Glossary of Lean Terms
The term Lean derives from the improvement methodologies developed, refined and applied to the specific business needs of Toyota. These methodologies are commonly referred to as the Toyota Production System (TPS) or the Toyota Business System. In its entirety, TPS has many techniques of implementation, methodologies for deployment and tools for tactical analysis. To be successful, all of the above must be supported by a management philosophy that creates a culture of continuous improvement. This combination of understanding, maturity and tactical skill, when developed and deployed properly, enables performance improvements through the identification and elimination of “waste”…Lean. To enhance your understanding of Lean terminology, we offer this glossary. For an understanding of Lean Horizons Consulting’s methodology for deploying a Lean transformation, please consult the about us and our work sections of this site.
A line indicator light or board hung above the production line to act as a visual control, which shows at a glance the current state of work operation. Andons are used to visually signal an abnormal situation, and allow for quick corrective action to be taken by supervisors when a problem arises.
Additionally, an Andon may provide work instructions such as quality checks, or changing of cutting tools.
Annual Improvement Priorities (APS’s)
Refers to increasing production output with no change in the number of workers. It is a numerical increase unrelated to production need as based on sales and market demand. (See True Efficiency).
Automation with a human touch or transferring human intelligence to a machine. This allows the machine to detect abnormalities or defects and stop the process when they are detected. (See also Jidoka).
The process of automatically decrementing perpetual inventory records, based on the bill of materials of a given product. Normally triggered by shipment and invoicing to a customer, backflushing is used to eliminate wasteful inventory transactions.
Cause and Effect Diagram
Japanese term for “Load-Load”. It refers to a production line raised to a level of efficiency that allows the operator to simply load the part and move on to the next operation. No effort is expended on unloading. (see Hanedashi).
As used in manufacturing, the time from when the last “good” piece comes off of a machine until the first “good” piece of the next product is made on that machine. Includes warm up, first piece inspection and adjustments. Changeover times can be reduced through the use of S.M.E.D.
The practice of designing a product (or service), its production process, and its delivery mechanism simultaneously. The process requires considerable up-front planning as well as the dedication of resources early in the development cycle. The pay off comes in the form of shorter development time from concept to market, higher product quality, lower overall development cost and lower product or service cost.
Continuous Flow Process
A method that permits the uninterrupted flow of production regardless of external process location or cycle time. Normally used when product must leave the cell for processing through equipment that cannot be put into the cell. (i.e. heat treat, curing oven, plating, wave solder) Curtain quantities are established using the following formula:
The total amount of time required for a worker to complete on cycle of their entire job process, including manual working time and walking time. (See also Takt Time).
Designed For Manufacture and Assembly (D.F.M.A.)
An approach to product development that starts and ends with the voice of the customer. It involves representatives of manufacturing, finance, design engineering, sales and marketing as contributing team members from the concept stage to final product.
Economic Value Added (E.V.A.)
A residual income measure that subtracts the cost of capital from the net operating profits after taxes (NOPAT). It is the financial performance measure most closely linked to shareholder value and the cornerstone for a financial management and incentive compensation system that makes managers think and act like owners.
Failure Mode and Effect Analysis. A structured approach to assess the magnitude of potential failures and identify the sources of each potential failure. Corrective actions are then identified and implemented to prevent failure occurrence.
A method of creating a self-sustaining culture that perpetuates an organized, clean, and efficient work place. English words approximate the Japanese originals:
- Simplify – (Seiri) Clearly distinguish between what is needed and what is not needed to perform a given work process.
- Straighten – (Seiton) Organize those things that are needed, making it easy for users to locate, use and return them.
- Scrub – (Seiso) Clean all aspects of the area, including floors, machines and furniture.
- Stabilize – (Seiketsu) Maintain and improve the first three S’s in addition to personal orderliness and neatness.
- Sustain – (Shitsuke) Achieve the discipline or habit of maintaining the correct 5S procedures.
