In this article, you will learn the most relevant Six Sigma Definitions and Terms related to lean manufacturing activities.
5S is the name of a workplace organization method that uses a list of five words: “sort”, “set in order”, “shine”, “standardize”, and “sustain”. The list describes how to organize a workspace for efficiency and effectiveness by identifying and storing the items used, maintaining the area and items, and sustaining the new order. The decision-making process usually comes from a dialogue about standardization, which builds understanding among employees of how they should do the work.
5 whys 5 Whys is an iterative interrogative technique used to explore the cause-and-effect relationships underlying a particular problem. The primary goal of the technique is to determine the root cause of a defect or problem by repeating the question “Why?”. Click here for more information.
Availability, [Plant Uptime]
The availability measures the uptime of a machine or process against the planned production time. As one of the factors of Overall Equipment Efficiency (OEE), Availability is expressed as a percentage. The uptime is calculated by taking the difference between the planned production time and the total duration of the downtime events that occurred during the planned production period.
Plant Uptime is a process or production performance measure or KPI which is used extensively in many industries as an alternative or together with plant downtime. It is sometimes referred to as plant downtime because it incorporates all the possible downtime causes both scheduled and unscheduled therefore representing the time that the plant is actually up and running producing value-added goods for customers. In the end, this is the time the production line or process is making money for the business. Plant Uptime or plant availability is also a component in calculating plant and process OEE. Click here for more information ix sigma definitions
A customer order that cannot be filled (due to inadequate inventory levels) when presented, need it, expected or promised for which the customer is prepared to wait for some time. The percentage of items back-ordered and the number of backorder days are important measures of the company’s profitability, the quality of customer service, and the effectiveness of its inventory management. Click here for more information
Process for generating creative ideas and solutions through intensive and freewheeling group discussion. Every participant is encouraged to think aloud and suggests as many ideas as possible, no matter seemingly how outlandish or bizarre. Analysis, discussion, or criticism of the aired ideas is allowed only when the brainstorming session is over and the evaluation session begins.
Breakdown Maintenance is referred to repair and maintenance work performed on a machine, production plant, or component, be it mechanical or electrical after it has failed or broken-down unexpectedly. It is also referred to as maintenance or engineering work related to unforeseen plant breakdowns. It is not a planned event and as such can cost the factory lost production and sales as well as other expenses such as out of budget maintenance costs including overtime, technician call-outs, and urgent delivery fees for spare parts or support. six sigma definitions
Maintenance breakdowns can have many causes, some being the result of improper preventive and long-term maintenance planning, lack of plant inspections, lack or incorrect evaluation of stresses and load cycles on machinery, faulty design and materials, and in some cases neglect. A proper maintenance plan, correct documentation, record keeping, and maintenance execution at the correct intervals usually aids the maintenance or engineering department to eliminate the majority of unforeseen breakdowns. Unforeseen plant breakdowns can be classified as a form of waste in the lean manufacturing system and are measured in time units, ex. minutes, hours, etc. Click here for more information
Standards of measurement by which efficiency, performance, progress, or quality of a plan, process, or product can be assessed. A business metric is a quantifiable measure businesses use to track, monitor, and assess the success or failure of various business processes.
The main goal of measuring business metrics is to track cost management, but the overall point of employing them is to communicate a company’s progression toward certain long- and short-term objectives. Metrics examples related to lean manufacturing are Work in process, Queues, Blockers, Lead times, Cycle times, Throughput, Cumulative Flow diagrams CFD, etc. Click here for more information
Complaints and (SCARS) per units sold
Complaint means any written, electronic, or oral communication that alleges deficiencies related to the identity, quality, durability, reliability, safety, effectiveness, or performance of a device after it is released for distribution. (Refer to Sec. 820.3 Definitions – CFR – Code of Federal Regulations Title 21). Customer complaints and SCARS Supplier Corrective Action Requests per units sold are measuring metrics of the magnitude of customer satisfaction. Click here for more information ix sigma definitions
Savings Action is taken to reduce future costs, such as replacing parts before they fail and cause damage to other parts. Cost avoidance may incur higher (or additional) costs in the short-run but the final or life cycle cost would be lower. Click here for more information
Cost per Unit
The cost per unit (CPU) is calculated when a company produces a large number of identical products. This information is then compared to budgeted cost information to see if the organization is producing goods in a cost-effective manner. The cost per unit is derived and calculated from the variable costs and fixed costs incurred by a production process, divided by the number of units produced. Click here for more information
Cycle time measures how long it takes a work item to get from point A to point B, without considering the waiting times and queue times. Since cycle time can be measured from any two starting and ending points, it’s common for several categories of cycle time to exist. e.g. QA cycle time, packaging cycle time, assembly cycle time, inspection cycle time, etc. Click here for more informations definitions
A defective product is an imperfection in a product that has a manufacturing or design defect or is faulty because of inadequate instructions or warnings. A product is in a defective condition if it is unreasonably dangerous to the user or to a consumer who purchases the product and causes physical harm. Consumable, commercially produced and distributed good that is
(1) unfit for its intended use,
(2) dangerous or harmful for normal use,
(3) does not carry adequate labels, identification, or instructions for its use, or
(4) is inherently dangerous due to defective design, assembly, or manufacture.
