Lean Lexicon

The Vocabulary of Lean

Lean Domains

DOMAIN	DEFINITION
Alignment	The process of bringing the whole organization in agreement on strategy, goals, and objectives and assigning responsibility for component tasks necessary for achieving business objectives. Uses the process of Hoshin Kanri (or policy deployment) to drive accountability and traceability of goals and objectives across the organization.
Block Chain	A blockchain, originally block chain, is a growing list of records, called blocks, which are linked using cryptography. Blockchains which are readable by the public are widely used by cryptocurrencies, such as Bitcoin. Private blockchains have been proposed for business use. By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”
Coaching	The process of mentoring leadership and management in the implementation of continuous process improvement and Lean systems and processes. Reinforces the importance of leadership commitment to continuous process improvement and the changes in leadership behavior that are required for a sustained culture of process improvement.
Golf	An awesome game played by cool people which involves hitting a small ball with a club and then finding it, sometimes in tall grass, wetland, or forested areas.
Human Relations	HR within the Lean system. Concentrates on the person adding value so that they may be free of any unnecessary burden or waste and enabled/empowered to do their very best work. Works with higher levels of management to assure that the value adder at the focus is fully supported and that management is committed to continuous process improvement.
Lean General	Familiarity and experience with all or most of the tools and techniques of Lean.
Lean Implementation	The practice of continuous process improvement that transforms a business through the identification and elimination of waste, the specification of information and material flows, and the leveling of production. Typically, a phased approach based on the Toyota Production System.
Supply Chain	The development of suppliers in the lean model. Includes improvements to quality and delivery to support lean initiatives within the business, including just-in-time and Kanban.

Lean Terms

TERMS	DEFINITIONS
3 Forms of Waste	The 3 forms of waste are muda (non-value-added tasks, those that are essential and those that can be eliminated), mura (inconsistency), and muri (excessive stress & strain).
5 Phases	A lean implementation model, originally developed by Toyota, comprised of the following phases: 1. Stability, 2. Continuous Flow, 3. Synchronous Production, 4. Pull Systems, and 5. Level Production.
5 S (6 S)	A visible way to clean & organize the work area and identify items not needed or are in the wrong place: Sort (organization), Stabilize (orderliness), Shine (cleanliness), Standardize (adherence), and Sustain (self-discipline). A sixth item, Safety is often added.
5 Whys	Asking “why” something occurs 5 times (an arbitrary number) in order to reach back through a series of direct causes to the root cause of a problem.
7 Wastes	Toyota’s 7 categories of waste (non-value added activity): Over-production – Producing more than customers demand (or making items earlier than customer orders them. Waiting – People waiting for machines or processes (or products waiting for people, machines or processes). Transportation – Moving products from one place to another. Inventory – Raw materials, work-in-process (WIP), and finished goods in excess of direct customer requirements. Motion – Any movement (of people or machines) that doesn’t actually transform the product from one state to another. Over-processing – Performing unnecessary operations. Defects – Creating or passing along products, which contain errors in material or processing.
A3	Popularized by Toyota, it is a single page report, typically on “A3″ sized paper (297 x 420mm or approx. 11 x 17”). It forces the person preparing the report to eliminate non-essential information and stick to essential facts only.
Absentee Rate	Absentee Rate is a lean metric for employee satisfaction. Absentee Rate = (Total absentee days) / (Total work days)

Action Item	Formally assigned requirement to accomplish something within an assigned time frame.
Action Plan	A time-phased schedule for executing events and projects that transitions a process from the current state to the desired future state, as determined by members of the lean event.
Alignment	The disciplined agreement within an organization between top level strategic plans, goals and objectives with all subordinate levels’ plans, goals and actions.
