Lean Training for your lean journey


Lean Glossary of Terms

Lean Dictionary for Process Improvement

Definitions, formulas, and examples for lean manufacturing terms that are so important to Lean process improvement.
These are the exact formulas and definitions used in your Systems2win Excel templatesDownload free trial templates

Table of Contents


  • Use CTRL+F to find keywords
  • You can use your browser's Back button
    to return to where you were before
    following a hyperlink.
  • You will learn better and faster if you keep a copy of your Systems2win template open in another window — and actually play with some data — so that you really "get it".
    Download free trial templates
  • Consider starting with
    the Value Stream Mapping training and videos,
    which give a nice introduction to the lean dictionary terms covered more thoroughly here.

Lean Training

Bookmark = TheThing

Customer Demand

also known as 'the thing being transformed'


What the customer is buying. What you are transforming.


In a manufacturing, distribution, or retail environment, the thing is usually a physical product.

In an office, service, non-profit, or government environment, the thing might be a form.

Video: Units of Measure

In a medical environment, the thing might be a patient.

Units of Measure

Customer Demand Unit of Measure

should be the most common unit of measure for the end product
that is delivered to the customer for the entire value stream.

Examples: Cases or six-packs of soda (rather than bottles).
Units or cases, rather than pallets. (unless your customer usually buys pallets)

Customer Demand should be expressed in the same time Unit of Measure as Work Time Available.

Examples: Demand units per week and Work Time Available per week.
Demand units per shift and Work Time Available per shift.


Your Systems2win Value Stream Mapping template allows you to define both:

  1. The Common Demand Unit of Measure

    The most common unit of measure for the end product
    that is delivered to the customer of the entire value stream.

    Example: The Common Demand Unit of Measure for the product family produced by this value stream might be 'go carts'.

  2. Each process can optionally have its own Demand Unit of Measure

    For example, one process might produce 4 'wheels' per 'go cart'.

    And (unlike any other value stream mapping software on the market),
    all values are automatically converted back into the Common Demand Unit of Measure
    so that the math comes out correctly in the Time Sum Line for your Value Stream Totals.

Bookmark = WorkingTimeAvailable

Lean Work Time Available

Work Time Available

aka Time Available for Work, or Working Time Available


Time available to work toward meeting Demand.

Customer Demand should be expressed in the same Unit of Measure as Work Time Available.

Examples: Demand per week and Work Time Available per week.
Demand per shift and Work Time Available per shift.


How to calculate Work Time Available:

(Your Systems2win templates have fields with pop-up help to remind you, and to make calculations visible)

  1. Your initial starting number should NOT include meal times
  2. Then deduct regularly scheduled breaks and meetings
  3. Then deduct Planned Downtime

    such as beginning of shift setup, end of shift clean-up, planned maintenance, and most other planned non-working time.

    Tip: Optionally use your Custom Formula Zone to explain "Where did that number come from?"

Do NOT deduct unplanned downtime or change-overs.

Time Conversion

Several of your Systems2win templates allow you to calculate Work Time Available in minutes,
and then a series of sophisticated formulas automatically convert Work Time Available into your chosen Units of Measure for Cycle Time (which might be seconds, minutes, or hours), and Lead Time (which might be hours, days, or weeks), and Work Time Available (which might be shift, batch, day, week, or any other unusual work cycle).

If you pay your expensive Black Belts to invent their own templates... good luck with that.


Your Standard Work Template has special features to make Planned Downtime and other Out of Cycle Work visible, understandable, auditable, and controllable.

That template will summarize Time per Unit for all Out of Cycle Work,
and then in addition to Work Time Available, you also have visibility of 'Run Time Available'.

Run Time Available = Work Time Available minus (Out of Cycle Work * Demand)

Bookmark = OOCW

Out of Cycle Work

aka 'Planned Downtime', but more correctly, it includes more than Planned Downtime


Mid-shift steps that are not performed in every Run Cycle,
but reduce Work Time Available to meet Customer Demand


Inspection, palletizing, routine mid-shift maintenance, periodic quality inspections, and any other activities that have their own mid-shift cycles that happen regularly, but not with every Run Cycle.

Also includes setup change-overs between run cycles.

