Glossary of Terms



A | B | C | D | E | F | G | H | I | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y


A

Accelerated life testing (ALT) The process of testing a product by subjecting it to conditions (stress, strain, temperatures, voltage, vibration rate, pressure, etc.) in excess of its normal service parameters in an effort to uncover faults and potential modes of failure in a short amount of time.
Acceptance sampling A common quality control technique that uses statistical sampling to determine whether to accept or reject a production lot of material.
Active cooling A system that involves the use of energy to cool something, as opposed to passive cooling that uses no energy.
Allocated cost A type of expense that is clearly associated with and can be readily assigned to a certain business process, project, or department.
Alpha testing In-house testing of a pre-production model or version to locate or estimate design flaws or deficiencies.
Annealing A heat treatment that alters the physical and sometimes chemical properties of a material to increase its ductility and reduce its hardness, making it more workable.
Assembly drawings Assembly drawings show how different parts go together, identify those parts by number, and have a parts list.
Attribute data Data that can’t fit into a continuous scale but instead is chunked into distinct buckets, such as small/medium/large, pass/fail, acceptable/not acceptable, and so on.

 

B

Beginning inventory Products or services that a business starts out with during a new fiscal year.
Benchmarking Comparing one's business processes and performance metrics to industry bests and best practices from other companies.
Beta testing Second-level, external pilot-test of a product (usually a software) before commercial-quantity production. At the beta test stage, the product has already passed through the first-level, internal pilot-test (alpha test) and glaring defects have been removed.
Bill of Lading A document issued by a carrier (or the carrier's agent) to acknowledge receipt of cargo for shipment.
Bill of Materials (BOM) A list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, parts, and the quantities of each needed to manufacture an end product.
Bill of Process (BOP) A best-practices template for production, composed of detailed plans explaining the manufacturing processes for a particular product. These plans include in-depth information on machinery, plant resources, equipment layout, configurations, tools, and instructions.
Block diagram A diagram of a system in which the principal parts or functions are represented by blocks connected by lines that show the relationships of the blocks.
BOM processor A Bill of Materials processor is a data-management system that organizes the specifications of product assemblies and structures used in manufacturing and related industries. A BOM processor is an essential component in most commercial software packages; it maintains the BOM and automatically assigns lowest-level coding (LLCs). The BOM processor is essential for products with large BOMs (e.g., automobiles include approximately 30,000 components).
Brand power The trust, satisfaction, and loyalty assumed by your customer when they see your name on a product. This can be affected dramatically by your reliability goals.
Break-even level/output A production level that achieves zero economic profit—e.g., a firm is just breaking even. The total revenue received by a firm at the break-even output just matches the total cost incurred. However, because total cost includes a normal profit, only economic profit is zero.
Break-even point (BEP) The point at which total cost and total revenue are equal.
Burn rate The rate at which a company is losing money.

 

C

C charts A type of control chart used to monitor "count"-type data where the sample size is greater than one, typically the average number of nonconformities per unit.
Captive (in-house) manufacturing Conducting an activity or operation within a company, instead of relying on outsourcing.
Cash-out date The future date at which the company will run out of money if the current burn rate remains constant.
Casting A manufacturing process in which a liquid material is usually poured into a mold containing a hollow cavity of the desired shape and then allowed to solidify.
Casual factor Those elements that lead to variation in the quality of the finished product. The Events and Causal Factors (ECF) chart depicts the necessary and sufficient events and causal factors for accident occurrence.
Certification The confirmation of certain characteristics of an object, person, or organization. This confirmation is often, but not always, provided by some form of external review, education, assessment, or audit.
Code of Federal Regulations (CFR) The codification of the general and permanent rules and regulations (sometimes called administrative law) published in the Federal Register by the executive departments and agencies of the federal government of the United States.
COGS unit cost A unit cost is the total expenditure incurred by a company to produce, store, and sell one unit of a particular product or service.
Common stock A form of corporate equity ownership and a type of security. Investors buy the same stock as founders and get no special privileges.
Component level design The selection, maintenance, design, and construction of smaller parts for a larger machine/assembly. This includes selecting, qualifying, approving, documenting, and managing the purchasing of components and direct material required to produce an end product.
Composite A material that is made from several different substances.
Compression External force (stress) that tends to crush a material, squeezing its particles closer and shortening the dimension in the direction of its action.
Compression molding A method of molding in which the molding material, generally preheated, is first placed in an open, heated mold cavity.
Computer-aided design (CAD) The use of computer systems (or workstations) to aid in the creation, modification, analysis, or optimization of a design.
—   Autodesk Vault - A data management tool
—   PTC Windchill - A product life cycle management (PLM) software
—   Siemens Teamcenter - An integrated set of PLM and collaboration (cPD) tools
—   Dassault Enovia - Collaborative management and global life cycle (PLM)
Consequence of failure The effect of failure that may go beyond the loss of the product that fails. E.g., if a power unit running a pump that keeps a city from flooding fails, the consequence of failure far outweighs the cost to replace the pump.
Control charts Statistical process control tool used to determine if a manufacturing or business process is in a state of control. Also known as Shewhart charts (after Walter A. Shewhart) or process-behavior charts.
Control limit (CL) Also known as natural process limits, CLs are horizontal lines drawn on a statistical process control chart, usually at a distance of ±3 standard deviations of the plotted statistic from the statistic's mean. Control limits are used to detect signals in process data that indicate that a process is not in control and, therefore, not operating predictably.
Convertible note Frequently used by angel investors, think of this as “debt wanting to be equity.” It forestalls the valuation discussion until the next round of financing. A convertible note sites on the balance sheet as debt, has a modest interest rate, and converts into equity according to certain terms and conditions and at a discount.
Convertible preferred stock Upon a liquidation event, like sale of the company, convertible preferred stock converts into common stock unless the liquidation value of its proportional share in the conversion to common is less than the value of the investment (in which case it gets principal and dividends of typically 8% before common stock).
Corporate average fuel economy (CAFE) Regulations in the United States, first enacted by Congress in 1975 after the 1973-74 Arab Oil Embargo, to improve the average fuel economy of cars and light trucks (trucks, vans, and sport utility vehicles) produced for sale in the United States.
Cost of goods sold (COGS) Expenses directly attributed to production (i.e., raw materials, processing, assembly, factory facility, and equipment).
Cumulative distribution function (CDF) The CDF of a real-valued random variable X, or just distribution function of X, evaluated at x, is the probability that X will take a value less than or equal to x.
Cyclic fatigue analysis Evaluates material fatigue caused when subjected to a cyclic load. This type of structural damage occurs even when the experienced stress range is far below the static material strength. Loads tested include electrical, thermal, and mechanical.

