A production area consisting of one or more machines (and, if appropriate for capacity planning, the necessary support personnel) that can be considered as one unit for capacity requirements planning and detailed scheduling.
The amount of time, in hours, that a machine is actually running. Machine hours, rather than labor hours, may be used for planning capacity for scheduling, and for allocating costs.
A production environment where a specific machine limits throughput of the process. See: constraint, throughput.
The accumulation by workstation, machine, or machine group of the hours generated from the scheduling of operations for released orders by time period. Machine loading differs from capacity requirements planning in that it does not use the planned orders from MRP but operates solely from released orders. It may be of limited value because of its limited visibility of resources.
A partial productivity measure. The rate of output of a machine per unit of time compared with an established standard or rate of output. Machine productivity can be expressed as output per unit of time or output per machine hour. See: labor productivity, productivity.
A measure of how intensively a machine is being used. Machine utilization compares the actual machine time (setup and run time) to available time.
A machine capable of performing a variety of metal, wood, or plastic removal operations on a part, usually operated by numerical control.
The environment external to a business including technological, economic, natural, and regulatory forces that marketing efforts cannot control.
Acronym for mean absolute deviation.
Large computer system, typically with a separate central processing unit. This high-level computer is designed for the most intensive computational tasks.
The characteristic of equipment design and installation that provides the ability for the equipment to be repaired easily and efficiently. See: serviceability.
Maintenance, repair, and operating supplies (MRO)
Items used in support of general operations and maintenance such as maintenance supplies, spare parts, and consumables used in the manufacturing process and supporting operations.
Maintenance, repair, and overhaul (MRO)
An item for reprocessing in the remanufacturing industry.
The equipment setup and related activities required to manufacture a group of items in sequence, exclusive of the setup required for each item in the group.
Make-or-buy cost analysis
A comparison of all of the costs associated with making an item versus the cost of buying the item.
The act of deciding whether to produce an item internally or buy it from an outside supplier. Factors to consider in the decision include costs, capacity availability, proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing.
A production environment where a good or service can be made after receipt of a customer’s order. The final product is usually a combination of standard items and items custom-designed to meet the special needs of the customer. Where options or accessories are stocked before customer orders arrive, the term assemble-to-order is frequently used. See: assemble-to-order, make-to-stock.
A production environment where products can be and usually are finished before receipt of a customer order. Customer orders are typically filled from existing stocks, and production orders are used to replenish those stocks. See: assemble-to-order, make-to-order.
Malcolm Baldrige National Quality Award
An award established by Congress in 1987 to raise awareness of quality management and to recognize U.S. companies that have implemented successful quality management systems. Up to four awards may be given annually in each of three categories: manufacturing company, service company, and small business. The award is named after the late Secretary of Commerce Malcolm Baldrige, a proponent of quality management. The U.S. Commerce Department’s National Institute of Standards and Technology manages the award and the American Society for Quality (ASQ) administers it. Syn: Baldrige Award.
The functions of planning, organizing, and controlling the transformation process and its utility in providing a good or service to customers.
Management by objectives (MBO)
A participative goal-setting process that enables the manager or supervisor to construct and communicate the goals of the department to each subordinate. At the same time, the subordinate is able to formulate personal goals and influence the department’s goals.
Management by walking around (MBWA)
The management technique of managers touring a facility on a regular basis to talk with workers and staff about problems, trends, and potential solutions.
A judgmental forecasting technique whereby responsible individuals predict the demand for new products or alter a quantitative forecast for existing products largely on the basis of experience and intuition. Other judgmental forecasting techniques may be used in combination with management estimation to improve the accuracy of the estimate. See: Delphi method, historical analogy, panel consensus, pyramid forecasting.
Management information system (MIS)
Integrated approach for providing interpreted and relevant data that can help managers make decisions. This information can reflect the progress or lack of progress made in achieving major objectives.
Syn: operations research.
A branch of accounting that uses techniques such as break-even analysis, cost-volume-profit analysis, make-buy analysis, and others to provide information used in day-to-day decision making.
