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A Terms

"AHA!" Moments

“Aha!” moments are the instances when the light bulb comes on. It is the point in time when someone makes the transition from not knowing something to full understanding.

A3 Management

A3 management is a structured way of running a business. A3 management focuses on...

A3 Problem Solving

A3 problem solving is a structured approach to resolving problems. It was popularized by...

A3 Process

The A3 process is a methodology for getting to the root cause of a problem and addressing it in a way that will permanently eliminate it.

A3 Report

The A3 report is the communication medium of A3 management. The A3 report takes its name from the size of the paper, “A3” that it is generally written or printed on.

A3 Thinking Term

A3 Thinking is a sophisticated approach to problem-solving. It is closely associated with the A3 Report.

ABC Inventory

ABC inventory is a method of grouping materials based on cost and usage to assign them different inventory management processes.

ABC Machines

Machines are essential to production environments, but not all machines are created equal. The impact of breakdowns varies widely.

Abnormal Conditions

Unusual appliance noises, a smoky odor, or obvious wet marks on ceilings can all be signs of abnormal conditions.

Abnormality Management

There are many different styles of management. One that works well in a Lean leader’s bag of tricks is abnormality management.

Absences

Absences are, in a nutshell, times when a person is not present to do their normal work. Absences primarily fall into two categories from a production viewpoint—planned and unplanned.

Acceptable Quality Level / AQL

Acceptable quality level (AQL) is the percentage of defects allowed for a lot before it is rejected by a customer.

Acceptance Number

The acceptance number is the highest number of nonconforming items that can be found in a sample for a lot to still be considered acceptable.

Accountability in Lean

Accountability and authority are the yin and yang of leadership. Authority is the state of having power to give directions and make decisions.

Accounting

A company has to know whether what they are doing makes money, right? The people who know how to figure this out are the accountants.

Accounts Payable (AP)

Accounts payable (AP) is an accounting term. It is the listings on a company’s financial statement of the obligations to pay off short term debt.

Accuracy

The definition of accuracy is essentially having results (data) that is centered on a target value. Statistically speaking, it is how correct the mean value is.

Action Date

Using an “action date” is a proactive approach to managing your workload.

Action Plan

Action plans are, in effect, roadmaps to achieve goals.

Activity Ratio

The activity ratio is a measure of how quickly work moves through a process. It is simply the sum of the process times divided by the total lead time.

Activity-Based Costing

Activity-Based Costing is a means of attempting to accurately apply costs of running a business to a specific product or service.

Ad Hoc Query

An ad hoc query is simply a one-time request for information from a database. (Ad hoc is Latin for “for this purpose”.)

Administrative Processes

Administrative processes substantially contribute to a company’s costs. Obviously, it depends on the company, but estimates commonly attribute 60-80% of expenses to administrative processes.

Affinity Diagram

One of the more unusually named Lean tools, the affinity diagram is not really a diagram at all. It is more of a sorting and grouping process to organize ideas into manageable chunks.

Agile Manufacturing

Agile manufacturing describes a company’s ability to be responsive to the marketplace.

Algorithm

An algorithm is simply a set of instructions for solving a specific problem. It is commonly associated with math or computers but applies to all problems.

Allocation (Resources)

Resource allocation is simply the art and science of parceling out the various resources available to an organization.

Alpha Risk

Alpha risk is, in statistical terms, the chance of rejecting the null hypothesis when it is, in fact, true. In other words, it is a false positive (i.e. a good part is identified as a defect).

Alternate Hypothesis

The alternative hypothesis is the premise that there is a statistically significant difference from the null hypothesis.

Ambiguity

Ambiguity is the state of uncertainty in meaning. Ambiguity is harmful to Lean companies for several reasons.

AME (Association for Manufacturing Excellence)

See: Association for Manufacturing Excellence

American National Standards Institute (ANSI)

The American National Standards Institute (ANSI) is a US government organization that coordinates the creation of voluntary national standards.

American Society for Quality (ASQ)

AQQ is a non-profit based out of Milwaukee, Wisconsin. It lists its mission as: "ASQ empowers people, communities, and organizations of the world to achieve excellence through quality."

Amortization

The concept of amortization is that the initial payment for an intangible asset does not always correspond to the useful life of that asset.

Analysis

Analysis is the deep dive into the details of a problem in order to better understand it.

