Flow Manufacturing Glossary
Definitions
- ACQUISITION COST
The costs associated with procuring material from a supplier. This additional cost is typically applied as a percentage of the actual material cost from the supplier. Elements of the acquisition cost include the procurement, cost to carry, quality inspection, and freight costs.
- AVAILABLE TO PROMISE (ATP)
The quantity of a product that is available to promise to new customer orders. ATP includes on-hand inventory plus any additional availability when total demand is greater than actual orders.
- BACKFLUSH
The DFT manufacturing method of relieving RIP inventory of a product's Bill of Material quantities when the product is completed. This computer transaction is performed at the end of the production process when the completed product is moved to finished goods. The backflush transaction can also be executed at an in-process deduct point or used to relieve consigned inventory from a purchase order.
- BILL OF MATERIAL (B.O.M.)
Complete list of material used to manufacture a product. Often referred to as the product recipe in the process industry. Hierarchical B.O.M.’s are used in scheduled manufacturing and “flat”, B.O.M.’s are utilized in Flow manufacturing.
- BOTTLENECK
This is a process or machine in production where the capacity is less than the current demand. In DFT this is addressed at the time of balancing prior to line design. Reducing internal set-up time, eliminating non-valued steps in the sequence of events, additional work hours or resources are some of the techniques used to eliminate the issue prior to line design.
- CAPACITY
Targeted output volume of products used in line design. Management defined volume to be achieved by the DFT line. Usually expressed in terms of units per day for discrete products. Reference as Dc in line design and Demand Based Planning.
- CELL
Grouping of resources (people and/or machines) in a logical and sequential order to enable a part or assembly to flow from machine to machine or process to process. With a quality objective to reduce the potential exposure from a scheduled lot to a single unit or piece. From a productivity improvement standpoint, the cell allows a person to easily move and run multiple machines in the cell.
- CHAKU-CHARU
Japanese word for load-load. Associated to single piece flow where an operator will remove a part from one machine and load it into another machine.
- CONSTRAINT
Limiting process or machine that restricts the achievement of a higher output or volume.
- COST OF GOODS SOLD (COGS)
Accumulated costs to produce a finished product. Consisting of Material, Labor and Overhead cost.
- DAILY RATE
The rolling daily production plan. This rate is determined each day based upon the total demand for completed products. The daily rate of a mixed-model flow line is the sum of the volumes for each of the products to be completed on a specific day. The daily rate is adjusted each day in the direction of actual demand.
- DEMAND AT CAPACITY
The volume that can be achieved when a line is running at capacity. This is the targeted volume for a flow line design. Capacity is established by management and this maximum design volume rarely changes. DFT lines can run this volume or lower, based upon the daily total demand.
- DEMAND BASED MANAGEMENT (DBM)
Planning methodology to drive production in the direction of demand and to forecast material requirement to the supply chain. DBM utilizes flex time fences to smooth out a demand pattern and to create a cushion of raw material requirements from the supply chain. This methodology separates the production plan from the supply chain requirements and was created and patented by John Costanza. This allows DFT production to change volume and mix, within a range, without impacting the raw material plan from the supply chain.
- DEMAND FLOW IN THE OFFICE (DFO)
Application of applying the DFT techniques to a non-production environment such as an office, warehouse, distribution center, hospital, financial institute or supermarket. Always starts with the P-Sync and the Sequence of Events to define work and quality.
- DEMAND TIME FENCE
The future planning time fence where total demand is independent of forecast and must be driven by customer demand. Total demand cannot be changed within this time fence.
- DEPENDANT ACTIONS
Actions that are associated and directly tied to another activity.
- DUAL CARD KANBAN
Kanban pull technique that separates what is consumed from the replenishment process. Uses a "move" and "produce" Kanban communication method. Typically used to control production in machine cells with set-ups where the replenishment time is greater than the consuming process. Fabricated parts are still pulled through the cell but in a quantity greater than the consuming process. Also used to control the replenishment of finished goods in repeating consumer products.
- ENTERPRISE REQUIREMENTS PLANNING (ERP)
An expansion of the Material Requirements Planning (MRP/II) manufacturing computer system to include order management, finance, CAD (Computer Aided Design), distribution and shop floor control. Designed to be schedule- and track production- and work order-based. Material requirements for the supply chain are dependently tied to the planned production quantity.
- EXTERNAL SET-UP
Machine set-up time that can be performed while a machine is currently running. Does not impact the machine capacity or the effective hours that the machine is available.
- FEEDER PROCESS
Process that is dependently controlled by a consuming operation or process(es). Feeder processes are identified on the Product Synchronization and attached to their consuming process(es). (See Product Synchronization)
- FLOW RATE
Volume of products to be produced per hour. Directly associated to today’s daily rate, it can change every day along with the daily rate. Flow rate is determined by taking the daily rate and dividing it by the result of the effective work hours per shift, multiplied by the number of shifts in a day.
