The document defines key terms used in operations management. Some of the terms described include ABC analysis which categorizes inventory, assembly lines which manufacture products through sequential workstations, and just-in-time manufacturing which aims to reduce waste. Additional concepts covered are economic order quantity which minimizes total ordering and holding costs, and enterprise resource planning which integrates business processes and resource tracking.
The document defines key terms used in operations management. Some of the terms described include ABC analysis which categorizes inventory, assembly lines which manufacture products through sequential workstations, and just-in-time manufacturing which aims to reduce waste. Additional concepts covered are economic order quantity which minimizes total ordering and holding costs, and enterprise resource planning which integrates business processes and resource tracking.
The document defines key terms used in operations management. Some of the terms described include ABC analysis which categorizes inventory, assembly lines which manufacture products through sequential workstations, and just-in-time manufacturing which aims to reduce waste. Additional concepts covered are economic order quantity which minimizes total ordering and holding costs, and enterprise resource planning which integrates business processes and resource tracking.
ABC analysis is an inventory categorization technique. ABC
analysis divides an inventory into three categories—"A items" with very tight control and accurate records, "B items" with less tightly controlled and good records, and "C items" with the simplest controls possible and minimal records. Advanced planning refers to a manufacturing management process by and scheduling which raw materials and production capacity are optimally allocated to meet demand. Assembly line is a manufacturing process in which parts are added as the semi-finished assembly moves from workstation to workstation where the parts are added in sequence until the final assembly is produced. By mechanically moving the parts to the assembly work and moving the semi-finished assembly from work station to work station, a finished product can be assembled faster and with less labor than by having workers carry parts to a stationary piece for assembly. Backflush is a certain type of "postproduction issuing", it is accounting a product costing approach, used in a Just-In- Time (JIT) operating environment, in which costing is delayed until goods are finished. Base stock model is a statistical model in inventory theory. In this model inventory is refilled one unit at a time and demand is random. If there is only one replenishment, then the problem can be solved with the newsvendor model. Bill of is a list of the raw materials, sub-assemblies, materials (BOM) intermediate assemblies, sub-components, parts, and the quantities of each needed to manufacture an end product. Build to is a production approach where products are not Order (BTO) built until a confirmed order for products is received. Thus, the end consumer determines the time and number of produced products. Build to stock is a build-ahead production approach in which (BTS) production plans may be based upon sales forecasts and/or historical demand. Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services). Business is the harvesting of value from assets owned by a operations business. Assets can be either physical or intangible. An example of value derived from a physical asset, like a building, is rent. An example of value derived from an intangible asset, like an idea, is a royalty Business process re- is a business management strategy, originally engineering pioneered in the early 1990s, focusing on the (BPR) analysis and design of workflows and business processes within an organization. BPR aimed to help organizations fundamentally rethink how they do their work in order to improve customer service, cut operational costs, and become world- class competitors. Business-to-business is a situation where one business makes a (B2B) commercial transaction with another. Capacity is the process of determining the planning production capacity needed by an organization to meet changing demands for its products. Cellular is a process of manufacturing which is a manufacturing subsection of just-in-time manufacturing and lean manufacturing encompassing group technology. The goal of cellular manufacturing is to move as quickly as possible, make a wide variety of similar products, while making as little waste as possible. Changeover is the process of converting a line or machine from running one product to another. Changeover times can last from a few minutes to as much as several weeks in the case of automobile manufacturers retooling for new models.
Consumer-to- is a business model in
business (C2B) which consumers (individuals) create value and businesses consume that value. Cross-training also known as multiskilling, involves training employees for flexible response to changing production schedules. Customer is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for money or some other valuable consideration. Demand forecasting is a field of predictive analytics which tries to understand and predict customer demand to optimize supply decisions by corporate supply chain and business management. Direct-to- refers to selling products directly to customers, consumer (DTC) bypassing any third-party retailers, wholesalers, or any other middlemen. Economic order is the order quantity that minimizes the quantity (EOQ) total holding costs and ordering costs. It is one of the oldest classical production scheduling models.
