Activity-Based Costing (ABC: An accounting technique that enables an organization to determine the actual cost of a product or service by tracing the cost back to the specific activities that produce or provide it.
Affinity diagram : A tool for gathering and grouping ideas; one of the new seven quality tools; used in hoshin planning.
Andon: A visual management tool that highlights the status of a process in an area at a single glance whenever an abnormality occurs.
Autonomous Maintenance: A program in which equipment operators share responsibility with maintenance staff for the care of the equipment they use.
Balanced Scorecard (the): The balanced scorecard (Kaplan and Norton, 1992) tracks business organizational functions in the areas of financial, customer, and internal business process, and learning and growth. In this system, an organization’s vision and strategy lead to the cascading of objectives, measures, targets, and initiatives throughout the organization. This book describes issues with this system and an alternative IEE system that overcomes these shortcomings.
Baseline: Beginning information from which a response change is assessed.
Batch Processing: The movement of products through the manufacturing process in large numbers of identical units at once. Entire batches, or lots, are sent to each operation in the production process at the same time. Also known as large-lot processing.
Benchmark: A standard in judging quality, value, or other important characteristics.
Business Process Improvement Event (BPIE) System: A system for identifying and timely resolving reoccurring problems. The resolution for these issues could lead to a simple agree-to procedure change, a DMADV design project, or P-DMAIC process improvement project.
Capability/Performance Metric: See Process capability/performance metric.
Capacity: The ability of a machine and its operator to complete the work required.
Cause-and-Effect Diagram (C&E Diagram): Also called the fishbone or Ishikawa diagram, the C&E Diagram is a graphical brainstorming tool used to organize possible causes (KPIVs) of a symptom into categories of causes (problem solve). Standard categories are considered to be materials, equipment, methods, personnel, measurement, and environment. These are branched as required to additional levels. It is a tool used for gathering Wisdom of the Organization.
Cause-and-Effect Matrix: A tool used to help quantify team consensus on relationships thought to exist between key input and key output variables. The results lead to other activities such as FMEA, multi-vari charts, ANOVA, regression analysis, and DOE.
Cell: The location of processing steps for a product collocated next to other steps so that parts, documents, etc., can be processed in a continuous flow process.
Champions: Executive level managers who are responsible for managing and guiding the Lean Six Sigma or IEE deployment and its projects.
Changeover – Intellectual: The process from switching from one office task or process to another or from one design process to another – mental preparation to perform a new or different task or to change from one task to another.
Changeover – Machine: A process of switching from the production of one product or part number to another. Changeover time is measured as the time elapsed between the last piece in the run just completed and the first good piece from the process after the changeover.
Collins’s Three Circles
What can you do to be the best in the world?
What drives your economic engine?
What are you deeply passionate about? (Collins, 2001)
Constraining Operation: The manufacturing step that determines the upper limit on the number of finished parts that can be produced within a value stream. Also known as a bottleneck operation.
Continuous flow: In its purest form continuous flow means that items are processed and moved directly to the next process one piece at a time. Each processing step complete its work just before the next process needs the item, and the transfer batch size is one. Also known as one-piece flow and “make one, move one.”
Control Chart: A procedure used to track a process over time for the purpose of determining whether data are common or special cause.
Core Processes: The essential activities an organization must perform to produce products, complete order fulfillment functions, maintain its assets, and complete all supporting business functions.
Corrective Action: Process of resolving problems.
Cost of Doing Nothing Differently (CODND): COPQ within Six Sigma includes not doing what is right the first time, which can encompass issues such as scrap, reworks, and meeting with no purpose. To keep IEE from appearing as a quality initiative, I prefer to reference this metric as the cost of doing nothing differently (CODND), which has even broader costing implications than COPQ. In this book, I make reference to the CODND.
Cost of Non-Conformance (CONC): The cost of waste, caused by things like rejects, engineering change orders, excess or obsolete parts and warranty repair – a tool for converting waste into dollars.
Cost of Poor Quality: Traditionally, cost of quality issues have been given the broad categories of internal failure costs, external failure costs, appraisal costs, and prevention costs.
