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Lean Glossary

Agile Manufacturing

In essence, it is the ability to thrive under conditions of constant and unpredictable change.  Like flexible manufacturing, agile manufacturing seeks to achieve rapid response to customer needs.  But agile manufacturing also emphasizes the ability to quickly reconfigure operations – and strategic alliances – to respond rapidly to unforeseen shifts in the marketplace. In some instances, it also incorporates “mass customization” concepts to satisfy unique customer requirements. And, in the broadest sense, it includes the ability to react quickly to technical or environmental surprises.

Andon Board

A visual control device in a production area, typically a lighted overhead display, giving the current status of the production system and alerting team members of emerging problems.


A signal, light, bell, music alarm, triggered by an operator confronted with a non-standard condition. Tool failure, machine failure, bad part, lack of parts, cannot keep up; error needs correction, etc. The signal for immediate help to prevent line stop. 

Annual Inventory Turns

A measure that is calculated by dividing the value of annual plant shipments at plant cost (for the most recent full year) by the total current inventory value at plant cost.  Total current inventory includes raw materials, work in process, and finished goods.  Plant cost includes material, labour, and plant overhead. 


Transferring human intelligence to automated machinery so machines are able to detect the production of a single defective part and immediately stop themselves.

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Big picture mapping

A specific visual approach designed to display, at a high level, a major part of, or whole Lean enterprise. 


See kaizen. 


Business process re-engineering, where minute activity sets are defined as processes and improvement generally takes the form of a complete redesign. 

Brain storming

A group activity designed to capture all possible ideas however obvious or lateral, without in the initial stages commenting or debating each suggestion. 

Buffer stocks

Goods held , usually at the downstream end of a facility, to protect the downstream customer from starvation in the event of an abrupt increase in point demand by a customer – a demand spike that exceeds point production capacity.  See also Safety Stocks and Shipping Stocks.

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The feedback and agreement process for plans with Policy Deployment.


Computer-Augmented Three-Dimensional Interactive Applications.

Cellular Manufacturing

A manufacturing approach in which equipment and workstations are arranged to facilitate small-lot, continuous-flow production.  In a manufacturing “cell”, all operations necessary to produce a component or subassembly are performed in close proximity, thus allowing for quick feedback between operators when quality problems and other issues arise.  Workers in a manufacturing cell are typically cross-trained and, hence, able to perform multiple tasks as needed. 


CEDAC or Cause & Effect Diagram with Additional Cards – is based on the fishbone analysis of Ishikawa.  It is an analytical approach designed to help identify and eliminate any type of waste in a company (such as the seven wastes). 

Change-over Time

The change-over time is the time from the last piece of the previous batch to the first good piece in the next batch. It is this that should be minimised. The set up time is a part of the change over time. 


A method of conduction single-piece flow in which the operator proceeds from machine to machine, taking a part from the previous operation and loading it in the next machine, then taking the part just removed from that machine and loading it in the following machine.  Means “load-load” in Japanese.

Computer-Aided Design (CAD) & Drafting (CADD)

Computer-based systems for product design that may incorporate analytical and “what if” capabilities to optimize product designs.  Many CAD systems capture geometric and other product characteristics for engineering data management systems, producability and cost analysis, and performance analysis.  In many cases, CAD-generated data is used to generate tooling instructions for computer-numerical-control (CNC) systems.  Computer Aided Drafting describes the process of drafting with a computer.

Computer-Aided Manufacturing (CAM)

Computerized systems in which manufacturing instructions are downloaded to automated equipment or to operator workstations.

Computer-Aided Process Planning (CAPP)

Software-based systems that aid manufacturing engineers in creating a process plan to manufacture a product whose geometric, electronic, and other characteristics have been captured in a CAD database.  CAPP systems address such manufacturing criteria as target costs, target lead times, anticipated production volumes, availability of equipment, production routings, opportunity for material substitution, and test requirements.

Computer-Integrated Manufacturing (CIM)

A variety of approaches in which computer systems communicate or interoperate over a local area network.  Typically, CIM systems link management functions with engineering, manufacturing, and support operations.  In the factory, CIM systems may control the sequencing of production operations, control operation of automated equipment and conveyor systems, transmit manufacturing instructions, capture data at various stages of the manufacturing or assembly process, facilitate tracking and analysis of test results and operating parameters, or a combination of the above.

Computerized Process Simulation

Use of computer simulation to facilitate sequencing of production operations, analysis of production flows, and layout of manufacturing facilities.

