Glossary

Analytical models are mathematical models that provide closed form solutions. While there is significant ambiguity in describing the mathematical difference between analytical and numerical models, the definition here is determined by its use in Production System Optimization and Project Production Management. Specifically, analytical models provide closed formed mathematical solutions (equations) for project production system evaluation in contrast to discrete event simulations which are numerical solutions that model project production systems as a discrete sequence of events in time. Find an example of an Analytical Model related to Onshore Drilling Rig Fleet Size and Schedule here.

To join together two or more parts or subassemblies to form a complete machine, structure, or other article.

Product put together from parts that are already designed and made so as to meet the specifics of a customer order.

The arrangement of machine, equipment, material, and workers that permits work in process to progress sequentially from operation to operation until the product (or product component) has been assembled.

An assembly process occurs when two or more completed entities are required before the assembly process can begin. Assembly processes are always preceded by one or more stocks.

A substitution of machine labor for human labor, either manual or intellectual.

The transfer of human intelligence to automated machinery so that the machine can detect the production of a defect and immediately stop while asking for help. In Japanese: jidoka.

The time between the origin of demand and its satisfaction is backorder time. Technically, the backorder time is the number of backorders divided by demand. But this includes all demand, even demand that is not backordered. Of more interest is the backorder time when orders are backordered. This is given by:

Where fill rate is the probability that an order is not backordered. Fill rate is also known as service level.

As applied to operations management, it is the condition in which the process times for each operation are approximately equal and the work flows steadily or at a desired rate from one operation to the next.

Many in industry focus on establishing balanced lines as an objective in and of itself. A balanced line is not an objective for production or projects. The objective for a project is usually on­time delivery at minimal cost with no safety incidents. There are very many instances where having unbalanced resources in a project is the most effective way to achieve on­time delivery at least cost.

A series of sequential operations with approximately equal process times, arranged so the work flows at a desired steady rate from one operation to the next.

The collection of entities on which the same operation is performed. There are two types of batches: process batches and transfer batches. A process batch refers to the amount of entities worked on between setups. A transfer batch is the amount of entities transferred from one operation to the next. Batches are also called lots. In project management, an Integrated Work Package can be modeled as a batch.

Production system whereby processing stations are laid out by functional grouping so that each unit being produced is likely to have to follow a jumbled flow from one to the next, according to the processing steps it requires.

The time jobs spend waiting due to batching and is composed of Wait-to-Batch Time and Wait-in-Batch Time. Wait-­to-Batch Time is the time jobs spend waiting to form a batch for either (simultaneous) processing or moving. Wait-­in-Batch Time is the average time a part spends in a (process) batch waiting its turn on a machine.

A bill of material, see also Product Tree Structure, is a formally structured list for an object (semi­-finished or finished product which lists all the component parts of the object with the name, reference number, quantity, and unit of measure of each component.

It is a product data structure, which captures the end products, its assemblies, their quantities and relationships.

The bottleneck of a routing in a production system is the station in the routing with the highest utilization. In traditional production, constraint is commonly used as another word for bottleneck. This is different than the definition of constraint as used in scheduling for Project Production Control.

The Bottleneck Rate of a routing is the rate (parts per unit time or tasks per unit time) of the station having the highest long­term utilization. By “long­term”, it is meant that transitory deviations, which are small with respect to the timeframe under consideration, are averaged out in the calculation of the rate. For example, when considering bottleneck rate over the course of a year, deviations small with respect to a year, such as outages due to machine failures, operator breaks, or quality problems are included in the rate calculation. However, a month­long maintenance shutdown is removed from the time available when determining the time period for calculating the rate.

A means or device used as a cushion against the shock of fluctuations in business or financial activity. Due to variability, the demand flow and the process flow never perfectly synchronize, and some sort of buffer is required when matching process output to demand.

The only buffers available are:

• Inventory—transformation occurs before demand
• Time—transformation occurs after demand
• Capacity—above the average demand.

The maximum average rate at which the items/units/tasks/products can flow through a process or system. Capacity is the upper limit of throughput. Having installed capacity above average demand allows the Stock Inventory and Backorder Time buffers to remain small.

If the process had infinite capacity, there would never be either Stock or Backorders as the process could satisfy demand instantly.”

A raw material, product or service that is indistinguishable from ones manufactured or provided by competing companies and that therefore sells primarily on the basis of price rather than quality or style.

Generic term for a unit used in production of a product or a project. Components may be put together as part of subassemblies or final assembly products or projects.

From the Latin, concatenare, to link or chain together. Concatenate means to link, end-to-end. For production systems, elements of a single line or routing are concatenated in a sequence of processes.