Approaches for how to handle Out of Cycle Work

  1. The most common practice is to deduct most Out of Cycle Work from 'Work Time Available'.

    See 'Work Time Available' (above)

  2. Your Standard Work Template has special features to use 'Frequency' codes that make Out of Cycle visible, understandable, auditable, and controllable.

Bookmark = LeadTime

Lead Time

Also known as "Throughput Time", "Delivery Time", or "Turnaround Time"

Video: Lead Time


The time it takes for one unit
of the thing being transformed
to go through every step of the process
     (or every process of the entire value stream)

from start to finish —
including time waiting between steps


Lead Time Chart

The Lead Time Chart in your value stream mapping template makes it very easy to see that Lead Time consists of:

the sum of Process Lead Times (time within a process)

+ the sum of Queue Times (time between processes)

(and your value stream mapping template makes it easy to include or exclude Pre and Post-Production processes. Learn more)


time observation

In practice, the term "Lead Time" usually means "Production Lead Time",
but lead time can also optionally include steps that happen before or after production:

Production Lead Time

The time it takes to physically make or deliver the thing
from the receipt of production authorization to customer delivery.

Order Lead Time

The time between a customer placing an order and receiving delivery.

Production Lead Time plus everything that happens before releasing
Work Authorization, and after the product leaves the shipping dock.

Order-to-Cash Time

Time between receiving customer order and receiving payment.

Quote-to-Cash Time

Time between receiving a customer request for quotation and receiving final payment.

(Of particular interest for make-to-order production environments)

Units of Measurevalue stream mapping template

Your Value Stream Mapping template
has a Lead Time Unit of Measure Converter
that allows you to quickly convert between
Working Days, Calendar Days, Weeks, or Hours.

And also has features to easily calculate or override
both Queue Time and Process Lead Time.

Learn more

Bookmark = QueueTime

Queue Time

Also known as "Waiting & Transportation Time" or "Inventory/Transportation Time"


The time between processes

Time that the thing gets shuffled around or sits around waiting for someone to work on it.

See advanced training for how to handle queue time for a shared process.

Bookmark = ProcessLeadTime

Process Lead Time


The time within each process

Unit of Measure

Process Lead Time is usually simply Process Time converted into the same unit of measure as lead time.


For example 60 seconds = a very tiny fraction of a working day

So tiny that it can often be simply ignored when you are doing a hand-drawn "As Is" process map.

But in other environments, this fraction is large enough that you ignore it at your peril.

If "the thing" continues to be transformed in a way that does not involve the operator...

(perhaps drying, curing, growing, fermenting...)

then you might override Process Lead Time, as explained in our training for Value Stream Mapping.

Bookmark = ProcessingTime

Process Time

Also known as "Processing Time" or "Touch Time"


The time that the thing is being worked on by an Operator.

Video: Process Time
and Cycle Time

Processing time is observed with a stopwatch or video camera —
following one unit being processed by one operator —
all the way through the process.

In an analytical environment,
Process Time includes both "think time" and "touch time".

Use a Time Observation Worksheet to collect and filter your stopwatch results.

Your Systems2win templates include multiple choices of Time Observations worksheets that are appropriate for different types of observations and different types of processes.

Be sure to coach your people to learn and follow to the instructions
for how to collect accurate Time Observations
while improving (not degrading) rapport with the people being observed.

Lean Processing Time


Process Time = Manual Work + Walking + Waiting

That portion of Processing Time that is performed by the Production Department is sometimes called "Operator Cycle Time", but Processing Time might also include time spent in sales order processing, engineering, approval cycles, etc.

Note that  Machine Time is NOT included in Processing Time.

If the Operator has nothing better to do than stand around to wait for the machine to finish doing its thing,
then that is called 'Wait time',
and Wait Time is included within Processing Time.

Just remember...

Processing Time is all about the Operator

(not the machine)

Personal Fatigue and Delay

It would be impossible for any worker to maintain 100% efficiency, every working hour of every day.

Personal Fatigue and Delay is an adjustment factor multiplied by Process Time
to adjust for personal needs, fatigue, and work interruptions.

The U.S. Department of Labor requires a Personal Fatigue and Delay factor of at least 1.2 when paying piece work, and even if you're not paying piece work, it can be very helpful to adjust your capacity planning for a dose of reality.

Your Standard Work Template allows you to analyze Process Time both with and without Personal Fatigue and Delay.

