Glossary of Lean Terms
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
A
Abnormality Management – a system by which abnormalities in the process are successfully detected and corrected.
Absorption Accounting – the traditional system of accounting that most manufacturing companies practice. Otherwise known as Cost Accounting.
Andon – a visual control device in a production area, such as a lighted overhead display. It communicates the current status of the production system and alerts team members to emerging problems.
Autonomation – transferring human intelligence to automated machinery so machines are able to detect the production of a single defective part and immediately stop themselves while asking for help. Also known as Jidoka.
B
Balanced line – a manufacturing line where all of the operator cycle times are balanced as evenly as possible so that they are below, but as close to possible, to the takt time of the line.
Balanced Plant – A plant where all available capacity is balanced exactly to market demand.
Batch – the opposite of one-piece flow. The practice of making large lots of a single part.
Black Belt – a person who has completed five weeks of LeanSigma® or Six Sigma training, culminating in two projects that show substantial financial benefit to the company. This person operates in this position on a full-time basis and initiates and oversees improvement projects within a company and mentors Green Belts. Black belts tend to be picked from the most enthusiastic, educated leaders in the company because each black belt must become an effective change agent.
Bottleneck – a location in the chain of a complete process where the flow of production slows downs and impedes the continuation of the process.
Business Process – processes in non-manufacturing environments. Examples include order entry, engineering changes, purchasing, financial closings, request for quotes, etc.
C
Cell – an arrangement of people, machines, materials and equipment with the processing steps placed right next to each other in sequential order through which parts are processed in a continuous flow. The most common cell layout is a U-shape.
Chaku-Chaku – a Japanese word that means “load-load”. It is a method of conducting a 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. Chaku-Chaku lines allow different parts of a production process to be completed by one operator, eliminating the need to move around large batches of work-in-process inventory.
Change Agent – a person with the personality and catalytic force to help lead a company’s lean transformation. One who leads cultural change in an organization.
Changeover – the installation of a new type of tool in a machine, a new paint in a painting system, a new mold or new resin in a injection molding machine, etc. The term applies whenever a production device is assigned to perform a different operation.
Comparative Analysis – a tool used in Sigma Kaizen events to determine the root cause of a problem.
Constraint – A workstation or a process that limits the output of the entire system.
Continuous Improvement – The everyday commitment to create a better product, work environment and business.
Consultant – a person who facilitates organizational change and/or provides subject matter expertise on technical, functional and business topics during development or implementation.
Culture – the predominating attitudes and behavior that characterize the functioning of a group or organization.
Customer Demand – The true demand for products based on actual point-of-sale data; not based on forecasts or historical sales information.
Cycle time – the time required to complete one cycle of an operation. 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.
D
Defects – imperfections that cause inadequacy or failure.
Demand Management – Demand management helps you see true customer demand. It allows you to forecast at the product family and SKU levels so you can better plan resources and capabilities.
Demand Segmentation – allows for visibility to understand the volume and frequency of demand patterns, and facilitates the capability to shape demand by taking advantage of more agile order fulfillment.
Design for LeanSigma® – a unique approach to new product development, production process planning and implementation by using rapid, team-based product and process design within a lean framework generating results that are a quantum leap from traditional or concurrent engineering approaches.
DFMA – an acronym for Design for Manufacture and Assembly. A system that allows you to systematically analyze your product designs with the goal of reducing manufacture and assembly costs, improving quality and speeding time to market.
DMAIC – the steps in a Sigma Kaizen project. Define, Measure, Analyze, Improve and Control.
E
Elemental Time – Time allotted to a specific operational step, within standard work.
External Set-Up – Elements of tooling set-up that can be performed safely while the machine is still running.
First pass yield – a measure of products or services that are done right the first time.
5S – a lean tool used for workplace organization and standardization. Benefits include prompt problem detection and clear standards. In addition, routine disciplines are established to keep the workplace in order and ensure that materials are in the correct location to maximize productivity. The 5S’s are Seiri, Seiton, Seiso, Seiketsu, Shitsuke.
5 Why’s – the practice developed by Taiichi Ohno of asking “why” five times whenever a problem is encountered in order to identify the root cause of the problem so that effective countermeasures could be developed and implemented.
F
Floor space – the amount of space in a company’s building.
G
Green Belt – a person who has completed three weeks of LeanSigma® or Six Sigma training, culminating in a project that shows substantial financial benefit to the company. This person devotes a minority percentage of their time to individual projects, while maintaining their full-time position. Green belts are most often selected from support groups, such as quality, engineering and supervisory groups, but they can also be operators.
Global Production System – An expansion of the Toyota Production System, this is a strategy to enable lean manufacturing using kaizen methodology.
