Lean lexicon
• Activity-Based Costing (ABC) An accounting technique that enables an organization to determine the actual cost of a product or service by tracing the cost back to the specific activities that produce or provide it. Compare to Traditional Cost Accounting (TCA).
• Symmetry When opposite sides of a part, tool, material, or fixture are different in size, shape, or relative position. Asymmetrical differences can be hard to spot, resulting in errors. Compare to symmetry.
• Autonomous maintenance A program in which equipment operators share responsibility with maintenance staff for the care of the equipment they use.
• Batch delay The amount of time a service operation or product unit waits while other operations or units in the lot, or batch, are completed or processed.
• Batch processing The movement of products through the manufacturing process in large numbers of identical units at once. Entire batches, or lots, are sent to each operation in the production process at the same time. Also known as large-lot processing. Compare to one-piece flow.
• BTS (build to schedule) A metric that measures the percentage of units scheduled for production on a given day that are actually produced on the correct day, in the correct mix, and in the correct sequence.
• Capacity The ability of a machine and its operator to complete the work required.
• constant order-cycle system An inventory-control system that features a fixed reorder date and a varying order quantity.
• constant order-quantity system An inventory-control system that features a fixed order quantity and a varying reorder date.
• constraining operation The manufacturing step that determines the upper limit on the number of finished parts that can be produced within a value stream. Also known as a bottleneck operation.
• Constraint operation An operation that is long in duration or is critical to completing a manufacturing process.
• Contact method An error-proofing method that involves inspecting the size, shape, or color of an object to determine if any deviations exist.
• Core processes The essential activities an organization must perform to produce products, complete order-fulfillment functions, maintain its assets, and complete all supporting business functions.
• Cost shifting Moving costs from one account to another without creating any real savings. Cost shifting often hides waste rather than removing it.
• Customer value An aspect of a product or service for which a customer is willing to pay.
• Cycle time The time it takes to successfully complete the tasks required for a work process.
• Defect A part, product, or service that does not conform to specifications or a customer’s expectations. Defects are caused by errors.
• demand-supply chain All the parts, materials, and services supplied by outside sources that are necessary to produce a product or service.
• DTD (dock-to-dock) A metric that measures how long it takes raw materials or sub-components coming into a plant to be turned into finished products.
• End-of-the-line inspection An inspection or check done at the end of a process. See also judgment inspection.
• Enterprise resource planning (ERP) The integration of all an organization’s departments and functions onto a single computer system that can serve all those different departments’ needs.
• Error Any deviation from a specified manufacturing or business process. Errors cause defects in products or services.
• Error-proofing devices Mechanical, electrical, or pneumatic devices that signal existing errors or prevent potential ones.
• External processes Activities that an equipment operator can perform while the production line is still running. Compare to internal processes.
• FIFO (first-in, first-out) A production method in which the oldest remaining items in a batch are the first to move forward in the production process.
• 5S’s (Sort, Shine, Set in Order, Standardize, and Sustain) A method of creating a clean and orderly workplace that exposes waste and errors.
• fixed costs Costs that aren’t changed by production or service/sales levels, such as rent, property tax, insurance, and interest expenses. They are the costs of being in business. Compare to variable costs.
• fixed-value method An error-proofing method that ensures the right quantity of parts is used or the right number of activities are performed.
• FTT (first time through) A metric that measures the percentage of units or aspects of a service that are completed without error the first time they go through your work processes.
• Hard-cost savings Money that actually produces cash savings or profit increases and directly affects a company’s profit-and-loss statement. Compare to soft-cost savings.
• Informative inspections An error-proofing method that provides timely information about a defect so that a root-cause analysis can be performed and process adjustments can be made before significant numbers of defects are created.
• Internal processes Activities that an equipment operator must perform while the production line is idle. Compare to external processes.
• Inventory Any part or product that is not immediately required for a customer order, such as excess raw materials, work in progress (WIP), and finished goods.
• ITO (inventory turnover rate) A metric that measures how quickly your company sells the products you produce.
• Judgment inspection An error-proofing method in which a quality inspector or operator compares the final product or part with a standard. It is a type of endof-the-line inspection.
