Activity Ratio. An indicator of process efficiency, equal to the sum of the Process Times for the individual steps divided by Total Lead Time.
Andon. A visual control device used to show the current status of the process and/or system. The visual control usually takes the form of a lighted overhead display or series of lights that can signal normal and abnormal conditions in the process.
Autonomation. A machine or process that immediately stops whenever a defect or abnormal condition occurs. This technique is an essential element in introducing one-piece flow to a process. Also referred to as Jidoka. Compare to Mistake Proofing.
Barriers to Flow. Any barrier, physical or not, that prevents the passing of one unit of work directly to the next process without the work stopping.
Batch and Queue. A processing method where multiple pieces of work (often referred to as a “batch” or “lot”) are processed and/or passed together from one operation to the next. Upon arrival at the next process some or all of these pieces of work may wait in a “queue” to be worked on. Contrast with One-piece Flow.
Cause-and-effect Diagram. A visual root cause analysis tool used to brainstorm and document potential causes and sub-causes for an undesired effect. Also referred to as an Ishikawa Diagram (after its developer) or Fishbone Diagram (due to its shape).
Cells. See Layout for Flow.
Changeover. The activity of converting a process from performing one type of work to another. Changeover time is the elapsed time from when the last good unit of the run just completed is completed until the first good unit of the following run is completed. Changeovers can be physical (changing a fixture) or mental (orienting one’s self with the next “job”). Long changeovers often result in batch processing, inhibiting the ability to achieve one-piece-flow. This term is also commonly called Set-up.
Checklist. A form used as a reference to assure all of the key steps in a process have been completed. Check lists are often integrated into the standard work for an operation.
Check Sheet. A simple form used to tabulate information regarding the type and frequency of an occurrence. Check sheets are often used to quantify data and provide direction for corrective actions or continuous improvement activities. Results from Check Sheets often provide the input data for creating Pareto Charts.
Co-location. See Layout for Flow.
Complete and Accurate (%C&A). See Percent Complete and Accurate.
Continuous Flow. A process management system wherein workers only work on one unit at a time and only one unit of work moves from process to process. Implementation of continuous flow can have significant impact on reducing throughput time, minimizing waste and improving value adding activity. This concept is also referred to as Single Piece Flow or One Piece Flow. Contrast with Batch and Queue.
Continuous Improvement. A philosophy of frequently reviewing processes, identifying opportunities for improvement and implementing changes to get closer to perfection. See Kaizen and Kaikaku.
Cross-functional Team – A team comprised of individuals representing different functions within a given process. The team may be formed for a specific activity (e.g. a Kaizen Event), or the team may be more permanent in nature (a cross-functional team, co-located and cross-trained, put in place to support a specific product or customer).
Cross-training. To train individuals to perform a variety of tasks and skills. In a Lean environment, the focus of cross-training should be to increase competence along the Value Stream in order to optimize performance of that Value Stream.
CS. See Current State.
CT. See Cycle Time.
Current State (CS). All of the steps that are performed to complete the work as it is operating in today’s environment (this is often quite different from how a written procedure states it should be done) as well as the issues and performance (metrics) of the process.
Cycle Time (CT). The frequency, or interval, of work being completed. Compare to Process Time,contrast with Lead Time.
Downstream. As viewed from a reference point, downstream processes are activities that take place after the reference point (e.g. transmitting a quote to the customer is a downstream process from writing the quote). Contrast with Upstream.
Effective – Measure of quality. How well is it done? All processes must be both efficient and Effective. Contrast with Efficient.
Efficient – Measure of speed. How fast is it done? All processes must be both efficient and Effective. Contrast with Effective.
Eighty (80%) Percent Rule. See Pareto Principle.
FIFO. See First In First Out and FIFO Lanes.
FIFO Lanes. A type of Pull Production that is often used in administrative and non-standard product environments. A FIFO Lane is a coupling mechanism which defines the maximum WIP level between two processes. FIFO Lanes are typically physical in nature, which provides a clear visual indicator to the supplying process when they have authorization to produce and when they should stop (e.g. 5 colored folders between the design and estimating steps indicate design activities should stop if all 5 folders are full with work for the estimating process). Compare to Kanban.
First In First Out (FIFO). A order sequencing and control approach which ensures that the first order entering the system is the first order to be worked on.
First Pass Yield (FPY). A quality metric for process performance. First pass yield is expressed as a percentage and is calculated by dividing the number of “right the first time” units of work by the quantity of work entering the process. Similar to %C&A.
