- Analytical Model
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.
- Assemble to order (ATO)
Product put together from parts that are already designed and made so as to meet the specifics of a customer order.Sources: “Operations Management: Focusing on Quality and Competitiveness”, 2nd edition, Roberta S. Russell and Bernard W. Taylor III, 1995, pp 43-44, “Operations and Supply Chain Management: The Core”, Third Edition, F. Robert Jacobs and Richard B. Chase, p 276
- Assembly Line
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.Sources: Maynard’s Industrial Engineering Handbook, Fifth Edition, Kjell B. Zandin (ed.), McGraw-Hill 2001, p G.2
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.Sources: Maynard’s Industrial Engineering Handbook, Fifth Edition, Kjell B. Zandin (ed.), McGraw-Hill 2001, p G.2
- Backorder Time
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.Sources: “Factory Physics for Managers”, Pound, Spearman and Bell; McGrawHill, New York, pp. 47, 131-133
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.
- Balanced Line
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.Sources: Maynard’s Industrial Engineering Handbook, Fifth Edition, Kjell B. Zandin (ed.), McGraw-Hill 2001, p G.2, Project Production Institute
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.
- Batch Flow
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.Sources: Schmenner, R. W. (1993), Production/operations management: from the inside out. Macmillan College
- Batch Time
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.Sources: “Factory Physics”, Third Edition, Wallace J. Hopp and Mark L. Spearman, Waveland Pr. Inc., P327
- Bill of Material
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.Sources: Production & Operations Management: Manufacturing and Services, R. B. Chase, N. J. Aquilano and F. R. Jacobs, Eight Edition, pp 101-102, pp 626-628
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.Sources: “Supply Chain Science”, First Edition, Wallace J. Hopp, 2008, MCGraw-Hill, p 11, "Factory Physics", W. J. Hopp and M. L. Spearman, Third Edition, 2011, Waveland Press, p 231
- Bottleneck Rate
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.Sources: "Factory Physics", W. J. Hopp and M. L. Spearman, Third Edition, 2011, Waveland Press, p 231
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:
Sources: Project Production Institute, Merriam-Webster on-line
- 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.”Sources: Project Production Institute, "Factory Physics", W. J. Hopp and M. L. Spearman, Third Edition, 2011, Waveland PressSee Also: Process
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.Sources: Product Production Institute
- Constant Work in Process (CONWIP)
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.Sources: “Factory Physics”, Third Edition, Wallace J. Hopp and Mark L. Spearman, Waveland Press, p363, “CONWIP: a pull alternative to Kanban”. International Journal of Production Research, 1990, Vol 28, pp 879-894 M. L. Spearman and M. A. Zazanis, “Push and Pull Production Systems: Issues and Comparisons”, Operations Research, Vol 40, No. 3, pp 521-531, May-June 1992
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.See Also: Bottleneck
- Continual / Continuous Improvement
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.”Sources: Schonberger, R. J., 1982, “Japanese Manufacturing Techniques: Nine Hidden Lessons in Simplicity”, p55, New York: Free Press
- Control Mechanism
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.
- Control Protocol
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).
- Critical Path Method (CPM)
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”.Sources: “Non-Computer Approach to the Critical Path Method for the Construction Industry”, Prof. John Fondahl, Stanford University Paper for US Navy, Kelley, James; Walker, Morgan. Critical-Path Planning and Scheduling. 1959 Proceedings of the Eastern Joint Computer Conference
- Cycle Time (CT)
Cycle time is measured as 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.Sources: “Factory Physics”, Third Edition, Wallace J. Hopp and Mark L. Spearman, Waveland Press, p 230
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.