(5) manufactured not following the applicable regulatory compliance requirements, e.g. GMPs, etc.
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DMAIC (an acronym for Define, Measure, Analyze, Improve, and Control) refers to a data-driven improvement cycle used for improving, optimizing, and stabilizing business processes and designs. The DMAIC improvement cycle is the core tool used to drive Six Sigma projects. Click here for more information six sigma definitions
Documented evidence that proves the degree to which something is successful in producing the desired result; success. It refers to the level of quality with which a task or process is carried out that ultimately leads to higher overall business performance. In other words, does it do what it’s supposed to do? Click here for more information
Escalation orders are defined as customer product purchase order confirmed between the manufacturer and the client, but which is advanced or re-scheduled to be manufactured before the expected default or original assigned planned date/time. Escalation orders may be new orders or existing orders that are treated urgently and fast track into the manufacturing scheduling and process to advance it delivery time. Escalation orders may have the potential to trigger and result in either short orders, hold orders, orders rescheduled, etc. Click here for more information
Corroborated supporting facts and data information, accurate and reliable that bring confidence and credibility to the client.
Fast or High Runners Products
The finished product manufactured with the most demand, volume, and frequency. Click here for more information six sigma definitions
First Pass Yield
Making a Good Part, ‘right first time’ without rejecting it to be scrapped or reworked. First pass yield (FPY), also known as throughput yield (TPY), is defined as the number of units coming out of a process divided by the number of units going into that process over a specified period of time. Only good units with no rework or scrap are counted as coming out of an individual process. Click here for more information
A fishbone diagram also called a cause and effect diagram or Ishikawa diagram is a visualization tool for categorizing the potential causes of a problem in order to identify its root causes. Click here for more information six sigma definitions
A forecast is a prediction. Maybe it is based on some kind of market analysis, maybe even asking the dealers what they think they will sell. It could be based on a lot of things, as historical data of previous sales volumes for the same or comparable seasons or period of times. Click here for more information
Hold Orders or Delayed Orders
Hold orders are defined as customer product purchase order confirmed between the manufacturer and the client, but which cannot be manufactured on-time or as scheduled due to one or more unexpected reason(s) or unplanned situation(s) which prevent to continue and complete the started and planned order as expected, coordinated and agreed. Hold orders includes short orders and any other order which is stopped after been planned and started the scheduling process. Hold orders are the result and may be observed when escalation orders are placed and advanced in the schedule. Also, known as delayed orders. Click here for more information
Incomplete Order or Short Orders
Manufacturing order that cannot be accomplished, assembled, completed, or moved to the next manufacturing stage because one or more components or items are missing or not available physically. The short orders are on queue status waiting to receive the pending component or item. This is an example of waiting for waste. Click here for more information six sigma definitions
Over and under Inventory is a waste in lean manufacturing. Inventory is the raw materials, work in progress (WIP), and finished goods stock that is held. The main causes are the over inventory is associated with overproduction, making more than the customer wants or in advance of customer demand, these two wastes are heavily interlinked. It is associated or caused by poor layout and lack of balance in the workflow causing inventory to build up before or after different processes. This is a good indication of poor flow within the processes. Under inventory is a waste too, since promotes backorders, short orders, high waiting times, high lead times, etc. Click here for more information
Just-in-time (JIT) manufacturing is a production model in which products are created to meet demand, not created in surplus or in advance of need. The purpose of JIT production is to avoid the waste associated with overproduction, waiting, and excess inventory. Just-in-time (JIT) is an inventory strategy that companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. Click here for more information six sigma definitions
Kanban is a scheduling system used during lean and just-in-time manufacturing. Kanban is an inventory-control system to manage the supply chain. Instead of estimating the number of a specific item the market will want (forecast) and producing based on that amount, Kanban produces items in direct relation to the number requested by the market. System of shelves or trays of components well-identified and organized that serves as a supermarket for dispensing, pick up, and replenishment of materials.