Fixed Manpower Line
Always requires a fixed number of workers. If production fluctuates up or down, the number of workers cannot be increased or decreased to match those fluctuations. (See also Isolated Job Sites, Flexible Manpower Line).
Fixed Position Stop System
When a worker on a conveyor line notices a problem, such as a delay in the work flow or quality defect, they turn on a fixed-position stop switch. Instead of stopping immediately, the conveyor keeps moving until it reaches a fixed position. Turning on the switch also summons the supervisor. (See also Andon, Jidoka).
Flexible Manpower Line
Preparing a production line so that it can meet changing production requirements with any number of workers, without lowering productivity. (See also Fixed Manpower Line, Isolated Job Sites, Manpower Savings).
A philosophy that rejects batch, lot or mass processing as wasteful. Product should move (flow) from operation to operation in the smallest increment, one piece being the ultimate. Product should be pulled from the preceding operation, as it is needed. Often referred to as “One Piece Flow”, only quality parts are allowed to move to the next operation.
Increasing the delivery frequency of parts in order to keep the inventory at each process to a minimum. (See also Mixed Load Conveyance).
Device or means of automatic unload of the work piece from one operation or process, providing the proper state for the next work piece to be loaded. Automatic unloading and orientation for the next process is essential for a “Chaku-Chaku” line.
Production leveling process. This process attempts to minimize the impact of peaks and valleys in customer demand. It includes level production-volume and level production-variety. (See also Just-In-Time).
Developed by executive management, this is a goal (with targets) and means for achieving those goals. Addresses business priorities to move the company to a new level of performance, and can vary from year-to-year or could be multi-year.
Isolated Job Sites
Refers to job sites that are in isolated locations, where the worker cannot easily work closely with other job sites for flexibility during increases or decreases in production. (See also Flexible Manpower Line, Fixed Manpower Line).
Automation with a human touch or transferring human intelligence to a machine. This allows the machine to detect abnormalities or defects and stop the process when they are detected. Defects are therefore prevented from passing through the line, and makes it possible to build in quality into the production process. Since defects are prevented automatically, inspectors become unnecessary, which in turn results in significant labor savings. (See also Autonomation).
Just In Time (J.I.T.)
An accounting system that seeks to reduce accounting transactions while at the same time improving the accuracy of product costs and manufacturing performance. JIT Accounting relies on continuous improvement trends to established goals rather than traditional variance analysis. (also known as Lean Accounting).
Japanese for radical overhaul of an activity to eliminate all waste (Muda) and create greater value.
Japanese for Continuous Improvement. Based on the philosophy that what we do today should be better than yesterday and what we do tomorrow should be better than today, never resting or accepting status quo. Continuous Improvement recognizes that Muda (waste) exists everywhere related to people, materials and facilities, or the production set-up itself.
Kaizen also refers to a series of activities where instances of waste are eliminated one by one at minimal cost, by workers pooling their knowledge and increasing efficiency in a timely manner. Kaizen activities typically emphasize manual work operations rather than equipment.
A means of communicating need for products or services. It is generally used to trigger the movement of material where one piece flow cannot be achieved, but is also used to “signal” upstream processes to produce product for downstream processes.
Kanban – Inter-Process (Parts Withdrawal)
This Kanban is used between production processes for following processes to pick up required parts from preceding processes. (See also Kanban – Supplier).
Kanban – Intra-Process
Used to order the start of a particular job within a larger process, such as within the same machine shop. Its purpose is to make sure that the parts withdrawn by the following process are replaced by exactly the amount withdrawn, in the order withdrawn. (See also Kanban – Signal).
Kanban – Parts Withdrawal
Kanban – Production Instruction
Kanban – Signal
A Production Instruction Kanban used on production lines where different items are processed and time is needed for changing from processing of one item to another. It is often called a “Triangle Kanban” due to its shape. It is used mainly for jobs related to stamping, die casting, and resin molding. (See also Kanban – Intra-Process).
Kanban – Supplier
Attached to parts containers coming from suppliers. These are used the same way as an Inter-Process Kanban.