- FORECAST CONSUMPTION
Planning technique used to establish a production plan. Typically starts with a sales forecast which is consumed by actual customer orders, to eventually create a production plan. Production plans are tied by ERP systems to the requirements for raw material from the supply chain.
- FIELD REPLACEABLE UNIT (FRU)
Field Replaceable Units are spare parts for previously manufactured products. The FRU typically consists of replacement parts, field instructions, packaging and any additional costs for creating the FRU. They are independent products that are forecast, planned and produced. Their volume should be considered in the volume for line design.
- FURNITURE REARRANGEMENT PROJECT
The result of relaying out a production line or plant without first designing the processes. It has a perception of a Flow process but there is little or no data to support the design. As an example, the P-Sync may be a factory layout and the Sequence of Events is a routing that is used for workcenter scheduling. The foundation is still batch/scheduling, the same as before the rearrangement. Cost systems are still labor based and they track time and pieces by workcenters. They can have a dangerous impact on product quality with no positive impact in the bottom line.
- HEIJUNKA
Japanese term associated with constant volume, or fixed volume production. Volume is fixed regardless of actual customer demand. In English, it is translated to filling up warehouses.
- HOMOGENEOUS OVERHEAD
Financial pool of fixed or variable overhead costs that are applied to similar or general products. The pools are applied to the production process of converting raw material into a finished product. Homogeneous overhead cost pools are typically applicable to all products.
- INDEPENDENT PROCESS
An independent process that feeds multiple lines or machines. Unlike a feeder line, they are not attached to a consuming process. In line design, their Takt time target is determined by the total volume required to support multiple consuming processes.
- IN-PROCESS KANBAN (IPK)
In-process inventory that is required to support imbalances between operations. If the operations are balanced, the IPK is mathematically “zero”, and not necessary. An in-process Kanban never has a "part number" identity and is simply identified by the letter "X" painted on a card, table or the floor.
- INTERMEDIATE BACKFLUSH
Inventory transaction that may be performed to relieve in-process inventory without completing the final product. Optional computer transaction that relives the RIP inventory that was consumed up to a physical point in the production process. The relieve inventory is considered to be in-process inventory. This in-process inventory will later be relieved by the end of the line backflush transaction. Intermediate backflush points can be used as a physical point for scrap transactions or defined by finance for in-process inventory audit points.
- INTERMEDIATE DEDUCT ID
This is an identity of a physical location for an intermediate backflush. The intermediate backflush transaction relieves the inventory consumed up to this point in the flow process.
- INVENTORY CARRYING COSTS
The actual costs associated with maintaining inventory. These costs apply to all inventory, i.e. raw, RIP and finished goods. Depending on the length of the product lifecycle and the technology used in the product, the carrying costs typically range between 20 and 50 percent of the value of the inventory. The higher the technology in the product, the higher the carrying cost. Consists of the cost of capital, cost of inventory facilities, operating costs, excess and obsolescence, scrap, taxes and lost opportunity costs.
- INVENTORY TURNS
Financial calculation for determining the efficiency of the current business to convert raw material into cash. Calculated by dividing the on-hand total inventory into the annual, Material Cost of Goods Sold (MCOGS). Competitive companies are in the upper teens and beyond. Single digits results are expensive manufacturing.
- JUST-IN-TIME (J-I-T)
Just-In-Time inventory is a term coined by observers of the flow and pull material process. Early observers attributed it to the Japanese culture or “secrets” of their success. Simply a technique of the Kanban pull process within DFT. Western observers used this as an excuse to push their inventory back onto their supply chain. The very nature of the pull techniques is to pull additional material as the current inventory is consumed, therefore created the uninformed perception of Just-In-Time inventory.
- KAIZEN
Japanese term for unending, gradual improvement for achieving even higher standards. In DFT it is used by the Process Perfection team to continuously improve the Flow process by eliminating the non-value-added steps in the sequence of events and causes of linearity deviations.
- KANBAN
The Japanese word for a communication signal or card used in the demand-pull techniques. It is a physical or electronic signal used to pull material into the production process. As a minimum, it identifies the part number, description, point of consumption, point of resupply and the quantity associated to the replenishment.
- LABOR HOURS
The required time for a person to complete a production step.
- LINEARITY
Monitored at the completion of the product, it associates the planned versus actual production. Management tool used in identifying the efficiency of the production flow process. Used by the Process Perfection Teams to achieve higher and higher performance.
