Lean Dictionary

Lean Glossary for Process Improvement

Definitions, formulas, examples, training, videos, and Excel templates
to (really) learn and understand lean manufacturing terms for Lean process improvement.

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Lean Manufacturing Terms

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Lean Dictionary

TheThing

Customer Demand

also known as 'the thing being transformed'

Definition

What the customer is buying. What you are transforming.

Examples

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.

Units of Measure

What if your Units of Measure are different for different processes?

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.

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WorkingTimeAvailable

Work Time Available

aka Time Available for Work, or Working Time Available

Definition

Formula

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.

Variations

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)

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OOCW

Out of Cycle Work

Definition

Steps that are not performed in every Run Cycle,
but reduce Work Time Available to meet Customer Demand

Examples

Inspection, palletizing, routine maintenance, periodic quality inspections,
and any other activities that have their own 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

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LeadTime

Lead Time

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

Formula

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)

Variations

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

Lead Time Units of Measure

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

Learn to use all three ways to calculate Lead Time for a value stream map.

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QueueTime

Queue Time

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

Definition

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.

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ProcessLeadTime

Process Lead Time

Definition

The time that a batch is being worked on within each process

Formula

Unless you override it, Process Lead Time is calculated as

Cycle Time * Pulse Batch Size (also known as Pitch Batch Size)

Cycle Time is converted into the same unit of measure as lead time.
For example seconds or minutes, must be converted into 'working days', taking into consideration all of the factors that affect Work Time Available.

Fortunately, your Systems2win templates do this math for you.

Why would you override it?

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.

Examples

For example 60 seconds = a very tiny fraction of a working day but a batch of 100 items * 60 seconds per item becomes substantial enough to ignore at your peril.

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ProcessingTime

Process Time

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

Definition

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

Formula

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.

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activity

Activity Ratio

Formula

Activity Ratio = Process Time / Lead Time

Value Percent of Time

Definition

The ratio of how much time your people are doing something your customer values vs. how long your customer waits

An even more embarrassingly smaller number that makes it even more painfully obvious how much room there is for improvement.

Formula

Value Percent of Time = Value Add Time / Lead Time

Additional Considerations

The dark purple is Lead Time. The light blue is either Process Time or Value Add Time.

As your lead time shrinks, it is not uncommon for your pie chart to be mostly blue.

It is even possible to have an Activity Ratio of greater than 100%.

This can happen if you have simultaneous processes, and/or multiple operators.

If your Activity Ratio nears or exceeds 100%, you might edit your chart (or create a new one) to measure Process Lead Time / Lead Time.

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ValueAddTime

Value Add Time

also known as Value Creating Time

Definition

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

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:

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.

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MachineTime

Machine Time

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.

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CycleTime

Cycle Time

also known as Exit Cycles

Formulas

Cycle Time in a Functional Flowchart

Using your Cross Functional Flowchart template

Cycle Time is approximated as
Process Time divided by the # of Workers

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

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EffectiveCycleTime

Effective Cycle Time

Also known as Output Pace

Definition

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

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?"

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TaktTime

Takt Time

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

Definition

Takt Time is your planning drumbeat.

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

and perhaps adjusted for Sales & Operations Planning factors, as explained in the Operational Takt Time section below

Takt Time Calculator

Use your Takt Time Calculator template (Takt.xlsx)

to correctly calculate:

• Takt Time
• Work Time Available
• Pulse (also known as Pitch)

Variations of Takt Time

Operational Takt Time

In most real-world production situations, 'Takt Time' actually means 'Operational Takt Time' which is customer demand adjusted for factors such as:

• Seasonal demand
• Planned down-time
• New product introductions, etc.

In other words, in the real world, most people working on a process (even the leaders) don't have visibility to actual or forecasted customer demand.

So the 'Demand' used to calculate Takt Time actually comes from management (not directly from customer demand)
and is the result of management's Sales & Operations Planning process.

And in the real world...
'Demand' is often even further adjusted for the additional factors described in the training in the next section below for 'Target Cycle Time'.

Tip: Many lean practitioners make no distinction between Takt Time, Operational Takt Time, and Target Cycle Time, so whenever you work with a new team member, it is a really good idea to clarify your Operational Definitions of what each of you means when you use the term 'Takt Time'

Takt Capability

In lean 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.

Office Takt Time Example:

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 'Takt Time per Shift Cycle'

which is the more commonly known 'regular' Takt Time — described above

and it also calculates 'Takt Time per Run Cycle'

which is calculated by deducting 'Out of Cycle Work' from 'Work Time Available'.

The more experience you have calculating takt time for diverse types of processes, the more that you will appreciate the difference between:

'Takt Time per Shift Cycle' vs. 'Takt Time per Run Cycle'

Every experienced lean practitioner will have been vexed with questions like:

What if we reduce setup times? How will that affect Takt Time?

What about inspections, palletizing, and other things that happen at different frequencies?

In the past, those questions were answered with approximated guesses, because a lean practitioner had never had a tool capable of correctly answering those questions.

Now you do.

Learn more about the Standard Work template

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TargetCycleTime

Target Cycle Time

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

Definition

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

  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.

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TaktImage

Takt Image

Definition

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

Examples

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

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Pitch

Pitch Pulse

We found that few people were familiar with the term 'Pitch', and it isn't easily translated, so we started calling it 'Pulse', to more accurately describe this important lean control.

Definition

If Takt Time is your planning drumbeat. 'Pitch Pulse' is your production drumbeat.

How often work is released to the pacemaker process, and how often work progress is monitored throughout the entire value stream.

Formula

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

This important management control is often overlooked

In addition to the (much more popular) Takt Time,

Pitch Pulse and (related) Pulse Batch Size
are the other 2 variables that management can control
in order to manage the (all-important) FLOW of work
that sets the pace for how work pulses through your entire value stream.

