ESTIEM Lean Six Sigma Green Belt course - Glossary of terms
Lean Six Sigma
Activity Based Costing. ABC is a business improvement process used to
streamline cost for work activities by more realistically measuring the costs of
products, and processes through the detailed evaluation of the value-added work
performed in activities.
Abscissa The horizontal axis of a graph used to plot an “X” variable.
The region of values for which the null hypothesis is accepted at a given
confidence level which is related to the chosen sample size (alpha risk).
A plan to implement a change or a project that identifies the target to be
achieved, the milestones for achievement of this result, the individual assigned
responsibility for the project, the steps that will be taken and indicators of both
the interim progress toward the goal and the achievement of the desired result
(in Hoshin Kanri this is called an Implementation Plan) (See HOSHIN KANRI).
An identifiable work unit that combine together to form a process. Activities
normally are confined in location and each activity may be further sub-divided
into the tasks that are performed by individual participants or teams within the
A thinking tool used to gather information or viewpoints, define a situation,
generate ideas, sort the ideas into coherent groups, and classify these groups
with clear labels.
The probability of accepting the alternate hypothesis when, in reality, the null
hypothesis is true. This factor is usually designated by the Greek letter alpha (α).
A tentative explanation which indicates that an event does not follow a chance
distribution; contrast with the null hypothesis and considered an alternate
From the word meaning ‘light’ – a visual control device to indicate production
process status – it may be either a flashing light that signals problems (e.g., yellow
for off-rate production and red for line stoppage) or it may be an overhead video
display that provides visual and numerical indicators of flow in production. An
andon is used to describe the current status of production and to alert everyone
to changes in status or emerging problems (line slowdown, etc.).
Analysis of Variance. A statistical method used to evaluate if there is a statistically
significant difference among means of similar groups. A method of determining
which factors in an orthogonal array significantly affect the response by
comparing response variation between factor levels to error variation within
factor levels. Results of an ANOVA are frequently utilized to establish an
The top-down structure of a system. Business architecture typically represents
the decomposition of business processes into a system of work processes that
deliver the overall results.
A source of variation in results which is non-random (it can be assigned to a
particular cause or reason for occurrence); a change in this factor (“Vital Few”
variables) will produce a significant change of some magnitude in the response
(dependent variable), e.g., a correlation exists; the change may be due to an
intermittent in-phase effect or a constant cause system which may or may not be
highly predictable; an assignable cause is often signaled by an excessive number of
data points outside a control limit and/or a non-random pattern within the
control limits; an unnatural source of variation; most often economical to
Attribute A quality or characteristic feature of a person, place or thing.
Qualitative data that can be counted; factual information at the nominal level;
subdivision is not conceptually meaningful; data which represents the frequency
of occurrence within some discrete category, e.g., 42 solder shorts.
A person who has been granted the right to make a decision, issue a command,
control, or settle a dispute without reference to a higher-level authority.
A form of automation in which machinery automatically inspects each item it
produces for defects and then stops production if a defect is detected and
notifies the operator of this condition (see jidohka).
The self-management of routine equipment maintenance tasks by the operators.
This approach may also include participation of operators in the repair and
service of their equipment.
Baka Yoke [Japanese]
A manufacturing method for preventing mistakes by designing the production
process, equipment and tools so operations cannot be performed incorrectly. In
this system the device not only prevents incorrect operation, but it also provides
a warning to the operator of incorrect performance (see POKA YOKE).
This graph visually compares bars that indicate the magnitude or accumulated
frequency count of an attribute the using the relative length of bars to illustrate
differences for a common measurement scale of the data.
Either an historical or current level of performance that is used as a standard of
comparison for future performance improvements.
A manufacturing condition where the capacity of the production resources is
matched exactly to the market demand for the product. Work is distributed in
the production line to avoid underutilization or overburden of individual activities
and assure a shorter flow time as both bottlenecks and downtime are avoided.
Batch and Queue
Producing more than one unit of production at a time and then moving the units
to the next operating step before it has a need to produce using these units. This
style of production creates waiting time as parts are moved in batches and wait in
queues for the next operation to be conducted.
A decision-making method used to estimate the probability that an outcome will
occur when a known prior event occurs. It applies the probability equation
known as Bayes’ Theorem.
A method to establish targets and identify improvement projects based on the
comparison of processes with leading best practices.
The probability of accepting the null hypothesis when, in reality, the alternate
hypothesis is true (the null hypothesis is false). This factor is noted by the Greek
letter beta (β) (See CONSUMER’S RISK and POWER OF THE TEST).
Best-In-Class. The top performing organization in a group of similar organizations
as indicated by performance for a measure or process characteristic in a
benchmarking study. BIC usually requires that an organization’s process measure
in the top 5th quartile of the process benchmark results.
The step in the production process that restricts the smooth flow of output to
the customer – a production resource whose capacity is equal to or less than the
demand that is placed upon it is a bottleneck.
A dramatic change in process performance which removes an old barrier or
surpasses milestone performance by achieving a significant increase in efficiency,
cost reduction, quality level or some other measurable performance indicator
A creative process for bring out the ideas of team members regarding a specific
topic. The problem to be considered must be clearly defined. Each person
presents their ideas without critique by others. Ideas are recorded without
discussion, but people are encouraged to creatively build on the ideas of others.
Improvement in performance to an unprecedented capability level for a service,
product or process (or a similar dramatic reduction in defects, cost or cycle
time); also the process of achieving a vision (desired business state) that is a
significant departure from the current business state (current state).
A model for developing “aspirations” for quality by indicating areas that must be
addressed by processes, measures, action, or reviews in order for an
organization to achieve long-term results driven by a focus on customers and
significant stakeholders. The approach to business excellence is embedded in the
programs of the Malcolm Baldrige National Quality Award and the European
Quality Prize of the European Foundation for Quality Management.
The end-to-end sequence of processes and activities that defines one or more
business functions that are required to deliver a product (either goods or
services) to a customer. If the customer is an external customer then these
processes may be considered to be core business processes, if they serve internal
customers, then these processes may be called support services.
The successive top-down deployment of training or strategy where a manager
leads his subordinates who thereafter lead their subordinates in the deployment
of a business initiative through training or an active learning process.
The give-and-take dialog that occurs between organization levels as part of the
negotiation process that leads to shared objectives or consensus on direction in a
policy deployment planning system (also called “cascade push-back”); part of a
Hoshin Kanri planning system.
The inherent potential of a machine or process to produce goods or services
that meet specified requirements. Its ability to meet these requirements must be
demonstrated by measured performance in a process capability study (see Cp
A financial term that designates the balance between cash inflows (receivables) to
a business and cash outflows (expenditures).
Causality The principle that every change implies the operation of a cause.
That which produces an effect or brings about, creates or serves as a catalyst for
change – when a cause occurs, then the effect is created in a predictable manner.
A process for evaluating problem symptoms and sorting them into apparent
causes, then sorting these into potential causes in order determine the root
cause (see ROOT CAUSE ANALYSIS, DIAGNOSIS).
