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Dictionary of Lean Terms

Browse our comprehensive list of Lean and Six Sigma Terms to learn new terms and solidify your understanding of Lean concepts and ideas. Direct co-workers, employees, and more to the list to learn the terminology that you will be using during your Lean transformation.

3 Elements of Demand

The three drivers of customer satisfaction are Quality, Cost, and Delivery.

See also QCD

3 Elements of Just-In-Time (JIT)

The three elements of JIT are 1) Takt Time, 2) Flow Production, and 3) a Pull System.

3 Gen Principle

The combination of going to the Genba or Gemba (actual place), to observe the Genbutsu or Gembutsu (item or product), to obtain Genjitsu (facts) in order to solve problems.

3 Reals

The '3 Reals' relate closely to the concept of the 3 Gen Principle. '3 Reals' simply means that in order to learn something you need go to the point of creation, get the facts, and see what is happening. (Go to the Real place, to make Real observations of the object or issue, to get the Real facts.) In Lean the use of the '3 Reals' helps to focus a group away from speculation and conflict by focusing on facts and truths.


Dirty, Dangerous, and/or Difficult working conditions or processes.


Production, Preparation, Process. Rapidly designing production processes and equipment to ensure capability, built-in quality, productivity, and Takt-Flow-Pull. The Production Preparation Process minimizes necessary resources, such as capital, space, inventory, and time.

5 Why

A simple and effective method of analyzing root causes and solving problems by asking ‘Why?’ five times (or as many times as needed to get to the root cause of the problem).

See also Root Cause and Root Cause Analysis


5C is a 5 step technique, very similar to 5S, that supports sustainable QCD by stabilizing, maintaining, and improving the safest working environment possible. The 5C's are:

Clear Out: Separate essential from non essential
Configure: A place for everything and everything in its place
Clean and Check: Clean to be able to see abnormal conditions
Conformity: Standards are maintained and improved upon
Custom and Practice: Everyone follows the rules, understands the benefits, and contributes to improvement

5Ms of Production

Man, Machine, Material, Method, and Measure. Understanding these factors and the establishment of Standards are key steps in strengthening the production processes.


5S is an approach to organizing the workplace to improve performance that stems from 5 Japanese words (Seiri, Seiton, Seiso, Seiketsu, Shitsuke), translated to Sort, Set in Order/Straighten, Shine/Sweep, Standardize, and Sustain. 5S utilizes visual controls to remove unnecessary materials and equipment, place items where they are needed to eliminate reaching and moving to find tools and equipment, standardizing the labeling and organization of items, and maintaining this through constant, thorough cleanliness and adherence to the first 4 Ss. This creates a safe, clean, organized, and high performance work environment.

See also 5S Training Package

See also Five S

7 QC Tools

These 7 Quality Control tools are also known as Ishikawa's 7QC tools, which revolutionized Japan & the World in the 1960's and 1970's:

7 Wastes

Defects, Inventory, Processing, Waiting, Motion, Transportation, and Overproduction. These 7 Wastes are common steps within any operation which add no value to the customer. These original 7 Wastes were described by Taiichi Ohno, and have since been added on to as Lean moves into industries that deal with more than physical production.

See also 8 Wastes, Waste, Elimination of Waste, and Non Value-Added


8 Wastes

Defects, Inventory, Processing, Waiting, Motion, Transportation, Overproduction, and Non-Utilized Talent. These eight wastes are common steps within any operation which add no value to the customer. The original 7 Wastes were described by Taiichi Ohno, and have since been added on to as Lean moves into industries that deal with more than simply physical production.

See also 7 Wastes, Waste, Elimination of Waste, and Non Value-Added

8D Process

8D is short for Eight Disciplines which originated from the Ford TOPS (Team Oriented Problem Solving) program (first published approximately 1987). The 8D Process is a problem solving method for product and process improvement. It is structured into 8 steps (D's) and emphasizes teamwork. This is often required in automotive industries. The 8 basic steps are:

  1. Establish the Team
  2. Describe the problem.
  3. Develop an Interim Containment Action
  4. Define / Verify Root Cause
  5. Choose / Verify Permanent Corrective Action
  6. Implement / Validate Permanent Corrective Action
  7. Prevent Recurrence
  8. Recognize the Team


Of course, different companies have their different twists on how they define the steps, but that is the basic standard starting point.

A3 Report()

A form used at Toyota that details a problem evaluation, root cause analysis, and a corrective action plan—all on one page. Often it includes graphics, flow charts and maps, and other forms of visual management to assist in summarizing current and future states. In the US this is on an 11″x17″ paper, as this is closest to the European A3 paper size.

ABC Inventory

A methodology for determining inventory levels based on value, space consumption, and turns.

(A=expensive, B=mildly expensive, C=fairly inexpensive)

Abnormality Management

Being able to see and quickly take action to correct abnormalities (anything that deviates from Standard Work). The goal of Standardization and Visual Management is the continuous elimination of waste and problem solving through Kaizen, which is only possible when abnormalities are visible.

Absorption Costing

Accumulates only product costs, direct and indirect, to measure product cost. The gross margin (under absorption costing) is sales revenue minus all product costs, including applied fixed manufacturing overhead. Absorption costing averages all product costs across units produced.

Acceptable Quality Level (AQL)

Also referred to as Assured Quality Level. The largest quantity of defects within a certain sample size that can make the lot definitely acceptable. Customer will definitely prefer the zero defect products or services and will ultimately establish the acceptable level of quality. There is, however, only one ideal acceptable quality level—zero defects—all other quality levels are compromises based upon acceptable business, financial and safety levels.

Acceptance Number

The highest number of defects found in a sample that permits the acceptance of the lot.

Accessory Planning

The planned utilization of remnant material for value-added purposes.


Conditional personal or professional liability “after” the fact, determined by action or responsibility. Accountability to action assumes the willingness to be held accountable for adequate expertise and capability. The state of being accountable, liable, or answerable for outcomes.


Accuracy refers to the clustering of data about a known target. It is the difference between a physical quantity's average measurements and that of a known standard.

Active Data

Actively and purposefully make changes in our data to monitor the corresponding impact and results on the Xs and Ys.

Activity Based Costing (ABC)

A management accounting system that assigns cost to products based on the resources that are used to perform the process. (Raw materials, energy, machine time, labor, etc.)

Activity Ratio

An indicator of process efficiency. (Sum of Process Time for Individual Steps) / (Total Lead Time) = Activity Ratio.

See also Percent Value-Adding

Actual Costing

Attempts to assign costs to specific products based on the costs of resources that are actually used. Due to fluctuations and/or more permanent changes, actual costs may be different from expected costs.

Affinity Diagram

A tool used to organize and present large amounts of data (i.e. ideas, problems, solutions) into categories based upon the users perception. Often used in the form of “sticky notes” sent up to the front of the room during brainstorming exercises, then grouped by the facilitator and workers. The final diagram shows the relationship between the issue and the category. The categories are then ranked and duplicate issues are combined to make a simpler overview.

Agile Manufacturing

A manufacturing approach designed to contribute of the flexibility of a process. This flexibility reduces the impact of changes in product mix.


Lost interactions in a Design of Experiment. An alias indicates that you've changed two or more things at the same time in the same way. Aliasing is a critical feature of Plackett-Burman, Taguchi designs, or standard fractional factorials. The lower the resolution, the higher the aliasing issue.

See also Confounding

Alpha Risk

Alpha risk is defined as the risk of rejecting the Null Hypothesis (H0) when in fact it is true.

See also Type I Error, Producers Risk and Type II Error

Alternate Hypothesis (Ha)

The Alternate Hypothesis (Ha) is a statement that the means, variance, etc. of the samples being tested are not equal. In software programs, this presents a “P” value in lieu of an F Test or T Test. When the P value is less than or equal to your agreed upon decision point (typically 0.05) you accept the Ha as being true and reject the Null H0.

Analysis of Variance (ANOVA)

Analysis of Variance is a statistical technique for analyzing data that tests for a difference between two or more means by comparing the variances within groups and variances between groups.

Analytical Modeling

A software or other service component modeling technique using tools based on mathematical models.

Anderson-Darling Normality Test

The Anderson-Darling Test is used to test if a sample of data came from a population with a specific distribution. It is a modification of the Kolmogorov-Smirnov (K-S) Test and gives more weight to the tails than does the K-S Test. The K-S Test is distribution free in the sense that the critical values do not depend on the specific distribution being tested. The Anderson-Darling Test makes use of the specific distribution in calculating critical values. This has the advantage of allowing a more sensitive test and the disadvantage that critical values must be calculated for each distribution.


A Visual Management Tool, typically a light, which is placed on a machine or production line to signal normal and abnormal processes. Typically the lights are color-coded as Green (Normal), Yellow (Warning that something is imperfect), Red (Abnormality, the Machine or Line is Stopped).

See also Andon Board

Andon Board

A visual control device, typically a lighted overhead board or display, that gives the current status of the production system in an area. This is used to alert team members to any arising problems.

See also Andon and Visual Management

Appraisal Cost

Appraisal Cost is a component of 'Cost of Quality'. This is the cost incurred on Preventing the defects. (e.g. Cost to establish Methods & Procedures, Cost to Plan for Quality, Cost of Training.)


Advanced Product Quality Planning is a control plan methodology which discusses the use of a Control Plan and the relevant data required to construct and determine control plan parameters. Stresses the importance of the Control Plan in the continuous improvement cycle. The phases of planning are typically as follows:

Phase 1:
Plan & Define Program – Determine customer needs, requirements, and expectations using tools such as Quality Function Deployment (QFD). Review the entire quality planning process to enable the implementation of a quality program to define and set the inputs and the outputs.

Phase 2:
Product Design & Development – Review the inputs and execute the outputs, which include Failure Modes and Effects Analysis (FMEA), Designed for Manufacturing & Assembly (DFMA), design verification, design reviews, material, and engineering specifications.

Phase 3:
Process Design & Development – Address features for developing manufacturing systems and related control plans. These tasks are dependent on the successful completion of Phases 1 & 2.

Phase 4:
Product & Process Validation – Validate the selected manufacturing process and its control mechanisms through production run evaluation, outlining mandatory production conditions and requirements as well as identifying the required outputs.

Phase 5:
Launch, Feedback, Assessment, & Corrective Action – Focus on reducing variation, continuous improvement, identifying outputs, and links to customer expectations, as well as future product programs.

Artisan Process

Known for pioneering efforts to invent or create that which has never existed. It is one of a family of four work process types (Artisan Process, Project Process, Operations Process, Automated Process) and is characterized as a temporary endeavor, undertaken to create a unique product or result which is performed by people.

Attribute Based Cost System

Integrates Activity Based Costing (ABC) with Quality Function Deployment.

Attribute Based Cost System contribution analysis provides a means for examining profitability at the market segment and customer level. Attribute Based Cost System uses multiple internal, as well as external, cost objects and improves management decision making.

Attribute Data

Attribute data is the lowest level of data. Good or Bad, Yes or No. No analysis can be performed on attribute data, it needs to be converted to a form of Variable Data (called Discrete Data) in order to be useful.

Attribute Data is commonly misnamed as discrete data.


The granting or taking of power and liability to make decisions and influence action on the behalf of others.


Autocorrelation means that observations are not wholly independent. Each observation will tend to be close in value to the next, which can result in under-estimating sigma. However, a little bit of autocorrelation will not ruin a Control Chart.

Automated Process

Known for eliminating labor costs, it is one of a family of four work processes (Artisan Process, Project Process, Operations Process, Automated Process) characterized as an on-going endeavor undertaken to create a repetitive product or result which is planned, executed, and controlled.

Automatic Time

The time when a machine is running on an automatic cycle and an operator does not need to be present.


Machines that are given “human intelligence” so that they are able to prevent producing a defect by shutting down an operation if a defect is detected. This is essential in introducing One-Piece Flow to a production line, as it allows the line to be stopped and the number of defects produced to be drastically cut.

See also Intelligent Automation and Jidoka

Autonomous Maintenance

A component of TPM that involves production machine operators, in step-by-step operations, to ensure optimal machine conditions for operation.


Availability is the state of able-readiness of a product, process, person, or organization to perform its specified purpose, under pre-specified environmental conditions, when called upon.


Software tools which provide customers and customer service representatives have access to product order delivery dates in real time. Often this interfaces with inventory replenishment, forecasting, and scheduling/planning.

Average Income Quality (AIQ)

AIQ is the average quality level going in to the point of inspection.

Average Outgoing Quality (AOQ)

AOQ is the average quality level leaving inspection after rejection and acceptance of a number of lots. If rejected lots are not checked 100% and defective units are not removed or replaced with good units, the AOQ will be the same as the AIQ.

B10 Life

B10 Life is the time by which 10% of the product population will fail.

Back Flushing

A method of recording accounting transactions for labor and materials based upon what was shipped, rather than by materials issued or cards. The aim of Back Flushing is to reduce the number of Non Value-Added transactions.


The start and due dates for each operation in the manufacturing process are calculated back from the ship date.

See also Ship Date

Balanced Experiment

An experiment is balanced when all factor levels (or treatment groups) have the same number of experimental (or treatment) units. Unbalanced experiments add complexity to the analysis of the data (hopefully for a good reason). For example, some levels are expected to produce greater variation than others and so more units are assigned to those levels.

Balance is not necessarily essential but is desirable if equal accuracy, power, or confidence interval width for treatment comparisons is important. Severe imbalance can induce factor Confounding.

Balanced Production

Having all operations, or cells, producing at the same Cycle Time. Also when a manufacturing system is producing at Takt Time.

Balanced Scorecard

The Balanced Scorecard is a strategic management system used to drive performance and accountability throughout an organization. The scorecard balances traditional performance measures with more forward-looking indicators in four key areas:

  • Financial
  • Integration/Operational Excellence
  • Employees
  • Customers

Bar Chart

A Bar Chart is a graphical comparison of several quantities, where the lengths of the horizontal or vertical bars represent the relative magnitude of the values.

Bartlett Test

This test is used to determine if there is a difference in variance between 3 or more samples. It is useful for testing the assumption of equal variances, which is required for one-way ANOVA.


A snapshot of the state of inputs/outputs, frozen at a point in time for a particular process. A baseline should be recorded to establish a starting point in order to measure the changes achieved regarding any process improvement.


The process of measuring and comparing performance metrics of products, services, and practices against those of leading companies within similar industries. This helps to establish standards for improvement, based upon what others have achieved.

Batch & Queue

Processing method where multiples pieces of work are processed and/or passed on to the next operation together (a batch or lot). Because of the high volume being transported from operation to operation, these pieces will sit in a queue, waiting to be processed.


“Business As Usual” The old way of doing business, considering repetitive tasks with no critical sense of improvement.


The process of measuring and comparing performance metrics of products, services, and practices against those of leading companies within similar industries. This helps to establish standards for improvement, based upon what others have achieved.

Best Practice

A way or method of accomplishing an activity or process that is considered to be superior to all other known methods.


A best-known performance example in a particular operation. Both the class and the operation need to be defined when utilizing Best-in-Class for benchmarking purposes.

Beta Risk

Beta Risk is defined as the risk of accepting the Null Hypothesis (H0) when, in fact, the Alternate Hypothesis (Ha) is true. In other words, stating no difference exists when there is an actual difference. A statistical test should be capable of detecting differences that are important to you, and Beta Risk is the probability (such as 0.10 or 10%) that it will not. Beta Risk is determined by an organization or individual and is based on the nature of the decision being made. Beta Risk depends on the magnitude of the difference between sample means and is managed by increasing test sample size. In general, a Beta Risk of 10% is considered acceptable in decision making.

See also Type II Error, Consumer Risk, and Type I Error


Bias in a sample is the presence or influence of any factor that causes the process being sampled to appear different from what it actually is. Bias is introduced into a sample when data is collected without regard to key factors that may influence it.

Big 'Q'

Distinguishing the concepts of Quality from that of the word quality.

Bimodal Distribution

Bimodal Distribution is when 2 values occur more frequently in a data set than rest of any of the values.

Binomial Distribution

In a situation where there are exactly two mutually exclusive outcomes (e.g. Success/Failure) of a trial, to find the “X” success in “N” trials with “P” as the probability of success on a single trial.

Binomial Random Variable

A discrete random variable which represents the number of successes out of “n” (the sample size) from identical and independent trials.

Black Belt

A Black Belt is a Six Sigma team leader, responsible for implementing process improvement projects (DMAIC or DFSS) within the business in order to increase customer satisfaction levels and business productivity. Black Belts are knowledgeable and skilled in the use of the Six Sigma methodology and tools, demonstrated by the completion of an exam and project(s).

See also Six Sigma Belts

Black Noise

Sources of variation which are non-random (Special Cause).


A fast process for improvement, generally consisting of a cross-functional team that focuses on designing solutions to meet a well defined goal. This is focused on a particular component of a business (machine, process, product) and involves quick problem-solving exercises.


Blocking neutralizes background variables that can not be eliminated by randomizing. It does so by spreading them across the experiment.

A block is a type of uncontrollable factor within an experiment. A block is usually incorporated into the experiment used, in a controlled way, when the uncontrollable factor cannot be avoided during the experiment. The idea is to pull the variation, due to the blocks, out of the experimental error in order to reduce the experimental error and give the test more power.


A step or process that limits the throughput of items, resources, and products through the entire process.

