Part I Strategic Planning Flashcards
1
Q
Production Line
A
A series of pieces of equipment dedicated to the manufacture of a specific number of products or families.
2
Q
advanced planning and scheduling (APS)
A
Techniques that deal with analysis and planning of logistics and manufacturing during short, intermediate, and long-term time periods. [This] describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to-promise, and capable-to-promise capabilities. [This] often generates and evaluates multiple scenarios. Management then selects one scenario to use as the “official plan.” The five main components of [these] systems are (1) demand planning, (2) production planning, (3) production scheduling, (4) distribution planning, and (5) transportation planning.
3
Q
andon
A
A sign board with signal lights used to make workers and management aware of a quality, quantity, or process problem.
4
Q
assemble-to-order (ATO)
A
A production environment where a good or service can be assembled after receipt of a customer’s order. The key components (bulk, semi-finished, intermediate, subassembly, fabricated, purchased, packing, and so on) used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product. This strategy is useful where a large number of end products (based on the selection of options and accessories) can be assembled from common components.
5
Q
assembly line
A
An assembly process in which equipment and work centers are laid out to follow the sequence in which raw materials and parts are assembled.
6
Q
assignable cause
A
A source of variation in a process that can be isolated, especially when its significantly larger magnitude or different origin readily distinguishes it from random causes of variation.
7
Q
bullwhip effect
A
An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being excess. This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain. [This] can be eliminated by synchronizing the supply chain.
8
Q
business plan
A
1) A statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow (source and application of funds) statement. [It] is usually stated in terms of dollars and grouped by product family. [It] is then translated into synchronized tactical functional plans through the production planning process (or the sales and operations planning process). Although frequently stated in different terms (dollars versus units), these tactical plans should agree with each other and with [this concept]. 2) A document consisting of the business details (organization, strategy, and financing tactics) prepared by an entrepreneur to plan for a new business.
9
Q
cause-and-effect diagram
A
A tool for analyzing process dispersion. It is also referred to as the Ishikawa diagram (because Kaoru Ishikawa developed it) and the fishbone diagram (because the complete diagram resembles a fish skeleton). The diagram illustrates the main causes and subcauses leading to an effect (symptom). [This] is one of the seven tools of quality.
10
Q
closed-loop MRP
A
A system built around material requirements planning that includes the additional planning processes of production planning (sales and operations planning), master production scheduling, and capacity requirements planning. Once this planning phase is complete and the plans have been accepted as realistic and attainable, the execution processes come into play. These processes include the manufacturing control processes of input- output (capacity) measurement and detailed scheduling and dispatching, as well as anticipated delay reports from both the plant and suppliers, supplier scheduling, and so on. [This term] implies not only that each of these processes is included in the overall system, but also that feedback is provided by the execution processes so the planning can be kept valid at all times.
11
Q
component
A
The raw material, part, or subassembly that goes into a higher-level assembly, compound, or other item. This term may also include packaging materials for finished items.
12
Q
continuous process improvement (CPI)
A
A never-ending effort to expose and eliminate root causes of problems; small-step improvement as opposed to big-step improvement.
13
Q
continuous production
A
A production system in which the productive equipment is organized and sequenced according to the steps involved to produce the product. This term denotes that material flow is continuous during the production process. The routing of the jobs is fixed and setups are seldom changed.
14
Q
control chart
A
A graphic comparison of process performance data with predetermined computed control limits. The process performance data usually consists of groups of measurements selected in the regular sequence of production that preserve the order. The primary use of [these] is to detect assignable causes of variation in the process as opposed to random variations. [This] is one of the seven tools of quality.
15
Q
control limit
A
A statistically determined line on a control chart […]. If a value occurs outside this [upper or lower] limit, the process is deemed to be out of control.
16
Q
cost of poor quality
A
The costs associated with performing a task incorrectly and/ or generating unacceptable output. These costs would include the costs of nonconformities, inefficient processes, and lost opportunities.
17
Q
customer service
A
1) The ability of a company to address the needs, inquiries, and requests of customers. 2) A measure of the delivery of a product to the customer at the time the customer specified.
18
Q
data governance
A
The overall management of data’s accessibility, usability, reliability, and security. Used to ensure data record accuracy.
19
Q
delivery lead time
A
The time from the receipt of a customer order to the delivery of the product.
20
Q
demand lead time
A
The amount of time potential customers are willing to wait for the delivery of a good or a service.
