizational culture. The result also indicated that organizational /Copyright 215, IJRMST, December

8 culture is a moderator variable that determines the relationship between the independent variable (total productive maintenance) and dependent variable (operational performance) of the study. Also, the culture of an organization was found to have a very strong influence on the implementation of maintenance strategies towards operational performance. [34] studied the Impact of maintenance performance in cable manufacturing industry: Cutix Cable Plc. The research design was a descriptive case study aimed at integrating the efficiency and effectiveness of the production function into equipment and plant maintenance in Cutix Cable Plc, Nnewi, Nigeria. The study made use of primary data of 12 months period from January to December 211, as well as direct observation and interview with production, inventory and maintenance personnel of the case study organization and subjected the extracted data to Pearson Product Moment Correlation statistics to measure the strength of the relationship between the maintenance performance and manufacturing system productivity of the company on which the three hypotheses of the study were built. The result of the study revealed three findings. First, no significant relationship was found to exist between equipment availability and overall equipment effectiveness following the obtained computed value of which was less than the critical value from t- test table. Significant relationship was found between production rate and overall equipment effectiveness as a result of computed value of 4.216, which was greater than the critical value from t-test table. Also, the study established no significant relationship between quality rate and overall equipment effectiveness due to the calculated value of.388, which was less than the critical value from t-test table. A. Research Design III. METHODOLOGY We adopted the descriptive survey method to evaluate production facilities maintenance of selected process manufacturing firms of six medium and largesized manufacturing firms in Nigeria. Our choice of the companies was based on the fact that they are process manufacturing firms that run serial production systems, where one machine failure affects process continuity. This is the kernel of the study wherein establishing the relationship between production facilities maintenance and operational performance with respect to cost of manufacturing operations, product quality, productivity target, on-time delivery and profitability is paramount. We designed a structured questionnaire on a five point Likert scale with Crombach alpha of.732; validated the instrument by means of proto-type questionnaire given to production and maintenance experts for the content and face validity. The data generated from the field were analyzed with E-view software package in co-integration statistics. B. Population of the Study The study s population is 3 from five functional units in each of the case study organizations selected, which include maintenance, production, marketing/store administration, finance and general administration. The population is used as a census study due to its size and is shown in table 1 (appendix 1). IV. DATA PRESENTATION AND ANALYSIS Table 2 (appendix 2) is the summary of findings from the questionnaire responses. A. Analysis of Data Survey data from questionnaire instrument of data collection were used to test the study s hypotheses using e-view version 7. software package to run co-integration analysis as shown on table 3&4 (Appendix 3). B. Interpretation of Results Looking at the theoretical signs of the coefficient, reactive maintenance (RAM) which has a negative coefficient value of -.317, has met our theoretical expectation. It therefore means that an increased use of reactive maintenance strategy leads to a direct proportional negative effect on the cost of manufacturing operations. In view of the result, the null hypothesis (H 1 ) is rejected and the alternate hypothesis (H 2 ) that reactive maintenance has effect on the cost of manufacturing operations is accepted. Preventive maintenance (PVM) has a positive coefficient value of.943 which implies that an increased use of preventive maintenance strategy leads to optimum capacity utilization and efficiency of a manufacturing plant in achieving zero defects of products. Based on this coefficient value of.943, the null hypothesis (H 1 ) that there is no significant relationship between preventive maintenance of production machines and product quality determination is rejected. Thus, there is a strong positive relationship between the two variables. Predictive maintenance (PRM) has a positive coefficient value of.11, which implies that there is a significant (positive) relationship. This result connotes that an increased use of predictive maintenance strategy leads to a direct proportional increase in machine availability, reliability and optimum machine performance rate in meeting productivity target (quantity). Hence, the null /Copyright 215, IJRMST, December