A unit of measure representing one person working for one hour. The combination of “n” people working for “h” hours produces nh man-hours. Frequent qualifications to the definition include (1) designation of work effort as normal effort; (2) designation of time spent as actual hours.
A production control system where the exact sequence of items to be assembled is required.
The most common method of rescheduling open orders (scheduled receipts). Under this method, the MRP system provides information on the part numbers and order numbers that need to be rescheduled. Due dates and order quantity changes required are then analyzed and changed by material planners or other authorized persons. Syn: planner intervention. Ant: automatic rescheduling.
A measure of the design of a product or process in terms of its ability to be produced easily, consistently, and with high quality.
Syn: manufacturer’s representative.
One who sells goods for several firms but does not take title to them. Syn: manufacturer’s agent, manufacturing representative.
A series of interrelated activities and operations involving the design, material selection, planning, production, quality assurance, management, and marketing of discrete consumer and durable goods.
Syn: manufacturing order.
Manufacturing automation protocol (MAP)
An application-specific protocol based on the International Standards Organization’s open systems interconnection (OSI) standards. It is designed to allow communication between a company’s computers and computers from different vendors in the manufacturing shop floor environment.
A calendar used in inventory and production planning functions that consecutively numbers only the working days so that the component and work order scheduling may be done based on the actual number of workdays available. Syn: M-day calendar, planning calendar, production calendar, shop calendar.
Syn: manufacturing lead time.
Manufacturing cycle efficiency
The ratio of value-added time to manufacturing lead time or cycle time. Manufacturing cycle time can be improved by the reduction of manufacturing lead time by eliminating non-value-added activities such as inspecting, moving, and queuing.
Manufacturing data sheet
The engineering discipline concerned with designing and improving production processes. See: process engineering.
The framework in which manufacturing strategy is developed and implemented. Elements of the manufacturing environment include external environmental forces, corporate strategy, business unit strategy, other functional strategies (marketing, engineering, finance, etc.), product selection, product/process design, product/process technology, and management competencies. Often refers to whether a company, plant, product, or service is make-to-stock, make-to-order, or assemble-to-order. Syn: production environment.
Manufacturing execution systems (MES)
Programs and systems that participate in shop floor control, including programmed logic controllers and process control computers for direct and supervisory control of manufacturing equipment; process information systems that gather historical performance information, then generate reports; graphical displays; and alarms that inform operations personnel what is going on in the plant currently and a very short history into the past. Quality control information is also gathered and a laboratory information management system may be part of this configuration to tie process conditions to the quality data that are generated. Thereby, cause-and-effect relationships can be determined. The quality data at times affect the control parameters that are used to meet product specifications either dynamically or off line.
A set of detailed instructions for carrying out a manufacturing process. It is usually referenced by the routing and thus can simplify the content of the routing.
Manufacturing layout strategies
An element of manufacturing strategy. It is the analysis of physical capacity, geography, functional needs, corporate philosophy, and product-market/process focus to systematically respond to required facility changes driven by organizational, strategic, and environmental considerations.
Manufacturing lead time
The total time required to manufacture an item, exclusive of lower level purchasing lead time. For make-to-order products, it is the length of time between the release of an order to the production process and shipment to the final customer. For make-to-stock products, it is the length of time between the release of an order to the production process and receipt into inventory. Included here are order preparation time, queue time, setup time, run time, move time, inspection time, and put-away time. Syn: manufacturing cycle, production cycle, production lead time. See: lead time.
A document, group of documents, or schedule conveying authority for the manufacture of specified parts or products in specified quantities. Syn: job order, manufacturing authorization, production order, production release, run order, shop order. , work order. See: assembly parts list, batch card, blend order, fabrication order, mix ticket, work order.
Manufacturing order reporting
Syn: production reporting and status control.
The set of guiding principles, driving forces, and ingrained attitudes that helps communicate goals, plans, and policies to all employees and that is reinforced through conscious and subconscious behavior within the manufacturing organization.
Manufacturing planning and control system (MPC)
A closed-loop information system that includes the planning functions of production planning (sales and operations planning), master production scheduling, material requirements planning, and capacity requirements planning. Once the plan has been accepted as realistic, execution begins. The execution functions include input-output control, detailed scheduling, dispatching, anticipated delay reports (department and supplier), and supplier scheduling. A closed-loop MRP system is one example of a manufacturing planning and control system.