 

D

Data collection The process of gathering and measuring information on targeted variables in an established systematic fashion, which then enables one to answer relevant questions and evaluate outcomes.
Data management plan (DMP) A formal document that outlines how data are to be handled both during a research project and after the project is completed.
Defect A physical, aesthetic, or functional attribute of a product or service that exhibits that the product or service failed to meet a desired specification.
Defects per million opportunities (DPMO) A measure of process performance.
Defects per unit (DPU) A metric used in Six Sigma and other process improvement methodologies. The observed DPU value is used to calculate the DPMO value for a process, which in turn is used to assess the overall quality of the process output and to determine areas in which the process can be improved.
Define-measure-analyze-improve-control (DMAIC) A data-driven improvement cycle used for improving, optimizing, and stabilizing business processes and designs.
Deliverable A tangible or intangible good or service produced as a result of a project that is intended to be delivered to a customer (either internal or external).
Demand forecast The art and science of forecasting customer demand to drive holistic execution of such demand by corporate supply chain and business management.
Design failure mode effect analysis (DFMEA) Analytical technique used in quality control to ensure that the potential failure modes of a product or process (including their associated causes and mechanisms) have been studied and addressed to the extent possible.
Design for assembly (DFA) A process by which products are designed with ease of assembly in mind.
Design for manufacturing (DFM) The general engineering practice of designing products in such a way that they are easy to manufacture.
Design for reliability Reliability and availability models use block diagrams and Fault Tree Analysis to provide a graphical means of evaluating the relationships between different parts of the system.
Design research Originally constituted as primarily research into the process of design, developing from work in design methods; the concept has been expanded to include research embedded within the process of design, including work concerned with the context of designing and research-based design practice.
Design validation Testing aimed at ensuring that a product or system fulfills the defined user needs and specified requirements, under specified operating conditions.
Destructive tests Ongoing reliability tests (ORT), tear-down, break-open, etc.
Detectability The ability to detect a failure before it causes harm. The purpose of considering detection in any scenario is to ensure that potential or actual failures can be identified with enough time to take action before the user is adversely affected.
Deteriorative properties The response or deterioration due to the environment.
Development The systematic use of scientific and technical knowledge to meet specific objectives or requirements.
Dimensional tolerances The permissible limit or limits of variation in: a physical dimension; a measured value or physical property of a material, manufactured object, system, or service; other measured values (such as temperature, humidity, etc.); in engineering and safety, a physical distance or space (tolerance); in mechanical engineering, the space (such as between a bolt and a nut or a hole, etc.).
Direct costs Costs that are directly accountable to a cost object (such as a particular project, facility, function, or product).
Double sampling plan Performed after the first sample is tested. There are then three outcome possibilities: (1) accept lot, (2) reject lot, (3) no decision. If the outcome is (3), and a second sample is taken, then the procedure is to combine the results of both samples and make a final deciding on that information.