Cross-Dock: A mapping icon used to indicate the movement of materials from in-bound trucks to shipping lanes for out-bound trucks by-passing warehousing.
Cross Training: The capability to perform another team members tasks, responsibilities in their absence.
Current State: Capturing the “as-is” of a process or task. This is the first step to Value Stream Mapping the current state.
Customer: Someone for who work or a service is performed. The end user of a product is a customer of the employees within a company that manufactures the product. There are also internal customers in a company. When an employee does work or performs a service for someone else in the company, the person who receives this work is a customer of this employee.
Customer Value: An aspect of a product or service for which a customer is willing to pay.
Cycle Time: The time when work was started on an operation/work segment until the operation/work segment is complete. Cycle time is a subject of production lead-time. If the cycle time for each operation or work segment can equal taxt time, products can be made in single piece flow.
Dashboard: See Scorecard.
Days Sales Outstanding (DSO): In general, the average number of days it takes to collect revenue after a sale has been made. In the example in the text, it is the average number of days before or after the due date that a payment is received.
Defect:A part, product, or service that does not conform to specifications or a customer’s expectations. Defects are caused by errors.
Defective: A nonconforming item that contains at least one defect or having a combination of several imperfections, causing the unit not to satisfy intended requirements.
Demand-Supply Chain: All the parts, materials, and services supplied by outside sources that are necessary to produce a product or service.
Deming, Dr. W. Edwards: As an American statistician, Dr. Deming is known for his top management teachings in Japan after World War II. Dr. Deming made a significant contribution to Japan becoming renown for its high-quality, innovative products.
Design for Manufacturability: (also sometime known as design for manufacturing) – (DFM) is the general engineering art of designing products in such a way that they are easy to manufacture.
Design-to-Cost: Design to cost simply means designing a product from scratch to meet the “largest cost” or the market price which customers are willing to pay, for a particular (or specified) level of functionality and quality, while returning a profit to the enterprise.
DOE (Design of Experiments): Experiment methodology in which factor levels are assessed in a fractional factorial experiment or in a full factorial experiment structure.
Do-Its: The simplest for of action (usually within 48 hours) and is a result of an issue discovered in an RPI or Value Stream. It is not another event; rather it is an issue or item that needs immediate attention.
Dojo: Training hall.
Drill-Down: A transition from general category information to more specific details by moving through a hierarchy.
DTD (Dock-to-Dock): A metric that measures how long it takes raw materials or sub-components coming into a plant to be turned into finished products.
Dwell Time: The period during which a dynamic process remains halted in order that another process may occur.
Earnings Per Share (EPS): Earnings power for each share of ownership. EPS goes up when earnings to up. It also goes up if the number of shares held by our shareowners goes down, thus making the earnings power per share higher.
Electronic Date Interchange, EDI: Electronic commerce is the exchange of information within or between enterprises for daily business activities. Also, the paperless (electronic) exchange of trading documents, such as purchase orders, shipment authorization, advanced shipment notices, and invoices, using standardized document formats.
End-of-the-Line Inspection: An inspection or check done at the end of a process.
Enterprise Resource Planning (ERP): The integration of all an organization’s departments and functions onto a single computer system that can serve all those different departments’ needs.
Error: Any deviation from a specified manufacturing or business process. Errors cause defects in products or services.
Error-Proofing Devices: Mechanical, electrical, or pneumatic devices that signal existing errors or prevent potential ones.
Expedited Transport: To go around or by-pass normal operations to elevate priority of a task or product.
External Processes: Activities that an equipment operator can perform while the production line is still running.
Fail-Safing: A process, procedure or device within an organization that prevents a defect due to failure or malfunction.
FIFO (First-In, First-Out): A production method in which the oldest remaining items in a batch are the first to move forward in the production process.
Finished Goods: Manufactured product ready for sale – often referred to as finished good inventory.
Firefighting: The practice of giving focus to fixing the problems of the day or week. The usual corrective actions taken in firefighting, such as tweaking a stable process, do not create any long term fixes and may actually cause process degradation.
First In, First Out (FIFO): The first part to enter a process or storage location is also the first part to exit.
Fishbone diagram:: A problem-solving and brainstorming tool; also known as a Cause and Effect diagram; one of the Seven Quality Tools.