Concurrent Engineering

A cross-functional, team-based approach in which the product and the manufacturing process are designed and configured within the same time frame, rather than sequentially.  Ease and cost of manufacturability, as well as customer needs, quality issues, and product life cycle costs are taken into account earlier in the development cycle.  Fully configured concurrent engineering teams include representation form marketing, design engineering, manufacturing engineering, and purchasing, as well as supplier – and even customer – companies.

Continuous Improvement

A never-ending effort to expose and eliminate root causes of problems; small-step improvement as opposed to big-step or radical improvement.  Synonym: Kaizen.

Core processes

Those central processes that directly deliver results against targets.  See also Key business processes,

Strategic processes and Support processes. 


A statistical calculation used to indicate how well a design tolerance compares with the normal process variation (defined as +/-3s).  The greater the value of Cp, the smaller the probability of creating a defect for the measured characteristic of that product, or system component.  As Cp approaches 2.0, the process approaches Six Sigma capability (3.4 defective units per million). 


A statistical calculation used to indicate how well a design tolerance compares with the normal process variation (defined as +/-3s) and accounts for any difference between the design target and the actual process mean.  A good Cpk value indicates that the process is consistently under control – i.e., within specification limits – and is also centered on the design target value.  A Cpk value of 1.33 is typically considered a minimum acceptable process capability; as the Cpk value approaches 1.5, the process approaches Six Sigma capability (3.4 defective units per million). 

Critical success factors (CSFs)

Those key external or internal elements that a business needs to focus on for success, such as market growth or employee involvement. 

Cross-dock  facility

A facility where products are not stored but instead moved immediately from an incoming vehicle to an outbound shipping lane. 

Cross-Functional Teams

Teams of employees representing different functional disciplines and/or different process segments who tackle a specific problem or perform a specific task, frequently on an ad hoc basis. 

Cross Training

Skill-development practices which require or encourage production workers and other employees to master multiple job skills, thus enhancing workforce flexibility. 

Current state map

A visual method of succinctly recording the key aspects of the current structure and processes in the whole or any part of a supply chain.  See Big picture mapping.  

Customer Reject Rate (PPM)

A quality measure reflecting the number of completed units rejected or returned by external customers, expressed in parts per million.  Calculation should include parts reworked by customers. Applies to all shipped units, including parts. 

Cycle Time

1)     In industrial engineering, the time between completion of two discrete units of production.  For example, the cycle time of motors assembled at a rate of 120 per hour would be 30 seconds.  Also, if cycle time for every operation in a complete process can be reduced to equal takt time, products can be made in single-piece flow.  2) In materials management, it often refers to the length of time from when material enters a production facility until it exits.  3) In Lean, manual + walking + waiting time for one cycle of work sequence.  Syn: span time or throughput time. 

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Defects Per Unit (DPU)

The ratio of the number of defects found at any review point to the number of units processed through that review point.  It is a universal measure of actual total product quality that allows prediction, analysis, planning, and benchmarking. 

Defects Per Million Opportunities (DPMO)

The ratio of defects found per unit (DPU) multiplied by 1,000,000 to the average opportunities for error in one unit.  DPMO can be used in benchmarking because it is normalized to provide an equivalent comparison to products or services of varying complexity. 

Design for Assembly

The practice in which ease and cost of assembly is emphasized during the product-design stage. DFMA asks: Can this design be manufactured at superior quality levels, at a cost and using processes which will give it a clear sustainable competitive advantage? 

Design for Logistics

The practice in which physical handling and distribution of a manufactured product are emphasized during product design. 

Design for Manufacturability

The method for creating robust product designs that will be insensitive to long-term dynamic variation in the processes and materials used in manufacturing and will be immune to foreseeable misuse of the product in the environment in which it is used. 

Design for Manufacturing & Assembly  (DFM/A)

A conscious process of making design decisions only after fully evaluating the manufacturing processes, tools, quality control measures, and equipment impacts. 

Design for Procurement

A practice in which product designers work effectively with suppliers and sourcing personnel to identify and incorporate technologies or designs which can be used in multiple products, facilitating the use of standardized components to achieve economies of scale and assure continuity of supply. 

Design for Quality

The practice in which quality assurance and customer perception of product quality are emphasized as an integral part of the design process.
Design of Experiments (DOE)

An experimental design methodology, which enables process designers to determine optimum product/process parameters by conducting a limited number of experiments involving combinations of variables.  The usual objective is to determine which variables in a complex process are most critical for quality control – or those which can be most easily be changed to reduce overall process variance. 

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Electronic Data Interchange (EDI)

Information-system linkages, based on communication protocols and document formats, which permit inter-company computer-to-computer communications. It not only speeds communication, but also eliminates re-keying of information and reduces the opportunity to introduce errors.  A typical EDI application might speed information exchange between a customer and supplier company for purchase orders, invoices, or other transactions.  EDI communications are often facilitated through “electronic mailbox” systems on third-party value-added networks.