See also Constraint

Box Plot

A Box Plot, also known as a Box and Whisker Diagram, is a basic graphing tool that displays the spread, distribution, and centering of a continuous data set.

A Box Plot provides a 5 point summary of the data:

  1. The box represents the middle 50% of the data.
  2. The median is the point where 50% of the data is above it and 50% below it. (Or left and right depending on orientation).
  3. The 25th quartile is where, at most, 25% of the data fall below it.
  4. The 75th quartile is where, at most, 25% of the data is above it.
  5. The “whiskers” cannot extend any further than 1.5 times the length of the inner quartiles. If you have data points outside this they will show up as outlier.

Box-Cox Transformation

The Box-Cox transformation can be used for converting data to a normal distribution, which then allows the process capability to be easily determined.

See also Distribution


A problem solving approach/technique where working members in a group generate ideas regarding identifying possible causes of a problem. This process can also be used to identify solutions to the problems in order to overcome poor performance in any process or activity that is pursued as a result of the Brainstorming session.

Breakthrough Objective

A 'stretch goal' for an organization that requires multi-department teamwork, which will significantly change the organization to gain a competitive advantage.


The location between each operation in a production line that contains in-process parts. Typically a conveyor, roller-rack, or CML (continuously-moving-line).

The size of the buffer is governed by the average cycle times for each operation. A machine with a low cycle time feeding to a machine with a higher cycle time will typically have a large buffer in order to prevent blocking the first machine.


A problem in software. (A part of code that makes the program behave in an unwanted, unnecessary manner.)


Helping the person(s) before or after a said person in a manufacturing system or cell (i.e. working on a proceeding process's work so that you continue to have work).

Business Impact Analysis (BIA)

A formal analysis of the effect on the business if a specific process loses efficiency or fails altogether. This also identifies the minimum performance level of a given process that an organization requires in order to continue operating.

Business Metric

A business unit of measure to gauge a company's performance and have a standard to improve. This is of great importance to Champions.

Business Process Management System (BPMS)

Business Process Management System is a 9 step model enables companies to model, deploy, and manage critical business processes which span multiple departments. BPMS is usually used for lesser mature processes to make them repeatable and reliable.

The 9 step approach includes:

  1. Create a Process Mission
  2. Document the Process
  3. Document Customer & Process Requirements
  4. Identify Output & Process Measures
  5. Build a Process Management System
  6. Establish a Data Collection Plan
  7. Process Performance Monitoring
  8. Develop Dashboards with Spec Limits & Targets
  9. Identify Improvement Opportunities

Business Process Quality Management

Also called Process Management or Reengineering. The concept of defining macro and micro processes, assigning ownership, and creating responsibilities of the owners.

Business Requirements

The critical activities of an enterprise that must be performed in order to meet organizational objectives.

Business Risk Management (BRM)

Evaluating the business risk involved for any change in process.


A typical term that is used to describe senior executives within an organization. (For example: CEO, CFO, COO, CIO, etc.)


Calibration is simply the comparison of performance to a standard of known accuracy. It may simply involve determining whether there is deviation from nominal or may also include correction (adjustment) to minimize the errors. Properly calibrated equipment provides confidence that your products/services meet their specifications.


The maximum achievable results, based upon imposed limitations.

Capability Analysis

Capability Analysis is a graphical or statistical tool that visually or mathematically compares actual process performance to the performance standards established by the customer.

To analyze (plot or calculate) capability you need the mean and standard deviation associated with the required attribute in a sample of product (usually n=30), and customer requirements associated with that product.

Capability Maturity Model (CMM)

The Capability Maturity Model for Software (also known as the CMM and SW-CMM) has been a model used by many organizations to identify best practices, useful in helping them increase the maturity of their processes.


The maximum amount a machine, process, or system can produce.

Capacity Constraint Resources (CCR)

A series of non-bottlenecks which, based upon the sequence in which they perform their jobs, act as a constraint.

CAR (Corrective Action Report)

Procedure used in response to a defect. This implies that you are reporting a detected Non-Conformity and have determined the root cause to correct this from reoccurring.


A process or series of discussions between managers and employees (tossed back & forth like a ball) to come up with a means of achieving a Breakthrough Objective.


A factor (X) that has an impact on a response variable (Y); a source of variation in a process or a product or a system.
Anything that adversely affects the nature, timing, or magnitude of an adverse effect.

Cause & Effect Diagram

A visual problem solving tool used to identify and document relationships between effects and potential causes.

See also Fishbone Diagram and Ishikawa Diagram


The co-location and layout of differing types of equipment, performing different operations, in a sequence (typically in a U-shape) which permits One-Piece Flow and flexible deployment of workers.

Cellular Manufacturing

The layout and alignment of processes and equipment in the correct sequence of process flow, wherein operators work within a cell with materials brought to them from outside of the Cell.

See also Runner and Waterspider


The Center of a process is the average value of its data. It is equivalent to the mean and is one measure of the central tendency.

Center Points

A Center Point is a run performed with all factors set halfway between their lowest and highest levels. Each factor must be continuous to have a logical halfway point.

Central Limit Theorem

The Central Limit Theorem states conditions under which the mean of a sufficiently large number of independent random variables, each with finite mean and variance, will be approximately normally distributed.

Central Tendency

The numerical average (e.g. mean, median, or mode) of a process distribution. Can also be displayed as the centerline of a process control chart.

An indication of the location or centrality of the data. The most common measures of central tendency are: mean (numerical average), median (the midpoint of an order data set, such that half of the data points are above and half are below it), and the mode (the value that occurs most frequently).

Certified Six Sigma Black Belt (CSSBB)

Certified Six Sigma Black Belts (CSSBB) are those individuals who have displayed proven knowledge and expertise in implementing Six Sigma. This involves both “textbook” knowledge of the subject matter (methodologies, tools, principles, and related topics such as leadership and change management), as well as real-world, successful application of the methdology and tools in more than one Six Sigma project.

An individual can become a Certified Six Sigma Black Belt (CSSBB) in a variety of ways: from a not-for-profit society, from a consulting company, or from their private company (e.g. GE, Motorola, etc.). No one way is necessarily better than another, however, it is widely accepted that private companies with mature Six Sigma programs serve as the best vehicles for certification. In other words, this becomes the most valuable certification in marketability of individuals who become certified.

Arguably, what matters the most is the results the Certified Six Sigma Black Belt (CSSBB) has delivered and can prove, and provide, to a potential new employer.


A One-Piece Flow method where an operator simply proceeds from one machine to the next, taking a part from one machine and loading it into the proceeding one.


Business leaders and senior managers who ensure that resources are available for training and projects and who are involved in project Tollgate reviews.

Change Acceleration Process (CAP)

CAP is a change management framework with a set of tools used to gauge the environment within the organization, and plan for action which will eventually determine how much success a change initiative can bring in within the existing operating boundaries.

Some of the CAP tools are:

  • ARMI
  • GPRI
  • Includes/Excludes
  • Threat vs Opportunity
  • In Frame/Out Frame
  • More of/Less of Exercise
  • Elevator Speech

Change Agent

A person who leads a change project or business-wide initiative by defining, researching, planning, building business support, and carefully selecting volunteers to be part of a change team. Change Agents must have the conviction to state the facts based on data, even if the consequences are associated with unpleasantness. This person helps to push thinking from an inward to a more outward focus.

Change Management

A process of implementing a culture change within an organization through planned education, preparation, planning, resource allocation, and people empowerment.


The activity that takes place to convert a process from performing one type of work to performing another.

See also Setup

Changeover Time

The time it takes to perform a Changeover.


A characteristic is a definable or measurable feature of a process, product, or variable.


A document or sheet that clearly identifies and defines the purpose of a Quality Improvement Project. Items specified include background, purpose, team members, timeline, etc.

Check Sheet

A form used to tabulate information regarding the type and frequency of an occurrence. Often these Check Sheets are used to quantify data and provide direction for corrective actions or continuous improvement activities. The results of Check Sheets often provide the input data for the creation of Pareto Charts.


A form used as a reference to ensure all key steps in a process have been completed. Often these checklists integrated into the Standard Work for an operation.

Chi Square Test

The Chi Square Test is a statistical test which consists of three different types of analysis:

  1. Goodness of Fit
  2. Test for Homogeneity
  3. Test of Independence

The Test for Goodness of Fit determines whether the sample under analysis was drawn from a population that follows some specified distribution or not.

The Test for Homogeneity answers the idea that several populations are homogeneous with respect to a few characteristic.

The Test for Independence (one of the most frequent uses of Chi Square) is for testing the Null Hypothesis that two criteria of classification, when applied to a population of subjects are independent. If they are not independent then there is an association between them.

Chi Square is the most popular Discrete Data Hypothesis Testing method.


The sum of essential facts or events accompanying, conditioning, or determining the probability or improbability of an event.


The location of processes and equipment, in sequence, that permits One-Piece Flow as well as the flexible deployment of workers to operate multiple processes or resources.

See also Layout for Flow

Coefficient of Variance

Coefficient of Variation is defined as the relative measure of dispersion as it relates to the mean and standard deviation. This is expressed by representing the Standard Deviation as a % of mean. The benefit of Standard Deviation is an absolute measure which explains the dispersion in the same unit as original data.

Common Cause

A source of quality failure that is always present as part of the random variation inherent in the process itself. Its origin can usually be traced to an element of the process which only management can correct.

Common Cause Variation

Common Cause Variation is a source of variation caused by unknown factors, which results in a steady but random distribution of output around the average of the data. Common Cause Variation is a measure of the process's potential, or how well the process can perform when Special Cause Variation is removed. Therefore, it is a measure of the process technology.

Also known as Random Variation, Noise, Non Controllable Variation, Within-Group Variation, or Inherent Variation.

Competitive Advantage

The ability of any organization or enterprise to dominate in the national and international markets, through offering quality products or services which exceed the requirements of customers.

Concomitant Variable

An incidental or subordinate variable.

Concrete Head

Japanese term for someone who resists and will not accept change. These people do not accept that businesses must be focused on waste elimination and customer satisfaction, as well as other concepts inherent in a Lean System.

Concurrent Engineering

Designing a product or service, its production process, supporting information flow, and its delivery mechanism all at the same time. Concurrent Engineering requires up-front planning and dedicated resources during the early stages of development. The benefits of this include shorter concept-to-market time, higher quality products and services, lower overall development costs, and lower product or service costs.

Confidence Band

Measurement of the certainty of the shape of the fitted regression line. A 95% confidence band implies a 95% chance that the true regression line fits within the Confidence Bands.

Confidence Interval

A confidence interval is a range around a measurement that conveys how precise the measurement is.


This is the last and also one of the most critical steps of a Design of Experiment (DOE). This is the phase of setting a process at the settings that have been calculated in order to see if the outcome is truly what your equation says it should be.

This should always be done before advertising results and implementing new factor settings. You should confirm the results, however if you are unable to get a confirmation, there is likely a problem with the DOE. There may be an interaction involved and/or the DOE may have been compromised.


Confounded is when the effects of multiple factors in a response cannot be separated. This occurs to some degree in all situations, though it occurs less frequently when the data is obtained from a carefully planned and executed experiment which has a predefined objective.

See also Alias

Consequential Metrics

Consequential Metrics measure any negative consequences that are encountered as a result of improving the Primary Metric. This is also known as a Secondary Metric.

There can be multiple Consequential Metrics in a project of improving one process or one Primary Metric.


A step or process that limits the throughput of items, resources, and products through the entire process.

See also Bottleneck

Consumer Risk

Stating no difference exists when there is an actual difference.

See also Type II Error and Beta Risk

Contingency Table

An application used to test the relationship between two variables.



Continuous Data

Continuous data is information that can be measured on a continuum or scale. Continuous Data can have almost any numeric value and can be broken down into smaller parts and still have meaning, depending upon the precision of the measurement system.

As opposed to Discrete Data like good or bad, off or on, etc., Continuous Data can be recorded at many different points (length, size, width, time, temperature, cost, etc.).

See also Quantitative Data

Continuous Flow

A system where workers only work on one unit/product at a time, pass this one unit/product on to the next process, then begin on another unit/product. Unlike Batch & Queue, this One-Piece Flow method has a significant impact on reducing throughput time, wastes, and improving Value-Added Activities.

See also One-Piece Flow and Single-Piece Flow

Continuous Improvement

The never-ending pursuit of improving a business, operation, or product to get closer to perfection. This includes removing unnecessary steps, activities, and wastes to increase customer satisfaction, employee morale, and value to society.

See also Kaizen and Kaikaku


An “in statistical control” process is one that is free of Special Causes of Variation. Such a condition is most often evidence on a Control Chart, which displays an absence of non-random variation.

A technical function in nature and a continuous process by which the expected results are measured against a predetermined criteria or standards. In the case of variances, a disciplinary action will be undertaken or improvement actions will be pursued.

Control Chart

A statistical problem solving tool that indicates control of a process within established limits. This distinguishes variations which are inherent in the process (Common Cause) from variations that yield a change to the process (Special Cause). This change may be a single point or a series of points in time—each is a signal that something is different from what was previously observed and measured.

Control Element

Any specific process variable that must be controlled. The measurement of control elements indicates whether or not a process is operating under stable conditions.

Control Limits

Control Limits define the area 3 Standard Deviations on either side of the centerline, or mean, of data plotted on a Control Chart which is the expected variation in the data. This is not to be confused with Specification Limits (USL and LSL). Bi-lateral specification/tolerances have two limits on both side of the tolerances which is not appreciated in the unilateral tolerances.

Control Plan

The intent of a process Control Plan is to control the product characteristics and the associated process variables to ensure capability (around the identified target or nominal) and stability of the product over time.

The process Failure Modes and Effects Analysis (FMEA) is a document to identify the risks associated with something potentially going wrong (creating a defect) in the production of the product. The FMEA identifies what controls are placed in the production process to catch any defects at various stages on the processing.

Every completed Six Sigma project should have not only a Control Chart (if applicable), but a Control Plan. This ensures that the process doesn't revert to the way it previously operated.


Constant Work In Process is another way of definining FIFO.

See also First-In, First-Out (FIFO)

Corrective Action

Action taken to eliminate the cause(s) of a nonconformity (or multiple nonconformities). Corrective Action is taken to prevent recurrence of existing problems by correcting the root cause.

Corrective and Preventive Action (CAPA)

Corrective Action:
Action taken to eliminate the cause of the existing non-conformities to prevent its recurrence.

Preventive Action:
Action taken to eliminate the cause of potential non-conformities.

Both of these are prevention oriented. The quick fix type actions are called as corrections.


Correlation is the degree or extent of the relationship between two quantitative, continuous variables.

Cost of Conformance

Cost of Conformance (COC) is the total cost of ensuring that a product is of good quality. It includes Cost of Quality Assurance activities, such as standards, training, and processes; and Cost of Quality Control activities such as reviews, audits, inspections, and testing. COC is a component of the Cost Of Quality for a work product.

Cost of Non-Conformance

The cost of waste, which can be caused by excess and obsolete material, defect rework, engineering changing orders, non-standard modifications, warranty repair, and more.

Cost of Poor Quality (COPQ)

Cost of Poor Quality consists of those costs which are generated as a result of producing defective material. This cost includes the cost involved in fulfilling the gap between the desired and actual product/service quality. It also includes the cost of lost opportunity due to the loss of resources used in rectifying the defect. This cost includes all the labor cost, rework cost, disposition costs, and material costs that have been added to the unit up to the point of rejection.

COPQ does not include detection and prevention cost.

Cost of Quality (COQ)

A quantification of the Cost of Poor Quality.

Counter Measures

Actions taken to bring less than expected results of a process back up to targeted levels.

Counterclockwise Flow

The idea that the flow of materials and the motion of people should be from right to left (counterclockwise), is a basic principle of Lean Manufacturing Cell Layout.

This thought originated from the design of machine tools and lathes, which have chucks on the left side, thereby making it easier for right-handed people to load from right to left.


The impact of one variable upon others in the same group.


Covariants are random variables you treat as Concomitants (see Concomitant Variable) or as other influential variables that also affect the response. Covariates in DOE are uncontrolled variables that influence the response but do not interact with any of the other factors being tested at the time. Therefore, if they are present during the experiment then they would show as measurements of error.

Cp (Capability Index)

Capability Index is the availability to produce products that conform to a given specification, regardless of mean location. It is a ratio of tolerance specified to process capability (Cp= Tolerance/6s).

Cpk (Process Capability Index)

Process Capability Index (Cpk) is used to find out how well the process is centered within the specification limits. (Cpk = min of (USLmean) or (meanLSL)/3s ).

Creative Problem Solving

Methods that combine defining problems, identifying patterns, generating new ideas, and action planning in order to resolve problems using unique and innovative solutions.

Critical Element

A critical element is an “X” that does not necessarily have different levels of a specific scale, but can be configured according to a variety of independent alternatives.

See also Red X

Cross Training

The training of individuals in skills that enable them to perform a variety of tasks or jobs. In Lean, this focuses on increasing the competencies along the Value Stream in order to optimize performance.

Cross-Functional Team

A team comprised of individuals who represent different functions within a given process. This may be a specific activity formed team (for a Kaizen Event) or a more permanent team.

Current Reality Tree

Current Reality Trees (CRT) are logical structures designed to show the state of reality that exists, currently, within a given system.

Current State

The steps and issues which are currently being performed to complete a necessary task. Often this is quite different from the written procedure, which states how a task should be performed.

