Economical Order Quantity (EOQ)
The optimum number of parts to be run within one batch based on a tradeoff of the inventory carrying cost and the cost associated with a product changeover. See SMED
Economies of Scale
The idea that by maximizing volume, costs are minimized. Procuring the maximum sized equipment and then running that equipment around the clock produce economies. Economies of scale create batch manufacturing when the number of product types to be run across a specific piece of equipment exceeds one. The concept of economical order quantity (EOQ) based on set-up costs grew out of the use of large-scale equipment.
Refers to the Pareto principle, which suggests that most effects stem from relatively few causes; that is, eighty percent of the effects come from twenty percent of the causes. (See Pareto Chart.)
Time allotted to a specific operational step, within standard work.
A practice within an organization whereby employees regularly participate in making decisions on how their work areas operate, including making suggestions for improvements, planning, goal setting and monitoring performance.
A condition in which employees have the authority to make decisions and take action in their work areas without prior approval. For example, an operator can stop a production process if he or she detects a problem, or a customer service representative can send out a replacement if a customer calls with a complaint.
Enterprise Resource Planning (ERP)
The combination of Manufacturing Resource Planning (MRPII) techniques with accounting information into a single database and data structure. The intent of ERP is to automate purchasing, inventory, production, accounting, shipping, receiving, billing and invoicing into a single seamless database.
The application of scientific principles to the process of work: aimed at making work easier and less physically stressful.
A manufacturing technique of preventing production errors by designing the manufacturing process, equipment, and tools so that an operation literally cannot be performed incorrectly (See poka-yoke, baka-yoke, or mistake proofing)
A problem of method used in Theory of Constraints. Same as Conflict Resolution.
External Setup (OED)
Elements or tasks associated with a changeover that can be performed safely while the machine or operation is still running. Also known as OED - "outer exchange of die" [See: Single Minute Exchange of Die (SMED), Internal Setup]
Finished Goods Inventory (FGI)
Material that has completed the production process and is ready for customer consumption but is waiting for an order.
Five S (5S)
Five terms beginning with "S" utilized to create a workplace suited for visual control and lean production. Refers to the following five words: seiri, seiton, seison, seiketsu, shitsuke. These words are shorthand expressions for principles of maintaining an effective, efficient workplace. 5S is the first step in developing a sustainable process and is frequently used to introduce Total Productive Maintenance (TPM) into an organization. There are many American interpretations of these words but for this definition we will use the following: Sort, Straighten, Shine, Standardize, and Sustain.
5S (Like many concepts, the 5S can be interpreted narrowly or broadly, depending on circumstances of their use.)
Five Whys (5 Whys)
Taiichi Ohno’s practice of asking "why" five times in order to uncover the root cause of a problem so that effective countermeasures can be developed and implemented. A simple technique, used to reveal the 'root cause' (as opposed to symptoms) of a problem. The technique asks 'why' the symptom occurred, 'why' did the situation which allowed the symptom; exists, and so on, until the root cause is finally discovered.
Flexible Manning (Shojinka)
A way of managing person-power on the line such that when demand decreases, workers can be re-deployed to areas where needed, or when demand increases, they can be deployed to areas requiring additional support. Preferred to the system of maximizing machine efficiency, which pays no attention to customer demand and TAKT time. This is not a very critical concept in cellular flow
Flexible Manufacturing System (FMS)
an integrated manufacturing capability to produce small numbers of a great variety of items at low unit cost; an FMS is also characterized by low changeover time and rapid response time.
Flexible Work Cell
A group of machines or processes (work cell) whose capacity is dictated by the staffing level of the cell. If requirements increase, increasing the number of workers will allow increased output; if requirements decrease, decreasing the number of workers will allow the cell to meet the requirements with no loss in efficiency.
A main objective of the lean production effort, and one of the important concepts that passed directly from Henry Ford to Toyota. Ford recognized that, ideally, production should flow continuously all the way from raw material to the customer.
Radical Improvement, usually applied only once within a value stream. [Same as Kaikaku]
The application of the idea of “flow” to discrete manufacturing. Flow manufacturing attempts to mimic continuous manufacturing by combining a mixed stream of products, pulled through the process at a rate equal to daily customer demand (takt) requirements. Flow manufacturing concepts are typically associated with repetitive manufacturing of discrete products.
Recognized as the father of “mass” production, Henry Ford applied the principles of the assembly line, division of labor and waste reduction to the manufacture of automobiles. Ford Motor Company became the largest manufacturing company in the world in 15 short years.
Full Work Analysis
The process of analyzing all activities associated with the production of a part, component or unit. Worker activity, machine activity and part activity are all analyzed using observation, stop watches and / or video.
The practice of grouping machines or activities by type of operation performed. For example, grinding machines or order-entry. Contrast with Cells
Future State Map
A blueprint for lean implementation. Your organization's vision, which forms the basis of your implementation plan by helping to design how the process should operate.