An economic framework for total productive maintenance (TPM)

In the last twenty years, the knowledge of Lean has been spread out to the industry and the academia as well. Lean represents a set of tools that can be used in order to eliminate the activities that do not add value, commonly called wastes. However, Lean is characterized for improvements where practitioners are not used to tie them up to the savings or the economic benefits of these improvements. Literature about the economic effects of using Lean tools is scarce. A Lean tool that has been widely applied is Total Productive Maintenance (TPM). It is based on the Overall Equipment Efficiency (OEE) index. This index is obtained from three particular elements: Availability, performance and the quality ratio. The OEE index makes TPM suitable for an economic analysis where it is possible to quantify the benefits associated with it in terms of money; a language that management can understand. One of the general models to measure economics is the Cost of Quality (COQ) model, also known as the PAF model with the inclusion of opportunity costs (L). For this reason, this paper develops an economic framework for TPM based on the COQ model, supported by an economic Model.