Cause and Effect Diagram
Often referred to as an Ishikawa Diagram (to respect its originator Karou
Ishikawa) or a fishbone diagram (due to its shape), the Cause and Effect Diagram
illustrates the linkage between a problem statement and its potential causes
which may be designated by a set of categories called the “6 M’s” (Man, Machine,
Measurement, Method, Manpower, and Mother Nature).
An arrangement of people, machines, material and equipment so that processing
of the production unit are co-located in their sequence of operation with minimal
delay time between process steps.
Numerical average, e.g., mean, median, and mode; center line on a statistical
process control chart.
‘Load-load’ – a method of conducting single piece flow (nagara) in which the
operator moves from machine to machine taking the part from a previous
machine and loading into the next machine to decrease the inter-machine waiting
The act of converting a production line or equipment to produce a new part,
product, or model and which may require a new setup of the facilities such as
changing of tooling, material replacement or rearrangement of people and
The time required to convert a workstation to achieve a part, product or model
changeover – it includes teardown time to remove a previous set of production
conditions and setup time to assemble the new production conditions (see setup
Characteristic A definable or measurable feature of a process, product, or variable.
A written commitment (or contract) by management that states the purpose and
objectives of a project improvement team. Resources and performance targets
are specifically addressed, participants are assigned responsibility and review
authority is established.
Check Points (Control Points)
A physical point in a process where an adjustment can be made to affect the
throughput rate, quality level, or test the in-process work for adherence to
requirements. This point may also correspond to a process constraint or choke
A predefined document with a series of steps that must be followed in order to
carry out an operation properly. It contains a description of activities that must
be done broken into the component parts that must be approved (or checked
off) as they are completed.
A tally record of observations that can be used for purposes such as data
collection, problem analysis or testing.
Anything that reduces the capacity of a system from achieving its throughput
capability – the bottleneck that most severely restricts the continuous flow of
Any individual who is an ultimate user of the goods or services of an
organization. Consumption may be either physical or mental as the products may
be tangible or intangible.
The production process where units are produced sequentially moving one unit
at a time through the processing steps. Continuous flow is also called one-piece
flow or single-piece flow production (see nagara).
A way to differentiate between variables, factors, or functions based on their
logical categories that define their associations or relationships.
Common Cause Variation See RANDOM CAUSE
The probability that a random variable “x” lies within the physical interval defined
in the data for probability of occurrence.
The values that define the margins or physical range of a confidence interval for a
chosen probability or confidence level.
A state of agreement within a team or group where everyone supports an action
or decision as the best choice, even if some don’t fully agree with it. In arriving at
this point, all arguments and data that show counter-points have been reviewed
and considered in arriving at the final agreement. At the end, everyone openly
participates, understands, and supports the decision or action.
Probability of accepting a hypothesis when, in fact, the hypotheses was false and
should have been rejected (see BETA RISK).
Numerical information that is either interval or ratio data; where its subdivision
is meaningful; and all numbers in this interval specify a natural meaning; data
observed from a scalar continuum
A method that assures the step-wise or incremental improvement of a process
or the sequential improvement in the performance of a product’s features over
time based on the idea that performance improvement is necessarily a
continuous activity to ensure ongoing customer satisfaction and improved results
A graphical rendition of a characteristic’s performance across time in relation to
its natural control limits and central tendency which is used to evaluate if a
process is operating in a state of statistical control
Statistical criteria for either taking action or judging the significance of variations
between samples or subgroups. Upper and lower control limits are calculated
based on the capability of work process as judged by their standard deviation
Control Specifications Specifications that define the acceptable limits for a product being manufactured.
Cost of Poor Quality. (Also called the price of non-conformance IPONC) or the
cost of non-quality (CNQ), or just the cost of quality (COQ)). These costs are
calculated as the sum of cost for preventing problems, detecting problems, and
correcting observed internal and external failures. The cost of prevention is an
investment to reduce the other costs. COPQ is often off-set by the return on
quality – the benefit received from reductions in scrap, rework and lost time, as
well as a productivity improvement from using the failure time to produce
Cost of Ownership
The total cost associated with an acquisition: including the initial purchase price,
plus additional cost such as cost of quality assurance or compliance testing, cost
of receiving inspection, cost of reliability tests, cost of warehouse storage, cost of
warranty, cost of field failure, cost of maintenance, etc. Represents a total life
A measure of the degree of strength in the association between two variables
(also related to Pearson correlation coefficient, coefficient of determination, and
This capability index indicates the ratio between a product’s specifications
(planned tolerances) and the process capability or spread (natural tolerance or
variation in the production process). To be calculated, the process must be in
statistical control (e.g., no special cause variation has been observed in the data)
(see PROCESS CAPABILITY)
This capability index extends the measurement beyond the Cp by taking into
account both process centering and dispersion (or accuracy and precision). The
measure compares the upper and lower specification limits to the average of the
observed process data. When Cp and CpK are equal, this means that the process
is centered at the nominal value of the product specification and the magnitude of
the ratio describes the match of the performance with the specification (values
over 1.0 indicate that there is more than a 95% confidence in meeting the
specified level of performance (see PROCESS CAPABILITY).
A team who membership is composed of participants from several different
functions that have an interest or “stake” in the outcome of a particular activity.
These functional groups may act as “process owners” for an improvement
project that has been assigned to a team through the project chartering process.
The person who receives the output of an activity. This may be an economic
customer (purchasing goods or services), an investment customer (providing
capital for the business), or an internal customer (providing process output to
the next step in the process).
Those characteristics that the customer would like to have delivered as the
output of your process or business activity.
The concept that top priority must be given to working on those things that
satisfy the short and long-term customer needs. All decisions must be made in
full understanding of their impact on external customers. Some organizations also
extend this principle to their internal customers
The time required to complete a cycle or sequence of production operations
from start to finish. The elapsed time from when an item first starts in an activity
or process through the time it is received by the customer of that activity or
process step. This includes the time for set-up of the work, time for transaction
processing, and logistics time associated with shipment and handling in the
process. When cycle time for each operation is equal to or less than takt time
then products can be produced in a single-piece continuous flow.
The process of managing and performing the routine work of an organization as
accomplished by front-line workers to achieve the organization’s basic mission
(see NICHIJO KANRI).
Being the ‘best of the best’ – sometimes translated as “world class” or best
Factual information used as a basis for reasoning, discussion, or calculation; often
refers to quantitative information
The process of gathering raw product or process information about its
performance by making observations, recording measurements, and transferring
these observations into a structured format
Defect An unacceptable variation in a quality characteristic from its desired level of
A unit of product or service that contains at least one defect which causes the
unit not to fulfill a specified requirement.
Deming Cycle See P-D-C-A
A response variable that is predicted by an experiment; e.g., Y is the dependent
or “response” variable when Y= f (X1 … Xn).
Design for Manufacturability. The process of developing a product design that
considers the method in which it will be produced and is optimized to be
assembled efficiently and effectively by workers in a process for which it was
The activity of discovering the cause(s) of deficiencies. The process of studying
symptoms, taking and analyzing data, conducting experiments to test theories and
then establishing the relationships between causes and effects (see CAUSE-
SCREENING, ROOT CAUSE ANALYSIS).