• Just-in-time inventory (JIT) A method of inventory management in which small shipments of stock are delivered as soon as they are needed. JIT minimizes stocking levels.
• Kanban system A production-control system that uses cards or tickets as visual signals to trigger or control the flow of materials or parts during the manufacturing process.
• Kaizen Refers to activities that continuously improve all functions and involve all employees from the CEO to the assembly line workers. Kaizen aims to eliminate waste by improving standardized activities and processes.
• Lead time The time it takes to complete an activity from start to finish; it includes batch and process delays.
• Lean metrics Financial, behavioral, and core-process measurements that help you monitor your organization’s progress toward achieving the goals of your lean initiative.
• Load balancing Finding a balance between the volume of work that your organization needs to do and your capacity.
• Load leveling Adjusting a production schedule to meet unexpected changes in customer demand.
• Location indicators Markers that show where and how much material should be kept in a specific location in a work area.
• Marketplace An area where materials are stocked in a supermarket system.
• Motion-step method An error-proofing method that involves checking to make sure actions are performed in the correct sequence.
• OEE (overall equipment effectiveness) A metric that measures the availability, performance efficiency, and quality rate of your equipment.
• OFLT (order-fulfillment lead time) The average time that elapses between your company’s receipt of an order from a customer and when you send an invoice to your customer for the finished product or service.
• one-piece flow The movement of products through the manufacturing process one unit at a time. Compare to batch processing.
• OTD (on-time delivery) A metric that measures the percentage of units you produce that meet your customers’ deadlines.
• Llanned maintenance Maintenance activities that are performed on a set schedule. Compare to reactive maintenance.
• PQ analysis table A tool that helps employees understand the types of products your organization produces and the volume that your customers demand. (The P in PQ stands for products; the Q stands for quantity of production output.)
• Process A series of steps or actions that produces a completed order or product.
• Process capacity table A tool for gathering information about the sequence of operations that make up a work process and the time required to complete each operation.
• Process delay The time that batches or lots must wait until the next process begins.
• Process route table A tool that shows the machines and equipment that are needed for processing a component or completing an assembly process. Aids in grouping your manufacturing tasks into work cells.
• Production smoothing Synchronizing the production of your company’s different products to match your customer demand.
• Productivity The ratio of output to input. It provides information about the efficiency of your core processes.
• Pull system A production system in which goods are built only when requested by a downstream process. A customer’s order “pulls” a product from the production system. Nothing is produced until it is needed or wanted downstream. Compare to push system.
• Push system A production system in which goods are produced and handed off to a downstream process,where they are stored until needed. This type of system creates excess inventory. Compare to pull system.
• Quality function deployment A structured process that provides a means to identify and carry customer requirements through each stage of product and service development and implementation. Quality responsibilities are effectively deployed to anyneeded activitywithin acompany to ensure that appropriate quality is achieved.
• Quick changeover A method of analyzing your organization’s manufacturing processes and then reducing the materials, skilled resources, and time needed for equipment setup, including the exchange of tools and dies. It allows your organization to implement small-batch production or one-piece flow in a cost-effective manner.
• Reactive maintenance Maintenance activities that are performed after a piece of equipment breaks. Compare to planned maintenance.
• Red-flag condition A situation in which the probability that errors will happen is high.
• Return on investment (ROI) Profit from an investment as a percentage of the amount invested.
• Root-cause analysis A process of identifying problems in an organization, finding their causes, and creating the best solutions to keep them from happening again.
• RTY (rolled throughput yield) A metric that measures the probability that a process will be completed without a defect occurring.
• Self-inspection An inspection performed by the opera-tor at his or her own workstation or area.
• Shadow board A visual control technique that uses an image of an object to show where it should be stored.
• Soft-cost savings Assets that are freed up so they can be used for another purpose. This contributes no positive change to a company’s profit-and-loss statement. Compare to hard-cost savings.
• Source inspection An inspection that detects errors in the manufacturing process before a defect occurs in the final part or product.
• Standard operating procedures (SOPs) Reliable instructions that describe the correct and most effective way to get a work process done.
• Standard operations The most efficient work combination that an organization can put together.