21
Q
discrete manufacturing
A
The production of distinct items such as automobiles, appliances, or computers.
22
Q
electronic data interchange (EDI)
A
The paperless (electronic) exchange of trading documents, such as purchase orders, shipment authorizations, advanced shipment notices, and invoices, using standardized document formats.
23
Q
employee empowerment
A
The practice of giving non-managerial employees the responsibility and the power to make decisions regarding their jobs or tasks. It is associated with the practice of transfer of managerial responsibility to the employee. [This] allows the employee to take on responsibility for tasks normally associated with staff specialists. Examples include allowing the employee to make scheduling, quality, process design, or purchasing decisions.
24
Q
employee involvement (EI)
A
The concept of using the experience, creative energy, and intelligence of all employees by treating them with respect, keeping them informed, and including them and their ideas in decision-making processes appropriate to their areas of expertise. [It] focuses on quality and productivity improvements.
25
engineer-to-order
Products whose customer specifications require unique engineering design, significant customization, or new purchased materials. Each customer order results in a unique set of part numbers, bills of material, and routings.
26
enterprise resources planning (ERP)
Framework for organizing, defining, and standardizing the business processes necessary to effectively plan and control an organization so the organization can use its internal knowledge to seek external advantage. [This type of] system provides extensive databanks of information including master file records, repositories of cost and sales, financial detail, analysis of product and customer hierarchies, and historic and current transactional data.
27
external failure costs
The costs related to problems found after the product reaches the customer. This usually includes such costs as warranty and returns.
28
field service
The functions of installing and maintaining a product for a customer after the sale or during the lease. [It] may also include training and implementation assistance.
29
five Ss
Five terms beginning with “S” used to create a workplace suitable for lean production: sort, simplify, scrub, standardize, and sustain. Sort means to separate needed items from unneeded ones and remove the latter. Simplify means to neatly arrange items for use. Scrub means to clean up the work area. Standardize means to sort, simplify, and scrub daily. Sustain means to always follow the first four Ss. Sometimes referred to by the Japanese equivalents: seiri, seiton, seiso, seiketsu, and shitsuke.
30
five whys
The common practice in total quality management is to ask “why” five times when confronted with a problem. By the time the answer to the fifth “why” is found, the ultimate cause of the problem is identified.
31
fixed-position manufacturing
Similar to project manufacturing, this type of manufacturing is mostly used for large, complex projects where the product remains in one location for its full assembly period or may move from location to location after considerable work and time are spent on it. [Examples...include] shipbuilding or aircraft assembly, for which the costs of frequent movement of the product are very high.
32
flow processing
In process systems development, work flows from one workstation to another at a nearly constant rate and with no delays. When producing discrete (geometric) units, the process is called repetitive manufacturing; when producing non-geometric units over time, the process is called continuous manufacturing. A physical-chemical reaction takes place [when this process is continuous.]
33
flow shop
A form of manufacturing organization in which machines and operators handle a standard, usually uninterrupted, material flow. The operators generally perform the same operations for each production run. [This] is often referred to as a mass production shop or is said to have a continuous manufacturing layout. The plant layout (arrangement of machines, benches, assembly lines, etc.) is designed to facilitate a product “flow.” Some process industries (chemicals, oil, paint, etc.) are extreme examples of [this]. Each product, though variable in material specifications, uses the same flow pattern through the shop. Production is set at a given rate, and the products are generally manufactured in bulk.
34
flowchart
[A] chart that shows the operations, transportation, storages, delays, inspections, and so on related to a process. [This is] drawn to better understand processes [and is] one of the seven tools of quality.
35
functional layout
A facility configuration in which operations of a similar nature or function are grouped together; an organizational structure based on departmental specialty (e.g., saw, lathe, mill, heat treat, press).
36
Gantt chart
The earliest and best-known type of planning and control chart, especially designed to show graphically the relationship between planned performance and actual performance over time. [This] chart is used for (1) machine loading, in which one horizontal line is used to represent capacity and another to represent load against that capacity; or (2) monitoring job progress, in which one horizontal line represents the production schedule and another parallel line represents the actual progress of the job against the schedule in time.
37
gemba
The place where humans create value; the real workplace. Also a philosophy: "Go to the actual place, see the actual work."
38
genchi genbutsu
A Japanese phrase meaning to visit the shop floor to observe what is occurring.