Current State Map

A visual representation of the current production process, identifying steps and sources of waste.

Customer Focus

The idea/concept that the customer is the only person qualified to specify what requirements of the product or service are necessary.

Customer Relationship Management (CRM)

Customer Relationship Management (CRM) is an ABC System applied to the Customer base which looks at order processing, logistics, packaging and distribution, sales and inventories. The General Ledger lumps most of these categories into SG&A.

Cusum Chart

A Cusum Chart is used to detect small changes between 0-0.5 sigma. For larger shifts (0.5-2.5), Shewart-type charts are just as good and easier to use. Cusum charts plot the cumulative sum of the deviations between each data point (a sample average) and a reference value, T.

Cycle Time

The total time that is required to complete one cycle of an operation or task. Categories of Cycle Time include: Manual Cycle Time (loading, unloading, flipping/turning parts, adding components to parts, while still in the same process/machine), Machine Cycle Time (processing time of the machine working on the part), and Auto Cycle Time (time a machine runs automatically, without manual intervention), Overall Cycle Time (complete time it takes to produce a single unit – generally used when speaking of a single machine or process), and Total Cycle Time (includes all machines, processes, classes of Cycle Time that a product must pass through to become a finished product).


Problem solving methodology can be defined as MAGICS:

M – Measure
A – Analyze
G – Grasp
 I – Improvize
C – Control
S – Sustain

Daily Management

The day to day activities that are necessary to ensure the business is generating profit and serving its customer base.


A dashboard is a tool used for collecting and reporting information about vital customer requirements and/or a business’s performance for key customers. Dashboards provide a quick summary of process and/or product performance.


Data are factual information used as a basis for reasoning, discussion, or calculation; often this term refers to quantitative information. The singular of data is “datum.”

Data Boxes

Forms or templates used to document each process in a Value Stream.

Datsu Chaku

A Japanese term used to tell the traditional way of component loading on a machine. The term “Datsu” means Unloading, and the term “Chaku” means Loading. This terminology is used to compare with another Japanese word “Chaku-Chaku”.

Days Supply of Inventory

Total number of days it would take to deplete finished goods inventory for a specific product line, if production were to cease entirely.


Improving the throughput rate of a process bottleneck.


Making bad parts, having scrap, wrong information, and/or having to rework items.

One of the 7 Wastes.

Degree of Freedom

Degrees of freedom is central to estimating statistics of populations from samples of those populations. Another way of thinking about the meaning behind degrees of freedom is to imagine predictability.

As an example, imagine you have four numbers (a, b, c, and d) that must add up to a total of e. You are free to choose the first three numbers at random, but the fourth must be chosen so that it makes the total equal to e—thus your degree of freedom is 3.

Demand Management

Also known as Demand Forecasting, Demand Management is a way of predicting the levels of weekly or monthly product activity over a specified period of time.

Deming's 14 Points

Deming offered 14 key principles for management for transforming business effectiveness.

  1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and stay in business, and to provide jobs.
  2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, learn their responsibilities, and take on leadership for change.
  3. Cease dependence on inspections to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
  4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item to create a long-term relationship of loyalty and trust.
  5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease cost.
  6. Institute training on the job.
  7. Institute leadership—the aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
  8. Drive out fear so that everyone may work effectively for the company.
  9. Break down barriers between departments. People in research, design, sales, and production must work as a team to foresee problems of production and use that may be encountered with the product or service.
  10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
  11. a. Eliminate work standards (quotas) on the factory floor. Substitute leadership. b. Eliminate management by objective. c. Eliminate management by numbers, numerical goals. Substitute workmanship.
  12. a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality. b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.
  13. Institute a vigorous program of education and self-improvement.
  14. Put everyone in the company to work to accomplish the transformation. The transformation is everyone's work.

Dependent Events

Events which occur only after a previous event.

Dependent Variable

A variable that can change a desired output.

Descriptive Statistics

A method of statistical analysis of numeric data (discrete or continuous) that provides information about centering, spread, and normality. Results of the analysis can be in tabular or graphic format.

Design of Experiment (DOE)

A family of statistical improvement techniques used in the planning and conducting of experiments and evaluation of the results. The outcome of a Design of Experiment (DOE) includes a mathematical equation predicting the interaction of the factors that will influence a process, and the relevant output characteristics of the process.

Design Risk Assessment

A Design Risk Assessment is the act of determining the potential risk in a design process, either in a concept design or a detailed design. It provides a broader evaluation of your design beyond just CTQs and will enable you to eliminate possible failures and reduce the impact of potential failures. This ensures a rigorous, systematic examination in the reliability of the design and allows you to capture system-level risk.

Designed for Manufacturing & Assembly (DFMA)

A way of improving the cost, quality, and safety of the manufacturing and assembly processes by design.

Detectable Effect Size

The smallest effect that is considered significant enough to improve a process.


Designed for Six Sigma

Direct Cost

The cost of resources used that can be traced directly to decisions that were made.


Statements and priorities that serves to guide, and usually encourage us towards an action or goal.

Discrete Data

Discrete data is information that can be categorized into a single classification. Only a finite number of values is possible, and the values cannot be subdivided meaningfully. For example, the number of parts damaged in shipment. Discrete data is data that can't be broken down into a smaller unit of additional meaning.

See also Qualitative Data


The degree to which the data set tends to spread about the mean. Dispersion has three common measures: Range, Variance, and Standard Deviation.


Distribution refers to the behavior of a process described by plotting the number of times a variable displays a specific value or range of values rather than by plotting the value itself.

Distribution Management

A tool used to decide upon and produce the optimal quantities of products needed from each plant to supply distribution warehouses/centers with sufficient products to meet customer demand, while incurring the minimal amount in costs and risks.


DMADV is an acronym for:

  • Define
  • Measure
  • Analyze
  • Design
  • Verify

DMADV is a data-driven strategy for designing products and processes and it is an integral part of a Six Sigma Quality Initiative.


A Six Sigma methodology that's purpose is to remove defects from a process. DMAIC stands for:

  • Define
  • Measure
  • Analyze
  • Improve
  • Control


Downstream processes are activities that take place after a specified reference point. For example, Shipping is a downstream process from Order Picking.


DPMO stands for Defects per Million Opportunities.

DPMO is calculated using Defects (D), Units (U), and Opportunity for a defect (O). The calculation is as follows: DPMO = (D/(UxO))x1,000,000


As components age and equipment undergoes changes in temperature or sustain mechanical stress, critical performance gradually degrades. This is called drift. When this happens your test results become unreliable and both design and production quality suffer.

Dynamic Scheduling Software

Software that allows for updating and refining production schedules as demand and conditions change.

Eco Efficiency

The means by which more and better quality goods and services are created using fewer resources and minimizing waste and pollution.


A measure of Quality.


A measure of Speed.

Electronic Kanban

A software system designed to automate many of the manual processes associated with releasing or creating a Kanban order.

Elemental Time

The time allotted to a specific operational step within Standard Work.

Elements of Work

A key step to understanding Lean and Lean thinking is understanding the Elements of Work. These are: Value-Added, Non Value-Added, and Waste.

Elimination of Waste

Philosophy stating that all activities that are undertaken need to be evaluated to determine if they are necessary or not, as defined by the customer. Waste elimination is the backbone of the Lean Production System.


An employee is a person working for another person or a business for pay.

Employee Empowerment

Giving employees more responsibility, authority, and accountability for affecting daily processes and improvements.

See also Empowerment

Employee Involvement

Those who do the job have vital information for eliminating waste and solving problems, and in order to get their commitment they need to be involved in the decision making process.


Giving employees more responsibility, authority, and accountability for affecting daily processes and improvements.

See also Employee Empowerment

Engineer Change Order (ECO)

Engineering changes in procedures that will be implemented in a new revision of a procedure.

Engineering Change Request

A request or suggestion to Engineering for an improvement in a process or procedure.

Enterprise Resources Planning (ERP)

ERP is essentially an extension of MRP (Manufacturing Resources Planning), which takes the needs of an entire organization into account.

Entry Criteria

A predefined set of conditions used as a Process Control mechanism to determine the cost-effectiveness of initiating a process or sub-process.

This is used to prevent the entry of “bad data” into a process, such as poor quality specifications or inadequate levels of prior work content.

Error Mode Effects Analysis (EMEA)

A procedure in which each potential error made in every sub-process of a process is analyzed to determine its effect on other sub-processes and on the required accuracy of the process. EMEA is also used to prioritize and rank potential causes of process or human failures, as well as create, launch, and evaluate countermeasures.

Error Proofing

Changes in the design of a product or process that help to eliminate the potential for errors to occur.

See also Mistake Proofing and Poka-Yoke

Every Part Every Interval (EPEI)

Similar to Takt Time, EPEI highlights the need of the organization to have a rate of production based on One-Piece Flow.

Exit Criteria

A predefined set of conditions used as a Process Control mechanism to verify that a process or sub-process has been completed, and that its products are of acceptable Quality. Exit Criteria prevent the delivery of “bad units” to downstream users of the products.

External Customer

The final, end-product user or supplier.

External Setup (Changeover)

Setup tasks which can be performed while the machine is running. The movement of setup activities to External Setup, from Internal Setup, is a central activity of reducing setup times and SMED.

Extra Processing

Activity that adds no value to the product or service from the viewpoint of the customer (Internal or External).

One of the 7 Wastes.

F Test

Tests whether or not two samples that had been drawn from different populations have the same standard deviation, with specified confidence level. Samples may be of different sizes.


A factor is an independent variable; an X.

Failure Modes and Effects Analysis (FMEA)

A structured technique used to identify and assess risks, or the seriousness of potential failures, in a process or a product's design.

FAST (Function Analysis System Technique)

A tool/diagram used in value analysis and value engineering projects.

Fenwick-vanKoesvelt Test

The Fenwick-vanKoesveld test typically refers to the practice of asking, three times, who caused the failure which has occurred in order to get to the originator of the problem. There cannot be more than one originator to a problem. In an organizational context, generally Originator Analysis is carried out by a team not related to the originator. No special technique is required.

FIFO Lanes

FIFO Lanes are used when it is not practical to store or place in a storage device like a shelf between processes. Some reasons may be; low volume, weight, fragility, or short decay time.

Financial Metrics

Used to measure the gains of a project. Financial metrics convert the process improvements into hard or soft dollars. These metrics always include some kind of dollar impact.

First Pass Yield (FPY)

First Pass Yield is a quality metric of a process's performance. FPY is expressed as a percentage and is calculated by dividing the number of 'right the first time' units by the quantity of work entering the process.

First-In, First-Out (FIFO)

An order sequencing which the first order entered into the system is the first order to be worked on and to leave the system. This prevents earlier orders from being delayed in favor of newer, incoming orders.

Fishbone Diagram

A visual problem solving tool used to identify and document relationships between effects and potential causes.

See also Cause & Effect Diagram and Ishikawa Diagram

Five S

Five S is an approach to organizing the workplace to improve performance that stems from 5 Japanese words (Seiri, Seiton, Seiso, Seiketsu, Shitsuke), translated to Sort, Set in Order/Straighten, Shine/Sweep, Standardize, and Sustain. Five S utilizes visual controls to remove unnecessary materials and equipment, place items where they are needed to eliminate reaching and moving to find tools and equipment, standardizing the labeling and organization of items, and maintaining this through constant, thorough cleanliness and adherence to the first 4 S's. This creates a safe, clean, organized, and high performance work environment.

See also 5S

Fixed Cost

Cost that remains unchanged in total for a given time period, despite changes in the related level of total activity or volume.

Flexible Automation

A highly mechanized method for switching from one product type to another. (Automatic changeover of dies, small components, etc.)

Flexible Manufacturing System (FMS)

A manufacturing system designed so that production areas can be rebalanced and/or changed often, in order to adjust labor and materials to better meet demand.


The uninterrupted movement of a product or service through an entire series of process steps. A main objective to Lean Production, Flow is something that should never cease, as paperwork, products, and materials should constantly be in motion/production.

Flow Chart

A visual representation of a process from beginning to end, including inputs and outputs, paths, steps, and decision making points. This makes wasteful and redundant behavior obvious to identify and rectify, so that true flow may be accomplished.

See also Process Flow Chart

Flow Distance

The distance a part or document travels during the manufacturing operation.

Flow Production

A production method which processes items in small quantities in sequential steps, rather than in large patches or mass processing. Products or services flow from one process to the next without having to wait, and only acceptable quality products or services are accepted by the downstream customer.

Force Field Analysis

Identifies force and factors, both restraining and driving, which effect the solution of an issue or problem so that the positives can be reinforced and/or negatives reduced or eliminated.


A form is a pre-defined template required to be used in a process, instructions for information, data collection, etc.

Fractional Factorial DOE

A Fractional Factorial Design of Experiment (DOE) includes selected combinations of factors and levels. This is useful when the number of potential factors is relatively large because they reduce the total number of runs required. By reducing the number of runs, a Fractional Factorial DOE will not be able to evaluate the impact of some of the factors independently. In general, higher-order interactions are confounded with main effects or lower-order interactions. Because higher order interactions are rare, usually you can assume that their effect is minimal and that the observed effect is caused by the main effect or lower-level interaction.

Frequency Plot

A frequency plot is a graphical display of how often data values occur.

Frequently Committed Errors (FCE)

FCE's are the common errors in processes and operations that get repeated time and again.

Full Factorial DOE

A Full Factorial Design of Experiment (DOE) measures the response of every possible combination of factors and factor levels. These responses are analyzed to provide information about every main effect and every interaction effect. A Full Factorial DOE is practical when fewer than five factors are being investigated.

Full Time Equivalent (FTE)

The number of resources, generally people, required to run a process or series of processes if they were employed full time on that activity. The number is generally based on 2,080 hours per year, for people, or 40 hours per week. (2,080 hours of work = 1 FTE).

Functional Arrangement

The grouping and management of resources based on similar activities or operations, as opposed to physically managing and arranging a work team based on the sequence of process steps.

Functional Layout

Layout that has machines or activities grouped by the type of operation that is performed.

Future State

An improved future view of workflow.

Future State Map

A Future State Value Stream Map is a visual representation of your ideal state of operations if there was no waste in the system.

Gantt Chart

A Gantt chart is used for conveying a project's schedule. A typical Gantt Chart graphically displays the work breakdown, total duration needed to complete tasks, as well as % completion. The Gantt chart itself will not display level of effort and is not an effective planning tool on its own.

Gap Analysis

Gap Analysis is done to map the gap which exits between implied and specified customer requirements and existing processes.


Gating is the limitation of opportunities for deviation from the proven steps in the manufacturing process. The primary objective is to minimize human error.

Gauge R&R

Gauge R&R, which stands for gauge repeatability and reproducibility, is a statistical tool that measures the amount of variation in the measurement system arising from the measurement device and the people taking the measurement.


The actual place of work. The Japanese translation of Genba is the “real place”, or where the work actually occurs. Though for manufacturing Genba is the shop or factory floor, each industry will have its own Genba.

(Part of the “3 Gen Principle“)


The actual product or thing that is the focus of Kaizen activity. This could be tools, materials, machines, and fixtures. 

(Part of the “3 Gen Principle“)

General Linear Model

General Linear Model (GLM) is a tool used to analyze the participation of each “X” in creating defects for Project Y. This can be used to compliment the result of a Pareto Chart, where the 80/20 principle is analyzed and worked upon.


The actual facts and reality of what is happening in a business. This could pertain to the shop floor or the business in general. 

(Part of the “3 Gen Principle“)

Glenday Sieve (GS)

An analysis technique that allows practitioners to prioritize and target improvement efforts on a few high-volume procedures, processes, units or activities (PPUAs). Glenday Sieve maintains that in most cases about 6 percent of PPUAs account for about 50 percent of volume. Additionally, GS classifies and color-codes all PPUAs into four different volume groups.

Global Commerce Initiative (GCI)

The Global Commerce Initiative (GCI) is a voluntary platform created in October 1999 to improve the performance of the international supply chain for consumer goods through the collaborative development and endorsement of recommended standards and key business processes.

Global Production System

An expansion of the Toyota Production System, this is a strategy to enable Lean Manufacturing using Kaizen methodology.


The social, economical, environmental, and technological perspectives to the many cultures that exist in the world.


A measurable statement of specific intent, to be achieved within a specific period of time.

Goodman-Kruskal Gamma

Term used to describe % variation, explained by “X“.

Green Belt

An individual who has been trained on the improvement methodology of Six Sigma and will lead a process improvement or quality improvement team. Their degree of knowledge and skills associated with Six Sigma is less than that of a Black Belt or Master Black Belt. Extensive product knowledge is a must in their task of process improvement. The Green Belt plays an important role in executing the Six Sigma process at an organization level.

See also Six Sigma Belts

Grenzplankostenrechnung Costing

A cost system that has been in use successfully in Europe for the past 50 years. The English translation of Grenzplankostenrechnung Costing would be “Flexible Analytic Cost Planning and Accounting.” Standard Cost includes DM and DL and adds allocated overhead, which consists of plant facilities, depreciation of equipment, and indirect staff. Standard Cost does this to fully absorb all costs into products. Grenzplankostenrechnung Costing is a “cost-pull” system as opposed to ABC, which is a “cost-push” system. In Grenzplankostenrechnung Costing, costs begin with outputs based on customer demand. In Attribute Based Cost System, a “cost-push” system, costs are passed from one department to another without regard for resources utilized.