In statistics, the manner in which large numbers of observations tend to group
themselves around some central value with a certain amount of variation on
either side of the central value. Many distributions are defined using a
mathematical relationship that is defined by the measure of central tendency and
variation or “scatter” on either side
Design of Experiments. A designed experiment discovers optimized conditions
when there are two or more independent variables and possibly several
dependent variables, with a sharply reduced number of experimental runs over a
One-Factor-At-a-Time (OFAT) approach to the same problem. The method of
Any loss in production time due to equipment operating capability resulting from
breakdown, maintenance or repair, power failure, operator availability, etc. (see
operational availability and uptime).
Forces that change a situation by moving the outcomes toward the desired
direction or future state of performance
Design-to-Cost. Developing a product design based on an allowed or budgetary
price of the future product, as allocated to the sub- assembly, module, or part
level of the product’s bill of materials
Effect An observable action, result or evidence of a problem.
The act of placing accountability, decision-making authority and responsibility for
the performance outcomes of work at the lowest possible level. The extent to
which a person is empowered depends on personal capabilities and seriousness
of the consequences.
The best performance results obtainable without adding additional resources. In
fact, an organization requires fewer resources to operate at entitlement than it
does at baseline, because it is not performing corrective actions to increase the
performance to this level.
When an individual makes an inadvertent mistake, this mistake is compounded to
become an error when the product of their work is passed on to the next phase
of a process and thus has an impact on the productivity of subsequent steps
inside the organization. If an error is not caught within an organization and it
“escapes” to the customer, then that error becomes a defect
Any process to prevent errors from moving down the production line and being
delivered to customers as defects. When errors are not passed down the line,
then both quality and productivity improve (see baka-yoke and poka-yoke
First Pass Yield. The percentage of production that completes the final quality
test for performance without being scrapped, rerun, reworked, retested or
returned or diverted for off-line repair (also called the Right the First Time Yield
(RFTY) or outgoing quality level).
A structured investigation or test that is conducted under defined conditions to
determine an unknown effect; to illustrate or verify a known law; or test to
establish a logical hypothesis. An experimenter selects and controls specific
factors to study their response on a specific characteristic.
Settings (or levels) of all factors for one run of the planned experiment. The full
set of experimental combinations is known as the treatment combinations of the
The arrangement in which an experiment is to be conducted. It includes the
selection of the type of experiment to be performed as well as the spread in
levels for the factors and the sequence of the combinations used in the
Variation in measured observations of experimental outcomes that made under
identical test conditions that indicate the effectiveness of the experimental
system. This is also called residual error. The amount of variation which cannot
be attributed to the variables included in the experiment. The total amount of
experimental error can be observed in the variation of the center points in a
central composite designed experiment.
Experimental Factor (“X”) that
is managed under an
An independent variable experimental plan to control its changes and determine
the influence that it has on the dependent variable (“Y”).
This is the title given to a person who functions as a coach, teacher, or
moderator to make the work of a group, team or organization easier. In quality
improvement teams, the facilitator focuses a team on their group process, while
the team leader concentrates on the content.
Direct inputs from customers about their satisfaction with the progress or
operation of a process.
The act of eliminating the immediate symptoms of problems by removing
sporadic causes of quality problems and restoring the status quo. This corrective
action process is followed by a long-term analysis to eliminate the root cause of
the problem and execute permanent preventive action so the problem does not
Fishbone Diagram See CAUSE AND EFFECT DIAGRAM.
Fixed Effects Model
Experimental treatments are specifically selected by the researcher. Conclusions
only apply to the factor levels considered in the analysis. Inferences are restricted
to the experimental levels.
A block diagram that illustrates the sequential actions and decisions that
represent the steps of a process. This chart may follow a logical, geographical,
physical or functional means to decompose the process (break it down into
smaller steps or activity increments).
Failure Mode and Effects Analysis. A formal method for both anticipating and
prioritizing possible failure modes of a new or modified design, work procedure
or process step; and implementing preventive or control procedures prior to the
observation of a failure (mistake-proofing). A method that can be used for either
engineering change or a business process change.
Force Field Analysis
An analysis tool that contrasts the positive (helping or driving) and negative
(hindering or restraining) forces that are influencing a desired change. This
method illustrates areas of resistance in an organization as well as areas of
opportunity for the rapid promotion of change
Frequency Distribution The pattern or shape formed by the group of measurements in a distribution.
A team whose membership consists of participants from a single business area or
function (compare this definition with CROSS- FUNCTIONAL TEAM).
The difference between an observed measurement average of a gage and the
master average of the same parts using both precision instruments and a
Gemba[Japanese] The shop floor or workplace where production operations occur.
A planning method used to indicate projected start and completion time for
scheduled activities that result in the accomplishment of an overall project.
The act of following the logical linkage (golden thread) from a problem statement
to its root cause in order to resolve it.
Hanedashi[Japanese] Automatic part ejection.
A method for load leveling of production rate or line balancing to smooth the
flow of production by avoiding batching of different product categories, mixing
production processes or fluctuating volume produced for the same product
Hinshitsu Kanri[Japanese] Quality control management system.
Vertical display of a population sampling distribution that shows the frequency of
occurrence; a formal method of plotting a frequency distribution.
Homogeneity of Variance
The variances of two or more groups are contrasted to test if they are equal (a
test for statistical differences in variation).
Strategic planning and business control system that assigns the resources, people
to complete projects that achieve breakthrough on the focus areas for
improvement and achieve measurable goals for performance gains.
A test of difference between two hypotheses, a null hypothesis and an alternative
hypotheses (see NULL HYPOTHESIS and ALTERNATIVE HYPOTHESIS), where
the comparison is made based on a specified degree of risk (see ALPHA RISK and
BETA RISK) in order to achieve the desired confidence in the finding. The validity
of the test depends on the underlying statistical distribution (see TEST OF
DIFFERENCE), capability of the measurement system, and the size of the sample
that is used for testing (see OFAT).
A controlled variable that is expected to change the results in an experiment as
measured by a dependent variable; a variable whose value is independent of the
value of another variable; independent factor whose value is managed using a
system of experimental controls (the “X” variable when Y= f (X1… Xn).
The act of converting a creative concept into a concrete or tangible product or
output. The creative destruction of the past or the planned abandonment of
familiar ways of working (according to the late Austrian economist Joseph
The processing of intelligence to formulate the underlying meaning of the facts
observed. Insight may be extended to become foresight if future trends may be
projected or predicted based upon observed past behaviors.
Unnaturally large fluctuations in a pattern of natural variation that is not
The understanding that comes from dedicated study of conditions that influence
the business environment of an organization: market, technology, competitors,
etc. Good intelligence provides a sound understanding of factual conditions that
prevail in the world (see also insight).
The tendency of two or more variables to produce an effect in combination
which neither variable would produce if it were acting individually. The effect of
one factor depends on the settings of another factor (e.g., when the effects of a
factor A are not the same at all levels of another factor B). In other words,
interaction exists if two factors have different outcomes as they are combined in
An tool that allows a team to systematically identify, analyze and classify cause
and effect relationships that exist among all critical issues so that key drivers can
A category of numeric data that has equal units of measure but no absolute zero
point, i.e., quality scale or index.