Bookmark = ValueAddTime

Value Add Time

also known as Value Creating Time


Time of those work elements or process steps
that actually transform the thing in a way that the customer is willing to pay for.

Paying Money

Although Value Add Time has a widely accepted definition,
there are many opinions about how to sub-categorize Non Value Add Time.

One popular approach is to differentiate:

  1. Pure Waste (sometimes called "Type 1 Muda")

    "Gee, that's embarrassing... let's stop doing that..."

  2. Non Value Add Time (sometimes called "Type 2 Muda") Money as toilet paper

    Things that currently "have to be done",
    but don't directly provide value to the customer.

    See our online training for Muda — the 7 Types of Waste.

Some non-customer-facing supporting value streams, (such as accounting, purchasing, IT...),
won't have ANY Value Add Time (using the classic definition)...

For this reason, some teams differentiate "Customer Value Add Time"
from "Organizational Value Add Time".

Lean Healthcare Example:

Time spent examining a patient is customer value add time.
Doing patient admission paperwork might be organizational value add time.
And waiting in the lobby is clearly non-value add time.

The important thing is for YOUR team to agree upon YOUR definitions, and then use them consistently.

Functional Flowchart template
Standard Work template

Which tool to use for Value Add Analysis?

Many lean practitioners do Value Add Analysis using a Value Stream Map

but potentially complex processes
are depicted with a single Process Box,
so it is often not very useful to try to label the entire process
either "Value Add" or "Waste"

Your Swim Lane Functional Flowchart
and Standard Work Analysis templates

have far more useful features for Value Add Analysis
which is more appropriately done at the process level,
rather than the value stream level

Bookmark = MachineTime

Machine Time - Lean Manufacturing

Machine Time


The time that a machine is working on the thing

Machine time is the total time that the machine is working on the product. Whether or not the Operator has something better to do than to stand around waiting for the machine to finish has no influence on Machine Time.


If an automatic machine is running for 60 seconds,
and the Operator has something valuable to do for 20 seconds,
and then has 40 seconds of "Wait time",
the Machine Time is still 60 seconds.

Machine Cycle Time

Machine Cycle Time = Machine Time divided by Quantity per Run

Example: If a machine makes 10 items at a time,
then Machine Cycle Time = Machine Time divided by 10

Additional Considerations

If your process is potentially machine constrained,

then you should be using your Machine Balancing template.

Although Machine Time is analyzed and charted in your Standard Work Instructions template,
it is important to understand that your Standard Work template is "all about the Operator".

Machine time is only relevant if and when the operator has nothing better to do than to wait for the machine to finish. Operator 'Wait' time is very important to that standard work analysis. Machine time isn't.

In your Value Stream Mapping template,

Cycle Time is usually calculated based on the Operator,
but there is the option to calculate Cycle Time based on Machine Time
for those processes that are constrained more by a machine than an operator.

Bookmark = CycleTime

Cycle Time

also known as Exit Cycles


The average time between completed units "coming out the end of the pipe"



The cycle time of motors assembled at the rate of 120 per hour
would be 30 seconds per unit


Cycle Time in a Value Stream Map

Using your Value Stream Mapping template

Cycle Time = Time per Cycle / Qty per Cycle

or if those fields are blank... then...

Cycle Time = Process Time / # Workers

or you can manually override Cycle Time
in the cell to the right of each Process

Cycle Time in a Standard Work Combination Sheet

For Standard Work Analysis with more than one Operator:  

Cycle Time = the operator with the longest Processing Time

Bookmark = EffectiveCycleTime

Effective Cycle Time

Also known as Output Pace


Cycle Time adjusted for all the factors that reduce Work Time Available and Productivity.

Video: Process Time
and Cycle Time


In other words...

If a new-hire comes running up with a proud smile and says:

"I just finished using a stopwatch to measure Cycle Time, and it looks like we will just barely make our schedule, because Cycle Time is just barely under the Takt Time that we need to meed customer demand."

Then your response should be:

"You're new here, aren't you? Does this process ever experience downtime? Scrap? Rework? Staff unavailability? Less-than-perfect performance? Does it have any change overs?"

Your Systems2win Value Stream Map has color-coded andons that will turn bold red:

  1. if your planned Capacity is too close to your customer Demand
  2. if your Effective Cycle Time is too close to your required Takt Time

so that you can have confidence when you answer the (common) question:

"Will we be able to meet our schedule?"