5S’s (Sort, Shine, Set in Order, Standardize, and Sustain): A method of creating a clean and orderly workplace that exposes waste and errors.
5S’s in Japanese: Seiri (put things in order), Seiton (proper arrangement), Seiso (clean), Seiketsu (purity), and Shitsuke (commitment).
Five Why Analysis: A problem-solving technique that entails continually asking why until the root cause is found.
Fixed Costs: Costs that aren’t changed by production or service/sales levels, such as rent, property tax, insurance, and interest expenses. They are the costs of being in business.
Flow: The progressive achievement of tasks along the value stream so that a product proceeds from design to launch, order to delivery, and raw materials into the hands of the customer with no stoppages, scrap, or backflow.
FMEA (Failure Mode and Effect Analysis): A proactive method of improving reliability and minimizing failures in a product or service. It is an analytical approach to preventing problems in processes. For a process FMEA, Wisdom of Organization is used to list what can go wrong at each step of a process that could cause potential failures or customer problems. Each item is evaluated for its importance, frequency of occurrence, and probability of detecting its occurrence. This information is used to prioritize the items that most need improving. These are then assigned to a corrective action plan to reduce their risk.
Free Cash Flow: Cash that remains after we have subtracted all the costs of making and selling our products. It represents the amount of cash available for shareowners (dividends) and investments.
FTT (First Time Through): A metric that measures the percentage of units or aspects of a service that are completed without error the first time they go through your work processes.
Future State: Representation or vision of a process in a ?to be? scenario, eliminating waste that is currently in the process – this is the second step in Value Stream Mapping.
Gantt Chart: A bar chart that shows activities as blocks over time. A block’s beginning and end correspond to the beginning and end date of the activity.
Gemba: The real place or the specific place. Usually means the shop floor and other areas where work is done.
Genchi genbutsu: Go see; go to the real place and see what is actually happening.
Green Belts (GBs): Part-time practitioners who typically receive two weeks of training over two months. Their primary focus is on projects that are in their functional area. The inference that someone becomes a green belt before a black belt should not be made. Business and personal needs/requirements should influence the decision whether someone becomes a black belt or green belt. If someone’s job requires a more in-depth skill set, such as the use of Design of Experiments, then the person should be trained as a black belt. Also, at deployment initiation black belt training should be conducted first so that this additional skill set can be used when coaching others.
GTS: Grasp the situation; the heart of PDCA.
Hansei: Reflection; part of both hoshin planning and problem solving.
Histogram: A graphical representation of the sample frequency distribution that describes the occurrence of grouped items.
Hoshin: A statement of objectives, goals, direction, and/or policy.
Hoshin Kanri: Japanese name for policy deployment. Used by some Lean companies to guide their operational strategy.
Hoshin planning: See Hoshin kanri.
Hypothesis: A tentative statement, which has a possible explanation to some event or phenomenon. Hypotheses are not a theoretical statement. Instead, hypotheses are to have a testable statement, which might include a prediction.
Ideal-State Map: Part of the value stream process to develop a process with out limitations or starting from scratch on demand, one by one, defect free, low cost, capable and committed work force.
In Control: The description of a process where variation is consistent over time; that is, only common causes exist. The process is predictable.
Individuals Control Chart: A control chart of individual values where between-subgroup variability affects the calculated upper and lower control limits; i.e., the width between the upper and lower control limits increases when there is more between subgroup variability. When plotted individuals chart data is within the upper and lower control limits and there are no patterns, the process is said to be stable and typically referenced as an in control process. In IEE, this common-cause state is referenced as a predictable process. Control limits are independent of specification limits or targets.
Information Flow: The information necessary to complete any process. The movement of information on customer desires backward from the customer to the points where the information is needed to direct each operation. The flow of information tells each process what to make or do next. The information flow is treated with as much importance as the material flow.
Information Technology: Computer systems and applications, which involves development, installation, and/or implementation.