Analysis of Variance (ANOVA)

Analysis of variance, also known as ANOVA, is a sophisticated statistical modeling technique that looks at variation within and between two or more groups.

Analysis Paralysis

Analysis paralysis is the act of bogging down a problem-solving effort by continuing to crunch data despite diminishing returns.

Analytic Hierarchy Process (AHP)

The Analytic Hierarchy Process, or AHP, is a decision-making tool developed in the 1970’s by Thomas L. Saaty.

Analyze Phase of Six Sigma

The Analyze Phase of Six Sigma is the third phase of the DMAIC process.

Andon Board

An andon light, in its most common use, is a status indicator for a work area. It generally has green, yellow, and red lights in a stack.

An andon light is one of the most common forms of visual management that is used in Lean. It is a staple in the bag of Lean tools because it is highly effective at keeping operations running smoothly.

Annual Objectives

In the generic definition, annual objectives are simply the company’s goals for a calendar year. In most cases these goals should target an aggressive degree of improvement.

Annualized Values

Often, something occurs over a short period, but needs to be compared to a full year. This is known as annualizing.

Anomaly

An anomaly is a condition outside of the expected range. Generally, an anomaly has an unusual or unexplained circumstance around it.

ANOVA

See: Analysis of Variance

ANSI

See: American Nationals Standards Institute

AP or A/P

AP (or A/P) is an abbreviation for “accounts payable”.

Apples to Oranges Comparisons

Apples to oranges comparisons occur when people examine two objects or situations and draw incorrect conclusions.

Appreciation (Employee Value)

Appreciation is the increase in value of an item over time.

Appreciation for People

People crave appreciation for their accomplishments.

AQL

See: Acceptable Quality Level

Artisan Process

An artisan process is one that relies on the skills of workers over strong processes.

ASQ (American Society for Quality)

See: American Society for Quality

Assembly Lines

Henry Ford is generally considered to be the inventor of the assembly line.

Asset

In accounting terms, an asset is an economic resource owned by a company or individual. Assets hold value because of the future benefit they can bring.

Assignable Cause

An assignable cause is a type of variation in which a specific activity or event can be linked to inconsistency in a system.

Association for Manufacturing Excellence (AME)

AME is a non-profit organization based out of Rolling Meadows, Illinois.

Assumptions

Assumptions are pieces of information that are presumed to be true, often without any evidence to support them.

Asynchronous Learning

Asynchronous learning is the concept of teaching the same material to students at different times or places.

ATP (Available to Promise)

See: Available to Promise

Attribute Data

All data is not created equally. There are many different categories of ways to describe things. Interestingly, there seems to be little consensus on what the terminology means.

Attribution Theory

Attribution theory is the study of the psychology behind how people attribute causes to the way they behave and the resulting outcomes.

Attrition

One of the imperatives of any continuous improvement program is a commitment by the organization to protect jobs.

Audits

The term “audit” generally brings up an image of an IRS accountant knocking on the door.

Authority

Authority is a formally granted power to make decisions. Authority is generally bestowed upon a position rather than a person. It is different than accountability.

Autoejector

An autoejector is a tool used to streamline production. It is also known by the Japanese term, hanedashi.

Automated Guided Vehicle (AGV)

Automated guided vehicles (sometimes called Automatic Guided Vehicles) are driverless vehicles that primarily perform transportation functions.

Automated Storage and Retrieval Systems (AS/RS)

Automated Storage and Retrieval Systems are systems linked to a computerized control with an automated method of retrieving items from a designated storage location.

Automatic Machine Cycle Time

Automatic machine cycle time, sometimes referred to as automatic machine time, is the time a machine spends processing a single part without an operator’s interaction.

Automatic Machine Time

See: Automatic Machine Cycle Time

Automation

Automation is the act of adding of a mechanical device to a machine that allows it to operate with reduced, non-continuous input from an operator.

Autonomation

Autonomation is automation with a human touch.

Autonomy

Autonomy is the state of being competent and empowered to make decisions on one’s own.

Availability

Availability is exactly what it sounds like. It is a state of readiness to perform a task or operation. The term can be applied to a person, process, or piece of equipment.

Available to Promise (ATP)

Available-to-Promise, or ATP is a logistics function.

Average

“Average” is the layperson’s way of saying arithmetic mean.