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ERP/supply chain education
need to define a term that's not here? ask us
T
Taguchi Method- The analysis of quality problems
developed by Genichi Taguchi that involves removing variability and
the effects of causes instead of the cause, and focuses on robust
process and product design and the identification of after-sales
costs.
takt time-
Based on the German word that indicates pace, the rate or pace of
production as matched to the pace of customer sales. Used in
lean
manufacturing to align production time in linked manufacturing
processes.
target
date- A projected start or finish date for a project task.
target
pricing-
Establishing a sales price based on market penetration or price
points rather than building from standard cost.
task-
syn: activity.
teardown-
The activities required to remove tooling and preset parameters
used for the last production run that must occur before setup for the
next run can start.
theoretical capacity- The maximum output a given resource could
generate if operated full-time and the optimal production rate was
met.
theory
of constraints (TOC)- Originally developed by Dr. Eliyahu Goldratt
and published in his book The Goal, and based on the theory that a
system has a single goal, and that systems are composed of multiple
linked activities, one of which acts as a constraint on the whole
system. It places emphasis on methods to achieve the primary business
goal of making money through increasing throughput and reducing
inventory and operating expenses, ways to synchronize the production
pace of linked activities and ensure continued operation of the system
constraint, and the use of thinking processes to identify problems and
propose alternatives.
third party logistics
provider (3PL)- An outsourced provider that manages all or a
significant part of an organization's logistics requirements and
performs transportation, locating and sometimes product consolidation
activities.
throughput- 1) The
volume of output generated by a resource in a specific period of
time. 2) In the
theory of constraints, the rate at which a system
generates money.
tier 1, 2 supplier- A tier 1 supplier is the immediate or
primary set of vendors directly used by a company, and tier 2 is a
vendor to tier 1. In some industries the final customers or dominant
chain partners are consolidating (reducing) their
number of tier 1 suppliers, and requiring proof of the communications
and fulfillment capabilities between tier 1 and tier 2.
time
and attendance- Systems used to collect actual employee labor
hours and absence data, and provide input for payroll generation.
time-based
competition- A corporate strategy that has identified a focus on
time as providing a competitive edge due to its value by the customer.
It may assume no advantage in product or quality characteristics while
focusing on the reduction of variability and total design, production
and delivery lead time.
time
fence- A specific date used as a boundary for policy changes in a
planning or other system. A policy that seeks to stabilize the
master
production schedule may prohibit changes to the existing schedule
inside the time fence (which is based on lead time) and allow changes
under certain circumstances after that date. Another example is the
reaction to demand based on customer orders only inside the lead time
fence, and based on forecast thereafter.
timeliness-
The characteristic of a measurement reported in real time or
shortly after the events it measures. A timely measurement can be used
for preventive or corrective action, as opposed to a measurement that
may be accurate but only serves as a status report due to the time lag
between the events and the report.
time
phased order point (TPOP)- A reorder system that determines the
timing and quantity of suggested reorders based on a specified order
point and forecasted demand for a designated item, and not by
exploding
the bill of material. It generates multiple suggested orders as
required, as opposed to an order point system that suggests a single
reorder, and is typically used for independent demand items.
time
series- A data distribution that represents the consecutive changes in values
over a period of time.
timesheet-
A document or entry program used to record actual labor time
against an order or project, that may also specify the operation,
location and category or type of task being performed.
time
stamp- The record of the exact date and time a transaction
occurred.
time-to-market-
The cycle time between product conception and fulfillment.
Reduction in time-to-market is a significant competitive advantage in
industries with short product life cycles.
tolerance
level- An allowable variation from a predefined standard. A
variance is not considered
significant unless it exceeds the limit set
by a tolerance level.
toll manufacturing-
A version of contract manufacturing sometimes used in the
pharmaceutical and specialty chemical industries in which production
of specific batches are outsourced to
GMP-certified
third parties. Ingredients are usually supplied by the originating
company in order to control sourcing quality.
tool crib- A
specific area dedicated to the storage of tooling items, which
typically does not include production components. Locator and
limited-physical access systems are often useful based on the amount
of tooling stored.
tooling-
The tools and support devices required to setup and position
equipment for a production run, which may be consumed during that run
or remain available for additional jobs. Requirements for unique or specialized
tools are scheduled through their addition to the bill of materials
(while excluded from product cost) or by other methods to ensure their
availability for a specific order.
top-down
planning- The process of beginning with an aggregate volume,
budget or forecast and dividing the total by assigning values to
individual units within the group based on estimates or historical
averages.
top
level (item)- An end item not used as a component or
child of
other items.
total
cost of ownership (TCO)- The life cycle cost view of an asset,
which includes acquisition, setup, support, ongoing maintenance,
service and all operating expenses. It focuses attention on the sum of
all costs of owning an asset, as opposed to the initial or vendor
cost, and is useful in outsourcing decisions.
total
quality control (TQC)- The comprehensive set of principles that
focuses company-wide attention on the aspects of design, production
and logistics that lead to quality conformance and customer
acceptance. It maintains a cross- functional view of the processes
involved, and stresses that quality is not the responsibility of a
separate quality control department.