Assemble to order a product from a set of parts that are most often in stock.

A control protocol wherein a new job is introduced into the process each time a job departs the process. The objective of CONWIP is maintain a nearly constant level of WIP in the process. This does not mean maintaining a constant level of WIP at each operation in the process.

In Project Production Control, a constraint is a predecessor task that must be completed in order for work to flow through the process. This is different usage than occurs often in traditional production where the term constraint is also used to mean bottleneck.

Consumable resources do not become part of the entity. Examples include energy, lubricating oil, cooling water, etc.

A continual improvement process, also often called a continuous improvement process (abbreviated as CIP or CI), is an ongoing effort to improve products, services, or processes for instance by repeated iteration of the PDSA cycle.

Continuous Improvement, often known as Kaizen, is essentially a small step­by­step incremental improvement strategy. It is based upon a belief that continual improvement can be brought about by a never­ending series of small changes. Even in the face of enormous innovative improvement strategies, there will always be the need and opportunity to supplement such strategies and initiatives with continual small step changes.”

To take actions or steps to regulate or limit the behavior of processes in a production system.

A means to control the behavior of or within a process or system. There are many types of control mechanisms. Human decision making is a control mechanism made by an individual to start or delay a process in an attempt to keep or bring a process within a desired state. Control mechanisms can be physical such as limiting the number of trailers controls the number of deliveries that can be made at a given time. Software provides control by signaling whether a process should be started or delayed in order to achieve or maintain a desired state.

The means in which production is planned and controlled. There are two primary control protocols: push and pull (see Push and Pull). Push protocol is typically based on external considerations such as the schedule, desired production rate, etc. whereas the pull protocol considers the status of the system, particularly how much WIP there is in the system. Consequently, push protocols can easily overload the system resulting in excessive WIP and long cycle times. Alternatively, pull protocols avoid these problems by keeping WIP at a level to maintain good throughput with minimal cycle time. CONWIP is a general pull system that is easily implemented and effective (see CONWIP).

Forecasting, updating, and reporting of the status of the project in accordance with a baseline plan.

A mathematical algorithm for computing the shortest duration of a set of project activities given a set of precedence-successor relationships between the activities. The sequence of activities that comprises the shortest duration is called the “critical path”.

The WIP required for a line with no variability to achieve maximum throughput with minimum
cycle time.

Critical WIP = (Bottleneck Rate)(Raw Process Time)

The direct or indirect consumer or beneficiary of the output of an operation, process or production system.

The average time from when a job is released into a station or line to when it exits. Cycle Time (CT) is related to Throughput (TH) and Work in Process (WIP) by Little's Law.

Demand represents the desire of an external customer and/or downstream process for an entity or a set of entities with particular attributes. Demand is always satisfied by a process. Entities demanded can be physical, information, services, etc. Demand is typically characterized by a rate of consumption. Examples are gallons of gas sold per day, pipe spools installed per week or tasks completed per day.

Service demand is unique because the demand characteristics are not known until the demand is created. For example, a drawing for a new product cannot be produced until the product is defined. In this sense, the demand for services is always backordered. There can be no stock inventory to satisfy service demand. There is no stock of, for instance, maintenance calls on a crane to repair the lift motor. The maintenance call is not provided until the crane lift motor breaks.

Another name of the PDCA cycle (see PDSA) in honor of W. Edwards Deming (1900­1993) and based on the work of Walter A. Shewhart (1891­1967).

First introduced by W. A. Shewhart in “Statistical method from the viewpoint of Quality Control” in 1939, originally introduced as a linear sequence of 3 steps and subsequently evolved into the 4­step cycle by Shewhart.

Shewhart was one of Deming’s mentors, and introduced him to the cycle. Deming built on Shewhart’s concept emphasizing the interactions between the four steps and popularizing the cycle in the area of Total Quality Management.

A discrete-event simulation (DES) models the operation of a system as a discrete sequence of events in time. Each event occurs at a particular instant in time and marks a change of state in the system.

The time during which a machine, especially a computer, is out of action or unavailable for use.

An integrated management system that integrates the work scope, schedule, and cost parameters of a program in a manner that provides objective performance measurement data. It measures progress objectively with earned value metrics; accumulates direct costs; allows for analysis of deviations from plans; facilitates forecasting the achievement of milestones and contract events; provides supporting data for forecasting of estimated costs; and fosters discipline in incorporating changes to the baseline in a timely manner.

Product or item for which design and engineering are performed in response to a specific request (order) from a customer and which is subsequently fabricated and assembled to that specification.