39
hansei
A Japanese word meaning reflection.
40
heijunka
In just-in-time philosophy, an approach to level production throughout the supply chain to match the planned rate of end product sales.
41
histogram
A graph of contiguous vertical bars representing a frequency distribution in which the groups or classes of items are marked on the x axis and the number of items in each class is indicated on the y axis. The pictorial nature of [this] lets people see patterns that are difficult to see in a simple table of numbers. [It] is one of the seven tools of quality.
42
hoshin
A Japanese word meaning statement of objectives.
43
hoshin planning
Breakthrough planning. A Japanese strategic planning process in which a company develops up to four vision statements that indicate where the company should be in the next five years. Company goals and work plans are developed based on the vision statements. Periodic audits are then conducted to monitor progress.
44
intermittent production
A form of manufacturing in which the jobs pass through the functional departments in lots, and each lot may have a different routing.
45
internal failure costs
The cost of things that go wrong before the product reaches the customer. [These] usually include rework, scrap, downgrades, reinspection, retesting, and process losses.
46
jidoka
The Japanese term for the practice of stopping the production line when a defect occurs.
47
jishuken
A Japanese word meaning voluntary study groups.
48
job shop
1) An organization in which similar equipment is organized by function. Each job follows a distinct routing through the shop. 2) A type of manufacturing process used to produce items to each customer’s specifications. Production operations are designed to handle a wide range of product designs and are performed at fixed plant locations using general-purpose equipment.
49
kaizen
The Japanese term for improvement; refers to continuing improvement involving everyone—managers and workers. In manufacturing, [this] relates to finding and eliminating waste in machinery, labor, or production methods.
50
kanban
A method of just-in-time production that uses standard containers or lot sizes with a single card attached to each. It is a pull system in which work centers signal with a card that they wish to withdraw parts from feeding operations or suppliers. [This] Japanese word, loosely translated, means card, billboard, or sign, but other signaling devices such as colored golf balls have also been used. The term is often used synonymously for the specific scheduling system developed and used by the Toyota Corporation in Japan.
51
key performance indicator (KPI)
A financial or nonfinancial measure that is used to define and assess progress toward specific organizational goals and typically is tied to an organization’s strategy and business stakeholders. [This] should not be contradictory to other departmental or strategic business unit performance measures. A metric used to measure the overall performance or state of affairs. SCOR level 1 metrics are considered [these].
52
lean production
A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. It involves identifying and eliminating non- value-adding activities in design, production, supply chain management, and dealing with customers. [It also employs] teams of multiskilled workers at all levels of the organization and use highly flexible, increasingly automated machines to produce volumes of products in potentially enormous variety. [It] contains a set of principles and practices to reduce cost through the relentless removal of waste and through the simplification of all manufacturing and support processes.
53
lean six sigma
A methodology that combines [two] improvement concepts [...]. It uses the seven wastes of lean and the DMAIC process from six sigma, and awards recognition of competence through judo-style belts.
54
logistics
1) In a supply chain management context, it is the subset of supply chain management that controls the forward and reverse movement, handling, and storage of goods between origin and distribution points. 2) In an industrial context, the art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities. 3) In a military sense (where it has greater usage), its meaning can also include the movement of personnel.
55
make-or-buy decision
The act of deciding whether to produce an item internally or buy it from an outside supplier. Factors to consider in the decision include costs, capacity availability, proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing.
56
make-to-order
A production environment where a good or service can be made after receipt of a customer’s order. The final product is usually a combination of standard items and items custom- designed to meet the special needs of the customer. Where options or accessories are stocked before customer orders arrive, the term assemble-to-order is frequently used.
57
make-to-stock
A production environment where products can be and usually are finished before receipt of a customer order. Customer orders are typically filled from existing stocks, and production orders are used to replenish those stocks.
58
manufacturing lead time
The total time required to manufacture an item, exclusive of lower-level purchasing lead time. For make-to-order products, it is the length of time between the release of an order to the production process and shipment to the final customer. For make-to-stock products, it is the length of time between the release of an order to the production process and receipt into inventory. Included are order preparation time, queue time, setup time, run time, move time, inspection time, and put- away time.
59
manufacturing philosophy
The set of guiding principles, driving forces, and ingrained attitudes that helps communicate goals, plans, and policies to all employees and that is reinforced through conscious and subconscious behavior within the manufacturing organization.