Example

Example for work release: Golf course 'Tee Times' as 'Pulse'

On a typical day, golfers pulse through the golf course at the rate of one group per Tee Time.

Tee Times are scheduled at an interval establised by the golf course at a pace that allows a typical foursome of golfers enough time to complete the pacemaker hole (usually a par 5).

Notice that if you define your 'thing being processed' as a 'foursome',
then Pulse is identical to Takt Time
because your Pulse Batch Size = 1 foursome of golfers.

If, however, you define your 'thing being processed' as a 'golfer',
then Pulse and Takt Time will be different.
Let's say that golf course records show that the average 'foursome' is actually a 'threesome'.
(or perhaps there is a an average of 3.2568 golfers per group, but let's keep math simple)
Then Tee Times (Pulse) will be 3 times longer than Takt Time per golfer.

On some days, however, a large group reserves the entire golf course.

And on those days, it is common to speed things up by using a 'shotgun start'.

The first 18 groups of golfers are instructed to drive out to the tee box for their assigned hole, and then start golfing when they hear the shotgun.

So in this situation, the Takt Time remains the same.

But the Pulse would be the Takt Time (typical Tee Time intervals) multiplied by 18 'foursomes'.

Assuming that you are measuring Takt Time by groups of 'foursomes' instead of individual 'golfers'.

Just to be really clear... this example has one flaw.

If there are more than 18 groups of golfers in this tournament, then the 19th and following groups will usually begin teeing off at the interval of the typical Tee Times.

A more correct understanding of Pulse would be if the next 18 groups of golfers all waited to tee off at the next 'shotgun' start time.

Or an even more correct understanding of Pulse would be to understand that typically a Pulse Batch of work is released only to a single control point operation (the tee box for the first hole), and then all of the groups of golfers play their way through all 18 holes, and then at the next Pulse cycle, it is expected that the final 18th foursome from the initial Pulse Batch should have just completed playing the first hole... so the next batch of 18 foursomes should be ready to release.

Example for how Pulse is monitored:

It can be helpful to think of Pulse like a train station or a bus stop.

The bus comes around on a pre-determined schedule,
and you either make your bus 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.

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PitchBatchSize

Pulse Batch Size

aka Pitch Batch Size

Definition

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

Formula and Examples

If Takt Time is 10 seconds, and pallet size is 1200 units
then Pulse = 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 Pulse = 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

Factors to consider when choosing Pulse Batch Size

which in turn determines the Pitch Pulse time increment

1. The "delivery unit" that is delivered to the end customer.

   perhaps pallet size, case size, the amount of time that the doctor needs for an average patient visit, etc.

2. In a mixed environment, the Pulse 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. How often do you want to monitor production progress?

   For example, if you want to monitor progress at least 4 times per shift — then Pulse should be 2 hours or less.

5. It is always best if Pulse is rounded to the nearest increment of Takt Time.

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

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

then as the leader, you can simply 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.

Optional Override

Once you have chosen your Default Pitch Pulse Batch Size

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

then you can optionally override Pulse 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 Pulse Batch Size.

For example, 2x or 3x.

Technical Design Note:

If a process uses the default Pulse Batch Size for the entire value stream, then the Pulse rate for that process will be the default Pulse for the entire value stream.

If you override the default Pulse Batch Size, then it calculates Pulse rate for that specific process, taking into consideration Takt Time and Work Time Available for that process, which might be different from those values for the entire value stream. This can cause confusion because if the number that you enter into the override field is the same number as the default Pulse Batch Size for the entire value stream, you might get a different Pulse rate (calculated based on WTA for that unique process).

Important

Do confuse Pitch Pulse Batch Size with Change Over Batch Size.

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ChangeOverBatchSize

Change Over Batch Size

Definition

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 Pulse Batch Size (defined above).

While the pacemaker operation usually determines the Pulse 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.

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EPEx

Guaranteed Turnaround Time

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

Definition

Formula

The formula for Guaranteed Turnaround Time =

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

Caution:

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, pulse 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

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StdWIP

Standard Work In Process Inventory

Definition

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

Additional Considerations

Refer to Systems2win Lean & Kaizen online training.

Lean Office and Administration

Just because your process might not have inventory doesn't mean that Standard WIP is irrelevant.

See online training for Lean Office and Administration to learn how to reduce your piles of emails and papers.

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PCA

Percent Complete and Accurate

aka First Pass Yield or Rolled First Pass Yield

Definition

The percent of deliverables that are received by the downstream operation or customer that do not need correction, addition, clarification, or rework.

Several prominent lean authors suggest that this is the single most important lean metric for processes in Lean Office and Administration and Lean Healthcare.

Formula

Using your Functional Flowchart template, Percent Complete and Accurate is observed and entered directly for each Step

And then the bottom line 'First Pass Yield' = the product of all % Complete and Accurate for each Step

When doing Value Stream Analysis, Percent Complete and Accurate is derived from Rework.

The formula is 1 minus Rework.

In other words, if Rework is 5%, then % Complete and Accurate is 95%.

Rework = How often did it need fixing?

Percent Complete and Accurate = How often did we get it right? (without need for fixing)

Rework is the more popular metric in Lean Manufacturing.

% Complete and Accurate is the more popular metric in Lean Office and Administration.

Additional Considerations

The correct way to observe Percent Complete and Accurate is to ask the downstream recipient.

Don't ask the people doing the work. Ask the people that need to use their deliverables.

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more

More Lean Glossary Terms

Gemba

Gemba

The actual place where work is performed.

 

Kata

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

Sensei

Sensei

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

Consensus

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.

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