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:
Reference: Apics Dictionary 14'th edition.
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 2015 edition defines the categories of the ABC system as:
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.
B = The B grouping usually represents about 20 percent of the items and about 20 percent of the dollar volume.
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.
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
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 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."
Actual measurements are the measurements as they exist in fact. They are real measurements that are accompanied by objective evidence.
Samantha went to the store to buy Michelle her favorite popsicles while she was sick. Michelle asked Samantha how much money she would need. Samantha answered "about $5.00." After Samantha went to the store, Michelle asked for the change and the receipt. The receipt showed the popsicles were $3.50 and the change was $1.50.
What two amounts are considered "actual" amounts? **Place answers in comments below**
Activity based costing (ABC) is a system used in accounting that identifies costs based on activities performed. The system then uses the drivers of cost (indirect and direct) to allocate or reserve costs to products, projects, customers or other segments. The system attempts to allocate costs like overhead on a more accurate basis than simply assigning direct labor or machine hours which may change from product to product.
The Affinity Diagram is a great 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 general process of building an affinity diagram that Lean Strategies International LLC uses is ©CURE.
- Communicate - Facilitator will ask a question so everyone can provide input and or ideas.
- Understand - Understand the what your input is and write it down. One idea per sticky.
- 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.
- 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.
Jidoka is a term that describes one of the key pillars of the Toyota Production System. Sakichi Toyoda first invented Jidoka or Autonomation back in the mid 1890's. He created a stop so that when a broken thread occurred the machine would detect the abnormality and stop the loom from spinning, saving material. The phrase jidoka can be defined as "automation" with a human touch. The automation of machines gives operators the unique ability to run more than one machine while ensuring if anything goes wrong the machine will stop giving someone an opportunity to remove the cause and contain the abnormality. There are four critical stages involved in Jidoka:
1. Detect the abnormality.
2. Contain or stop the abnormality.
3. Fix the abnormality.
4. Solve the root cause and ensure it does not happen again.
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.
The name A3 is actually in 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 key elements of improvement events/kaizen events 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 above. 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!
The ABC's of