Growth Strategy – a plan or strategy developed by a company to help grow the business.
H
Hanedashi – A device that allows a machine to automatically unload a part without waiting for an operator.
Heijunka – the creation of a “level schedule” by sequencing orders in a repetitive pattern and smoothing the day-to-day variations in total orders to correspond to longer-term demand. Also known as production smoothing.
Hoshin Kanri – a strategic decision-making tool for a firm’s executive team that focuses resources on the critical initiatives necessary to accomplish the business objectives of the firm. By using visual matrix diagrams similar to those employed for policy deployment, three to five key objectives are selected while all others are clearly deselected. The selected objectives are translated into specific projects and deployed down to the implementation level in the firm. This practice unifies and aligns resources and establishes clearly measurable targets against which progress toward the key objectives is measured on a regular basis.
House of Quality – a product planning matrix that is developed during a Design for LeanSigma® event and shows the relationship of customer requirements to the means of achieving these requirements. Acronym is HOQ.
I
Internal Set-Up – Elements of tooling set-up that must be performed while the machine is not in motion
Inventory – Usually the highest cost category, inventory is all raw materials, purchased parts, work-in-progress and finished goods that are not yet sold to a customer.
J
Jidoka – see Autonomation. Japanese term for transferring human intelligence to a machine.
Just-in-time – a system for producing and delivering the right items at the right time in the right amounts. The key elements of just in time are flow, pull, standard work and takt time.
K
Kaikaku – Radical improvement, usually in a business process, that affects the future value stream.
Kaizen – a Japanese word that means “continuous improvement”. Literally translated as “good change,” kaizen refers to small, incremental improvement of an activity to create more value with less waste. A kaizen event is a highly focused, action-oriented workshop that typically involves a team of five to 15 individuals. It usually lasts three to five days. The goal of a kaizen event is to concentrate on improving one specific process.
Kaizen Breakthrough – TBM’s proprietary one-week, rapid-deployment methodology that employs a focused, team-based approach to continuous improvement
Kaizen Newspaper – a tool used during a kaizen event in which the team leader or facilitator writes down tasks that need to be completed, then assigns people to the tasks. This list is usually posted in an area in the team room where everyone is able to see it and can check off when the task has been completed.
Kanban – a Japanese word that means “card” or “visible record”. It refers to a small card attached to boxes of parts that regulates pull by signaling upstream production and delivery.
Kitting – a process in which assemblers are supplied with kits, a box of parts, fittings and tools, for each task they perform. This eliminates time-consuming trips from one parts bin, tool crib or supply center to another to get the necessary material.
KPO – acronym for Kaizen Promotion Office. The department created in a company that coordinates, implements and manages the continuous improvement activities within the organization.
L
Lead time – the total time a customer must wait to receive a product after placing an order.
Lean Accounting – the new method of accounting that analyzes results and processes as well as delivers more accurate, actionable information about overall performances in today’s lean companies.
Lean Manufacturing – producing the maximum sellable products or services at the lowest operational cost, while optimizing inventory levels.
Lean Value Chain – The sequence of business activities by which, from the perspective of the end user, value is added to products or services produced by an organization. A lean value chain builds upon capabilities from internal lean manufacturing initiatives.
LeanSigma® – pioneered by Maytag and TBM, LeanSigma is today’s fastest and most effective approach to business improvement. By combining the rapid waste elimination and lead-time reduction of lean with Six Sigma’s focus on quality and yield improvement, LeanSigma gives companies an unprecedented, one-two improvement punch in a fraction of the time of standalone Six Sigma.
M
Machine Automatic Time – The time is takes for a machine to produce one unit, exclusive of loading and unloading.
Machine Cycle Time – The time it takes for a machine to produce one unit, including the time it takes to load and unload.
MDI – acronym for Managing for Daily Improvement. Major improvements made through kaizen must be sustained through incremental, daily, continuous improvement. Supervisors are the first line of defense against backsliding to old methods. MDI is targeted at making process improvement at least 40% of a supervisor’s daily routine. MDI gives the tools and empowerment supervisors need to respond to the problems they face on a daily basis. MDI develops performance management skills among group leaders and first line supervisors.
Mistake Proofing – see Poka-yoke.
MRP – acronym for Material Requirements Planning. A computerized system used to determine the quantity and timing requirements for materials used in a production operation. MRP systems use a master production schedule, a bill of materials listing every item needed for each product to be made, and information on current inventories of these items in order to schedule the production and delivery of the necessary items.
Muda – a Japanese word that means “waste.” It refers to any activity that consumes resources but creates no value.
Mura – Variations in process quality, cost and delivery
Muri – Unreasonableness; demand exceeds capacity.