Kanban – Temporary
Used to indicate production for use in the future, for example to adjust for difference in working days between the manufacturer and suppliers, or make up for time spent on die maintenance or machine repairs. These Kanban show clearly their date of expiration, are only used once, and collected after use. They are usually distinguished from other Kanban by a red line drawn diagonally across them.
Kanban Cycle (Delivery Cycle)
Key Performance Indicator (K.P.I.)
Partial replacement of manual labor by machines. The savings in labor, however, is not to the extent of saving on unit of manpower. (See also Manpower Savings).
Improving work procedures, machinery and equipment to free workers from particular jobs on a production line consisting of one or more workers. (See also Labor Savings).
Mixed Load Conveyance
When any plant transport vehicle is loaded with more than one type of part. Use of mixed loading makes it possible to increase frequency of delivery without lowering conveyance efficiency (i.e. without increasing the total number of deliveries). This allows the amount of inventory kept at each process to be decreased, and permits the delivery schedules to be more easily adjusted according to production changes. (See also Frequent Conveyance).
Mizu-Sumashi (Fixed Course Pick Up)
In this system, a delivery worker goes around fixed routes inside the plant stopping along the way to pick up sets of parts to take to the production line for assembly. Taiichi Ohno coined the phrase Mizu-Sumashi, or “Water Spider”.
Japanese for “waste”. It refers to non-value-added activities, or process steps that take time, resources or space (therefore increasing costs), but do not transform or shape the product or service towards that which is sold to a customer.
Eight types of waste have been identified for business. They are as follows:
- Waste from over-production
- Producing anything earlier than needed and/or in greater volumes than needed, resulting in excess inventory. This is also the most serious of all wastes.
- Refers to a situation where a worker who has been working according to a standardized work sequence finds themselves unable to proceed to the next job. This often occurs due to a low work volume.
- Refers to any transportation above the minimum necessary to keep Just-In-Time production operating smoothly.
- Any work or processing that does not add value to the product and advance the production process, or contribute to the precision of quality of the processed units.
- All of the inventory that is derived from the process of production and transportation.
- Refers to any unnecessary motion in the production process. For example, production line workers should not have to walk long distances, reach for items, repeat motions, lift heavy items or other unsafe actions.
- Refers to the waste of producing defective items that must be repaired or disposed of. This includes the regular processes which tend to make people less aware of the waste involved and slow improvement.
- Refers to when someone is not used to their full capabilities (under-utilizing), or the opposite, where a task is assigned to someone who is not qualified to complete it (over-utilizing).
Refers to one shop worker that will move among a group of machines or pieces of equipment and operate them to perform multiple jobs by himself. The machines and equipment are grouped together because of the similarity of processes involved or similarity of the machines used. (See also Multi-Process Handling).
One shop worker will move down a row of machines or equipment arranged in the order of the flow of production processes and will perform all necessary jobs within the Takt-Time. (See also Multi-Machine Handling, Multi-Skilled Worker).
Associates at any level of the organization that are diverse in skills and training. They provide the organization with flexibility and grow in value over time. Essential for achieving maximum efficiency through J.I.T. (See also Multi-Process Handling).
Japanese for “unevenness”. Refers to irregularities that sometimes happen in the production schedule in the volume of parts produced. Instead of remaining at set levels, volume moves temporarily up or down. For workers, it refers to workloads that vary from the standard. (See also Muri, Muda).
Japanese for “unreasonableness”. On a job site, this refers to giving too heavy of a mental or physical burden to workers on the shop floor. With regards to machinery, this means trying to have equipment do more than it is normally capable of.
On Line Set Up
Refers to the operations which cannot be carried out without stopping the line or machines. This includes the actual changing of dies, cutting tools, or jigs. (See also Set Up Time).
One Piece at a Time Production
Refers to the system of production in which only one part is processed or assembled and sent along the production line to following processes. (See also Continuous Flow Process).