Andon	A Japanese term meaning ‘lantern’, it refers to a system of visual signals used to indicate the status (at a glance) of a machine or work center. Color codes vary with the application, but are traditionally: Green – no problems Yellow – situation requires attention, production flow at risk Red – PRODUCTION STOPPAGE: IMMEDIATE ASSISTANCE REQUIRED Contemporary use of the andon concept has been expanded to include many useful devices, such as flags, audible signals (buzzers, alarms), and visual displays/production boards.
Baseline Measure	A statistic or numerical value for the current performance level of a process or function. A baseline needs to be taken before improvement activities are begun to accurately reflect the rate of improvement or new level of attainment of the performance being measured.
Batch (Batch & Queue)	The size of a production lot. One method of “leaning” out a process is to continually reduce batch sizes. ‘Batch & queue’ refers to the process of collecting parts in batches, imposing significant wait times on every part in the batch. Smaller batches flow through production systems faster. They also provide greater flexibility (since we don’t have to wait for large batches to complete before changing models), to provide better response to customers. Also, smaller batches make it easier to control production and quality.
Benchmark	A qualitative and/or quantitative performance measure of an activity or activities enacted at one or more enterprises that are considered best in class. A benchmark helps an organization set goals in the strategic or tactical phase of an implementation. The comparison is usually made between companies competing for the same market shares, but can also be done based on a single similar function even if the enterprises are from different industries and participate in different markets.
Buffer Stock	Maintaining some small portion of finished products/goods to temporarily satisfy variations in demand.
Build-to-Schedule (BTS)	BTS is a lean metric for productivity. BTS = Volume Performance x Mix Performance x Sequence Performance
Business Case	A written document describing why an organization is planning to implement a process improvement initiative, to include a goal and objectives that are specific and measurable based on cost, performance, or schedule.
Capacity Constraint	Anything that hinders production or process flow (the weak link in the chain).
Catchball	This refers to a participative approach to decision-making, used in policy deployment to describe communication across management levels when setting annual business objectives. Information and ideas are “thrown and caught” back and forth, up and down throughout the organization, describing the interactive nature of policy deployment.
Cell	A logical, efficient, and usually physically self-contained arrangement of personnel and equipment to complete a sequence of work. The cell enables one-piece flow and multi-process handling. Typically, each cell has a leader who manages the workflow and is responsible for maintaining performance and productivity.
Cell Design	The technique of creating and improving cells to optimize their one-piece flow. A quality cell design results in improved space use, higher value-adding ratios, shorter lead times, lower work in process, and optimal use of employees.
Champion	The individual within an organization with the authority to commit and dedicate resources, assets, and people, and to charter new initiatives. Charged with primary responsibility for creating the vision and leading an organization based on their strategic view of his/her organization. Champions guide CPI initiatives through critical understanding of how the organization fits into the enterprise at large.
Change Management	Change that is planned, predictable, focused and aligned with the wants and needs of the organization’s leadership.
Continuous Flow	Smooth flow of products through all operations (from “dock to dock”) and all work centers in between; it is a core concept of lean, along with eliminating waste & implementing pull. Establishing continuous flow forces work cells to continually evaluate inventories, batch sizes, and work methods & distribution, to better meet takt time & customer demand. Deliberate smooth flow balances resources with current requirements. Also, it is the second of the 5 Phases and its implementation includes such tools as mistake proofing, quick changeover, TPM flow racking, and organizational alignment.
Continuous Process Improvement (CPI)	A comprehensive philosophy of operations built around the concept that there are always ways in which a process can be improved, constantly and incrementally, to better meet the needs of the customer and that an organization should constantly strive to make those improvements.
Culture Change	A major shift in attitudes, norms, sentiments, beliefs, values, operating procedures, and behavior of a group or organization.
Current State Map (CSM)	In value stream mapping, the map (using standard icons and graphic depictions) that depicts the current steps, delays and information flows (the “current state”) required to deliver the product or service.
Customer	The end user, which pays for the completed product or service. See External Customer and Internal Customer.
