ABC classification or ABC analysis is a technique used in materials management.  The ABC represents the different categories of inventory in your system and indicates the level of control each category requires.  The Apics Dictionary defines the categories of the ABC system as:

1. A = The A group usually represents 10 percent to 20 percent by the number of items and 50 percent to 70 percent by projected dollar volume.
2. B = The B grouping usually represents about 20 percent of the items and about 20 percent of the dollar volume.
3. C = The C grouping usually contains 60 percent to 70 percent of the items and represents about 10 percent to 30 percent of the dollar volume.  

  It is important to note that there is no fixed numbers for each category.  Each organization should customize their classification system based on a pareto analysis.  

Discussion:

1. What benefits can you see in applying tighter or looser controls to inventory management items?

  

  When calculating Takt time you will need to know the available time.  The available time is the total amount of time available minus breaks, lunch and planned downtime.

  The action plan is an effective way to track tasks given throughout events or projects.  The action plan captures the action number, action items, action owners and the dates of the actions.  The action plan is often used when documenting and tracking project actions.

  Assets is an accounting term that is used for items and resources that a company already owns.  The term is used on a balance sheet to classify these items.  Assets on hand are not the same as liabilities.  The APICS Dictionary defines the term Assets as:

  An Accounting/Financial term (balance sheet classification of accounts) representing resources owned by a company, whether tangible (cash, inventories) or intangible (patent, goodwill).  These may have short term time horizon - such as cash, accounts receivable, and inventory- or a long term value (such as equipments, land, and buildings).

  The Affinity Diagram is a powerful tool to use during projects with team members.  It is an analytical tool that teams can use to organize ideas into subgroups with a common theme or relationship. The affinity diagram can help you see correlation in large amounts of data/information.  It was created by Jiro Kawakita. There are many different methods that practitioners use to develop or build the affinity diagram.  In 2015 Lean Strategies International LLC created the ©CURE  methodology, which is a simple four step methodology that teams can use to group large amounts of data, establish innovative ideas and find solutions to issues while getting the most out of opportunities.  The four steps for our upcoming course on the ©CURE methodology are shown below.

1. Communicate - Facilitator will ask a question so everyone can provide input and or ideas.  
2. Understand - Understand the what your input is and write it down.  One idea per sticky.
3. Reveal - Each participant places there input where everyone can see (e.g. wall).  They then explain their inputs on the wall for a set amount of time.  Team members can take notes but should not reject or disapprove of ideas.
4. Evaluate - Now the team can place all of the ideas in groups based on a common theme or relationship.  Give each theme a name and confirm consensus and that's it.  the ©CURE.  For more information on our ©CURE methodology email us by clicking on the button below.

  The name A3 is actually a reference to the size of paper the report is placed on.  This report collects all key pieces of information and allows users to review all elements of improvement events, kaizen events and initiatives on one piece of paper.  From a philosophical standpoint A3 refers to a thinking process used by many lean and six sigma practitioners for solving problems or taking advantage of opportunities.  The thought process is outlined shown on the A3 and helps users establish a standard method of thinking while indirectly creating a familiar language and method of thinking amongst people.  To learn more about A3 thinking visit a recent post in our blog Listen to the Gemba titled The Size of your brain matters not, A3 will fit!

What is your experience?

  Have you used an A3 document in an improvement event before?  If so, we would love to here what your experience was like.  

• What did you learn from using the A3 document?
• Do you still use A3's today?
• How did the A3 format transform your thinking?
• Which format of A3 did you follow (ex. DMAIC, PDCA, SOLUTIONS)?

  Share your thoughts in the comments down below.

  In both lean and six sigma it is important to understand all aspects of waste, including inventory.  One form of inventory is anticipation inventory.  Anticipation inventory is built according to "anticipated" or some future demand.  It is additional inventory that is created above and beyond the actual demand of customers according to forecasts, projections or trends.  Some examples of anticipation inventory might be:

1. Promotions
2. Vacations
3. Shutdowns
4. Strike

​Reference: Apics Dictionary 14'th edition.

  The nomogram is a computational aid which consists of two or more scales which are drawn and arranged so that results of calculations may be found by the linear connection points.  The graph usually contains three parallel scales graduated for different variables so that when a straight line connects each value of any two, that value can be read directly from the third at the point of intersection.

Also Called: Alignment Chart

  Assemble-To-Order describes a production environment in which a good or service can be assembled after receipt of a customer’s order. The key components (bulk, semi-finished, intermediate, subassembly, fabricated, purchased, packing, and so on) used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product. This strategy is useful where a large number of end products (based on the selection of options and accessories) can be assembled from common components.

Synonyms for Assemble-To-Order include Finish-To-Order and Make-To-Order.

Reference:  Supply Chain Insights - Assemble to Order

  The term Anova in six sigma stands for analysis of variation.  Anova is a form of hypothesis testing which helps determine the differences if there is any between the two samples of data.  If the samples mean / averages turn out to be equal to one another they are denoted as "null hypothesis."  If the samples have different values, it will be noted in the results which are measured by "confidence level."