Bookmark = TaktTime

Takt Time

Also known as "rate of customer demand" or "pace of customer demand"


Your planning drumbeat.

How often completed units NEED to come out the end of the pipe — as established by customer demand.

takt time drumbeat


Takt Time = Working Time Available / Target Units to Produce
(usually calculated per week or per shift)


420 working minutes per shift / 210 Target Units to Produce during that shift = Takt Time of 2 minutes per unit

One common example of takt time is golf course tee times. Groups of golfers are scheduled to tee off according to the takt time schedule determined by the golf course operators. Doctors' office appointments (with patients scheduled every 12 or 15 or 20 minutes) are another example of takt time scheduling.


Operational Takt Time

In most real-world production situations,
"Takt Time" actually means "Operational Takt Time", which is customer demand adjusted (through a Sales & Operations Planning process) for factors such as:

Takt Capability

In office, service, and other environments where it is hard to predict customer demand, it is common to plan for the demand the process or value stream is capable of handling — expressed in terms of both volume and mix.

The quoting process is capable of processing 5 quotes per day, and only 1 of those can be a complex quote.

Takt Time per Run Cycle

Your Standard Work Template features both regular Takt Time, and...

Takt Time per Run Cycle, which is calculated by deducting Out of Cycle Work from Work Time Available.

Bookmark = TargetCycleTime

Target Cycle Time

Also known as Planned Cycle Time, or Takt Time Per Run Cycle


Operational Takt Time adjusted for other factors

Other factors might include:

  • Adjusting to shop floor conditions

    such as absenteeism, different-than-expected yields, etc.

  • Master Scheduler discretion

    to plan for or react to the same factors that are considered within Sales & Operations Planning, but within a Sales & Operation Planning period, rather than across periods.

  • Change Over Time

    If your process has multiple machines that run mostly unattended,
    then use your Machine Balancing template to determine the machine with the longest Change Over Time, and/or the Change Over Time for the machine with the longest total Machine Cycle Time, and then use that (one chosen number) as your Change Over Time for the entire inter-connected process.

    It can be difficult to estimate/choose the number to use for Change Over Time, especially if it varies by products within the product families produced in a mixed model production environment, and it is very important to use your Machine Balancing template to re-evaluate your bottleneck or pace maker machine each time that you get a new machine, and each time that you do a kaizen event to improve your SMED Quick Change Over Setup Reduction for each machine.

  • Unplanned Downtime

    Refer to the DV sheet in your OEE template for all of the various Reason codes for Unplanned Downtime as well as Standby.

    Note that Unplanned Downtime only considers small stoppages.
    Catastrophic disasters cannot and should not be considered in your production planning.

    If you have gaps between shifts, then Unplanned Downtime is usually NOT considered in your calculation of Target Cycle Time — because you can (and often should) handle unplanned downtime with simple tolerances (allowing a little extra time per shift to still fulfill production requirements even if a few small things go wrong), and/or overtime.

  • Wait Time staff load balancing chart

    When doing Staff Load Balancing for a process that is divided between several staff positions, it is common to need to add Wait time to the Standard Work for some staff positions in order for each sub-job to be synchronized to the same Target Cycle Time. (as depicted in the chart on the right)

Many consultants and lean professionals have differing
(and often strong) opinions about what factors to include and exclude from Target Cycle Time.

The important thing is to clearly define how Target Cycle Time is calculated for YOUR team, and then ensure that everyone calculates it the same way. A good place to document your agreed-upon factors to include and exclude from Target Cycle Time is the User-Defined Training section near the bottom of the Help sheet of each Systems2win template. (And remember, this is one of the many types of personalizations that will be automatically found and transferred each time that you upgrade your templates.)

Some lean professionals have equally strong opinions about whether to call it Target Cycle Time or Planned Cycle Time. It's a good thing your Systems2win templates can be so easily personalized to use a User Substitution to call it whatever you want.

In many environments, Takt Time, Operational Takt Time, and Target Cycle Time are all the same,
and the single term "Takt Time" can be used.

In other environments, especially High Mix / High Variability environments,
the differences can become important.

Target Cycle Time must be less than or equal to (and is usually equal to) Operational Takt Time.