9 hypothesis (H 1 ) is rejected and the alternate hypothesis (H 2 ) is accepted. Reliability centre maintenance (RCM) has a positive coefficient value of.37. This depicts that an increased use of reliability centre maintenance strategy leads to optimum capacity utilization and efficiency of a manufacturing plant in producing goods at the right time, right quality, right quantity, as well as delivering finished products to the targeted customers at the right or expected time. In the light of this, the null hypothesis (H 1 ) that reliability centre maintenance does not significantly account for ontime delivery in meeting customers expectation is rejected. Thus, the alternative hypothesis (H 2 ) is upheld. Total productive maintenance (TPM) has a positive coefficient value of.236, which is an indication that an increased use of total productive maintenance strategy leads to total employees involvement in production facilities maintenance management for the purpose of achieving cost minimization and profit maximisation objective functions of business through zero production loss and waste. Against this background, the null hypothesis is rejected and the alternative hypothesis that there is a significant relationship between total productive maintenance and profit contribution is accepted. Thus, since the r-squared is.78 (78%) and the adjusted r-squared is.74 (74%), an r-squared is our degree of error determination. Knowing that the r- squared determines the percentage change in the dependent variable (competitive advantages) to the percentage change in the independent variable (production facilities maintenance), it shows that 78% change in the dependent variable is accounted for by the independent variable. Therefore 22% which was not accounted for was handled by the disturbance variable. P-value enables us to make a categorical statement between our estimated model and the r-squared which is the error determination. Since our F-statistics is and P-value is.; showing that the P-value is <.1, it means that the estimated model and the related error determination which is the error of correlation (r-squared) is significant at that level, thus, there is a relationship between the dependent and independent variables. V. DISCUSSION OF FINDINGS Based on the study results, five findings were made. The study found out that reactive maintenance strategy has direct and indirect cost implications on manufacturing operations. Owing to the coefficient value of -.317, there is an inverse relationship between reactive maintenance strategy and cost of manufacturing operations. The analysis result showed negative influence of reactive maintenance strategy on cost minimization objective of manufacturing operations by way of unplanned down time of manufacturing plant, labour and spare parts cost of maintenance and process damage from machine failure. This finding is in agreement with the findings of [53], [54] that maintenance cost consists of direct cost of labour, tools, spare parts, training and indirect cost of production losses during planned and unplanned stoppages, customer losses, loss of market share as a result of maintenance related factors, performance inefficiency costs, reduced machine speed, poor quality cost, idle fixed cost resources (idle machine and idle worker costs during machine breakdown), delivery delays resulting from unplanned down time, assurance claim from dissatisfied customers as a result of maintenance related poor quality. This study result also corresponds with the view of [55] that it is more costly to carry out maintenance on a failed system than to prevent the system from failing, owing to repair cost, downtime of equipment, loss of production, customers, market and profit. Another finding of the study reveals that there is significant relationship between preventive maintenance of production machines and product quality determination. The relationship between these two variables is a positive one as preventive maintenance strategy accounts for production machines overall effectiveness and reduces the chance of machine process failure to the barest minimum level for product defect control, other things being equal. This study result is in line with the research findings of [56]; [57]; [58] that production machines overall effectiveness accounts for availability of machines, machine performance efficiency and rate of quality products and that it is key to optimization of product quality, quantity, delivery targets and customer satisfaction. The study also found positive relationship between condition-based maintenance (predictive) and productivity target. From the analysis result,.11 coefficient value of predictive maintenance is an indication of significant correlation, which means mutual dependence of productivity target (quantity) on predictive maintenance strategy and inverse relationship between the dependent and independent variable. This result agreed with the report of [59] that predictive maintenance allows for overall effectiveness of production and manufacturing plants for improved product quality and productivity target. Also, the finding is in compliance with the study result of [6] that condition based maintenance improves system availability and reliability for optimum performance. The study result showed that reliability centre maintenance significantly accounts for on-time delivery in meeting customers expectation at.38 coefficient value. Thus, the coefficient value of.38 signifies positive correlation between the reliability centre maintenance and on-time delivery target. This finding is in agreement with the study result of [61] /Copyright 215, IJRMST, December

10 that reliability centre maintenance complements operational goals of a manufacturing organization. The study result is also in harmony with the research view of [62] that reliability centre maintenance provides manufacturing organizations with safety and system reliability, prevention and mitigation of the consequences of equipment failure and maintenance cost effectiveness. At.236 coefficient value, total productive maintenance was found out to have positive influence on profit contribution. This means that the total productive maintenance was able to meet the theoretical expectation that an increase in company expenditure on total productive maintenance, will lead to direct proportional profit contribution. This finding is consistent with the study results of [63] and [64] ;[65]; [66]; [67] that total productive maintenance accounts for overall equipment effectiveness, which in turn influences operational performance of cost, quality, productivity, on-time delivery, profitability and flexibility in manufacturing operations by the percentage in the gap between actual and achieved overall equipment effectiveness. VI. CONCLUSIONS This study examined the effects of production facilities maintenance on the competitive advantage of process manufacturing firms and found out that maintenance function has strong influence on operating cost, product quality, productivity target, on-time delivery and profitability. The study results showed clearly that maintenance of production facilities can improve competitive advantage of manufacturing firms. Hence, successful integration of maintenance function into production and manufacturing operations and its implementation is critical for a manufacturing firm to remain competitive. The choice of maintenance decision to adopt by a manufacturing firm is influenced by maintenance culture and maintenance policies. Owing to production losses and wastes resulting from machine failure, every world class manufacturing firm conducts its manufacturing operations to meet up with the objective functions of cost minimization and profit maximization via production support function while satisfying customer needs. The challenges of manufacturing plant availability, reliability and performance lies within the heartbeat of maintenance culture. VII. RECOMMENDATIONS In line with the findings of this study, we recommend that every manufacturing firm should integrate maintenance objectives into organizational objectives; have functional maintenance centre/department or engage the services of external maintenance experts to sustain the life cycle of manufacturing plant. Looking at the challenges in today s production and manufacturing operations, manufacturing firms should be committed to high maintenance culture to minimize production losses and wastes. Preventive maintenance education and training should be given to every machine operator on regular basis and implementation of preventive maintenance actions be monitored by the head of maintenance department to reduce the chances of machine breakdown, which calls for costly maintenance action. Reactive maintenance strategy should be the last resort maintenance action to engage in having used other maintenance strategies. Maintenance records should be kept and used for maintenance budget by top management of every manufacturing firm. Different maintenance strategies including corrective, preventive, predictive, reliability centre maintenance and total productive maintenance should be used appropriately by process manufacturing firms to maximize operational performance targets of cost effectiveness, product quality, productivity, on-time delivery, profitability and flexibility in the use of modern manufacturing techniques. REFERENCES [1]. Ahuja, I. P. S. and Khamba, J. S. (28). Assessment of contributions of successful TPM initiatives towards competitive manufacturing. Journal of Quality in Maintenance Engineering, 14(4), [2]. Ahuja, I. P. S., Khamba, J. S. and Choudhary, R. (26). Improved organizational behaviour through strategic total productive maintenance implementation. International Mechanical Engineering Congress and Exposition (IMECE), 1-8. [3]. Alsyouf, I. (27). 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