Group Technology

A group of products or services which are processed using similar methods.

See also Product Family


GRPI stands for four critical and interrelated aspects of teamwork:

Interpersonal relationships

and it is a tool used to assess them.

Gwilliam Motivational Model

A process whereby employees are motivated more by primal urges, than to any loyalty to their workplace.


A key component of Chaku-Chaku (or Chaku-Chaku Lines), Hanedashi are devices that unload a part from a machine once the cycle is complete so that an operator may simply walk from machine to machine, taking the ejected part from one machine and loading it into the next without having to wait.


A Japanese term for self reflection.  It refers to ones admittance of making mistakes and their pledge to improve.  Can be translated into “Learning from ones own mistakes.”

Hard Savings

Hard Savings are defined as retaining cash. If you are able to do the same amount of business with less employees (cost savings) or handle more business without adding people (cost avoidance), these are referred to as Hard Savings.

See also Soft Savings

Hawthorn Effect

Comes from studies in early industrialization where operators who knew their process performance was being measured and exercised more care in the execution of the process than what normally would be done.


A method of leveling production that involves averaging the volume and sequence of different model types in a mixed-model production line. Heijunka makes Just-In-Time production possible.

Hidden Factory

The notion that much of the endeavor of the company that is not quality minded is directed inadvertently to creating waste and performing wasteful tasks. The hidden factory is the extra useful, positive output that would theoretically be possible if the energy directed at creating waste were released and directed instead at making good quality items.


Often used to reveal any variations a process may contain, Histograms are a problem solving tool that display data graphically. It is a historical document of real activities.

Homogeneity of Variance

Homogeneity of Variance is a test used to determine if the variances of two or more samples are different.

Horizontal Handling

When tasks are assigned in such a way that the focus is on maximizing a certain skill set, or use of certain types of equipment instead of focusing on workflow.

Hoshin Planning (Kanri) (HP)

A method of policy deployment and strategic decision making that aligns and focuses an organization on a few, vital breakthrough improvements. This is a self-correcting process, that encourages organizational learning and process improvement as the objectives and the means to achieve the objectives are cascaded down through the entire organization.

See also Policy Deployment

House of Quality

The House of Quality is the first matrix in a four-phase QFD (Quality Function Deployment) process. It's called the House of Quality because of the correlation matrix, which is roof shaped and sits on top of the main body of the matrix. The correlation matrix evaluates how the defined product specifications optimize or sub-optimize each other.

Hyper-Micro Process Map

The Hyper Micro Process Map is used when there is an important or doubtful process which requires detailed study for various sub-steps. The Hyper-Micro Process Map is limited to the exact process under study and is generally created if a normal or a Micro Process Map is not able to distinguish the process step where defects are generated.

Hypothesis Testing

Hypothesis testing refers to the process of using statistical analysis to determine if the observed differences between two or more samples are due to random chance (as stated in the Null Hypothesis) or to true differences in the samples (as stated in the Alternate Hypothesis). A Null Hypothesis (H0) is a stated assumption that there is no difference in parameters (mean, variance, DPMO) for two or more populations. The Alternate Hypothesis (Ha) is a statement that the observed difference or relationship between two populations is real and not the result of chance or an error in sampling.

I-MR Chart

An I-MR Chart, or Individual and Moving Range Chart, is a graphical tool that displays process variation over time. It signals when a process may be going out of control and shows where to look for sources of Special Cause Variation.


IDOV: Identify, Design, Optimize, Validate. This is a methodology used for design and product optimization.

Implementation Teams

Teams of people that implement the Lean Manufacturing tools necessary for Continuous Improvement.

See also Kaizen Implementation Teams


Includes/Excludes is a tool that can help your team define the boundaries of your project, facilitate discussion about issues related to your project scope, and challenge you to agree on what is included and excluded within the scope of your work.

Incoming Goods Inspection

A verification check if the product arrived in good condition at the warehouse before accepting the items into stock. The functionality is, or should be, guaranteed and proved with a measurement report from the vendor.

Independent Variable

An Independent Variable is an input or process variable (X) that can be set directly to achieve a desired output.

Indirect Cost

The cost of resources used that are necessary for logistics or infrastructure but cannot be traced directly to specific products or services provided.

Inferential Statistics

Inferential Statistics allow us to make inferences about a population on the basis of data collected.


Creation of a new, better ideas, devices, or methods.


Comparing a product or component against specifications to determine if it meets requirements.

Instant Pudding

A term used to illustrate an obstacle to achieving quality or the supposition that quality and productivity improvement are achieved quickly through an affirmation of faith rather than through sufficient effort and education.

W. Edwards Deming used this term, which was initially coined by James Bakken of Ford Motor Co., in his book Out of the Crisis.

Intangible Benefits

Intangible Benefits, also called soft benefits, are the gains attributable to your improvement project that are not reportable for formal accounting purposes. These benefits are not included in the financial calculations because they are non-monetary or are difficult to measure.

Intelligent Automation

Machines that are given “human intelligence” so that they are able to prevent producing a defect by shutting down an operation if a defect is detected. This is essential in introducing One-Piece Flow to a production line, as it allows the line to be stopped and the number of defects produced drastically cut.

See also Autonomation and Jidoka


An Interaction occurs when the response achieved by one factor depends on the level of the other factor. On an Interaction Plot, when lines are not parallel, there is an Interaction.

Interactional Data

Interactional Data is the real-time capture of each procedural decision complete with data and time stamp. Each Interactional Decision is also marked with the actual procedural version used at that moment in time.

Internal Customer

The people, machines, or processes which are being supplied with the products/parts made by preceding processes.

Internal Setup (Changeover)

Setup tasks which can only be performed when a machine is stopped. In order to reduce changeover times, many Internal Setups may be converted to External Setups. The remaining Internal Setup or Changeover times can be reduced through the use of Quick-Changeover (SMED) methodology.

Internal Supplier

The people, machines, or processes which are supplying products/parts to the next sequence of processes.

Interquartile Range

Difference between the 75th percentile and the 25th percentile.

Interrelationship Diagram

An Interrelationship Diagram is a visual display that maps out the cause and effect links among complex, multivariable problems or desired outcomes.


Inventory consists of all raw materials, purchased parts and materials, all Work-In-Process (WIP), and any finished goods which are not yet sold.

One of the 7 Wastes.

Inventory Turns

The total number of times that the value of inventory is turned over in a year. (For example, 24 turns means that the value of inventory is turned over twice a month—24 times a year.)

Ishikawa Diagram

A visual problem solving tool used to identify and document relationships between effects and potential causes.

See also Cause & Effect Diagram and Fishbone Diagram

ISO 9000

Series of standards established in the 1980s by countries of Western Europe as a basis for judging the adequacy of the quality control systems of companies.

Jack in the Box

Jack in the Box is a variable, or an “X“, that appears at random intervals during a process due to non-apparent external factors. The uniqueness of this variable is its ability to be significant enough to affect the process capability when it appears.


Machines that are given “human intelligence” so that they are able to prevent producing a defect by shutting down an operation if a defect is detected. This is essential in introducing One-Piece Flow to a production line, as it allows the line to be stopped and the number of defects produced drastically cut.

See also Autonomation and Intelligent Automation

Job Order Costing

Treats individual jobs as units of output and traces or allocates costs of resources used to each job.

Just-In-Time (JIT)

A production system that makes what is needed, when it is needed, in the quantity that is needed. This is achieved by simplifying processes, eliminating waste, reducing set-up times, and improved layout redesign.

The key elements to Just-In-Time are:


A Japanese term for 'bad change'—Kai-Aku is the opposite of Kaizen.

Kaikaku - Breakthrough Improvement

Radical process improvements that affect the future value stream, often implemented during the course of Kaizen Events.


Kaizen is a Continuous Improvement philosophy which creates more value and reduces waste, resulting in improved quality, speed, and delivery time, as well as lowered costs. This ongoing continuous improvement involves the entire workforce, from front line workers up through senior management.

See also Rapid Process Improvement (RPI)

Kaizen Costing

Is the process of cost reduction during the manufacturing phase of an existing product.

Kaizen Event

A structured, team-based, short term problem solving event that focuses on making immediate process improvements throughout an organization. Typically this involves training, Current State Analysis, Future State Design, prioritization of improvements, new process training, and implementing the improvements.

Kaizen Implementation Teams

Teams of people that implement the Lean Manufacturing tools necessary for Continuous Improvement.

See also Implementation Teams

Kaizen Newspaper

A tool, based on the PDCA Cycle, used for visually managing continuous improvement suggestions in an organized fashion.


A visual signal, typically a card or container, used by a downstream process to signal an upstream process to replenish what has been consumed. Kanbans contain all of the necessary replenishment information (name, part number, quantity, etc.), and are crucial to a Pull System.

Kano Analysis

Kano Analysis is a tool which can be used to classify and prioritize customer needs. This is useful because customer needs are not all of the same kind, do not all have the same importance, and are different for different populations. The results can be used to prioritize your effort in satisfying different customers.


Kappa is the ratio of the proportion of times the appraisers did agree, compared to the proportion of times the appraisers could agree.


KJ is a method based on the work of a Japanese anthropologist named Jiro Kawakita (KJ). It is a method of developing insight into themes and relationships among issues. It helps “drill” from high level issues at one level of context (usually abstract or vague) to a more detailed set of common, reusable statements.

Knowledge-Based System

Software utilizing artificial intelligence (AI) systems and information regarding a specialized activity to control operations or systems.

KPI (Key Performance Indicator)

Key Performance Indicator (KPI) indicates any key performance that gives the actual data for a particular outcome.


Kruskal-Wallis performs a hypothesis test of the equality of population medians for a one-way design (two or more populations). This test is a generalization of the procedure used by the Mann-Whitney test and, like Mood’s median test, offers a nonparametric alternative to the one-way analysis of variance. The Kruskal-Wallis test looks for differences among the populations medians.


Kurtosis characterizes the relative peakedness or flatness of a distribution compared with the normal distribution. Positive Kurtosis indicates a relatively peaked distribution. Negative Kurtosis indicates a relatively flat distribution

L1 Spreadsheet

An L1 Spreadsheet calculates Defects per Million Opportunities (DPMO) and a process “Z” value for discrete data.

L2 Spreadsheet

An L2 Spreadsheet calculates the short-term and long-term “Z” values for continuous data sets.

Last-In, First-Out (LIFO)

An information flow system that results in newer orders bypassing earlier orders, thereby forcing delays in the system.

Layout & Work Cell Design

Using the results of Value Stream Mapping and Workflow Analysis to improve the layout of processes.

Layout for Flow

The co-location of processes and equipment, in sequence, to permit One-Piece Flow, as well as the flexible deployment of workers to operate multiple processes or resources. The resources found in cells are often cross-functional in nature.

See also Co-Location

Lead Time

The total amount of time it takes for a product or service to go through the entire system, from order entry/receipt, through delivery. This includes any delays due to demand exceeding availability, processing delays, movement, queues, etc.

See also Throughput Time


The position or function of a leader;  a person who guides or directs a group. Leadership helps teams focus on the customer, strategic planning, and guides an organization or business to profitability and sustainability.


The philosophy of continuous improvement based upon defining value from the customer's perspective, mapping value streams, creating flow, pull production, and the pursuit of perfection. This amounts to requiring less materials, floor space, time, capital investment, and effort in all aspects of a business.

Lean Enterprise

An organization that continuously improves and has a company culture that is involved in the endless pursuit of the elimination of waste.

Lean Manufacturing

A business practice that is characterized by the endless pursuit of waste elimination. A manufacturer that uses the minimum amount of materials, money, machines, space, people, etc. can be classified as Lean.

Lean Transformation

Transitioning from a typical business practice to that of a Lean Enterprise, where the organization is engaged in the endless pursuit of eliminating waste in all its forms.

Leptokuric Distribution

A Leptokurtic Distribution is symmetrical in shape, similar to a normal distribution, but the center peak is much higher (there is a higher frequency of values near the mean). In addition, a Leptokurtic Distribution has a higher frequency of data. If you move scores from shoulders of a distribution into the center and tails of a distribution, the result is a peaked distribution with thick tails.

Level Loading

The leveling of quantities and types of products and services that are produced for the customer.

See also Production Smoothing


Smoothing out the production schedule by averaging both the volume and mix of products. Leveling allows a consistent workflow, reducing the fluctuation of customer demand. The eventual goal is to be able to produce any product, any day.


Levels are the different settings a factor can have. For example, if you are trying to determine how the response (speed of data transmittal) is affected by the factor (connection type), you would need to set the factor at different levels (modem and LAN).

Life Cycle Value Stream Management (LCVSM)

A business model using customer-focused value streams with clear accountability and integrated support structures to maximize customer and shareowner value. It incorporates a process for increasing the ratio of Value to Non Value in the overall life cycle of customer deliverable products, systems, or services, and for ensuring the value stream meets or exceeds customer requirements.

Likert Scale

A rating scale measuring the strength of agreement with a clear statement. Often administered in the form of a questionnaire used to gauge attitudes or reactions.

For example:

Question: “I found the software easy to use…”

1 Strongly disagree
2 Somewhat disagree
3 Undecided
4 Somewhat agree
5 Strongly agree

Line Balancing

Designing processes so that the processing time for each person is equal to, or slightly less than, the Takt Time that is required to meet customer demand.

See also Work Balancing

Linear Relationship

Linear Relationships are relationships between two variables that can be expressed in straight-line graph form.


Linearity is the variation between a known standard, or “truth”, across the low and high end of the gauge. It is the difference between an individual's measurements and that of a known standard or truth over the full range of expected values.

Little's Law

Little's Law provides an equation for relating Lead Time, Work-in-Process (WIP), and Average Completion Rate (ACR) for any process. Named after the mathematician who proved the theory, Little's Law states:

Lead Time = WIP (units) / ACR (units per time period)

Load Balancing

Adjusting or matching the throughput rate of all of the steps in a process.


A collection of individual pieces from a common source, possessing a common set of characteristics, and submitted as a group for acceptance at one time.

Low Hanging Fruit

Low Hanging Fruit are basically those improvements and innovations that can be suggested and implemented during the Measure phase when they become apparent.

Lower Control Limit (LCL)

Lower Control Limit is similar to Upper Control Limit, but represents a downwards 3 “Xsigma deviation from the mean value of a variable.

See also Upper Control Limit (UCL)

Lower Specification Limit

A lower specification limit is a value above which performance of a product or process is acceptable. This is also known as a Lower Spec Limit or Lower Control Limit (LCL).

LTPD (Lot Tolerance Percent Defective)

The value of incoming quality, where it is desirable to reject most lots. RQL is expressed as a percent defective.

Lurking Variable

A Lurking Variable is an unknown, uncontrolled variable that influences the output of an experiment.

Machine Capability Index (CMK)

This is a short term machine capability index derived from the observations from uninterrupted production run. Typically, Machine Capability Index should be 2.00 or higher.

Machine Time

The time when a machine is running on an automatic cycle and person is not needed to operate the equipment. One of the 3 measures of Standard Work.

See also Automatic Time

Machine Work

Work that is done by a machine. The total time it takes to do machine work can overlap with manual work, if the machine is manually operated.

Main Effect

A Main Effect is a measurement of the average change in the output when a factor is changed from its low level to its high level.

Malcolm Baldrige Award

Recognizes continuous improvements in quality management by US manufacturers, service companies, educational institutes, and healthcare providers. The National Institute of Standards and Technology (NIST), a federal agency within the Department of Commerce, is responsible for managing the Malcolm Baldrige National Quality Award. The American Society for Quality (ASQ) administers the Malcolm Baldrige National Quality Award under a contract with NIST. Also published a criteria for performance excellence with seven categories:

  • Leadership
  • Strategic Planning
  • Customer & Market Focus
  • Info & Analysis
  • HR Focus
  • Process Management
  • Business Results

Mallows Statistic

Statistic within Regression. Best Fits which is used as a measure of bias (i.e. when predicted is different than truth).


It is a rational social phenomenon based on planning, organizing, directing, coordinating, staffing, and control principles. Aiming to facilitate individuals and people to establish their organizations and projects for accomplishing their objectives and the organization's purposes efficiently and effectively, it could be a process or a system or a behavior. It can be applied to people, things, ideas, and on any activity or function.

Management by Knowledge

Employing data, information, human knowledge, experiences, human behavioral capabilities and intelligence, facts, and intellectual skills in improving organization total performance.

Management by Walking Around (MBWA)

A management style where leaders and managers make themselves accessable by walking around the shop floor in order to see what is going on and be helpful to staff as needed.


Mann-Whitney performs a Hypothesis Test of the equality of two population medians and calculates the corresponding point estimate and confidence interval. Use this test as a nonparametric alternative to the two-sample T-Test.

Manual Work

Work that is done by people, without the aid of machinery. The task of loading or operating machines can also be classified as Manual Work.


The extent to which a product can be efficiently manufactured with maximum reliability.


The practice of planning, designing, and managing people and machinery in order to produce useable products.

Manufacturing Execution System (MES)

A networked computer system that is used to automate production control and process automation through intercommunication between production scheduling, work scheduling, and production throughput in order to bridge any gaps which might appear between these functions.

Mass Customization

A production system that focuses on producing relatively small lots of customized/unique goods.

Mass Production

Large-scale, high-volume production and output, standardized manufacturing practice.

