Lean Supply Chain Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
5-S
A workplace organization methodology where emphasis is placed on maximizing space and minimizing movement/travel
5 Whys
The 5 why’s typically refers to the practice of asking, 5 times, why the failure has occurred in order to get to the root cause/causes of the problem. There can be more than one cause to a problem as well. In an organizational context, generally root cause analysis is carried out by a team of persons related to the problem. No special technique is required.
Accumulates only product costs, direct and indirect, to measure product cost. The gross margin (under absorption costing) is sales revenue minus all product costs, including applied fixed manufacturing overhead. Absorption costing averages all product costs across units produced. When there are large amounts of committed or fixed costs, making more units reduces the average cost per unit, which may be a visible number. Also, placing some units in inventory defers all the costs of those units from being recognized as expense, which could increase currently reported income.
Activity Based Cost System
A cost methodology that assigns costs to activities and cost objects based on the consumption of resources rather than the traditional costing approach in which costs are allocated to products based on some arbitrary bases such as labor. Activity Based Cost System describes various activities (e.g., unit-level, batch-level, product-level, customer-level, and facility-level) that drive a company?s costs. The integration of Activity Based Cost System into a CVP model thus recognizes the existence of multiple cost drivers, resulting in the production of better information for management.
Actual Costing
Attempts to assign costs to specific products (or batches) based on the costs of resources actually used. Due to fluctuations or permanent changes, actual costs may be different from normal or expected costs.
Andon
A visual management tool that highlights the status of operations in an area at a single glance and that signal whenever an abnormality occurs.
Autonomation
Stopping a line automatically when a defective part is detected. [Same as Jidoka]
Any resource whose capacity is equal to, or less than the demand placed on it.
Where a series of non-bottlenecks, based on the sequence in which they perform their jobs can act as a constraint. [Abbreviation: CCR]
Chaku-Chaku
A method of conducting single-piece flow, where the operator proceeds form machine to machine, taking the part from one machine and loading it into the next. [Same as Load-Load]
Change Agent
The catalytic force moving firms and value streams out of the world of inward-looking batch-and-queue.
Constraint
Anything that limits a system from achieving higher performance, or throughput. Alternate: That bottleneck which most severely limit the organization’s ability to achieve higher performance relative its purpose/goal.
Events that occur only after a previous event.
Methods that help operators avoid mistakes in their work caused by choosing the wrong part, leaving out a part, installing a part backward, etc. Also called poka-yoke.
External Setup (OED)
Die setup procedures that can be performed while machine is in motion. OED – “outer exchange of die” [See Internal Setup]
Radical Improvement, usually applied only once within a value stream. [Same as Kaikaku ]
The Japanese term for ?actual place?, often used for the shop floor or any place where value creating work actually occurs.
Keeping total manufacturing volume as constant as possible. [Same as Production Smoothing]
Hoshin Kanri
The selection of goals, projects to achieve the goals, designation of people and resources for project completion, and establishment of project metrics. [Same as Policy Deployment]
The task of taking a specific product from order-taking through detailed scheduling to delivery. [See Value Stream]
Informative Inspection
A form of inspection used to determine non-conforming product. [See Inspection or Judgment Inspection]
Inspection
Comparing product, or component against specifications to determine if such product or component meets requirements. [See Judgment Inspection or Informative Inspection]
Internal Setup (IED)
Die setup procedures that must be performed while machine is in stopped. IED – “inner exchange of die” [See External Setup]
Inventory
The money the system has invested in purchasing things it intends to sell.
Jidoka
Stopping a line automatically when a defective part is detected. [Same as Autonomation]
Radical Improvement, usually applied only once within a value stream. [Same as Flow Kaizen]
Kaizen
Continuous improvement through incremental improvements. [Same as Process Kaizen]
Kanban
A kanban is a signaling device that gives authorization and instructions for the production or withdrawal of items in a pull system.
