Pass the CIPS Level 4 Diploma in Procurement and Supply L4M7 Questions and answers with Dumpstech

Explanation

Obsolescent stock is stock, usually finished goods, which is in good condition and satisfactory working but for which demand is irreversibly falling towards zero. Once this demand reaches zero the stock can be considered 'obsolete'. It cannot be used or sold in its current state. Food ingredients (like candy canes) which are out of date are another example.

Just-in-Time (JIT) inventory management minimizes stock levels by synchronizing orders with production schedules, which:

Reduces holding costs: Less inventory means lower costs for storage and management.

Increases cash flow: Reduced stock levels free up working capital.

Whole-life asset management supports JIT as a cost-saving measure, focusing on maintaining lean inventories while meeting production needs.

Explanation

Last in, first out (LIFO) is a method used to account for inventory that records the most recently produced items as sold first. Under LIFO, the cost of the most recent products purchased (or pro-duced) are the first to be expensed as cost of goods sold (COGS)—which means the lower cost of older products will be reported as inventory.

Moving average: a calculation to analyse data by creating series of averages of different subset of full data set. It is commonly used with time series data to smooth out short-term fluctuation and highlight long-term trends or cycle

ABC analysis is a method of analysis that divides the subject up into three categories: A, B and C.

There is no technique called time-weighted series.

LO 2, AC 2.3

Explanation

There are different types of maintenance that organizations use to increase the uptime of their assets and utility of their facilities. Based on an organization’s budget, amount of resources, level of combined experience, and maintenance goals, one or more maintenance types are used.

Proactive types of maintenance

Preventive maintenance

Preventive maintenance is the most popular type of proactive maintenance. To start conducting preventive maintenance tasks (PMs), an organization does not need to purchase new technology if it already has a CMMS. This is not the case with predictive maintenance which requires condition monitoring sensors and new software integrations. However, with preventive maintenance, the or-ganization runs the risk of over-scheduling maintenance tasks because tasks are scheduled based on time rather than actual conditions. That said, preventive maintenance achieves 12% to 18% cost savings over reactive maintenance.

Predictive maintenance

Predictive maintenance (PdM) is what savvy maintenance teams aspire to have or are already im-plementing. The major barrier to PdM is the time it takes to implement rather than the cost of the technology itself. For instance, a vibration sensor that can identify imbalance, misalignment, and resonance issues only costs around $200. But the time it takes to install, integrate with other maintenance software, and adopt a culture around is not time that all organizations are willing to allocate. For those that do allocate the time, PdM provides an 8% to 12% cost savings over preventive maintenance.

Condition-based maintenance

Condition-based maintenance (CBM) is at the core of predictive maintenance but, on its own, does not rely on technology to determine the condition of an asset like PdM does. For instance, a manager may instruct an operator to monitor the condition of an asset and submit a work request when a specific condition is met. This approach may, or may not be, as reliable as predictive maintenance. An organization that has highly-trained operators may spot hazardous conditions better than an organization using PdM technology that doesn’t know what to look for.

Scheduled maintenance

Scheduled maintenance includes work that is scheduled on a calendar for completion. The most common type of scheduled maintenance is calendar-based preventive maintenance tasks. These are scheduled well in advance of completion. For instance, an asset with a monthly PM has twelve instances of scheduled maintenance in a given year. However, just because maintenance is scheduled does not mean it’s planned. Planned maintenance implies that a maintenance planner or other type of maintenance worker has fully planned for parts, materials, skills, and other resources to be available during the scheduled time window.

Planned maintenance

Planned maintenance is work that’s prepared for in advance of it taking place. According to an UpKeep survey, it’s also the most popular key performance indicator (KPI) to track. A high planned maintenance percentage indicates that a maintenance team will have resources available to complete work for the time/day the work is scheduled for. Having a high planned maintenance percentage also helps boost other maintenance KPIs like schedule compliance. More planned maintenance means more successful completion of scheduled maintenance.

Routine maintenance

Routine maintenance is a form of time-based maintenance and preventive maintenance, though some organizations differentiate between routine maintenance and preventive maintenance. They use the latter for smaller tasks (i.e. cleaning) performed at higher frequencies (hourly, daily) and the former for larger tasks (i.e. inspections) performed at lower frequencies (weekly, monthly, annually). Additionally, routine maintenance is performed by operators, janitors, and other staff member while preventive maintenance is performed by technicians. Non-routine maintenance includes maintenance that is performed reactively or only when needed based on an asset’s conditions.

Reactive types of maintenance

Emergency maintenance

Emergency maintenance occurs when an asset requires immediate attention in order to keep a facility operational or safe. This is the most reactive and intrusive type of maintenance as it pulls technicians away from other jobs and lowers schedule compliance. In extreme circumstances, emergency maintenance can set an organization back days depending on the scope of the repair, available parts, and the asset’s level of importance. To reduce the amount of emergency maintenance that is both unplanned and unscheduled, organizations adopt various forms of proactive maintenance.

Corrective maintenance

Corrective maintenance is inherently part of emergency maintenance because, when there is an emergency, something needs corrected or fixed. In this way, corrective maintenance is mostly reactive. However, it can also be proactive. If an asset with a condition monitoring sensor detects an issue, a work order is created and a technician is sent to correct it. Similarly, preventive maintenance is considered corrective maintenance if there is an issue to fix. This is rare though as PMs are often conducted when an asset is in good working order.

Other types of maintenance

Deferred maintenance

Deferred maintenance includes repairs and inspections that are put into a backlog due to limited budget and resources. While deferring maintenance saves money up front, the costs of not performing important maintenance compounds at 7% annually. Rising costs come from fines resulting from missed inspections and unscheduled downtime that brings production to a standstill. By far, deferred maintenance and emergency maintenance are the least desired types of maintenance.

Total productive maintenance

Total productive maintenance (TPM) is the broadest type of maintenance that targets more than the assets that need maintained. It also aims to improve employee satisfaction and overall morale in the workplace, specifically in manufacturing plants. TPM does this by increasing overall equipment effectiveness (OEE) and the amount of planned maintenance. More planned work means more workers have the resources they need to do their job, which means higher levels of satisfaction. TPM also leverages machine operators to participate in maintenance and take ownership of their equipment.