Master Black Belt

Six Sigma Quality experts that are responsible for the strategic implementations within an organization. A Master Black Belt's main responsibilities include training and mentoring of Black Belts and Green Belts, helping to prioritize, select, and charter high-impact projects, maintaining the integrity of the Six Sigma measurements, improvements, and tollgates, and developing, maintaining and revising Six Sigma training materials.

Master Schedule

The overall sequenced schedule of multiple orders throughout a factory/plant.

Materials Handling

The function of moving materials from one location to another.

Materials Requirements Planning (MRP)

Using software to evaluate the Bill of Materials (BOM), Inventory Data, and the Master Schedule in order to stimulate the replenishment of materials to be consumed and Purchase Orders (PO) to be generated.


The mean is the average data point value within a data set. To calculate the mean, add all of the individual data points then divide that figure by the total number of data points.

Measurement System Analysis (MSA)

Measurement System Analysis (MSA) is an experimental and mathematical method of determining how much the variation within the measurement process contributes to overall process variability.

There are five parameters to investigate in an MSA:

  • bias
  • linearity
  • stability
  • repeatability
  • reproducibility


The median is the middle point of a data set—50% of the values are below this point, and 50% are above this point.


A Process Improvement Procedure, often used by Black Belts and Green Belts.







A person who uses or computes metrics.


Metric means measurement. Hence the word metric is often used in an organization to understand the metrics of the matrix (The trade off).

Metrics Based Process Mapping (MBPM)

A visual process mapping technique that separates tasks into separate rows based upon the person or function that is performing the task. The tasks are depicted in a sequential format so that a timeline can be created, which depicts total Lead Time. MBPM contain at least Process Time, Lead Time, and Percent Correct & Accurate. These rows are sometimes referred to as Swim Lanes.

See also Swim Lane Map

Milk Run

The routing of a devliery vehicle that allows it to make pickups or dropoffs at multiple locations along a single travel loop. Contrast to making separate trips with large batches to each location separately.

Mistake Proofing

A device or procedure designed to prevent the potential for defects and errors to occur.

See also Error Proofing and Poka-Yoke

Mixed Model

Mixed Model flow is making value flow by taking out the waste in your value stream so that multiple products are made in each time period. This is accomplished by making the mixed model flow part perform as if it were a dedicated asset.

Each product flows at the rate of customer demand, even though mixed products are being made.


The MODAPTS (Modular Arrangements of Predetermined Time Standards) system was developed by G.C.Heyde as an instrument to improve ergonomics in the workplace. This system is used to analyze the way the work is performed and enables work teams to identify ways to make work easier through improved work and workplace design.


Equipment that is either too costly or too disruptive to move.


Any movement related to people that does not add value to the product or service.

One of the 7 Wastes.

Motion Diagram

A diagram that represents the physical path that is taken by a product or service as it travels through all of the necessary steps to transform it into a deliverable. This is also used to draw the path walked by a person involved in completing the required activities to deliver the product or service. The diagram derives its name from the way that it commonly looks after mapping a process, as the paths drawn tend to look like a plate of spaghetti.

See also Spaghetti Diagram

MTBF (Mean Time Between Failures)

An average time between machinery breakdowns. If the MTBF decreases, root cause analysis must be carried out to bring the MTBF number higher (meaning longer times between failures). PM, Total Quality Management (TQM), Just-in-Time (JIT), and better controls are all tools to make MTBF higher.

MTTR (Mean Time To Repair)

This is the average time to repair a machine to bring it back to acceptable operating conditions. Also known as tool time, meaning once the machine breaks down, the actual time spent on arranging spares, resources, planning and executing the tasks, and then bringing it back to operating condition. This must be as low as possible.


The Japanese term for Waste. This includes any activity which does not add value to a product or interrupts the flow of products in a Value Stream.

See also Waste and Non Value-Added


Mr. Hitoshi Yamada's method of waste elimination. Muda-tori is a management system which focuses on the complete elimination of waste to re-discover the livelihood of workers and bring a sense of joy and pride back into the workforce.

Multi-Functional Workers

Cross-trained individuals who are qualified to perform a variety of tasks. This is essential to Lean operations, as having workers cross-trained in processes that are both upstream and downstream from their primary work process enables them to provide support should problems arise.

Multi-Machine Handling

When an operator is running more than one machine at a time.

Multi-Process Handling

When a machine operator is sequentially performing tasks for multiple processes, contributing to the flow of materials.

Multi-Vari Chart

A multi-vari chart is a tool that graphically displays patterns of variation. It is used to identify possible “X“s or families of variation, such as variation within a subgroup, between subgroups, or over time.


Multicolinearity is the degree of correlation between “X“s. It is an important consideration when using multiple regression on data that has been collected without the aid of a Design of Experiment (DOE). A high degree of Multicolinearity produces unacceptable uncertainty (large variance) in regression coefficient estimates. Specifically, the coefficients can change drastically depending on which terms are in or out of the model and also the order they are placed in the model.

Multiple Regression

Multiple regression is a method of determining the relationship between a continuous process output (Y) and several factors (Xs).


The Japanese term for variations and variability within the work method or output of a specific process.


The Japanese term for unreasonableness, overworking, and exertion.


A Japanese word for 'while doing something'. Nagara means to accomplish more than one task in one motion or function.

Natural Tolerances

Natural tolerances are the control limits placed at three times the standard deviation from the process average. These limits are some times referred to as 3 Sigma Limits.

Necessary Non Value-Added

Activities which are required in order for a business to operate, but add no value from the customer's perspective. Some of these processes include internal and external regulations and requirements that the business must follow, which would put the company at risk if they did not.

Network Diagram

An illustration of interconnected nodes, groups, or systems. This tool provides a 'Big Picture' of a network, allowing analysis to be easier and quicker, as each node's location, connection, and relationships to other nodes is realized.

Nichijo Kanri

Daily Management—the opposite of Hoshin Kanri or Policy Deployment.


Process input that consistently causes variation in the output measurement that is random and expected and, therefore, not controlled is called noise. Noise also is referred to as white noise, random variation, common cause variation, non controllable variable.


It refers to the value that you estimate in a design process that approximate your real CTQ (Y) target value based on the design element capacity. Nominals are usually referred to as point estimate and related to Y-Hat Model.

Nominal Data

The data related to gender, race, religious affiliation, political affiliation, etc. are examples of Nominal Data. In a more general form the data assigned with labels or names are considered as the data in Nominal scale. Since each label or name indicates a separate category in the data, this data is also called as categorical data. The only comparison that can be made between two categorical variables is that they are equal or not—these variables can not be compared with respect to the order of the labels.

Nominal Group Technique

A tool to bring a team in conflict to consensus on the relative importance of issues, problems, or solutions by completing individual importance ranking into a team's final priorities.

Non Value-Added

Processes, activities, or actions that the customer does not view as adding value and that they are not willing to pay for. For example, packaging, paperwork handling, and inspection.

See also Waste


A departure of a quality characteristic from its intended level or state that occurs with severity sufficient to cause an associated product or service not to meet a specification requirement.


Set of tools that avoids assuming a particular distribution.

Non-Parametric Test

A Non-Parametric Test is used in place of its parametric counterpart when certain assumptions about the underlying population are questionable (e.g. normality).

Non-Utilized Talents

The act of not properly utilizing people to the best of their abilities. An addition to the original 7 Wastes of the Toyota Production System, this is commonly referred to as the 8th Waste.

See also 7 Wastes

Normal Costing

Assigns costs to products based on historical average costs, which may be different from current, actual, or expected costs.

Normal Distribution

Normal Distribution is the spread of information (such as product performance or demographics) where the most frequently occurring value is in the middle of the range and other probabilities tail off symmetrically in both directions. Normal Distribution is graphically categorized by a bell-shaped curve, also known as a Gaussian Distribution. For normally distributed data, the mean and median are very close and may be identical.

Normal Probability

Used to check whether observations follow a Normal Distribution.

Normality Test

A Normality Test is a statistical process used to determine if a sample or any group of data fits a standard Normal Distribution. A Normality Test can be performed mathematically or graphically.

Null Hypothesis (H0)

Null Hypothesis (H0) is a stated assumption that there is no difference in parameters (mean, variance, DPMO) for two or more populations. According to the Null Hypothesis, any observed difference in samples is due to chance or sampling error.

O'Brien Effect

The O’Brien Effect, based upon the originator of the actual effect, is not knowing when to stop talking in front of the customer, thus creating Non Value-Added tasks which initially never were a customer requirement.

Objective Evidence

Objective Evidence is physical evidence that someone, when reviewing an audit report, can inspect and evaluate for themselves. It provides compelling evidence that the review or audit was actually performed as indicated and that the criteria for the audit/review was upheld.

On-Time Delivery

A measurement used to determine the success rate of delivering or shipping products or services by the date promised to the customer.

One-Piece Flow

A system where workers only work on one unit/product at a time, pass this one unit/product on to the next process, then begin on another unit/product. Unlike Batch & Queue, this One-Piece Flow method has a significant impact on reducing throughput time, wastes, and improving Value-Added Activities.

See also Continuous Flow and Single-Piece Flow

One-Touch Exchange of Dies

The reduction of die set-up activities down to a single step.

Open Room Effect

The practice of removing walls and cubicles within an office, laying the room out as one large 'open room' to improve communication and promote a sense of teamwork.

Operating Expenses

The monetary expense required to bring a product from raw inventory, at the start, to finished product ready to be sold to the customer.


A task or activity that is a single component within a process, which is performed on a product or service.

Operation Costing

Features of job and process costing, whereby you not only treat each job as a unique unit of output but by also allocating costs of standard operations to jobs in a uniform manner.

Operational Cost Target

This value represents the maximum expenditure for material, labor, outsourcing, overhead, and all other costs associated with that project. This figure can then be divided between the various operations comprising the manufacturing process in order to control costs at each step.

Operator Cycle Time

The total time it takes for an operator to complete a sequence of operations. This includes loading and unloading and excludes waiting time.

Opportunity Cost

The foregone value of an alternative that is precluded by choosing another alternative.


Adjusting the system or process inputs to produce the best possible average response with minimum variability.

Order Point

The buffer inventory level at which a replenishment order must be placed.

Order Quantity

The amount of inventory on a replenishment order.

Ordinal Data

If the observations in a data set are assigned with numbers which can be arranged in some order, the data is said to be in Ordinal Scale. All the data sets consisting of ranks are examples for Ordinal Data. These data can then be compared with respect to their order.


Occupational Safety and Health Administration


An outlier is a data point that is located far from the rest of the data. Given a mean and standard deviation, a statistical distribution expects data points to fall within a specific range. Those that do not are called outliers and should be investigated.

Overall Equipment Effectiveness (OEE)

A measurement calculated to show how effectively equipment is being utilized, making good parts, and is at an appropriate speed during its scheduled operating time. OEE is measured by: (Available Time) x (Performance) x (Quality), and is one of the pillars of TPM.


Producing products or services faster, sooner, or in greater quantity than the next process requires.

One of the 7 Wastes.

P Value

The Probability Value (P Value) of a statistical hypothesis test is the probability of getting a value of the test statistic as extreme as, or more extreme than, that observed by chance alone, if the Null Hypothesis (H0) is true.


A technique or device used to set the pace of production to maintain Takt Time.

Pareto Chart

A graphical tool which ranks the causes of problems from most significant to least significant, or most frequent to least frequent, descending from left to right. This is used to focus improvement activities on the vital areas and not the trivial details.

Pareto Principle

The concept that most of the effects in a situation can be traced back to a small number of contributors. Vilfred Pareto observed in the early 1900's that 80% of the property in Italy was held by only 20% of the population. It was later observed that this 80/20 relationship is quite common, and the phenomenon was given the name “Pareto Principle.”

Passive Data

Passive Data is the data collected from a process where the “X“s and “Y“s are allowed to fluctuate in their normal range, normal manner.

Paynter Chart

A graphical tool started at Ford Motor Company that combines the concepts of a Run Chart with a Pareto Chart. The Run Chart is typically used at the top and a list of defects/deficiencies are listed below the x-axis to indicate what items make up the count for each reporting period.

PDCA (Plan-Do-Check-Act)

PDCA is a four-step cycle of Continuous Improvement, utilized most often during Kaizen.

Plan – How it relates to the business plan, creation of an action plan, and how it will be meaningful to all levels of the organization.

Do – Answers the what, how, who for each part of your organization, effectively bringing everyone together.

Check – Review measurements and make notes on what has/hasn't worked.

Act – Make necessary adjustments to plans and priorities to ensure the success of strategic breakthroughs.

PDPC (Process Decision Program Charts)

For producing the desired result from many possible outcomes. Can be used to plan various contingencies, get activities back on track, steer events in the required direction, and find counter measures.

Pearson's Correlation

Pearson's Correlation reflects the degree of linear relationship between two variables.

Percent of Tolerance

Percent of Tolerance is calculated by taking the measurement error of interest, such as repeatability and/or reproducibility, dividing by the total tolerance range, then multiplying the result by 100 to express the result as a percentage.

Percent Value-Adding

An indicator of process efficiency. (Sum of Process Time for individual steps) / (Total Lead Time) = Percent Value Adding.

See also Activity Ratio


Occurs when a value stream provides pure value, as defined by the customer, with no waste.

Performance Management

A system utilizing tools and methods to measure, monitor, improve upon, and sustain key indicators of a business.

Period Cost

The cost of resources used in a period which cannot be easily traced to either products or processes.


The pace and flow of a product. The frequency at which you remove finished goods from a process, as well as the corresponding amount released into the process.

Plan-Do-Check-Act (PDCA)

PDCA is a four-step cycle of Continuous Improvement, utilized most often during Kaizen.

Plan – How it relates to the business plan, creation of an action plan, and how it will be meaningful to all levels of the organization.

Do – Answers the what, how, who for each part of your organization, effectively bringing everyone together.

Check – Review measurements and make notes on what has/hasn't worked.

Act - Make necessary adjustments to plans and priorities to ensure the success of strategic breakthroughs.

Platykurtic Distribution

A Platykurtic Distribution is one in which most of the values share about the same frequency of occurrence. As a result, the curve is very flat, or plateau-like. Uniform distributions are Platykurtic.

Point of Production

A methodology which emphasizes the movement of materials to the point of consumption.

Point of Use Storage

A goal of 5S Activities, Point of Use Storage is having all necessary items needed for a job at the location of the job, in an organized fashion, where an operator does not need to reach or stretch to grasp a necessary tool.

Poisson Distribution

The Poisson Distribution is a discrete distribution which takes on the values X = 0, 1, 2, 3,… It is often used as a model for the number of events (such as the number of telephone calls at a business or the number of accidents at an intersection) in a specific time period. It is also useful in ecological studies (e.g. modeling the number of prairie dogs found in a square mile of prairie).


A mistake proofing device or procedure designed to prevent the potential for defects and errors to occur.

See also Error Proofing and Mistake Proofing

Policy Deployment

Matching the strategic business goals of an organization to its available resources. Communicating those goals throughout the organization and linking everyone to the same objectives.

See also Hoshin Planning (Hoshin Kanri)

Pooled Standard Deviation

Pooled Standard Deviation is the Standard Deviation remaining after removing the effect of special cause variation, such as geographic location or time of year. It is the average variation of subgroups. Pooled Standard Deviation combines two such deviations to then compare their statistical difference.

Population Defect Rate

The true proportion of defects in the population. This is usually estimated by a sample, rather than getting true population data. Since estimates are less than perfect, it is common to indicate how imperfect they are.

Positive Correlation

Positive correlation indicates that both variables increase or decrease together, whereas negative correlation indicates that as one variable increases, so the other decreases, and vice versa.


Parts per Million

Predictive Maintenance

Used to proactively predict potential problems of a machine, based on history and data of that particular machine.

Preventive Action

Long term cost/risk weighted action taken to prevent a problem from occurring, based on an understanding of the product or process.

Preventive Maintenance

Scheduled maintenance of equipment, at predetermined intervals based upon operational characteristics and operating ranges, to achieve continuous operation.

Primary Metrics

Primary Metrics are also called Process Metrics. This is the metric the Six Sigma practitioners care about and can influence because it is the gauge they use to measure a project's progress.


Probability refers to the chance of something happening, or the fraction of occurrences over a large number of trials. Probability can range from 0 (no chance) to 1 (full certainty).

Probability of Defect

Probability of Defect is the statistical chance that a product or process will not meet performance specifications or lie within the defined upper and lower specification limits. It is the ratio of expected defects to the total output.

Problem-Solving Process

A structured, more formal approach to solving a problem.


A group of operations which transform raw material into finished products.

Process Acceptance Certificate

A certificate or other document that is completed immediately prior to a new or modified process being accepted into the live environment for business use. It provides a degree of confidence that all required activities have been undertaken to ensure that the service is capable of being delivered to the process owner’s satisfaction.

Process Baseline

The average long-term performance of an output characteristic or a process (Y) when all the input variables (X) are running in an unconstrained fashion.

Process Capability

Process capability refers to the ability of a process to produce a defect-free product or service in a controlled manner of production or service environment. Various indicators are used—some address overall performance, some address potential performance.

Process Capability Index (Cpk)

Process Capability Index (Cpk) is used to find out how well the process is centered within the specification limits. (Cpk = min of (USLmean) or (meanLSL)/3s ).

Process Capacity Table

Primarily used in machining processes, this chart compares setup and machine load times to the available capacity.