60
manufacturing process
The series of operations performed upon material to convert it from the raw material or a semifinished state to a state of further completion. [It] can be arranged in a process layout, product layout, cellular layout, or fixed-position layout. [It also] can be planned to support make-to-stock, make-to-order, assemble-to-order, and so forth, based on the strategic use and placement of inventories.
61
manufacturing resource planning (MRP II)
A method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units and financial planning in dollars, and has a simulation capability to answer what-if questions. It is made up of a variety of processes, each linked together: business planning, production planning (sales and operations planning), master production scheduling, material requirements planning, capacity requirements planning, and the execution support systems for capacity and material. Output from these systems is integrated with financial reports such as the business plan, purchase commitment report, shipping budget, and inventory projections in dollars. [It] is a direct outgrowth and extension of closed-loop MRP.
62
mass customization
The use of mass production techniques to create large volume of products in a wide variety keeping production costs low while enabling customized output primarily utilizing postponement or delayed differentiation.
63
master planning
A group of business processes that includes the following activities: demand management (which includes forecasting and order servicing); production and resource planning; and master scheduling (which includes the master schedule and the rough-cut capacity plan).
64
materials management
The grouping of management functions supporting the complete cycle of material flow, from the purchase and internal control of production materials to the planning and control of work in process to the warehousing, shipping, and distribution of the finished product.
65
modularization
In product development, the use of standardized parts for flexibility and variety. Permits product development cost reductions by using the same item(s) to build a variety of finished goods. This is the first step in developing a planning bill of material process.
66
muda (waste)
In lean manufacturing, costs are reduced by reducing [this] within a system. There are seven [categories]: (1) overproduction—excess or too early; (2) waiting—queuing delays; (3) transportation—unneeded movements; (4) processing—poor process design; (5) motion—activities that do not add value; (6) inventory—stock that is sitting and is accumulating cost without necessarily providing value; (7) defective units—scrap or rework.
67
mura
A Japanese word meaning unevenness or variability
68
muri
A Japanese word meaning strain or overburden
69
nesting
The act of combining several small processes to form one larger process.
70
one-card kanban system
A kanban system where only a move card is employed. Typically, the work centers are adjacent; therefore, no production card is required. In many cases, squares located between work centers are used as the kanban system. An empty square signals the supplying work center to produce a standard container of the item.
71
operations management
1) The planning, scheduling, and control of the activities that transform inputs into finished goods and services. 2) A field of study that focuses on the effective planning, scheduling, use, and control of a manufacturing or service organization through the study of concepts from design engineering, industrial engineering, management information systems, quality management, production management, inventory management, accounting, and other functions as they affect the operation.
72
operator flexibility
Training machine workers to perform tasks outside their immediate jobs and in problem-solving techniques to improve process flexibility. This is a necessary process in developing a fully cross-trained workforce.
73
order qualifiers
Those competitive characteristics that a firm must exhibit to be a viable competitor in the marketplace. For example, a firm may seek to compete on characteristics other than price, but in order to “qualify” to compete, its costs and the related price must be within a certain range to be considered by its customers.
74
order winners
Those competitive characteristics that cause a firm’s customers to choose that firm’s goods and services over those of its competitors. [These can be considered to be competitive advantages for the firm. [They also] usually focus on one (rarely more than two) of the following strategic initiatives: price/cost, quality, delivery speed, delivery reliability, product design, flexibility, after-market service, and image.
75
outsourcing
The process of having suppliers provide goods and services that were previously provided internally. [This] involves substitution—the replacement of internal capacity and production by that of the supplier.
76
package to order
A production environment in which a good or service can be packaged after receipt of a customer order. The item is common across many different customers; packaging determines the end product.
77
participative design/engineering
A concept that refers to the simultaneous participation of all the functional areas of the firm in the product design activity. Suppliers and customers are often also included. The intent is to enhance the design with the inputs of all the key stakeholders. Such a process should ensure that the final design meets all the needs of the stakeholders and should ensure a product that can be quickly brought to the marketplace while maximizing quality and minimizing costs.
78
performance standard
In a performance measurement system, the accepted, targeted, or expected value for the criterion.
79
plan-do-check-action (PDCA)
A four-step process for quality improvement. In the first step[...], a plan to effect improvement is developed. In the second step[...], the plan is carried out, preferably on a small scale. In the third step[...], the effects of the plan are observed. In the last step[...], the results are studied to determine what was learned and what can be predicted. [This] cycle is sometimes referred to as the Shewhart cycle (because Walter A. Shewhart discussed the concept in his book, Statistical Method from the Viewpoint of Quality Control) or as the Deming circle (because W. Edwards Deming introduced the concept in Japan and the Japanese subsequently called it the Deming circle).