Fishbone Diagram. See Cause-and-effect Diagram.
Five S (5S). An approach utilizing workplace organization and visual controls to improve performance. It is derived from the Japanese words seiri, seiton, seiso, seiketsu and shitsuke. The English equivalents are sort, set-in-order, shine, standardize and sustain. Safety is often referred to as the sixth “S,” but in traditional 5S programs safety is assumed to be predominant throughout.
Five “Whys.” A root-cause analysis tool used to identify the true root cause of a problem. The question “why” is asked a sufficient number of times to find the fundamental reason for the problem. Once that cause is identified, an appropriate countermeasure can be designed and implemented to eliminate reoccurrence.
Flow. The smooth, uninterrupted movement of a product or service through a series of process steps. In true flow, the work product (information, paperwork, material, etc.) passing through the series of steps never stops.
Flow Chart. A schematic representation of a process, from start to finish, including inputs, outputs, paths, steps and decision points. Traditional process maps are often depicted in flow chart form. Also referred to as a Process Flow Chart. Contrast with Metrics-based Process Map.
Flow Stopper. See Barriers to Flow.
FPY. See First Pass Yield.
FS. See Future State.
FTE. See Full Time Equivalent.
Full Time Equivalent (FTE). Number of resources (usually people) required to run a process or series of processes if they were employed full time on that activity. For people, the number is usually based on 2080 hours per year (i.e. 2080 hours of work = one FTE) or 40 hours per week. Example: four people working 20 hours per week each on the same activity, equals two FTEs.
Functional Arrangement. The grouping and management of resources based on similar activities or operations, as opposed to physically arranging and managing a work team based on the sequence of process steps. An example would be where all the design engineers sit together, separate from the drafting staff. Contrast with Layout for Flow.
Future State (FS). A plan for how a process is planned to be running at a defined point in time in the future. Serves as the primary input for the development of an implementation plan. Future State Value Stream Maps are usually developed looking 3 – 12 months into the future. Also referred to as the ideal state, blue sky state or nirvana state.
Gemba. A Japanese word for the “real place” or the place where the work actual occurs. To understand the real issues that affect a process it is critical to go to gemba in order to see what is actually happening.
Heijunka: See Production Smoothing.
Ishikawa diagram. See Cause-and-effect Diagram.
Jidoka. See Autonomation.
Kaikaku. Radical process improvement over a short period of time, innovation. Changes of theses type are often implemented during the course of a Kaizen Event.
Kaizen. An improvement philosophy in which continuous incremental improvement occurs over a sustained period of time, creating more value and less waste, resulting in increased speed, lower costs and improved quality. When applied to a business enterprise, it refers to ongoing improvement involving the entire workforce including senior leadership, middle management and frontline workers. Kaizen is also a philosophy that assumes that our way of life (working, social or personal) deserves to be constantly improved.
Kaizen Event. A structured, team-based, problem-solving activity of short duration used to improve processes throughout an organization. Activities typically include: 1) team training, 2) current state analysis 3) future state design 4) prioritization of improvements 5) train on new process, and 6) implementing the selected improvements. Duration is typically one to five days. The event team is focused on the process 100% of time during the event and is cross-functional in composition. Also referred to as Kaizen Blitz and Rapid Improvement Event (RIE).
Kanban. A type of Pull Production system whereby the downstream process signals the upstream process to replenish what has been consumed. Kanbans typically pull by part number. Kanban means signboard in Japanese. Compare to FIFO Lanes.
Layout for Flow. The co-location of processes and / or equipment in sequence to permit one-piece flow and the flexible deployment of workers to operate multiple processes (resources). The resources found in cells are often cross-functional in nature. Also referred to as Cells, or Cellular Arrangement. Contrast with Functional Arrangement.
Lead Time (LT). The amount of time it takes for a product (or service) to go through the system, from the first operation to the final operation, including processing, delays, movement, queues, etc. At a process level, the process lead time begins when the work is received, and ends when the work is delivered to the next downstream customer. Lead Time = Process Time plus Wait Time (or delays). Also referred to as Throughput Time or Turnaround Time.
Lean. The philosophy of aggressive continuous improvement based executed through; defining value from the customer’s perspective; mapping the value streams; creating flow; working at the pull of the customer; and, pursuit of perfection.
Level Loading. The leveling of quantities and types of products/services produced for the customer. Also referred to Load Leveling, and Heijunka or Production Smoothing.
Line Balancing. See Work Balancing.
LT. See Lead Time.
MBPM. See Metrics-Based Process Mapping.