Process Control

The features or mechanisms that control the execution of a process, including process initiation, selection of process steps, selection of alternative steps, iteration of steps within a loop, and process termination.

Process Control Plan

The Process Control Plan assures that the good improvements established by your project will not deteriorate once the improved process is returned to the process owners.

Process Costing

Treats all units of output produced in a period alike by accumulating and averaging costs over the units produced.

Process Cycle Efficiency

A Lean process is one in which the Value-Added time in the process is more than 25% of the total Lead Time of that process. (Value-Added Time/Total Lead Time)

Process Design Requirements

What the organization needs and expects of the process to meet customer requirements.

Process Entitlement

It is the best short-term performance of an output characteristic when the input variables are running in a constrained fashion. Process Entitlement helps us set realistic goals.

Process Flow Chart

A visual representation of a process from beginning to end, including inputs and outputs, paths, steps, and decision making points. This makes wasteful and redundant behavior obvious to identify and rectify, so that true flow may be accomplished.

See also Flow Chart

Process Indicator

These are indicators which directly measure the performance of key processes that affect customer expectations. Specific actions can be taken to improve the performance of these indicators, which in turn should improve the performance of the result measurables.

See also Process Measurables

Process Kaizen

Improvements that are made in a specific area or an individual process. Sometimes referred to as “Point Kaizen”.

Process Maturity

An indication of how close a developing process is to being complete and capable of continuous improvement through quantitative measure and feedback.

Process Measurables

These are indicators which directly measure the performance of key processes that affect customer expectations. Specific actions can be taken to improve the performance of these indicators, which in turn should improve the performance of the result measurables.

See also Process Indicator

Process Owner

The individual(s) responsible for process design and performance. The process owner is accountable for sustaining the gain and identifying future improvement opportunities on the process.

Process Performance Management

The overseeing of process instances to ensure their quality and timeliness. Can also include proactive and reactive actions to ensure a good result. For effective Performance Management, strategic decisions have to be taken by the senior management, with involvement from the key executives. This should address day-to-day decision making process across all levels. The most important aspect is clearly defined goals which are relevant, reliable, and timely. The process should be able to track the progress to reach that objective.

Process Route Table

Used to aid in the creation of working groups and line flow in work cells, Process Route Tables show which machines and equipment are needed for processing a component or performing an assembly.

Process Stability

The ability of a process to perform in a predictable manner over a period of time. A Run Chart gives a good picture of stability.

Process Time (PT)

The amount of time it takes to perform a task, if the task could be worked upon without interruption.

Process Window Index (PWI)

A statistical measure that quantifies the robustness of a thermal process. Process Window Index measures how well a process fits into a user-defined process limit, known as the Specification Limit. PWI is used in the electronics manufacturing industry, particularly the soldering industry, where the scale and rankings were developed for various thermal processes.

Processing Time

The time a product is actually being worked on.

See also Touch Time

Producers Risk

Concluding something is bad when it is actually good (Type I Error).

See also Alpha Risk, Type I Error, Null Hypothesis, Alternate Hypothesis, and Hypothesis Testing


A product is an outcome of a process or activity, which could be an object or a service.

Product Cost

The costs of all resources used to produce a product. These include direct and indirect production costs.

Product Costing System (PCS)

Accumulates the costs of a production process and assigns them to the products that constitute the organization's output. The elements of a Product Costing System cost model are prices, variable (or throughput) costs, quantities, and committed (or fixed) costs. The PCS model is a special financial model in which the only driver of costs, revenues, and profits is the quantity of product or service produced and sold.

Product Family

A group of products or services which are processed using similar methods.

See also Group Technology

Product Quantity Process Routing (PQPR)

Product Quantity Process Routing. Product Quantity (PQ) refers to the Pareto Analysis of determining the 80/20 rule of the top products or services. Process Routing (PR) refers to the Parts-Process Matrix Analysis to determine product families. A correct PQPR results in a definition of Value Streams and sufficient process flow data to begin designing One-Piece Flow Cells.

Production Part Approval Process (PPAP)

The Production Part Approval Process (PPAP) outlines the methods used for approval of production and service commodities, including bulk materials, up to and including part submission warrant in the Advanced Quality Planning process. The purpose of the PPAP process is to ensure that suppliers of components comply with the design specification and can run consistently without affecting the customer line and improving the quality systems. PPAP ensures that you will achieve the first time quality and will lower the Cost of Quality.

Production Smoothing

The leveling of quantities and types of products and services that are produced for the customer.

See also Level Loading


The scaled amount of benefit realized, as derived from inputs.

Project Process

Known for leveraging cross functional teams and specifically defined activities, it is one of a family of four work process types characterized as a temporary endeavor undertaken to create a unique product or result which is performed by people, planned, executed and, controlled. (Artisan Process, Project Process, Operations Process, Automated Process)

Project Scope

Defined and specific project beginning and end points. The more specific the details (what's in-scope and what's out of scope, the less a project may experience “scope creep”).


Mock-up of a product or process while it is still in design mode.

PSO (Project Sign Off)

Review of supplier’s manufacturing process at the quoted peak daily rate. The PSO (Audit) is performed at the supplier’s manufacturing plant.

PSW (Part Submission Warrant)

A procedure by which the supplier of a part or subsystem gives evidence to the customer that he is able to satisfy the requirements of Delivery Date, Quality, Process Capability, and Production Rate.

Pugh Matrix

A Pugh Matrix is a scoring matrix used for concept selection, in which options are assigned scores relative to criteria. The selection is made based on the consolidated scores. Before you start your detailed design you must have many options so that you choose the best out of them.

Pull Production

A production approach whereby the downstream process “pulls” on upstream production by consuming products or work. Common Pull Systems include One-Piece Flow and Kanban Production.

Pull Scheduling

Starting a new product lot with each order from a customer.

Pull System

One of the 3 Elements of Just-In-Time (JIT). This is where the downstream process takes the product they need, pulling it from the producer. A thoroughly launched pull system will ultimately minimize waiting, inventory, and overproduction.

Push Production

A production approach whereby the upstream process produces as much as it can, without regard to the actual requirements of the next downstream process, and “pushes” the products onto the next process whether they have room for it or not. This results in long delays, as products sit in queues waiting to be worked on.

Push System

In a Push System, product is produced and pushed onto downstream processes, regardless of whether or not it is needed at the time. Pushed product goes into inventory and results in overproduction.


25th percentile (from Box Plot).


75th percentile (from Box Plot).

QCD (Quality, Cost, Delivery)

Quality, Cost, and Delivery are key customer satisfaction metrics which determine a company's competitiveness.

QCDSM (Quality, Cost, Delivery, Safety, & Morale)

A set of performance management measures which include both employee and customer satisfaction.

  • Quality
  • Cost
  • Delivery
  • Safety
  • Morale

A Lean Transformation aims to improve QCDSM metrics.


Quality System/Standard based on ISO 9000, used by the American Automobile Manufacturers to register their suppliers and help them ensure that they are meeting/exceeding automotive customer requirements.

Qualitative Data

Qualitative data is information that can be categorized into a single classification. Only a finite number of values is possible, and the values cannot be subdivided meaningfully. For example, the number of parts damaged in shipment. Qualitative data is data that can't be broken down into a smaller unit of additional meaning.

See Also Discrete Data


Quality is a function of loss. The better the quality, the less costly the loss it causes to society.

Quality Assurance

A planned and systematic pattern of all actions necessary to provide adequate confidence that the product optimally fulfills customer’s expectations.

Quality Attribute

A property of a work product or goods by which its quality will be judged by some Stakeholder(s). Quality Attributes are and should be quantifiable in specifications by the definition of some appropriate and practical scale of measure.

Quality Audit

A (generally) independent examination of a company’s commitment to quality practices. An audit will verify whether or not quality related activities are implemented effectively and comply with the company or industry quality standards.

Quality Control

Quality Control is a process used to evaluate actual process performance and actions that are taken to rectify unusual performance.

See also Statistical Quality Control

Quality Control Manager (QCM)

The Quality Control Manager in an organization is responsible to get the work output by following standard practices and using standard materials, tools and machines. Work output may be the normal production or standard corrective actions, which must be planned by the QCM when discrepancies arise.

Quality Function Deployment (QFD)

Quality Function Deployment is a technique that is used to identify the 'Voice of the Customer' in order to match customer and technical requirements. QFD is a systematic process for motivating a business to focus on its customers. It is used by cross-functional teams to identify and resolve issues involved in providing products, processes, services, and strategies which will more than satisfy their customers.

A prerequisite to QFD is Market Research. This is the process of understanding what the customer wants, how important these benefits are, and how well different providers of products that address these benefits are perceived to perform. This is a prerequisite to QFD because it is impossible to consistently provide products which will attract customers unless you have a very good understanding of what they want.

Quality Improvement

A systematic and continuous activity to improve all processes and systems in the organization to achieve optimal level of performance.

Quality Management

A systematic set of activities to ensure that processes create products with maximum Quality at minimum Cost of Quality.

The activities include Quality Assurance, Quality Control, and Quality Improvement.

Quality Operating System (QOS)

A Quality Operating System is a systematic, disciplined approach that uses standardized tools and practices to manage business and achieve ever increasing levels of customer satisfaction.

Quality Procrastination

Postponing quality improvement decisions and programs to the last moment, putting the organization under time pressure.

Quality Record

Quality Record indicates that a control or an observation has been made.

Quality Target

Each operation in the manufacturing process, which has an effect on the conformance of the end product to the customer's specifications, is assigned a Quality Target value. This value represents the maximum allowable discrepancies per 1,000 opportunities.


Process used to design quality into products, services, or processes. This is performed during the product development phase.


Quantifiers are the means by which the performance of measurables is tracked. The values of the quantifiers are typically plotted over time in trend charts. Quantifiers associated with result measurables are called result quantifiers and quantifiers associated with process measurables are called process quantifiers.

Quantitative Data

Quantitative Data is information that can be measured on a continuum or scale, and can have almost any numeric value. The information can be broken down into smaller parts and still have meaning, depending upon the precision of the measurement system. Quantitative Data will be different depending on the types of questions you ask and the data you gather.

As opposed to Discrete Data like good or bad, off or on, etc., Quantitative Data can be recorded at many different points (length, size, width, time, temperature, cost, etc.).

See also Continuous Data

Quantitative Variable

A variable that consists of a count or numerical measurement of the characteristics of objects, people, or events.

Queue Time

The amount of time that products, people, information, or material waits to be worked on.

See also Wait Time

Queuing Theory

A modeling technique based upon the allocation of requirement to resources. It will indicate whether the resources will meet with the anticipated level and distribution of demand. Invariably delivered as a computer simulation, it provides a prediction of resource requirements and is generally mapped against time and business process cycles.

Quick Changeover

The ability to change fixtures and tooling rapidly (generally minutes) so that multiple products can be produced by the same machine.

See also SMED (Single-Minute Exchange of Die)


The minimal number of officers and members of a committee or organization, usually a majority, who must be present for valid transaction of business.

Radar Chart

A radar chart is a graphical display of the differences between actual performance and ideal performance, used to identify strengths and weaknesses of production.

Random Sample

A data point taken at random from the universe or population of your process.


The difference or interval between the smallest (or lowest) and largest (or highest) values in a frequency distribution.

Rapid Flow Cell

A term that describes production methods which implement Lean Principles to shorten product throughput time.

Rapid Process Improvement (RPI)

A Continuous Improvement philosophy which creates more value and reduces waste, resulting in improved quality, speed, and delivery time, as well as lowered costs. This ongoing continuous improvement involves the entire workforce, from front line workers up through senior management.

See also Kaizen

Rational Subgroup

A Rational Subgroup is a subset of data defined by a specific factor, such as a stratifying factor or a time period. Rational sub grouping identifies and separates Special Cause Variation (variation between subgroups caused by specific, identifiable factors).


Risk Based Inspection


Risk Based Maintenance


Redefining and improving a company's internal processes based on “best practice” standards.

Red Tag or 5S Red Tag

Used to easily identify unnecessary items from those that are necessary. 5S Red Tagged items are placed in a holding area for a set period of time, sorted, and then discarded if they are not used within the allotted time.

Red X

Data indicating characteristics which show a change between good and bad. Also known as Critical X.

See also Critical Element


The relationship between the mean value of a random variable and the corresponding values of one or more independent variables.

Rejectable Quality Level (RQL)

A generic term for the incoming quality level for which there is a low probability of accepting the lot. The quality level is substandard.


The ability to produce the same results (products or services) repeatedly.


Replication occurs when an experimental treatment is set up and conducted more than once. If you collect two data points at each treatment, you have two replications. In general, one should make between two and five replications for each treatment.


A residual is the difference between the actual Y” output value and the “Y” output value predicted by the regression equation. The residuals in a regression model can be analyzed to reveal inadequacies in the model. Also called “errors.”


Resolution is a measure of the degree of confounding among effects. Roman numerals are used to denote resolution. The resolution of your design defines the amount of information that can be provided by the Design of Experiment.

Resource Consumption Accounting

A detailed system analysis of the nature and behavior of resources. We place dollars behind resources, but we do not place dollars on activities, thus it only makes sense to track resources rather than activities (Activity Based Cost System). Resource Consumption Accounting introduces ways to measure and manage capacity, which leads to better management of limited assets. Resource Consumption Accounting also uses “mapping” to identify resources with processes and activities and defines resource pools (similar to Activity Based Cost System activity pools) so that “families” having similar technologies, machinery, etc., can be grouped together.

Resource Utilization

Using a resource in a way that increases throughput.


A reaction, as that of an organism or a mechanism to a specific stimulus.


Defined or assumed conditional liability “before” the fact. This is limited to overt practices.

Result Measurables

These are indicators which are tied directly to customer expectations. There is usually little direct control over Result Measurables.

Return on Investment (ROI)

An indicator used to measure the financial savings/gain/loss of a project in relation to its cost. Typically, it is used in determining whether a project will yield positive financial benefits, and in turn giving approval to proceed.

The formula for a Project ROI = ((project's financial gain or loss – project's cost) / project's cost) X 100.

Return on Net Assets (RONA)

Return on Net Assets is one bottom-line measurement showing performance relative to strategic goals and objectives. More and more successful companies are utilizing RONA measurement. It provides an apples-to-apples comparison of performance that is understood by non-financial professionals.

Calculated as: RONA = Net Income / (Fixed Assets + Net Working Capital)


Work that is performed in order to correct a defect.

Related to the 7 Wastes.

Right Sized Tool

Design, scheduling, or production device/tool which can be fitted directly into the flow of products within a product family so that production no longer requires unnecessary transportation and waiting.


Insensitivity of a process output to the variation of the process inputs.

Robust Process

A robust process is one that is operating at 6 Sigma and is therefore resistant to defects. Robust processes exhibit very good short-term process capability (high short-term “Z” values) and a small “Z” shift value.

Rolled First Pass Yield (RFPY)

A value based on moving a set of like products through multiple operations with no rework or fixing of defects that occur along the manufacturing process. If no defects are corrected throughout the process the RFPY is usually very low.

As an example, if each process operates at a 'no rework rate' of 90%, and this 90% goes through 5 processes, your RFPY is: 90% x 90% x 90% x 90% x 90% = 59%.

Root Cause

The most base, underlying reason for a condition or event. The root cause must be addressed and corrected to prevent recurrence.

See also 5 Why

Root Cause Analysis

A problem solving approach, where the underlying, or Root Cause, of a problem is identified so that a proper solution or corrective action can be designed. Root Cause Analysis is designed to eliminate recurrence of the same problems.

This approach uses 5 Whys, Cause & Effect Diagrams, Pareto Charts, and more.


Risk Priority Number

Run Chart

A performance measure of a process over a specified period of time used to identify trends or patterns.

Run Rate

Extrapolating current or known performance to predict future performance over a period of time.


A person on the production floor that paces the value stream, delivering and picking up materials through the use of Kanbans.

See also Waterspider


A sample is a portion of the whole collection of items or products.

Saturated Design

Resolution III Designs  are sometimes referred to as Saturated Designs because all or most of the orthogonal columns are assigned factors. If 2-way interactions are of interest, Unsaturated Designs of Resolution V or greater are suggested.

See also Taguchi Method

Scatter Plot

A Scatter Plot, also called a Scatter Diagram or a Scattergram, is a basic graphic tool that illustrates the relationship between two variables. The dots on the scatter plot represent data points.


Generally, the extent to which a process or procedure applies.  The scope of Configuration Management may not, for example, extend to customer information (other than on an 'as informed' basis) and the scope of a Change Management procedure may not apply to 'Urgent Changes'.  Also a key concept in outsourcing for defining which activities are covered by the base contract, and which are separately chargeable.

SCOT Analysis

SWOT Analysis is renamed as SCOT Analysis. W—Weakness is replaced by C—Challenge.

A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as: Strengths (S) or Challenges (C), and that external to the firm can be classified as Opportunities (O) or Threats (T). Such an analysis of the strategic environment is referred to as a SWOT Analysis.

S – Strengths

C – Challenges

O – Opportunities

T – Threats

Screening DOE

A Screening Design of Experiment (DOE) is a specific type of a Fractional Factorial DOE. A screening design is a Resolution III design, which minimizes the number of runs required in an experiment. A Screening DOE is practical when you can assume that all factors are known and are included, as appropriate, in the experimental design.

See also Taguchi Method


Segmentation is a process used to divide a large group into smaller, logical categories for analysis. Some commonly segmented entities are customers, data sets, or markets.