- Demand for Services
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.See Also: Service Processes and Stock
- Deming Cycle
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.Sources: W. A. Shewhart 1980, “Economic Control of Quality of Manufactured Products/ 50th Anniversary Commemorative Issue. American Society for QualitySee Also: Shewhart Cycle
- Discrete Event Simulation
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.Sources: Stewart Robinson, "Simulation – The Practice of Model Development and Use", 2004, Wiley
- Earned Value Management System
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.Sources: Department of Defense Earned Value Management System Interpretation Guide, Feb 15, 2015, US Department of Defense, page 80 (Definitions)
- Engineered to Order (ETO)
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.Sources: “Operations Management: Focusing on Quality and Competitiveness”, 2nd edition, Roberta S. Russell and Bernard W. Taylor III, 1995, pp 43-44
- Fabricate to Order (FTO)
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).Sources: “Operations Management: Focusing on Quality and Competitiveness”, 2nd edition, Roberta S. Russell and Bernard W. Taylor III, 1995, pp 43-44, “Operations and Supply Chain Management: The Core”, Third Edition, F. Robert Jacobs and Richard B. Chase, p 276
- First-Run Study
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 (also called Slack)
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.Sources: Guide to the Project Management Body of Knowledge, 4th Edition, Project Management Institute, pp 450-451
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
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.Sources: “Factory Physics for Managers”, Pound, Spearman and Bell, McGrawHill, New York, p. 47, Factory Physics, Third Edition, Wallace J. Hopp and Mark L. Spearman, “Factory Physics”, Third Edition, Waveland Press, p 203
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.Sources: Guide to the Project Management Book of Knowledge, Fourth Edition, Project Management Institute, p 435
- Job Shop
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.Sources: “Factory Physics”, Third Edition, Wallace J. Hopp and Mark L. Spearman, pp. 9-10
- Just in Time (JIT)
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.Sources: Toyota Production System: Beyond Large-Scale Production, Ohno, Taiichi, 1988, Productivity Press, New York, p. 4
- Kingman’s Equation (VUT equation)
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.Sources: Factory Physics, Third Edition, Wallace J. Hopp and Mark L. Spearman, Page 288
The process of assembling a kit (see Kit).
- Last Planner System™
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.orgSources: G. Ballard (1994). The Last Planner, Northern California Construction Institute, Monterey California., G. Ballard (2000) The Last Planner System of Production Control, Ph. D. Dissertation, Univ. of Birmingham UK
- Last Planner™
The person making commitments on behalf of and assignments to direct workers.Sources: G. Ballard (1994). The Last Planner, Northern California Construction Institute, Monterey California., G. Ballard (2000) The Last Planner System of Production Control, Ph. D. Dissertation, Univ. of Birmingham UK
- Last Responsible Moment (LRM)
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.Sources: “Wicked Problems, Righteous Solutions – Back to the Future on Large Complex Projects”, Proceedings of the Proceedings 8th Annual Meeting of the International Group for Lean Construction, Aug 17-19, 2000, Brighton UK
- Law of Variability
Increased variability always requires increased buffering when trying to synchronize demand
and transformation.Sources: Project Production Institute, Factory Physics, W. J. Hopp and M. L. Spearman, p 309
- Lead Time
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.Sources: “Factory Physics”, Third Edition, Wallace J. Hopp and Mark L. Spearman, Waveland Press, 2011, p 230
- Line of Balance
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 1962Sources: Line of Balance Technology: A graphic method of industrial programming, US Department of Navy, April 1962
- Little’s Law
Little's Law defines the relationship between system throughput (TH), cycle time (CT), and workinprocess (WIP).
Cycle time is a dependent variable. WIP is a leading indicator of CT.Sources: Factory Physics, Third Edition, Wallace J. Hopp and Mark L. Spearman, Waveland Press, p 239, Queues, Inventories and Maintenance: The Analysis of Operational Systems with Variable Demand and Supply, P. M. Morse, Dover, 2004, p 22, A Proof for the Queuing Formula: L = lW, J. D. C. Little, Operations Research, Volume 9, Issue 3, pp 383-387, Little’s Law as viewed on its 50th Anniversary, J. D. C. Little, Operations Research, Volume 59, Issue 3, pp 536-549
- Made to Stock (MTS)
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.Sources: “Operations Management: Focusing on Quality and Competitiveness”, 2nd edition, Roberta S. Russell and Bernard W. Taylor III, 1995, pp 43-44, “Operations and Supply Chain Management: The Core”, Third Edition, F. Robert Jacobs and Richard B. Chase, McGraw Hill Irwin, p 276, “Factory Physics”, Third Edition, Wallace J. Hopp and Mark L. Spearman, Waveland Pr. Inc., P230
- Make to Order (MTO)
A product or item that has been designed but is made (physically realized) only at the time when a customer orders it.Sources: “Factory Physics”, Third Edition, Wallace J. Hopp and Mark L. Spearman, Waveland Press, p 230, “Operations and Supply Chain Management: The Core”, Third Edition, F. Robert Jacobs and Richard B. Chase, McGraw Hill Irwin, p 276
- Matching Problem
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.Sources: Project Production Institute
- Merge Bias
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.Sources: Integrated Cost and Schedule Control in Project Management, Urusla Kuehn, pp. 172-173
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.Sources: P2SL Glossary p 38 . “Guide to the Project Management Body of Knowledge”, 4th Edition, Project Management Institute, p 136
- Milk-Run System
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.Sources: International Business, A. Aswathappa, p55, “Milk Run Logistics: Literature Review and Directions”, G. S. Brar and G. Saini, Proceedings of the World Congress on Engineering, 2011, Vol I, WCE 2011, July 6-8, 2011, London UK
- Min / Max Inventory
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.Sources: T. Wang, Y. Chen, Y. Feng, On the time-window fulfillment rate in a single-item min-max inventory control system, IIE Transactions (2005) 37, 668
- Modeling – Production System
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.