Customer Pull	Pull systems are similar to other systems like “just in time” (JIT), and kanban. Pull got its start in America in the grocery business where grocers had to continually replace products on their shelves, as demanded or “consumed” by customers. Grocer needed deliveries on time, in the proper mix of brands at the right prices and sizes to satisfy customers. To do this, they used JIT, communication with both supplier and customer, and rotation of stock (FIFO).
Cycle Time	The time duration of a process, e.g., from request of a part to fulfillment of the order. The beginning and end of a specific cycle time are defined as part of a CPI project and used to set the baseline for related value stream analysis and improvement goals.
DMAIC	An acronym for Define-Measure-Analyze-Improve-Control, it is an ordered problem solving methodology applied widely in organizations to direct a process improvement team logically from problem definition to implementing solutions linked to root causes, to establishing best practices to help ensure the solutions stay in place. A Six Sigma tool.
Dock-to-Dock	Dock-to-Dock measures the number of days of supply of raw materials for production, the number of days in production including work-in-process inventories, and the number of days of finished goods that are held in inventory given average daily demand.
EPE (or EPEI)	Every Part Every (or Every Part Every Interval) – In ‘mixed-model’ production, the interval of time used to level production. In a mass production environment, large batches are run to spread out, and so minimize the cost of setups to production units and production flow. In a lean environment, production is leveled according to customer demand, requiring the constant reduction in setup times.
Error-proofing	The design or development of tools, techniques and processes that make it impossible or very difficult for people to make mistakes.
Event	A short-term, high intensity effort to address a specific problem. The focus is typically a week, though the preparation normally begins several weeks in front and follow-up continues after. Also called by other names, including Rapid Improvement Event, Rapid Improvement Workshop, Kaizen Event, Kaizen Blitz, or Improvement Event/Workshop.
External Customer	An entity, which actually pays for the product or service being provided, as distinguished from an “internal” customer, who does not pay for goods or services, so anything they request in addition to value-added tasks is waste.
External Setup	Setup tasks that can be accomplished before a machine or operation is taken down for changeover, or after the operation is restarted (e.g., transporting dies or raw materials, gathering tools and equipment, filling out paperwork, inspections, etc.).
Facilitator	Consultant, advisor, or subject matter expert that leads or drives the pace and direction of a group participation event.
FIFO	” First in First Out” refers to using the oldest inventory (loaded ‘first’) before newer inventory. FIFO racks or lanes are usually loaded from the back, and accessed/emptied/used from the front. For inventory, which ages, FIFO systems help manage inventory by minimizing spoilage/expiration. In production areas, FIFO reduces the need to access inventory from the “production side,” reducing the required size of the production area (since inventory can generally be loaded from the rear or aisle-side areas).
First Time Through (FTT)	FTT is a lean metric for quality.
Fishbone diagram	A tool for determining the “root cause” of a problem (also known as an Ishakawa or “cause and effect” diagram)
Future State Map (FSM)	In value stream mapping, the map (using standard icons and graphic depictions) that depicts those feasible proposed future steps, delays and information flows resulting in an improved delivery of the product or service. (Distinguished from an Ideal State Map.)
Gap Analysis	An analysis that compares current performance to desired performance so that solutions can be found to reduce the difference (close the gap).
Gemba	Japanese for “the real place.” In lean, “gemba walk” refers to the need for management to go to the site where activities occur (e.g., shop floor, sales floor, or where the service provider interacts with the customer), so they can personally observe the problem or state of affairs and look for waste.
Heijunka Box	A visual scheduling tool created by Toyota to achieve smoother production flow. It typically consists of a box with horizontal rows for each product and vertical columns for identical time intervals of production (often used with kanban cards).
Hoshin Kanri or Hoshin Planning	This is a strategic planning-management methodology used in lean environments. It relies upon a process of cascading or communicating a policy from top to middle management, and throughout the rest of the organization using a give-and-take process called “catchball.” Linking local action plans to the overall goals of the organization provides a means for everyone to become involved in realizing the organizational vision. Managing this process year to year ensures that the organization continues to grow and evolve with its customers. In Japanese, hoshin means “compass needle” or “direction.” Kanri means “management” or “control.” The name suggests how hoshin planning aligns an organization toward accomplishing a single goal.