For example, you may collect the cause of defects of a process and place the data into a Pareto Chart. The Pareto Chart then displays the segmentation (Type A defects are 50%, Type B defects are 30%, and Type C defects are 10%). These are possible ways to segment the data.


A Japanese word for teacher or master. In Lean this typically refers to an individual who has led many Lean Transformations.


The ratio of change in the output to the change in the value of the measure.

Sequential Changeover

In a flow process, this is when changeover times are within Takt Time, thereby allowing changeovers to be performed one after another. Sequential Changeover assures that the time lost for each process in the line is minimized to one 'Takt beat'. A setup team, or expert, follows the operator so that by the time the operator has made one full round (at Takt Time), the entire flow line has been completely changed over to the next product.

Set in Order

The 2nd 'S' in the 5S program. Set in Order is the activity that identifies the best placement for all items, tools, machines, etc. in an area.

See also Straighten and 5S


The activity that takes place to convert a process from performing one type of work to performing another.

See also Changeover

Setup Reduction

Reducing the amount of time that a machine or process is down during the changeover from the last good piece of one product to the first good piece of the next product.

Setup Time

The time it takes to setup a process to produce the next product. This is measured from the last good piece of the prior lot to the first good piece of the new lot.

Seven Wastes

Defects, Inventory, Processing, Waiting, Motion, Transportation, and Overproduction. These seven wastes are common steps within any operation which add no value to the customer. These original 7 Wastes were described by Taiichi Ohno, and have since been added on to as Lean moves into industries that deal with more than physical production.

See also 7 Wastes, Waste, and Non Value-Added

Shadow Board

Created during the 2nd 5S stage of Straighten/Set in Order, a shadow board is a system to organize tools and materials.  The shadow board includes outlines or labeled shadows of designated tools to show where they are to be stored when not in use.


The 3rd 'S' in the 5S program. Shine is the constant action of cleaning an area so that anomalies and problems can easily be seen and addressed.

See also Sweep and 5S

Ship Date

Ship Date is the latest date an order can depart the manufacturing facility.

Short-Run SPC

Statistical Process Control charting techniques for small production runs, from which sufficient data is not available for X Bar & R, or Individuals and Moving Range charts.


The Greek letter “σ” (sigma) refers to the standard deviation of a population. Sigma, or standard deviation, is used as a scaling factor to convert upper and lower specification limits to “Z.” Therefore, a process with three standard deviations between its mean and a spec limit would have a “Z” value of 3 and commonly would be referred to as a 3 Sigma process.

Sigma Level

Determining sigma levels of processes (one sigma, six sigma, etc.) allows process performance to be compared throughout an entire organization, because it is independent of the process. It is merely a determination of opportunities and defects, however the terms are appropriately defined for that specific process.

Sigma is a statistical term that measures how much a process varies from perfection, based on the number of defects per million unit.

One Sigma = 690,000 per million units
Two Sigma = 308,000 per million units
Three Sigma = 66,800 per million units
Four Sigma = 6,210 per million units
Five Sigma = 230 per million units
Six Sigma = 3.4 per million units


Vertically organized, functional departments that do not take into account any other department or process in the business.

Simple Linear Regression

Simple Linear Regression is a method that enables you to determine the relationship between a continuous process output (Y) and one factor (X).

The relationship is typically expressed in terms of a mathematical equation such as: Y = b + mX

Single-Piece Flow

A system where workers only work on one unit/product at a time, pass this one unit/product on to the next process, then begin on another unit/product. Unlike Batch & Queue, this One-Piece Flow method has a significant impact on reducing throughput time, wastes, and improving Value-Added Activities.

See also One-Piece Flow and Continuous Flow

SIPOC Diagram

SIPOC, or Supplier-Input-Process-Output-Customer, Diagram is a tool used in Six Sigma methodology to identify all of the relevant elements of a process improvement project and to narrow down the scope of a complex project, before work actually begins.

Six Sigma

A set of problem solving tools and methods used to improve performance and decrease process variation. The goal of Six Sigma is to increase profits by eliminating variability, defects, and waste that undermine customer loyalty.

Six Sigma can be understood/perceived at three levels:

Metric: 3.4 Defects Per Million Opportunities (DPMO). DPMO allows you to take complexity of product/process into account. Rule of thumb is to consider at least three opportunities for a physical part/component – one for form, one for fit and one for function, in absence of better considerations. Also you want to be Six Sigma in the Critical to Quality characteristics and not the whole unit/characteristics.

Methodology: DMAIC/DFSS structured problem solving roadmap and tools.

Philosophy: Reduce variation in your business and take customer-focused, data driven decisions.

Six Sigma Belts

In order of achievement, with the lowest belt on the bottom of the list:

Six Sigma Strategy

Strategy of improvements through Six Sigma can be summed up as any one or combination of the following 3S's.

SHIFT: If the central tendency of the process is outside the specification limits and spread is well within these limits, we need to Shift the process within these limits.

SHRINK: If the central tendency of the process is within the limits but the spread of the process is beyond the limits, Shrink the process within the limits

STABILIZE: If both central tendency and spread are as desired, stabilize the process by monitoring, standardizing and documenting the process.


Most often, the median is used as a measure of central tendency when data sets are skewed. The metric that indicates the degree of asymmetry is called, simply, Skewness. Skewness often results in situations when a natural boundary is present. Normal distributions will have a Skewness value of approximately zero. Right-skewed distributions will have a positive Skewness value; left-skewed distributions will have a negative Skewness value. Typically, the skewness value will range from negative 3 to positive 3.

SMED (Single-Minute Exchange of Die)

A setup reduction and quick changeover system, designed to bring the changeover time for a machine to less than 10 minutes. This minimizes the time that a process is down while being changed from one product to another. This process was developed by Dr. Shigeo Shingo.

See also Quick Changeover

Soft Savings

Six Sigma project benefits such as reduced time to market, cost avoidance, lost profit avoidance, improved employee morale, enhanced image for the organization and other intangibles may result in additional savings to your organization, but are harder to quantify. These are referred to as Soft Savings.

See also Hard Savings


The first 'S' in the 5S program. Deciding which items, tools, machines, etc. in an area are necessary, which aren't, and which potentially could be. This step utilizes Red Tags in its process.

See also 5S

Spaghetti Diagram

A diagram that represents the physical path that is taken by a product or service as it travels through all of the necessary steps to transform it into a deliverable. This is also used to draw the path walked by a person involved in completing the required activities to deliver the product or service. The diagram derives its name from the way that it commonly looks after mapping a process, as the paths drawn tend to look like a plate of spaghetti.

See also Motion Diagram


Unlike the Range (R) which is the maximum value minus the minimum value of process data, the Span removes the extreme outliers of your process by looking only at the difference between the 95th and 5th percentiles.

Special Cause

A source of quality failure that lies outside the process, and so is intermittent/unpredictable/unstable. Sometimes called an Assignable Cause.

See also Special Cause Variation, Common Cause, and Common Cause Variation

Special Cause Variation

Special Cause Variation is a shift in output caused by a specific factor, such as environmental conditions or process input parameters. It can be accounted for directly and potentially removed and is a measure of process control.

See also Special Cause


Customer’s expectation for product or service deliverable/output. The parameters by which an output can be verified.


The spread of a process represents how far data points are distributed away from the mean, or center. Standard Deviation is a measure of spread.


Six Sigma Body of Knowledge


Stability represents variation due to elapsed time. It is the difference between an individual’s measurements taken of the same parts after an extended period of time using the same techniques.

Stable Process

A process that does not contain any Special Cause Variation, it only contains Common Cause Variation. Common Cause Variation is that which is normal to the process and doesn't change over time.


A person who has an interest in a process. Typically this is a supplier, customer, or person who actually performs the work. People who will be affected by the project or can influence it but who are not directly involved with doing the project work.

Stakeholder Analysis

Stakeholder Analysis is a tool used to identify and enlist support from Stakeholders. It provides a visual means of identifying Stakeholder support so that you can develop an action plan for your project.

Standard Costing

Assigns costs to products based on expected costs of resources used, which may differ from both normal and actual costs. Under a Standard Costing System, Standard Costs are used for product-costing purposes as well as for control purposes. The costs entered into Work-in-Process Inventory are Standard Costs. From that point forward, Standard Costs flow through all the manufacturing accounts. When goods are finished, the standard cost of the finished goods is removed from the Work-in-Process Inventory account and transferred to the Finished-Goods Inventory account. When goods are sold, the standard cost of the goods sold is transferred from the Finished-Goods Inventory account to Cost of Goods Sold.

Standard Deviation

Standard Deviation can be thought of as “the average distance each data point is from the average of the entire data set”. If you add the squared distance each point is from the average value and divide by the number of points in the population, or 1 minus the number of data points for a sample, then take the square root of the answer, you will find your Standard Deviation.

The distances are squared to eliminate any negative values. It is the most common measure of the variability of a set of data.

Standard Operating Sheet (SOS)

Consists of all elements for a specific operation, including each step involved in the process and the approximate amount of time required for that process. Can be divided into Manual and Machine times if an operator deals with a machine.

Standard Work

Step-by-step descriptions, written out by employees working within a process, that detail the best known method for completing a task or activity.

The three elements of Standard work are:

  1. Takt Time
  2. Work Sequence
  3. Standard Work-In-Process (SWIP).


Standard Work should always be evolving to become more efficient and less wasteful. This then becomes the baseline for future work and the way that everyone working on that process performs the work.

Standard Work Combination Sheet

A document outlining the best combination of worker and machine, detailing the sequence of production steps assigned to a single worker performing Standard Work.

Standard Work Sheets

Visual work instruction for Standard Work. This drawing shows the work sequence, Takt Time, Standard Working Process, and the layout of the cell or workstation.

Standard Work-In-Process (SWIP)

The minimum Work-In-Process needed to maintain Standard Work.

The parts of Standard WIP are:

  1. Parts completed and in the machine after auto cycle
  2. Parts placed in equipment with Cycle Times exceeding Takt Time
  3. Parts currently being worked on or handled by operators performing Standard Work


The 4th 'S' in the 5S program. Standardize is the act of creating an area-wide standard that is followed regarding procedures on item placement, cleaning, etc. that must be followed by all employees.

See also 5S


A numerical value, such as Standard Deviation or mean, that characterizes the sample or population from which it was derived. Any number calculated from sample data, describes a sample characteristic.

Statistical Process Control (SPC)

Statistical Process Control is the application of statistical methods to identify and control the special cause of variation in a process.

Statistical Quality Control (SQC)

Statistical Quality Control is the application of statistical methods to the monitoring and control of a process to ensure that it operates at its full potential to produce a product or service.

See also Quality Control

Statistical Thinking

The process of using wide ranging and interacting data to understand processes, problems, and solutions. The opposite of One Factor at a Time (OFAT), where ones natural born tendency is to change one factor and “see” what happens. Statistical Thinking is the tendency to want to understand complete situational understanding over a wide range of data where several control factors may be interacting at once to produce and outcome.

Stem and Leaf Plot

Using a data set's numbers themselves to form a diagram, the Stem and Leaf Plot of this data can be constructed by writing the first digits in the first column, then writing the second digits of all the numbers in that range to the right. The result is a histogram turned on its side, constructed from the digits of the data.

Stop-The-Line Authority

The ability for workers to be able to stop the production line to indicate a problem. The production line or machine will remain stopped until the supervisor, manager, engineer, maintenance personnel, etc. have identified the problem and taken corrective action.


The 2nd 'S' in the 5S program. Straighten is the activity that identifies the best placement for all items, tools, machines, etc. in an area.

See also Set in Order and 5S

Strategic Planning

The development of both short-term and long-term competitive strategies, utilizing tools such as SWOT (or SCOT) Analysis to assess the current situation, develop missions and goals, and create an implementation plan.


A technique used to analyze/divide a universe of data into homogeneous groups (strata). Often data that is collected about a problem or event represents multiple sources that need to be treated separately. It involves looking at process data, splitting it into distinct layers (almost like rock is stratified), and doing analysis to possibly see a different process.


A distinct group within a group; a subdivision or subset of a group.


A condition in which gains made by one activity are offset by the losses in another activity or activities. These loses are created by the same actions that created gains in the first activity.

Subjective Rating & Ranking

This is a very common and easy to use matrix where the possible causes generated through brainstorming or other group activities are rated by a team of experts first individually.

For convenience and clarity, the rating is done as from 0 Strongly Disagree through 5 Strongly Agree. Once the entire team has rated the possible causes, they are grouped and ranked (normally by using median) and higher ranked reasons are worked on priority.

Successive Changeover

A changeover method where each machine is changed over as soon as its current step is no longer needed.


Accomplishing defined or required objectives, according to the required or defined conditions, conforming with the right time, place, quantity, quality and costs.

Suggestion System

A system where workers are encouraged to identify wastes, safety issues, and environmental concerns and submit their improvement ideas to management. Rewards are generally given for suggestions which result in savings for the company and are typically shared among the production line or Kaizen Team.

Sunk Cost

Any cost or expenditure that has already taken place and cannot be undone.


The supermarket is a tool of the Pull System, which helps signal demand for the product. In a supermarket, a fixed amount of raw materials, WIP, or finished goods are kept as a buffer to schedule variability or an incapable process. Typically this is located at the end of a production line.

Supply Chain Management (SCM)

The tools used to pass data and expectations between suppliers and customers. The primary purpose for the customer is to have what is needed, when it is needed, in the quantity it is needed, in good quality, at the lowest possible price.


The 5th 'S' in the 5S program. Sustain is the act of maintaining the other 4 S's to keep an area continuously clean, organized, and easy to use.

See also 5S


The 3rd 'S' in the 5S program. Sweep is the constant action of cleaning an area so that anomalies and problems can easily be seen and addressed.

See also Shine and 5S

Swim Lane Map

A Swim Lane Map is used to study a process involving more than three functions. This illustrates “who does what” in a given process, and is useful in effectively showing interruptions to a process due to the handoffs, transportation, queues, and rework that are involved in a process.

See also Metrics Based Process Mapping (MBPM)

SWOT Analysis

A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as: Strengths (S) or Weaknesses (W), and that external to the firm can be classified as Opportunities (O) or Threats (T). Such an analysis of the strategic environment is referred to as a SWOT Analysis.

S – Strengths

W – Weaknesses

O – Opportunities

T – Threats

See also SCOT Analysis

System Audit

System Audit (also called Process Audit) are usually made against a specific document such as operating procedure, work instruction, training manual, etc. and can be conducted for any activity.

System Kaizen

Improvement that is aimed at an entire Value Stream.

System of Profound Knowledge

Deming advanced the System of Profound Knowledge (SoPK) which he said consisted of four main subheadings:

Knowledge of Variation — a knowledge of common cause and special variation.
Knowledge of Systems — understanding that all the parts of a business are related in such a way that if you focus on optimizing one part, other parts may suffer.
Knowledge of Psychology — what motivates people.
Theory of Knowledge — how we learn things.

Systems Engineering

An interdisciplinary collaborative approach to derive, evolve, and verify a life cycle balanced system solution which satisfies customer expectations and meets public acceptability.

Systems Integration

A process where all elements of a product are incorporated, and usually tested, in order to ensure proper functions, per customer specifications.

Systems Thinking

Any process of estimating how local policies and actions influence the state of the neighboring universe. Everyone is a Systems Thinker—some more neighborly than others. The development of a Systems Thinking Model and intervention involves five phases:

  1. Problem Structuring
  2. Causal Loop Modeling
  3. Dynamic Modeling
  4. Scenario Planning and Modeling
  5. Implementation and Organizational Learning

T Statistic

The T Statistic is used to determine whether two means are statistically different. The formula uses the means of the two samples, their standard deviation, and sample size. The T Value is then evaluated against the alpha to determine if the Null Hypothesis can be rejected or not.

T Test

A T Test is a statistical tool used to determine whether a significant difference between the means of two distributions, or the mean of one distribution and a target value, exist.

Taguchi Method

A technique for designing and performing experiments to investigate processes where the output depends on many factors, without having to tediously and uneconomically run the process using all possible combinations of values of those variables. By systematically choosing certain combinations of variables it is possible to separate their individual effects.

A special variant of Design of Experiment (DOE) that distinguishes itself from classic DOE in the focus on optimizing design parameters to minimize variation before optimizing design to hit mean target values for output parameters.

Takt Time

Takt is a German word for 'beat' or 'rhythm' and in Lean this is often referred to as the pace at which your business should operate.

The rate at which the customer uses a product, or the pace at which work must be completed in order to meet customer demand. Takt Time is measured by dividing the average available work time by the average rate of customer demand.

For example: If customers order 90 parts per day, and you have 900 available minutes between two shifts, your Takt Time is 10 minutes. A part must be completed every 10 minutes in order to meet Takt Time.

Target Cost

Target Cost is a function of the sales price and the organization's target profit margin—essentially profit management.

4 Types are:

  • Determine Target Price
  • Set Target Cost (per unit and in total)
  • Compare Total Target Cost to Feasible Cost
  • Redesign/Design products to achieve Cost Reduction Target

Target Costing

A way of establishing a cost goal for a product or service, utilized in the design phase.

The formula is: (Sales Price) – (Target Profit) = Target Cost


Turn Around Time


A group of people associated in some joint action. Teams are formed to work together to solve problems and achieve goals. Another way to look at it is a group which:

Totally (or effectively) and

Team Capacity

The available manpower of a team, with the desired skill set and the available number of hours in a day to deliver a specified output.