• Standard operations combination chart A tool that enables you to study the work sequence for all your organization’s work processes.
• Statistical process control (SPC) The use of mathematics and statistical measurements to solve an organization’s problems and build quality into its products and services.
• Streamline To reduce the time spent in non-valueadded steps, such as downtime, travel time, and inspecting or reworking materials.
• Successive inspection An inspection that is performed after one operation in the production process is completed, by employees who perform the next operation in the process.
• Supermarket system A stocking system in which materials are stored by the operation that produces them until they are retrieved by the operation that needs them. When a store is full, production stops.
• Symmetry
• When opposite sides of a part, tool, material, or fixture are, or seem to be, identical. The identical sides of a symmetrical object can be confused during an operation, resulting in errors. Compare to asymmetry.
• Takt time The total available work time per day (or shift) divided by customer-demand requirements per day (or shift). Takt time sets the pace of production to match the rate of customer demand. For example, if your customers demand 480 spark plugs per day and your production line operates 960 minutes per day, takt time is two minutes; if customers want two new contracts written per month, takt time is two weeks
• Traditional Cost Accounting (TCA) An accounting technique that arbitrarily allocates overhead to the products or services an organization creates. It is unable to calculate the actual cost of a product or service. Compare to Activity-Based Costing (ABC). An accounting technique that arbitrarily allocates overhead to the products or services an organization creates. It is unable to calculate the actual cost of a product or service. Compare to Activity-Based Costing (ABC).
• Value-added activities Tasks performed during the production of a product or service that increase its value to the customer.
• Value stream All the activities that a company must do to design, order, produce, and deliver its products or services to customers.
• Value stream map An illustration that uses simple graphics or icons to show the sequence and movement of information, materials, and actions in a company’s value stream.
• VA/NVA (value-added to non-value-added) ratio A metric that compares the amount of time in your work process spent on value-added activities to the amount of time spent on non-value-added activities.
• Variable costs Costs that vary with production or ser¬vice/sales levels, such as the costs of raw materials used in the manufacturing process. Compare to fixed costs.
• Waste - MudaAny activity that takes time, resources, or space, but does not add value to a product or service.
• Work combination A mixture of people, processes, materials, and technology that comes together to enable the completion of a work process.
• Workflow The steps and motions employees take to perform their work tasks.
• Workflow (spaghetti) diagram A graphic that shows your organization’s current equipment layout and the movement of materials and workers during work processes.
• Work sequence The sequential order in which tasks that make up a work process are performed.
Six Sigma Lexicon
• Aliasing Combined factors/interactions (usually in a fractional factorial experiment) for which it is not possible to distinguish the magnitude of effect contributed by each individual factor/interaction. Also Confounding
• ANOVA - Analysis Of Variance A method for determining differences in mean values using the variation of the measurements.
• Balanced Design A design with an equal number of experimental units in each treatment combinations or run
• BB - Black Belt A Six Sigma project leader.
• Black Belt Certification Recognition obtained upon satisfactory completion of 2 projects.
• Block Group of homogeneous experimental units.
• Blocking An experiment in which the trials &e made in some restricted order or under restricted conditions. The experiment is designed such that any nuisance factors do not confuse the true effects of the factors of interest.
• Capability The ability of a process to stay within specifications and on target
• Cause & Effect Diagrams A diagram to show the relationship between an effect (outcome) and its possible causes. Often displayed with five spines to group the potential causes as method, material, people, environment and machine. Asking five ‘whys’ helps to lead toward the root cause.
• Center points Experimental runs with all factor levels set half way between the low and high settings. Obviously can only be done with quantitative factors.
• CEPTS -- A formatted problem statement consisting of a description of the Conditions, Extent, Performance, Time frame, and Standards surrounding the issue.
• Completely Randomized Design (CRD) -- An experiment in which one factor of interest is investigated (at multiple levels). The trials are made in a completely randomized order to limit the effect of uncontrollable factors.
• Confidence Interval -- the range of response values for which one is some percent confident that the true average of the response will fall within that interval that percent of the time.