Integrated Enterprise (process) Excellence (IEE, I double E): A roadmap for the creation of an enterprise process system in which organizations can significantly improve both customer satisfaction and their bottom line. The techniques help manufacturing, development, and service organizations become more competitive and/or move them to new heights. IEE is a structured approach that guides organizations through the tracking and attainment of organizational goals. IEE goes well beyond traditional Lean Six Sigma and the balanced scorecard methods. IEE integrates enterprise process measures and improvement methodologies with tool such as Lean and Theory of Constraints (TOC) in a never-ending pursuit of excellence. IEE becomes an enabling framework, which integrates, improves, and aligns with other initiatives such as Total Quality Management (TQM), ISO 9000, Malcolm Baldrige Assessments, and the Shingo Prize. IEE is the organizational orchestration that moves toward the achievement goal of the three Rs of Business: i.e., everyone is doing the Right things and doing them Right at the Right time.
ISO 9000: The International Organization for Standardization (ISO) series of developed and published standards. The intent of these standards is to define, establish, and maintain an effective quality assurance system in both manufacturing and service industries.
IT: See Information Technology
Jidoka: Automation with a human mind. Jidoka means developing processes with both high capability (few defects made) and containment (defects contained in the zone).
Jim Collins’s Three Circles: See Collins’s three circles.
Jishuken: Voluntary study groups; e.g., association suppliers might join to share experiences and thus deepen their understanding of critical concepts.
Just-In-Time Inventory (JIT): A method of inventory management in which small shipments of stock are delivered as soon as they are needed. JIT minimizes stocking levels.
Kaizen Event or Blitz: An intense short-term project that gives focus to improve a process. Substantial resources are committed during this event; for example, Operators, Engineering, Maintenance, and others are available for immediate action. A facilitator directs the event, which usually includes training followed by analysis, design, and area rearrangement.
Kanban: Pulling a product through the production process. This method of manufacturing process-flow-control only allows movement of material by pulling from a preceding process. Inventory is kept low. When quality errors are detected, less production is affected.
LAI (Lean Aerospace Initiative): A consortium at the Massachusetts Institute of Technology focused on understanding and applying lean and deploying knowledge around lean principles and practices in industry. Visit them on the Web at http://lean.mit.edu/.
Law of Physics: A physical law, or a law of nature, that is considered true.
Lead Time: From a customer standpoint it is the total time a customer must wait to receive a product after placing an order. Production and Procurement cycle time are subsets of lead-time.
Lean: Improving operations and the supply chain with an emphasis on the reduction of wasteful activities like waiting, transportation, material hand-offs, inventory, and overproduction.
Lean Supply Chain: A lean supply chain defines how a well-designed supply chain should operate, delivering products quickly to the end customer, with minimum waste.
Level Five System: Jim Collins (2001) describes in Good to Great as a level five leader as someone who is not only great when they are leading an organization but who enables the organization to remain great after they leave it. I describe the level-five-leader-created legacy as being a Level Five System.
Life Cycle Value Stream Management (LCVSM): A business model utilizing customer-focused value streams with clear accountability and integrated support structures to maximize customer and shareowner value. It incorporates a process for increasing the ration of value to non-value in the overall life cycle of customer deliverable products, systems, or services, and for ensuring the value stream meets or exceeds customer requirements. LCVS leasers are the people responsible for leading the LCVS processes and LCVS teams.
Machine with a Brain or Machine Vision (MV): (MV) is the application of computer vision to industry and manufacturing. It is a subfield of engineering that encompasses computer science, optics, mechanical engineering, and industrial automation.
Malcolm Baldrige Award: An award that recognizes yearly up to five companies that demonstrate outstanding quality management systems. The award, started in 1986, would later be known as the Malcolm Baldrige National Quality Improvement Act which was created under the direction of ASQ and the National Institute of Standards and Technology. The Act established a national award that recognizes total quality management in American industry.
Management by objectives (MBO): The precursor to hoshin planning; introduced by Peter Drucker in his 1954 book, The Practice of Management.
Manufacturing Cycle Time: Amount of time that elapses between the times the production process begins on a product until it is completed.
Market Share: Our portion of the market in which we do business.
Master Black Belts (MBBs): Black belts who have undertaken two weeks of advanced training and have a proven track record of delivering results through various projects and project teams. They should be a dedicated resource to the deployment. Before they train, master black belts need to be certified in the material that they are to deliver. Their responsibilities include coaching black belts, monitoring team progress, and assisting teams when needed.