The series of operations performed upon material to convert it from the raw material or a semifinished state to a state of further completion. Manufacturing processes can be arranged in a process layout, product layout, cellular layout, or fixed-position layout. Manufacturing processes can be planned to support make-to-stock, make-to-order, assemble-to-order, etc., based on the strategic use and placement of inventories. See: production process, transformation process.
Manufacturing process development
The definition and implementation of an execution system for making a part, good, or service that is consistent with the objectives of the firm.
Manufacturing progress curve
Syn: learning curve.
The final phase of new product and process development, whereby the new product moves from pilot production to full-scale manufacturing.
The issuance of a manufacturing order into the factory.
Syn: manufacturer’s representative.
Manufacturing resource planning (MRP II)
A method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning in dollars, and has a simulation capability to answer what-if questions. It is made up of a variety of processes, each linked together: business planning, production planning (sales and operations planning), master production scheduling, material requirements planning, capacity requirements planning, and the execution support systems for capacity and material. Output from these systems is integrated with financial reports such as the business plan, purchase commitment report, shipping budget, and inventory projections in dollars. Manufacturing resource planning is a direct outgrowth and extension of closed-loop MRP.
A collective pattern of decisions that acts upon the formulation and deployment of manufacturing resources. To be most effective, the manufacturing strategy should act in support of the overall strategic direction of the business and provide for competitive advantages (edges).
Manufacturing volume strategy
An element of manufacturing strategy that includes a series of assumptions and predictions about long-term market, technology, and competitive behavior in the following areas: (1) the predicted growth and variability of demand, (2) the costs of building and operating different sized plants, (3) the rate and direction of technological improvement, (4) the likely behavior of competitors, and (5) the anticipated impact of international competitors, markets, and sources of supply. It is the sequence of specific volume decisions over time that determines an organization’s long-term manufacturing volume strategy.
Communication that enables many people to exchange information with many other people.
Acronym for manufacturing automation protocol.
1) A procedure for equipment replacement analysis sponsored by the Machinery and Allied Products Institute. 2) A method of capital investment analysis that has been formulated by the Machinery and Allied Products Institute. This method uses a fixed format and provides charts and graphs to facilitate calculations. A prominent feature of this method is that it explicitly includes obsolescence.
A ratio of an organization’s operating profit to revenues, measuring management’s ability to control operating expenses.
A decision rule that optimality occurs where incremental revenue equals incremental cost.
The incremental costs incurred when the level of output of some operation or process is increased by one unit.
Marginal cost of capital
The cost of the next dollar, after taxes, that a firm expects to raise for investment.
Pricing products at a markup over the marginal cost of producing the next item. Marginal costs generally include the variable cost of producing and selling an additional item.
In economics, the additional quantity of total output following from a one-unit increase in variable input. See: law of diminishing marginal returns.
The incremental sales dollars received when the level of output of some operation is increased by one unit.
The additional usefulness and enjoyment received from consuming one more unit of a good or service.
A set of buyers and sellers exchanging products. Prices tend to equalize through ongoing exchanges between buyers and sellers. Markets include institutional markets, government markets, industrial markets, and consumer markets. See: consumer market, government market, industrial market, institutional market.
The boundary where the laid-down cost for two companies is equal. Laid-down cost is product cost plus unit transportation cost.
In marketing, the total demand that would exist within a defined customer group in a given geographical area during a particular time period given a known marketing program.
Responding to customers’ needs.
Scheduling or holding an inventory quantity greater than the expected demand because of expected inaccuracy or volatility in the forecasted demand. See: hedge.
The design, pricing, promotion, and distribution of goods to create transactions with businesses and consumers.
That set of organizations through which a good or service passes in going from a raw state to the final consumer. See: channels of distribution, distribution channel.
Marketing cost analysis
The study and evaluation of the relative profitability or costs of different marketing operations in terms of customers, marketing units, commodities, territories, or marketing activities. Cost accounting is typically used.