The process of conducting a survey or asking individuals a set of prepared
questions to gather data about a topic
Transferring human intelligence to automated machinery so machines are able to
detect production of a single defective part and immediately stop production and
request help. In Toyota this also includes the responsibility of each operator to
inspect the quality of their own work and when a problem is detected to stop
working until the cause of the defect has been corrected.
Jundate[Japanese] A sequential supply system for production parts replenishment.
Radical improvement of any business activity to eliminate waste by reorganizing
process operations to achieve dantotsu breakthrough results (see HOSHIN
Continuous, incremental improvement – always doing little things to consistently
set and achieve higher work standards of performance.
A signal that authorizes production or movement of a product using a card, sign
board, container, or other physical indication to control the flow of production
material through the process
The intellectual, mental understanding of information and their relationships that
is acquired and retained through both study and experience.
A performance indicator that specifies after-the-fact what occurred in the period
of observation. This type of indicator has explanatory value.
A performance indicator that anticipates future results based on its current
values. This type of indicator has predictive value
The total time a customer must wait from submitting an order to receiving the
ordered item (see order turnaround time).
A systematic approach to identifying and eliminating waste (non- value-added
activities) through continuous improvement by making the production flow
according to the rate of pull by the customer demand. Lean maximizes
production of products to be sold to customers while minimizing operating and
Level A particular setting for a factor.
A process for distributing work in a production line so that tasks and staff are
evenly balanced to coordinate individual work station cycle times to meet the
takt time (see takt time).
Charts used to track the performance without relationship to process capability
of control limits.
Named after MIT Professor John D. C. Little who is considered the father of
queuing theory in operations research – the average number of customers in a
system (over some time interval) (work in process) is equal to their average
arrival rate (throughput), multiplied by their average time in the system (cycle
Lower Control Limit
A horizontal dotted line plotted on a control chart that to show the lower
process limit capability of a process, the calculation will be an approximation of
three standard deviations below the grand average for the performance measure
A comparison of the responses at each level of a factor averaged over all levels of
other factors in the experiment.
A series of activities that are used to plan, direct, control, organize,
communicate, and report the behaviors organization.
A process-level, actionable indicator that directly translates into work activities of
individuals or teams (e.g., throughput rate, work- in-process inventory, job
accident rate, billing inquiry rate, etc.).
A system-level, aggregate indicator of overall business performance (e.g., return-
on-assets, employee satisfaction, customer satisfaction, etc.).
A simple model defining the structure of a process at a high level of logical
abstraction, rather than at a level of detail that is required to conduct the
process work (e.g., SIPOC Map).
A statement that succinctly defines the purpose, role, and ‘reason for being’ of an
organizational unit and specifies the relationship or contribution that this unit has
to the entire structure.
Mixed Effects Model
A designed experiment that contains elements of both the fixed and random
Waste – all (non-value added work) of those elements of production that add no
value to the product or service but only increase its cost.
A structured voting process used to reduce a large number of items, usually
ideas, to a more manageable number for more processing or analysis.
Waste – all (unevenness or variation in work) irregularities that sometimes
happen in a production schedule or in the volume of parts or finished goods.
Waste – all (overburden) work that overloads or creates a burden on the
workers to produce at the point of activity on the shop floor (gemba).
Nagara[Japanese] One-piece production flow.
Nichijo Kanri[Japanese] The
daily management control
system implementing 5S, visual
controls, and standardized work. This system is monitored using fundamental
measures of quality and cycle time to assure balanced flow of production to
reliably meet customer demand.
Nominal Group Technique. A structured idea-generating method that is used to
develop, combine and prioritize a list of individual solutions (or other idea
category) using a voting technique where each of the participants receives an
equal number of votes (number of ideas divided by 3 is a good rule).
Non-value Added Activity
Any activity for which a customer would not willingly pay and has no need. These
activities add no real value to a product or service and are a form of waste (e.g.,
waiting time, transportation and handling time, or repair time) (see value).
A category of data that is unordered where values indicate either membership or
non-membership in a category with no implication of quantity, i.e., assembly area
number one, part numbers, etc.
A unit of production which does not conform to one or more specifications,
standards, and/or requirements.
A condition within a unit which does not conform to some specific specification,
standard, and/or requirement; often referred to as a defect; any given
nonconforming unit can have the potential for more than one nonconformity.
A curve that follows the mathematical definition of a Gaussian frequency
distribution – continuous, symmetrical density function characterized by a bell-
shaped curve, e.g., distribution of sampling averages. The normal distribution is
the basis of statistical concepts used throughout statistical process control as well
as many statistical tests, procedures and techniques. Many observations in nature
follow the normal distribution.
A tentative explanation that indicates that a chance distribution is operating and
labeled as H0to indicate its status as the null hypothesis; stands in contrast to the
alternative hypothesis (H1).
Non-Value-Adding. Activities or tasks that do not contribute to meeting
customer requirements and are candidates for elimination from the work
process without degrading its overall results or performance. These are activities
that the customer is not willing too pay for, given they had a choice.
The opposite of batch production. Instead of building several products and
holding them at the work station before passing them on to the next operation,
the operator passes each product to the next station without interruption of the
production flow and the products are presented one-piece-at-a-time to their
subsequent process (see continuous flow and nagara)
One-Sided Hypothesis Test
A hypothesis test which evaluates the value of a parameter for either the upper
bound or the lower bound (greater than or less than), but not both tails at the
same time (test of equality or inequality).
The reduction in work change over or set-up time so that the task is completed
in a single step (see Single Minute Exchange of Dies).
Operational Availability (Ao)
The percentage of time during which production equipment is available to
operate – also called uptime. It is calculated as machine operating time as divided
by available time (net planned non- working time for training, breaks, vacations,
or holidays) (see uptime and downtime).
Operational Definition A
precise description of a term
(process, product, etc.) that is
decomposed into its logical sub-groups according to clear boundary conditions
for each group with a specified means to measure and evaluate each sub-group
specified within the definition.
Operational Excellence The
state of organizational operation
where work is performed in a
manner that is most efficient and effective and at the lowest total cost (this may
include the external costs borne throughout the life cycle of use for the product
or service delivered by the organization as an output).
Ordered categories (ranking) with no information about distance between each
category, i.e., rank ordering of several measurements of an output parameter
Ordinate The vertical axis of a graph used to plot a “Y” variable.
Order Turnaround Time. The total time from initial placement of a customer
order to delivery of the ordered item in a usable state.
Out of Control
The condition where a process has variations that fluctuate outside the
computed control limits. This condition normally indicates that the process is not
operating as desired or that external factors have been introduced to change the
way the process performs. A process that is in this condition is not stable and
therefore is not predictable
Parameter A constant defining a particular property of the density function of a variable.
Pareto Analysis A technique for
ranking potential problem
contributors by their
relative quantitative contribution to a whole problem and to separate the vital
few potential causes from the trivial many. This method is named after the 18th
century Italian economist Wilfredo Pareto.