Empowered Natural Work Teams

Teams that share a common workspace and/or responsibility for a particular process or process segment.  Typically such teams have clearly defined goals and objectives related to day-to-day production activities, such as, quality assurance and meeting production schedules, as well as, authority to plan and implement process improvements.  Unlike self-directed teams (see definition), empowered work teams typically do not assume traditional “supervisory” roles. 

Empowered Teamworking

See Empowered Natural Work Teams

Enterprise Integration

A broad implementation of information and telecommunications technology (typically using a client/server architecture) to link various functional units within a business enterprise.  On a wider scale, it may also integrate strategic partners in an inter-enterprise configuration.  In a manufacturing enterprise, EI may be regarded as an extension of CIM that integrates financial or executive decision-support systems with manufacturing tracking and inventory systems, product data management, and other information systems. 

Enterprise Resource Planning (ERP)

An extension of MRP II software designed to operate on enterprise-wide client/server computing platforms. ERP systems typically claim the ability to achieve tighter (or “seamless”) integration between a greater variety of functional areas including materials management, supply chain management, production, sales and marketing, distribution, finance, field service, and human resources.  They also provide information linkages to help companies monitor and control activities in geographically dispersed operations. 


Frequency of the production cycle. “ËPE = 1day” means every part every day. 

Expert Systems

Software based “artificial intelligence” systems that capture the knowledge and experience of experts in a specialized field and make that expertise available to less skilled personnel. 

Extended value stream mapping

Value stream mapping is the simple process of directly observing the flows of information and materials as they now occur from raw material to the end customer across plant, divisional and company boundaries , summarizing them visually , and then envisioning a future state with much better performance. 

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Extended Deployment

The deployment of targets with subsequent means of achieving them to both lower levels of an organisation and their wider supply chain. 

Failure Modes and Effects Analysis (FMEA)

A procedure used to identify and assess risks associated with potential product or process failure modes. 

Finite Capacity Scheduling

Software-based systems that enable simulation of production scheduling (and determination of delivery dates) based on actual unit/hour capacity at each step in the production routing.  Finite scheduling systems, running on desktop computers, often compensate for the “infinite capacity” assumptions built into capacity-planning modules in traditional MRP II systems. 

Finite Element Analysis (FEA)

A mathematical method for analysing stress.  FEA is used in product design software to conduct graphical (typically colorized) on-screen analysis of a model’s reactions under various load conditions. 

First-Pass Yield

The percent of finished product or subassembly/component units that meet all quality-related specifications at a critical test point in the process.  This is a measure of the yield that results from the first time through the process, prior to any rework.  It should reflect all defective units detected since the preceding yield test point.  In process industries, yield should be calculated as the percent of output that meets target-grade specifications (excluding saleable “off-grade” product). 

Five (5) Whys

Root Cause Analysis – Taiichi Ohno’s practice of asking “why” five times whenever a problem was encountered, in order to identify the root cause of the problem so that effective countermeasures could be developed and implemented.  Used along with other problem solving tools, enables you to derive the proper correction action.

1. Why did the machine fail?
A. The motor burned out.
2. Why did the motor burn out?
B. The shaft seized.
3. Why did the shaft seize?
C. There was no lubrication
4. Why was there no lubrication?
D. The filter was clogged.
5. Why was the filter clogged?
E. It was the wrong size mesh (root cause of the problem)

Corrective Action Implemented:

Flexible Assembly Systems

Automated assembly equipment and/or cross-trained work teams that can accommodate a variety of product configurations in small lots. 

Flexible Machining Centres

Automated machining equipment that can be rapidly reprogrammed to accommodate small-lot production of a variety of product or component configurations.

Flexible Manufacturing Systems

Automated manufacturing equipment and/or cross-trained work teams that can accommodate small-lot production of a variety of product or part configurations. From an equipment standpoint, an FMS is typically a group of more than two computer-based machine tools with integrated material handling, able to produce a family of similar parts. 


All activities being undertaken within the Lean enterprise at an even rate without delays, interruptions or other batching. 

Flow Chart

A measurement grid designed to map out and record the various activities within a particular process, probably with a view to improvement. 

Focused Factory Production

A plant configuration and organization structure in which equipment and manpower is grouped to create essentially self-contained “mini-businesses,” each with a specific product-line or customer focus.  A single plant may be divided into several focused-factory units, designed around process flows, each of which has control over such support activities as maintenance, manufacturing engineering, purchasing, scheduling, and customer service. 