80
postponement
A product design, or supply chain strategy that deliberately delays final differentiation of a product (assembly, production, packaging, tagging, etc.) until the latest possible time in the process. This shifts product differentiation closer to the consumer to reduce the anticipatory risk of producing the wrong product. The practice eliminates excess finished goods in the supply chain. Sometimes referred to as delayed differentiation.
81
prevention costs
The costs caused by improvement activities that focus on the reduction of failure and appraisal costs. Typical costs include education, quality training, and supplier certification. [This is one of the] four categories of quality costs.
82
preventive maintenance
The activities, including adjustments, replacements, and basic cleanliness, that forestall machine breakdowns. The purpose is to ensure that production quality is maintained and that delivery schedules are met. In addition, a machine that is well cared for will last longer and cause fewer problems.
83
process flexibility
The design of the manufacturing system, including operators and machinery, that allows quick changeovers to respond to near-term changes in product volume and mix. A necessary tool in lean and just in time.
84
process flow diagram
A graphical and progressive representation of the various steps, events, and tasks that make up an operations process. Provides the viewer with a picture of what actually occurs when a product is manufactured or a service is performed.
85
procurement lead time
The time required to design a product, modify or design equipment, conduct market research, and obtain all necessary materials. Lead time begins when a decision has been made to accept an order to produce a new product and ends when production commences.
86
product differentiation
A strategy of making a product distinct from the competition on a nonprice basis such as availability, durability, quality, or reliability.
87
product layout
Another name for flow process layout. A system that is set up for a limited range of similar products. Focused-factory production is also considered to be in this category.
88
product life cycle
1) The stages a new product goes through from beginning to end (i.e., the stages that a product passes through from introduction through growth, maturity, and decline). 2) The time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) The period of time during which a product can be produced and marketed profitably.
89
product mix
The proportion of individual products that make up the total production or sales volume. Changes in [this] can mean drastic changes in the manufacturing requirements for certain types of labor and material.
90
production line
A series of pieces of equipment dedicated to the manufacture of a specific number of products or families.
91
project management
The use of skills and knowledge in coordinating the organizing, planning, scheduling, directing, controlling, monitoring, and evaluating of prescribed activities to ensure that the stated objectives of a project, manufactured good, or service are achieved.
92
pull system
1) In production, the production of items only as demanded for use or to replace those taken for use. 2) In material control, the withdrawal of inventory as demanded by the using operations. Material is not issued until a signal comes from the user. 3) In distribution, a system for replenishing field warehouse inventories where replenishment decisions are made at the field warehouse itself, not at the central warehouse or plant.
93
purchasing lead time
The total lead time required to obtain a purchased item. Included here are order preparation and release time; supplier lead time; transportation time; and receiving, inspection, and put-away time.
94
push system
1) In production, the production of items at times required by a given schedule planned in advance. 2) In material control, the issuing of material according to a given schedule or issuing material to a job order at its start time. 3) In distribution, a system for replenishing field warehouse inventories where replenishment decision making is centralized, usually at the manufacturing site or central supply facility.
95
quality
Conformance to requirements or fitness for use. [It] can be defined through five principal approaches: (1) [The transcendent type] is an ideal; a condition of excellence. (2) [The product-based type] is based on a product attribute. (3) [The user-based type] is fitness for use. (4) [The manufacturing-based type] is conformance to requirements. (5) [The value-based type] is the degree of excellence at an acceptable price. Also, [it] has two major components: (1) [conformance—it] is defined by the absence of defects, and (2) [design—it] is measured by the degree of customer satisfaction with a product’s characteristics and features.
96
quality at the source
A producer’s responsibility to provide 100 percent acceptable quality material to the consumer of the material. The objective is to reduce or eliminate shipping or receiving quality inspections and line stoppages as a result of supplier defects.
97
quality control
The process of measuring quality conformance by comparing the actual with a standard for the characteristic and taking corrective actions on the difference.