Material Flow: The movement of physical items through the entire value stream.
Material Flow Time: Inventory that is partially built, but not yet completed. Production work-in-process is used to measure material flow time.
Material Handling: The process of moving material from a warehouse or staging to the point of use – often at an operator’s workstation.
Mean: Sum of all responses divided by the sample size.
Median: For a sample, the number that is in the middle when all observations are ranked in magnitude. For a population, the value at which the cumulative distribution is 0.5.
Mental model: One’s assumptions about how the world works, based on experience, temperament, and upbringing; the invisible glasses that filter our experience and determine what we see.
Milk Run: Routing a delivery vehicle in a way that allows it to make pick-ups or drop-offs at multiple locations on a single travel loop – as opposed to making several trips to each location.
Mixed Model Production/Scheduling (Every Product Every Interval – EPEI): Producing several different parts or products in varying sizes within a work cell so that production is in sync with customer demand.
Mixed Model Work Cell: Capability to produce a variety of items that differ in labor and material content, on the same production line; allows for efficient utilization of resources while providing rapid response to customer demands.
Monument: The process step that determine the upper limit on the number of finished items that can be produced with a value stream – also know as bottleneck.
Move Time: The time that a job spends in transit from one operation to another. Move time is a subset of cycle time.
Muda: A Japanese term indicating efforts that do not add value (waste). Some categories of muda are defects, over production or excess inventory, idle time, and poor layout.
Multiple Cycles: Products that go through a cell more than once in order to be completed. Typically used to provide greater flow visibility for products having a low build rate.
Multi-Tasking : The ability to perform more than one task or series of task in tandem.
Multi-Vari Chart: A chart that displays the variance within units, between units, between samples, and between lots. It is useful in detecting variation sources within a process.
Muri: Strain, either physical or mental; overburden.
Nemawashi: Literally means “to prepare a tree for transplanting,” refers to the formal and informal method of gaining consensus prior to the implementation of a hoshin or plan.
New Seven: Problem-solving tools developed in Japan and North America in the 1970s. They include the affinity diagram, fault tree, Process Decision Program Charts (PDPC), matrix, tree diagram, interrelationship digraph, and Gantt chart.
Nonconformance: Failure to meet specification requirement.
Non-value Added: Any product, process, or service that does not add value to the ultimate customer.
On-Time Delivery: Percentage of product delivered to out customer that is on schedule according to our contracts.
One-Piece Flow: The movement of products through the manufacturing process one unit at a time. Compare to batch processing.
Out of Control: Control charts exhibit special causes conditions. The process is not predictable.
Out of Cycle Work: Tasks of an operator in a multi-operator process which require the operator to break the flow or leave the cell area (i.e. retrieve parts, getting paperwork, etc.)
Pareto Chart: A graphical technique used to quantify problems so that effort can be expended in fixing the “vital few” causes, as opposed to the “trivial many.” Named after Vilfredo Pareto, an Italian economist.
PDCA: The plan, do, check, act cycle developed by Walter Shewhart in the 1930s and refined by W. Edwards Deming.
Pitch: The available time of work week divided by the total number of units scheduled for the work cell. Pitch is used as a heart beat of the work cell – known as a takt time for mixed model scheduling.
Plan, Do, Check, Act (PDCA): An improvement cycle based on the scientific method of proposing a change in a process, implementing the change, measuring the results, and taking appropriate action. The PDCA cycle has four stages:
Plan: Determine goals for a process and needed changes to achieve them.
Do: Implement the changes.
Check: Evaluate the results in terms of performance.
Act: Standardize and stabilize the change or begin the cycle again, depending on the results.
Point of Use Stock: Storing inventory as close as possible to the process that requires them.
Poka-Yoke: A Japanese term indicating a mechanism that either prevents a mistake from occurring or makes a mistake obvious at a glance.
Policy Deployment (Hoshin Kanri): A management process that aligns – both vertically and horizontally – a firm’s functions and activities with its strategic objective. A specific plan is developed with precise goals, actions, milestones, responsibilities, and measures.