Four Fields Mapping

A standard Value Stream Mapping tool which is often used in information based processes (such as New Product Development) to map out a process with a view to improvement.  The generally used four fields are: the members of the team involved, the phases of the processes (e.g. concept design, detailed design, sample production, testing, and production), the individual tasks and the standards by which the process is measures. 

Forecast/Demand Management Software

An emerging class of software that provides front-end input to master production scheduling systems and helps to optimize inventory planning.  Such software not only takes into account historical demand trends, but also may calculate the impact of planned sales promotions, price reductions, and other factors that cause spikes in demand levels. 

Future state map

A vision of a lean system which is used as the guide for the change process. 

Future value adding (FVA) activity

Those activities within a company or supply chain that directly contribute to satisfying end consumers in some future time period; activities consumers will therefore be happy to pay for. 

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Group Technology (GT)

An engineering and manufacturing philosophy that identifies the physical similarity of parts (common routing) and establishes their effective production.  It provides for rapid retrieval of existing designs and facilitates a cellular layout.

Hoshin Kanri

See Policy deployment

ILU charting

A skills and competency charting method that visually displays the existing position for each employee against a given set of targets to identify necessary training and development needs.

ISO 9000

An international quality process auditing program, based on a series of standards published by the International Organization of Standardization in Geneva, Switzerland, through which manufacturing plants receive certification attesting that their stated quality processes are adhered to in practice. 

ISO 14000

A series of generic environmental management standards developed by the International Organization of Standardization which provide structure and systems for managing environmental compliance with legislative and regulatory requirements and affect every aspect of a company’s environmental operations. 

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JIT/Continuous-Flow Production

Implementation of “just in time” techniques to reduce lot size, reduce setup times, slash work-in-process inventory, reduce waste, minimize non value-added activities, improve throughput, and reduce manufacturing cycle time.  JIT production typically involves use of “pull” signals to initiate production activity, in contrast to work-order (“push”) systems in which production scheduling typically is based on forecasted demand rather than actual orders.  In many “pull” systems, a customer order/shipment date triggers final assembly, which in turn forces replenishment of component WIP inventory at upstream stages of production. 

Just-in-Time (JIT)

A system for producing and delivering the right items at the right time in the right amounts.  Just-in-Time approaches just-on-time when upstream activities occur minutes or seconds before down-stream activities, so single-piece flow is possible. 


Radical improvement of an activity to eliminate muda, single piece flow in a small space.  Reduce travel by co-locating related activities.  [Also called breakthrough kaizen, flow kaizen, and system kaizen. 


The systematic, organized improvement of processes by those who operate them, using straightforward methods of analysis.  It is a “do it now” approach to continuous, incremental improvement of an activity to create more value with less muda.  Kaizen establishes what needs to be done and instils the principles of continuous improvement.  [Also called point kaizen, process kaizen, or blitz] 

Kaizen Event

A concentrated effort, typically spanning 3 to 5 days, in which a team plans and implements a major process change or changes to quickly achieve a quantum improvement in performance.  Participants generally represent various functions and perspectives, and may include non-plant personnel. 


A communication tool in the “just-in-time” production and inventory control system developed by Taiichi Ohno at Toyota.  A kanban, or signboard, is attached to specific parts in the production line signifying the delivery of a given quantity.  When the parts have all been used, the same sign is returned to its origin where it becomes an order for more. 

Kanban Signal

A method of signalling suppliers or upstream production operations when it is time to replenish limited stocks of components, or subassemblies in a just-in-time system.  Originally a card system used in Japan, kanban signals now include empty containers, empty spaces and even electronic messages. 

Key business processes

Patterns of interconnected value-adding relationships designed to meet business goals and objectives, or the main cross-functional activities required in a business for success.  See also

Strategic processesCore processes and Support processes.

Key performance indicators (KPIs)

A set of measures designed to benchmark a business’s most important characteristics against a set of strategic targets. 

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Lead Time

The total time a customer must wait to receive a product after placing an order.  When a scheduling and production system is running at or below capacity, lead time and throughput time are the same.  When the demand exceeds the capacity of a system, there is additional waiting time before the start of scheduling and production, and lead time exceeds throughput time. 


A consumer-focused approach to the provision of effective solutions involving the consumption of a minimum of resources. 

Lean Accounting

The application of lean thinking principles to the controlling area of the business.  This is often necessary as traditional standard costing approaches tend to impede lean change by, for instance, not recognising the benefit of stock reduction, lead time reduction etc..

Lean Administration

The application of lean thinking in the office environment.  Lean activities in many companies are (quite wrongly) only applied in the manufacturing shop floor whereas much of the waste existing in the office environment. 

Lean enterprise

The extended supply chain responsible for effectively satisfying consumer requirements using a minimum of resources. 

Lean thinking

The process by which individuals can understand the need for, create and implement a

Lean enterprise. 

