Classification of the items in an inventory in decreasing order of annual dollar volume. This array is then split into three or more classes called A, B, and C, etc. Class A contains the items with the highest annual dollar volume and receives the most attention. The medium class B receives less attention, and class C, which contains the low-dollar volume items, is controlled routinely. The ABC principle is that effort saved through relaxed controls on-low value items will be applied to reduce inventories of high-value items. Syn: distribution by value.
Acceptable productivity level (APL)
The work pace established by management, or jointly by management and labor, at a level considered satisfactory; it is established at a given relationship to the motivated productivity level.
The overhead cost due to the nonprofit-specific operations of a company. Generally includes top management salaries and the costs of legal, central purchasing, traffic, accounting, and other staff functions and their expenses for travel and accommodations.
Automated storage and retrieval system (AS/RS)
A combination of equipment and controls which handles, stores, and retrieves materials with precision, accuracy and speed under a defined degree of automation. Systems vary from relatively simple, manually controlled order-picking machines operating in small storage structures to giant, computer-controlled storage/retrieval systems totally integrated into the manufacturing and distribution process. Vertical heights of these latter systems can exceed 100 feet.
Autonomous work group design
The design of work around autonomous work teams to incorporate job rotation and/or job enrichment for a greater sense of task meaningfulness.
A conflict-handling mode that involves ignoring or suppressing a conflict in the hope that it will either go away or not become too disruptive.
An order picking method in which an operator is responsible for picking multiple orders to completion in the same work cycle.
Measurement of performance or actions and comparison with established standards in order to maintain performance and actions within permissible limits of variance from the standard. May involve taking corrective action to bring performance into line with the plan or standards.
Critical path scheduling or critical path method (CPM)
A network planning technique used for planning and controlling elements in a project. By showing each of these elements and associated completion time requirements, the critical path can be determined. The critical path identifies those elements that actually control the lead time of the project. CPM uses network diagrams with precedence constraints. It is easily run on a computer.
One of two main components of any item of inventory, the cycle stock is the most active part, i.e., that which depletes gradually and is replenished cyclically. Another part of the item inventory is the safety stock which is a cushion of protection against uncertainty in the demand or in the replenishment lead time. The stock level necessary to prevent shortage during ordering, producing, and shipping of replacement work.
Added expenses due to the indirect results of a changed condition, delay or changes that are a consequence of the initial event. Examples of these costs are premium time, lost efficiency and extended overhead.
The number of times that an inventory "turns over" or cycles during the year. One way to compute inventory turnover is to divide the average inventory level into the annual cost of sales.
Extending the parameters of the job being performed by an employee in order to make the work more psychologically rewarding. A job may be extended in two dimensions - horizontal and vertical. Horizontal job enlargement can take the form of a greater variety of tasks on which the employee works, an increased number of tasks and job rotation. Vertical job enlargement, or job enrichment, usually takes the form of more planning, more controlling or more team participation on the part of the job incumbent. The additional controlling aspects may include self-pacing as well as inspection. This form of enlargement involves building motivators into the job (See Z94.15 ORGANIZATION PLANNING & THEORY)
1) Manufacturing activities performed with a specific objective of minimizing inventory related costs and activities. 2) A term developed by MIT researchers to describe companies which have implemented the Toyota Production System.
A graphic representation of the progress in production effectiveness as time passes. Learning curves are useful planning tools, particularly in the project-oriented industries where new products are phased in rather frequently. The basis for the learning curve calculation is the fact that workers will be able to produce the product more quickly after they get used to making it.
Management by wandering around (MBWA)
A practice whereby managers frequently tour areas for which they are responsible, talk to various employees, and encourage upward communication
A grouping of equipment to form a self-contained autonomous unit to produce parts or products of similar geometry and specifications; equipment may range from traditional machine tools through computer numerical control machines and robots.
Margin of Safety
A border, edge or limit beyond which a particular behavior, condition or situation becomes hazardous, unsafe.
That part of methods engineering normally involving an examination and analysis of an operation or a work cycle broken down into its constituent parts for the purpose of improvement elimination of unnecessary steps, and/or establishing and recording in detail a proposed method of performance.
Managers beneath the top level of the hierarchy who are directly responsible for the work of other managers below them.
The organization's purpose or fundamental reason for existence.
A broad declaration of the basic, unique purpose and scope of operations that distinguishes the organization from others of its type.
A schedule comprised of key events or milestones elected as a result of coordination between the clients and the contractor’s project management. These events are generally critical accomplishments planned at time intervals throughout the project and used as a basis to monitor overall project performance. The format may be either network or bar chart and may contain minimal detail at a highly summarized level.
Poke-yoke is a Japanese term meaning "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.
Action taken to eliminate the causes of a potential nonconformity defect or other undesirable situation in order to prevent occurrence.
Process capability is a statistical measure of inherent process variability for a given characteristic.
1) Standard measures of process capability have not achieved consensus at the present time. some examples are:
- the standard deviation(s) or the range, or a multiple thereof based upon the inherent variability
- a composite value of the component due to inherent variability and a component due to small assignable causes
- a composite value of a multiple of the standard deviation of inherent variability based upon an individual process, plus an acceptable small range allowed for shifts due to assignable causes.
2) When using the term "process capability," it is essential to state which measure is being used.
1) Automatic control of industrial processes in which continuous material or energy is produced. 2) Pertaining to systems whose purpose is to provide automation of continuous operations. This is contrasted with numerical control, which provides automation of discrete operations.
A plan to build user demand for a product that distribution channels will be forced to meet.
The replenishment of consumables needed to keep an item in operating condition, but not including any other preventative maintenance or any corrective maintenance.
A temporary or ongoing group whose members are charged with working together to identify problems, from a consensus about what should be done, and implement necessary actions in relation to a particular task or organizational area.
(1) A permissible variation in a characteristic of a product or process, usually shown on a drawing or specification. (2) In work measurement, the permissible variation of a time value for an operation or other work unit.
Two bin system
A type of fixed order system in which inventory is carried in two bins. A replacement quantity is ordered when the first bin is empty. When the material is received, the reserve bin is refilled and the excess is put into the working bin. This term is also used loosely to describe any fixed order system even when physical "bins" do not exist.
Review of product costs to evaluate contribution to product value. May include phases of work design, methods engineering, and motion economy to reduce manufacturing costs. May include phases of work simplification and brainstorming to evaluate use of alternate materials, components, or work specifications.
Between-lot (or between-batch) Variation.
Dispersion of the lot or batch averages of the observations or test results over several lots or batches.
NOTE: The between-batch variation will include a component of within-batch variation which can be reduced by increasing the within-batch sample size.
Within-lot (or within-batch) variation.
Dispersion of observations or test results obtained within a lot or batch.
NOTE: The within-batch variation may be estimated from a single batch or by pooling the estimates for several batches, as appropriate.
Wear-out failure period
That final period, if any, in the life of an item during which the instantaneous failure intensity for a repaired item or the instantaneous failure rate for a non-repaired item is considerably higher then that of the preceding period.
Within-lot (or within batch) variation
Dispersion of observation or test results obtained within a lot or batch. Note: The with-in batch variation may be estimated from a single batch or by pooling the estimates for several batches, as appropriate.