N
Nagara System – Accomplishing two or more activities with one motion.
Non-Value Add – activities that the customer is not willing to pay for. Some activities may be necessary but do not add value as defined by the customer. Examples are packaging, paperwork, and inspection. Opposite of Value Add.
O
OCT – acronym for Operator Cycle Time. The time it takes for an operator to complete one cycle of their portion of a process.
OEE – acronym for Overall Equipment Effectiveness. The overall performance of a single piece of equipment, or even an entire factory, will always be governed by the cumulative impact of the three OEE factors: Availability, Performance Rate and Quality Rate.
One-piece flow – the opposite of batch production. Instead of building many products and then holding them in queue for the next step in the process, products go through each step in the process one at a time, without interruption. It improves quality and lowers costs.
One-Touch Exchange of Dies – The reduction of die set-up activities down to a single step.
Operator Cycle Time – The time it takes for a person to complete a predetermined sequence of operations, inclusive of loading and unloading, exclusive of time spent waiting.
Order Fulfillment – The critical link in the value chain that allows you to provide greater value by responding quickly to customer demand.
P
Pacemaker – A technique for pacing a process to takt time.
Point Kaizen – An improvement activity intensely directed at a single workstation, performed quickly by two or three specialists. Typically follows a full-blown kaizen event.
Point of Use – the location where tools or materials should be placed in a process so that the operator has access to them at the exact location where they will be used.
Poka-yoke – a mistake-proofing device or procedure that prevents a defect from passing on to the next operation or process.
Policy Deployment – Matching the strategic business goals of an organization to its available resources. Communicating those goals throughout the organization and linking everyone to the same objectives. See Hoshin Kanri.
Process Capacity Table – A chart primarily used in a machining environment that compares machine load to available capacity
Product Development – the overall process of strategy, organization, concept generation, product/marketing plan creation/evaluation, and commercialization of a new product.
Production Smoothing – A method of production scheduling that, over a period of time, takes the fluctuation of customer demand out of manufacturing. Producing every part, every day. See Heijunka.
Productivity – the a mount of output per unit of input (labor, equipment, and capital). There are many different ways of measuring productivity. For example, in a factory, productivity might be measured based on the number of hours it takes to produce a good, while in the service sector productivity might be measured based on the revenue generated by an employee divided by his/her salary.
Pull – a system of cascading production and delivery instructions from downstream to upstream activities in which nothing is produced by the upstream supplier until the downstream customer signals a need. The opposite of push.
Push – a process of manufacturing by which products are pushed through the system by sending them to the next operation automatically upon completion of the prior operation.
Q
Quality Function Deployment – A methodology in which a cross-functional team reaches consensus about final product specifications, in accord with the wishes of the customer.
R
Routing Standardization – a method used to help determine what machines/processes should be dedicated and linked in a production cell configuration. It is typically used in job-shop, machining type environments.
S
SQCD – acronym for Safety, Quality, Cost and Delivery. A tool on a manufacturing floor that is used to track daily the Safety, Quality, Cost and Delivery numbers for a particular line.
Seiketsu – #4 of the 5 S’s. Revisit frequently.
Seiso – #3 of the 5 S’s. Clean and inspect daily.
Seiton – #2 of the 5 S’s. Arrange and identify.
Seri – #1 of the 5 S’s. Segregate and discard.
Sensi – A revered master or teacher.
Set-Up Reduction – Reducing the amount of downtime during changeover from the last good piece to the first good piece of the next order.
Set-Up Time – the time it takes to change over a tool, die, mold, paint or resin in a process step. The time is calculated by starting at the end of the last good part made and stopping at the end of the next good part made.
7 Wastes – the original classification developed by Taiichi Ohno of the most common wastes in manufacturing. These are overproduction ahead of demand, waiting for the next processing step, unnecessary transport of materials, over processing of parts due to poor tool and product design, inventories more than the absolute minimum, unnecessary movement by employees during the course of their work and production of defective parts.
Shitsuke – #5 of the 5 S’s. Motivate to sustain.
Six Sigma – a standard of operational excellence used in lean manufacturing environments. It is a process that designs and monitors everyday business activities in ways that minimize waste while increasing customer satisfaction. Six Sigma objectives are directly and quantifiably connected t o the objectives of the business.
SMED – acronym for Single Minute Exchange of Dies. A series of techniques pioneered by Shigeo Shingo for changeovers of production machinery in less than ten minutes.
Spaghetti map – 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.
Standard Operations – The best combination of people and machines utilizing the minimum amount of labor, space, inventory and equipment.
Standard Work – a precise description of each work activity specifying the cycle time, takt time, and work sequence of specific tasks and the minimum inventory of parts on hand needed to conduct the activity.