• Degrees of Freedom for Error Values used in the analysis of variance to estimate the process noise. Without a good estimate of the process noise, determination of which factors are significant and to what degree may be fruitless. A rule of thumb is 5 degrees of freedom for error at a minimum this can equate to at least six replicates.
• Defect Any parameter identified to be evaluated to a given standard, which fails to meet that standard.
• DFT Demand Flow Technology -- Materials Management methodology that assures adequate, but not excessive availability of material at the specific time of the need -- neither early nor late.
• Defective (part) A part identified to be evaluated to a given standard, which fails to meet any portion of that standard. A single defective part could have multiple defects.
• DOA Dead on Arrival Product which will not work upon customer’s receipt.
• DoE - Design of Experiments Any of a class of matrices (usually orthogonal) used to understand high-contribution factors. Most often associated with factorial designs.
• Confounded Effects Effects which cannot be estimated independently of each other (see aliasing).
• Confounding One or more effects that cannot unambiguously be attributed to a single factor or interaction.
• Control Chart A methodology for identifying when a process is operating “in control” (within known statistical boundaries).
• Cp Potential Capability Index -- Cp = Tolerance / 6s.
• Cpk Performance Capability Index -- Cpk = min of (USL - mean) or (mean - LSL) / 3s.
• CTQ Critical to Quality parameter.
• CTQ 4-Block Powerful device within the Jugular process for analyzing most critical parameters/process steps vs. current knowledge.
• CTQ Flowdown A very rigorous methodology for allocating requirements and assessing capabilities of the most critical segments of a product prior to M1
• CTQ Jugular A process of structured and rigorous brainstorming and identification of parameters that are most critical together with an assessment of current knowledge about the process, culminating in a monitoring device for maintained success.
• Degrees of Freedom Values used in the analysis of variance. Equates to the number of independent pieces of information used to estimate the variability of a factor.
• EWMA -- Exponentially Weighted Moving Average a control charting methodology which utilizes historical data at an exponentially diminishing weighted value.
• Experimental Region All possible factor-level combinations for which experimentation is possible. Also known as Factor Space
• Experimental Unit The unit that is observed and measured during the experiment. Also known as unit of analysis.
• F Test A statistical test to determine if a difference exists between two variances.
• Factor an input to a process which can be changed during experimentation. Can be qualitative (e.g. type of additive) or quantitative (e.g. temperature, pressure)
• Factor, Fixed If factor levels are specifically assigned, the factor is said to be fixed. Inferences generalize to only those factors. Effects are of interest.
• Factor, Monitored a factor (usually uncontrollable and hence cannot be held constant) that is observed throughout the experiment and can possibly be correlated to part of the unexplained variation in the process.
• DPU - Defects Per Unit (# defects found / # total units physically evaluated). - Defective Parts Per Million (outside of specification) -- (# defective units / # total units) x 1,000,000 -- based upon Cpk.
• DPMO Defects Per Million Opportunities -- (# defects found / (# units) x (# opportunities per unit)) x 1,000,000.
• Duncan's Method a statistical method used to determine which levels of a factor cause a change in the response. Used only after the ANOVA indicates a difference among all levels.
• Effect the average change in the response when a factor is changed from a low level to a high level.
• Error the inherent variability in a process. Represents the change in a response when no change in the factor is made. See noise.
• Estimate a prediction of some response based on the level and impact of all factors in a process. See prediction.
• EVOP Evolutionary Operation -- A method of conducting designed experiments on an ongoing process without interrupting affecting it’s efficiency.
• Fractional 3k Designs all factors are run at three levels: a low, medium and high (see Fractional Factorial Designs).
• Gage R&R Gage Repeatability and Reproducibility. A analysis of the percent of total variation of a distribution that can be attributed to variation in the measurement system.
• Gage Repeatability Variation in the measurements obtained when one operator uses the same gage for measuring the identical characteristics of the same parts.
• Gage Reproducibility Variation in the average of measurements made by different operators using the same gage when measuring identical characteristics of the same parts.
• Generator An interaction effect(s) used in creating a fractional factorial design.
• GLM General Linear Model -- A form of ANOVA which allows for a small degree of unbalance in the experimental design.
• Graeco Latin-Square Design -- an experimental design in which one factor of interest is investigated and three nuisance factors are blocked against.