Product or item put together from parts that are already designed, but remain to be made, so as to meet the specifics of a customer request (order).

Process of making an item through transforming materials through operations such as cutting, drilling, fastening, welding etc.

The framework applying the science of operations to manufacturing management, after the book by Drs. Wallace J. Hopp and Mark L. Spearman.  Factory Physics^® is a registered trademark.

A controlled experiment to validate assumptions made about the design of a work process or production system. The key objectives of a first-run study include validation of the work process design, understanding implications of product design, identification of hidden work, capture of data related to actual throughput, cycle time and its components, capacity use and Source / implications of variability. Such that further analysis including ergonomic considerations can be made, First-Run studies are often captured using videography.

Float is the amount of time that a schedule activity can be delayed without delaying the early start date of any immediately following schedule activities. Total Float is the total amount of time that a schedule activity may be delayed from its early start date without delaying the project finish date or violating a schedule constraint. Calculated using the critical path method technique and determining the difference between the early finish dates and late finish dates.

A flow is a collection of production or service routings or a collection of demand streams. A flow represents materials or resources moving through the transformation process, A flow is described by a rate. The measure of a flow is some unit or task per period of time, e.g. barrels per day or service calls
per day.

A flow can be a set of operations called a process that accomplishes transformation. A flow can also be a set of individuals creating the demand for the transformed entities. The rate of flow for a process is called its throughput.

An estimate or prediction of conditions and events in the project’s future based on information and knowledge available at the time of the forecast. The information is based on the project’s past performance and expected future performance and includes information that could impact the project in the future, such as estimate at completion and estimate to complete.

The application and use of high-volume manufacturing methods and technologies to the delivery of capital projects, including the use of product development, flow-based production processes and automation.

Production systems that self-form, control and optimize through the application and integration of Operations Science, autonomous vehicles and robots, IoT, edge computing, artificial intelligence and machine learning.

The accumulation of entities that occurs anywhere within and/or between processes (flows).

Inventory between two or more flows is called stock while inventory within a flow is called work in process or WIP.

One of the primary underlying tenets of Project Production Management (PPM) is that operators can and should be calculating the appropriate level of inventory required within and between each task in their project.

The point in a flow where entities switch from make-to-stock to make-to-order.

Production system that accommodates making one-­of­-a­-kind products or infrequent demand. Typically, processing stations (machines) are laid out by functional grouping, such that each unit being produced is likely to have to follow a jumbled flow from one to the next, according to the processing steps it requires.

Just-in-time means that, in a flow process, the right parts needed in assembly reach the assembly line at the time they are needed and only in the amount needed.

In queueing theory, a discipline within the mathematical theory of probability, Kingman's formula is an approximation for the mean waiting time in a queue in a system with a single server where arrival times have a general (meaning arbitrary) distribution and service times have a (different) general distribution. It is generally represented as CT = VUT, where CT is Cycle Time, V is a factor representing variability, U is a factor representing utilization, and T represents the mean effective process time.

An assemblage of information, consumables, materials / parts and special tools required to execute a specific operation or element of work.

The process of assembling a kit (see Kit).

The collaborative commitment-based planning system that integrates should-can-will-did planning developed by Ballard et al.

Last Planner is a trademark of the Lean Construction Institute. www.leanconstruction.org

The person making commitments on behalf of and assignments to direct workers.

The last point in time when an operation or task can be completed without negatively impacting schedule objectives.

The moment beyond which a decision to select one of several alternatives cannot be taken either because the cost of selecting the alternative exceeds the benefit, or because the alternative is no longer available for selection.

Increased variability always requires increased buffering when trying to synchronize demand
and transformation.

The lead time of a given routing or line is the time allotted for production of a part on that routing or line. Unlike cycle time, which is generally random depending on utilization, variability and WIP levels, lead time is a constant and a management policy decision. Service Level, a measure of customer delivery performance, is the probability that cycle time is less than or equal to lead time.

The "Line of Balance" (LOB) is a graphic device that enables a manager to see at a single glance which of many activities comprising a complex operation are "in balance" ­ i.e., whether those which should have been completed at the time of the review actually are completed and whether any activities scheduled for future completion are lagging behind schedule. History: LOB was devised by the members of a group headed by George E. Fouch. During 1941, the Goodyear Tire & Rubber Company monitored production with LOB. It was successfully applied to the production planning and scheduling of the huge Navy mobilization program of World War ll. LOB proved to be a valuable tool for expediting production visibility during the Korean hostilities. During this period, defense suppliers used LOB http://www.valuation-opinions.com/ev/lob.lasso.

