The term Lean derives from the improvement methodologies developed, refined and applied to the specific business needs of Toyota. These methodologies are commonly referred to as the Toyota Production System (TPS) or the Toyota Business System. In its entirety, TPS has many techniques of implementation, methodologies for deployment and tools for tactical analysis. To be successful, all of the above must be supported by a management philosophy that creates a culture of continuous improvement. This combination of understanding, maturity and tactical skill, when developed and deployed properly, enables performance improvements through the identification and elimination of "waste"...Lean. To enhance your understanding of Lean terminology, we offer this glossary. For an understanding of Lean Horizons Consulting's methodology for deploying a Lean transformation, please consult the about us and our work sections of this site.

Andon
A line indicator light or board hung above the production line to act as a visual control.   Andons are used to visually signal an abnormal situation.

Annual Improvement Priorities (APS's)
In Strategy Deployment, those initiatives that we need to achieve this year, and will enable us to reach our overall 3-5 year Breakthrough Objectives.

Autonomation
Automation with a human touch or transferring human intelligence to a machine.  This allows the machine to  detect abnormalities or defects and stop the process when they are detected.  Also known as Jidoka.

Backflush
The process of automatically decrementing perpetual inventory records, based on the bill of materials of a given product.  Normally triggered by shipment and invoicing to a customer, backflushing is used to eliminate wasteful inventory transactions.

Benchmarking
A method of establishing internal expectations for excellence based on direct comparison to “best”.  In some cases, the best is not a direct competitor in your industry.

Bowling Chart
A form used to track performance (Plan vs. Actual) on Strategy Deployment Objectives.  Usually reviewed with top management on a monthly basis, but reviewed by the SD team more frequently.

Breakthrough Objectives
In Strategy Deployment, those objectives characterized by multi-functional teamwork, significant change in the organization, significant competitive advantage and major stretch for the organization.

Catch Ball
Communication occurring vertically or horizontally in an organization with the goal of attaining common understanding and consensus.

Cause and Effect Diagram
A problem-solving tool used to establish relationships between effects and multiple causes.

CEDAC
Acronym for Cause and Effect Diagram with the Addition of Cards. CEDAC is a method for involving team members in the problem solving process.

Cellularization
Grouping machines or processes that are connected by work sequence in a pattern that supports flow production.

Chaku-Chaku
Japanese term for “Load-Load”. It refers to a production line raised to a level of efficiency that allows the operator to simply load the part and move on to the next operation. No effort is expended on unloading. (see Hanadashi)

Changeover
As used in manufacturing, the time from when the last “good” piece comes off of a machine until the first “good” piece of the next product is made on that machine. Includes warm up, first piece inspection and adjustments. Changeover times can be reduced through the use of S.M.E.D.

Concurrent Engineering
The practice of designing a product (or service), its production process, and its delivery mechanism simultaneously. The process requires considerable up-front planning as well as the dedication of resources early in the development cycle. The pay off comes in the form of shorter development time from concept to market, higher product quality, lower overall development cost and lower product or service cost.

Control Chart
A statistical tool for problem solving that indicates control of a process within established limits.

Control Element
A specific process variable which must be controlled. Measurements of a control element indicate whether or not a stable condition has been achieved.

Counter Measures
Immediate actions taken to bring performance that is tracking below expectations back into the proper trend.  Requires root cause analysis.

Curtain Effect
A method that permits the uninterrupted flow of production regardless of external process location or cycle time. Normally used when product must leave the cell for processing through equipment that cannot be put into the cell. (i.e. heat treat, curing oven, plating, wave solder) Curtain quantities are established using the following formula:
Per unit Cycle Time of Curtain Process ÷ TAKT Time = Curtain Quantity

Development System
An approach to product development that starts and ends with the voice of the customer. It involves representatives of manufacturing, finance, design engineering, sales and marketing as contributing team members from the concept stage to final product.

D.F.M.A.
Designed For Manufacture and Assembly - A philosophy that strives to improve costs and employee safety by simplifying the manufacturing and assembly process through product design.

Economic Value Added (E.V.A.)
A residual income measure that subtracts the cost of capital from the net operating profits after taxes (NOPAT). It is the financial performance measure most closely linked to shareholder value and the cornerstone for a financial management and incentive compensation system that makes managers think and act like owners.