Enterprise is the integrated management of main business
resource processes, often in real time and mediated by planning (ERP) software and technology. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll.
Final Assembly is a schedule of end items to finish the product for
Schedule specific customer orders in a make to order (MTO) or assemble-to-order (ATO) environment. Fixed position refers to an assembly system or situation in which assembly the product does not move while being assembled, this configuration is usually contrasted in operations management and industrial engineering with assembly lines. Flexible is a manufacturing system in which there is some manufacturing amount of flexibility that allows the system to react system (FMS) in case of changes, whether predicted or unpredicted. Flow process chart is a graphical and symbolic representation of the activities performed on the work piece during the operation in industrial engineering. Fordism is a manufacturing technology that serves as the basis of modern economic and social systems in industrialized, standardized mass production and mass consumption. The concept is named for Henry Ford. Forecasting is the process of predicting future events, including product demand. Gantt chart is a type of bar chart that illustrates a project schedule, named after its inventor, Henry Gantt. Modern Gantt charts also show the dependency relationships between activities and the current schedule status. Goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. Hayes-Wheelwright also known as the product-process matrix, is a tool Matrix to analyze the fit between a chosen product positioning and manufacturing process. Industrial is an engineering profession that is concerned with engineering the optimization of complex processes, systems, or organizations by developing, improving and implementing integrated systems of people, money, knowledge, information and equipment. Interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. Inventory refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilization. Inventory control is the problem faced by a firm that must decide problem how much to order in each time period to meet demand for its products. The problem can be modeled using mathematical techniques of optimal control, dynamic programming and network optimization. Job shops are typically small manufacturing systems that handle job production, that is, custom/bespoke or semi-custom/bespoke manufacturing processes such as small to medium-size customer orders or batch jobs. Location analysis it pertains to identifying the best location for facilities. Management is the administration of an organization, whether it is a business, a non-profit organization, or a government body. Manufacturing lead is defined as the total time required to time manufacture an item, including order preparation time, queue time, setup time, run time, move time, inspection time, and put-away time. Manufacturing is the production of goods through the use of labor, machines, tools, and chemical or biological processing or formulation. Manufacturing is defined as a method for the effective planning of resource planning all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning, and has a simulation capability to answer "what-if" questions and is an extension of closed- loop MRP (Material Requirements Planning). Market is the process of dividing a broad consumer or segmentation business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics. Marketing refers to the process an organization undertakes to engage its target audience, build strong relationships to create value in order to capture value in return. Maslow's is used to study how humans intrinsically partake hierarchy of in behavioral motivation. Maslow used the terms needs "physiological", "safety", "belonging and love", "social needs" or "esteem", and "self-actualization" to describe the pattern through which human motivations generally move. This means that in order for motivation to arise at the next stage, each stage must be satisfied within the individual themselves. Mass customization is the ability of a firm to highly customize its goods and services at high volumes through its operations management function. Master production is a plan for individual commodities to be produced schedule in each time period such as production, staffing, inventory, etc. It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded. Material is a production planning, scheduling, requirements and inventory control system used planning (MRP) to manage manufacturing processes. Most MRP systems are software-based, but it is possible to conduct MRP by hand as well. Material theory is the sub-specialty within operations research and operations management that is concerned with the design of production/inventory systems to minimize costs: it studies the decisions faced by firms and the military in connection with manufacturing, warehousing, supply chains, spare part allocation and so on and provides the mathematical foundation for logistics.
