Activity-Based Costing - A management accounting
system that assigns costs to products based on the amount of resources used
which may include floor space, raw materials, machine hours, tooling and human
effort in order to design, order or make a product. Contrast with Standard
Costing.
Autonomation - Designing a machine or system so that
it is able to detect the production of a defective part, stop the process and
alert a human operator.
Batch processing - The practice of manufacturing
large lots of a part and then then moving them to a queue before the next
operation in the production process. Most MRP systems function this way.
Contrast with One Piece Flow.
Cells - The layout of machines of different types
performing different operations in a tight sequence, typically in a U-shaped,
to permit one piece flow and flexible use of human labor by means of
Multi-Machine Working. Contrast with Functional Layout.
Changeover - The installation of a new of tool into
machine, a different material in a process or any change from one product or
process to another that requires a machine to be shut down and modified in
some way.
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 One Piece Flow.
Five Ss - Five terms beginning with S that define
the areas a company needs to control to function in a visual control and lean
production environment. Sort means to separate needed tools, parts, and
instructions from unneeded materials and to remove the latter. Simplify means
to neatly arrange and identify parts and tools for ease of use. Sweep means to
conduct a cleanup campaign. Standardize means to conduct Sort, Simplify, and
Sweep at frequent, indeed daily, intervals to maintain a workplace in perfect
condition. Sustain means to form the habit of always following the first four
Ss.
Flow - The movement of materials or information
along the value stream so that a product proceeds from design to launch, order
to delivery, and raw materials into the hands of the customer with no
stoppages, scrap, or backflows
Functional Layout - The practice of grouping
machines or activities by type of operation performed; for example, welding
departments or order-entry. Contrast with Cells.
General Case (of flow) – continuous flow achieved in
small-lot production through the use of quick change over and "right-sized"
tools that permit processing steps of different types to be placed adjacent to
each other to permit continuous flow. Contrast with Special Case.
Just-In-Time - A system for producing and delivering
the right quantity of the right product to a customer at the right time.
The key elements of Just-in-Time are Flow, Pull, Standard Work (with standard
in-process inventories), and Takt Time.
Kaizen - Continuous, incremental improvement of an
activity to create more Value with less Waste. Also known as Point Kaizen, and
Process Kaizen.
Kanban - An element in a Pull System that signals an
upstream operation to begin production and delivery of a specified quantity of
a particular product.
Lead Time - The total time a customer must wait to
receive a product after placing an order.
Level Selling - A system of customer relations that
attempt to eliminate surges in demand caused by the selling system itself.
Material Requirements Planning (MRP) - 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. Manufacturing
Resource Planning (often called MRPII) expands MRP to include capacity
planning tools, a financial interface to translate operations planning into
financial terms, and a simulation tool to assess alternative production plans.
Muda - Any activity that does not add value, whether
necessary or unnecessary for the process. The objective with necessary muda
is to minimize it, the objective with unnecessary muda is to eliminate it.
Multi-Machine Operation - Training of employees to
operate and maintain different types of production equipment. Multi-machine
working is essential to creating production cells where each worker utilizes
many machines.
Non-Value Added Activity - Any activity that
consumes resources but creates no Value (see Waste).
One Piece Flow - A process in which products
proceed, one unit at a time, through various operations in design,
order-taking, and production, without interruptions. Contrast with Batch
Processing.
Open-Book Management - A management culture in which
all financial information relevant to design, scheduling, and production tasks
is shared with all employees of the firm, and with suppliers and distributors
up and down the value stream.
Operation - An activity or activities performed on a
product by a single machine.
Poka-Yoke - A mistake-proofing device or procedure
to prevent a defect during order taking or manufacture.
Process - A series of individual operations required
to create a design, completed order, or product.
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.
Product Family - A range of related products that
can be produced interchangeably in a production cell.
Production Smoothing - 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.
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. See also Kanban.
Queue Time - The time a product spends in a line
awaiting the next design, order processing, or fabrication step.
Seven Wastes - Taiichi Ohno's original enumeration
of the wastes commonly found in physical production. These are overproduction,
producing more that required to meet demand, waiting for the next processing
stop, unnecessary transport of materials (for example, between functional
areas of facilities),
Single Minute Exchange of Dies (SMED) - A series of
techniques pioneered by Shigeo Shingo for changeovers of production machinery
in less than ten minutes.
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. Also a map of an operators movements during a production
operation.
Special Case (of flow) – First achieved by Ford in
the fall of 1913. He reduced the effort required to assemble a model T by 90%.
His method worked only when volumes were high enough to justify high-speed
assembly lines where every product used exactly the same parts. Contrast with
General Case.
Standard Costing - A management accounting system
which allocates costs to products based on the number of machine hours and
labor hours available to a production department during a given period of
time. Standard cost systems encourage managers to make unneeded products or
the wrong mix of products in order to minimize their cost-per-product by fully
utilizing machines and labor. Contrast with Activity Based Costing.
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.
Takt Time - The available production time divided by
the rate of customer demand. For example if customers demand 240 widgets per
day and the factory operates 480 minutes per day, takt time is two minutes; if
customers want two new products designed per month, takt time is two weeks.
Takt Time sets the pace of production to match the rate of customer demand and
becomes the heartbeat of any lean system.
Throughput Time - The time required for a product to
proceed from concept to launch, order to delivery, or raw materials into the
hands of the customer. This includes both processing and queue time. Contrast
with Processing Time and Lead Time.
Total Productive Maintenance (TPM) - 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.
Value - A capability provided to a customer at the
right time at an appropriate price, as defined in each case by the customer.
Features of the product or service, availability, cost, and performance are
dimensions of value.
Value Added Activity - Any step in a process that
adds value in the eyes of the customer; an activity for which the customer is
willing to pay and which changes form, fit, or function of a product.
Value Stream - The specific activities required to
design, order and provide a specific product, 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.
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.
Waste - Any activity that consumes resources but
creates no Value (see Non-Value Added Activity).