Source: Line of Balance Technology: A graphic method of industrial programming, US Department of Navy, April 1962

The relationship between system throughput (TH), cycle time (CT), and work­ in­ process (WIP).

Cycle time is a dependent variable. WIP is a leading indicator of CT.

A product that is made based on a forecast of customer demand and then stored in inventory (finished goods) until a customer specifically orders it.

A product or item that has been designed but is made (physically realized) only at the time when a customer orders it.

The challenge to have the correct entities available, without excessive inventory, when their assembly is needed to satisfy a downstream demand.  In the case of a capital project, the problem becomes having the correct predecessor work, information, labor, space and equipment / tooling as elements available when all are needed to proceed and to do so without having too many elements available before they are required.

Refers to the likelihood of a successor starting given the probabilities of a set of parallel predecessor activities completing. All the path probabilities of the predecessors must be combined to describe the likelihood of the successor starting – typically smaller than one might intuitively believe.

A significant point in time or event on the master plan or schedule of a project that defines the end or beginning of a phase or a contractually required event.
 Typically, milestones represent completion of a certain portion of project scope as measured by the achievement of predefined criteria.

Refers to automotive industry practice of picking up small quantities of supplies from vendors throughout the day (“milk run”) to ensure that the inventory stayed below a present level. Frequent restocking to limits the maximum WIP in the system.

An inventory system that is controlled by an (s, S )-replenishment policy is also known as a min-max system. Under the (s, S ) control, a replenishment order is placed to raise the inventory position (= on-hand stock + outstanding orders − backorders) up to S whenever it drops to s or below.

A mathematical model of a production system is a description of the system using mathematical concepts equations, graphs, process maps. The model provides an abstraction that reduces the system to its essential characteristics.

Using mathematical tools such as linear programming and queueing theory, the mathematical model representation can help explain the behavior of the system. For example, models can explain how different components of the system interact with each other. They can also make predictions about future behavior of the system, such as maximum throughput achievable, where bottlenecks are located, and how much inventory is built up as the system operates.

Any modeling of any production system should incorporate the relationships of Operations Science. It is common for companies to construct models that poorly reflect reality because of a limited understanding of Operations Science. Math is not the same as science. One can, and people often do, construct precise mathematical models that are wrong because the math does not reflect underlying Operations Science driving system behavior.

In the construction industry, the process of completing subassembly packages of work which are then joined to the final assembly structure. A module could be a section of a house, living quarters for an offshore oil platform or a pipe rack.

The practice of modularization in construction has commonly come to mean moving work away from the construction site. Modularization is independent of location. The common use of modularization as offsite work can cause significant degradation of project performance due to excess buildup of WIP and sequencing issues between module construction and onsite final construction.

The time jobs in a production system spend being moved from one station in the production system to the next station, including the time waiting to move. This definition of move time assumes a resource is always available to move the job (i.e., not capacity constrained).

Non-consumable resources do not become part of the entity but are required and not consumed. Examples include information, plans, designs, CAD drawings, etc.

Numerical models are mathematical models that use some sort of numerical time-stepping procedure to obtain the model's behavior over time. The mathematical solution is represented by a generated table and/or graph.

Assembly of raw materials and fabricated parts performed in a location other than the point of final installation.

An act that transforms one or more attributes of an entity or set of entities. Examples include manufacturing, services, transportation, or projects. An operation will require the use of one or more resources in order to perform the transformation. These resources include raw materials, subassemblies, components, labor, machines, information, intelligence, energy, fuel, etc.

Operations Management is the application of operations science to real­-world production, service, and distribution systems. This includes supply chain management as well. Operations management is concerned with the design, control and improvement of any organization’s operations.

The application of mathematical (quantitative) techniques to the scientific study and analysis of complex systems and optimization problems of organization and coordination of activities in business operations and decision making.

Historically the discipline emerged as the confluence of several different threads of scientific application. Charles Babbage conducted research into the cost of transportation and sorting of mail which were applied in the UK’s first postal system. To understand the best choice of railway gauge, he conducted studies into dynamical behavior of railway vehicles on a railway network. Military planners during World War 1 were concerned with the scientific planning and organization of logistics of supplies for troops (convoy theory and Lanchester’s laws). The field expanded with the Second World War conferring several problems for US and UK military planners resulting in the development (among other things) of linear and dynamic programming techniques, and other mathematical tools.

Since then, the field has found application in many areas in transportation, finance, logistics
and government.

Operations Research tends to be heavily focused on complex mathematical models to solve a specific problem as mentioned above. Operations Science provides first principle observations about the behavior of nature. Operations Research techniques can be used to test any of these observations.