Level Scheduling

The sequencing of orders in a repetitive pattern and smoothing the day-to-day variations in total orders.

Life Cycle Costing

The identification, evaluation, tracking, and accumulation of actual costs for each product from its initial research and development through final customer servicing and support in the field. 

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Machine Availability Rate

The percent of time that production equipment is available for use, divided by the maximum time it would be available if there were no downtime for repair or unplanned maintenance. 

Machine Vision

Optical systems in which video equipment is used to guide robotic, or automated equipment during production operations; also, computerized visual inspection systems used for quality control. 

Management by Policy

A strategic management process which involves both planning and execution.  Typically, MBP seeks to achieve breakthrough advances in targeted areas through cross-functional cooperation.  Focusing on customer needs, MBP identifies a few major improvement opportunities and marshals a company’s human resources and initiative to meet those needs.  Whereas MBO (management by objectives) focuses on desired results, MBP focuses on both results and the processes for achieving those results. 

Manufacturing Cells

The layout of machines of different types performing different operations in a tight sequence, typically U-shape, to permit single-piece flow and flexible deployment of human effort.

Manufacturing Cost

Includes quality-related costs, direct and indirect labour, equipment repair and maintenance, other manufacturing support and overhead, and other costs directly associated with manufacturing operations.  It does not include purchased materials costs or costs related to sales and other non production functions. 

Manufacturing Cycle Time

The length of time from the start of production and assembly operations for a particular (finished) product, to the completion of all manufacturing, assembly, and testing for that product or specific customer order.  (Does not include front-end order-entry time or engineering time spent on customized configuration of non standard items).

Manufacturing Execution Systems (MES)

Software-based systems that provide a link between planning/administrative systems and the shop floor.  It can link MRP II-generated production schedules to direct process-control software.  An element of computer-integrated manufacturing, MES encompasses such functions as planning and scheduling, production tracking and monitoring, equipment control, maintaining product histories (verifying and recording activities at each stage of production), and quality management.


The use of appropriate tools and technique to analyse the current situation in any process. 

Mistake Proofing

See Poka Yoke


Software-based Manufacturing Resource Planning systems that translate forecasts into master production schedules, maintain bills of material (lists of product components), create work orders for each step in the production routing, track inventory levels, coordinate materials purchases with production requirements, generate “exception” reports identifying expected material shortages or other potential production problems, record shop-floor data, collect data for financial reporting purposes, and other tasks depending on the configuration of the MRP II package.


The Japanese term for Waste.  Any activity which consumes resources but adds no value. 


The appropriate application of a range of skills to a workforce.  Generally multi-skilling should be governed by the needs of an organisation as designated within their Policy Deployment cascade. 


The Japanese term for unevenness.  Any activity that has not been levelled out creating consequential complexity and cost.  A target for reduction or elimination.


The Japanese term for overburden.  Any activity that causes physical or mental stress to those people involved in it.  A target for reduction or elimination. 

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Natural Work Team – A team of employees, often hourly personnel, who share a common workspace and have responsibility for a particular process or process segment.

Necessary non value adding

Non value adding activities which are necessary under the present operating system or equipment.  They are likely to be difficult to remove in the short term but may be possible to eliminate in the medium term by changing equipment or processes. 

Non value adding

Those activities within a company or supply chain that do not directly contribute to satisfying end consumers’ requirements.  Useful to think of these as activities which consumers would not be happy to pay for. 


Activities which are essential tasks that have to be done under present working conditions but don’t add value to the product (sometimes referred to as required waste).  The desire is to either minimize these activities or introduce process improvements that would eliminate them entirely. 

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Online Order Entry System

A computer-based system that enables distributors, field sales representatives, and even customers to place orders directly, over the Internet or a corporate intranet, without intervention by an inside salesperson.  An Internet-based transaction might be initiated by accessing a Web Page, then choosing a sales-order-entry option. The software often includes a product configurator and pricing “engine,” and may be linked to production scheduling systems. 


An activity or activities performed on a product by a single machine, or operator. 

Overall channel effectiveness

A modification of the Overall equipment effectiveness measure when applied to a total

Value Stream or channel. 

Overall equipment effectiveness

A composite measure of the ability of a machine or process to carry out value adding activity.

OEE = % time machine available x % of maximum output achieved x % perfect output.  It measures the degree to which machines are adding value by not being wastefully employed due to planned or unplanned downtime or in producing defects.

Overall supply chain effectiveness

A composite measure of supply chain performance.  OSCE = % orders delivered on time x % order completeness x % on time delivery.