Methods-Time is a predetermined motion time system that is
Measurement used primarily in industrial settings to analyze the methods used to perform any manual operation or task and, as a product of that analysis, set the standard time in which a worker should complete that task. Newsvendor is a mathematical model in operations management and applied economics used to determine optimal inventory levels. It is (typically) characterized by fixed prices and uncertain demand for a perishable product. Operations research is a discipline that deals with the development and application of advanced analytical methods to improve decision-making. Overheads are the expenditure which cannot be conveniently traced to or identified with any particular revenue unit, unlike operating expenses such as raw material and labor. Therefore, overheads cannot be immediately associated with the products or services being offered, thus do not directly generate profits. PDCA (plan–do– is an iterative design and management method check–act) used in business for the control and continuous improvement of processes and products. It is also known as the Deming circle/cycle/wheel. Piece work is any type of employment in which a worker is paid a fixed piece rate for each unit produced or action performed, regardless of time. predetermined is frequently used to perform Labor Minute Costing motion time system in order to set piece-rates, wage-rates and/or (PMTS) incentives in labor (labor) oriented industries by quantifying the amount of time required to perform specific tasks under defined conditions. Today the PMTS is mainly used in work measurement for shorter cycles in labor oriented industries such as apparel and footwear.
Price is the quantity of payment or compensation given
by one party to another in return for one unit of goods or services Process layout is a design for the floor plan of a plant which aims to improve efficiency by arranging equipment according to its function. Process selection is the process of identifying the unique features of the production process that will give the product its unique characteristics. Process selection typically goes hand in hand with product design, as we need to create a process that gives rise to the particular product design desired. An excellent product design is worthless if a process for its creation cannot be developed. Production is the process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (output). It is the act of creating an output, a good or service which has value and contributes to the utility of individuals. Production line is a set of sequential operations established in a factory where components are assembled to make a finished article or where materials are put through a refining process to produce an end- product that is suitable for onward consumption Production planning is the planning of production and manufacturing modules in a company or industry. It utilizes the resource allocation of activities of employees, materials and production capacity, in order to serve different customers. Productivity is the efficiency of production of goods or services expressed by some measure. Project production is the application of operations management to the management (PPM) delivery of capital projects. The PPM framework is based on a project as a production system view, in which a project transforms inputs (raw materials, information, labor, plant & machinery) into outputs (goods and services). Purchasing is the process a business or organization uses to acquire goods or services to accomplish its goals. Quality it's also defined as being suitable for its intended (fitness for purpose) while satisfying customer expectations. Quality is a process by which entities review the quality of control (QC) all factors involved in production. ISO 9000 defines quality control as "A part of quality management focused on fulfilling quality requirements". Quality it ensures that an organization, product or service management is consistent. It has four main components: quality planning, quality assurance, quality control and quality improvement. Reconfigurable is one designed at the outset for rapid change in manufacturing its structure, as well as its hardware and software system (RMS) components, in order to quickly adjust its production capacity and functionality within a part family in response to sudden market changes or intrinsic system change. Safety stock is a term used by logisticians to describe a level of extra stock that is maintained to mitigate risk of stockouts (shortfall in raw material or packaging) caused by uncertainties in supply and demand. Scheduling is the process of arranging, controlling and optimizing work and workloads in a production process or manufacturing process. Scientific is a theory of management that analyzes management and synthesizes workflows. Its main objective is improving economic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes to management. Scientific management is sometimes known as Taylorism after its pioneer, Frederick Winslow Taylor. Service is a transaction in which no physical goods are transferred from the seller to the buyer. The benefits of such a service are held to be demonstrated by the buyer's willingness to make the exchange. Simulation is the imitation of the operation of a real-world process or system over time. Simulations require the use of models; the model represents the key characteristics or behaviors of the selected