Metrics-Based Process Mapping (MBPM). A visual, micro-level process mapping technique that separates tasks into separate rows based on who the person or functional area is that is performing the tasks. These rows are sometimes referred to as swim lanes. The tasks are depicted in a sequential format such that a time line can be created which depicts total lead time. MBPM process blocks contain at a minimum the: process time, lead time and %C&A for that step. Contrast with traditional Flow Charts.
Mistake Proofing. A device or procedure designed to prevent the generation of defects. The English translations for this Japanese phrase are: poka means “error” and yoke is “to avoid.” Also referred to as Poka-yoke.
Muda. A Japanese word for waste. See Non-value-adding and Waste.
Multi-functional Workers. Individuals trained and qualified to perform a variety of tasks. In a lean operation, the focus is to have workers cross-trained on operations upstream and downstream of their primary work so they can support the Value Stream should problems occur.
Necessary Non-value-added. Activities that add no value from the customer’s perspective but are required in order to operate the business. This could include legal and regulatory requirements as well as certain internal business processes which would put the business at risk if eliminated in today’s environment.
Non-value-adding (NVA). A task that the customer does not care about and would be unwilling to pay for if he/she knew the incremental cost of that task. The attribute of a task or activities that can be eliminated from a process without deterioration of the function, performance or quality of a product or service as viewed by the customer. Two types of Non-value-adding activity exist: Necessary NVA and Unnecessary NVA.
NVA. See Non-value-adding.
OEE. See Overall Equipment Effectiveness.
One-piece Flow. See Continuous Flow.
Operation. An activity performed on a product or service by a single resource. An operation is a component of Process. Also referred to as Task.
Overall Equipment Effectiveness (OEE). A measure of how effectively equipment is utilized during scheduled operating time. OEE = (% time available) x (% of designed output rate) x (% First Pass Yield).
Pareto Principle. The concept that most of the effects in a situation can be traced back to a small number of contributors. In the early 1900’s Wilfred Pareto observed that 80% of the property in Italy was held by only 20% of the population. Joseph Juran later observed that this 80/20 relationship is in fact quite common, and coined this phenomenon as “The Pareto Principal.”
Pareto Chart. A graph or chart, based on the Pareto Principle, that ranks occurrences from the most frequent to the least frequent. Pareto charts are often used to prioritize improvement activities. Check Sheets are a common input to creating a Pareto Chart.
PDCA. See Plan-Do-Check-Act.
Percent Complete and Accurate (%C&A). A quality metric used to measure the degree to which work from an upstream supplier is determined by the downstream customer to be complete and accurate (or error free). In other words, to what degree does the downstream customer need to: 1) correct information that is incorrect; 2) add missing information that should have been supplied by an upstream supplier; and/or 3) clarify information provided. Out of 100 “things” passing to the downstream customer, what percentage of them are complete and accurate and do not require one of the three above actions before completing the task? The number is obtained by asking the immediate, or successive, downstream customer(s) what percentage of the time they receive work that is 100% complete and accurate.
Percent-value-adding. See Activity Ratio.
Plan-Do-Check-Act (PDCA). The basic steps to be followed in making continuous incremental improvements (kaizen). This is also called the Shewhart cycle, named after Walter Shewhart and popularized by W. Edwards Deming.
Poka Yoke. See Mistake Proofing.
Process. An operation or group of operations that receives inputs, performs an activity and then provides outputs to an internal or external customer.
Process Flow Chart. See Flow Chart.
Process Time (PT). The amount of time is takes to perform a task (or series of tasks) if one could work on it uninterrupted. For example, if one enters data for two minutes, places a call to obtain additional information and waits for ten minutes for the call to be returned, talks with the information supplier for three minutes and finishes data entering in one minute, the process time is six (6) minutes (2 + 3 + 1). Process Time plus wait time (or delays) = Lead Time. This time is related toTakt Time such that if every operation in a complete process has a Process Time equal to or less than the Takt Time, then the product or service can be made in One-piece Flow.
Also referred to as Touch Time or Operator Cycle Time..
Product Family. A group of products or services that pass through similar process steps. In the service sector, product families are often referred to as Service Families.
Production Smoothing. See Level Loading.
PT. See Process Time.
Pull Production. A Work In Process (WIP) management approach whereby the downstream process authorizes upstream production through the consumption of work. Common pull systems include One-piece Flow, Kanban and FIFO Lanes.
Push Production. A system where an upstream process produces as much as it can without regard to the actual requirements of the next process and sends them to the next process whether they have capacity to begin work or not. Push Production typically results in queues of work building up, which result in delays.