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Pareto analysis

Sometimes referred to as the ‘80:20 rule’.  The tendency in many business situations for a small number of factors to account for a large proportion of events.  For example 80% of total sales volume might be attributable to 20% of customers and to 20% of the product range.  In terms of quality, 80% of defects might be attributable to 20% of causes.  The 20% is sometimes referred to as ‘the vital few.’ 

P ass-Through Yield

The percentage of all manufactured components that move through all stages of the manufacturing/assembly process and become part of a finished product – after deductions are made for components and subassemblies which fail quality tests and are scrapped or require rework.  Deductions include line fallout of both purchased components and internally manufactured components found to be defective. (Note: if the “line fallout” rate on all components were 10%, the pass-through yield would be 90%).


The complete elimination of muda so that all activities along a value stream create value. 


Plan Do Check Act – PDCA – the Deming circle used as a problem solving tool used by all persons working in the same team.


A mistake-proofing device or procedure to prevent a defect during order intake or manufacturing. 

Policy deployment

A strategic decision-making tool that focuses resources on the critical initiatives necessary to accomplish the Critical success factors of the firm.  The term usually also encompasses the cascading of this by Key business processes together with the control, measurement and feedback of results.  Also known as Hoshin Kanri. 

Predictive Maintenance

Practices that seek to prevent unscheduled machinery downtime by collecting and analysing data on equipment conditions.  The analysis is then used to predict time-to-failure, plan maintenance, and restore machinery to good operating condition.  Predictive maintenance systems typically measure parameters on machine operations, such as vibration, heat, pressure, noise, and lubricant condition.  In conjunction with computerized maintenance management systems (CMMS), predictive maintenance enables repair-work orders to be released automatically, repair-parts inventories checked, or routine maintenance scheduled.

Problem-Solving Methodologies

A variety of approaches to problem solving, including the Deming Circle (Plan-Do-Check-Act), used by all persons working in the same team or organization.  Considered fundamental to teamwork.


A series of individual operations required to create a design, completed order, or product. 

Process Mapping

The mapping out of a particular business process using a range of tools, most frequently involving Process Activity Mapping – which in a detailed manner captures the time, distance and number of people involved in each step of a process. 

Processing Time

The time a product is actually being worked on in design or production and the time an order is actually being processed. Typically, processing time is a small fraction of throughput time and lead time. 

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The characteristics of a design that enable the item to be produced and inspected in the quantity required at least cost and minimum time. 

Product Data Management (PDM)

Enabling software-based systems that link, manage and organize product-related data from various sources – both internally and externally with suppliers – across various computer platforms, divisions, departments, and geographic locations.  PDM incorporates CAD files, manufacturing data, and documents to reduce engineering design times; ensures timely access to consistent up-to-date product information; and improves information flow and cross-functional communications. 

Productivity Increase

The primary definition here is “the plant-wide increase in annual value-added per employee, based on total employment in the plant, not just direct labour”.  Value-added should be calculated by subtracting cost of purchased materials and services from value of shipments.  The Best Plants entry form also includes a secondary calculation, which many manufacturers prefer to use: “increase in sales per employee.”  Where possible, Best Plants candidates should compute and report five-year productivity increases using both calculations. 

Profit potential

The profit potential is the effect on the ‘bottom line’ of any activity that occurs during a lean transformation programme. 


All activities being undertaken within the Lean enterprise according to and at the rate of the actual demand requirements of the end consumer.

Pull System

A system for controlling work flow and priorities whereby the processes needing materials (or attention) draw them from the feeding processes or storage areas as needed, typically using “kanban” signals – in contrast to “push” systems in which material is processed, then pushed to the next stage whether or not it is really needed.

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QFD (Quality Function Deployment)

A customer-focused approach to quality improvement in which customer needs (desired product or service characteristics) are analysed at the design stage and translated into specific product-and process-design requirements for the supplier organization.  Targeted customer needs may include product features, cost, durability, and other product characteristics.  QFD involves carefully listening to the customer’s true unvarnished expression of their needs.  Then those needs must be translated into engineering characteristics, competitive assessment, selection of critical/key characteristics, the product/process design, and follow-up.  Through this technique, product performance features and the characteristics that deliver them are determined by the customer and paid heed to by the producer (by listening and acting).  The quality responsibility is then deployed throughout the organization by tying compliance activities directly to the fulfilment of these customer requirements. 

Queue Time

The time a product spends in a line awaiting the next design, order processing, or fabrication step. 

Quick Changeover Methods

A variety of techniques, such as SMED (single-minute exchange of dies), which reduce equipment setup time and permit more frequent setups, thus improving flexibility and reducing lot sizes and lead times.

