​  Days sales outstanding or DSO as it is often called, is a ratio that measures the average number of days a company takes to collect its accounts receivable. When a company's DSO is short, it tells us that the company is faster at collecting payments from customers.  ​This also means you are able to use the cash from sales sooner.

​  Days payable outstanding ratio is used in accounting and finance departments that measures how many days, usually on average, it takes a company to provide payment to its suppliers.  The higher a company’s DPO, the longer it takes to pay its bills.

  Days inventory outstanding, or, DIO, as it is often referred to, is a ratio that measures the average number of days that a company holds inventory before they transform that inventory into sales.  The lower the figure, the better.

  A Defect is any output from a service or a product that does not meet the customer required specifications, standards or requirements. 

  When something is said to be coupled, it would mean that the two items are connected and interdependent on one another.  In the case of processes and supply chains there can be both positives and negatives with regards to coupled inventory and decoupled inventory.  As you know, demand can fluctuate, shortages will occur, people call in sick and shipping routes are sometimes detoured.  There is a long list of issues that can disrupt both internal processes and supply chains.

  Dependent demand is the demand that is directly related to or derived from the bill of materials structure for other items or end products which are independent demand.

  Programs like six sigma, lean and total quality management are effective ways to manage continuous improvement strategies and create quality in an organization.  Over the years these fundamental strategies have proven to be drivers of success.  With this in mind, every organization needs quality at all levels of a business.  In today's global economy quality is a common desire.  Everyone wants it.  So, where did this desire for quality come from?

  DMADV is the methodology used when designing new processes that did not exist prior to their design.  

  The DMAIC Method is a problem solving methodology used within a six sigma strategy.  The methodology focuses on improving business processes, specifically through the improvement of quality and reducing variation.  It is an Integral part of six sigma.

  Design for Environment or DFE as it is often referred to as, is a design method which considers the safety, sustainability, health and environmental aspects of a service or a product in the initial phases of development and design.

  Design for six sigma is a method or approach used in designing products and processes which attempts to create and provide products and processes that adhere or comply with six sigma quality or approximately 3.4 defects per million opportunities.

  A dedicated line is one that is configured to run, produce or supply either information or parts one piece at a time.  This allows production to move from station to station at a more rapid pace and ultimately improves quality, efficiency and eliminates waste.  Dedicated lines should be established only after analysis as they often times require larger investments.

  Downtime is the period of time during which a piece of equipment or a machine is not functional or can not work.

  Demand is an economic principle that describes a consumer's desire or willingness for a specific good or service. Holding all other factors constant, an increase in the price of a good or service will decrease demand, and vice versa.  Demand can also be defined as a quantity of a commodity or service which is either wanted or needed.

A standard that is set to monitor sales data for specific items in forecasting models. The standard is usually set to be tripped or triggered when the demand for a period is different from the forecast by more than some number of mean absolute deviations.

  Data cleansing, data washing or data scrubbing as it is often referred to, is a process of correcting and eliminating inaccurate (defects) records from a particular network, server, database or data warehouse. The purpose of data cleansing is to find errors or wasteful pieces of irrelevant information and delete or correct them. This ensures that data being used is accurate according to what is needed.  Data cleansing is a powerful way to improve information and can be performed by following the 5S System.

Reference: Infyzoom.com - Data Cleansing

  Digitization is the adoption of digital, real-time and networked products and services and related information. In real terms, digitization is about choice, efficiency, and responding to customer needs. All of this digitization requires the skills of operations managers to implement and oversee. 

Reference - Kettering University, 01/12/2017, Operations Management and Technology.

  The image above is used for showing data on a value stream map.

​See also: Data Box for Definition

  A data box is a box drawn on a value stream map to illustrate and show data that is related to the process on the value stream map.  Some types of data that are commonly held within a data box are:

• Cycle Time
• Process Time
• Yield
• Lead Time
• Changeover Time
• Number of Shifts

 A process by which products are designed with ease of assembly in mind. If a product contains fewer parts it will take less time to assemble, thereby reducing assembly costs. In addition, if the parts are provided with features which make it easier to grasp, move, orient and insert them, this will also reduce assembly time and assembly costs. The reduction of the number of parts in an assembly has the added benefit of generally reducing the total cost of parts in the assembly. This is usually where the major cost benefits of the application of design for assembly occur.

  Demand stability refers to the reduction of variation that happens with supply and demand.

  Design for manufacturability is the process of designing products to optimize manufacturing functions such as fabrication, assembly and test.  DFM focuses on the simplification of parts, products and processes to improve quality and reduce manufacturing costs.  

  The door to door value stream refers to a value stream map or value stream process of internal operations/activities as they pertain to an organization.  The door to door value stream stretches from the very first process step to the last activity within the organization.

​Example: 

  Organizations will generally start their lean journey or identification process from the door to door level.  This is because the organization has more influence on internal activities than they do at any other level of the value stream.

Question:
  What is the very first step within your organization?  What is the very last step within your organization?

**Place answers in the comments tab**

  Dashboards allow the appropriate party to see at a glance, Key Performance Indicators (KPI's).  

Examples of Dashboards:

1. Speedometer
2. Website dashboards
3. Analytics

Qualities of a good dashboard:

1. Easy to understand and provides simple communication.
2. To the Point.
3. Data is relevant and useful.
4. Visual.

  For more information on Dashboards visit our recommended reading:  The Balanced Scorecard: Translating Strategy into Action, by Robert S. Kaplan and David P. Norton.

The average or ratio of the number of defects per unit observed during an average production or service run divided by the total number of opportunities to make a defect on a product or service normalized to the number 1,000,000.

Calculating DPMO

​-To Calculate DPMO from DPO simply multiply DPO by 1,000,000.
- To Calculate DPMO from DPU - DPU/(opportunities/unit) x 1,000,000.