GLOSSARYProduction GLOSSARYActivity-Based Costing—A management accounting system that assigns costs to products based on the amount of resources used (including floor space, raw materials, machine hours, and human effort) in order to design, order or make a product. Contrast with standard costing.Aggregate Planning (Aggregate Scheduling)—An approach to determine quantity and timing of production for the intermediate future; usually 3 to 18 months.Alliances—Cooperative agreements that allow firms to remain independent, but that pursue strategies consistent with their individual missions.Andon—Call light that signals problems.Andon Board—A visual control device in a production area, typically a lighted overhead display, giving the current status of the production system and alerting team members to emerging problems.Assembly Chart—A graphical means ofidentifying how components flow into subassemblies and ultimately into a finalproduct.Assembly Drawing—An exploded viewof the product, usually via a three-dimensional or isometric drawing.Assembly line—An approach that puts fabricated parts together at a series of workstations; used in repetitive processes.Attribute Inspection—An inspection that classifies items as being either good or defective.Automated Guided Vehicle (AVG)—Electronically guided and controlled cart used to move materials.Autonomation—Transferring human intelligence to automated machinery so machines are able to detect the production of a single defective part andimmediately stop themselves and ask for help. This concept, also known as jidoka, was pioneered by Sakichi Toyoda at the turn of the twentieth century when he invented automatic looms that stopped instantly when any thread broke. This permitted one operator to oversee many machines with no risk of producing vast amounts of defective cloth.Average Observed Cycle Time—The arithmetic mean of the times for each element measured, adjusted for unusualinfluence for each element.Back Flush—A system to reduce inventory balances by deducting everything in the bill of material on completion of the unit.WEC 07/06 IET 498 1Backlog—Orders in process for goods and services.Backward Scheduling—Scheduling that begins with the due date and schedules the final operation first and the other job steps in reverse order.Batch-and-Queue—The mass production practice of making large lots of a part and then sending the batch to wait in the queue before the next operation in the production process. Contrast with single piece flow.Benchmarking—benchmarking involves comparing aspects of an organization’s performance with others (if possible this will be with what are regarded as best in class). Using this information, areas are identified that require improvement. Sometimes the comparisons will just be with one other organization or more frequently will be part of a group of organizations (benchmarking group) who will agree to participate jointly in such an exercise. Bill of Materials (BOM)—A listing of thecomponents, their description, and the quantity of each required to make one unit of product.Blanket Order—A long term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship.Bottleneck—An operation that limits output in the production sequence.Breakdown Maintenance—Remedial maintenance that occurs when equipment fails and must be repaired onan emergency or priority basis.Break-Even Analysis—A means of finding the point in dollars and units at which costs equal revenues.Brownfield—An established design or production facility operating with mass-production methods and systems of social organization. Contrast with Greenfield.Buckets—Time units in a material requirements planning system (MRP).Bucketless System—Time-phased data are referenced using dated recordsrather than defined time periods, or buckets.Business Planning—Is the comprehensive planning for the whole ofthe business and involves defining the overall objectives for the organization, and all the actions that must be adoptedin order that those objectives are achieved. Capacity—The “throughput” or number of units a facility can hold, receive, storeor produce in a period of time.Cause-and-Effect Diagram—A schematic technique used to discover possible locations of quality problems.Cells—The layout of machines of different types performing different operations in a tight sequence, typically in a U-shape, to permit single-piece flowand flexible deployment of human effort by means of multi-machine working. Contrast with process villages.Chaku-Chuka—A method of conductingsingle piece flow in which the operator proceeds from machine to machine, WEC 07/06 IET 498 2taking the part just removed from that machine and loading it in the following machine, etcetera. Literally means “load-load” in Japanese.Changeover—The installation of anew type of tool in a metal working machine, a different paint in a painting system, a new plastic resin and new mold in an injection molding machine, new softwarein a computer, and so on. The term applies whenever a production device isassigned to perform a different operation.Closed-Loop MRP System—A system that provides feedback to the capacity plan, master production schedule, and production plan so planning can be kept valid at all times.Clustering—The location of competing companies near each other, often because of a critical mass of information, talent, venture capital, or natural resources.Competitive Advantage—The creation of a unique advantage over competitors.Computer-Aided-Design (CAD)—Interactive use of a computer to developand document a product.Computer-Aided-Manufacturing (CAM)—The use of information technology to control machinery.Computer Integrated Manufacturing —A manufacturing system in which CAD, FMS, inventory control, warehousing, and shipping are integrated.Control Charts—Graphic representations of process data over time with predetermined control limits.Concurrent Engineering—Use of participating teams in design and engineering activities.Consignment Inventory—An arrangement in which the supplier maintains title to the inventory until it is used.Continuous Improvement—Continuous improvement, often known as Kaizen, is essentially a small step improvement strategy. It is based on a belief that continual improvement can bebrought about by a continuing series of small changes. Even if there