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Rapid Prototyping

A variety of techniques for quick conversion of CAD-generated product designs into useful, accurate physical models, typically using computer-controlled systems.  In the stereolithography approach, CAD designs guide laser beams that create precise plastic models by polymerising and fusing liquid resins into a laminated composite of very thin slices. 

Real-Time Feedback

Instantaneous (or nearly instantaneous) communication of electronically captured data (typically quality data) to process operators or equipment to enable rapid or automated adjustments to keep production processes operating within quality parameters. 


Products or services that have an ongoing demand but are difficult to predict.  They exhibit a medium risk to the business and may have medium levels of inventory.  They generally have intermediate volumes but not dedicated facilities.


Products or services that have a regular ongoing, predictable demand which represent a low risk in the business and may have low inventories.  Such products generally are high volume and have dedicated facilities. 

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Safety Stock

Goods held at any point ( in raw materials, WIP, or Finished Goods) to prevent downstream customers from being starved by upstream process capability issues.  Also, see Buffer stocks andShipping stocks.

Self-Directed Natural Work Teams

Nearly autonomous teams of empowered employees, including hourly workers that share a common workspace and/or responsibility for a particular process or process segment.  Typically such teams have authority for day-to-day production activities and many supervisory responsibilities, such as job assignments, production scheduling, maintenance, materials purchasing, training, quality assurance, performance appraisals, and customer service.  Often called “self-managed” work teams. 

Self Verification

Mechanism to check your own work. 

Seven Forms of Muda

Taiichi Ohno’s original enumeration of the wastes commonly found in physical production. They are overproduction, waiting, transportation, overprocessing, excess inventory, worker movement, and production of defective parts. 

Seven wastes

A framework of seven types of activity that do not add value, originally defined by the Toyota company.  (These have been adapted into service wastes by Bicheno & Holweg, 2009)

Shop-Floor Data Collection

Automated collection of data on factory production activities, including units produced, labour hours per unit or customer order, time and date of specific production activities, and maintenance and quality data.

Single Minute Exchange of Dies (SMED)

A series of techniques pioneered by Shigeo Shingo for changeovers of production machinery in less than ten minutes. One-Touch setup is the term applied when changeovers require less than a minute. Obviously, the long-term objective is always zero setup, in which changeovers are instantaneous and do not interfere in any way with continuous flow. 

Single Piece Flow

A situation in which products proceed, one complete product at a time, through various operations in design, order taking, and production, without interruptions, backflows, or scrap. 

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Six Ss:

Sort – To clearly distinguish the needed from the unneeded.
Straighten – Keeping needed items in the correct place to allow for easy and immediate retrieval
Shine – Keeping the workplace swept and clean
Standardize – Consistency applying 6S methods in a uniform and disciplined manner
Safety – identifying dangerous and hazardous conditions
Sustain – making a habit of maintaining established procedures

Spaghetti Chart

A map of the path taken by a specific product as it travels down the value stream in a mass-production organization, so-called because the product’s route typically looks like a plate of spaghetti.

Span Time

See manufacturing cycle time.

Standard Work

A precise description of each work activity specifying cycle time, takt time, the work sequence of specific tasks, and the minimum inventory of parts on hand needed to conduct the activity.  Standard Work details the motion of the operator and the process sequence in producing a part.  It is the proclamation of the most waste-free production method, through the best combination of people and equipment, the least amount of work in process possible, showing where to check for quality, and where there are safety issues.  It provides a routine for consistency of an operation and a basis for improvement. 

Statistical Process Control (SPC)

The use of basic graphical and statistical methods for measuring, analysing, and controlling the variation of a process for the purpose of continuously improving the process. 


Products or services that are hard to predict and will exhibit highly irregular but generally low demand profiles. 

Strategic processes

Those processes that help focus overall direction but do not directly impact on targets. See also

Key business processesCore processes and Support processes. 

Support activity (SA) or necessary non value adding activity

Support activities which are necessary under the present operating system or equipment.  They are likely to be difficult to remove in the short term but may be possible to eliminate in the medium term by changing equipment or processes.

Support processes

Those processes only indirectly impacting on targets but providing support to the Core processesthat do.  See also Key business processesStrategic processes and Core processes.

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Takt Time

The available production time divided by the rate of customer demand.  Takt time sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean system.  In repetitive operations, the cycle time between completion of units calculated based upon the rate of need for those units.  Used to determine how to set up, revise, or improve operations.

Time to Market

The period of time it takes to bring a product from concept stage to mass production. 

Throughput Time

The time required for a product to proceed from concept to launch, order to delivery, or raw material into the hands of the customer.  This includes both processing and queue time. 