Population: Statistically a population is a group of data from a single distribution. In a practical sense, a population could also be considered to be a segment or a group of data from a single source or category. In the process of explaining tools and techniques, multiple populations may be discussed as originating from different sources, locations, or machines.
PPM (Parts per Million): An attribute measurement of defect rate, expressed in defects found divided by one million. Percent defects were once the standard. Note that a percentage-unit-improvement in parts-per-million (ppm) defect rate does not equate to the same percentage improvement in the sigma quality level.
Predictable Process: A stable, controlled process where variation in outputs is only caused by natural or random variation in the inputs or in the process itself.
Preventive Action: An action that is taken to eliminate from reoccurrence a potential nonconformity cause or other undesirable situation.
Probability Plot:Data are plotted on a selected probability paper coordinate system to determine if a particular distribution is appropriate (i.e., the data plot as a straight line) and to make statements about percentiles of the population. The plot can be used to make prediction statements about stable processes. Breyfogle (2008c) describes the creation of this plot.
Process: A series of steps or actions that must occur in a specific sequence to create a design or produces a completed order or product.
Process Capability/Performance Metric: IEE uses the term process capability/performance metric to describe a process’s predictive output in terms that everyone can understand. The process to determine this metric is:
An infrequent sub grouping and sampling plan is determined, so that the typical variability from process input factors occurs between subgroups, for example, subgroup by day, week, or month.
The process is analyzed for predictability using control charts.
For the region of predictability, the noncompliant proportion or parts per million (ppm) is estimated and reported. If there are no specifications, the estimated median response and 80 percent frequency of occurrence is reported.
Process Capacity Table: A tool for gathering information about the sequence of operations that make up a work process and the time required to complete each operation.
Process Delay: The time that batches or lots must wait until the next process begins.
Process Flow Diagram (Chart): Path of steps of work used to produce or do something.
Procurement Lead Time: The time required to obtain all necessary materials. Lead-time begins when a decision has been made to accept a new order to produce a new product and ends when production commences.
Product Development Cycle Time: Amount of time that elapses between the authorization to proceed in the design of a product (Decision Point D) and the introduction of the product into the factory (Decision Point E).
Productivity: The ratio of output to input. It provides information about the efficiency of your core processes.
Progressive Work Cell: Product manufactured in a sequential continuous flow incorporating Successive Checks and Takt Time; work is broken down by segments of time rather than by pieces of material.
Pull: A Lean term that results in an activity when a customer or down-stream process step requests the activity. A homebuilder that builds houses only when an agreement is reached on the sale of the house is using a pull system.
Pull System: A production system in which goods are built only when requested by a downstream process. A customer’s order “pulls” a product from the production system. Nothing is produced until it is needed or wanted downstream.
Purchasing Flow Time (PFT): The average number of weeks of active production stock we have in inventory for future production needs. A production stock week is currently used to measure purchasing flow time.
Push: A Lean term that results in an activity that a customer or down-stream process step has not specifically requested. This activity can create excessive waste and/or inventory. A home-builder that builds the houses on the speculation of sale is using a push system. If the house does not sell promptly upon completion, the homebuilder has created excess inventory for his company, which can be very costly.
Push System: A production system in which goods are produced and handed off to a downstream process, where they are stored until needed. This type of system creates excess inventory.
Quality Function Deployment: A structured process that provides a means to identify and carry customer requirements through each stage of product and service development and implementation. Quality responsibilities are effectively deployed to any needed activity within a company to ensure that appropriate quality is achieved.
Queue Time: The amount of time a job waits at a work center before setup or value added work is performed on the job. Queue time is a subset of production lead-time.
Quick Changeover: A method of analyzing your organization’s manufacturing processes and then reducing the materials, skilled resources, and time needed for equipment setup, including the exchange of tools and dies. It allows your organization to implement small-batch production or one-piece flow in a cost-effective manner.
Radar Chart: A chart that is sometimes called a spider chart. The chart is a two-dimensional chart of three or more quantitative variables represented on axes from the same point.
Rapid Flow Cell: The overarching term that describes methods of production that implement Lean Principles to shorten product throughput time. These are alternatives to batch and push methods.