A list of topics that have been postponed for discussion at a later time with the
consent of team participants. The reason for delay on discussion about these
topics is that they are not immediately relevant to the discussion, but warrant
dialog at a future time.
A way for structurally decompose a problem, situation, or opportunity according
to the elements that contain a team’s cultural frame of reference and dividing
these into a set of underlying assumptions which the solution must overcome.
Plan-Do-Check-Act or ‘Deming Cycle.’ The continuous improvement cycle that
is alternative named after Dr. W. Edwards Deming or Walter A. Shewhart. In
reality the name was developed by members of the Japanese Society for Quality
Control in the late 1950s as they sought to simplify the idea of an improvement
cycle that was presented by Deming. PDCA is a structured, cyclical (step-by-step
logical process) methodology for developing and implementing actions of any
type: Plan for action by collecting and analyzing data and developing alternatives;
Do, implement the selected alternative on a small scale to pilot the change;
Check, evaluate the results and compare with expected values; Act, by adopting
or abandoning the change, standardize the action, and look for the next
Perturbation A nonrandom disturbance.
A pie chart visually shows the proportional relationships of logical sub-categories
within a large data set.
The pace and flow of production – the amount of takt time it takes to produce a
single, shippable unit of production (see takt time).
Poka Yoke [Japanese]
A Japanese term translated as mistake-proofing, fool-proofing and safeguarding.
This method applies a discipline of simple, low-cost methods to either prevent
mistakes or to detect them immediately and request a corrective action before
the mistake can be repeated and problems escape to customers. Mistake-
proofing techniques are used to avoid, eliminate, and/or prevent errors at the
point of process design. The method uses devices and detection methods to
identify inadvertent mistakes and prevent them from occurring. Mistakes are
activities that are wrong at the point of occurrence (within operation activity);
errors are mistakes that have been passed on to the next workstation and
reduce its productivity; and defects are errors that have failed detection in the
process and are delivered to the customer (see ERROR-PROOFING and BAKA
The process for cascading shared goals into a common set of objectives and
measurements that are aligned across functional boundaries throughout the
The totality of all units or members in a group of similar items from which a
sample is drawn. This is also referred to as the universe or domain of a
Power of the Test
The probability of rejecting the null hypothesis when it is false and accepting the
alternate hypothesis when it is true. This is calculated as 1 – β (see BETA RISK
and CONSUMER’S RISK).
The relative spread among the elements of the data sample which is measured as
variation (e.g., range, variance, or standard deviation).
The practice of eliminating unwanted variation of priori (before the fact), e.g.,
predicting a future condition from a control chart and when applying corrective
action before the predicted event transpires.
A matrix that illustrates the performance of various decision options (left
column) against a set of weighted criteria for the decision (top row). Summary
calculations for each of the options are presented in the right-hand column.
The chance of something happening; the percent or number of occurrences over
a large number of trials. Probability is usually indicated as a number from 0 (no
chance of an event occurring) to 1.0 (absolute certainty of an event occurring).
The range of values between these limits is described as a probability distribution
(e.g., uniform, normal, or Poisson distribution).
Probability of an Event The number of successful events divided by the total numbers of trials.
A deviation from a specified standard or desired state. A gap in the level of
performance between the current state of operation of a process and its desired
state (or target value – whether the target is set by plan, budget, or engineering
calculation) for that measure.
A process of solving problems; the isolation and control of those conditions that
generate or facilitate the creation of undesirable symptoms. A problem is
considered solved when the root cause of the problem formation has been
A succinct statement of a problem that describes what the problem is, where it
occurs, when it occurs, some potential reasons why it occurs, how the process
operates at the point of this problem, and who is involved in the problem or in a
A particular method of performing work or accomplishing a task, generally
involving a number of activities, steps or operations. A work process is
characterized by its inputs; control mechanisms that direct its performance (e.g.,
give signals to start or stop and perform its critical functions); resources that are
applied to accomplish the specified transformation that occurs in the sequence of
activities or steps; and outputs that are delivered. Inputs are said to come from
suppliers of the process and outputs are delivered to its customers (see also
The central tendency of a given process characteristic across a given amount of
time or a specific point in time.
A ratio of the “voice of the process” to the “voice of the customer” that
measures the process variability relative to the customer’s specification and the
nominal or target value for performance. These ratios relate customer
requirements to actual process performance (see also Cp and Cpk).
Process Control See STATISTICAL PROCESS CONTROL
Process Control Chart
Graphs upon which plotted data observations against the specific statistical
process control limits to record the process behavior as a means for improving
or controlling the performance of the activity.
A block diagram that illustrates the flow of a particular work or business process
and illustrates the boundaries of the process, it’s major inputs and outcomes
delivered. It may also be decomposed from the process level to a activity level
and then further broken down into the task level
The range of values which a given process characteristic displays; this particular
term most often applies to the range but may also encompass the variance. The
spread may be based on a set of data collected at a specific point in time or may
reflect the variability across a given amount of time.
Also called Management by Walking (Wandering) Around (MBWA). The act of
walking a process from end-to-end as if it was a fresh experience – taking a naïve
perspective – looking at it with the eyes of a first-time tourist. This process is
very distinct from a software structured walkthrough which is used for analysis
and assessment of software quality. In the case of the later the “touring” has a
plan that is followed rigorously, while in the former case MBWA takes a more
casual agenda for its examination of activities.
Probability of rejecting a lot when, in fact, the lot should have been accepted (see
Production Status Board
An electronic status board that displays production information such as hourly
targets and units produced. Information about problems and abnormal conditions
relating to continuous flow are recorded for visual observation by the entire
A measure of process outputs given the rate of production inputs (or result
divided by effort). Only product that meets specification should be included in
the calculation as output as product that does not conform will require additional
work which degrades the level of productivity.
A system of production scheduling whereby the demand for production is set by
the withdrawal of a finished item from inventory by a customer order, thereby
setting a signal to replenish this item in inventory by producing an additional unit
(this produces the trigger signal for a one-piece production flow).
A temporary activity undertaken to create a unique task that requires
coordination and planned action.
Quick Changeover. The ability to change either the product or model rapidly on
a production line – switching tooling and fixtures rapidly so that multiple
configurations or products may be produced using the same resources (see
Single Minute Exchange of Dies and One-Touch Changeover).
The ability of a process or product to consistently meet or exceed the
expectations of its customer. The entitlement of value that a process should
expect if it is operating as designed.
Sometimes abbreviated as QA. This quality management activity involves
activities in the business, systems and technical audit areas. A set of
predetermined, systematic actions that are required to assure that a product or
service satisfies or is able to meet its quality requirements.
Sometimes abbreviated as QC. This quality management activity is a regulatory
process by which actual performance is measured, compared with standards, and
act upon the differences. This is used to differentiate between inspection and test
activities and other quality-related tasks.