Syn: demand management.
The concept that marketing strategy selects product, price, promotion, and channel targets in selected markets.
The systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services. Such research may be undertaken by impartial agencies or by business firms or their agents. Marketing research includes several types: (1) Market analysis (product potential is a type) is the study of the size, location, nature, and characteristics of markets, (2) Sales analysis (or research) is the systematic study and comparison of sales (or consumption) data, (3) Consumer research (motivation research is a type) is concerned with the discovery and analysis of consumer attitudes, reactions, and preferences. Syn: market research.
The basic plan marketing expects to use to achieve its business and marketing objectives in a particular market. This plan includes marketing expenditures, marketing mix, and marketing allocation.
The degree to which a product has been accepted by the marketplace. Syn: market reach.
The output of the market planning process. The market plan includes the current market position, opportunity and issue analysis, marketing objectives and strategies, action plans, programs, projects, budgets, and pro forma profit and loss statement and management controls. Syn: brand plan, product plan.
The process of developing market plans for products and services. This process is composed of the following phases—identification; research and analysis of market opportunities; selection of target markets; development of marketing strategies; development of the marketing plans, programs, and projects; and management, execution, and control of the market plans, programs, and projects.
Warehouse positioned to replenish customer inventory assortments and to afford maximum inbound transport consolidation economies from inventory origin points with relatively short-haul local delivery.
Syn: market penetration.
Syn: marketing research.
A group of potential customers sharing some measurable characteristics based on demographics, psychographics, lifestyle, geography, benefits, etc.
A marketing strategy in which the total market is disaggregated into submarkets, or segments, sharing some measurable characteristic based on demographics, psychographics, lifestyle, geography, benefits, etc.
The actual portion of current market demand that a company or product achieves.
The marketing plan to support the business strategy.
The process of developing measurements of the desirability of given market segments and deciding in which market segments to compete.
Market value added
In financial management, the surplus of a firm’s equity over the capital that has been invested in the firm.
Key strategic relationships. By partnering with big players, via equity offerings if necessary, a company creates barriers to entry into supply chain relationships for competitors.
Maslow’s hierarchy of needs
A theory that human needs are arranged in an order, or hierarchy, of importance. The hierarchy includes physiological, safety, social, esteem, and self-actualization needs.
The creation of a high-volume product with large variety so that a customer may specify his or her exact model out of a large volume of possible end items while manufacturing cost is low because of the large volume. An example is a personal computer order in which the customer may specify processor speed, memory size, hard disk size and speed, removable storage device characteristics, and many other options when PCs are assembled on one line and at low cost.
The strategy of sending the same message to all potential customers.
High-quantity production characterized by specialization of equipment and labor. See: continuous production.
Master black belt
In six sigma, quality expert capable of implementing strategic quality efforts including teaching other facilitators (black belts) the quality applications within all levels of the organization.
The document that consolidates all other budgets of an organization into an overall plan, including the projection of a cash flow statement and an operating statement for the budget period as well as a balance sheet for the end of the budget period. Syn: static budget.
A main reference file of information, such as the item master file and work center file. See: detail file, item master file.
A group of business processes that includes the following activities: demand management (which includes forecasting and order servicing); production and resource planning; and master scheduling (which includes the master schedule and the rough-cut capacity plan).
Master planning of resources
A grouping of business processes that includes the following activities: demand management, which includes the forecasting of sales, the planning of distribution, and the servicing of customer orders; sales and operations planning, which includes sales planning, production planning, inventory planning, backlog planning, and resource planning; master scheduling, which includes the preparation of the master production schedule and the rough-cut capacity plan.
Master production schedule (MPS)
The master production schedule is a line on the master schedule grid that reflects the anticipated build schedule for those items assigned to the master scheduler. The master scheduler maintains this schedule, and in turn, it becomes a set of planning numbers that drives material requirements planning. It represents what the company plans to produce expressed in specific configurations, quantities, and dates. The master production schedule is not a sales item forecast that represents a statement of demand. The master production schedule must take into account the forecast, the production plan, and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals. See: master schedule.
