Glossary

1) Response Time:
It is the time taken for the vendor to start providing the service to the
customer from the time the request for the service was raised.
2) Safety stock or Buffer stock:
It is a certain amount of the stock of material that is always
maintained for emergency usage. When the available stock quantity
falls below the safety stock level, the stock is replenished.
3) Re-order point:
When the available stock falls below a certain quantity, the available
stock is replenished with fresh stock. That certain quantity is called
Re-order point. The Re-order point level is always higher than the
safety stock level.
4) Scrap:
Materials that are found to be defective and cannot be reworked
and/or the waste materials after the manufacturing of a product is
called scrap.
5) Setup time:
The time taken for setting up a machine for working on a job is called
setup time
6) Six Sigma:
It is the technique implemented to improve the quality of the
products. By using six sigma we can attain a failure of just 3.4 parts
per million. It was developed by Motorola.
7) Taguchi methods:
Taguchi is the name of the scientist born in Geneva who formulated
certain techniques to optimize the manufacturing processes. There
are several softwares available to implement these optimization
methods.

8) ATO:
ATO stands for Assemble to Order which means that a product is
broken down into simpler modules at the time of manufacturing and is
assembled into a single product when the customer places the order.
9) MTO
MTO stands for Make To Order which means that a product is only
made when the order is placed by the customer. Pull strategy is used
at the time of production. Eg. automobiles
10)

MTS
Make To Stock is a manufacturing strategy where the products are
manufactured based on the forecasted demand. Push strategy is used
at the time of production. Eg. FMCG

11)

JIT:
Just In Time is a philosophy developed by Toyota. It literally has no
waiting time. The product is delivered the instant the order is made.

12)

Kaizen:
Kaizen means gradual improvement in Japanese. As the name
suggests it is a continuous and gradual improvement process.

13)

Work In Process:
Materials which are still under production or which are being on
worked on is called work in Process.

14)

Vendor Managed Inventory(VMI)

In VMI the vendor holds responsibility for the replenishment of the
goods and services.

15)

Stock Keeping Units(SKU):

An SKU is a container or a palette for placing the stock in it. It is used
for the identification of a certain material.

16)

ERP:
Enterprise Resource Planning is the integration of various departments
in an organization.

17)

Standard Time:

It is the average time taken for the production of a product including

allowances such a tea break, bathroom breaks, etc
18)

Preventive maintenance:
Maintenance done before a machine breaks down is called preventive
maintenance.

19)

Breakdown Maintenance:
Maintenance done after the machine breaks down is called breakdown
maintenance.

20)

Process Capability:
The stability of a manufacturing process to adhere to specified
dimensions with the permitted tolerance or variation.

21)

Critical Path Method:

It is used to find the critical path which is the longest path in a project
planning.

22)

Cycle time:
It is the time taken to convert raw material into a finished product.

23)

Principle of Amalgamation:
It is the process of combining one or more simpler parts to form a
complex part.

24)

Principle of Separation:
It is the process for separation or breaking down of a complex part
into much simpler modules.

25)

Consignment Stock:
It is the inventory held by the customer but owned by the vendor. The
customer has to pay the vendor only when a product from the
inventory is sold or consumed by the customer.

26)

Core Competence:
It is the ones unique feature that differentiates them for their
competitors.

27)

Scheduling:
It is the process of coming out with a delivery date

28)

Forward scheduling:
This is a scheduling process wherein the delivery date is obtained
based on the raw material available date.

29)

Backward Scheduling:
This is a scheduling process wherein the raw material available date is
calculated based on the customer requested delivery date.

30)

Mean time Between failure:

The average time a machine is expected to operate without breaking
down.

31)

Mean Time To Repair:

The average time taken to fix the machine and get it running.