 

E

E-fulfillment Is an amalgamation of all the people, processes, and technology employed to deliver an online order to a customer.
Efficiency The (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result.
Electrical Resistivity The reciprocal of conductivity. It is the opposition of a body or substance to the flow of electrical current through it, resulting in a change of electrical energy into heat, light, or other forms of energy. The amount of resistance depends on the type of material.
Electrical properties The ability of a material to transmit, store, or impede electricity.
Electronic data interchange (EDI) The concept of businesses electronically communicating certain information that was traditionally communicated on paper.
Electronic loading Testing a product under the conditions it will receive in its final environment, which may include voltage, current, frequency, natural resonance, etc. To protect the power devices from damage, electronic loads usually have a pre-settable power limit.
Electronic product code (EPC) A universal identifier that provides a unique identity for every physical object anywhere in the world, for all time.
Ending inventory The amount of inventory a company has in stock at the end of its fiscal year.
Engineering change management (ECM) The process of requesting, determining attainability, planning, implementing, and evaluating changes to a system.
Engineering Change Notice (ECN) A document that records or authorizes a change to a specific design. The reasons for the change should also be recorded.
Engineering Change Order (ECO) These are used for changes in components, assemblies, or documents, such as processes and work instructions. They may also be used for changes in specifications.
Engineering Change Request (ECR) This form is used to describe a suggested enhancement or problem with a product. The form initiates the change process; it promotes discussions within the organization to help determine the impact of a change and the best possible solution.
Engineering drawings A type of technical drawing that is used to fully and clearly define requirements for engineered items.
Engineering validation Measures and analyzes the process, audits and calibrates equipment, and creates a document trail that shows the process leads to a consistent result.
Enterprise resource planning (ERP) The integrated management of core business processes, often in real time and mediated by software and technology.
Environment loading Testing a product under the conditions it will receive in its final environment, which may include pressure, temperature, humidity, radiation, moisture, etc.
Environmental properties The ability of the material to maintain performance in its application environment.
Environmental Protection Agency (EPA) An agency of the US federal government which was created for the purpose of protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress.
Exotic metals Metals that are more costly to manufacture and process, due to high temperatures required for heating and shaping of parts.
Expendable Component or part (such as bolt, nut, rivet) for which no authorized repair procedure exists, and/or the cost of repair would exceed cost of its replacement.

 

F

Factoring A financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount.
Failure mode and effects analysis (FMEA) One of the first highly structured, systematic techniques for failure analysis. It was developed by reliability engineers in the late 1950s to study problems that might arise from malfunctions of military systems. An FMEA is often the first step of a system reliability study. It involves reviewing as many components, assemblies, and subsystems as possible to identify failure modes, and their causes and effects.
Feasibility The process in a product's life cycle that first translates feasible ideas into technically feasible and economically competitive product concepts, and then produces product concept through concept generation and selection. Two commonly used techniques to decide the best design candidate are design-to-cost and life-cycle-cost analyses.
Field readiness The stage of development just prior to final launch. It's the time to review the pilot run and determine if there are any “game-stopper” issues.
Financial benchmarking Performing a financial analysis and comparing the results in an effort to assess your overall competitiveness and productivity.
Fixed cost (FC) In economics, fixed costs, indirect costs, or overheads are business expenses that are not dependent on the level of goods or services produced by the business.
Flowchart A type of diagram that represents an algorithm, work flow, or process, showing the steps as boxes of various kinds, and showing order by connecting them with arrows.
Forecasting The process of making predictions based on past and present data and, most commonly, by analysis of trends.
Foreign standards and certificates Required for many products that are sold in multiple countries. This may include performance tests and quality assurance tests, to meet qualification criteria stipulated in contracts, regulations, or specifications (typically called "certification schemes" in the product certification industry).

Most product certification bodies (or product certifiers) are accredited to ISO/IEC Guide 65:1996, an international standard for ensuring competence in those organizations performing product certifications. The organizations that perform this accreditation are called accreditation bodies, and they themselves are assessed by international peers against the ISO 17011 standard. Accreditation bodies that participate in the International Accreditation Forum (IAF) Multilateral Agreement (MLA) also ensure that these accredited product certifiers meet additional requirements set forth in "IAF GD5:2006 - IAF Guidance on the Application of ISO/IEC Guide 65:1996."

Free-trade agreement Free-trade area is the region encompassing a trade bloc whose member countries have signed a free-trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers—import quotas and tariffs—and to increase trade of goods and services with each other.
Freight bill Carrier's invoice for freight charges applicable to a shipment. Also called freight invoice.
Freight claims A legal demand by a shipper or consignee to a carrier for financial reimbursement for a loss or damage of a shipment.
Functional benchmarking Focusing benchmarking on a single function to improve the operation of that particular function.

 

G

Geometric dimensioning and tolerancing (GD&T) A system for defining and communicating engineering tolerances. It uses a symbolic language on engineering drawings and computer-generated, three-dimensional solid models that explicitly describes nominal geometry and its allowable variation.
Gerber files An open ASCII vector format for 2D binary images. It is the de facto standard used by printed circuit board (PCB) industry software to describe the printed circuit board images: copper layers, solder mask, legend, etc.

 

H

Hand lay-up A molding process where fiber reinforcements are placed by hand then wet with resin.
Hardening Process by which a material acquires greater hardness, such as cold-forming or heat treatment.
Hardness The resistance of a material to indentation.
Hardware The collection of all the parts you can physically touch, as opposed to software, which is a set of digital instructions to perform specific operations.
Harmonized system (HS) An internationally standardized system of names and numbers to classify traded products.
Harmonized tariff schedule (HTS) The primary resource for determining tariff (customs duties) classifications for goods imported into the United States.
Highly accelerated stress screening (HASS) Uses accelerated stresses beyond a product’s specifications to detect product defects during manufacturing and production.