Ensure that standardized work is carried out correctly at each job site. The information is available at each job site on worksheets based on diagrams, quality check standards, quality control process charts, and safety standards. They are aimed at achieving quality, quantity, cost and safety targets. (See also Standard Work).
The time that a machine operates maintenance free as a percentage of the total time during which it is turned on. This is equivalent to the reliability of the equipment and its maintenance. The ideal condition is to have 100% operational availability during the time the machine is turned on to fill a Kanban order. (See also Rate of Operation).
Performance Analysis Board
A board located at the job site on which hourly production targets are recorded along with the actual production achieved. Details concerning problems and abnormal conditions can also be recorded. The supervisor checks the board hourly, takes steps to prevent the re-occurrence of abnormalities, and confirms the positive effects of job site improvements that have been introduced. (See also Visual Management).
Plan-Do-Check-Act Cycle (PDCA)
A vertical bar graph showing the bars in descending order of significance, ordered from left to right. Helps to focus on the vital few problems rather than the trivial many. An extension of the Pareto Principle suggests that the significant items in a given group normally constitute a relatively small portion of the items in the total group. Conversely, a majority of the items will be relatively minor in significance, (i.e. the 80/20 rule).
Pick Up and Supply System
When a worker picks up a new supply of parts from a preceding process, they take with them a supply of material corresponding to the amount of parts they will be obtaining. Via this system, when the preceding process is situated by itself in an isolated location its inventory is kept at a constant level.
Also Baka-Yoke, a Japanese expression meaning “common or simple, mistake proof.” A method of designing production or administrative processes which will, by their nature, prevent errors. This may involve designing fixtures, which will not accept an improperly loaded part. In the administrative area, having a credit memo be a different color than a debit memo. It requires that thought be put into the design of any system to anticipate what can go wrong and build in fail-safe measures to prevent errors. (See also Jidoka).
A one year plan, reflecting the long-term vision and the 3-5 year strategic planning objectives. A planning/implementation process that focuses on a few, major, long term, customer focused breakthrough objectives that are critical to a company’s long term success. This process links major objectives with specific support plans throughout the organization. (also referred to as “Strategy Deployment”).
Policy Deployment Action Plan
Form used by the team working on a PD objective, detailing specific activities required for success, milestones, responsibilities and due dates. Team members are also listed with objective definition, meeting dates and management support or owner.
Policy Deployment Matrix
A measure used to evaluate production productivity, calculated as follows:
Quality Control Process Chart
Lists the quality control items, standards, specifications and characteristics of each process for building quality in at the production processes. It also includes the names of the supervisors and shop workers who are responsible for the quality control methods used. (See also Operation Standards).
Quality Function Deployment (Q.F.D.)
A system for translating consumer requirements into appropriate company requirements at each stage from research and product development to engineering and manufacturing to marketing/sales and distribution. Makes use of the voice of the customer throughout the process.
Rate of Operation
States the actual production levels being achieved by equipment. It is the percentage of total production capacity actually produced during regular work hours as determined by demand. (See also Operational Availability).
Scheduled Quantity Conveyance
When a set quantity of parts is used up at a following process, a worker picks up a fresh supply of parts from a preceding process. (See also Scheduled Time Conveyance).
Scheduled Time Conveyance
Conveyance moves at set times only. This means the volume of parts carried varies according to the volume consumed between each conveyance. Conveying a scheduled quantity is preferable to conveying an unscheduled quantity, but for distant destinations, unscheduled quantity is the only practical way. (See also Scheduled Quantity Conveyance).
The time it takes to change over from the production of one product to another, from the instant that the processing of the last component of one type is finished, to the production of the first good sample of the next type of component. It includes all the time needed for changeover of the dies, cutting tools, etc. (See also On Line Set Up).
Simultaneous Start Time Study
A method used to uncover problems on a production line. At a given signal, all shop workers start work beginning with the first job in the standardized work sequence. When they have finished one cycle of jobs, another signal is given and they start work on the next cycle. (See also Pacemaker).