Red-Flag Condition: A situation in which the probability that errors will happen is high.
Return on Investment Capital (ROIC): Measures how well we use the money we invest in our business to generate a profit.
Right Sized Equipment: A design, production, or scheduling device that can be fitted directly into the flow of within a product family so that production no longer requires unnecessary transportation and waiting. Right sized equipment makes economical sense.
Root-Cause Analysis: A process of identifying problems in an organization, finding their causes, and creating the best solutions to keep them from happening again.
RPI: Radical Process Improvement: is a methodology that accelerates the continuous process improvement philosophy and generates dramatic results. The actual workshop phase focuses on a phase focuses on a cross-functional team on improving a process.
Rotation: A scheduled movement of operators from station to station.
Run time: The time a product is actually being worked on in design or production and the time an order is actually being processed. This is a subset of cycle time.
Sales/Employee: Amount of sales generated per employee.
Sales Growth : Year over year percentage change in sales.
Scorecard: A scorecard is to help manage an organization’s performance through the optimization and alignment of organizational units, business processes, and individuals. A scorecard can also provide goals and targets, which is to help individuals understand their organizational contribution. Scorecards span the operational, tactical and strategic business aspects and decisions. A dashboard is to display information so that an enterprise can be run effectively. A dashboard is to organize and present information in a format that is easy to read and interpret.
Self-Inspection: An inspection performed by the operator at his or her own workstation or area.
Sensei: The Japanese term for “teacher”.
Setup Time: The time required for a specific machine, resource, work center, or assembly line to convert from production of the last good piece of lot A to the first good piece of lot B. This is a subset of cycle time.
Internal Setup – Setup that must be done while the process/machine is stopped.
External Setup – Setup that can be done while the process/machine is in operation.
Set-Up Reduction: The process of reducing the amount of time needed to changeover a process from the last part from the previous product to the first good part for the next process.
Shadow Board: A visual control technique that uses an image of an object to show where it should be stored.
Shingo Prize: Established in 1988, the prize promotes awareness of Lean manufacturing concepts and recognizes United States, Canada, and Mexico companies that achieve world-class manufacturing status. The philosophy is that world-class business performance may be achieved through focused core manufacturing and business process improvements.
Sigma: The Greek letter (σ) that is often used to describe the standard deviation of data.
Sigma Quality Level: A metric calculated by some to describe the capability of a process relative to its specification. A six sigma quality level is said to have a 3.4 ppm rate.
Single Piece Flow: The progressive movement of a single assembly through the assembly process with no stoppage, scrap, or backflow. Making and moving one piece at a time.
Six Sigma: Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes.
SMART: Simple, measurable, achievable, reasonable, and trackable. Refers to goals and targets.
The Seven Quality Tools: Problem solving tools developed in Japan and North America over the past century. They include the run chart, Pareto chart, histogram, control chart, checksheet, and scatter diagram.
Social Stream: Analysis of relationships, organizational, procedural and behavioral issues that impact the process or decision making. Often referred to as Social Stream Mapping.
Spaghetti Chart: Mapping physical movement of product as it passed thru the production or office process.
Stakeholders: Those people or organizations who are not directly involved with project work but are affected its success or can influence its results. They may be process owners, managers affected by the project, and people who work in the studied process. Stakeholders also include internal departments, which support the process, finance, suppliers, and customers.
Standard: The best way we know at this moment; standard in the lean system change as we discover better ways of working; a clear, simple image of what should be happening.
Standard Deviation (σ, s): A mathematical quantity that describes the variability of a response. It equals the square root of variance. The standard deviation of a sample (s) is used to estimate the standard deviation of a population (σ).
Standard Work: A documented process that establishes the most efficient way to perform a task that is observable and repeatable according to the Takt Time, Work Sequence, and Standard WIP of the product. Standard work yields certain measurable performance factors that are a base line for future reference.
Standard Work in Process (WIP): The minimum number of parts in a process that are required to make the process work.
Statistical Process Control (SPC): The application of statistical techniques in the control of processes. SPC is often considered to be a subset of SQC, where the emphasis in SPC is on the tools associated with the process but not on product acceptance techniques.