Bookmark = TaktImage

Takt Image


Any visual, at-a-glance way to monitor whether a process is meeting its takt time.


Folders in an in-box. Colored chart. Heijunka box. A runner that comes around every Pitch Cycle to take away finished work and bring materials needed for the next Pitch Cycle.

Bookmark = Pitch



Home Run

how often work is released and monitored


Pitch = Takt Time * Pitch Batch Size (the batch size in which work is released to the pacemaker process)


It is sometimes helpful to think of Pitch like a train station or a bus stop.

The bus comes around on a pre-determined schedule,
and you either make it or you don't.

The big difference is that the bus driver NOTICES that you're off schedule —

and immediately sends up a red flag that triggers a troubleshooter to very quickly show up at your workstation to do whatever it takes to help you get back on schedule.

Inverse Pitch

If Pitch is less than Takt Time, then this is known as Inverse Pitch,
and often requires creative ideas for how to establish Pitch Batch Size and/or a visual Takt Image.

Ideas like:

  • Break work into an assembly line, with work being completed in small chunks, and either the worker or the "thing" moves to another work station for the next processing step.
  • Have the worker validate completion of sub-phases of work — and provide obvious visual feedback as to whether the process is on or behind schedule.
  • Provide the worker with only enough materials and/or instructions to do what is needed for the next Pitch increment.
  • Create FIFO lanes with obvious visual feedback re: expected vs. actual progress.
  • Hire an experienced Lean consultant — who can help you invent creative ways to release and monitor work in a rhythmic and highly visual way — that reliably triggers a quick response whenever work falls behind schedule.

Bookmark = PitchBatchSize

Pitch Batch Size


how many things to be processed get released to the pacemaker operation for every Pitch cycle

Formula and Examples

If Takt Time is 10 seconds,
and pallet size is 1200 units
then pitch = 10 seconds x 1200 units = 12000 seconds (or 200 minutes)

Every 200 minutes — the production scheduling department releases instructions for the pacemaker work cell to produce another 1200 units of the thing to be processed

If Takt Time is 15 minutes
and new patients are assigned to doctors in batches of 4 client folders
then pitch = 15 minutes x 4 client folders = 60 minutes (or 1 hour)

Every hour — the physician's assistant releases another 4 patient case folders to each doctor

Additional Considerations

If you are just getting started mapping a value stream for the first time,

and your team isn't ready yet for "the Pitch discussion",

then just know that the only thing that Pitch Batch Size is used for is to calculate your Pitch time increment,
so you can safely just enter your typical or median batch size, and then perhaps just hide those rows, and come back to them as your team matures on their lean journey.

Factors to consider when choosing Pitch Batch Size (which in turn determines the Pitch time increment)

  1. The "delivery unit" that is delivered to the end customer. (e.g. pallet size, case size, the amount of time that the doctor needs for an average patient visit, etc.)
  2. In a mixed environment, the Pitch time increment should usually not be lower than the longest time to produce one "delivery unit" of any item in the product family.
  3. The batch size that is delivered between processes. (Inter-process transport considerations can be especially important if your product is large or cumbersome)
  4. You usually want to monitor progress at least 4 times per shift —
    so Pitch should usually be 2 hours or less.
  5. It is always best if Pitch is rounded to the nearest increment of Takt Time.

Optional Override:

Once you have chosen your Default Pitch Batch Size

(which you enter in the pink cell in the 'Values' column on your value stream map)

then you can optionally override Pitch Batch Size for any operation.

But usually not.
Usually every operation in the value stream beats to the same heartbeat.

If you do override, it is usually an increment of Default Pitch Batch Size.
(for example 2x or 3x)

It is important not to confuse Pitch Batch Size with Change Over Batch Size.

Bookmark = ChangeOverBatchSize

Change Over Batch Size


how many things get processed before a Change Over is needed (to reset or change equipment)

Additional Considerations

Change Over Batch Size can be identical to, or dramatically different from Pitch Batch Size (defined above).

While the pacemaker operation usually determines the Pitch Batch Size for every other process in the value stream, Change Over Batch Size can be (and often is) different for some processes.

To extend the above examples:

The doctor works on only one patient at a time — not 4 patients at a time.

Perhaps an intern might come in to re-set or change the configuration of the room between each patient visit.