House of Lean	Visual depiction of Toyota’s lean implementation model.
Ideal State Map	A graphic depiction of a vision of the “future state” that reflects what the system should look like if there were no constraints. Based on the “King or Queen for a Day” mentality.
Injury Incidence Rate	See Safety
Internal Customer	This is a downstream process, or an individual requesting work (tasks, information) in addition to value-added tasks. Since internal customers don’t pay for goods or services, anything they request in addition to value-added tasks is waste.
Internal Setup	Those setup tasks that must be performed while a machine or operation is between production runs (e.g., unloading and loading dies, manual adjustments, running the first production piece, etc.).
Jidoka	Jidoka, as used in the Toyota Production System, refers to “automation with a human touch,” as opposed to a machine that simply moves under the monitoring and supervision of an operator. A pillar of lean along with JIT, jidoka refers to high-technology sensing equipment in machinery, as a means of preventing defects from occurring (preferred), or detecting them once they occur. Once a defect condition or defect is detected, the operator is alerted, and the condition can be corrected before further parts are produced. Properly executed, this technique can free the worker to operate multiple pieces of equipment. (Also referred to as high-tech “poka-yoke.”)
Just-in-Time (JIT)	“Just-in-Time” is a strategy for inventory management in which raw materials and components are delivered from the vendor or supplier immediately before they are needed in the transformation process.
Kaizen (Kaizen Event)	A Japanese term that means “continuous, incremental improvement.” In a lean context, kaizen means everyone applying small (low impact & low cost) improvements each and every day. Applied in this manner, kaizen can have the same affect as large, costly, infrequent changes. A “kaizen event” commonly refers to a combination of classroom and shop floor learning and activities over a fixed period of time (often a week), within a defined area, resulting in actual improvements to designated processes.
Kanban	Kanban (Japanese for signboard or signal) is a scheduling system for lean and JIT production. The kanban signals a cycle of replenishment for production and materials in order to maintain an orderly and efficient flow of materials. Printed cards (kanban card) are a key component; they signal the need to move materials (either within or outside a facility from a supplier) and contain specific information such as part name, description, quantity, etc.
Labor Productivity	Labor Productivity is a lean metric for productivity.
Lead Time	This is the total time, from start to finish, of a process or activity.
Lean	A systems approach for continuously improving processes and work through improving its flow or smoothness and eliminating waste.
Lean Metrics	Series of measurements essential to implementation of lean. See the following subject categories of lean metrics: Safety, Quality (Quality Rate, First Time Through FTT), Productivity (Overall Equipment Effectiveness OEE, Dock-to-Dock DTD, Days of Supply DOS, Build-to-Schedule BTS, Labor Productivity) Cost (Total Cost), Human Resources (Absentee Rate, Injury Incidence Rate), and Customer Satisfaction (Surveys, Warranty Claims).
Level Production	The fifth of the 5 Phases, it is defined by building product in the exact sequence ordered, leveled in volume, mix and sequence. Tools include sequencing production, leveling and running to sequence and constant monitoring of the production process to ensure daily output. The Japanese term for production leveling is heijunka.
Milk Run	A programmed route for inventory replenishment.
Mistake Proofing	This refers to the implementation of generally low-tech designs (into parts themselves or fixture/machines) so defects of a particular type cannot be produced. The Japanese term is “poka-yokes.”
Non-Value-Added	Any activity that takes time, materiel or space, but does not add value to the product or service from the customer’s perspective. For example, inspections or reviews normally are non-value-added because they are checking to see whether the work was done right in the first place. A non-value added process step violates at least one of the following criteria: · The customer is willing to pay for this activity. · It must be done right the first time. · The action must somehow change the product or service in some manner.