The study of the transformation of resources to create and distribute goods and services.

Operations Science (OS) focuses on the interaction between demand and production and the variability associated with either or both. OS also describes the set of buffers required to synchronize demand
with production.

The design, implementation and control of the portfolio of demand, inventory, time, capacity, variability and cost to achieve a company’s marketing and financial goals.

Generic term used in manufacturing for a basic item forming part of the whole of a more complex product. The hierarchy for the terminology is as follows: parts are elements or units in a component. Components are elements or units in either subassemblies or assemblies.

Metric used in Last Planner System to gauge reliability. The number of actual completions divided by the number of planned completions in a given time period, based on a binary assessment on whether a task is 100% complete.

A measure of construction efficiency, which equals the planned productivity divided by the actual productivity. This ratio is sometimes called a PF value or a rate ratio. A ratio greater than 1.0 signifies better-than-planned performance.

A quantitative or qualitative measurement, or any other criterion, by which the performance, efficiency, achievement, etc. of a person or organization can be assessed, often by comparison with an agreed standard or target.

Physical resources become part of the entity. Examples are raw materials, sub-assemblies, components, individual items, etc.

Plan Do Study Act Cycle of Continual Improvement, also known as the Deming Cycle. The cycle of scientific experimentation used in pursuit of continuous improvement. First introduced by W. A. Shewhart in “Statistical method from the viewpoint of Quality Control” in 1939, originally introduced as a linear sequence of 3 steps and subsequently evolved into the 4­step cycle by Shewhart. Shewhart was one of Deming’s mentors, and introduced him to the cycle. Deming built on Shewhart’s concept emphasizing the interactions between the four steps and popularizing the cycle in the area of Total Quality Management.

The time that parts or tasks spend waiting due to policies that govern whether work can be done or not.

A set of ideas, course or principles of action adopted by or proposed for a system or organization. In a production system, policies may be rules related to setting inventory levels, service levels, and other means on imposing constraints on processes and other aspects of a production system.

In manufacturing, preassembly refers to the prior fabrication and assembly of elements of a product in a separate location before assembling the final product on the production line.

In construction, preassemblies are sections of a facility that are assembled remotely from their final position and transported to the site as a unit.

A set of one or more operations designed to transform a set of entities into another form to achieve a particular purpose. A process may result in production of a physical product or completion of a service. A project is a collection of service and production processes.

Examples of processes include production lines, construction projects, hospital operating theaters, insurance claims processing and Discrete Event Simulation analysis. Also called a Value Stream.

A resource or collection of resources, commonly people or machines, where an operation or set of operations is performed. For example, simulation-based design may be modeled as a process center in the design process. In fabrication, welding may be a process center. A piping crew may be modeled as a process center on a construction project. In fixed site production processes, such as construction of a building, the process centers move through the work site. In traditional production, entities move through the process center. Process centers are also known as stations.

A graphical flowchart identifying the operations in a process, steps in each operation and work time for each step.

The time a job spends at an individual station in a production system from the time the station begins working on it, till the time the station finishes.

Procurement involves the process of sourcing and evaluating suppliers, selecting vendors, establishing payment terms, strategic vetting, selection, the negotiation of contracts and actual purchasing of goods. Procurement refers to the process of accessing goods and services necessary for a production system to operate. Supply chain refers to the infrastructure (internal or external companies) over which the Procurement process operates.

A graphical method to illustrate the interaction between the characteristics of products being produced by a production system and the processes used to produce those products.

In manufacturing the product structure tree provides a hierarchical classification of the items which form a product. With the product structure, the understanding of the components which compose a product as well as their attributes, can be represented. The product structure shows the material, component parts subassemblies and other items in a hierarchical structure that represents the grouping of items on an assembly drawing or the grouping of items that come together at a stage in the manufacturing process.

In construction, a product structure tree is structured with the following levels:

• Asset
• Module
• Assembly
• Sub­-Assembly
• Part

The act of transforming or changing the shape, composition or combination of materials, parts, subassemblies or information to increase their value.

Policies, protocols and mechanisms to control transformational processes and the accompanying use of resources and variability levels.

An integrated configuration of sensor measurements, business processes, rules and performance indicators to enable effective control based on desired objectives.

Selection, configuration and integration of business processes, rules and performance indicators to effectively control production in accord with objectives.

Software application that automates and enables scalable and sustainable implementation of the production control solution.

Production engineers apply basic engineering know-how coupled with operations science to define, design and optimize processes and production systems.