Sometimes abbreviated as QE. This quality management activity provides the
means to design quality into products, services, and processes by applying
measurement systems analysis, statistical analysis, process control, and standard
Sometimes abbreviated as QI. This quality management activity is a planned,
systematic improvement through either small, incremental improvement projects
(kaizen) or by major, breakthrough projects (hoshin) to move quality indicators
toward the level of their process entitlement
A measure or metric that indicates the desired performance of a product or
service from the perspective of a customer. A specification may be set for the
quality indicator to assure that a nominal performance output level is established
Sometimes abbreviated as QM or, as it is frequently called Total Quality
Management (TQM). This process provides an organization structure, operating
philosophy and systematic methodology for the delivery of quality engineering,
quality control, quality assurance, and quality improvement through a formalized
quality system. QM is sometimes divided into “BIG Q” and “LITTLE Q” as
described by Joseph M. Juran where BIG Q refers to the overall system of quality
management for the total organization and LITTLE Q refers only to the
processes for assuring quality at the production process or point of service
An expectation for the performance outcome of a good or service that is
delivered to a customer. Such an expectation may be either a deliberate promise
(e.g., warranty or guarantee or specification), or it may be an implicit promise
(e.g., ‘best’ or ‘world class’). Often this promise is supported by a “service level
agreement” (SLA) that specifies the limits of performance for the promise.
The organizational structure, responsibilities, procedures, processes and
resources for managing product and process quality across an organization.
The amount of time that a product spends in line waiting for the next step in the
operation to be performed
Principles and statistics related to the performance and productivity of service
lines (e.g., waiting for service, service time, etc.). The performance of these
functions is generally characterized using the Poisson distribution which is
characterized by the mass of the data observations close to the “zero time”
performance for waiting or service and a minority of incidents creating a “long
tail” that shifts the average performance (mean) further toward the tail than the
location of the median (50thpercentile of the data).
Plot of the difference between the highest and lowest in a sample. Range control
Responsible – Authority – Collaborate – Inform: labels for the set of relationships
that define decision rights in a process.
Also called a spider chart, polar chart or a Daetz diagram (after Douglas Daetz,
the originator of this technique). The diagram has an origin from which linear
vectors displaying measurements of process or product parameters emanate.
This is a simple way to illustrate multivariate performance indicators at a point in
time and is quite useful for graphing a system of performance factors that are
influencing the output of a process (e.g., quality, cost, time, etc. all driving
Selecting a sample so each item in the population has an equal chance of being
selected; lack of predictability; without a systematic pattern.
A source of variation which is random and affects all of the data within a process;
a change in the source (“trivial many” variables) will not produce a highly
predictable change in the response (dependent variable), e.g., a correlation does
not exist; any individual source of variation results in a small amount of variation
in the response; cannot be economically eliminated from a process; an inherent
natural source of variation. This variation is the sum of many unidentified factors
that contribute to the variation routinely observed in a process, where each
cause is of small relative importance (see COMMON CAUSE VARIATION).
Random Effects Model
Experimental treatments are a random sample from a larger population of
treatments. Conclusions can be extended to the population. Interferences are
not restricted to the experimental levels (see also FIXED EFFECTS MODEL and
MIXED EFFECTS MODEL).
A condition in which any individual event in a set of events has the same
mathematical probability of occurrence as all other events within the specified
set, i.e., individual events are not predictable even though they may collectively
belong to definable distribution.
One or more samples randomly selected from a universe (population) where all
members of the universe have an equal opportunity to be selected and there is
no relationship between the choice for selecting one sample and the next sample
(this means that there is independence between selections of the observations
that are sampled).
Random Variable A variable which can assume any value of a set of possible values.
Random Variation Variations in
data that result from causes that
cannot be pinpointed
or controlled (also called noise, common cause variation and natural variation)
(see RANDOM CAUSE VARIATION).
The difference between the highest and lowest values in a set of numbers which
represent a rational subgroup
Values assigned to items in a sample to determine their relative occurrence in a
Numeric scale which has an absolute zero point and equal units of measure
through, i.e., measurements of an output parameter, i.e., amps.
A logical grouping of objects or events th event-to-event variations, e.g., the
objects or events are grouped to create homogenous groups free of assignable
or special causes. By virtue of the minimum within group variability, any change in
the central tendency or variance of the universe will be reflected in the
“subgroup-to-subgroup” variability.displays only random
The phase in the Six Sigma analysis process where the top level managers are
engaged to determine the strategic issues which the business is facing as a way to
prioritize selection of analysis projects.
Using one or more independent variables to predict changes in a dependent
variable. An equation is formulated during a regression analysis to fit observations
of activity (X’s) to an outcome measure or response. This prediction equality can
be evaluated to determine the goodness of fit and statistical significance.
Reject Region The region of values for which the alternate hypothesis is accepted.
The delivery of sustained performance over time (e.g., software or hardware
reliability). Also, the ability to repeat an experiment and obtain similar results.
A strategy for improving experimental results by taking repeated samples during
a single run of an experiment to determine short- term variation, measurement
error, and noise.
A strategy to improve the quality of experimental results by repeating all of the
experimental combinations that have been tested in an experiment; observations
made under identical test conditions. This strategy observes an estimate of the
long-term variation that occurs between the different set-up conditions of the
A sample which accurately reflects the set of conditions that are the critical
characteristics of a rational sub-group.
A category of non-value added work which cannot be eliminated from a
production process because the work output is required by a third party for
legal, safety, environmental, or any other non- negotiable business reason that
affects good governance of the organization.
A minimum performance standard that has been established for the outcome
desired by the customer of a product, service or process.
Critical and exhaustive investigation or experimentation having with the objective
to discover fact that could revise accepted conclusions about a theory or
Residual Error See EXPERIMENTAL ERROR.
The amount of variation that remains unexplained once the sum of squares for
the factors included in the regression model have been subtracted from the total
sum of squares from the sampled data.
Response . Outcome variable being studied (see DEPENDENT VARIABLE)
A time-sequenced program to introduce future new products that indicates what
will be developed, when it is targeted for delivery as well as any sequential
requirements when there is a dependency of one technology on prior
technologies to achieve its successful application.
The conditions or state in which a response parameter exhibits hermeticity to
external causes of a nonrandom nature (noise); i.e., impervious to perturbing
influence. Able to accept variation in the inputs without causing variation in the
This experimental design technique was devised by Genichi Taguchi and is often
called Taguchi Analysis. The method seeks to design a product so it functionality
varies minimally despite the influence of disturbing factors; a design that is able to
accept variation in the inputs without changing the output variability.
Root Cause Analysis See CAUSAL SCREENING
Rolled Throughput Yield. The product of the first pass yield of the individual
steps in a continuous flow process. RTY is the probability of producing the final
production unit right the first time without rework, repair or retesting.
A form of line graph that plots individual data observations of a specific variable
(quantified) as a function of a second variable (usually fixed time intervals). A dot
is placed on the chart to indicate the performance level for the variable at that
point in time. The successive dots are connected in accordance with their order
A selected sub-group of a population used to gain or predict information about
the population; one or more observations drawn from a larger collection of
observations or universe (population).
The process of taking a small part or quantity (sample) that represents the larger
collection for purpose of analysis.
A graphical method used to study correlation, e.g., the relationship between two
variables that indicates their strength of association.
