17  Glossary

Terms are alphabetized. Follow a definition’s explanation link to see it in context. Abbreviations and alternate names point to the same definition.

Batch Processing Production System

A batch-processing production system accumulates multiple units and processes them as a group before releasing the group to the next step.

Explanation in context.

Branching Decision Point

See Decision.

Business Functions

The functions are the things the firm has to do in order to operate, comprising broad areas such as HR, Sales, Finance, Operations, and potentially other functions such as legal or research and development.

Business process

See Process.

C/O

See Changeover Time.

C/T

See Cycle Time.

Changeover Time

Changeover time, written C/O, is the setup time required to switch a process from one product, service, batch type, or operating mode to another. Every changeover is setup, but not every setup is a changeover. Use C/O only when the observation records an actual transition and identifies what changed.

Explanation in context.

Common Cause Variation

Variation produced by the process as it currently operates: the combined effect of sources that are inherent in the system over time and affect its outcomes broadly.

Continuous Flow Production System

In a continuous-flow production system, each unit begins the next step as soon as the preceding step is complete and the next step is available.

Explanation in context.

Continuous Process Improvement

A philosophy that says our processes can always be improved.

Customer

The customer of a firm is the person or organization that receives the benefit of its services or the use of its goods, regardless of who pays. The customer, payer, purchaser, and funder may be the same party, but they need not be.

Explanation in context.

Customer Specification

The precise, measurable properties a finished good or service must have to meet a customer’s need.

Cycle Time

Cycle time, written C/T, is the observed time between successive completions from a process or process step. For repeating operator work, it can also describe the time required to complete the work elements before the sequence repeats. In a stable, sequential one-piece operation, one unit’s P/T and the C/T between completions may be numerically equal; the labels still answer different questions. Cycle time is a completion pace, not the sum of processing times along a unit’s path.

Explanation in context.

Decision

A decision identifies the point where a process can follow alternative paths. If making the decision consumes work or waiting time, preserve that time in the log.

Explanation in context.

Defect

A defect is a failure of a product or service to fulfill a stated requirement or a reasonable expectation for use, including applicable safety requirements.

Explanation in context.

Distribution

The pattern of values observed for a quantity, including which values occur and how often or where they occur.

Economy of Scale

A firm enjoys an economy of scale when average cost per unit falls as output increases over the relevant range.

Event log

An event log is a row-by-row record of what happens to identified units of work as they move through a process. Each row preserves enough context to say what happened, to which unit, and when. The log is the evidence from which the map worksheet, process map, and order-level summaries are derived.

Explanation in context.

Firm

A firm is an organized entity that coordinates people and resources to provide goods or services of value to customers.[^firm-usage]

Explanation in context.

First-Pass Yield

First-pass yield, or FPY, is the proportion of units that complete a defined step or process without a defect, correction, scrap, or rework on their first pass:

\[ \mathrm{FPY}=\frac{\text{Units completed correctly on the first pass}}{\text{Units entering the defined boundary}} \]

State the process boundary, observation period, and denominator. One unit can contain more than one defect, so FPY is not the same as a defect count.

Explanation in context.

Five-Number Summary

A compact distribution summary consisting of the minimum, first quartile, median, third quartile, and maximum.

FPY

See First-Pass Yield.

Hidden Factory

The unmeasured or poorly visible capacity consumed by rework, sorting, expediting, firefighting, workarounds, and other activities needed to compensate for failures in the official process.

Industrial Engineering

An engineering discipline concerned with the creation of efficient production systems that integrate workers, materials, machinery, and information to produce products or provide services.

Interruption

An interruption is a stop or diversion that pauses the normal flow of a work unit, usually to handle an urgent exception or priority task. Interruptions increase variation and make processing-time and completion-pace estimates less stable. Record the source, duration, and point in the activity in Notes so repeated patterns can be investigated later.

Explanation in context.

L/T

See Lead Time.

Lead Time

Lead time, written L/T, is the elapsed time between the defined start and stop events for one work unit. Unless another clock is stated, elapsed lead time includes all calendar time within that boundary.

Explanation in context.

Lean Six Sigma

A methodology and body of knowledge that combines features of the Lean and Six Sigma traditions into a collection of tools used in carrying out process-improvement projects. The goal of Lean Six Sigma is to implement continuous improvement by eliminating waste and reducing variation.