Single Minute Exchange of Dies (S.M.E.D.)
Method of increasing the amount of productive time available for a piece of machinery by minimizing the time needed to change from one model to another. This greatly increases the flexibility of the operation and allows it to respond more quickly to changes in demand. It also has the benefit of allowing an organization to greatly reduce the amount of inventory that it must carry because of improved response time, while maximizing ROI and EVA.
A process that is six sigma generates a maximum defect probability of 3.4 parts per million (PPM) when the amount of process shifts and drifts are controlled over the long term to less than +1.5 standard deviations from the centered mean.
Standard Production Capacity Sheet
Indicates the maximum capacity for parts processing at any one process. Recorded on it are the amount of time spent in manual work, the machine’s automatic operation time the time spent in changing cutting tools, etc. It is used for calculating the capacity of each process. (See also Standard Work Combination Table).
Standard Work is a tool that defines the interaction of people and their environment when processing a product or service. It details the motion of the operator and the sequence of action. It provides a routine for consistency of an operation and a basis for improvement. It details the best process we currently know and understand. Tomorrow it should be better, (continuous improvement), and the standard work should be revised to incorporate the improvement. There can be no improvement without a basis or or standard.
Standard Work has three central elements; Takt Time, Standard Work Sequence, and Standard Work in Process. Standard work (as a tool) establishes a routine/habit/pattern for repetitive tasks, makes managing (scheduling, resource allocation) easier, establishes the relationship between person and environment, provides a basis for improvement by defining the normal and highlighting the abnormal, and it prohibits backsliding.
Standard Work Chart
Shows the outline of work for each worker. It records Takt Time, Standard Work Sequence, and Standard Work in Process, plus quality checks and safety warning symbols and other information. (See also Standard Work).
Standard Work Combination Table
Clarifies how much time is spent doing manual work and walking at each production process. It is used to examine the range of processes that one worker can take care of within Takt Time. The amount of time during which machines or equipment are operated are also recorded to help determine what combinations of operations are possible. (See also Standard Work).
Standard Work In Process
The minimum amount of material or a given product, which must be in process at any time to insure proper flow of the operation. It allows the worker to do their job continuously in a set sequence of processes, repeating the same operation over and over in the same order. (See also Standard Work).
The frequency with which the customer wants a product. How frequently a sold unit must be produced. The number is derived by dividing the amount of time available in a shift by the customer demand for that shift. Takt Time is usually expressed in seconds.
Takt Time (Actual)
It is desirable that production targets be achieved within regular work hours, and the word “Takt Time” refers to work accomplished within regular hours. When it becomes necessary, for operational purposes, to calculate Takt Time for other than regular hours, that Takt Time is called “Actual Takt Time”.
A method or establishing a cost objective for a product or service during the design phase. The target cost is determined by the following formula:
Total Productive Maintenance (T.P.M.)
Producing the number of parts that can be sold while utilizing the minimum number of workers and equipment possible. It is contrasted with producing as much as possible with available workers and equipment. Essentially, this is a cost reduction concept. (See also Apparent Efficiency).
Two Point Control
Value Added (Shigoto)
Vertical teams are groups of people who come together to meet problems or challenges. These teams are made up of the most appropriate people for the issue, regardless of their levels or jobs within the organization.
Voice of the Customer (V.O.C.)
The specific order in which an operator performs the manual steps of the process, which leads the operator to produce quality products in the most efficient way. (See also Standard Work).
World Class Quality Management
An operating methodology totally committed to quality and customer satisfaction. It focuses on continuous improvement in all processes and advocates decisions based on fact. World Class Quality Management includes all associates in meeting and exceeding customer expectations.
Refers to plant related activities or countermeasures that are communicated plant wide and with other company affiliates. For example, if an injury occurs in one part of the plant, complete details of the injury are communicated plant-wide. Supervisors will look to see if any conditions exist in their departments where a similar injury can be possible. If so, they will adapt countermeasures provided in the communication to remove those conditions and possible injuries.