It is an easy and convenient way to supply fast the manufacturing demand of components before the assembly process. When an assembly item or stocked item begins to run low, an employee takes the item’s reorder card to a manager, who place a replenishment order or buys the needed amount of supplies or components. The refreshed supplies arrive before the first supply has run out, and production or sales continue without interruption or hindrance.
While reordering slips used to be the norm for requesting more of an item, today computerized cards or empty packaging containers perform the same task. Kanban is a PULL system. It pulls inventory as it is needed. ERP/MRP is a PUSH system. It pushes inventory into a warehouse for “Safety Stock” to deal with fluctuations in demand from changing forecasts. Click here for more information six sigma definitions
Process in which individually separate but related items are identified, grouped, counted, labeled, packaged, and supplied together as one unit to the manufacturing area for assembly and final packaging. Click here for more information
The time between the initiation and completion of a production process. Total time required to manufacture an item, including order preparation time, queue time, setup time, run time, move time, inspection time, and put-away time. For make-to-order products, it is the time taken from the release of an order to production and shipment.
For make-to-stock products, it is the time taken from the release of an order to production and receipt into finished goods inventory. Click here for more information
Lean manufacturing or lean production is a systematic method for waste minimization (“Muda”) within a manufacturing system without sacrificing productivity. Working from the perspective of the client who consumes a product or service. The term “value” is any action or process that a customer would be willing to pay for. Lean manufacturing makes obvious what adds value, by reducing everything else (which is not adding value). Click here for more information six sigma definitions
Management Review Meeting
A meeting with top management to present the metrics results after implemented the recommended actions. Click here for more information
Manufacturing Orders or Batch Records
A production order is a documented request (a batch record) issued within a company to produce a specific quantity of material or finished product within a certain timeframe. A production order may be issued pursuant to a sales order, and its issuance triggers a number of events. six sigma definitions
If components in the bill of materials are in stock, reservations are generated for those items; if they are not in stock, then requisition orders may be generated to buy them. Requisition orders may also be generated for production that occurs externally to the firm. Planned costs for the order are also generated and capacity requirements are generated for the work floor centers. Click here for more information
Material reconciliation is performed to analyze and verify or count the number of components used at the end of a production process. It allows you to compare the material quantity that actually flowed in with the planned quantity or the quantity of the material produced. Reconciliation of the ingredients or components can ensure that there are no discrepancies outside of the valid range in the relationship between the input and output (yield). six sigma definitions
Milestone or Roadblock
Roadblocks are the biggest challenges that one needs to face while working on a project. These are issues that we need to overcome in order to complete a project effectively. six sigma definitions
Motion is a waste in lean manufacturing. Motion is put or moving more than necessary when doing work. The main causes of the waste of motion are with regards to cell layout, placing the product at floor level on pallets, poorly arranged space, tools that are disorganized, lack of space and organization for component parts, and so on. The simplest and most powerful lean manufacturing tool at your disposal to eliminate the waste of motion within the work cells is that of 5S;
OEE Overall Equipment Effectiveness
Overall Equipment Effectiveness or OEE has been adopted by many companies to improve operations and optimize the capacity of existing equipment. Overall equipment effectiveness (OEE) is a term to evaluate how effectively a manufacturing operation is utilized. It is a “best practices” metric that identifies the percentage of planned production time that is truly productive. six sigma definitions
An OEE score of 100% represents perfect production: manufacturing only good parts, as fast as possible, with no downtime. OEE takes into account the various sub-components of the manufacturing process – Availability, Performance, and Quality. After the various factors are taken into account the result is expressed as a percentage. This percentage can be viewed as a snapshot of the current production efficiency for a machine, line, or cell. It is calculated as OEE = Availability x Performance x Quality
Output [amount of good production units/shift]
The output is the “quantity of goods or services produced in a given time period, by a firm, industry, or country”, whether consumed or used for further production.