Master route sheet
The authoritative route process sheet from which all other format variations and copies are derived.
The master schedule is a format that includes time periods (dates), the forecast, customer orders, projected available balance, available-to-promise, and the master production schedule. The master schedule takes into account the forecast; the production plan; and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals. See: master production schedule.
Master schedule item
A part number selected to be planned by the master scheduler. The item is deemed critical in its impact on lower level components or resources such as skilled labor, key machines, or dollars. Therefore, the master scheduler, not the computer, maintains the plan for these items. A master schedule item may be an end item, a component, a pseudo number, or a planning bill of material.
Often the job title of the person charged with the responsibility of managing, establishing, reviewing, and maintaining a master schedule for select items. Ideally, the person should have substantial product, plant, process, and market knowledge because the consequences of this individual’s actions often have a great impact on customer service, material, and capacity planning. See: master production schedule.
The process where the master schedule is generated and reviewed and adjustments made to the master production schedule to ensure consistency with the production plan. The master production schedule (the line on the grid) is the primary input to the material requirements plan. The sum of the master production schedules for the items within the product family must equal the production plan for that family.
The person assigned responsibility for and identification of the planning requirements for specific items and responsibility for each order.
A means to describe a grouping of materials with similar characteristics for planning and scheduling purposes.
In the theory of constraints, a material constraint exists when the availability of material is less than or equal to the amount needed to maintain the planned product flow and to satisfy market demand.
Syn: inventory control.
A definition of the properties and characteristics of a substance.
Material-dominated scheduling (MDS)
A technique that schedules materials before processors (equipment or capacity). This technique facilitates the efficient use of materials. MDS can be used to schedule each stage in a process flow scheduling system. MRP systems use material-dominated scheduling logic. See: processor-dominated scheduling.
The ability of the transformation process to handle unexpected variations in material inputs.
Syn: picking list.
A uniquely identifiable amount of a material. This describes the actual quantity or amount of material available, its current state, and its specific property values.
1) The person normally responsible for managing the inventory levels, schedules, and availability of selected items, either manufactured or purchased. Syn: inventory planner. 2) In an MRP system, the person responsible for reviewing and acting on order release, action, and exception messages from the system. Syn: parts planner, planner.
Syn: inventory planning.
Material receipt inspection
The receiving department compares the incoming material to the purchase order to verify that the correct material and quantity have been received. The material is then inspected for quality and general condition. A material receipt report is prepared and copies are distributed to the appropriate departments such as purchasing and accounting.
Material requirements plan
The result from the process of material requirements planning.
Material requirements planning (MRP)
A set of techniques that uses bill of material data, inventory data, and the master production schedule to calculate requirements for materials. It makes recommendations to release replenishment orders for material. Further, because it is time-phased, it makes recommendations to reschedule open orders when due dates and need dates are not in phase. Time-phased MRP begins with the items listed on the MPS and determines (1) the quantity of all components and materials required to fabricate those items and (2) the date that the components and material are required. Time-phased MRP is accomplished by exploding the bill of material, adjusting for inventory quantities on hand or on order, and offsetting the net requirements by the appropriate lead times.
Material review board (MRB)
An organization within a company, often a standing committee, that determines the resolution or disposition of items that have questionable quality or other attributes.
Material safety data sheet (MSDS)
A document that is part of the materials information system and accompanies the product. Prepared by the manufacturer, the MSDS provides information regarding the safety and chemical properties and (if necessary) the long-term storage, handling, and disposal of the product. Among other factors, the MSDS describes the hazardous components of a product; how to treat leaks, spills, and fires; and how to treat improper human contact with the product.
A concept that addresses the efficiency with which materials are obtained, converted, and shipped in the overall purchasing, production, and distribution process. It can be considered as a companion concept to labor efficiency, and it is potentially more significant as the materials portion of cost of goods sold continues to grow.
Materials handling time
The time necessary to move materials from one work center to the next work center. This time includes waiting for the materials handling equipment and actual movement time.
The grouping of management functions supporting the complete cycle of material flow, from the purchase and internal control of production materials to the planning and control of work in process to the warehousing, shipping, and distribution of the finished product.