 

I

Indirect costs Costs that are not directly accountable to a cost object (such as a particular project, facility, function, or product). Indirect costs may be either fixed or variable. Indirect costs include administration, personnel, and security costs.
Industry standard Generally accepted requirements followed by the members of an industry.
Infant mortality Failures or early failure rate are caused by defects designed into or built into a product and are completely unacceptable to the customer. To avoid infant mortalities, appropriate specifications, adequate design tolerance, and sufficient component derating can help, and should always be used, but even the best design intent can fail to cover all possible interactions of components in operation. In addition to the best design approaches, stress testing should be started at the earliest development phases and used to evaluate design weaknesses and uncover specific assembly and materials problems.
Initial public offering (IPO) A type of public offering in which shares of a company are sold—usually to institutional investors—who in turn sell to the general public, on a securities exchange, for the first time.
Intellectual property (IP) Refers to creations of the intellect for which a monopoly is assigned to designated owners by law. Intellectual property rights (IPRs) are the rights granted to the creators of IP, and include trademarks, copyright, patents, industrial design rights, and in some jurisdictions, trade secrets.
Interest and taxes (I&T) Includes federal, state, local, and payroll taxes, plus business loan interest expenses. When you deduct the interest and taxes from income from operations, you get to the final number on the P&L, called net income.
Investment casting An industrial process based on lost-wax casting, one of the oldest known metal-forming techniques.

 

K

Key metrics The measurable quality standards according to Six Sigma standards.

 

L

Launch The stage of development when the company can vet the reception of the product before a full go-to-market investment is made. Market entry/commercialization is the stage in which the product is introduced to the target market.
Lead time The latency between the initiation and execution of a process. For example, the lead time between the placement of an order and delivery of a new car from a manufacturer may be anywhere from 2 weeks to 6 months. In industry, lead time reduction is an important part of lean manufacturing.
Left off-centered process Mean is to the left of the target mean, so the process is likely to produce undersized parts.
Less than load (LTL) The transportation of relatively small freight.
Low-level coding (LLC)Refers to the lowest level code of the item used in BOM. The low level code is registered to each item, and is used to perform a level-by-level explosion.
Lower control limit (LCL) Bottom limit in quality control for data points below the control (average) line in a control chart. Opposite of upper control limit.
Lower specification limit (LSL) The lowest level of process performance or product quality that is within the acceptable range defined by customer standards and measurements of defects in the process or product itself.

 

M

Make-versus-buy analysis Calculates the benefits between manufacturing a product in-house or purchasing it from an external supplier.
Make-to-forecast A building of inventory to meet the anticipated level of customer demand. This requires a very accurate forecasting method, as very few customers will guarantee purchase of inventory prior to an official written purchase order.
Make-to-order A production approach where products are not built until a confirmed order for products is received.
Make-to-stock A build-ahead production approach in which production plans may be based upon sales forecasts and/or historical demand.
Manufacturing capability A unique combination of tools, materials, methods, and people engaged in producing a measurable output; for example, a manufacturing line for machine parts. All processes have inherent statistical variability which can be evaluated by statistical methods.
Manufacturing capacity The volume of products or services that can be produced by an enterprise using current resources. Three commonly used definitions of capacity are design capacity, effective capacity, & actual output.
Manufacturing development Or Engineering & Manufacturing and Development (EMD). The phase when a system is developed and designed before going into production.
Manufacturing extension partnerships (MEP) A public-private partnership with centers in all 50 states and Puerto Rico dedicated to serving small and medium-sized manufacturers. MEPs assist with efficiency and growth efforts and are focused on operational excellence, workforce training, and innovation.
Manufacturing readiness level (MRL) A measure developed by the US Department of Defense (DOD) to assess the maturity of manufacturing readiness, in a manner similar to how technology readiness levels (TRL) are used for technology readiness.
Manufacturing research The lowest level of manufacturing readiness. The focus is to address manufacturing shortfalls and opportunities needed to achieve program objectives. Basic research (i.e., funded by budget activity) begins in the form of studies.
Manufacturing resource planning (MRP) A method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning, and has a simulation capability to answer "what-if" questions and extension of closed-loop MRP.
Marginal cost (MC) The change in the opportunity cost that arises when the quantity produced is incremented by one unit—that is, the cost of producing one more unit of a good.
Market differentiation A promotional method employed by a business to create an especially strong presence in a particular market. When using market differentiation, a manufacturer might produce several variations on a basic product to be marketed under the same brand in order to give itself a greater range of coverage and hence promote a sense of dominance within that market.
Master production schedule (MPS) A plan for individual commodities to be produced in each time period, such as production, staffing, inventory, etc. It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded.
Material properties An intensive, often quantitative, property of some material.
Material requirements planning (MRP) A production-planning, scheduling, and inventory-control system used to manage manufacturing processes.
Mean absolute deviation (MAD) The average of the absolute deviations from a central point.
Mean absolute percentage error (MAPE) A measure of prediction accuracy of a forecasting method in statistics, for example in trend estimation. It usually expresses accuracy as a percentage.
Mean squared error (MSE) Measures the average of the squares of the errors or deviations—that is, the difference between the estimator and what is estimated.
Mechanical properties Used to help classify and identify material. The most common properties considered are strength, ductility, hardness, impact resistance, and fracture toughness. Most structural materials are anisotropic, which means that their material properties vary with orientation.
Mechanical loads The external mechanical resistance against which a machine—such as a motor or engine, or a material that cause stresses, deformations, and displacements in— structures. Excess load or overloading may cause structural failure, and hence such possibility should be either considered in the design or strictly controlled.
Mechanical properties The response of the material to force and load.
Modular design Or modularity in design. A design approach that subdivides a system into smaller parts, called modules or skids, that can be independently created and then used in different systems.
Molding process The process of manufacturing by shaping liquid or pliable raw material using a rigid frame called a mold or matrix.
Multiple sampling plan the extension of the double sampling plans when more than two samples are needed to reach a conclusion.