Over-processing is a waste in lean manufacturing. It the inappropriate use of techniques, oversize equipment, working to tolerances that are too tight, perform processes that are not required by the customer, and so forth. Includes, over-engineering a product: unnecessary features that the customer does not use, but that increase the cost to the business. six sigma definitions
Considered a waste in lean manufacturing. Production of more of a product, commodity, or substance than is wanted or needed.
Performance, or Performance Loss
One of the three OEE Losses. The performance takes into account Idling and Minor Stops and Reduced Speed. A Performance score of 100% means when the process is running it is running as fast as possible. six sigma definitions
PTQ Percent to Quota
A measuring metric used to determine how effective a person or group was able to accomplish a pre-assigned task or goal. It is calculated by dividing the accomplished figure assigned to each production unit or operator by the required minimum amount or target figure for a specified period (month, quarter, year). The calculated PTQ may be expressed either in dollar figures (monetary terms) or in the number of goods produced or services provided (volume terms). An example of quota is the number of finished products that an operator accomplished divided by the expected (quota) amount of product assigned that he was supposed to complete each shift or hour.
Planned Downtime [minutes]
Planned downtime is a period of time during which operations are restricted in order to implement upgrades, repairs, and other changes. Unlike in more catastrophic types of downtime, planned downtime occurs when planners have set aside a particular time period to shut down or restrict operations. six sigma definitions
Poka-yoke is a Japanese term that means “mistake-proofing” or “inadvertent error prevention”. A poka-yoke is any mechanism in a lean manufacturing process that helps an equipment operator avoid mistakes. A poka-yoke device is one that prevents incorrect parts from being made or assembled or easily identifies a flaw or error. Or “mistake-proofing,” – a means of providing a visual or another signal to indicate a characteristic state. six sigma definitions
Often referred to as “error-proofing,” poka-yoke is actually the first step in truly error-proofing a system. Error-proofing is a manufacturing technique of preventing errors by designing the manufacturing process, equipment, and tools so that an operation literally cannot be performed incorrectly.
Scheduling is the process of arranging, controlling, and optimizing work and workloads in a production process or manufacturing process. Scheduling is used to allocate plant and machinery resources, plan human resources, plan production processes, and purchase materials.
One of the three OEE Losses. Quality is a measure of First Pass Yield and takes into account Process Defects and Reduced Yield. A Quality Score of 100% means when the process is running, it is only making good parts. six sigma definitions
Also known as “Waiting & Transportation Time” or “Inventory/Transportation Time”. Queues are defined as: (1) the time between processes. (2) The time that the components or events gets waiting for someone to work on it.
Rejects or Scrap
Rejects or scrap is the discarded material from an operation suitable for reprocessing. Scrap can be very expensive, as it can be leftover materials in excess of those needed for an assembly, or could be an entire batch of parts outside tolerances that need to be reworked or recycled. six sigma definitions
Return Goods per Units Sold [RGUS]
Is a measure of the magnitude of the amount of product returned by the customer taking previously purchased merchandise back to the retailer, and in turn receiving a refund in the original form of payment, exchange for another item (identical or different), or store credit.
Correcting of defective, failed, or non-conforming item, during or after inspection. Rework includes all follow-on efforts such as disassembly, repair, replacement, reassembly, etc. If you fix something because you did not do it correctly the first time that is reworked. Rework – Bringing a non-conforming part back into conformance by simply reprocessing a prior sequence. Do not confuse it with the term “repair” since is not the same. six sigma definitions
Repair – Bringing a non-conforming part back into conformance using methods outside the original process.
ROI Return of Investment
Return on Investment (ROI) is the benefit to an investor resulting from an investment of some resource. A high ROI means the investment’s gains compare favorably to its cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiencies of several different investments. six sigma definitions
Short orders are typically defined as customer product orders confirmed between the manufacturer and the client, but which cannot be manufactured on time or as scheduled due to one or more components materials not available on-hand. Short orders are considered a type of hold order.