Producing the maximum sellable products or services at the lowest operational cost, while optimizing inventory levels.
Load-Load
A method of conducting single-piece flow, where the operator proceeds form machine to machine, taking the part form one machine and loading it into the next. [Same as Chaku-Chaku]
Any human activity which absorbs resources, but creates no real value. [See Non-Value Added, Waste]
Mura
Unevenness in an operation, for example, a gyrating schedule not caused by end-consumer demand but rather by the production system, or an uneven work pace in an operation causing operators to hurry and then wait.
Muri
Overburdening equipment or operators by requiring them to run at a higher or harder pace with more effort for a longer period of time than equipment designs and appropriate workforce management allow.
Activities or actions taken that add no real value to the product or service, making such activities or action a form of waste. [See Value Added]
One-Touch Exchange of Dies (OTED)
The reduction of die set-up where die setting is reduced to a single step. [See Single Minute Exchange of Die, Internal Setup, or External Setup]
Operating Expenses
The money the required for the system to convert inventory into throughput.
Operations
Work or steps taken to transform material from raw materials to finished product. [See Process, Sub-Process]
The task of taking a specific product from raw materials to a finished product in the hands of the customer. [See Value Stream]
Pitch
The pace and flow of a product.
Poka-Yoke
Refer to Error-Proofing
Policy Deployment
The selection of goals, projects to achieve the goals, designation of people and resources for project completion, and establishment of project metrics. [Same as Hoshin Kanri]
Problem Solving Task
The task of taking a specific product from concept through detailed design and engineering to production launch. [See Value Stream]
Process
The flow of material in time and space. The accumulation of sub-processes, or operations that transform material from raw material to finished products.
Process Kaizen
Continuous improvement through incremental improvements. [Same as Kaizen]
Production Smoothing
Keeping total manufacturing volume as constant as possible. [Same as Heijunka]
Meeting expectation and requirements, stated and un-stated, of the customer.
Quality Function Deployment (QFD)
Using a cross-functional team to reach consensus that final engineering specification of a product are in accord with the voice of the customer.
Quick Changeover
The ability to change tooling and fixtures rapidly (usually minutes), so multiple products can be run on the same machine.
Attributes and features of a product or service that, in the eyes of customers, are worth paying for. [See Value Added, Non-Value Added]
Resource Activation
Using a resource regardless of whether throughput is increased. [See Resource Utilization ]
Resource Utilization
Using a resource in a way that increases throughput . [See Resource Activation]
Right-size
Matching tooling and equipment to the job and space requirements of lean production.
An outside master or teacher that assists in implementing lean practices.
Shusa
The leader of the team whose job is to design and engineer a new product and take it into production.
Single Minute Exchange of Dies (SMED)
The reduction in die set-up time. Set-up in a single minute is not required, but used as a reference. [See One-Touch Exchange of Die, Internal Setup, or External Setup]
Standard Work
Specifying tasks to the best way to get the job done in the amount of time available while ensuring the job is done right the first time, every time.
Sub-Optimization
A condition where gains made in one activity are offset by losses in another activity or activities, created by the same actions creating gains in the first activity.
Sub-Processes
A series of operations combined. Part of a process
Supermarket
The location where a predetermined standard inventory is kept to supply downstream processes.
Daily production number required to meet orders in hand divided into the number of working hours in the day.
Theory of Constraints (TOC)
A lean management philosophy that stresses removal of constraints to increase throughput while decreasing inventory and operating expenses.
Throughput
The rate the system generates money through sales.
Activities or actions taken that add real value to the product or service. [See Non-Value Added]
Value Analysis
Analyzing the value stream to identify value added and non-value added activities.
Value Stream
The set of specific actions required to bring a specific product through three critical management tasks of any business: Problem-solving, Information management and physical transformation.
Visual Controls
Displaying the status of an activity so every employee can see it and take appropriate action.
Anything that uses resources, but does not add real value to the product or service.
Produced product related to scheduled product.