system or process, whereas the simulation represents the evolution of the model over time. Often, computers are used to execute the simulation. Standard time In industrial engineering, the standard time is the time required by an average skilled operator, working at a normal pace, to perform a specified task using a prescribed method. It includes appropriate allowances to allow the person to recover from fatigue and, where necessary, an additional allowance to cover contingent elements which may occur but have not been observed. Statistical process is a method of quality control which control (SPC) employs statistical methods to monitor and control a process. This helps to ensure that the process operates efficiently, producing more specification- conforming products with less waste (rework or scrap). Systems is an interdisciplinary field engineering of engineering and engineering management that focuses on how to design, integrate, and manage complex systems over their life cycles. At its core, systems engineering utilizes systems thinking principles to organize this body of knowledge. Theory X and are theories of human work motivation and Theory Y management. Theory X explains the importance of heightened supervision, external rewards, and penalties, while Theory Y highlights the motivating role of job satisfaction and encourages workers to approach tasks without direct supervision. Management use of Theory X and Theory Y can affect employee motivation and productivity in different ways, and managers may choose to implement strategies from both theories into their practices. Time and motion is a business efficiency technique combining the study (or time- Time Study work of Frederick Winslow Taylor with motion study) the Motion Study work of Frank and Lillian Gilbreth. The two techniques became integrated and refined into a widely accepted method applicable to the improvement and upgrading of work systems. This integrated approach to work system improvement is known as methods engineering and it is applied today to industrial as well as service organizations, including banks, schools and hospitals. Time study is a direct and continuous observation of a task, using a timekeeping device (e.g., decimal minute stopwatch, computer-assisted electronic stopwatch, and videotape camera) to record the time taken to accomplish a task Transfer line is a manufacturing system which consists of a predetermined sequence of machines connected by an automated material handling system and designed for working on a very small family of parts. Parts can be moved singularly because there’s no need for batching when carrying parts between process stations (as opposed to a job shop for example). Value added is a term used to describe the net increase created during the transformation of inputs into outputs. The OM function seeks to create value added in the transformation process. Wage is the distribution from an employer of a security (expected return or profits derived solely from others) paid to an employee. Like interest is paid out to an investor on his investments, a wage is paid (from company earnings) to the employee on the employee's invested assets (time, money, labor, resources, and thought). Work in are a company's partially finished goods waiting process (WIP) for completion and eventual sale or the value of these items. These items are either just being fabricated or waiting for further processing in a queue or a buffer storage. Work sampling is the statistical technique used for determining the proportion of time spent by workers in various defined categories of activity (e.g. setting up a machine, assembling two parts, idle…etc.). It is as important as all other statistical techniques because it permits quick analysis, recognition, and enhancement of job responsibilities, tasks, performance competencies, and organizational work flows. Lean Management Key Terminologies
5S is a workplace organization method that uses a
list of five Japanese words and it describes how to organize a work space for efficiency and effectiveness by identifying and storing the items used, maintaining the area and items, and sustaining the new organizational system. Andon In manufacturing, the term Andon refers to a system which notifies managerial, maintenance, and other workers of a quality or processing problem. The alert can be activated manually by a worker using a pullcord or button or may be activated automatically by the production equipment itself. Bottleneck Analysis Identify which part of the manufacturing process limits the overall throughput and improve the performance of that part of the process. Continuous Flow Manufacturing where work-in-process smoothly flows through production with minimal (or no) buffers between steps of the manufacturing process. DMAIC (Define - refers to a data-driven improvement cycle used Measure - Analyze - for improving, optimizing and stabilizing business Improve - Control) processes and designs. The DMAIC improvement cycle is the core tool used to drive Six Sigma projects. However, DMAIC is not exclusive to Six Sigma and can be used as the framework for other improvement applications. Gemba A philosophy that reminds us to get out of our offices and spend time on the plant floor – the place where real action occurs. Promotes a deep and thorough understanding of real-world manufacturing issues – by first-hand observation and by talking with plant floor employees. Heijunka A form of production