Speed [units per minute],
The number of manufactured units, activities, or items done per minute
Standardized work is defined as work in which the sequence of job elements has been efficiently organized, and is repeatedly followed by a team member. Establishing standardized work relies on collecting and recording data on a few forms. These forms are used by engineers to design the process and by operators to make improvements in their own jobs. six sigma definitions
Standardization of work practices allows process steps to be decomposed and optimized into simple easy to follow steps that any operator can easily perform. Standardized practices allow operators and workers to perform tasks the same way every time by using a set standard and clearly defined process which combines and uses different resources effectively such as time, technology, and raw materials.
Supplier Risk Classification
A procedure to handle and determine the most critical requirements necessary to facilitate the information required to buyers to select and buy from trusted and reliable supplier’s products with QA approval of components at affordable prices. These benefits include, but are not limited to components, packaging materials, supplies, etc. based on their specific manufacturing needs and demand at affordable prices.
Supply Chain Management
Every product that reaches an end-user represents the cumulative effort of multiple organizations, referred collectively as the supply chain. The entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer. It comprises vendors that supply raw material, producers who convert the material into products, warehouses that store, distribution centers that deliver to the retailers, and retailers who bring the product to the ultimate user. six sigma definitions
Supply chains underlie value-chains because, without them, no producer has the ability to give customers what they want, when and where they want, at the price they want. Producers compete with each other only through their supply chains, and no degree of improvement at the producer’s end can make up for the deficiencies in a supply chain which reduces the producer’s ability to compete. Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. The three main flows of the supply chain are the product flow, the information flow, and the finances flow. SCM involves coordinating and integrating these flows both within and among companies.
Physical Flows: Physical flows involve the transformation, movement, and storage of goods and materials. They are the most visible piece of the supply chain. But just as important are information flows.
Information Flows: Information flows allow the various supply chain partners to coordinate their long-term plans, and to control the day-to-day flow of goods and materials up and down the supply chain. six sigma definitions
Throughput is the average number of units processed per time unit.
Situation or conditions in your assigned area that most significantly, frequently, and severely affect their costs, efficiency, lead times, accomplishments, and performances.
Transport is one of the seven wastes of lean manufacturing (Muda), it is the movement of products from one location to another. Transportation often leads to operations having to wait for the product to be delivered due to delays (the waste of waiting), thus costing more money as well as extending the lead times and creating delivery problems.
Value-Adding Activities are any activities that add value to the customer and meet the three criteria for a Value-Adding Activity. The three criteria for a Value-Adding Activity are:
(1) The step transforms the item toward completion;
(2) The step is done right the first time (not a rework step);
(3) The customer cares (or would pay) for the step to be done.
Value Stream Map
Value stream mapping is a lean management method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer. The value stream is a sequence of activities required to design, produce, and provide a specific good or service, and along which information, materials, and worth flows.
A value stream map takes into account not only the activity of the product but the management and information systems that support the basic process. This is especially helpful when working to reduce cycle time because you gain insight into the decision making the flow in addition to the process flow. It is actually a Lean tool. The basic idea is to first map your process, then above it map the information flow that enables the process to occur.
Waiting is one of the seven wastes of lean manufacturing. Waste is defined as anything that consumes resources (time, money, energy, etc.) but does not add value for the customer. It is the act of doing nothing or working slowly whilst waiting for a previous step in the process.
Work in process is all the work that is actively being worked on at any one time. Do not confuse the term “WIP” with “Work in Progress” since is not the same.
Work in progress is the total amount of work you have committed to but have not completed at any one time.
Workflow is a series of activities that are necessary to complete a task. Each step in a workflow has a specific step before it and a specific step after it, with the exception of the first step. In a linear workflow, the first step is usually initiated by an outside event. If the workflow has a loop structure, however, the first step is initiated by the completion of the last step.
The workflow is a sequence of industrial, administrative, or other processes through which a piece of work passes from initiation to completion. It includes a progression of steps (tasks, events, interactions) that comprise a work process, involve two or more persons, and create or add value to the organization’s activities. In a sequential workflow, each step is dependent on the occurrence of the previous step; in a parallel workflow, two or more steps can occur concurrently.
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REFERENCES: Six Sigma Definitions.