Least Cost Way

A feasible way of achieving the required result at the lowest relevant total cost among the alternatives considered. The comparison must include implementation, operating, quality, and safety consequences.

Little’s Law

The long-run relationship among work in process, throughput, and average lead time: \(WIP = \text{Throughput} \times \text{Average Lead Time}\).

Non-value-added process step

A non-value-added process step fails one or more parts of the value-added test and is not currently required to deliver the product or service safely and reliably.

Explanation in context.

NVA

See Non-value-added process step.

Operating Lead Time

Operating lead time counts only the periods in which the process is scheduled to operate between the defined start and stop events. Wash n’ Fold uses drop-off to ready-and-notified and excludes closed hours. Report the operating calendar whenever this measure is used.

Explanation in context.

Operations

The function of the business that produces the good or provides the service that the customer values.

Operations research

A branch of applied mathematics concerned with optimization problems relevant to business operations, including logistics, supply chain management, and production scheduling.

Operator Balance Chart

A chart that compares the work assigned to each operator with Takt. Bars above the Takt line identify assignments that cannot sustain the required pace under the stated assumptions; bars need not be equal for the process to meet Takt.

P/T

See Processing Time.

PCE

See Process Cycle Efficiency.

PDCA

Plan–Do–Check–Act: define the problem and proposed test, carry out the test, compare results with expectations, and use what was learned to standardize, revise, or reject the change.

Percentile

A value associated with a stated position in a sorted distribution; for example, P90 marks a value at or below which at least 90 percent of observations fall under the nearest-rank convention.

Process

A business process is a set of steps designed to produce a specific product or provide a specific service to a customer.

Explanation in context.

Process Cycle Efficiency

Process cycle efficiency, or PCE, is the share of lead time spent in value-added work:

\[ PCE = \frac{\text{Value-added time}}{\text{Lead time}}\times100\% \]

For a group of orders, this book’s White Belt convention is to divide total VA time by total lead time for the same orders. That equals mean VA time divided by mean lead time for that group. It need not equal an unweighted average of individual orders’ PCE percentages. When the study uses an operating clock, name the denominator as operating lead time and use that same clock throughout.

Explanation in context.

Process Model

A representation of the relationships between the steps of a process and the resources those steps require, including personnel, information, materials, machinery, and related elements. There are many kinds of process model, including flowcharts and Value Stream Maps.

Process run

A process run is one complete instance of a process, traced for one thing from the process’s defined start event to its defined stop event. That thing might be one customer order, one patient visit, one service request, one batch of work, or one invoice.

Explanation in context.

Process Step

A process step is a discrete unit of work.

Explanation in context.

Process variant

A process variant is a recurring alternative path within the same process boundary. Variants share the same start event, stop event, and primary unit of analysis but differ in one or more steps, roles, timings, or decision paths.

Explanation in context.

Processing Time

P/T means processing time. For one pass through an activity, processing time is the elapsed time from Work Start to Work End while the unit is actively being processed. Average processing time is the arithmetic mean across comparable activity records. Write Avg P/T when transferring that mean to the worksheet or map.

Explanation in context.

Production system

A production system is the organization of people, processes, machinery, materials, and information necessary to create a product or provide a service.

Explanation in context.

Project Management Body of Knowledge

A collection of tools and techniques formulated by the Project Management Institute and used to train project managers in the administration of project-based work.

Project Production System

A production arrangement organized around a particular, often one-off deliverable, with activities and resources coordinated to complete that project.

Pull production

Release of work authorized by actual downstream need and available capacity, using an explicit signal and rule. A new arrival alone does not override a work limit.

Push production

Release of work according to an upstream plan or forecast, without requiring an authorization signal from the receiving step.

Queue

A queue is a state where work items sit idle, waiting for the next process step to begin. A queue adds wait time rather than processing time. Record all queue time in the event log’s W/T calculation, record visible queue counts with their observation times, and draw a queue triangle when the waiting state is large or diagnostically important.

Explanation in context.

Range

The observed maximum minus the observed minimum for a stated group of values.

Red Tagging

Marking a questionable item during Sort so its use and disposition can be reviewed before it is retained, relocated, or removed.

Redundant Steps

Steps that repeat work already completed without adding value or meeting a necessary requirement. On a process map, they are a reason to investigate why the repetition occurs before removing it.

