5S
As a lean manufacturing theory, 5S focuses on organizing the workplace to eliminate waste and improve productivity. This theory has five elements: sort, set in order, shine, standardize, and sustain. By putting equipment and resources in their proper places, your workers improve their productivity and maintain an organized environment.
Activity-Based Costing
Activity-based costing involves taking all your products and services, and assigning overhead costs and indirect costs to them. This manufacturing accounting procedure bases the costs on how much of these products and services are used up during daily operations.
Availability %
The machine availability metric represents the percentage of time that a machine is fully operational, or “available.” Another common term for this is “uptime,” and it is one of three calculations to determine overall equipment effectiveness (OEE). To determine a machine's availability percentage, you use the following equation:
Availability % = Runtime / Planned production time
Bill of Materials
Your bill of materials list, often simply called BOM, details all the raw materials used for the final assembly of the manufactured product. Items listed on the BOM include all the assemblies, subassemblies, and parts. It also features the exact number of items that will be used to complete the product, and defines the assembly path the product will take along the production line.
Cell
In a cellular manufacturing layout, you arrange equipment into small groups (or “cells”) that make similar products or parts. Employees who work within a cell are typically cross-trained to use all the equipment in the cell. This makes the production line more efficient and reduces production lead times.
Corrective Action Preventative Action (CAPA)
Corrective action/preventative action is part of good manufacturing practice methodology (GMP). Workers maintain your company's quality standards by conducting investigations when they discover product failures. When they identify a failure, they take corrective action to eliminate the root cause while also taking preventative action to lessen the chances of the problem happening again in the future.
Corrective Action Request (CAR)
Suppliers get corrective action requests (CAR) when problems are discovered with their products during the QA process. These notices provide details about the issues, which help the supplier determine the cause of the problem. This way, they can take any corrective actions needed to remedy it.
Change Order
Change orders request changes to a part or product during the manufacturing process. These changes focus strictly on making adjustments to processes and don’t call for any alteration to the design of the product itself.
Computer-Aided Manufacturing (CAM)
Computer-aided manufacturing (CAM) relies on the use of computer-controlled machinery and software to automate processes. Workers use this process automation to increase their productivity, since these systems lower the need for human intervention and allow workers to focus on other tasks.
Coordinate-Measuring Machine (CMM)
Coordinate-measuring machines check the accuracy of a product's dimensions. These machines position probes (laser, mechanical, optical, etc.) along the surface of the product to ensure that the product's geometry meets its design measurement specifications.
Cycle Time
To understand the efficiency of workers and equipment in operations, you calculate the cycle time of production processes. Cycle time represents the time it takes to complete a product from start to finish. It begins when a product starts moving through the production line, and ends when the product is fully assembled and ready for shipment. The following equation determines cycle time:
Cycle time = Total number of products / Total production time
Document Change Request (DCR)
Document change requests are proposed changes to documents pertinent to the manufacturing process, such as standard operating procedures or instruction manuals.
Downtime
Downtime represents the timeframe when a process, machine, or cell stops production. This may happen due to a equipment malfunction that causes the systems to go offline.
Discrete Manufacturing
Discrete manufacturing refers to the production of products that are physically distinct, identifiable units. This is the manufacturing process used to create most finished products that you can buy in a store: computers, lawnmowers, cars, etc.
Engineering Change Request (ECR)
An engineering change request is the form that starts the process of making a change to a product’s design. Key stakeholders and the engineering team receive the engineering change request, then review and circulate the document to discuss the details on the form before putting in an official engineering change order (ECO).
Engineering Change Order (ECO)
Once the ECR has been approved, an engineering change order goes to those involved in the production process (as well as key stakeholders) that details the change that has been requested. The ECO provides a list of affected parts and outlines what needs to be changed.
Engineering Change Notice (ECN)
The final phase of the engineering change process, the engineering change notice indicates that an engineering change has been approved. It serves as a record of product changes over the course of its life cycle.
Enterprise Resource Planning (ERP)
Manufacturers use enterprise resource planning (ERP) throughout operations as an effective business strategy to manage day-to-day operations. Most ERP is done using software that manages, tracks and automates activities, such as supply chains, accounting tasks, inventory, procurement, and order processing. The applications also analyze data from across all the manufacturing departments, which helps when making business decisions.
Field Failure Request (FFR)
Workers may use field failure requests (FFR) to document problems or abnormalities in products that are observed by the end user in the “field.” Workers may not have noticed these problems during the manufacturing or testing phases of the product.
Good Manufacturing Practices (GMP)
Good manufacturing practices consist of guidelines, systems, and best practices for managing every aspect of the production process that impact the product's quality. This quality assurance system also ensures that manufacturers meet industry regulations so that products meet the highest possible standards.
Human-Machine Interface (HMM)
The human-machine interface consists of the user interface where the operator interacts with the machine. The operator may input data, monitor the machine, or make changes on how the machine performs work through this interface.
Industry 4.0
Industry 4.0 is a term used to describe the Fourth Industrial Revolution. It consists of the current manufacturing technologies, automations, and innovation trends. It encompasses both physical production processes and digital manufacturing processes to illustrate links between the two operations.
Machine Monitoring
Machine monitoring consists of software tools and technologies designed to monitor machine performance and collect performance data. Sensors attached to machinery transmit information about their utilization, which gives insight into how equipment is functioning and where repairs are needed. It can also help predict when maintenance is needed by collecting data over time.
