Abbreviation for Registrar Accreditation Board.
A storage device for handling material in pallets. A rack usually provides storage for pallets arranged in vertical sections with one or more pallets to a tier. Some racks accommodate more than one-pallet-deep storage.
A function performed by a rack-jobber, a full-function intermediary who performs all regular warehousing functions and some retail functions, typically stocking a display rack.
Abbreviation for research and development.
Syn: experimental order.
Having no predictable pattern. For example, sales data may vary randomly about some forecast value with no specific pattern and no attendant ability to obtain a more accurate sales estimate than the forecast value.
A manner of storing records in a computer file so that an individual record may be accessed without reading other records.
Syn: common causes.
A component of demand usually describing the impact of uncontrollable variation on demand. See: decomposition, time series analysis.
A storage technique in which parts are placed in any space that is empty when they arrive at the storeroom. Although this random method requires the use of a locator file to identify part locations, it often requires less storage space than a fixed-location storage method. Syn: floating inventory location system, floating storage location. See: fixed-location storage.
A sequence of integers or group of numbers (often in the form of a table) that show absolutely no relationship to each other anywhere in the sequence. At any point, all values have an equal chance of occurring, and they occur in an unpredictable fashion.
A selection of observations taken from all the observations of a phenomenon in such a way that each chosen observation has the same possibility of selection.
A fluctuation in data that is caused by uncertain or random occurrences.
In statistics, the spread in a series of observations. For example, the anticipated demand for a particular product might vary from a low of 10 to a high of 500 per week. The range would therefore be 500 – 10, or 490.
Syn: R chart.
1) The transformation of product designs into physical prototypes. Rapid prototyping relies on techniques such as cross-functional teams, data sharing, and advanced computer and communication technology (e.g., CAD, CAM, stereolithography, data links). Rapid prototyping involves producing the prototype on production equipment as often as possible. It improves product development times and allows for cheaper and faster product testing, assessment of the ease of assembly and costs, and validation before actual production tooling. 2) The transformation of system designs into computer system prototypes with which the users can experiment to determine the adequacy of the design to address their needs.
A method for scheduling and producing based on a periodic rate, e.g., daily, weekly, or monthly. This method has traditionally been applied to high-volume and process industries. The concept has also been applied within job shops using cellular layouts and mixed-model level schedules where the production rate is matched to the selling rate.
The expected output capability of a resource or system. Capacity is traditionally calculated from such data as planned hours, efficiency, and utilization. The rated capacity is equal to hours available × efficiency × utilization. Syn: calculated capacity, effective capacity, nominal capacity, standing capacity.
Rate of return on investment
The efficiency ratio relating profit or cash flow incomes to investments. Several different measures of this ratio are in common use.
The difference between the actual output rate of product and the planned or standard output rate.
The situation wherein a principal, failing to repudiate an agent’s unauthorized conduct, is bound by the conduct.
The allocation of product among consumers. When price is used to allocate product, it is allocated to those willing to pay the most.
Purchased items or extracted materials that are converted via the manufacturing process into components and products.
Raw materials inventory
Inventory of material that has not undergone processing at a facility.
Abbreviation for rough-cut capacity planning.
A control chart in which the subgroup range, R, is used to evaluate the stability of the variability within a process. Syn: range chart.
The percentage of target customers who receive an advertising message.
A special vessel to contain a chemical reaction.
Land and associated rights improvements, utility systems, buildings, and other structures.
The technique of coordinating data processing with external related physical events as they occur, thereby permitting prompt reporting of conditions. See: online service.
1) The physical acceptance of an item into a stocking location. 2) Often, the transaction reporting of this activity.
Receivables conversion period
The length of time required to collect sales receipts. Syn: average collection period.
The function encompassing the physical receipt of material, the inspection of the shipment for conformance with the purchase order (quantity and damage), the identification and delivery to destination, and the preparation of receiving reports.
The location to which material is being shipped. Ant: shipping point.
A document used by the receiving function of a company to inform others of the receipt of goods purchased.
Comparing the physical inventory figures with the perpetual inventory record and making any necessary corrections.
1) A collection of data fields arranged in a predefined format. 2) A set of related data that a computer program treats as a unit.
A measure of the conformity of recorded values in a bookkeeping system to the actual values, e.g., the on-hand balance of an item maintained in a computer record relative to the actual on-hand balance of the items in the stockroom.
In periods of insufficient capacity, jobs back up indefinitely. This leads to increased lead times and missed due dates. Recovery time is a period of time when capacity exceeds demand to allow the system to empty out. If there is not enough recovery time before the next episode of insufficient capacity, in-process inventory and lead times continue to grow.