F.M.E.A.
Failure Mode and Effect Analysis. A structured approach to assess the magnitude of potential failures and identify the sources of each potential failure. Corrective actions are then identified and implemented to prevent failure occurrence.

Five(5)S
A method of creating a self-sustaining culture that perpetuates an organized, clean, and efficient work place.  English words approximate the Japanese originals:
Simplify - (Seiri) Clearly distinguish between what is needed and what is not needed to perform a given work process.
Straighten - (Seiton) Organize those things that are needed, making it easy for users to locate, use and return them.
Scrub - (Seiso) Clean all aspects of the area, including floors, machines and furniture.
Stabilize - (Seiketsu) Maintain and improve the first three S’s in addition to personal orderliness and neatness.
Sustain - (Shitsuke) Achieve the discipline or habit of maintaining the correct 5S procedures.

Five Why's
A simple problem solving method of analyzing a problem or issue by asking “Why” five times. The root cause should become evident by continuing to ask why a situation exists.

Flow Chart
A problem solving tool that illustrates a process. It can show the “as is” process or “should be” process for comparison and should make waste evident.

Flow Production
A philosophy that rejects batch, lot or mass processing as wasteful. Product should move (flow) from operation to operation in the smallest increment, one piece being the ultimate. Product should be pulled from the preceding operation, as it is needed. Often referred to as “One Piece Flow”, only quality parts are allowed to move to the next operation.

Heijunka
Production leveling process. This process attempts to minimize the impact of peaks and valleys in customer demand. It includes level production-volume and level production-variety.

Histogram
A chart that displays data in distribution, generally in graph format. It may be used to reveal the variation that any process contains.

J.I.T. Accounting
An accounting system that seeks to reduce accounting transactions while at the same time improving the accuracy of product costs and manufacturing performance. JIT Accounting relies on continuous improvement trends to established goals rather than traditional variance analysis. (also known as Lean Accounting)

Just In Time (J.I.T.)
A strategy that concentrates on making quality products, in the quantity needed, when it is needed.  This strategy exposes waste and makes continuous improvement possible.

Kaizen
Japanese for Continuous Improvement. Based on the philosophy that what we do today should be better than yesterday and what we do tomorrow should be better than today, never resting or accepting status quo.

Kanban
A means of communicating need for products or services. It is generally used to trigger the movement of material where one piece flow cannot be achieved, but is also used to “signal” upstream processes to produce product for downstream processes.

Key Performance Indicator (K.P.I.)
Key Performance Indicator. A method of tracking or monitoring the progress of existing daily management systems.

Multi-skilled Worker
Associates at any level of the organization that are diverse in skills and training. They provide the organization with flexibility and grow in value over time.  Essential for achieving maximum efficiencies of J.I.T.

Mura
Japanese for "unevenness"

Muri
Japanese for "unreasonableness"

Non Value Added (N.V.A.)
Those process steps that take time, resources or space, but do not transform or shape the product or service towards that which is sold to a customer.

Pareto Chart
A vertical bar graph showing the bars in descending order of significance, ordered from left to right.  Helps to focus on the vital few problems rather than the trivial many.  An extension of the Pareto Principle suggests that the significant items in a given group normally constitute a relatively small portion of the items in the total group. Conversely, a majority of the items will be relatively minor in significance, (i.e. the 80/20 rule).

Poka-Yoke
Also Baka-Yoke, a Japanese expression meaning “common or simple, mistake proof." A method of designing production or administrative processes which will, by their nature, prevent errors. This may involve designing fixtures, which will not accept an improperly loaded part.  In the administrative area, having a credit memo be a different color than a debit memo.  It requires that thought be put into the design of any system to anticipate what can go wrong and build in measures to prevent errors.

Policy Deployment
A one year plan, reflecting the long-term vision and the 3-5 year strategic planning objectives. A planning/implementation process that focuses on a few, major, long term, customer focused breakthrough objectives that are critical to a company’s long term success. This process links major objectives with specific support plans throughout the organization. (also referred to as "Strategy Deployment")

Policy Deployment Action Plan
Form used by the team working on a PD objective, detailing specific activities required for success, milestones, responsibilities and due dates. Team members are also listed with objective definition, meeting dates and management support or owner.