Application of engineering (electrical, mechanical, structural, etc.), material science, operations science and related knowledge to define, design and optimize production processes and systems. Computer Aided Production Engineering (CAPE) is the application of various computer tools including 4D visualization, discrete event simulation, etc. to define, design and optimize production processes and systems.

The process of devising or estimating the conversion of resources and information to achieve an end.

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A specific or defined set of operations within a larger supply network or value chain that produces technical or physical output to satisfy an external demand.

The purpose, objectives and constraints upon which the production system design is based.

Setting forth business purpose and objectives for the project, establishing project objectives and identification of constraints upon which the production system design is based.

Engineering of processes, selection of resources and designation of controls to effectively transform inputs into outputs in accord with desired objectives.

The practice of mapping, analyzing and optimizing the processes, resources and controls in accord with a set of given objectives.

The practice of mapping, modeling, analyzing and simulating a production system to achieve best desired performance. Key areas of focus for PSO are throughput, cycle time, use of resources (capacity and inventory) along with sources and implications of variability. PSO supports design of new production systems and improvement of existing production systems.

Man-hours required per unit of work, productivity is the input divided by the output and is usually calculated for a finite time interval. It is also commonly referred to as a Unit Rate.

This process of quantifying the man-hours and quantities associated with an activity or account provides the measurements used in productivity calculations and performance evaluations.

Planning technique developed in the late 1950s to determine the duration of projects with highly uncertain activity durations.

A temporary endeavor undertaken to create a unique product, service, or result. A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources. And a project is unique in that it is not a routine operation, but a specific set of operations designed to accomplish a singular goal. So, a project team often includes people who don’t usually work together – sometimes from different organizations and across multiple geographies. The development of software for an improved business process, the construction of a building or bridge, the relief effort after a natural disaster, the expansion of sales into a new geographic market — all are projects. And all must be expertly managed to deliver the on­time, on-­budget results, learning and integration that organizations need. Project management is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.

The data gathering, management and analytical processes used to predict, understand and constructively influence the time and cost outcomes of a project or program; through the communication of information in formats that assist effective management and decision making.

The administrative functions of a project; application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.

Project Production Control is any action, process, mechanism, system or combination that organizes and enables control of production, or work execution. Project Production Control uses human, physical and software systems for implementing control in the production system. Project Production Control requires regular and timely attention to the details of executing work – every day, every week, every work cycle – before work is done as opposed to after work is done. It is not a process that is performed once a month or an ad-hoc basis like Project Controls.

The development and application of modern production theories, principles and methods to better understand, control and improve project delivery. This includes the application of Operations Science, digital and autonomous technologies.

The collection of production systems comprising the interconnected network of processes and operations that represent all the work activities to execute a project from start to finish.

Pull systems establish an a priori limit on work in process. A pull system, which triggers releases of work based on the amount of work in the system, will not allow WIP to grow without bound. In projects, this is a fundamental control to prevent projects from blowing up on cost and missing schedules. Using Operations Science, the optimal amount of WIP for a project can be determined during design of the Project Production Management system.

Refers to the transaction of buying goods and services as a result of the procurement decisions. 
Purchasing is a subset of Procurement.

A control protocol that releases work to the process based on external information—external means external to the status of the system. Push control releases work to a process independent of the amount of WIP in the process. For instance, a project schedule will direct shipment of modules to the worksite independent of whether or not the site is ready for the modules. Push control protocol allows WIP to grow without bound which has contributed in very large part to poor performance on cost and delivery
for projects.

Pull systems establish an a priori limit on work in process, push systems do not. There is much confusion on this topic. The key distinguishing characteristic is WIP control. Any kind of production system, such as make-­to-­order, make-­to-­stock, engineer­-to­-order or configure­-to­-order can use push or pull control. Further, the fundamental objective of WIP control is maintain the optimal WIP in the system to achieve maximum throughput with minimum time and cost. This fundamental objective is a central design question for any Project Production Management system.

A set of objects, task, or other things waiting for something, typically an action to be processed in a production system.

The time that parts or tasks spend waiting for processing at a station or to be moved to the next station (if move resources are capacity constrained).

Queuing theory is the mathematical study of waiting lines, or queues. In queuing theory, a probabilistic model of arrival times (of tasks, objects for work to be performed) and waiting times (waiting time in the queue before work starts) is constructed so that queue lengths and waiting time can be predicted.

A fixed ratio between two things. For production systems, rate is a measure of throughput or output and is stated as units per period of time or tasks per period of time.

The sum of average time required to process a single transfer batch including all detractors such as downtime and setup time (RPT = PT + ST + DT). It does not include queue time or the time blocked when a downstream station has no queue space.

The characteristic of an item expressed by the probability that it will perform a required function under stated conditions for a stated period of time.

A stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively. An operation will require the use of one or more resources in order to perform the transformation. These resources include raw materials, sub­assemblies, components, labor, machines, information, intelligence, energy, fuel, etc.

1. Consumable resources do not become part of the entity. Examples include energy, lubricating oil, cooling water, etc.
2. Non-consumable resources do not become part of the entity but are required and not consumed. Examples include information, plans, designs, CAD drawings, etc.
3. Physical resources become part of the entity.  Examples are raw materials, sub-assemblies, components, individual items, etc.
4. Capacity resources are required to transform the entity but do not become part of the entity such as machines, labor, transportation.

In a production system, work to transform inputs into finished outputs may take place in different parallel paths simultaneously, as different aspects of a finished work product or service are worked on simultaneously. An individual path is referred to as a routing. The sequence of processes, operations, transportations and machines, equipment, tools, workstations and miscellaneous information that a particular part, batch or work­in­-process item follow in a production system.

An accepted principle or instruction that states the way things are or should be done and tells you what you are allowed or are not allowed to do.

A procedural plan that indicates the time and sequence of each operation. In construction, a schedule is most often used to deterministically set milestones and completion dates for tasks and to monitor progress against those dates. Schedules are thereby are inherently unreliable when coordinating activities because projects are not deterministic endeavors.

In Project Production Management, schedules result from the analysis of capacity utilization, variability, WIP and their associated control as governed by Operations Science.

A performance metric measuring the extent to which demand (orders) are satisfied by a station in a production system or by the system as a whole. For flows, service level is measured as the fraction of jobs for which cycle time is less than or equal to lead time. For demand satisfied from stock inventory, service level is measured as the fill rate, or fraction of demands that are filled from stock.

A process to satisfy demand for services. Example of service processes include engineering design, emergency room diagnosis and treatment, meetings, and inspection.

Because service demand cannot be satisfied before the demand is known, there will never be a stock inventory of “completed services.” The time between the origin of demand and its satisfaction is backorder time. Consequently, all service processes are effectively backordered even when they are delivered within an agreed lead time.

The time required to go from the end of the last good part from one batch to when the first good part of the following batch is produced. With this definition, the trials needed to obtain the first good work product are considered part of the setup process and therefore, must be studied, analyzed and improved.

Another name of the PDCA (see PDSA) in honor of W. Edwards Deming (1900-1993) and based on the work of Walter A. Shewhart (1891-1967) First introduced by W. A. Shewhart in “Statistical method from the viewpoint of Quality Control” in 1939, originally introduced as a linear sequence of 3 steps and subsequently evolved into the 4-step cycle by Shewhart. Shewhart was one of Deming’s mentors, and introduced him to the cycle. Deming built on Shewhart’s concept emphasizing the interactions between the four steps and popularizing the cycle in the area of Total Quality Management.

The time that parts or tasks spend waiting for processing or to be moved due to different resources working on different schedules.

A family of methods for creating radically better products and processes originally branded and developed by Motorola – the primary focus being the measurement and reduction of defects in product and service quality.

Refers to the methodology developed by Shigeo Shingo in the 1950s to reduce Set Up Time in manufacturing processes. Shingo’s basic insight was that a Set Up process could be decomposed into: External Set Up tasks – those tasks that could be performed while the previous batch was still being worked on Internal Set Up tasks – those tasks that could be performed only after the previous batch had been completed and before the current batch could start. He identified ways in which to reduce overall Set Up time by converting where Internal Set Up tasks into External Set Up tasks where possible, through a 4-step analysis:

• An examination of the current Set Up
• Separating Internal and External Set Up
• Converting Internal Set Up to External Set Up
• Streamlining all aspects of the adjusted process

Manufacturing processes are categorized along a spectrum from Project at one end (unique or one­off event) to Continuous Flow at the other end. Job Shop, Batch Flow, and Line Flow are processes that fall along the spectrum.

Product types are categorized along a spectrum according to their lifecycle characteristics ranging from great variety in startup form to standardized commodity at the other extreme. In between, a product might have the form of a number of basic models with a variety of options through to a few models with
basic options.

In a production system, an individual step where inputs have some work task(s) performed upon them and the resulting outputs flow through another part of the production system is referred to as a station. Also called a process center.

The Station Cycle time formula states that the average cycle time at a station in a production system includes actual Processing Time (PT), as well as Move Time (MT), Setup Time (ST), Queuing Time (QT), Batch Time (BT) (CT=PT + MT + QT + ST + BT) Cycle time for an end-to-end process is CT = PT + MT + SDT + BT + QT where SDT represents the shift differential time.