Total Cost of Quality

The aggregate cost of poor quality or product failures – including scrap, rework, and warranty costs – as well as expenses incurred to prevent or resolve quality problems (including the cost of inspection).  In calculations for Best Plants entries, do not include costs of normal maintenance, quality training, or quality-related equipment upgrades.

Total Productive Maintenance (TPM)

A comprehensive program to maximize equipment availability in which production operators are trained to perform routine maintenance tasks on a regular basis, while technicians and engineers handle more specialized tasks.  The scope of TPM programs includes maintenance prevention (through design or selection of easy-to-service equipment), equipment improvements, preventive maintenance, and predictive maintenance (determining when to replace components before they fail).  TPM aims at zero breakdowns, but it also aims at zero defects. 

Total Quality Management (TQM)

A multifaceted, company-wide approach to improving all aspects of quality and customer satisfaction – including fast response and service, as well as product quality.  TQM begins with top management and diffuses responsibility to all employees and managers who can have an impact on quality and customer satisfaction.  It uses a variety of quality tools such as QFD, Taguchi methods, SPC, corrective-action response teams, cause-and-effect analysis, problem-solving methodologies, and fail-safing. 


See Visual management. 

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The % of time that a machine is available for productive work.


Value is a measurement of the worth of a specific product or service by a customer, and is a function of: (1) the product’s usefulness in satisfying a customer need, (2) the relative importance of the need being satisfied, (3) the availability of the product relative to when it is needed and (4) the cost of ownership to the customer.

Value Added

A type of processing (accomplished correctly the first time) that changes (transforms) the shape or character (fit, form, or function) of a product or assembly.

Value adding (VA) activity

Those activities within a company or supply chain that directly contribute to satisfying end consumers, or those activities consumers would be happy to pay for.

Value attribute

A value attribute is a feature directly desired by the customer and considered as a core criterion in making a purchasing decision.

Value Engineering

The process within the design of a product of establishing whether a product adequately satisfies a customer and avoids waste and unnecessary costs in its ultimate manufacture. 

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Value stream

The specific activities within a supply chain required to design, order and provide a specific product or service from concept to launch, order to delivery, and raw materials into the hands of the customer. 

Value stream mapping

Identification of all the specific activities occurring along a value stream for a product or product family, or the process of charting or visually displaying a value stream so that improvement activity can be effectively planned.  Also see Mapping and extended value stream mapping.

Visibility Systems

Visual systems in shops, design areas, and elsewhere that enable anyone familiar with the work to understand its status and condition, or to respond to work priorities.  This can be done with standard layouts, signal lights, kanban systems, or other methods, including those employing computers.  The distinguishing feature is that communication is rapidly executed by line of sight.

Visual Control

The placement in plain view of all tools, parts, production activities, and indicators of production system performance so everyone involved can understand the status of the system at a glance.  Also the use of signals, charts, measurements, diagrams, lights, and signs all to clearly define the normal or desired conditions and to expose the abnormal undesired conditions. 

Visual management

“You cannot manage what you cannot see”.  Visual management involves information-at-a-glance ; the clear display of charts, lists , records of performance so problems can be solved. Required to expose and eliminate waste and manage resources effectively.  Aka as Transparency . Based onVisual Order(5S)Andon, and Visual Control.

Visual Workplace

A Visual workplace is a work area that is self-explaining, self-regulating and self-managing. Where what is supposed to happen does happen: on time, every day.
Characteristics of a Visual Workplace:
– Physical Impediments to effective processing are removed
– Processes are tightly linked and logically ordered
– Tools and fixtures have homes – no searching
– Information and material travel together
– Standards are clear and self-explaining.  Clear baseline for continuous improvement. 

Vital Few

“The vital few”  see Pareto Analysis

Voice Recognition/Response

Computerized systems capable of recognizing, or synthesizing human voices.  Such systems capture verbalized data for quality control or inventory-tracking purposes (often when operators’ hands are busy), recognize spoken commands that activate equipment, and convert computer data into audible information. 

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A facility where incoming goods are sorted and stored before shipment to their next point of use. 

Waste (W) or non value adding activities

Those activities within a company or supply chain that do not directly contribute to satisfying end consumers’ requirements. Useful to think of these as activities which consumers would not be happy to pay for.  Sometimes called Muda.  See also Seven wastes. 


A symbol used in process activity mapping to designate those activities within a company or supply chain that do not directly contribute to satisfying end consumers’ requirements, but do not actually cost anything.

Work-in-Process Inventory (WIP)

The amount or value of all materials, components, and subassemblies representing partially completed production; anything between the raw material/purchased component stage and finished goods stage.  Value should be calculated at plant cost, including material, direct labour, and overhead.

WIP Turns

The value of total annual shipments at plant cost (for the most recent full year) divided by the current WIP value at plant cost.

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