Work in progress or process refers to one form of inventory. WIP as it is often referred to as, is the work that is in process or production at a stage that falls between raw material and finished product.
A push system is the production or performance of any item or activity performed at required times by a given schedule that has been planned in advance. Many push systems are built mainly to forecast. Push systems can also include issuing material or performing an activity based on a schedule rather than need. Push systems create excess inventory which is one of the 8 forms of waste.
Lean is a continuous improvement strategy that a company embarks on to maximize customer value and minimize waste. The term "Lean" was first used in the book The Machine That Changed the World by James Womack. A lean organization focuses on providing complete value or Value added activities to their customers. One of the ways that lean accomplishes this is through the complete and total elimination of any form of waste.
A huddle is an action by a team to strategize, support and motivate one another towards accomplishing or aligning objectives and goals. Huddles are typically held before an activity takes place. Huddles can be held in any area or department of an organization, they do not need specific rooms just a format to conduct the huddle. The main difference between a huddle and a meeting is both how it is conducted and the amount of time the huddle takes compared to a meeting. Huddles can be performed in under 7 minutes.
A raw material is any purchased, supplied or extracted item that will eventually be transformed via a manufacturing or transformative process. The raw material or materials are generally converted into components or a finished product.
Finished goods are products or end items that are sold as a complete item or unit. These items are commonly subject to a customer order, sales order or purchase order that is linked directly to a customer. Finished goods and products are an extension of your inventory. They are materials or products that have reached a point in either the manufacturing or transformative process where they are available for consumption. You can calculate finished goods using a formula that will also help create an inventory ratio which determines the value of your goods for sale. Finished goods inventory is generally considered a short term asset. Short term assets are expected to sell in less than a year as opposed to long term assets which are typically investments that will be kept for longer than a year. Let’s look at an example of finished goods.
The 5 core principles of a Lean Organization were first written about in a book entitled: Lean Thinking by James P. Womack and Daniel T. Jones. The 5 core principles are widely accepted as a means implementing and establishing a lean organization. The 5 core principles have been adapted from the 5 original principles that were defined by Dr. Womack and Daniel T. Jones:
Subscribe below and receive lean, six sigma, operations, supply chain, logistics, distribution and business terms in your mailbox.
CLICK HERE TO SUBSCRIBE