scheduling that purposely manufactures in much smaller batches by sequencing (mixing) product variants within the same process. Heijunka box is a visual scheduling tool of used in heijunka, a concept originally created by Toyota for achieving a smoother production flow. Hoshin Kanri Align the goals of the company (Strategy), with the plans of middle management (Tactics) and the work performed on the plant floor (Action). ISO 9000 family is a set of standards that helps organizations of Quality ensure they meet customer and other Management stakeholder needs within statutory and Systems (QMS) regulatory requirements related to a product or service. ISO 9000 deals with the fundamentals of QMS, including the seven quality management principles that underlie the family of standards. Jidouka It means Partial-Autonomation. It is basically automation with a human element. Jidouka implements few supervisory functions in preference to manufacturing functions. In this concept, machine is automatically stopped when defect is detected. Just-In-Time (JIT) Pull parts through production based on customer demand instead of pushing parts through production based on projected demand. Kaizen the Sino-Japanese word for "improvement", is a concept referring to business activities that continuously improve all functions and involve all employees from the CEO to the assembly line workers. Kanban -A method of regulating the flow of goods both within the factory and with outside suppliers and customers. The system takes its name from the cards that track production within a factory. Kanban is also known as the Toyota nameplate system in the automotive industry. KPIs (Key Metrics designed to track and encourage Performance progress towards critical goals of the Indicators) organization. Strongly promoted KPIs can be extremely powerful drivers of behavior – so it is important to carefully select KPIs that will drive desired behavior. Lean is a production process based on an ideology of manufacturing maximizing productivity while simultaneously minimizing waste within a manufacturing operation. Lean is a production method aimed primarily at manufacturing reducing times within the production system as well as response times from suppliers and to customers. It is derived from Toyota's 1930 operating model "The Toyota Way" (Toyota Production System, TPS) Lean Six Sigma is a method that relies on a collaborative team effort to improve performance by systematically removing waste and reducing variation. It combines lean manufacturing/lean enterprise and Six Sigma to eliminate the eight kinds of waste (“Muda”). Muda is a Japanese word meaning "futility; uselessness; wastefulness“ Muda Type I these are non-value-adding, but necessary for end-customers. These are usually harder to eliminate because while classified as non-value adding, they may still be necessary. Muda Type II these non-value-adding and unnecessary for end-customers. These contribute to waste, incur hidden costs and should be eliminated Mura is a Japanese word meaning "unevenness; irregularity; lack of uniformity; nonuniformity; inequality“. Mura, in terms of business/process improvement, is avoided through Just-In-Time systems which are based on keeping little or no inventory. Muri is a Japanese word meaning impossible; beyond one's power. Muri can be avoided through standardized work. To achieve this a standard condition or output must be defined to assure effective judgment of quality. Poka-Yoke (Error Design error detection and prevention into Proofing) production processes with the goal of achieving zero defects. Root Cause Analysis A problem solving methodology that focuses on resolving the underlying problem instead of applying quick fixes that only treat immediate symptoms of the problem. A common approach is to ask why five times – each time moving a step closer to discovering the true underlying problem. Single-Minute Enables manufacturing in smaller lots, reduces Exchange of Dies inventory, and improves customer (SMED) responsiveness. Six Sigma is a set of techniques and tools for process improvement. These strategies seek to improve manufacturing quality by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. SMART Goals: Goals that are: Specific, Measurable, Attainable, Relevant, and Time-Specific. Total Productive A holistic approach to maintenance that focuses Maintenance (TPM) on proactive and preventative maintenance to maximize the operational time of equipment. TPM blurs the distinction between maintenance and production by placing a strong emphasis on empowering operators to help maintain their equipment. Total quality it consists of organization-wide efforts to "install management (TQM) and make permanent climate where employees continuously improve their ability to provide on demand products and services that customers will find of particular value. Toyota Production is an integrated socio-technical system, System (TPS) developed by Toyota, that comprises its management philosophy and practices. The TPS is a management system that organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers. The system is a major precursor of the more generic "lean manufacturing". Taiichi Ohno and Eiji Toyoda, Japanese industrial engineers, developed the system between 1948 and 1975. Value Stream Mapping A tool used to visually map the flow of production. Shows the current and future state of processes in a way that highlights opportunities for improvement.