 

N

Net profit Revenue minus COGS, OpEx, and I&T (this is your bottom line).
Net profit margin Revenue divided by net profit.
Non-expendable mold casting A metalworking process in which liquid metal is poured into a mold that contains a hollow cavity of the desired shape, and then allowed to cool and solidify. Traditional techniques include lost-wax casting, plaster mold casting, and sand casting.
Non-recurring expenses An unusual charge, expense, or loss that is unlikely to occur again in the normal course of a business. Non-recurring costs include write-offs such as design, development, and investment costs, and fire or theft losses, lawsuit payments, losses on sale of assets, and moving expenses. Also called extraordinary cost.
Non-destructive inspections Or non-destructive testing (NDT). A wide group of analysis techniques used to evaluate the properties of a material, component or system without causing damage.
Non-disclosure agreements A legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to or by third parties.
Non-recurring engineering The one-time cost to research, design, develop, and test a new product or product enhancement.
NP chart A type of control chart used to monitor the number of nonconforming units in a sample. 

 

O

Occupational Safety and Health Administration (OSHA) An agency of the US Department of Labor. OSHA's mission is to "assure safe and healthful working conditions for working men and women by setting and enforcing standards and by providing training, outreach, education and assistance."
Ongoing reliability test (ORT) A hardware test process usually used in manufacturing to ensure that the quality of the products is still of the same specifications as the day it first went to production or general availability.
Operating expenses (OpEx) Expenses not directly related to the product (i.e., administrative payroll and office space).
Optical Property of a material is defined as its interaction with electro-magnetic radiation in the visible.
Optical properties The ability of the material to transmit, reflect, or absorb light.
Original equipment manufacturer (OEM) Producer or manufacturer of a complete end product (such as a car engine, cooling unit, or a circuit board) or a sub-assembly (such as a carburetor, compressor, or a chip).
Orthographic projection A means of representing 3D objects in two dimensions.
Outsource (contract) manufacturing Or contract manufacturer (CM). A manufacturer that contracts with a firm for components or products. It is a form of outsourcing. A contract manufacturer performing packaging operations is called co-packer or a contract packager.
Overhead percentage Regular expenses that are not directly related to producing goods or services. These indirect expenses are termed "overhead" costs. Most businesses calculate overhead cost on a monthly basis. Typically, overhead cost is expressed as a percentage of sales or of labor cost.

 