Required non-value-added process step

A required non-value-added process step fails one or more parts of the value-added test but is currently required by law, regulation, contract, a documented safety or control need, or another necessary condition of delivering the service reliably. Record the specific requirement rather than treating RNVA as a permanent exemption from improvement.

Explanation in context.

Rework loop

A rework loop is a path where work returns to an earlier step because a defect, omission, or mismatch was found. Rework loops increase total effort and delay; they are a cost multiplier on total processing time and lead time and indicate quality problems. Add a row for each pass through the correction activity, linked to its work unit. On the worksheet, record the trigger, destination, and frequency with its denominator, such as 5 affected orders out of 39.

Explanation in context.

RNVA

See Required non-value-added process step.

Rolled Throughput Yield

Rolled throughput yield, or RTY, is the product of the first-pass yields for the defined stages of a process.

For a referral pathway with booking and completed-visit stages, define the cohorts explicitly:

\[ \mathrm{RTY} = \frac{\text{Referrals booked}}{\text{Referrals created}} \times \frac{\text{Booked referrals completed in network}}{\text{Referrals booked}} \]

When every completed in-network visit belongs to the booked cohort, the booked-referral counts cancel and RTY equals completed in-network visits divided by created referrals. The stage percentages should still be reported because the same RTY can conceal different points of loss.

RTY

See Rolled Throughput Yield.

S/T

See Setup Time.

Setup Time

S/T means setup time. For one pass through an activity, setup time is the preparation interval from Setup Start to Work Start. Average setup time summarizes comparable observed preparation intervals; label it Avg S/T. Record it separately from queue wait time. Record 0 only when no setup occurs; leave unobserved setup time unknown.

Explanation in context.

Special Cause Variation

Variation associated with an intermittent, unusual, or unpredictable influence that affects only some process outcomes. A statistical signal may indicate a special cause before the specific source has been identified.

Swim-Lane Process Map

A process map organized into lanes for the roles, functions, teams, or systems that perform the work. The lanes make responsibility and handoffs visible; a swim-lane map is not, by that fact alone, a value-stream map.

Takt Time

Takt time is available production time in a planning period divided by demand for that same period:

\[ T = \frac{A}{D} \]

Explanation in context.

Throughput

The average number of work units completed by a process per unit of time.

Total Processing Time

Total processing time is the sum of the processing times on one unit’s path, including repeated work. Average total processing time averages those unit totals. Active processing includes automatic machine cycles; it does not mean a worker is occupied throughout.

Explanation in context.

Total Quality Management

A process-improvement methodology that preceded Lean Six Sigma.

Toyota Production System

Toyota’s production approach, centered on just-in-time flow and jidoka (detecting abnormalities and stopping to prevent defects from continuing downstream).

Unit of analysis

The unit of analysis is the primary “thing” whose passage through the process counts as one run of the process. It might be one customer order, patient visit, service request, batch, or invoice. Choose it before recording observations so that process-level measures refer to comparable cases.

Explanation in context.

VA

See Value-added process step.

Value

The value of a product or service is its worth to the customer, judged from the customer’s point of view.

Explanation in context.

Value Stream Map

A Lean process model that represents the material or service flow and the information flow needed to bring a product or service from a defined request to delivery. A current-state map helps expose sources of waste and supports the design of a future state.

Value-added process step

A process step is a value-added process step only when it passes this three-part test:

  • (i) Customer value: The step directly creates or advances an outcome the customer receives and values.
  • (ii) Transformation: The step changes the form, fit, function, information, or condition of the product or service toward that outcome.
  • (iii) Right first time: The step is performed correctly without creating a need for correction or rework.

Explanation in context.

Variation

Differences among individual observations or outputs of a process. Variation may arise from common causes inherent in the current process or from special causes that affect only some outcomes.

W/T

See Wait Time.

Wait Time

W/T means wait time. For one pass through an activity, it is the elapsed time from queue entry until setup starts; if there is no setup, it ends when work starts. Average wait time is the arithmetic mean of those observed waits; label the summary Avg W/T. All queue time is wait time, whether or not you later choose to draw that queue as its own symbol on the map.

Explanation in context.

Waste

Consumption of effort, time, materials, or other resources that does not create customer value. Some non-value-added work is currently required; classification alone does not authorize its removal.

WIP

See Work in process.

Work in process

Unfinished work currently inside the defined process boundary.