• Factor, Nuisance a factor that is known to cause variability in the process; it is not desired to investigate the factor, but rather not to have the factor influence the effect of the factors of interest. See blocking.
• Factor, Random If factor levels are selected randomly from a population of values, the factor is said to be Random. Variance components are of interest.
• Full Factorial Experiment A class of DoE where 2 levels of several variables are explored and understanding of primary and interaction effects is obtained.
• Fractional Factorial Experiment A class of DoE where 2 levels of several variables are only partially explored. Used to screen out ‘trivial many’ and allow focus on ‘vital few’ variables controlling the process.
• Fixed Effects Factor a factor for which the levels are chosen selectively. For example, the effect of temperature will be investigated at 400, 450 and 500 degrees (Compare with Random Effects Factor).
• Fractional 2k Designs all factors are run at a low level and a high level (see Fractional Factorial Designs).
• HALT Highly Accelerated Life Testing -- One of several methods for achievement of a reliable design. Concept is to test a product to extreme (failure) conditions, find root cause of failure, improve design, and repeat the process.
• Hetero-skedasticity unequal variances This condition when applied to factor levels may affect the conclusions from ANOVA.
• Histogram A bar chart to show the distribution of the collected data.
• Hyper-Graeco-Latin Square Design an experimental design in which one factor of interest is investigated and four nuisance factors are blocked against.
• Hypothesis an assertion that is tested using a statistical technique. The hypothesis will either be rejected or insufficient evidence will be available to reject.
• Interaction a condition in which the effect of the level of a factor on a response is different for different levels of a second factor. There are two-way interactions, three-way interactions, etc.
• IX-MR Individual X and Moving Range -- a control chart of sequential data points, together with a chart of ranges between points.
• Kurtosis Provides a measure of peakedness of the distribution - The 4th moment around the mean .
• Latin Square Design (LSD) an experimental design in which one factor of interest is investigated and two nuisance factors are blocked against.
• Level A setting or value of a factor. Can be qualitative (e.g. additive A and additive B) or quantitative (e.g. 1000psi, 2000 psi.)
• Main Effect The change in a response that occurs when a factor is changed from its low level to its high level.
• MBB Master Black Belt -- A Six Sigma trainer and project mentor.
• Mean Measure of central tendency of a variable- The first moment around the origin.
• Mean Square a column in the ANOVA table that represents the variance of a response due to different sources of variability.
• Mean Square Error an entry in the ANOVA table that represents the variance of a response at a given levels of all factors. An estimate of the variance of a response due to noise (error).
• Minitab GE’s current statistical analysis software application of choice.
• Multiple Comparison Procedure a statistical method used to determine which levels of a factor cause a change in the response. Used only after the ANOVA indicates a difference among all levels. Examples are Fisher's method, Duncan's method, Scheffe's method.
• Multi-Vari Analysis A graphical method of decomposing the sources of process variation into their basic components. This technique is an early step in removing some of the trivial many and preparing a sub-set of factors for designed experimentation.
• Multivariate Statistical Methods Statistical tools for analyzing a set of variables to determine their influence on several responses. Includes a wide class of statistical tools such as regression, principle components, factor analysis, clustering, discriminent analysis.
• Nested Design an experimental design in which a one factor has different level settings depending on the level of another variable. For example, batches within different suppliers, levels of competing additives, etc,
• Noise the inherent variability in a process. Represents the change in a response when no change in the factor is made. See error.
• Normal Distribution a bell-shaped curve of probabilities that describe many natural processes. Can occur also in situations in which replicates are taken and are averaged
• Normal Probability Plot a graphical method for investigating whether a sample might have come from a population with a normal distribution. Often used to check the validity of using ANOVA.
• One-Way ANOVA analysis of variance for investigating a single factor at multiple levels. See ANOVA.
• Optimization Finding the combination of factors and levels that produces the most desirable output from a process.
• Pareto Chart A bar chart to display events with respect to a common metric (# of times, $, time, etc.).
• Plackett-Burman Design a designed experiment used in screening experimentation in which a minimal number of trials are needed. Typically only main effects are investigated with no estimate of the interaction effects.