P

P-chart A type of control chart used to monitor the proportion of nonconforming units in a sample, where the sample proportion nonconforming is defined as the ratio of the number of nonconforming units to the sample size n.
Palletization of loads Method of storing and transporting goods stacked on a pallet, and shipped as a unit load. It permits standardized ways of handling loads with common mechanical equipment such as fork-lift trucks.
Pareto chart A type of chart that contains both bars and a line graph, where individual values are represented in descending order by bars, and the cumulative total is represented by the line.
Participating preferred stock Favored by VCs, this stock “double-dips” upon liquidation. Holders both get their principal out AND participate in the returns as if they held common stock. Also accumulates dividends.
Passive cooling A building design approach that focuses on heat gain control and heat dissipation in a building in order to improve the indoor thermal comfort with low or no energy consumption.
Percent Nonconforming ChartsA statistical quality control chart used to monitor the proportion of nonconforming units in a sample, where the sample proportion nonconforming is defined as the ratio of the number of nonconforming units to the sample size.
Performance benchmarking Allows the initiator firm to assess their competitive position by comparing products and services with those of target firms.
Performance metric Also called Key Performance Indicators (KPIs). Focuses on how the task is being performed by measuring performance and if individual goals are being achieved. A widely used tool to assist in determining these goals is the balanced scorecard.
Philosophy The study of general and fundamental problems concerning matters such as existence, knowledge, values, reason, mind, and language.
Physical properties Any property that is measurable, whose value describes a state of a physical system. Physical properties are often referred to as observables.
Pick-and-pack Part of a complete supply chain management process that is commonly used in the retail distribution of goods. It entails processing small to large quantities of product, often truck or train loads, and disassembling them, picking the relevant product for each destination and re-packaging with shipping label affixed and invoice included.
Pilot Small-scale campaign, survey, or test-plant commissioned or initiated to check the conditions and operational details before full scale launch.
Pilot testing A small-scale campaign, survey, or test plant commissioned or initiated to check the conditions and operational details before full-scale launch.
Plaster mold casting A metalworking casting process similar to sand casting, except the molding material is Plaster of Paris instead of sand.
Polycarbonates A group of thermoplastic polymers containing carbonate groups in their chemical structures. Polycarbonates used in engineering are strong, tough materials, and some grades are optically transparent.
Polymer A large molecule, or macromolecule composed of many repeated subunits.
PPM – parts per million Concentration by volume of one part of a gas (or vapor), or by weight of a liquid or solid, per million parts of air or liquid.
Pre-alpha testing Testing associated with concept validation. This validation could be customer-discovery-based or could require documented evidence that establishes a high degree of certainty that a particular product or process will consistently meet established criteria for concept success and reliability goals.
Predictable variation Also referred to as expected variation. Processes for which process variation is the result of random causes. The more stable processes produce products that adhere to specifications to a greater degree than those produced by unstable processes. The more variation in measured product characteristics, the less the product adheres to specifications.
Primary package First-level product packaging such as the bottle, can, jar, tube, etc., that contains the item sold. It is the last packaging thrown by the consumer.
Probability The likelihood of the hazard occurring and is ranked on a point scale.
Process benchmarking The initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms. Activity analysis will be required where the objective is to benchmark cost and efficiency; this is increasingly applied to back-office processes where outsourcing may be a consideration.
Process failure modes and effect analysis (PFMEA) A step-by-step approach for identifying all potential failure modes in a manufacturing or assembly process. Analytical technique employed to reasonably ensure that potential causes of process failure, and the associated mechanisms, have been identified and addressed.
Process mean The average of the sample data collected from a process with respect to the quality characteristic in question.
Process planning A plan of how your parts will be produced, what machines to use and in what order to achieve the correct tolerances, etc. It involves strategic decisions and careful analysis with production engineers and expertise in order to plan and adapt the production of every single component.
Process validation The analysis of data gathered throughout the design and manufacturing of a product in order to confirm that the process can reliably output products of a determined standard.
Product Benchmarking The process of designing new products or upgrades to current ones. This process can sometimes involve reverse engineering which is taking apart competitors products to find strengths and weaknesses.
Product hierarchy The decomposition of a product showing the relationship between parts. This is used in conjunction with the BOM, which shows all critical product information, including lists of raw materials, assemblies, components, parts, and the quantities of each needed to manufacture a product.
Product life cycle management (PLM) The succession of strategies by business management as a product goes through its life cycle.
Production The processes and methods used to transform tangible inputs (raw materials, semi-finished goods, sub-assemblies) and intangible inputs (ideas, information, knowledge) into goods or services.
Production ramp-up The start or increase in production ahead of anticipated increases in product demand and also in an effort to confirm all production assumptions.
Prototype An early sample, model, or release of a product built to test a concept or process or to act as a thing to be replicated or learned from.
Pultrusion A continuous process for manufacture of composite materials with constant cross-section.
Purchase order (PO) A commercial document and first official offer issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.

 

Q

Qualification Capacity, knowledge, or skill that matches or suits an occasion, or makes someone eligible for a duty, office, position, privilege, or status.
Quality function deployment (QFD) A tool to translate customer requirements into engineering specifications.

 

R

R-chart Or Range chart. Plots average R value, or R bar to determine the upper control limit.
Radio-frequency identification (RFID) technology Uses electromagnetic fields to automatically identify and track tags attached to objects. The tags contain electronically stored information.
Random failures Defect or failure whose occurrence is unpredictable in an absolute sense, but is predictable in a probabilistic or statistical sense.
Rapid prototyping A group of techniques used to quickly fabricate a scale model of a physical part or assembly using 3D computer-aided design (CAD) data.
Recurring costs Regular cost incurred repeatedly, or for each item produced or each service performed.
Refractory metals A class of metals that are extraordinarily resistant to heat and wear.
Regulation An abstract concept of management of complex systems according to a set of rules and trends.
Reliability block diagram (RBD) A diagrammatic method for showing how component reliability contributes to the success or failure of a complex system.
Renewable fuel standard (RFS) An American federal program that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels.
Research and development (R&D) Refers to innovative activities undertaken by corporations or governments in developing new services or products, or improving existing services or products.
Resin transfer molding (RTM) Resin transfer molding (RTM) is an increasingly common form of molding that uses liquid composites.
Retail price Also known as list price or manufacturer’s suggested retail price (MSRP). The recommended retail price (RRP), or suggested retail price (SRP), of a product is the price at which the manufacturer sells to or recommends sale to the end user.
Return on investment (ROI) The benefit to an investor resulting from an investment of some resource. A high ROI means the investment's gains compare favorably to its cost.
Revenue Total income received through sale of products and services.
Right off-centered process Mean is to the right of the target mean, so the process is likely to produce oversized parts.
Risk priority number (RPN) A numeric assessment of risk assigned to a process, or steps in a process, as part of Failure Modes and Effects Analysis (FMEA), in which a team assigns each failure mode numeric values that quantify likelihood of occurrence, likelihood of detection, and severity of impact.
Root cause An initiating cause of either a condition or a causal chain that leads to an outcome or effect of interest.
Root cause analysis A method of problem-solving used for identifying the root causes of faults or problems.
Routing sheet The map or blueprint of the manufacturing process in a production unit. It provides the exact location of the various processes of the unit. A route sheet determines the sequence or order of arrangement of various departments in a facility.
Rules of origin (ROO) Used to determine the country of origin of a product for purposes of international trade.
Runway The amount of time or money a company can operate in the red, calculated as cash balance divided by burn rate.

