Operations Management Glossary

A medium-term approach to matching production capacity with forecasted demand over a 3-to-18-month horizon by adjusting workforce, inventory, and production rates.

The process step or resource with the lowest capacity that limits the throughput of the entire system.

The process of determining the amount of production capacity needed to meet current and future demand for products or services.

An ongoing effort to enhance products, services, or processes through incremental and breakthrough improvements.

A project management technique that identifies the longest sequence of dependent activities to determine the minimum project duration.

The total time required to complete one unit of a product or one cycle of a process from start to finish.

A structured Six Sigma methodology with five phases: Define, Measure, Analyze, Improve, and Control, used to improve existing processes.

The optimal order quantity that minimizes total inventory costs by balancing ordering costs against holding costs.

The ratio of actual output to standard or expected output, measuring how well resources are utilized in a production process.

The process of estimating future demand for products or services using historical data, statistical methods, and market analysis.

A cause-and-effect diagram (also called fishbone diagram) used to identify and organize potential root causes of a quality problem.

A production strategy that produces and delivers goods exactly when needed, minimizing inventory and waste.

A Japanese philosophy of continuous, incremental improvement involving all employees at every level of the organization.

A visual workflow management system that uses signals (cards, boards) to control the production and movement of items in a pull-based system.

The total elapsed time from when a customer places an order until the order is delivered, or from the start to the end of any process.

A production philosophy focused on eliminating waste (muda), improving flow, and maximizing value to the customer, originating from the Toyota Production System.

A plan that specifies what finished products are to be produced, in what quantities, and when, serving as the primary input for material requirements planning.

A metric calculated as the product of Availability, Performance, and Quality, measuring how effectively manufacturing equipment is being used.

Plan-Do-Check-Act, a four-step iterative management method developed by W. Edwards Deming for continuous improvement of processes and products.

A mistake-proofing mechanism or technique designed to prevent errors from occurring or to make them immediately obvious when they do occur.

A production control approach in which downstream processes signal their need for materials, triggering upstream production only when there is actual demand.

A data-driven quality management methodology that aims to reduce process defects to no more than 3.4 per million opportunities using statistical analysis.

The maximum allowable time to produce one unit in order to meet customer demand, calculated as available production time divided by customer demand rate.

A management methodology that focuses on identifying and systematically improving the system's primary constraint (bottleneck) to increase overall throughput.

A lean tool for visually documenting all steps in a process, both value-adding and non-value-adding, to identify waste and design improved workflows.