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Lean Manufacturing Glossary

Activity-Based Costing - A management accounting system that assigns costs to products based on the amount of resources used (including floor space, raw materials, machine hours, and human effort) in order to design, order or make a product. Contrast with Standard Costing.

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 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. This concept also know as jidoka, was pioneered by Sakichi Toyoda at the turn of the twentieth century when he invented automatic looms that stopped instantly when any thread broke. This permitted one operator to oversee many machines with no risk of producing vast amounts of defective cloth.

Batch-And-Queue - The mass-production practice of making large lots of a part and then sending the batch to wait in the queue before the next operation in the production process. Contrast with Single-Piece Flow.

Brownfield - An established design or production facility operating with massproduction methods and systems of social organization. Contrast with Greenfield.

Cells - The layout of machines of different types performing different operations in a tight sequence, typically in a U-shaped, to permit single-piece flow and flexible deployment of human effort by means of Multi-Machine Working. Contrast with Functional Layout.

Changeover - The installation of a new type of tool in a metal working machine, a different paint in a painting system, a new plastic resin and a new mold in an injection molding machine, new software in a computer, and so on. The term applies whenever a production device is assigned to perform a different operation.

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.

Five Ss - Five terms beginning with S utilized to create a workplace suited for visual control and lean production. 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.

Five Whys - 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.

Flow - The progressive achievement of tasks 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 not stoppages, scrap, or backflows

Functional Layout - The practice of grouping machines or activities by type of operation performed; for example, grinding machines 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.

Greenfield - A new design or production facility where best practice, lean methods can be put in place from the outset. Contrast with Brownfield.

Just-In-Time - 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. 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 - A small card attached to boxes of parts that regulates Pull in the Toyota Production System by signaling upstream production and delivery.

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 demand exceeds the capacity of a system, there is additional waiting time before the state of scheduling and production, and lead time exceeds throughput time. See Throughput Time.

Level Selling - A system of customer relations that attempt to eliminate surges in demand caused by the selling system itself (for example, due to quarterly or monthly sales targets) and that strives to create long-term relations with customers so that future purchases can be anticipated by the production system.

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 MRP 11) 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.

Monument - Any design, scheduling, or production technology with scale requirements necessitating that designs, order, and products be brought to the machine to wait in a queue for processing. Contrast with Right-Sized Tool.

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 Working - 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).

Open-Book Management - A situation 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. Contrast with Process.

Perfection - The complete elimination of Waste so that all activities along a Value Stream create Value.

Poka-Yoke - A mistake-proofing device or procedure to prevent a defect during ordertaking or manufacture. An order-taking example is a screen for order input developed from traditional ordering patterns that questions orders failing outside the pattern. The suspect orders are them examined, often leading to discovery or inputting errors or buying based on misinformation. A manufacturing example is a set of photocells in parts containers along an assembly line to prevent components from progressing to the next stage with missing parts. The poka-yoke in this case is designed to stop the movement of the component to the next station if the light beam has not been broken by the operator's hand in each bin containing a part for the product under assembly at that moment. A poka-yoke is sometimes called a baka-yoke.

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. The term is often analogous to "platforms".

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.

Quality Function Deployment (QFD) - A visual decision-making procedure for multi-skilled project teams which develops a common understanding of the voice of the customer and a consensus on the final engineering specifications of the product that has the commitment of the entire team. QFD integrates the perspectives of team members from different disciplines, ensures that their efforts are focused on resolving key trade-offs in a consistent manner against measurable performance targets for the product, and deploys these decisions through successive levels of detail. The use of QFD eliminates expensive backflows and rework as projects near launch.

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

Right-Sized Tool - A design, scheduling, or production device that can be fitted directly into the flow of products within a product family so that production no longer requires unnecessary transport and waiting. Contrast with Monument.

Seven Wastes - Taiichi Ohno's original enumeration of the wastes commonly found in physical production. These are overproduction ahead of demand, waiting for the next processing stop, unnecessary transport of materials (for example, between functional areas of facilities), overprocessing 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 (looking for parts, tools, prints, help, etceteras), and production of defective parts.

Single Minute Exchange of Dies (SMED) - A series of techniques pioneered by Shigeo Shingo for changeovers of production machinery in less than ten minutes. 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. Contrast with Batch-And-Queue.

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.

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.

Target Cost - The development and production cost which a product cannot exceed if the customer is to be satisfied with the value of the product while the manufacturer obtains an acceptable return on its investment.

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.

Transparency - See Visual Control

Turn-Back Analysis - Examination of the flow of a product through a set of production operations to see how often it is sent backwards for rework or scrap.

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. Used synonymously with Transparency.

Waste - Any activity that consumes resources but creates no Value (see Non-Value Added Activity).

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