1) An authorization that identifies the items and quantities to be withdrawn from inventory. 2) An authorization that identifies the items and quantities to be included in a purchase order. Syn: production materials requisition.
A uniquely identifiable subset of a material lot containing quantity and location. A sublot may be a single item.
Material usage variance
The difference between the planned or standard requirements for materials to produce a given item and the actual quantity used for a particular instance of manufacture.
A term, used more frequently in nonmanufacturing organizations, to refer to the equipment, apparatus, and supplies used by an organization.
The general problem of optimizing a function of several variables subject to a number of constraints. If the function and constraints are linear in the variables and a subset of the constraints restricts the variables to be nonnegative, a linear programming problem exists.
A mathematical array having one, two, and sometimes more dimensions, into which collections of data may be stored and processed.
Matrix bill of material
A chart made up from the bills of material for a number of products in the same or similar families. It is arranged in a matrix with components in columns and parents in rows (or vice versa) so that requirements for common components can be summarized conveniently.
A graphical technique used to analyze the relationship between two related groups of ideas.
Matrix organizational structure
An organizational structure in which two (or more) channels of command, budget responsibility, and performance measurement exist simultaneously. For example, both product and functional forms of organization could be implemented simultaneously, that is, the product and functional managers have equal authority and employees report to both managers.
Maximum allowable cost
In service organizations, the limit of reimbursement allowed by an agency for the cost of a supply item.
Maximum demonstrated capacity
The highest amount of actual output produced in the past when all efforts have been made to “optimize” the resource; for instance, overtime, additional personnel, extra hours, extra shifts, reassignment of personnel, or use of any related equipment. Maximum demonstrated capacity is the most one could ever expect to produce in a short period of time but represents a rate that cannot be maintained over a long period of time. See: demonstrated capacity.
The planned maximum allowable inventory for an item based on its planned lot size and target safety stock.
Maximum order quantity
An order quantity modifier, applied after the lot size has been calculated, that limits the order quantity to a preestablished maximum.
Abbreviation for management by objectives.
Abbreviation for management by walking around.
Syn: manufacturing calendar.
Available manufacturing days excluding holidays and weekends.
Abbreviation for material-dominated scheduling.
The arithmetic average of a group of values. Syn: arithmetic mean.
Mean absolute deviation (MAD)
The average of the absolute values of the deviations of observed values from some expected value. MAD can be calculated based on observations and the arithmetic mean of those observations. An alternative is to calculate absolute deviations of actual sales data minus forecast data. These data can be averaged in the usual arithmetic way or with exponential smoothing. See: forecast error, tracking signal.
Mean time between failures (MTBF)
The average time interval between failures for repairable product for a defined unit of measure (e.g., operating hours, cycles, miles). See: reliability.
Mean time for failures (MTFF)
Average time for failure of a nonrepairable product (expected life) or average time to first failure of a repairable product. See: reliability.
Measure of service
Syn: level of service.
In the theory of constraints, measures are a constraint if they drive behaviors that are incongruous with the achievement of organizational goals, or discourage the behaviors needed to achieve these goals.
The middle value in a set of measured values when the items are arranged in order of magnitude. If there is no single middle value, the median is the mean of the two middle values.
The introduction of a neutral third party who attempts to provide alternatives to issues causing conflict that have not been put forth by either party or to change the way the parties perceive the situation. It is often used in collective bargaining to reach an agreement.
The acquisition of the assets and liabilities of one company by another.
Abbreviation for manufacturing execution systems.
The software component of electronic commerce that enables the sending and receiving of messages.
Issues of parts or materials from stores in quantities that correspond to the rate at which materials are used.
That part of methods engineering normally involving an examination and analysis of an operation or a work cycle broken down into its constituent parts to improve the operation, eliminate unnecessary steps, and/or establish and record in detail a proposed method of performance.
Methods-time measurement (MTM)
A system of predetermined motion-time standards, a procedure that analyzes and classifies the movements of any operation into certain human motions and assigns to each motion a predetermined time standard selected by the nature of the motion and the conditions under which it will be made.
Syn: performance measurement system.