98
quality costs
The overall costs associated with prevention activities and the improvement of quality throughout the firm before, during, and after production of a product. These costs fall into four recognized categories: internal failure costs, external failure costs, appraisal costs, and prevention costs. Internal failure costs relate to problems before the product reaches the customer. These usually include rework, scrap, downgrades, reinspection, retest, and process losses. External failure costs relate to problems found after the product reaches the customer. These usually include such costs as warranty and returns. Appraisal costs are associated with the formal evaluation and audit of quality in the firm. Typical costs include inspection, quality audits, testing, calibration, and checking time. Prevention costs are those caused by improvement activities that focus on reducing failure and appraisal costs. Typical costs include education, quality training, and supplier certification.
99
quality function deployment (QFD)
A methodology designed to ensure that all the major requirements of the customer are identified and subsequently met or exceeded through the resulting product design process and the design and operation of the supporting production management system. [It] can be viewed as a set of communication and translation tools. [It] tries to eliminate the gap between what the customer wants in a new product and what the product is capable of delivering. [This] often leads to a clear identification of the major requirements of the customers. These expectations are referred to as the voice of the customer (VOC).
100
quick changeover
The ability to shorten machine setups between different machine operation requirements to increase process flexibility. Highest concentration is on first reducing external setup time, then on internal setup issues. This reduces economic order quantity, queue and manufacturing lead times, and work-in-process inventory; it improves quality, process, and material flows.
101
random variation
A fluctuation in data that is caused by uncertain or random occurrences.
102
repetitive manufacturing
The repeated production of the same discrete products or families of products. Repetitive methodology minimizes setups, inventory, and manufacturing lead times by using production lines, assembly lines, or cells. Work orders are no longer necessary; production scheduling and control are based on production rates. Products may be standard or assembled from modules. Repetitiveness is not a function of speed or volume.
103
risk management
The identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.
104
root cause analysis
Analytical methods to determine the core problem(s) of an organization, process, product, market, and so forth.
105
scatter chart
A graphical technique to analyze the relationship between two variables. Two sets of data are plotted on a graph, with the y axis used for the variable to be predicted and the x axis used for the variable to make the prediction. The graph will show possible relationships (although two variables might appear to be related, they might not be—those who know most about the variables must make that evaluation). [This] is one of the seven tools of quality
106
scrap
Material outside of specifications and possessing characteristics that make rework impractical.
107
sensei
A Japanese word meaning teacher or one with experience.
108
service
Sometimes used to describe those activities that support the production or distribution functions in any [organization...].
109
service industry
1) In its narrowest sense, an organization that provides an intangible product (e.g., medical or legal advice). 2) In its broadest sense, all organizations except farming, mining, and manufacturing. Includes retail trade; wholesale trade; transportation and utilities; finance, insurance, and real estate; construction; professional, personal, and social services; and local, state, and federal governments.
110
Shingo's seven wastes
Shigeo Shingo, a pioneer in the Japanese just-in-time philosophy, identified seven barriers to improving manufacturing. They are the waste of overproduction, waste of waiting, waste of transportation, waste of stocks, waste of motion, waste of making defects, and waste of the processing itself.
111
six sigma
A methodology that furnishes tools for the improvement of business processes. The intent is to decrease process variation and improve product quality.
112
SMART
Abbreviation for organizational goals that are specific, measurable, achievable/attainable, relevant/realistic, and timely.
113
spread
Variability of an action. Often measured by the range or standard deviation of a particular dimension.
114
statistical process control (SPC)
The application of statistical techniques to monitor and adjust an operation. Often used interchangeably with statistical quality control, although statistical quality control [also includes acceptance sampling.]
115
strategic plan
The plan for how to marshal and determine actions to support the mission, goals, and objectives of an organization. Generally includes an organization’s explicit mission, goals, and objectives and the specific actions needed to achieve those goals and objectives.
116
subcontracting
Sending production work outside to another manufacturer.
117
supplier lead time
The amount of time that normally elapses between the time an order is received by a supplier and the time the order is shipped.
118
supplier partnership
The establishment of a working relationship with a supplier organization whereby two organizations act as one.
119
supply chain
The global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash.
120
supply chain management
The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.
121
sustainability
An organizational focus on activities that provide present benefit without compromising the needs of future generations.
122
tactical plan(s)
The set of functional plans (e.g., production plan, sales plan, marketing plan) synchronizing activities across functions that specify production levels, capacity levels, staffing levels, funding levels, and so on, for achieving the intermediate goals and objectives to support the organization’s strategic plan.