• Randomization Mixing up the order of the runs in an experiment as completely as is practical.
• Randomized Block Design an experiment in which one factor of interest is investigated and one nuisance factor is blocked against.
• Repetition Running several experimental units over one treatment combinations. Contrast with Replication
• Replication repeated runs at the same experimental conditions; provides an estimate of the noise in the process.
• Residuals the difference between the observed response and the predicted response for a given set of factor conditions. Used in model validation and process investigation.
• Resolution a description of fractional factorial designs that gives the degree to which factors will be aliased with other factors' interactions.
• Response an output from the process which will be measured during the experiment.
• RSM Response Surface Methodology -- A class of designed experiments where curvature of the vital few is examined and understood. Subsets include central composite designs with star or face points.
• R-Square percent of variability in the response explained by the controlled factors.
• Run a set of process conditions defined by specifying levels of all the factors in the experiment. Also known as a Treatment Combination.
• Point Estimate the best single value estimate of some prediction or mean response- Should be used in conjunction with confidence and/or prediction intervals.
• Pre-control A methodology for establishing statistically sound probabilities of goodness when a process is starting.
• PRD Phase Review Discipline -- A rigorous methodology for new product introduction which includes milestones at critical points.
• Prediction a best estimate of some response for a given set of levels for all factors.
• Prediction Interval the range of values for a response of which one is some percent confident that a future observation will fall within. See Confidence Interval.
• Process Demographics The list of conditions/states of various factors during the time a response is generated. These help us to understand what area of the process may be driving the problem.
• Random Effects Factor a factor for which the levels are chosen at random from a definable population. For example, the effect of batches will be investigated by randomly choosing five batches. (Compare with Fixed Effects Factor).
• Standard Deviation (s, sigma) A statistical calculation used to characterize the variability of a set of data. It is the square root of the variance.
• T-Test A statistical comparison of mean values of a sample, assuming a normal population.
• Trivial Many The factors that have long been thought to have some influence on the process but really account for very little of the variation in performance.
• Treatment Combination a set of process conditions defined by specifying levels of all the factors in the experiment. Also known as a Run.
• Two-Way ANOVA analysis of variance for investigating two factors at multiple levels
• Two-way Interaction Plot a scatter plot of the average responses (vertical axis) as a factor of one factor (horizontal axis) and the average responses for each level of a second factor connected by lines.
• Type I Error the error of assuming that the hypothesis is false when in fact it is true. Associated probability is labeled a.
• Type II Error the error of assuming that the hypothesis is true when in fact it is false. Associated probability is labeled b.
• Run chart A sequential time series plot of data which provides some statistical analysis capabilities and probabilities.
• Scatter Plot A chart (dot plot) to show the relationship between two variables.
• SCN Supplier Change Notice -- The communication device for requesting a change to a purchased part, initiated either by a Supplier to GEMS, or by GEMS to a Supplier.
• Screening Experiment a technique used to characterize a process (usually assumes linear changes in the response for a change of factor levels) (compare with RSM).
• Signal to Noise Ratio a ratio that depends on the variability in the response due to changing factor levels relative to the variability when there is no change in the factor level.
• (Six) 6-s process A stable process operating such that its output has a minimum Cpk of 1.5.
• Skewness a condition in which the normal distribution is shifted to the left or right, that is, no longer symmetric. Can influence the validity of using ANOVA.
• SPC - Statistical Process Control Used to monitor process stability preferably after after modification to desired state.
• Unbalanced Design A design with an unequal number of experimental units in each treatment combinations or run
• USL or LSL - Upper (Lower) Specification Limit boundaries of design criteria.
• UCL or LCL - Upper (Lower) Control Limit the statistical boundaries of a control chart. - Upper (Lower) Confidence Limit -- (used in T-test, ANOVA, etc).
• Variance Provides a measure of dispersion. The square root of the variance is the standard deviation. The 2nd moment around the mean.
• Vital Few The factors that are critical in controlling the process
• ZB Z benchmark, Zst, short term sigma -- Assumes process is centered (on target) with short term variation.
• Z value Calculation of how many sigmas fit between the process output average and the closest specification limit.
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