Make to Assemble (MTA)
In the make to assemble (MTA) production process, manufacturers keep the components on hand to assemble the orders they anticipate. They do this using demand predictions, which varies from one manufacturer to the next. However, assembly only begins when the manufacturer receives an order. This helps reduce the risk of over- and under-stocking products.
Make to Order (MTO)
In the make to order (MTO) production strategy, manufacturers don’t begin assembly until they get an order. This helps prevent manufacturers from having to rely too heavily on market demand (like the MTA and MTS methods) — which can be difficult to predict. The MTO process also allows for customization, as orders can be built to exact customer specifications.
Make to Stock (MTS)
As a traditional manufacturing strategy, make to stock means you create products that will go into warehouse inventory. Once a customer places an order, workers package and ship the stored items for delivery. Using demand forecasting to help predict customer demand can help manufacturers balance their inventories, so they don’t have too much or too little product on the shelves.
Mean Time Between Failures (MTBF)
Mean time between failures (MTBF) refers to the average time that elapses between your equipment failures. You can calculate MTBF with this formula:
MTBF = Number of operational hours / Number of failures
Mean Time to Repair (MTTR)
You use the mean time to repair formula to calculate how long it takes to repair machines or systems. This calculation takes into account both the repair time and the time it takes to perform tests, as this strategy goes hand in hand with MTBF.
MTTR = Total maintenance time / Number of repairs
Material Requirements Planning (MRP)
As a computer-based inventory management system, material requirements planning (MRP) ensures that raw materials are readily available for the manufacturing process. MRP works backward, using sales data and forecasting models to prepare, schedule, and manage raw material inventory.
Overall Equipment Effectiveness (OEE)
When determining the overall productivity of manufacturing operations, you use the overall equipment effectiveness (OEE) as a best practice measurement. OEE provides greater insights about where inefficiencies lie, which can help you formulate a plan to make improvements.
There are a few ways to calculate OEE, but this is the preferred method:
OEE = Availability x Performance x Quality
Original Equipment Manufacturer (OEM)
Original equipment manufacturer (OEM) refers to the manufacturer who originally makes the product that's marketed and sold by another company. An OEM is considered a business-to-business (B2B) company that normally does not sell products directly to consumers.
Operational Technology (OT)
Workers use operational technology software on the shop floor to monitor and control equipment. The software can automatically detect changes within machinery while it’s in operation.
Pareto
The Italian economist Vilfredo Pareto created the Pareto principle, also referred to as the “80/20 rule.” It was coined when Pareto noted that 80% of the land in Italy was owned by a 20% sliver of the population. When applied in a manufacturing context, the principle means that 80% of the problems that occur during the manufacturing processes are a result of 20% of the causes.
Performance %
Also known as throughput, performance percentage measures the actual cycle time for equipment, production times, or cells to meet the established schedule. You may use analytics software, which captures machine data as the software looks at the product counts and compares the figure to the system's ideal cycle time.
Programmable Logic Controller (PLC)
Workers use a programmable logic controller for specific manufacturing processes. A PLC is a programmed or modified computer that automates business processes, production lines, or machine functions. Using a custom program, the controller monitors and makes decisions for inputted devices.
Quality %
Simply put, manufacturers use the quality percentage metric to determine the quality of products produced by a specific machine. Analytical software can pull reject reason codes to determine why parts were rejected. From there, manufacturers can see which machines are producing quality parts and which are not.
Restriction of Hazardous Substance (RoHS)
The restriction of hazardous substances is a European Union (EU) initiative that places restrictions on the use of six hazardous substances in products sold in the EU: lead, cadmium, mercury, polybrominated biphenyl, hexavalent chromium, and polybrominated diphenyl ethers.
Return Material Authorization (RMA)
The return material authorization (RMA) identifies the return of a product using a financial order or work order tracking key. It's used during the transaction when a customer returns the product for a range of reasons, whether the item is damaged or unwanted, so the manufacturer can provide a credit or refund.
Six Sigma
You may use Six Sigma as a quality measurement and data-driven approach designed to eliminate product defects. Using statistical models and empirical data, the approach allows manufacturers to enhance quality control and process compliance.
Single-Minute Exchange of Dies (SMED)
You may use the single-minute exchange of dies (SMED) to reduce waste in the manufacturing cycle. This lean manufacturing method allows you to find fast and efficient ways to complete equipment changeovers. SMED helps to reduce operational downtimes and uneven production flow.
Standard Operating Procedure (SOP)
The standard operating procedure is a document that lists the steps used in the production process or the activities in a procedure. It ensures that your manufacturing operations meet regulations and maintain both performance quality as well as product quality.
Statistical Process Control (SPC)
Statistical process control involves using statistics to control production methods and processes. These tools and procedures monitor process behavior to discover production system issues and help workers find solutions.
Takt Time
Takt time is the rate at which you must produce a product to meet customer demand. For example, if you get two orders every hour, you need to complete one order every 30 minutes in order to meet customer demand.
You can calculate takt time with the following formula:
Takt time = Total available production time / Average customer demand
Time to Market (TTM)
The time to market is the period of time from product conception to product release. This period of time includes product idea generation, the product design process, product development, and product launch.
Total Productive Maintenance (TPM)
You use total productive maintenance as an enterprise-wide strategy to get all workers involved with the maintenance and improvements to machinery. This lean manufacturing methodology empowers workers to share in the responsibility of maintaining the equipment to increase efficiency.
Quality Management System (QMS)
The quality management system monitors operational controls, reports issues with processes, and documents improvements as well as manufacturing changes. The system is used to meet company regulations and customer requirements for all production processes.