One Piece Flow	This is where a single discrete unit of product flows from process to process. In effect, the batch quantity is one.
Overall Equipment Effectiveness (OEE)	OEE is a lean metric for productivity. Availability x Performance x Quality Rate
PDCA	The 4-step continuing cycle of Plan-Do-Check-Act & Adjust. Based on the scientific method of “hypothesize, experiment, evaluate/plan, do and check” and popularized by W.E. Deming, it is a foundational element of lean – continuous process improvement Plan – Set targets & plan how to get there. Do – Train, lean and implement solutions. Check – Check the effects of what you’ve done. Act & Adjust – Act on what you’ve found, adjusting for earlier results, and begin again.
Policy Deployment	See Hoshin Kanri and Hoshin Planning.
Problem	The discrepancy (a quantifiable difference) between the current situation and the standard for that situation.
Process	A series of individual operations required creating a design, completed order, product or service.
Problem Solving	A PDCA-based problem-solving process used in lean, comprised of 5 steps: 1. Initial problem identification, 2. Grasping the current situation & defining the real problem, 3. Conducting a cause investigation, 4. Implementing countermeasures, and 5. Following up. The focus is on determining the root cause of a problem so long-term countermeasures can be implemented.
Production Leveling	Configuring the workload and output of a workstation so that the workstation produces items at a rate close to “takt” time and in an even distributed mix over a time period with minimal slack or nonproductive time through balancing and rebalancing.
Pull	Production or material movement based on demand. In a ‘pull’ system (as opposed to traditional ‘push’ systems), production is restricted to actual downstream requirements. Pull production keeps WIP inventory to a minimum, which not only reduces space requirements, but labor requirements as well. Also, quality issues are easier to detect in pull systems, which can have a significant effect on defect rates.
Pull Scheduling	The flow of resources in a production process by replacing only what has been consumed.
Pull Signal	A communication tool used in the Just-In-Time system whenever batch production or product need exists. A Pull Signal (card, signboard, etc.) is used to order product for delivery when needed. See Kanban.
Pull Systems	The fourth of the 5 Phases, defined by the capacity to have the right parts at the right place, at the right time, and in the right quantity. Tools include kanban, daily schedule attainment and synchronous internal & external logistics.
Push	Production or material movement is based upon capacity, regardless of demand. In a “push system,” each work center produces to its capacity, regardless of downstream requirements.
Quality Rate	Quality Rate is a lean metric for quality.
Queue Time	The time a product spends in a line awaiting the next design, order processing or fabrication step.
Quick Changeover	Quick changeover is a lean tool designed for reducing the amount of changeover time in a system (e.g., changeover time from one process to another, one machine to another, etc.). There are five phases in a changeover event: · Set up. · First system or process outgoing. · Next system or process incoming. · Adjustments. · Cleaning, storing or placement of outgoing system or process.
Return-on-Investment (ROI)	The ratio between the predicted or computed savings or cost avoidance (the return) that will result from some action and the cost of completing the action (the investment). Should take the time value of money into account.
Safety	Injury Incident Rate is a lean metric for safety and employee satisfaction. K Factor = Average work hours per 50 people for one year.
Setup Time	The time interval between the production an operation’s last part, until the first good part is run, subsequent to a model or option changeover. NOTE: The terms “setup” and “changeover” are used interchangeably.
Shingo Prize	The Shingo Prize for Manufacturing Excellence (established in 1988 to honor Shigeo Shingo) is an annual award presented to organizations that achieve superior customer satisfaction and business results related to lean “excellence”.
Ship to Schedule	Ship to Schedule is a lean metric.
Single Piece Flow	See One Piece Flow.
Six Sigma	An improvement method that espouses increasing profits by eliminating variability, defects and waste that undermine customer loyalty. Six Sigma can be understood on three levels: 1 Metric—3.4 defects per million opportunities. 2 Methodology—a structured problem solving roadmap. 3 Philosophy—reduce variation in your business and make customer-focused, data driven decisions.