Statistical Quality Control (SQC): The application of statistical techniques in the control of quantity. SQC included the use of regression analysis, tests of significance, acceptance sampling, control charts, distributions, and so on.
Store: A controlled inventory of items that is used to schedule production at an upstream process. Usually located near the upstream process to make customer requirements visible. Also called a supermarket.
Strategy Deployment: see Hoshin Kanri.
Successive Checks: A verification of the previous stations work and communication and resolution of discrepancies if any are found.
Supermarket: A replenishment system that holds an amount of each product it produces in which each process simply produces what is withdrawn from its supermarket.
Takt Image: Creating an awareness of Takt time in areas where multiple cycles are used to build products and where flow is not readily visible.
Takt Time: The available production time divided by customer demand. Takt time sets the pace of production to match the rate of customer demand and becomes the drumbeat of any lean system. Takt time is calculated as follows: ))Available Production time in a day – lunch and breaks)/(Required production units in a day)).
Theory of Constraints (TOC): Constraints can be broadly classified as being internal resource, market or policy. The outputs of a system are a function of the whole system, not just individual processes. System performance is a function of how well constraints are identified and managed. When we view a system as a whole, we realize that the output is a function of the weakest link. The weakest link of the system is the constraint. If care is not exercised, we can be focusing on a subsystem that, even though improved, does not impact the overall system output. We need to focus on the orchestration of efforts so that we optimize the overall system, not individual pieces. Unfortunately, organization charts lead to workflow by function, which can result in competing forces within the organization. With TOC, systems are viewed as a whole and work activities are directed so that the whole system performance measures are improved.
Total Productive Maintenance (TPM): A company wide preventative maintenance, improvement – related system to improve the efficiency and use of equipment.
Total Quality Management (TQM): A management program, which works on continuous product or service improvements through workforce involvement.
Turnover Rate (Voluntary): Voluntary separation divided by average full-time salaried head count for a rolling 12-month period.
Value Added: A capability (product or service) provided to the ultimate customer at a specific time, at a specific price, as defined by the customer.
Value Chain: Describes flowchart fashion both primary and support organizational activities and their accompanying 30,000-foot-level or satellite-level metrics. Example primary activity flow is developing product-market product-sell product-produce product-invoice/collect payments-report satellite-level metrics. Example support activities include IT, finance, HR, labor relations, safety and environment, and legal.
Value Stream: All of the actions and tasks, both value added and non-value added, required to bring an item (an idea, information, product or service) from its inception through delivery. These include actions to process information from the customer and actions to transform the product on its way to the customer.
Value Stream Map: A diagram, usually hand drawn that shows the series of steps required to bring a product of service to a customer; also known as material and information flow diagram.
Variable Costs: Costs that vary with production or service/sales levels, such as the costs of raw materials used in the manufacturing process.
Visual Factory: Management by sight. Visual factory involves the collection and display of real-time information to the entire workforce at all times. Work cell bulletin boards and other easily-seen media might report information about orders, production schedules, quality, delivery performance, and financial health of business.
Visual Management: At a glance, without discussion, it tells people working and supporting an operation the working status and health of a cells function or operation.
Voice of the Customer (VOC): The identification and prioritization of true customer needs and requirements, which can be accomplished through focus groups, interviews, data analyses, and other methods.
Voice of the Process (VOP): A quantification of what the process delivers. A voice of the process to voice of the customer needs assessment can identify process improvement focus areas; for example, a 30,000-foot-level assessment indicates an 11 percent delivery-time nonconformance rate.
Waste: Any activity that takes time, resources, or space, but does not add value to a product or service.
WIP: A general description for inventory that is being processed within an operation or is awaiting another operation.
Work Combination: A mixture of people, processes, materials, and technology that comes together to enable the completion of a work process.
Workflow: The steps and motions employees take to perform their work tasks.
Workflow Diagram: A graphic that shows your organization’s current equipment layout and the movement of materials and workers during work processes.
Work-in-process (WIP): Items between machines waiting to be processed.
Work Sequence: The sequential order in which tasks that make up a work process are performed.
Yokoten: Information sharing across the plant; sharing