 

S

Safety stock Term used by logisticians to describe a level of extra stock that is maintained to mitigate risk of stockouts (shortfall in raw material or packaging) due to uncertainties in supply and demand.
Sales Activity related to selling or the amount of goods or services sold in a given time period.
Sand casting A metal casting process characterized by using sand as the mold material.
Schematic diagram A representation of the elements of a system using abstract, graphic symbols rather than realistic pictures.
Seasonal series Reflects cyclic or seasonal variations in a consistent manner. Time series data can contain trends which may be either linear or exponential or mixed. Smoothing on this data is required to predict the values for forecasting.
Secondary package Package that encloses the primary packaging, such as toothpaste tube in its box.
Sequential sampling Transactions listed in alphabetical order are measured to see if income minus expenses equals a total profit.
Severity Degree of harshness or sternness. "Despite incurring a loss, a company may still generate positive annual profits depending on the severity of the loss.”
Shear A deformation of a material substance in which parallel internal surfaces slide past one another. It is induced by a shear stress in the material.
Shell molding An expendable mold casting process that uses a resin-covered sand to form the mold. As compared to sand casting, this process has better dimensional accuracy, a higher productivity rate, and lower labor requirements.
Shewhart individuals control chart or table Used in statistical quality control. The individual/moving-range chart A type of control chart used to monitor variables data from a business or industrial process for which it is impractical to use rational subgroups.
Simple agreement for future equity (SAFE)Is an agreement between an investor and a company that provides rights to the investor for equity in the company similar to a warrant, except without determining a specific price per share.
Simulation The imitation of the operation of a real-world process or system over time.
Single sampling plan A statistical method by which the lot is accepted or rejected on the basis of one sample. These are the most common (and easiest) plans to use, although not the most efficient, in terms of average number of samples needed.
Six Sigma A set of techniques and tools for process improvement.
SMART (specific, measurable, action-oriented, reasonable, timely) goal A written statement that describes what needs to be done to work toward a specific change, ultimately creating success and improvement. Specific goals are more likely to be achieved than nonspecific goals.
Smart design Involves embedded sensors or firmware/software indicators to reveal when and where failures occur.
Society of Automotive Engineers (SAE) A US-based, globally active professional association and standards-developing organization for engineering professionals in various industries.
Softening A numerical trick used in N-body techniques to prevent numerical divergences when a particle comes too close to another.
Software A part of a computer system that consists of data or computer instructions, in contrast to the physical hardware from which the system is built.
Soldering A process in which two or more items (usually metal) are joined together by melting and putting a filler metal (solder) into the joint, the filler metal having a lower melting point than the adjoining metal.
Specification limit (SL) Boundaries or parameters that define acceptable performance for a process expressed as a target limit as well as an upper and lower limit.
Stainless steel A steel alloy with a minimum of 10.5% chromium content by mass. Stainless steel is notable for its corrosion resistance, and it is widely used for food handling and cutlery among many other applications.
Standard operating procedures (SOP) A set of step-by-step instructions compiled by an organization to help workers carry out complex routine operations.
Stationery series The historical demand data which is randomly scattered about some constant value.
Statistical process control (SPC) A method of quality control which employs statistical methods to monitor and control a process. This helps ensure the process operates efficiently, producing more specification-conforming product with less waste (rework or scrap).
Strategic benchmarking Involves observing how others compete. This type of benchmarking is usually not industry specific, meaning it is best to look at other industries.
Supply chain A system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.
System complexity The number of subsystems and interdependence between subsystems. Complexity is not to your advantage. Review all components within an assembly to determine whether components can be eliminated, combined with another component, or the function can be performed in a simpler way. Designing for fewer part components can reduce costs related to purchasing, stocking, and general infrastructure. Labor and assembly have a compounding effect on the metal fabrication process. The number of components increases the total cost of fabricating and assembly increases. When you can simplify assembly steps within your part or product design, lead times are reduced.