Policy Deployment Matrix
Form used to show relationships between 3-5 year objectives, improvement priorities, targets, resources required and benefits to the organization. Sometimes called the "X Matrix"

Process Map
A visual representation of the sequential flow of a process. Used as a tool in problem solving, this technique makes opportunities for improvement apparent.

Quality Function Deployment (Q.F.D.)
A system for translating consumer requirements into appropriate company requirements at each stage from research and product development to engineering and manufacturing to marketing/sales and distribution.  Makes use of the voice of the customer throughout the process.

Root Cause
The ultimate reason for an event or condition.

Six Sigma
A process that is six sigma generates a maximum defect probability of 3.4 parts per million (PPM) when the amount of process shifts and drifts are controlled over the long term to less than +1.5 standard deviations from the centered mean.

Standard
A prescribed documented method or process that is sustainable, repeatable and predictable.

Standardization
The system of documenting and updating procedures to make sure everyone knows clearly and simply what is expected of them. Essential for application of PDCA cycle.

Standard Work
Standard Work is a tool that defines the interaction of people and their environment when processing a product or service. It details the motion of the operator and the sequence of action.  It provides a routine for consistency of an operation and a basis for improvement.  It details the best process we currently know and understand. Tomorrow it should be better, (continuous improvement), and the standard work should be revised to incorporate the improvement. There can be no improvement without a basis or or standard.
      Standard Work has three central elements; TAKT time, Standard Work Sequence, and Standard Work in Process. Standard work (as a tool) establishes a routine/habit/pattern for repetitive tasks, makes managing (scheduling, resource allocation) easier, establishes the relationship between person and environment, provides a basis for improvement by defining the normal and highlighting the abnormal, and it prohibits backsliding.

Standard Work In Progress
The minimum amount of material or a given product, which must be in process at any, time to insure proper flow of the operation.

Strategic Plan
The management team’s vision for where and how they will win on a sustainable long-term basis in terms of customer, product, channel, quality, delivery, and cost.

Sunk Cost
An expenditure that has already been incurred and cannot be reversed. Future decisions should not be based on sunk costs.

Supplier Partnership
An approach to business that involves close cooperation between the supplier and the customer.  It provides benefits and responsibilities that each party must recognize and work together to realize.

TAKT Time
The frequency with which the customer wants a product. How frequently a sold unit must be produced. The number is derived by dividing the amount of time available in a shift by the customer demand for that shift.  TAKT time is usually expressed in seconds.

Target Costing
A method or establishing a cost objective for a product or service during the design phase.  The target cost is determined by the following formula:
Sales Price - Target Profit = Target Cost

Total Productive Maintenance (T.P.M.)
Productive maintenance carried out by all employees.  It is based on the principle that equipment improvement must involve everyone in the organization, from line operators to top management.

Vertical Teams
Vertical teams are groups of people who come together to meet problems or challenges. These teams are made up of the most appropriate people for the issue, regardless of their levels or jobs within the organization.

Vision
A long-term plan of direction that is based on a careful assessment of the most important directions for the organization.

Visual Management
Systems that enable anyone to immediately assess the current status of an operation or given process at a glance, regardless of their knowledge of the process.

Voice of the Customer (V.O.C.)
Desires and requirements of the customer at all levels, translated into real terms for consideration in the development of new products, services and daily business conduct.

Waste
Also known as "Muda." Any process or operation that does not add value. Eight types of waste have been identified for business. They are as follows:

• 1. Waste from over-production
• 2. Waste from waiting or idle time
• 3. Waste from unnecessary transportation
• 4. Waste from inefficient procecces
• 5. Waste of unnecessary stock on hand
• 6. Waste of motion and efforts
• 7. Waste from producing defective goods
• 8. Waste from dysfunctional behaviors

Work Sequence
The specific order in which an operator performs the manual steps of the process.

World Class Quality Management
An operating methodology totally committed to quality and customer satisfaction. It focuses on continuous improvement in all processes and advocates decisions based on fact. World Class Quality Management includes all associates in meeting and exceeding customer expectations.