The analysis of the behavior of individual economic decision makers (individuals and firms).
Software that interconnects incompatible applications software and databases from various trading partners into decision-support tools such as ERP.
In project management, an important event in a project, usually the realization of a significant deliverable.
Syn: Gantt chart.
In project management, a high-level schedule displaying important deliverables.
Product standards and specifications for military or defense contractors, units, suppliers, etc. These standards sometimes become de facto standards within the civilian community.
A regular route for pickup of mixed loads from several suppliers. For example, instead of each of five suppliers sending a truckload per week to meet the weekly needs of the customer, one truck visits each of the suppliers on a daily basis before delivering to the customer’s plant. Five truckloads per week are still shipped, but each truckload contains the daily requirement from each supplier. See: consolidation.
Minimum cost order quantity
Syn: economic order quantity.
The planned lowest amount or level of inventory for an item.
Minimum order quantity
An order quantity modifier, applied after the lot size has been calculated, that increases the order quantity to a preestablished minimum.
A type of order point replenishment system where the “min” (minimum) is the order point, and the “max” (maximum) is the “order up to” inventory level. The order quantity is variable and is the result of the max minus available and on-order inventory. An order is recommended when the sum of the available and on-order inventory is at or below the min.
The incremental setup activities required when changing from one item to another within a group of items.
Abbreviation for management information system.
The overall goal(s) for an organization set within the parameters of the business scope.
The company statement of purpose.
Syn: failsafe work methods, poka-yoke.
The control of the individual items going through the plant.
A procedure used in some process industries for building process train schedules that start at an initial stage and work toward the terminal process stages. This procedure is effective for scheduling where several bottleneck stages may exist. Detailed scheduling is done at each bottleneck stage.
Making several different parts or products in varying lot sizes so that a factory produces close to the same mix of products that will be sold that day. The mixed-model schedule governs the making and the delivery of component parts, including those provided by outside suppliers. The goal is to build every model every day, according to daily demand.
The process of developing one or more schedules to enable mixed-model production. The goal is to achieve a day’s production each day. See: mixed-model production.
The ability to handle a wide range of products or variants by using equipment having short setup times.
Forecast of the proportion of products that will be sold within a given product family, or the proportion of options offered within a product line. Product and option mix as well as aggregate product families must be forecasted. Even though the appropriate level of units is forecasted for a given product line, an inaccurate mix forecast can create material shortages and inventory problems.
Syn: lot number.
A listing of all the raw materials, ingredients, components, etc., that are required to perform a mixing, blending, or similar operation. This listing is often printed on a paper ticket, which also may be used as a turnaround document to report component quantities actually used, final quantity actually produced, etc. This term is often used in batch process or chemical industries. See: assembly parts list, batch card, blend formula, manufacturing order.
The most common or frequent value in a group of values.
A representation of a process or system that attempts to relate the most important variables in the system in such a way that analysis of the model leads to insights into the system. Frequently, the model is used to anticipate the result of a particular strategy in the real system.
An item number for a finished good. This number may encompass other parts, such as a user’s manual.
A device that converts digital signals to analog signals (and vice versa) so they can be sent over phone lines.
The capability of the transformation process to quickly implement minor product design changes.
Modular bill of material
A type of planning bill that is arranged in product modules or options. It is often used in companies where the product has many optional features, e.g., assemble-to-order companies such as automobile manufacturers. See: pseudo bill of material.
A system architecture design in which related tasks are grouped in self-contained packages. Each package, or module, of tasks performs all of the tasks related to a specific function and advances in functions can be implemented without affecting other packages or modules because of the loose coupling with other modules. One example is a multi-tiered architecture in which application business rules are separated from the data management rules. Another example is a client-server architecture in which user interface tasks are separated from the application software. See: open system architecture.
A self-contained unit of a computer program that communicates with other parts of the program solely through inputs and outputs.
The process of comparing actual to planned progress.
A market in which many competitors offer partially differentiated products or services within a given geographical area. Most competitors focus on market segments where they can meet customers’ needs somewhat better than their competitors. See: industry structure types.