Standard Work Combination Sheet – A document showing the sequence of production steps assigned to a single operator. It is used to illustrate the best combination of worker and machine.
Standard Work Layout – A diagram of a work station or cell showing how standard work is accomplished.
Standard Work-In-Process – Minimum material required to complete one cycle of operator work without delay.
Stop The Line Authority – When abnormalities occur, workers have power to stop the process and prevent the defect or variation from being passed along.
Sub-Optimization – Optimizing each piece of equipment; keeping all machines running, no matter the cost or consequence. Typically this inflates the number-one cost of production: material.
Supermarket – a supply of all the parts needed for a line located next to the line so that parts can be delivered quickly to the line and the flow of manufacturing does not stop due to the lack of available parts.
Supplier Management - Involves key processes that promote flow from your suppliers, build strategic supplier relationships, improve receiving and warehousing, and reduce costs. It develops clear commodity and sourcing strategies to control purchasing costs. It streamlines your sourcing and contracting process to develop supplier partnerships.
Sustain – one of the 5s’s used for workplace organization. Sustaining is the continuation of sifting, sweeping, sorting and sanitizing. It is the most important and the most difficult, because it addresses the need to perform the 5s’s on an on-going and systematic basis.
T
Takt time – a reference number that helps match the rate of production to the rate of sales. In other words, the rate at which customers require finished units. It is determined by dividing the total available production time per shift by the customer demand rate per shift. “Takt” is a German word for pace or beat.
TBM – an acronym for Time Based Management. A consulting firm founded by Anand Sharma that helps companies generate rapid business process improvement by using the Toyota Production System model.
3P – Production Preparation Process – a disciplined process used in the creation of new products and integrating them into lean production environments. Different tools used at various steps in the product development cycle are implemented utilizing kaizen as the methodology
30-Day Homework – a list of improvements that a kaizen team recommends to be completed no more than 30 days after the end of a kaizen event. These items are improvements the kaizen team identified during the event week, but were unable to complete due to time constraints.
Throughput – The rate at which the entire system generates money.
Time-Based Strategy – Organizing business objectives around economy-of-time principles.
Toyota Production System – Based on the concept developed by Taiichi Ohno to drive down lead time, identify and eliminate waste and increase production flexibility. Has been instrumental in helping Toyota become the world’s most efficient and successful manufacturer.
TPM – an acronym for Total Productive Maintenance. A series of methods, originally pioneered by Nippondenso (a member of the Toyota group), to ensure that every machine in a production process is always able to perform its required tasks so that production is never interrupted.
V
Value Add – a transformation of the shape or function of the material/information in a way that the customer will pay for. Opposite of Non-Value Add.
Value Analysis – Evaluating the total lead-time and value-added time to identify the percentage spent in value added activities.
Value Chain – an organization's set of linked, value-creating activities, ranging from securing basic raw materials and energy to the ultimate delivery of products and services.
Value Stream – the specific activities required to design, order and provide a product, from concept to launch, from order to delivery, and from raw materials into the hands of the customer. Whenever there is a product for a customer, there is a value stream.
Value Stream Map (or Value Chain Map) — A visual picture of how material and information flows from suppliers, through manufacturing, to the customer. It includes calculations of total cycle time and value-added time. Typically written for the current state of the value chain and the future, to indicate where the business is going.
Visual Controls – Creating standards in the workplace that make it obvious if anything is out of order.
Visual Management – System enabling anyone to quickly spot abnormalities in the workplace, regardless of their knowledge of the process.
VOC – acronym for Voice of the Customer. A systematic, institutionalized approach for eliciting and analyzing customers’ requirements, expectations, level of satisfaction and areas of concern. Typically, a Voice of the Customer effort includes facilitated focus groups, individual interviews, and surveys. The Voice of the Customer is a key data source in the Design for LeanSigma event.
W
Waste – anything that does not contribute to transforming a part to the customer’s needs.
Waterspider – The waterspider is a skilled and well-trained person who makes the rounds supplying parts, assisting with changeover, providing tools and materials, and any additional help needed to maintain Standard Work and keep the flow going. The waterspider has a routine and knows all processes thoroughly enough to step in if needed. At Toyota, performing the waterspider role is a prerequisite for supervision and management positions. Named after the whirligig beetle that swims about quickly in the water.
Work-in-process – items between machines or equipment waiting to be processed. Acronym is WIP.
Work Sequence – The correct steps the operator takes, in the order in which they should be taken.
Working Capital – Current assets minus current liabilities. It measures how much, in liquid assets a company has available to build its business. In general, companies that have a lot of working capital will be more successful, since they can expand and improve their operations.