Toyota
production system- A combination of techniques developed at the
Toyota Motor Company that focus on setup, lead time and lot size
reduction and systematic ways to improve quality.
tracking signal-
An accuracy measure that combines average forecast error with
bias, as defined as the ration of the exponentially smoothed error and
the exponentially smoothed mean absolute deviation. When the tracking
signal exceeds a certain value, the forecast error may considered to
be nonrandom and the forecast no longer usable.
trade
allowance-
The allowance or refund given by a manufacturer to a retailer or
distributor who participates in a sponsored advertising or promotion
campaign.
trade program- A government or
international organization program that specifies duties, tariffs,
documentation and other conditions for countries doing business within
the program. Trade programs are often designed to spur business for
companies and countries inside the program, at the exclusion or
penalty to outside companies. Consideration of established and
proposed trade programs are critical in evaluating sourcing, facility
locations and other factors.
trading exchange- An
internet site or sites that conduct sourcing, pricing, delivery and
other operations on a business-to-business (B2B) basis. Exchanges are
often classifies as private, which link two or more specific companies
and do not communicate with a larger group, or public, which provide
for a sourcing and bid process for any company that has joined the
exchange.
trading partner- A
supply chain vendor or customer that does business with a given
organization and normally has linked communications.
traffic
management- The process of determining timely and economic
delivery methods, arranging internal or external transportation, and
tracking shipment status and logistics network issues.
transfer pricing- Prices
used in the transfer of materials between units of the same company,
often at standard cost or standard plus transportation costs. Used
when transfers are not considered sales and purchases that generate
receivables and payables.
transient item- syn:
phantom.
transition tree- A
cause and effect diagram used in the
theory of constraints to
identify and construct the logic and sequence of actions required to
reach intermediate and ultimate objectives.
traveler- A
document used to tag and accompany material as it moves through
receiving dispositions or production operations and work centers, that
identifies the items, quantities and order number involved.
trend analysis-
The analysis of data that exhibits an ongoing upward or downward
pattern that is not due to seasonality or random noise. Analyzing
trends is useful in detecting patterns that could lead to future
quality problems, and in forecasting future demand periods.
TRIZ- The Russian
acronym for Theory of Inventive Problem Solving, a technique that
attempts to define a specific problem as a system and identify
elements in the system that need correction to reach the desired
solution.
turnaround time- The
lead time an operation or process takes to process an input and return
the output to the original source, such as documents submitted to a
department that returns them after entry or approval, or dry
cleaning.
turnkey- A system
designed to be fully operational at purchase or implementation time
and not require additional modification or investment.
turnover- syn:
inventory turnover.
two bin inventory
system- An inventory system that uses two bins (or the logical
equivalent, based on usage over lead time) to hold inventory.
Requirements are taken from an initial single bin; when that bin is
empty a reorder is placed and requirements are taken from the second
bin.
type I error- The
incorrect rejection of a true hypothesis.
type II error- The
failure to reject a false hypothesis.
U
undesirable effect (UDE)-
In the theory of constraints, a current state or reality that
negatively impacts reaching an objective or goal.
unfavorable variance- A
variance created by using or spending more of a given resource than
specified by the standard, often categorized as rate (spending more
per hour for labor for a given amount of production), efficiency
(using more hours for a given amount of production), usage (using more
material for a given amount of production) or price (paying more to a
vendor for a given purchased item).
unit cost- The total of
material, labor and overhead costs allocated to a single
unit and used in inventory valuation, and margin and variance
analysis.
unit of measure- The
base unit by which an item is normally stocked, costed and ordered.
Planning and costing systems must translate vendor or customer orders
based on alternate measures into a common unit for consistency.
unit of measure
conversion- A transaction or report for a specific product that
translates its value from one unit of measure into another, as in the
conversion of cases specified on a customer order into the planning
and stocking measure of units or eaches.
unit
test- A test
used to verify the acceptable functionality of a single program,
operation or process that does not also test the impact and
integration points with other programs or operations.
univariate- A
process or mathematical expression with only one variable.
Universal Product Code
(UPC)- A numeric code used to identify a specific product,
normally composed of a six digit code that identifies the
manufacturer, a six digit code used by the manufacturer to identify
the product, and a two digit check code.
unplanned issue- Issues
to
production orders not originally specified on the pick slip that
indicate usage variances, bill of material errors or process
changes.
upper control limit (UCL)-
The measurement point above the centerline in a process control
chart or report that indicates an out-of-bounds condition or a warning
signal.
usage-based pricing- Pricing
a service or item based on its consumption or usage, rather than a
flat rate for a given service or period of time.
usage variance- Actual
material usage for a given order or schedule that is different than
the standard amount. Variance analysis seeks to isolate dollar
variances due to usage (using more or less of the correct material)
from substitution (using different material than originally
intended).
user signoff- The
formal acceptance of a new process, system or program by the
appropriate end user.
utilization- The
measurement of actual hours as compared to scheduled or available
hours. The downtime that represents the difference is often
categorized by material shortage, equipment failure or other
cause.