123
takt time
Sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean production system. Computed as the available production time divided by the rate of customer demand. For example, assume demand is 10,000 units per month, or 500 units per day, and planned available capacity is 420 minutes per day. [This] = 420 minutes per day ÷ 500 units per day = 0.84 minutes per unit. [This... means] that a unit should be planned to exit the production system on average every 0.84 minutes.
124
tolerance
Allowable departure from a nominal value established by design engineers that is deemed acceptable for the functioning of the good or service over its life cycle.
125
total productive maintenance (TPM)
Preventive maintenance plus continuing efforts to adapt, modify, and refine equipment to increase flexibility, reduce material handling, and promote continuous flows. It is operator-oriented maintenance with the involvement of all qualified employees in all maintenance activities.
126
total quality management (TQM)
A term coined to describe Japanese-style management approaches to quality improvement. Since then, [it] has taken on many meanings. Simply put, [it] is a management approach to long-term success through customer satisfaction. [It] is based on the participation of all members of an organization in improving processes, goods, services, and the culture in which they work. The methods for implementing this approach are found in teachings of such quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa, J.M. Juran, and Genichi Taguchi.
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two-card kanban system
A kanban system where a move card and production card are employed. The move card authorizes the movement of a specific number of parts from a source to a point of use. The move card is attached to the standard container of parts during movement of the parts to the point of use. The production card authorizes the production of a given number of parts for use or replenishment.
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U-lines
Production lines [in the shape of a letter. This] shape allows workers to easily perform several nonsequential tasks without much walk time. The number of workstations in [this type of production line] is usually determined by line balancing. [These also] promote communication.
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UN Global Compact Management Model
A framework for guiding companies through the process of formally committing to, assessing, defining, implementing, measuring, and communicating the United Nations Global Compact and its principles.
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United Nations Global Compact
A voluntary initiative whereby companies embrace, support, and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, the environment, and anticorruption.
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upstream
Used as a relative reference within a firm or supply chain to indicate moving in the direction of the raw material supplier.
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value analysis
The systematic use of techniques that identify a required function, establish a value for that function, and finally provide that function at the lowest overall cost. Focuses on the functions of an item rather than the methods of producing the present product design.
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value chain analysis
An examination of all links a company uses to produce and deliver its products and services, starting from the origination point and continuing through delivery to the final customer.
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value stream
The processes of creating, producing, and delivering a good or service to the market. For a good, [this] encompasses the raw material supplier, the manufacture and assembly of the good, and the distribution network. For a service, [this] consists of suppliers, support personnel and technology, the service “producer,” and the distribution channel. May be controlled by a single business or a network of several businesses.
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value stream mapping
A lean production tool to visually understand the flow of materials from supplier to customer that includes the current process and flow as well as the value-added and non-value- added time of all the process steps. Used to lead to reduction of waste, decrease flow time, and make the process flow more efficient and effective.
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variable cost
An operating cost that varies directly with a change in one unit in the production volume (e.g., direct materials consumed, sales commissions).
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VATI analysis
n the theory of constraints, a procedure for determining the general flow of parts and products from raw materials to finished products (logical product structure). [The "V"] logical structure starts with one or a few raw materials, and the product expands into a number of different products as it flows through divergent points in its routings. The shape of an ["A"] logical structure is dominated by converging points. Many raw materials are fabricated and assembled into a few finished products. [The "T"] logical structure consists of numerous similar finished products assembled from common assemblies, subassemblies, and parts. An ["I"] logical structure is the simplest of production flows, where resources are shared between different products and the flow is in a straight line sequence (e.g., an assembly line). Once the general parts flow is determined, the system control points (gating operations, convergent points, divergent points, constraints, and shipping points) can be identified and managed.
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voice of the customer (VOC)
Actual customer descriptions in words for the functions and features customers desire for goods and services. In the strict definition, as related to quality function deployment (QFD), the term customer indicates the external customer of the supplying entity.
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waste
1) Any activity that does not add value to the good or service in the eyes of the consumer. 2) A by-product of a process or task with unique characteristics requiring special management control. [The] production [of this] can usually be planned and somewhat controlled. Scrap is typically not planned and may result from the same production run as [this term].
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what-if analysis
The process of evaluating alternate strategies by answering the consequences of changes to forecasts, manufacturing plans, inventory levels, and so forth.
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work cell
Dissimilar machines grouped together into a production unit to produce a family of parts having similar routings.