 

T

Target mean An average of lower specification limit (LSL) and upper specification limit (USL) values specified in a bill of process.
Technology The collection of techniques, skills, methods, and processes used in the production of goods or services or in the accomplishment of objectives, such as scientific investigation.
Thermal mass A material's resistance to change in temperature as heat is added or removed, and a key factor in dynamic heat transfer interactions within a building. The four factors to understand are: density, specific heat, thermal capacity, and thermal lag. Density is the mass of a material per unit volume.
Thermal properties The reaction of the material in the presence of heat or cold.
Thermoplastics A plastic material, a polymer, that becomes pliable or moldable above a specific temperature and solidifies upon cooling.
Thermoset A polymer that is irreversibly cured from a soft solid or viscous liquid prepolymer or resin. The process of curing changes the resin into an infusible, insoluble polymer network, and is induced by the action of heat or suitable radiation often under high pressure, or by mixing with a catalyst.
Third party logistics (3PL) In logistics and supply chain management, a company's use of third-party businesses to outsource elements of the company's distribution and fulfillment services.
Tiered supply chain Or multi-tier supply chains. Multiple single-tier collaborations, meaning multiple supplier-buyer-relations, within one supply chain. In practice it is said to have several suppliers but one customer from whose’s point of view a supply chain is derived.
Total cost (TC) Describes the total economic cost of production and is made up of variable costs, which vary according to the quantity of a good produced and include inputs such as labor and raw materials, plus fixed costs, which are independent of the quantity of a good produced and include inputs (capital) that cannot be varied in the short term, such as buildings and machinery.
Total fixed cost (FC) Business expenses that are not dependent on the level of goods or services produced by the business.
Total variable cost (VC) Costs that change in proportion to the good or service that a business produces.
Transportation Packaging Designed to protect goods that are in transit, especially products that are shipped by truck or train. However, the supply chain often includes other modes of transportation as well. Therefore, transport packaging needs to be designed for both the local conditions and the export conditions if the goods are sent from one country to another.
Trend series Historical demand data which exhibits an increasing (or decreasing) trend that can be linear or nonlinear.

 

U

U charts A type of control chart used to monitor "count"-type data where the sample size is greater than one, typically the average number of nonconformities per unit.
US International Trade Administration Commission (USITC) An independent, bipartisan, quasi-judicial federal agency of the United States that provides trade expertise to both the legislative and executive branches.
Unexpected variation Falls outside the upper and lower acceptable limits established for a product specification, which can lead to product discard or salvage. Therefore, a key manufacturing performance objective is the establishment of stable and predictable processes that limits variation to what can be described as random, minimum variation around target values.
Unit load Combines individual items or items in shipping containers into single "units" that can be moved easily with a pallet jack or forklift truck. 
Universal product code (UPC) A barcode symbology that is widely used in the United States, Canada, United Kingdom, Australia, New Zealand, in Europe and other countries for tracking trade items in stores. UPC (technically refers to UPC-A) consists of 12 numeric digits, that are uniquely assigned to each trade item.
Upper control limit (UCL) A value that indicates the highest level of quality acceptable for a product or service. The upper control limit is used in conjunction with the lower control limit to create the range of variability for quality specifications, enabling those within the organization to provide an optimal level of excellence by adhering to the established guidelines.
Upper specification limit (USL) A value that represents the highest range of a variable. The upper specification limit is the benchmark below which a product or service performs.

 

V

Vacuum assisted resin transfer molding (VARTM) A closed mold, out of autoclave (OOA) composite manufacturing process.
Value chain A set of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market.
Value for money (VFM) A utility derived from every purchase or every sum of money spent. Value for money is based not only on the minimum purchase price (economy) but also on the maximum efficiency and effectiveness of the purchase.
Variable cost (VC) Costs that change in proportion to the good or service that a business produces.
Variable Data Data, such as length or pressure, in a time-ordered sequence. In contrast, attribute control charts plot count data, such as the number of defects or defective units.
Venture capital (VC) A type of private equity and a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential, or which have demonstrated high growth (in terms of number of employees, annual revenue, or both).
Venture capitalist (VC) Firms look to buy a minority stake in your business. They offer unsecured finance, management expertise, increased credibility and business contacts. You have to give up part of your business and the VCs will expect to place a member on your board.
Voice of the customer A term used in business and information technology (through ITIL, for example) to describe the in-depth process of capturing customer's expectations, preferences, and aversions.

 

W

Warehouse management system (WMS) A software application designed to support and optimize warehouse or distribution center management.
Wear out failures Identified when failure is no longer random and greater than specified acceptability, usually caused by stress exceeding strength. Wear out failures are characterized by an increasing failure rate with failures that are caused by the "wear and tear" on the product over time.
Wholesale price The price at which your company sells the product.
Work in process (WIP) A company's partially finished goods waiting for completion and eventual sale or the value of these items. These items are either just being fabricated or waiting for further processing in a queue or a buffer storage. The term is used in production and supply chain management.
Working capital Product-related assets and liabilities.
Working capital cycle Time it takes to turn product assets and liabilities into cash.

 

X

X and R chart A type of control chart used to monitor variables data when samples are collected at regular intervals from a business or industrial process.
X-bar chart A type of Shewhart control chart that is used to monitor the arithmetic means of successive samples of constant size, n. This type of control chart is used for characteristics that can be measured on a continuous scale, such as weight, temperature, thickness, etc.

 

Y

Yield strengths Also known as tensile strength. Refers to the maximum amount of stress a material can withstand while being stretched or pulled without breaking. It is measured as a force per unit area—the unit being a pascal (Pa)/megapascal(MPa), a newton per square meter (N/m2), or pounds-force per square inch (psi).
Young's modulus Also known as the elastic modulus. A measure of the stiffness of a solid material.