Key Names and Organizations
Abraham was an American psychologist who was best known for
Harold creating Maslow's hierarchy of needs, a theory of Maslow psychological health predicated on fulfilling innate human needs in priority, culminating in self- actualization. Carl Georg is known as one of the foreman of scientific Lange Barth management, who improved and popularized the industrial use of compound slide rules. Douglas He has contributed much to the development of the Murray management and motivational theory, and is best McGregor known for his Theory X and Theory Y as presented in his book ‘The Human Side of Enterprise’ (1960), which proposed that manager's individual assumptions about human nature and behavior determined how individual manages their employees. Eli Whitney Eli Whitney popularized the concept of interchangeability of parts when he manufactured 10,000 muskets which is an important leap in manufacturing efficiency in the late eighteenth century. Ford Whitman was an American production engineer who derived the Harris square root formula for ordering inventory now known as the economic order quantity, which has appeared in countless academic articles and texts over the past 100 years. Frank Bunker was an American engineer, consultant, and author Gilbreth known as an early advocate of scientific management and a pioneer of time and motion study, and is perhaps best known as the father and central figure of Cheaper by the Dozen. Frederick He introduced the stopwatch method for accurately Winslow measuring the time to perform each single task of a Taylor complicated job. He developed the scientific study of productivity and identifying how to coordinate different tasks to eliminate wasting of time and increase the quality of work. Henry Ford He is credited with "Fordism", the mass production of inexpensive goods coupled with high wages for workers. Ford had a global vision, with consumerism as the key to peace. His intense commitment to systematically lowering costs resulted in many technical and business innovations, including a franchise system that put dealerships throughout North America and major cities on six continents. Lillian Evelyn was an American psychologist, industrial engineer, Moller Gilbreth consultant, and educator who was an early pioneer in applying psychology to time-and-motion studies. She was described in the 1940s as "a genius in the art of living."Gilbreth, one of the first female engineers to earn a Ph.D., is considered to be the first industrial/organizational psychologist. Michael Martin known as one of the founders of Hammer the management theory of Business process reengineering (BPR). Morris Llewellyn was an American engineer, best known for his work Cooke on Scientific Management and Rural Electrification. Ohno Taiichi was a Japanese industrial engineer and businessman. He is considered to be the father of the Toyota Production System, which inspired Lean Manufacturing in the U.S. He devised the seven wastes (or muda in Japanese) as part of this system. He wrote several books about the system, including Toyota Production System: Beyond Large- Scale Production. Ransom Eli The modern assembly line and its basic concept is Olds credited to Olds, who used it to build the first mass- produced automobile, the Oldsmobile Curved Dash, beginning in 1901. Sakichi Toyoda was a Japanese inventor and industrialist. He was born in Kosai, Shizuoka. The son of a farmer and sought- after carpenter, he started the Toyoda family companies. His son, Kiichiro Toyoda, would later establish Japan's largest automaker, Toyota. Toyoda is referred to as the "King of Japanese Inventors". Shigeo was a Japanese industrial engineer who was considered Shingo as the world’s leading expert on manufacturing practices and the Toyota Production System. Walter he introduced the control chart through a technical Shewhart memorandum while working at Bell Labs, central to his method was the distinction between common cause and special cause of variation. In 1931 Shewhart published his Economic Control of Quality of Manufactured Product, the first systematic treatment of the subject of Statistical Process Control (SPC). Association for Supply is a not-for-profit international education Chain organization offering certification programs, Management (APICS) training tools, and networking opportunities to increase workplace performance. Formed in 1957, the mission of the organization is to advance end-to-end supply chain management. APICS merged with the Supply-Chain Council in 2014, and the American Society of Transportation and Logistics in 2015. Association of is an international network of academics and Technology, practitioners from around the world who have a Management and common interest in the continuing development Applied Engineering of Operations Management. EurOMA is a (ATMAE) European-based network with rapidly growing international links, whereby members can share their ideas, knowledge, and experience. It is a communication network that bridges the gap between research and practice. European Operations is an international society for practitioners in Management the fields of operations Association (EurOMA) research (O.R.), management science, and analytics. It was established in 1995 with the merger of the Operations Research Society of America (ORSA) and The Institute of Management Sciences (TIMS). Institute for Operations sets standards for academic program Research and the accreditation, personal certification and Management professional development for educators and Sciences (INFORMS) industry professionals involved in integrating technology, leadership and design. Its primary mission is faculty, students and industry professionals dedicated to solving complex technological problems and developing the competitive technologist and applied engineering workforce.