V
valuation- The
assignment of dollars to units, as in multiplying on-hand inventory
quantities by the standard cost, or open customer order units by list
price.
value added- A
process or operation that increases the worth of a good or service as
perceived by the internal or external customer, as opposed to an
operation that may simply incur costs due to the performance of an
activity. ex.-in processing metal coils, stamping the part out of the coil
into the form required by the customer adds value; moving the coil
from the warehouse to where it is processed does not.
value added tax (VAT)-
A general consumption tax for the production and distribution of
goods and services, added as a percentage charge based on price that
reflects the incremental value added by a given activity.
value analysis- The
organized use of methodologies that focus on the function of a
material, process or service in providing value to the customer. It
attempts to define cost, quality and customer acceptance parameters in
determining the value and possible redesign or reengineering of a
given function.
value chain- The
linked set of activities within a supply chain that actively add value
to the end product, as opposed to support or reporting
activities.
value engineering-
An organized methodology that identifies and selects the lowest
lifecycle cost options in design, materials and processes that
achieves the desired level of performance, reliability and customer
satisfaction. It seeks to eliminate unnecessary costs in the above
areas and is often a joint effort with cross-functional internal teams
and relevant suppliers.
value stream mapping-
A technique used in
lean
manufacturing that maps the flow of material and data, and
associated time requirements. from initial supplier to end customer
for a given business process. Used to define improvement areas and
sources of waste.
variability- The
characteristic of a product or process in which parameters fluctuate
to a significant degree but do not typically trend in a specific
direction. Reduction of variability is a priority in systems that
attempt to ensure consistent quality and reduce lead times.
variable control chart-
A chart presenting actual data from quality tests that shows the range, upper and lower limits, and deviation
characteristics of a set of observations.
variable cost-
A cost for material, labor or overhead that changes in a traceable
and measurable way due to changes in the volume of production units or
operating hours in a given period.
variable lead time- Lead time for
a manufactured or purchased item that varies due to changes in
quantity or process constraints.
variable length- 1)
A field whose size varies based on the amount of data in the field 2)
A lead time that varies based on quantity or other parameter.
variable overhead- Overhead
costs that change as a result of changes in production volume, but can
not be directly traced to a given product or line. Ex.- utility costs
that increase for a given facility in proportion to increased overall
levels of production.
variance- The
difference between a standard or expected value and the actual result,
and often characterized as favorable or unfavorable.
velocity costing- An
overhead allocation method based on overall
cycle time
as opposed to
volume or number of units. It focuses on time as a factor in
competition, and the consumption of resources of all types as time
passes.
vendor- An
external supplier of goods or services.
vendor certification- The
verification of vendor processes, delivery cycle and quality levels
that allow that supplier to be categorized as an acceptable provider
of a specific material or service, as determined by the customer. It
may include the pre-certification of parts shipped as having
acceptable quality and the elimination of incoming inspection when
received.
vendor-managed
inventory (VMI)- An inventory planning and fulfillment technique
in which a supplier is responsible for monitoring and restocking customer
inventory at the appropriate time to maintain predefined levels. The
vendor is given access to current customer inventory, forecast and
sales order information and initiates replenishment as required.
vendor restocking- A
version of vendor-managed inventory (VMI) where the supplier
physically restocks required parts at the production point.
vendor
scheduling- The
sharing of internal schedules, often as generated by MRP, for
specified items with a vendor, instead of placing individual purchase
orders as required. A vendor schedule is often divided into zones,
such as a firm commitment zone in which the customer will pay for any
vendor production against that schedule, an information zone which
projects requirements that authorize the vendor to purchase raw
material but not add labor, and an information zone that gives
forecasted long-term requirements but does not make a
commitment.
vertical format- A
display method used for
MRP or other output reports in which dates are
sequenced along the left margin and horizontal headings are used for
gross requirements, scheduled receipts and other information. A
vertical format normally only displays data for individual days where
activity occurs, and does not group days into time buckets of weeks or
months as in the use of a horizontal format.
visibility- The
degree of insight into future requirements, or the key factors that
will impact system performance.
visual inspection- Human
inspection of items or processes for color, scratches or other parameters that does
not involve the use of equipment.
visualization tool- A
training or measurement tool that provides a graphic display of data
or concepts to increase understanding.
voice of the customer
(VOC)- In
six sigma and
other quality improvement programs, the identification and
prioritization of true customer needs and requirements through the use
of focus groups, interviews and other methods.
volume flexibility- The
ability of a process to handle large variations in volume without
significant changes in time or facility requirements.
volume test- The
verification that a new system or program will adequately process
expected transaction volumes while providing acceptable response time.
Volume tests of batch programs are required to estimate nightly and
weekend runs and determine system availability.
voucher number- An
internal number assigned in accounts payable to track and reference
one or more invoices.
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Glossary
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