Queue Time. The amount of time that product, people, information or material waits to be worked on. Also referred to as “wait time.”
RCA. See Root Cause Analysis.
Reliability. The ability of a process to produce the same results (product or service) over
RFPY. See Rolled First Pass Yield.
Rolled First Pass Yield (RFPY). A quality metric for determining the percentage of work going through a series of process steps that is error free. RFPY is the product of the % yield (or %C&A) of all of the process steps. For example, in a three-step process, if the %C&A is 80% at the first step, 75% at the second step, and 90% at the third step, the rolled first pass yield = 80%x75%x90=54%. In this example the 54% RFPY means that only 54% of the things go through the process “complete and accurate on the attempt.
Root Cause Analysis (RCA). A problem-solving approach whereby the underlying cause of a problem is first identified and only then is the corrective action or solution designed. The intent of RCA is to reduce or eliminate recurrence of the same problem. RCA tools include Five Why’s,Cause-and-effect Diagrams, Check Lists and Pareto Charts.
Sensei. A Japanese word for teacher or master. In Lean circles typically referring to an individual who has been led numerous Lean transformations.
Service Family. See Product Family.
Setup. See Changeover.
Single Piece Flow. See Continuous Flow.
Spaghetti Diagram. A diagram representing the physical path taken by a product (or service) as it travels through all the steps required to transform a requirement into a deliverable. This can also be used to draw the path walked by those involved in completing the required activities to deliver the product (or service). The diagram derives its name from the way it commonly looks after mapping a process that within a function-based organization because the diagram looks much like a plate of spaghetti.
Stakeholder. Anyone who has an interest in a process, typically as supplier, customer or one who actually performs the work.
Standard Work. Documentation of the best known method for completing a task or activity. This becomes the way for everyone working on that process to perform the work. This also becomes the baseline for future work. In the words of Taichii Ohno, “where there is no standard, there can be no kaizen (improvement).”
Takt Time (TT). The pace at which work must be completed to meet customer demand. To calculate, divide the available work time by the customer demand for that period. For example, if a call center receives 900 calls per shift, and there are 27,000 seconds of available work time, the takt time is 30 seconds per call. Therefore, one call must be completed every 30 seconds to meet customer demand. Takt, a German word meaning pace, is the heartbeat of any Lean system. Process Time divided by Takt Time yields the number of workers required to support a specific product.
Task. See Operation.
Throughput Time. See Lead Time.
Touch Time. See Process Time.
TT. See Takt Time.
Turnaround Time. See Lead Time.
Upstream. As viewed from a reference point, upstream processes are activities that take place prior to the reference point (e.g. receiving a request for a quote from the customer is upstream to writing the quote). Contrast with Downstream.
Unnecessary Non-value-adding. Activities that add no value from the customer’s perspective nor are they necessary to properly run the business. These activities are often legacy in nature (“we’ve always done it that way”).
VA. See Value-adding.
Value-adding (VA). Any activity, which, from the ultimate customer’s perspective is of value, such that the customer is willing to pay for that activity, or that that activity is a condition of doing business with that customer,
Value Stream. The specific activities required to design, order, and provide a specific product or service from the point of product (or service) concept, through launch, ordering raw materials, production and placing the product (or service) in the hands of the customer. From a shareholder’s perspective the Value Stream could also include the steps and time required until the receipt of revenue.
Value Steam Map (VSM). A high-level, visual representation of all of the process steps (both VA and NVA) required to transform a customer requirement into a delivered good or service. A VSM shows the connection between information flow and product flow, as well as the major process blocks and barriers to flow. VSMs are used to document current state conditions as well as design a future state. One of the key objectives of Value Stream Mapping is to identify non-value adding activities for elimination. Value Stream Maps, along with the Value Stream Implementation Plan are strategic tools used to help identify, prioritize and communicate continuous improvement activities.
Visual Management. An approach to managing product, people and processes using low-cost, easy to understand visual devices. These devices, when properly utilized, will quickly and effectively communicate objectives, performance, operating conditions and problems.
VSM. See Value Stream Map.
Waste. Any activity that consumes resources but does not provide value as defined by the customer. Also referred to as Muda or Non-value-adding activities. The eight common types of waste are:
WIP. See Work in Process.
Work Balancing. Designing processes so that the process time for each person is equal or slightly less than the takt time that is required to meet customer demand. Also referred to as Line Balancing.
Work in Process (WIP). Any work that has been initiated or available to be worked on and yet released to the downstream customer
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