- MACHINE CELL
Grouping of resources (people and/or machines) in a logical and sequential order to enable a part or assembly to flow from machine to machine or process to process. With a quality objective to reduce the potential exposure from a scheduled lot to a single unit or piece. From a productivity improvement standpoint, the cell allows a person to easily move and run multiple machines in the cell.
- MACHINE TIME
The required time for a machine to complete the manufacturing steps in the sequence of events. May be classified as set-up, move, required or value-added time.
- MIXED-MODEL DEMAND FLOW LINE
Mixed-Model flow line is designed to produce families of similar products. These lines have the ability to go from product to product without changing line design.
- MIXED-MODEL SEQUENCING
Sequencing is the order of products to be produced within a particular day. Sequencing of products helps to smooth out imbalances between products in a mixed-model line, the sequence order is determined at line design.
- MOVE TIME
Time associated to moving work from the operation where it was completed to the next consuming operation. Can be performed by a machine or a person and it is never value added. Indication of work that should be eliminated, if possible, during line design.
- MRP
Material Requirements Planning. The original version of a computerized system used to schedule product. Then, based upon that build schedule it explodes the product B.O.M. to establish requirements for raw material to support the scheduled production.
- MRP II (MANUFACTURING RESOURCE PLANNING)
Later version of MRP that expanded the manufacturing scheduling system to track production. This shop floor control capability tracked lot quantities around the manufacturing facilities work centers and departments.
- MUDA
Term used by Taiichi Ohno, the leader of the Toyota Kanban pull system, to eliminate waste. When asked as to why he created the pull system he simply replied, “I preferred the western “supermarket” pull approach to their scheduling (push) techniques of western manufacturing. The “supermarket” approach became the foundation for the Toyota material pull system and Kanban. His Seven Wastes Model (Muda in Japanese) is an anti-scheduling model for process design and a foundation for Process Perfection and Kaizen.
- NON-REPLENISHABLE KANBAN
Kanban technique where material is replenished on a limited basis. Each time the Kanban is pulled it is signed and dated. Typically used in situations where a component is temporarily used to replace the preferred part. Common in customer orders, temporary deviations or engineering changes.
- NON-VALUE-ADDED
Steps in the sequence of events that do not add value to the customer. They may be necessary at this point, but they are candidates for elimination by the process perfection team. Set-up and move times are always non-value-added.
- OPERATION
Determined by the Takt time of a process, it is a grouping of steps from the sequence of events to meet that targeted Takt time. This is where work is to be completed by a person or machine.
- OPERATIONAL CYCLE TIME (TAKT TIME)
Mathematical calculation used to determine the target time (Takt) for a process. It is calculated by multiplying the effective work hours times the number of shifts and dividing that result by the designed capacity of products to be produced in the DFT line. (See Takt Time)
- OPERATIONAL METHOD SHEETS
Graphically representation of work to be performed at an operation. It is defined by the sequence of events and displayed graphically in color. It depicts three distinct elements of work to be completed. The first element of work is “TQC" work, followed by “Work Content” and finally "Verification" work.
- PILE OF PARTS
Reference to the flat bill of material for a flow production product. Since the B.O.M. has nothing to do with determining work or picking kits in a flow process there isn’t a need for the hierarchal structure associated to scheduled production.
- PLANNING FLEX FENCE
DFT technique to smooth out demand and force forecasts to follow the general direction of customer demand. Also has a negotiated flexibility required by sales and management to project material requirements to the supply chain. Provides a cushion of raw material around the projected total demand. Material requirements are determined by the flex fences, not the production plan.
- PLANNING VISIBILITY
Long-range forecast of expected customer demand. Used for projecting manufacturing utilization as well as supplier requirements for raw material and components.
- PROCESS
Grouping of sequential steps performed by people or machines associated to a common volume. Tied together by the P-Sync and the foundation for the sequence of events.
- PROCESS MAPPING
Matrix of processes defined by the P-Sync. Used to find the commonality of processes associated to a mix of products.
- PRODUCT SYNCHRONIZATION (P-Sync)
Design technique that is the foundation for Flow manufacturing and the DFT Business Strategy. It defines the relationships of all manufacturing processes to produce a product. It can start with the production process, but it must expand to all organizations that support the product such as Engineering, Cost Accounting, Order Entry, Procurement, Quality, Sales and Marketing. In production the P-Sync defines the phased relationship of all manufacturing processes required to build a product. It will be used as a basis for the design of all processes as well as the design for the DFT line.
- PULL SEQUENCES
The information associated with Kanban pull chains. They create a pull associated between a point of supply to a point of consumption. Kanban sizing is based upon the replenishment interval for the points of usage/consumption and supply/replenishment.
- QUEUE
Waiting time associated to scheduling. It is part of the scheduling lead time. Lead time is measured in terms of days. Queue or wait time is never included in the sequence of events.