The first of the five S’s used to create a workplace that is suitable for the visual
control of a lean production system – sort, structure, screen or sift – to put in
order the work environment by separating necessary tools, parts and instructions
from those that are not necessary and removing the unnecessary ones from the
production environment. The activity simplifies the organization of the
To set in order or systematize – to arrange neatly and identify parts and tools for
ease of use. By organizing essential materials operators are able to find what is
needed when it is needed because everything is in its correct location (see
To sanitize, sweep or shine – to conduct a cleanup campaign. A dirty
environment is often the source of problems in reliability, safety or quality.
To standardize the work process – to conduct the first three steps of the 5S
process (seiri, seiton and seiso) as part of the daily routine in order to maintain
the orderliness of the workplace. Standard work is documented using visual
controls so that operators have clear communication of the daily routine and are
able to follow the policy and procedures unambiguously.
A teacher who has a profound mastery of a body of knowledge (lean production
or Six Sigma).
The time for conversion or changeover of a production operation. It includes
both external setup (work done off the line while production continues) and
internal setup (work that requires stopping the line and loss of productivity to
complete the changeover).
The mission, vision, common values, strategic direction and guiding principles that
define a company’s purpose and also provide guidance for strategic choice and
routine behavior of the organization’s people.
A visual management method which indicates the proper placement of a tool by
its painted outline in order to identify its storage location and assure fast sighting
of any misplaced tools.
Shewhart Cycle See P-D-C-A.
To sustain or maintain self-discipline – to form a habit of using the four S’s of the
5S system to collectively assure an orderly, clean and efficient working
Continuously creating personnel capability improvement (e.g., flexible workforce)
that possesses the required skills, training and knowledge to enhance the
performance capability of a production cell.
Sigma (σ) See STANDARD DEVIATION.
The development of a model (either physical or compute-based) of a production
environment in order to examine alternative ways to conduct the work and
eliminate non-value-adding activities.
Supplier Inputs to the Process with Outputs to the Customer. This is a high-
order map of a process that allows managers to talk about the activities
performed but not sufficient to describe actual work activity. The map
thoroughly describes input and output boundaries of the process but only
provides a “block diagram” of activities in the process.
A term devised at Motorola to express a process capability that produces only
0.0002 defects per million opportunities when the process is centered (Cp) and
3.4 defects per million opportunities when the process performance shifts by 1.5
sigma in process performance (Cpk) (see PROCESS CAPABILITY, Cp, Cpk).
Six Sigma Analysis Process
Projects conducted in a “Six Sigma” format follow a highly structured logical
analysis process in order to accomplish their objective which is a specialized
version of the PDCA cycle that uses the labels: Define-Measure-Analyze-
Improve-Control (see PDCA).
This phenomena occurs when the tail of a distribution has become elongated to
the left or the right of its area of central tendency. The long tail in a work
process can occur naturally in queuing processes (see QUEUEING THEORY).
Single Minute Exchange of Dies. A process developed by Toyota engineering
consultant Shigeo Shingo to effect rapid changeover of production equipment in
less than 10 minutes. The objective of SMED is to achieve such a rapid
changeover of tools so that it is virtually instantaneous and does not interrupt
the continuous flow of the production operations.
Statistical Process Control. A statistical methodology developed by Walter E.
Shewhart that evaluates process performance data to determine if new
observations come from the same population that produced the previous results.
A control chart is plots the data history and the average performance of a
process parameter of interest. The upper and lower control limits are calculated
to compare new process data and also a series of probability-based pattern
recognition tests are used to determine if performance of the process is
operating in a state of statistical control (e.g., no unusual events that are outside
the range of reasonable probability). When ‘out of control’ events are detected, a
‘special cause’ of variation is identified that must be investigated in order to
determine what changed from the ‘common cause’ system of natural process
variation. Investigation of a special cause of variation may lead to the root cause
of a process performance problem.
A process that is free of assignable causes, e.g., the process is said to be
operating in a state of statistical control.
A person who has an interest in an organization: e.g., shareholder, customer,
employee, or owner.
A statistical index of variability, dispersion, or spread of values within a statistical
distribution, designated by “s” for a sample and “σ” for a population (see
A precise description of the ‘one best way’ of working that specifies the cycle
time, takt time, and minimum quantity of parts that should always be available for
use during or between processes (buffer stock). All work is organized around the
human activity to assure that human motion is performed in an efficient sequence
Descriptive statistics involves the tabulation, depiction and description of a
collection of data (data from a sample used to make informed judgments about
the entire population). Inferential statistics is a formal body of techniques that is
used to infer the properties of a large collection of data from the inspection of a
sample from the collection
A quantitative condition that describes a process that is free of assignable or
special causes of variation, e.g., variation in the central tendency and variance.
Such a condition is most often evidenced on a control chart, i.e., a control chart
that displays an absence of nonrandom variation.
A condition in which the environment, process performance requirements, and
customer expectations are in harmony. It does not mean that the system is
performing satisfactorily from any one of these perspectives.
Techniques used to graphically summarize the methodology used and progress of
a project. It is specifically designed to display information that defines and
identifies the approach taken in a continuous improvement type of project.
The creation of a grouped data set according to similar type characteristics or
the separation of data into subsets that share similar characteristics (see
Synonym for lean – a process for eliminating waste and cycle time from the
production environment in order to assure the continuous flow of production.
Goals that are exceptionally difficult to reach and may not be obtainable unless an
organization changes its way of working to achieve this performance.
Quantitative stretch goals may be set by calculating the “ideal” performance of a
process (e.g., the consistent achievement of the Cp process capability level) and
determining the proportion of that value that should be accomplished within a
fixed period of time by applying a designated implementation plan to achieve the
required process improvement.
Sub-Group See RATIONAL SUB-GROUP.
Those business processes that deliver services primarily to internal customers
(e.g., human resources, finance, quality, facilities management, security,
information systems, etc.).
An observable phenomenon that often accompanies a defect. Sometimes, but not
always, the same word is used both as a defect description and as a symptom
description (e.g., as when the symptom is also a cause). Defects tend to display
A group of interdependent processes and people that share in the performance
of a common mission and work together to achieve it.
A pattern of variation in data which displays predictable tendencies such as shifts,
trends, oscillation, or clustering.
The rate of customer demand which is calculated by dividing the time that is
available for production by the quantity of products ordered by customers during
that time. Takt is a German work which describes a beat as in a heartbeat or the
beat of a metronome that defines the tempo of music.
The process of adjusting a stable process to compensate for a single undesirable
result; this results in decreased performance of the total system performance.
A team that is focused on the performance of a particular task or activity and
once completed is disbanded (also called a Tiger Team or Project Team).
Total Cycle Time. The total time from customer need identification to delivery of
the product; the time from new product design concept to cost effective
production; the time from identification of a new business opportunity to routine
or stable operation.
A group of people organized to work together in order to approach a common
task or shared mission.
The individual who takes responsibility to move the team toward their common
mission and focuses on the content and project management of the work to be
A participant on a team who contributes their unique skill, knowledge, or
capability toward achieving a shared mission or accomplishing a common task.
The cooperative or collaborative effort by members of a team to achieve their
An employee suggestion system used to solicit, analyze and implement ideas for
continuous improvement from front-line workers.