Stability	The first of the 5 Phases in the Toyota implementation model, defined as developing the skills to recognize instability, and react appropriately to eliminate it. Tools for this phase include value stream mapping, 5 S, visual factory, constraint analysis, equipment repair, and standardized work (without Takt time analysis).
Stakeholder	Person internal or external to an organization who has a stake in the outcomes of a process.
Standard	A specific, established and known expectation of what should be for a given situation. It should be shared and agreed to by everyone, and serves as the basis for further improvement.
Steering Committee	The steering committee comprises senior-level stakeholders who carry out CPI-related planning, identify key metrics, establish CPI infrastructure, monitor performance, and facilitate process improvement when necessary.
Strategic Plan	The process an organization uses to achieve and document long-term goals and objectives.
Supplier Management Development	This refers to an organization’s focus on improving its supplier network’s capability and reliability insofar as this has a direct impact upon its overall performance and efficiency.
Synchronous Production	This is the third of the 5 Phases, defined by the synchronization of the product’s rate of flow with the customer’s rate of demand. Tools include Takt time, work group teamwork, and task re-balancing.
Takt Time	Takt is German for beat, as in the beat of music. In lean, takt time is the available production time divided by the rate of customer demand. Takt time sets the pace of production to match the rate of customer demand and becomes the heartbeat of the system.
Throughput Time	The time required for a product to proceed from concept to launch, order to delivery, or raw materials into the hands of the customer. This includes both processing and queue time.
Total Cost	Total Cost per Unit is a lean metric for cost.
Total Productive Maintenance (TPM)	A set of techniques to ensure every machine in a process is always able to perform its required tasks. Focused on avoiding and eliminating breakdowns or maintenance delays, and increasing capacity, the techniques include: Preventative Maintenance, Corrective Maintenance, Maintenance Prevention and Breakdown Maintenance.
Value	From a lean perspective, value is anything a paying customer is willing to pay for. Anything a paying customer is not willing to pay for is considered waste, and should be designed out of the processes.
Value-Added	The parts of the process that add worth to the customer’s product or service. To be considered value added, the action must meet all three of the following criteria: 1. The customer will pay for this activity, 2. It must be done right the first time, and 3. The action somehow changes the product or service in some manner.
Value Stream	These are specific activities required to design, order and provide a specific product, service or piece of information, from concept to launch, order to delivery, into the hands of the customer. It encompasses all the planning, execution, products, and services that go into an organization-wide process to create value for the customer.
Value Stream Map (VSM)	The identification of all specific activities along a value stream for a product, product family or service (see Current State Map and Future State Map).
Variability	An aspect of an item or process that is likely to be unstable or has an inherent chance of unpredictability.
Vision	The vision is a clear depiction of the future that describes clearly yet succinctly how the organization will conduct business on a day-to-day basis.
Visual Factory (Visual Management)	The use of controls that will enable an individual to immediately recognize the standard and any deviation from it. It is comprised of visual control (to prevent defects and errors), visual display (to share information), and 5 S (to promote workplace organization and standardization).
Waste	Anything that takes time, resources or space but does not add to the value of the product or service delivered to the customer. See “3 Forms of Waste” and “7 Wastes”
WIP	Work-in-Process, that is, items currently somewhere between the start of a process and its end. In a lean system, standardized WIP is the minimum number of parts (including units in machines) needed to keep a cell or process flowing smoothly.
Yamazumi Board	A takt/cycle chart, used to balance a process to takt time. The board uses vertical bars of varying heights (representing relative time to complete a task), to depict how to move from operation to operation in order to balance the process. Unbalanced processes do not meet customer demand. Balanced processes allow production to occur at the required rate. The Yamazumi board provides a mechanism to quickly rebalance a process when takt changes, and provides visual indications of which operations are overloaded (beyond takt), and which are underutilized.