- Move Time
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).Sources: “Factory Physics”, Third Edition, Wallace J. Hopp and Mark L. Spearman, Waveland Press, p327
- Numerical Model
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.Sources: SERC Carleton College
An operation is 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
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.
- Operations Research (OR)
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
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.Sources: Introduction to Operations Research, F. S. Hillier and G. J. Lieberman, Eight Edition, McGraw- Hill, p3., Maynard’s Industrial Engineering Handbook, Fifth Edition, Kjell B. Zandin (ed.), McGraw-Hill 2001, p G.2
- Operations Science
Is 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
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.Sources: Production & Operations Management: Manufacturing and Services, R. B. Chase, N. J. Aquilano and F. R. Jacobs, Eight Edition, pp 101-102, pp 626-628
- Plan Do Study Act (PDSA)
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.Sources: W. A. Shewhart 1980, “Economic Control of Quality of Manufactured Products/ 50th Anniversary Commemorative Issue. American Society for Quality
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.Sources: CII SD-25 – Constructability Improvement Using Prefabrication, Preassembly, and Modularization -- Tatum, Vanegas, Williams
A process is 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.
- Process Center
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.See Also: Station
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.Sources: “Purchasing and Supply Chain Management: Analysis, Strategy, Planning and Practice”, A. J. Weele, Fourth Edition, Thomson Publishing
- Product – Process Matrix
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.Sources: “Link Manufacturing Process and Product Lifecycles’, R. H. Hayes and S. C. Wheelwright, Harvard Business Review, January, 1979
- Product Structure Tree
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:
- Production Engineering
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.
- Production Planning
The process of devising or estimating the conversion of resources and information to achieve an end.See Also: Production
- Production System Optimization
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.
- Program Evaluation and Review Technique (PERT)
Planning technique developed in the late 1950s to determine the duration of projects with highly uncertain activity durations.Sources: B. Ralph Stauber, H. M. Douty, Willard Fazar, Richard H. Jordan, William Weinfeld and Allen D. Manvel. Federal Statistical Activities. The American Statistician 13(2): 9-12 Malcolm, D. G., J. H. Roseboom, C. E. Clark, W. Fazar Application of a Technique for Research and Development Program Evaluation OPERATIONS RESEARCH Vol. 7, No. 5, September–October 1959, pp. 646–669
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.Sources: Guide to Project Management Body of Knowledge, Fourth Edition, Project Management Institute, p 442., https://www.pmi.org/about/learn-about-pmi/what-is-project-management
- Project Controls
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.Sources: Guide to the Project Management Body of Knowledge, Fourth Edition, pp 60-64, Project Management Institute, “Project controls: how much is enough?”, G. E. Heywood, G.E. Project Management Institute, PM Network, vol. 10, no. 11, Nov 1996
- Project Management
The application of knowledge, skills, tools, and techniques to project activities to meet the
project requirements.Sources: Project Management Institute
- Project Production Control
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.See Also: Project Controls
- Pull (Control Protocol)
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.Sources: Hopp and Spearman 1990 and MW Factory Physics, W. J. Hopp and M. L. Spearman, 3rd Edition, Waveland Press, p358
- Push (Control Protocol)
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.Sources: Factory Physics, Third Edition, W. J. Hopp and M. L. Spearman,Waveland Press, p358, Project Production Institute
- Push versus Pull
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.Sources: Factory Physics, Third Edition, W. J. Hopp and M. L. Spearman,Waveland Press, p358, Project Production Institute
- Queuing Theory
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.Sources: “Fundamentals of Queuing Theory”, D. Gross and J. F. Shortle., Queues, Inventories and Maintenance: The Analysis of Operational Systems with Variable Demand and Supply, P. M. Morse, Dover 2014, p. 2
Rate - 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.Sources: Merriam-Webster on-line, Project Production Institute
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.Sources: Project Production Institute, Oxford Dictionary
- Resource Types
- Consumable resources do not become part of the entity. Examples include energy, lubricating oil, cooling water, etc.