The (continuous) monitoring of processes with respect to mean and variability of performance to determine when problems occur or when the process has gone out of control.

A set of completed transformations or entities. As such the entities in stock are immediately ready to satisfy demand immediately.

Since Demand is a flow and the transformation Process is a flow, there will always be a stock between demand and transformation.

However, since the demand for services is always backordered, such a stock will always be empty but will nonetheless function as a stock.

Two or more parts joined together to form a unit that is only part of a complete machine, structure, or other article being manufactured in a production system.

A supply chain is a goal-oriented network of processes and stock points used to deliver goods and services to customers.

See Operations Management.

All processes necessary to engineer, fabricate, assemble, transport, install and commission a specific system.

The word system is derived from the ancient Greek sustema and thence the Latin systema. Thus, it has two distinct sets of meanings, from which numerous specializations exist:

1. A set of interconnected things or parts working together to form a complex whole e.g. a manufacturing assembly line consists of a series of manufacturing stations working together in an interconnected network
2. A set of principles or procedures according to which something is done; an organized scheme or method e.g. the metric system, a set of rules in measurement or classification

For the purposes of this glossary, we adopt definition (1) for use in phrases like “Production System” or “Project Production System” – a set of interconnected processes working together to form a complex whole.

The interval of time between outputs.

Allowable time for production divided by required number of units that need to be produced (e.g. 200 days / 1,000 spools = .2 days per spool).

Within the context of a production step, the smallest basic step or unit of activity that takes place within the system in the production of goods and services.

Work tasks can be generally classified as Pooled (completely independent), Sequential (one follows after another), or Reciprocal (mutually interdependent).

Measured as the average output of a production process (machine, station, line, plant) per unit time. Throughput is related to Cycle Time (CT) and Work in Process (WIP) by Little's Law.

A measure of the fraction of time that a station in a production system is not idle. Utilization equals rate of arrivals to a station divided by the effective rate of the station. Utilization is also defined as the time used at a station divided by the time available at the station.

A value chain is a set of activities that an organization carries out to create value for its customers. The idea of the value chain is based on the process view of organizations, the idea of seeing a manufacturing (or service) organization as a system, made up of subsystems each with inputs, transformation processes and outputs. Inputs, transformation processes, and outputs involve the acquisition and consumption of resources ­ money, labor, materials, equipment, buildings, land, administration and management.

The end-to-end flow of work from production of basic materials, through processing, manufacture, fabrication, assembly, and delivery to the end user customer for a product or service, or in the case of a capital project the start-up of an asset including all necessary design and engineering.

A value stream map is the graphical representation of all the actions (both value added, and non-value added) currently required to bring a product through the main flows essential to every product: (1) the production flow from raw material into the arms of the customer, and (2) the design flow from concept to launch.

Any step in the production process that improves the product for the customer. Also, any activity that the customer cars about, that changes the product and that is done right the first time. The value-added concept and value stream mapping approach is very subjective and thereby often causes confusion concerning the underlying science of a process. The value-added concepts were first promoted in the 1990s and became highly popular when Rother and Shook published “Learning to See” in 1998. For further discussion, see “The Value-Added Fantasy” in Factory Physics for Managers.

The term used to describe any dissimilarity between specific instances of a particular operation or process, particular entity output from an operation, or a particular demand. The dissimilarity may manifest itself in terms of attributes of the entities/ operations or in the timing of those entities/operations.

• Entity variation includes differences in any attribute such as size, color, hardness, density, quantity, quality, etc.
• Process variation includes differences in the output of the process itself such quality of service, application of the process, etc.
• Time variation deals with time to obtain or produce entities and/or services.

A change in operating parameters that improves overall project performance. For example, the unexpected arrival time of raw materials earlier than expected, can in the right circumstances, lead to an earlier than planned completion time for the project. Other examples of beneficial variability are the introduction of new technology or processes that improve overall project performance e.g., new technology or process design. that allows one to plan for less inventory (and thus less cost) than originally envisaged.

A change in operating parameters that worsens overall project performance. For example, rework due to quality issues increases costs and extends completion time. Other examples of detrimental variability are bad weather than causes work to be delayed or rescheduled, also potentially adding costs and extending completion times.

See Kingman's Equation.

The time that parts or tasks spend waiting for their counterpart(s) at an assembly operation.

Work in process or WIP is the set of entities that are partially transformed within any given process. WIP does not include stock inventory which is composed of completed entities.

WIP typically accumulates while waiting for available capacity in front of an operation. Stock accumulates between two or more processes (e.g., finished inventory between a process and its demand).