- QUICK COUNT
Methodology used in RIP to replenish material Kanban’s. Approximate quantities are preferred in RIP between the line and point-of-usage resupply areas. Visual or quick count quantities such as hand-full, fill line, container or box are acceptable in RIP.
- RAW AND IN-PROCESS INVENTORY (RIP)
DFT inventory term representing the raw material at the line and at the point of usage resupply areas. RIP is supplied by the storeroom or directly by suppliers. Inventory that is moved into RIP requires a computer and financial transaction. The inventory in RIP is relieved by the end of line backflush transaction which relieves the B.O.M. from RIP and moves the completed product into finished goods. The only other counting in RIP is associate to scrap reporting.
- SCHEDULED MANUFACTURING
Scheduled production is a technique currently used in batch or push production. It has a scheduled start date, quantity and due date for the quantity or lot to be produced. This traditional manufacturing philosophy uses work orders to identify the scheduled lot. Raw material is issued to the work orders to build the quantity of production sub-assemblies or fabricated parts. Once the lot of sub-assemblies or fabricated parts are completed, they are returned to the Stores area and the work order is then closed.
- SCRAP
Unusable components or raw material that is removed from the flow production and sent to a material review area for assessment and dispositioning. It is always reported immediately after it is found.
- SEQUENCE OF EVENTS (S.O.E.)
Sequential steps to define the work and quality criteria to build a product in a specific production process. They are essential in determining what work is to be performed at an operation. Each step in the S.O.E. is classified as either a set-up, move, require or value-added step and also serves as a roadmap for the process perfection teams to follow.
- SET-UP TIME
Non-value-added steps that are completed prior to required or value-added work. They can range from a person moving a fixture prior to welding or pulling a tool pack prior to a machine milling step.
- SINGLE-SOURCE SUPPLIER
Supplier that was selected over other qualified suppliers to receive all of the forecasted business on raw material or components. By committing all of the forecasted business to a single qualified supplier, the additional volume will reduce the cost per piece.
- SOCIO-TECH PRODUCTION
An experiment in liberal management philosophy. Intended to provide employees with power in many decisions associated with hiring, organizations, and leadership. Very few companies continued with it. Philosophical concept and theory that tends to stretch out the decision-making process as well as response to engineering change and new product introduction.
- SOLE-SOURCE SUPPLIER
Supplier that is the only known source for a specific raw material or component. They may allocate their components and dictate terms and conditions to buy. Manufacturers that require the specific material or components can only procure this item from this supplier.
- SUB-ASSEMBLIES
Bill of material structured group of parts that are assembled to meet a design drawing or function. They are a portion of the final product and they have their own part number identity. Required basis for the scheduled production methodology. Material to build the sub-assembly is typically pulled as a kit of parts and issued to work-in-process to start the build production.
- TAKT TIME
Word with heritage from the German language that translates into English for rhythm or beat. In DFT it defines the targeted work content for people and machines to meet the production capacity. Takt time determines the targeted work for each operation in a process. Each process on the product synchronization or mixed-model process map will have a Takt time target. This target is associated to the specific volume or design yield for a process. Mathematically always defined by the same operational cycle time calculation. (See Operational Cycle Time)
- TEAM PASS
Occurs whenever an operation produces a defective unit and a later operation does not perform a required approval step. The affected unit is tagged with the team pass and the unit is repaired and re-inspected before continuing in production. The unit is counted as a team pass unit, not as a TQC unit in the daily rate linearity reporting.
- TOTAL DEMAND
Total demand is controlled by the demand planning fence. Outside of the demand planning fence, total demand is the greater of forecast or actual orders. Within the demand time fence, it is equal to the actual customer orders. Based upon the flex fences, customer orders are smoothed outside of the demand planning fence.
- TOTAL PRODUCT CYCLE TIME (TPc/t)
Starting from the completion of the product (FGI), the accumulated work content time along the longest path of the product synchronization. Typically, less than the total work content hours to build a product. Dictates the time inventory is required to be in-process to support the current line design.
- TQC
In-process Total Quality Control techniques that are key in defining work and quality at a DFT operation. They are established in the Sequence of Events which brings quality to the point where work is being performed. Includes verification of work at the operation and later quality approvals of work that was completed earlier. Technically, takes parts per hundred quality to parts per million in-process quality.
- VALUE-ADDED
Steps in the Sequence Of Events that increase value in the eyes of the customer. Required steps to meet the product specification that increase the worth of a product or service to an external customer. The only steps that the customer is willing to pay for as a part of the product. Never includes a set-up or move classification of work.
- WORK CONTENT
All work is defined in the Sequence Of Events. Work is classified as either set-up, move, required or value-added work. Each step of work has its quality criteria defined for that element of work.