The 1200 units in each pallet might be made in batches of 12,000 before equipment change-over is needed

or, (keeping in mind that one of the objectives of Lean is to produce in the smallest batch sizes possible...)
the 1200 units in each pallet might be made in Change Over

As explained in the books Creating Continuous Flow and Creating Mixed Model Value Streams, if you have a machine or process that requires a 'Change Over Batch Size' greater than the rest of your processes, then that process must be decoupled from the rest of your continuous flow process, using either:

  1. A FIFO lane
  2. A supermarket
  3. A (non-Lean) pile of inventory

Learn how to use your Systems2win Value Stream Map
to calculate the Smallest Change Over Batch Size for your pacemaker and/or bottleneck operations.

Bookmark = EPEx

Guaranteed Turnaround Time

Also known as GTT, Every Part Every Interval, EPEI, or EPEx

Every Part Every Interval


The longest time that your customer will ever wait
for any product variation within the product family produced by your value stream.

Provides a rock-solid answer to your customers' most common question:

"When can I have it?"


The formula for Guaranteed Turnaround Time =

(Average Time per Change Over * # Product Variations) / Time Available For Change Overs


This classic formula assumes that (of course)

you will be using the optimum Smallest Possible Batch Size.

Most people don't even know how to calculate the optimum Smallest Possible Batch Size,

and even if you correctly calculate it,
there are many legitimate reasons to use a larger batch size

(Container sizes, machine optimization, batch sizes of other processes in the value stream, pitch batch size, or perhaps your customer simply doesn't need it that fast so you'd simply rather make bigger batches)

When you use your Systems2win Value Stream Mapping Power Tool to calculate GTT,

your chosen Change Over Batch Size is taken into consideration,
so that the resulting Guaranteed Turnaround Time provides the correct answer to your customer.

The much easier way to calculate it

Using your Value Stream Mapping template

Guaranteed Turnaround Time is auto-calculated for any process when you enter data for both:

  1. Time Per Change Over
  2. # Product Variations

Additional Considerations

When to calculate Guaranteed Turnaround Time

For most value streams

you will calculate Guaranteed Turnaround Time for one (and only one) process

the one process that you chose as the pacemaker process for the entire value stream

Exceptions to that rule

you might also calculate Guaranteed Turnaround Time for non-pacemaker processes that are:

  • Work Processing Cells

    A powerful way to establish visual flow in an office or service environment,
    by establishing a systems where everyone involved in a process works together on a process, but only at a specified time, which might happen on a less-than-daily cycle.

  • Other processes that are in some way detached from the flow established by the pacemaker

Requirements for EPEx to be meaningful

  1. You must have clearly defined your product families

    using your Product Family Matrix template

  2. You must have established flow for your value stream

    see training for A Typical Lean Journey

Bookmark = StdWIP

Standard Work In Process Inventory


The amount of inventory that SHOULD usually be found at specified locations within a process

Additional Considerations

One of the methods of Lean process improvement is to clearly define exactly how much inventory should be located at each specific place within a process — and then reorganize the workplace so that there is only space available for exactly that quantity of inventory.


One objective of Lean is to reduce the amount of inventory required,

but buffer inventories hide problems
so be careful to "lower the inventory swamp waters slowly"

so that the rocks and alligators lurking just below the surface
of your process can be systematically identified and removed one at a time —
rather than "draining the entire swamp all at once".

Refer to Systems2win Lean & Kaizen online training.

More Lean Manufacturing Terms

Bookmark = Gemba


The actual place where work is performed.



A structured way of thinking and acting that you practice until the pattern becomes a habit.
Learn more on our Kata training page.

Bookmark = Sensei


Mentor, coach, teacher... 
And every sensei needs their own sensei.

Bookmark = Consensus


Everyone feels that their ideas and concerns have been sincerely heard and listened to, and they are willing to fully support the agreed-upon course of action — even if it wasn't their first choice.

Consensus is NOT:

  • Unanimous agreement
  • Majority rule

OEE Overall Equipment Effectiveness

See the separate Glossary of terms for TPM Total Productive Maintenance and OEE Overall Equipment Effectiveness.

Bookmark = Reading



Suggested Reading


More Suggested Reading



Your purchase price is usually justified with the 1 or 2 templates that you use most

The others are a really nice
"gift with purchase"

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