Sole control of a market by a company. In the United States, a monopoly is a violation of Article 2 of the Sherman Act.
Monte Carlo simulation
A subset of digital simulation models based on random or stochastic processes.
The physical transportation of inventory from one location to another within a facility. Movements are usually made under the direction and control of the inventory system.
In a Just-in-Time context, a card or other signal indicating that a specific number of units of a particular item are to be taken from a source (usually an outbound stockpoint) and taken to a point of use (usually an inbound stockpoint). It authorizes the movement of one part number between a single pair of work centers. The card circulates between the outbound stockpoint of the supplying work center and the inbound stockpoint of the using work center. Syn: move signal. See: kanban.
A type of in-process inventory that arises because of the time required to move goods from one place to another.
The authorization to move a particular item from one location to another.
Syn: move card.
A document used in dispatching to authorize or record movement of a job from one work center to another. It may also be used to report other information, such as the actual quantity or the material storage location.
The time that a job spends in transit from one operation to another in the plant.
An arithmetic average of a certain number (n) of the most recent observations. As each new observation is added, the oldest observation is dropped. The value of n (the number of periods to use for the average) reflects responsiveness versus stability in the same way that the choice of smoothing constant does in exponential smoothing. There are two types of moving average, simple and weighted. See: simple moving average, weighted moving average.
Moving average forecast
A forecasting technique that uses a simple moving average or a weighted moving average projected forward as a forecast.
Abbreviation for manufacturing planning and control.
Abbreviation for master production schedule.
Abbreviation for material review board.
1) Abbreviation for maintenance, repair, and operating supplies. 2) Abbreviation for maintenance, repair, and overhaul.
Abbreviation for material requirements planning.
Abbreviation for manufacturing resource planning.
Abbreviation for material safety data sheet.
Abbreviation for mean time between failures.
Abbreviation for mean time for failures.
Abbreviation for methods-time measurement.
In lean manufacturing, costs are reduced by reducing waste within a system. There are seven categories of waste:(1) overproduction—excess or too early, (2) waiting—queuing delays, (3) transportation—unneeded movements, (4) processing—poor process design, (5) motion—activities that do not add value, (6) inventory—stock that is sitting is accumulating cost without necessarily providing value, (7) defective units—scrap or rework.
A strategy in which each country market is self-contained. Customers have unique product expectations that are addressed by local production capabilities. Syn: multidomestic strategy.
Syn: multicountry strategy.
Multilevel bill of material
A display of all the components directly or indirectly used in a parent, together with the quantity required of each component. If a component is a subassembly, blend, intermediate, etc., all its components and all their components also will be exhibited, down to purchased parts and raw materials.
Multilevel master schedule
A master scheduling technique that allows any level in an end item’s bill of material to be master scheduled. To accomplish this, MPS items must receive requirements from independent and dependent demand sources. See: two-level master schedule.
A display for a component listing all the parents in which that component is directly used and the next higher level parents into which each of those parents is used, until ultimately all top-level (level 0) parents are listed.
An interactive combination of two or more of the following: text, graphics, video, audio, and animation all controlled by a personal computer.
Digitized image, video, and audio files that can be retrieved and converted to a form usable by a human.
A company with capital investments in more than a single country.
A strategy that focuses on opportunities to achieve cross-business and cross-country coordination, thereby enabling economies of scope and an improved competitive position with regard to reducing costs, cross-country subsidization, and so on, to out-compete rivals. See: global strategy.
Multiple-item lot-sizing models
Processes or systems used to determine the total replenishment order quantity for a group of related items.
Multiple regression models
A form of regression analysis where the model involves more than one independent variable, such as developing a forecast of dishwasher sales based upon housing starts, gross national product, and disposable income.
The simultaneous use by a computer of two or more central processing units, with each executing its own instruction set and each controlled by a single operating system.
Procurement of a good or service from more than one independent supplier. Syn: multiple sourcing. Ant: single sourcing.
Multivariate control chart
A control chart for evaluating the stability of a process in terms of the levels of two or more variables or characteristics.
Mutually exclusive project
In capital budgeting, a project that will not be accepted if a competing project is accepted. See: contingent project, independent project.