- Non-consumable resources do not become part of the entity but are required and not consumed. Examples include information, plans, designs, CAD drawings, etc.
- Physical resources become part of the entity. Examples are raw materials, sub-assemblies, components, individual items, etc.
- 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.Sources: Supply Chain Science, Wallace. J. Hopp, 2008, Waveland Press, p10, Maynard’s Industrial Engineering Handbook, Fifth Edition, Kjell B. Zandin (ed.), McGraw-Hill 2001, p G.18
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.Sources: Merriam-Webster Online, Project Production Institute
- Service Level
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.Sources: Factory Physics, W. J. Hopp and M. L. Spearman, Third Edition, Waveland Press, pp 73-74 and p. 230
- Service Processes
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.See Also: Demand for Services
- Setup 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.Sources: Shigeo Shingo, A Revolution in Manufacturing: The SMED System. Portland: Productivity Press Inc, 1985
- Shewhart Cycle
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.
- Shift Differential Time (SDT)
The time that parts or tasks spend waiting for processing or to be moved due to different resources working on different schedules.Sources: Pound, Edward S. Factory Physics for Managers: How Leaders Improve Performance in a Post-Lean Six Sigma World. McGraw-Hill Education.
- Six Sigma (Continuous Improvement)
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.Sources: Factory Physics, W. J. Hopp and M. L. Spearman, Third Edition, Waveland Press, pp 171-172
- SMED Single Minute Exchange of Die (SMED)
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:
Sources: Shigeo Shingo, A Revolution in Manufacturing: The SMED System. Portland: Productivity Press Inc, 1985
- 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
- Spectrum of Manufacturing Processes
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.Sources: “Link Manufacturing Process and Product Lifecycles’, R. H. Hayes and S. C. Wheelwright, Harvard Business Review, January, 1979See Also: Product – Process Matrix
- Spectrum of Product Characteristics
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.See Also: Product – Process Matrix
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.Sources: “Supply Chain Science”, First Edition, Wallace J. Hopp, 2008, Waveland Press, p 3See Also: Process Center
- Station Cycle Time Formula
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.Sources: Factory Physics, Third Edition, Wallace J. Hopp and Mark L. Spearman, Waveland Press, p 327
- Statistical Process Control (SPC)
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.Sources: Factory Physics, W. J. Hopp and M. L. Spearman, Third Edition, Waveland Pr. Inc., p 404
Stock represents 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.
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:
- 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
- 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.Sources: Project Production Institute, F. Harary and M. F. Batell “What is a System”, Social Networks, Vol. 3, 1981, pp. 29 – 40.
- Takt Time
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).Sources: Factory Physics, W. J. Hopp and M. L. Spearman, Third Edition, Waveland Press, p495, P2SL Glossary p 59
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.See Also: Operation
Utilization is 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.Sources: Supply Chain Science, Wallace J. Hopp, 2008, McGraw-Hill, p 14
- Value Chain
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.Sources: Porter, Michael E., "Competitive Advantage". 1985, Ch. 1, pp 11-15. The Free Press. New York, Rowe, Mason, Dickel, Mann, Mockler; "Strategic Management: a methodological approach". 4th Edition, 1994. Addison-Wesley. Reading Mass
- Value Stream
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.See Also: Process
- Value Stream Mapping
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.Sources: Learning to See: Value Stream Mapping to Add Value and Eliminate MUDA Spiral-bound – June 1, 1999 by Mike Rother (Author), John Shook (Author), Jim Womack (Foreword), Dan Jones (Foreword) ISBN-13: 978-0966784305 ISBN-10: 0966784308
- Value-Added Activity
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.Sources: Pound, Bell and Spearman, Factory Physics for Managers, 2014 McGraw-Hill, New York, pp. 172-176
Variability is 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.
- Variability – Types
- 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.
- Variability – Beneficial
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.
- Variability – Detrimental
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.
- Work in Process (WIP)
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).