Test of Significance
A procedure to determine whether a quantity subjected to random variation
differs from a postulated value by an amount greater than that due to random
A plausible or scientifically acceptable general principle offered to explain
Theory “O” Decisions
Theory “X” type management decisions that are based on choices formed solely
by opinions of senior managers, not based on data analysis (this refinement to
Theory X was made by management consultant Gregory H. Watson).
Theory “X” Decisions
Decisions that are “dictated” by the management without the input, feedback or
challenge by members of the organization (theory X and Theory Y were
proposed by psychologist Douglas McGregor).
Theory “Y” Decisions
Decisions that are made with participation of the whole group where each has an
opportunity to make their personal opinion heard (consensus management).
Theory “Z” Decisions
Decisions that blend the limits of Theory “X” and “Y” to balance the two limits
of concern (Theory Z was proposed by management consultant William Ouchi).
The rate at which a production system generates cash through sales or the
conversion rate of inventory into shipped product.
Total Quality Management. A systematic approach for managing a business to
achieve customer satisfaction and business results that involves all managers and
employees and uses quantitative methods to analyze and continuously improve
the performance of an organization’s processes (see QUALITY MANAGEMENT).
The process of continuously monitoring a performance measure in order to
determine how well a system continues to operate.
A graphical diagram that begins with a high-order concept, goal or activity and
breaks it down into increasing levels of detail which bear a logical relationship to
the top level.
The use of a run chart to study observed data for a process performance
measure over a period of time in order to see trends or patterns in its real-time
A pilot test or demonstration of a potential problem solution in order to assess
how well the solution resolves the conflict or issue and determine if it has any
Theory of Constraints. Developed by management consultant Elihu Goldratt, this
theory holds that resource flow is constrained at bottlenecks which should be
managed to improve throughput (salable output) while decreasing both inventory
(non-salable output) and operating expense.
Total Productive Maintenance. A process that smoothes the flow of material
through the manufacturing process by continuously improving the production
equipment efficiency and reliability through the use of reliability prediction,
planned maintenance, and autonomous operator responsibility for equipment
upkeep in a systematic process to reduce or eliminate equipment degradation or
breakdown (equipment operation effectiveness, phased maintenance programs,
machine operator training, and autonomous work groups). This system focuses
on preventative behaviors and is tightly linked to the 5S process for
A statistical hypothesis test where the values of the parameter that is evaluated
are designated for both the upper and lower bound or two tails so that an
assessment is based on equality or inequality of the null hypothesis (see
Type I Error See ALPHA RISK.
Type II Error See BETA RISK.
Any pattern in which a significant number of the observations do not group
themselves randomly around a center line; when the pattern is unnatural, it
means that an outside disturbance is present and affects the process. When an
unnatural pattern exists in the residuals of an ANOVA or regression analysis, this
is an indicator of the presence of a coherent signal (unknown X) that is not
included in the analysis model.
Upper Control Limit
A horizontal line on a control chart which represents the upper limits of the
inherent process capability (it is located approximately three standard deviations
above the center line).
The time that production equipment is available for operation – the total time it
is available minus downtime (see operational availability and downtime).
The “correctness” of an experimental design to determine the effect of various
A judgment of utility by a customer – either an item is worth what they paid for
it or it is useful to get their job done at a cost that is tolerable. Judgments of the
value of a product are subjective and typically are based on a comparison with
alternative goods or services that could become a substitute.
Activities that transform inputs into customer usable output where the customer
may be either an external consumer or an internal associate who is part of the
flow sequence that delivers value to the ultimate consumer.
The fundamental beliefs that define an organization’s way of working, behavior
and decision making philosophy. The stated values may or may not match the
actual values that are observed in the daily behavior of managers or workers.
All activities, both value-adding and non-value adding, that transform a raw
material into a finished product that is ready for shipment to a customer. A value
stream may be described from order to delivery (or installation), or it may be
described from customer requirements through design to product launch.
A measureable factor that may take on different values (see EXPERIMENTAL
Quantitative information where measurement using a variable scale is possible;
numerical measurements made at the interval or ratio level; e.g., ohms, voltage,
diameter; subdivisions of the measurement scale are conceptually meaningful, e.g.,
Any quantifiable difference between individual measurements, such differences
can be classified as being due to common causes (random) or special causes
Procedures, techniques, and methods used to isolate one type of variation from
another (for example, separating product variation from test variation or
different sources of variation (e.g., temporal, cyclical, and positional).
Value-Added Time. The increase in value that is contributed by the performance
of a process transaction. The difference between the value of the input and the
value of the output of a process where the value adds worth according to the
A definition or description of how we want to be viewed by our organization’s
stakeholders at some point of time in the future. It defines what kind of company
(or other business unit) we have chosen to become as well as how well we
should perform; it can also have both descriptive and numeric objectives.
Any devices that allow workers to quickly manage the routine processes of
production. These devices increase operator ownership for their work, clarify
actions that are required, inform them of critical production information or
indicate the standards of work performance. Visual control devices include:
andon lights, painted floors, photo boards (e.g., for quality inspection
requirements, recognition of employee achievements or specification of work
standards), production status boards, shadow boxes, and kanban cards.
Value Stream Map. A graphical representation or process map of the value
stream of a production line.
The time that equipment, people or material is idle and not involved in an activity
Harmony within the workplace – a state achieved when all elements are in
balance and synchronized.
Any activity that consumes resources and produces no value for the product or
service that the ultimate customer desires (see muda).
Work in Process (WIP)
Production assemblies waiting to be processed or material that is in queue and
idle. That part of the material inventory that is found between raw material and
finished goods in the production process.
Weighted Criteria Ranking
A way to prioritize a list of issues, ideas or attributes using a system of weighted
criteria to judge their relative value.
An organization that has achieved exceptional standards of business performance
and is continuously improving its ability to meet customer demands. An
organization that would be ranked in the top one percentile of peer organizations
A group decision process that is conducted in a time-constrained workshop. A
workout requires a cross-functional team to meet and develop a defined position
that is based on solid data analysis and recommends a course of action. The team
of managers listens to the presentation, challenges the team on assumptions, data
analysis, and logic, the then must make a firm decision: yes, no, or set a date for
the decision to be made with requirements for additional data to drive a
Xbar & R Charts
A control chart that is a representation of process capability over time; displays
variability in the process average and range across time.
A cumulative measurement of key production indicators. The word has two
roots “yama” or mountain and “zumi” or building up – so the word literally
means “building-up mountains.” The measure is the total amount of time (in
minutes or seconds) for all activity required to complete a finished product.
Typically, this time falls into two categories: standard time tasks and muda. The
timeline on a Value Stream Map is a logical equivalent of a Yamazumi chart.
Percentage of production output that is in conformance with the specification.
This measure may be calculated in different ways: Total Yield (total output
divided by total input); First Pass Yield (the percentage of product that goes
through the operation without any rework); or Rolled Throughput Yield (the
probability that a product will be produced right the first time).
A long-range value or concept. It implies the end-state of a never- ending
improvement process and is practically seen as the achievement of six sigma
quality performance. This philosophy was first proposed by management
consultant Philip B. Crosby.
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