Team Leader

The representative for a team within the company, often the liaison between supervisors, managers, other departments, etc. This leads to streamlined communications and less waste and waiting.


A Japanese word for 'Hands-Free'. The goal of Tebanare is to use low cost automation on manual machines in order to allow people to do work that is more valuable, work that only a person can perform.

Theory of Constraints (TOC)

A Lean Management philosophy that focuses on the removal of constraints in order to increase throughput and decrease both inventory and operating expenses.

Thought Process Map (TMAP)

A visual representation of a person's or team's thoughts that act as a roadmap to progress through DMAIC. This is a living document that will change throughout the project and has no set format.


The rate at which the entire system generates money.

Throughput Costing

Counts only unit-level costs as the cost of a product or service. All other costs of resources used are counted as operating costs (or expenses). The throughput (under Throughput Costing) = (Sales Revenue) – (all unit-level spending for direct costs).

Throughput Time

The total amount of time it takes for a product or service to go through the entire system, from order entry/receipt, through delivery. This includes any delays due to demand exceeding availability, processing delays, movement, queues, etc.

See also Lead Time

Tier 1 Supplier

A supplier with prime or paramount design responsibilities for key systems, subsystems, or components as pertaining to end product(s).

See also Tier 2 Supplier

Tier 2 Supplier

A supplier to Tier 1 Suppliers, or a direct supplier of less critical components, systems, or subsystems.

See also Tier 1 Supplier

Time to Market

The length of time it takes for a product to go from development to the first market sale.

Time Value Map

Time Value Map is generated by tracking a work item through the process and tracking where it spends its time. Only work that is seen as Value-Added by the customer is plotted above the middle line

Time-Based Strategy

A strategy that drives improvement activities through a focus on time and its relation to Quality, Cost, Delivery, Safety, and Morale. Also focuses on the reduction in lead time, setup times, and cycle times as a means of becoming more competitive.

Tolerance Range

Tolerance Range is the difference between the Upper Specification Limit and the Lower Specification Limit.


The Six Sigma DMAIC problem solving methodology is accomplished in five phases, or steps:

  1. Define
  2. Measure
  3. Analyze
  4. Improve
  5. Control

Between each phase or step many companies employ a “tollgate” to control the process. Only when the person leading the project has satisfactorily accomplished the previous phase may they pass the tollgate and move to the next phase. Tollgates are usually reviewed by a higher authority, such as the Master Black Belt for a Black Belt, or a Business Quality Council.

Total Observed Variation

Total Observed Variation is the combined variation from all sources, including the process and the measurement system.

Total Probability of Defect

The Total Probability of Defect is equal to the sum of the Probability of Defect above the Upper Spec Limit and the Probability of Defect below the Lower Spec Limit.

Total Quality Management (TQM)

A quality control system which focuses on correcting quality issues before they are passed on for further processing downstream.

Touch Time

The time a product is actually being worked on.

See also Processing Time

Toyota Production System (TPS)

A detailed manufacturing methodology developed at Toyota by Taiichi Ohno and Shigeo Shingo to increase quality, lower cost, decrease defects. The heart of the system focuses on JIT, Level Loading, Customer, 5S, and the 7 Wastes.

TPM (Total Productive Maintenance)

An approach that aims at maximizing equipment effectiveness and reducing downtime due to failures and repairs. This ensures that each machine in a production process is able to perform at its optimal efficiency throughout the lifespan of the equipment, resulting in production never being interrupted.

Traditional Cost Systems

Adds all traceable costs of resources used to unit-level costs. The contribution margin (under Variable Costing) is sales revenue minus all variable cost.

See also Variable Costing

Transfer Function

A transfer function describes the relationship between lower level requirements and higher level requirements. If it describes the relationship between the nominal values, then it is called a Y-Hat Model. If it describes the relationship between the variations, then it is called an S-Hat Model.


The movement of materials from one area to another.

One of the 7 Wastes.

Trend Analysis

The process of analyzing data to identify underlying longer-term trends (i.e. failure patterns). Used in Incident and Problem Management, it is also employed as a method of modeling in Capacity Management. Process Control Charts are key tools in completing this type of analysis.

Trend Charts

Trend Charts allow a company to engage in visual management. They typically display the value of a quantifier through time, together with a goal line.

Tribal Knowledge

Tribal knowledge is any unwritten information that is not commonly known by others within a company. This term is used most when referencing information that may need to be known by others in order to produce quality product or service. The information may be key to quality performance but it may also be totally incorrect. Unlike similar forms of artisan intelligence, tribal knowledge can be converted into company property. It is often a good source of test factors during improvement efforts.

Trimmed Mean

Compromise between the mean and median. Trimmed mean is defined as the mean, calculated by trimming 5% data sets from the top and bottom of data sets. This helps to alleviate the distortion caused by extreme values from which the ordinary arithmetic mean suffers.

Trivial Many

The trivial many refers to the variables that are least likely responsible for variation in a process, product, or service.


TRIZ (pronounced “TREEZ”, the Russian acronym for the Theory of Inventive Problem Solving, short for Teoriya Resheniya Izobreatatelskikh Zadatch) is an established science, methodology, tools and knowledge, and model based technology for stimulating and generating innovative ideas and solutions for problem solving. Historically it has been widely spread in Eastern Europe, particularly in the countries of the former USSR and is a part of many universities, colleges, school education programs. TRIZ science expands system engineering approaches and provides powerful systemic methods and tools for problem formulation, system and failure analysis, both as-is and could be.

True Capacity

The actual attainable volume of a manufacturing system at full utilization, after deducting all normal events (maintenance, known bottlenecks, etc.)

Tsurube System

A way to keep product flow continuous, even when there are interruptions, such as outside processing or batch operations. The Tsurube System is often used when products leave the flow line for processing through equipment that cannot be placed into a Work Cell. (e.g. heat treating, plating, anodizing, etc.)

Turnaround Time

The total amount of time it takes for a product or service to go through the entire system, from order entry/receipt, through delivery. This includes any delays due to demand exceeding availability, processing delays, movement, queues, etc.

See also Lead Time

Two-Bin System

An example of both Visual Management and the Pull System, where two bins or containers are used to trigger a reorder of parts or materials. Each bin contains enough parts to last during the delivery lead time. Once one bin is empty it is time to reorder the two-bin quantity.

See also Kanban

Type 1 Error

In Hypothesis Testing, rejecting the Null Hypothesis (no difference) when it is in fact true (e.g. convicting an innocent person).

TYPE 1 Errors are those where a relationship is assumed where none existed. Production Risk: Rejecting a good part.

See also Alpha Risk, Producers Risk, and Type II Error

Type 2 Error

In Hypothesis Testing: failing to reject a false Null Hypothesis (e.g., failing to convict a guilty person).

TYPE 2 Errors are those where it is assumed no relationship exists, when in fact it does.

See also Beta Risk, Consumer Risk, and Type I Error

U Chart

A chart displaying the counts per unit.

Unbiased Statistic

An Unbiased Statistic is an estimate of a given parameter, when the mean of the sampling distribution of the statistic can be shown to be equal to the parameter being estimated.

Unexplained Variation

Regression statistical output that shows the unexplained variation in the data.

Unintended Consequences

Unintended Consequences are situations where an action results in a potential outcome that is not what was initially intended. The unintended results may be foreseen or unforeseen, but they should be the logical results of the action. Unintended Consequences in Six Sigma and Design for Six Sigma can be categorized into roughly three types:

  1. Positive unexpected outcomes or benefits
  2. Potential sources of problems and a corresponding reduction in quality
  3. Negative effects or outcomes, which are the opposite result of what is intended


A unit is any item that is produced or processed which is liable for measurement or evaluation against predetermined criteria or standards.

Unnecessary Non Value-Added

Activities which add no value from the customer's perspective and are not necessary to run the business.


A random variable with a numerical value that is defined on a given sample space.

Upper Control Limit (UCL)

Upper Control Limit (UCL) (different from USL) representing a 3 “Xsigma upwards deviation from the mean value of a variable. For normally distributed output, 99.7% should fall between UCL and LCL.

See also Lower Control Limit (LCL)

Upper Specification Limit (USL)

An Upper Specification Limit, also known as an Upper Spec Limit (USL), is a value below which performance of a product or process is acceptable.


Upstream processes are activities that take place before a specified reference point. For example, Order generation is upstream from Order Picking.


Value is the exchange for which customer pays. Value can also equate to Quality over Cost, i.e. the higher the quality the lower should be the cost in real context.

Value = Function/Cost

Value Analysis

An evaluation of total Lead Time and Value-Added time in order to identify the percentage of time spent in Value-Added Activities.

Value Chain

Activities outside of your organization or business that add value to your final product.

Value Stream

The tasks and activities which are required in order to design, order, and provide a specific product or service from input raw materials to an output. This includes ordering, raw materials, production, and finally providing the product or service to the customer.

Value Stream Map (VSM)

A high-level, visual representation of all of the process steps (both Value-Added and Non Value-Added) that are required to transform a customer request into delivered products or services. VSM's show the connection between information and product flow, as well as any major barriers to flow. By using VSMs to document current and future state conditions, the identification and removal of Non Value-Adding Activities can take place.

See also Future State Map

Value Stream Mapping

The process of mapping out a process for the purpose of finding out the current state flow and working out a future state for implementation.

See also Future State Map


Any activity which is seen from the customer's perspective as value; something a customer is willing to pay for.

Value-Added Activities

Any activity within a process that adds value in the eyes of the customer.

Value-Added Analysis

An activity in which a process improvement team breaks a process down to its essential elements. The team isolates all activities that, in the eyes of the customer, actually add value to the product or service. The remaining, or Non Value-Adding, activities (waste) can then be targeted for removal.

Value-Added Work

Any work that the customer is willing to pay for.


A quantity that may assume any one of a set of values. Usually represented in algebraic notation by the use of a letter.

Variable Cost

Cost that change in total proportion to changes in the related level of total activity or volume.

Variable Costing

Adds all traceable costs of resources used to unit-level costs. The contribution margin (under Variable Costing) is sales revenue minus all Variable Cost.

See also Traditional Cost Systems

Variable Data

Variable Data are what you would call Quantitative. There are two types (Discrete) count data and (Continuous) data. Attribute data are always binary and unusable for the purpose of quantification. (i.e. Good/Bad, Yes/No) Once you convert them to discrete data by counting the number of good or bad, they become discrete variables data.


Deviation from process mean (i.e. away from the target) which often results in extra cost to revert back on target/mean.

Variance Inflation Factor

Variance Inflation Factor (VIF) measures the impact of Co-Linearity among the X's in a regression model on the precision of estimation. It expresses the degree to which Co-Linearity among the predictors degrades the precision of an estimate. Typically a VIF value greater than 10 is of concern.


Any differences that exist between design specifications and actual output.

See also Noise

Vertical Handling

When tasks are assigned in such a way that the materials and processes are progressively being worked toward completion.

Visual Controls

A system which places all tools, parts, activities, and indicators of the performance of a production system in plain view, so that everyone involved can quickly understand the status of a system.

Visual Management

A management approach that expresses information publicly in a way that is easily understood by everyone in a work area. This management style utilizes simple visual tools to identify the target or normal state so that any abnormality can be quickly met with corrective action.

Visual Workplace

The use of visual controls and displays to help employees maintain control of their work areas and assess performance at a glance.

Vital Few

Derived from the Pareto Chart, the term indicates that many defects come from relatively few causes (the 80/20 rule).

Voice of the Business (VOB)

The “Voice of the Business” is the term used to describe the stated and unstated needs or requirements of the business/shareholders.

Voice of the Customer (VOC)

The “Voice of the Customer” is the term used to describe the stated and unstated needs or requirements of the customer. The Voice of the Customer can be captured in a variety of ways: Direct discussion or interviews, surveys, focus groups, customer specifications, observation, warranty data, field reports, complaint logs, etc.

Voice of the Employee (VOE)

The “Voice of the Employee” is the term used to describe the stated and unstated needs or requirements of the employees of a business.

Voice of the Process (VOP)

Term used to describe what the process is telling you. What it is capable of achieving, whether it is under control and what significance to attach to individual measurements – are they part of natural variation or a signal that needs to be dealt with. The best way to discover the VOP is to plot it on a Control Chart—time sequenced events across the bottom (x-axis) and the individual results up the side (y-axis). Calculate the normal variation ranges and plot these as lines above and below the average the process is giving you.

Wait Time

The amount of time that products, people, information, or material waits to be worked on.

See also Queue Time


Created when materials, information, or machines are not ready.

One of the 7 Wastes.

Warning Limits

In a Control Chart, if control limits are placed at two times the standard deviation from the process average then the limits are said to be Warning Limits or Two Sigma Limits.


Any activity or task which uses resources but does not add value to the product or service, as defined by the customer.

One of the 7 Wastes

See also Elimination of Waste and Non Value-Added


The Waterspider is a highly skilled, well-trained person who makes the rounds in a company, supplying parts, assisting with changeovers, providing tools and materials, and providing any additional help needed to maintain Standard Work and keep processes flowing. This person has a routine and knows all of the processes thoroughly enough that they can step in at any time to provide assistance.

See also Runner


Web Based Training


From a Box Plot, Whiskers represent the minimum and maximum observations within 1.5 Inter Quartile Range (75th-25th percentile span) from either 25th or 75th percentile. Outliers are those that fall outside of the 1.5 range.

Wilcoxon Rank Sum Test

A test used in nonparametric statistics used to compare the locations of two populations, to determine if one population is shifted with respect to another. The method employed is a sum of ranks comparison.

Work Balancing

Designing processes so that the Process Time for each person is equal to, or slightly less than, the Takt Time that is required to meet customer demand.

See also Line Balancing

Work Cell

A cross-functional process line, typically including equipment to process products, or product families, from start to finish.

Work Sequence

The defined steps and activities that are necessary to perform in order for the work to be completed.

Work-in-Process (WIP)

Products or inventory that is available to be worked on, at various stages, but is not yet completed and ready to be handed to the customer.

Workflow Analysis

The analyzing of the physical layout of a process flow, with the intent of reducing travel distances, eliminating redundancies, and improving quality and communication.

World-Class Quality

A term used to indicate a standard of excellence. The best of the best.


Xs are the independent inputs to a process that cause or control a problem to occur in the output (Y) of a process. Once quantified through Design of Experiment (DOE), a transfer function Y=f(X) can be developed to define the relationship of elements and help control a process.

X Bar

Also known as the sample mean.

See also Mean

X Bar and R Charts

X Bar and R Charts: This set of two charts is the most commonly used statistical process control procedure to monitor process behavior and outcome over time. X Bar and R Charts draw a Control Chart for subgroup means and a Control Chart for subgroup ranges in one graphic.

Interpreting both charts together allows you to track both process center and process variation and detect the presence of special causes. Generally, a user focuses on the range portion of the chart first, confirming that the process is in control. Finally, the user focuses on the average chart, looking for special cause there.


Y is the dependent output variable of a process. It is used to monitor a process to see if it is out of control, or if symptoms are developing within a process. It is a function of the X's that contribute to the process. Once quantified through Design of Experiment (DOE), a transfer function Y=f(X) can be developed to define the relationship of elements and help control a process.

Yellow Belt

A Yellow Belt typically has a basic knowledge of Six Sigma, but does not lead projects on their own, as does a Green Belt or a Black Belt. In addition, Yellow Belts may often be responsible for running smaller process improvement projects using the PDCA (Plan, Do, Check, Act) methodology. PDCA enables Yellow Belts to identify processes that could benefit from improvement. These smaller Yellow Belt projects often get escalated to the Green Belt or Black Belt level when DMAIC methodology is used to maximize cost savings using Statistical Process Control.

See also Six Sigma Belts


The product that is produced, related to scheduled product.


A Z value is a data point's position between the mean and another location as measured by the number of standard deviations. Z is a universal measurement because it can be applied to any unit of measure. Z is a measure of process capability and corresponds to the process sigma value that is reported by the businesses. For example, a 3 Sigma process means that three standard deviations lie between the mean and the nearest specification limit. 3 is the Z Value.

Z Bench

Z Bench is the Z value that corresponds to the total probability of a defect.

Z Score

A measure of the distance in standard deviations of a sample from the mean.

Calculated as (X-X Bar)/sigma.

Z Shift

Z Shift is the difference between ZST and ZLT. The larger the Z Shift, the more you are able to improve the control of the special factors identified in the subgroups.


The probability of a defect when defects are correlated.

For example, when line widths are printed too wide the process can cause thousands of “bridging” defects, so although the number of defects is extremely high, there is only one opportunity for them to occur. Unless there are four sensitive areas on the circuit so that a slight “under exposure” condition would cause four sensitive areas to bridge, in which case Zadj would then have four opportunities.

Zero Changeover

A changeover that is performed within one production cycle (typically in less than 3 minutes).

Zero Defects

A practice that aims to reduce defects as a way to directly increase profits. The concept of Zero Defects led to the development of Six Sigma in the 1980s.


Z Long Term (ZLT) is the Z Bench calculated from the overall standard deviation and the average output of the current process. ZLT represents the overall process capability and can be used to determine the probability of making out-of-spec parts within the current process.


Z Short Term (ZST) represents the process capability when special factors are removed and the process is properly centered. ZST is the metric by which processes are compared.