1) The reintroduction of partially processed product or carrier solvents from one operation or task into a previous operation. 2) A recirculation process.
Red bead experiment
An experiment developed by W. Edwards Deming to illustrate the impossibility of putting employees in rank order of performance. The experiment shows that it would be a waste of management’s time to try to find out why one worker produced more errors than another; management should instead improve the system, making it possible for everyone to achieve higher quality.
1) A backup capability, coming either from extra machines or from extra components within a machine, to reduce the effects of breakdowns. 2) The use of one or more extra or duplicating components in a system or equipment (often to increase reliability).
Syn: business process reengineering.
Reference capacity model
A simulation model with accurate operational details and demand forecasts that can provide practical capacity utilization predictions. Various alternatives for system operation can be evaluated effectively.
Syn: remanufactured parts.
Syn: remanufactured parts.
Slang abbreviation for regeneration MRP. Pronounced “ree-jen.”
An MRP processing approach where the master production schedule is totally reexploded down through all bills of material, to maintain valid priorities. New requirements and planned orders are completely recalculated or “regenerated” at that time. Ant: net change MRP.
Registrar Accreditation Board (RAB)
A board that evaluates the competency and reliability of registrars (organizations that assess and register companies to the appropriate ISO 9000 Series Standards). The Registrar Accreditation Board, formed in 1989 by the ASQC, is governed by a board of directors from industry, academia, and quality management consulting firms.
Registration to standards
A process in which an accredited, independent third-party organization conducts an on-site audit of a company’s operations against the requirements of the standard to which the company wants to be registered. Upon successful completion of the audit, the company receives a certificate indicating that it has met the standard requirements.
A statistical technique for determining the best mathematical expression describing the functional relationship between one response and one or more independent variables. See: least-squares method.
Inventory that does not meet quality requirements but has not yet been sent to rework, scrapped, or returned to a supplier.
The act of identifying an item as not meeting quality specifications.
A software program that allows users to obtain information drawn from two or more databases that are made up of two-dimensional arrays of data.
A graphic map of the relationship between the business functions. It shows the inputs and outputs flow across functions. It is useful to show how processes are currently performed, disconnections in processes, and proposed processes. Relationship maps show the products and services of a given unit, how work flows through organizational boundaries, and the relationships between functions represented by boxes in the map.
The authorization to produce or ship material that has already been ordered.
Syn: open order.
Those costs incurred because of a decision. The costs would not have resulted unless the decision was made and implemented. They are relevant to the decision.
The range of activity planned for a firm.
The probability that a product will perform its specified function under prescribed conditions without failure for a specified period of time. It is a design parameter that can be made part of a requirements statement. See: mean time between failures, mean time for failures.
The function responsible for the determination and application of appropriate reliability tasks and criteria during the design, development, manufacture, test, and support of a product that will result in achieving of the specified product reliability.
Components or assemblies that are refurbished or rebuilt to perform the original function. Syn: refurbished goods, refurbished parts.
1) An industrial process in which worn-out products are restored to like-new condition. In contrast, a repaired product normally retains its identity, and only those parts that have failed or are badly worn are replaced or serviced. 2) The manufacturing environment where worn-out products are restored to like-new condition.
Remanufacturing resource planning
A manufacturing resource planning system designed for remanufacturing facilities.
Unscheduled maintenance performed to return a product or process to a specified performance level after a failure or malfunction.
The capability of determining the cause of a problem from an off-site location.
Syn: replenishment lead time.
Syn: order point.
1) In a fixed-reorder quantity system of inventory control, the fixed quantity that should be ordered each time the available stock (on-hand plus on-order) falls to or below the reorder point. 2) In a variable reorder quantity system, the amount ordered from time period to time period will vary. Syn: replenishment order quantity.
Items that are technically feasible to repair economically.
Repair bill of material
In remanufacturing, the bill of material defining the actual work required to return a product to service. This bill is constructed based on inspection and determination of actual requirements. See: disassembly bill of material.
The percentage of time on average that an item must be repaired for return to a serviceable condition. The repair factor is also expressed as a percentage applied to the quantity per assembly on the bill of material. It is useful for forecasting materials and capacity requirements for planning purposes. Syn: frequency of repair. See: occurrence factor, replacement factor.
Syn: rework order.
Syn: service parts.
Repair parts demand
Syn: service parts demand.
Repeatability of measurement
The variation in measurements obtained when one measurement instrument is used several times by an appraiser while measuring the identical characteristic on the same part.
The group of manufacturers that produce high-volume, low-variety products such as spark plugs, lawn mowers, and paper clips. See: repetitive manufacturing.
The repeated production of the same discrete products or families of products. Repetitive methodology minimizes setups, inventory, and manufacturing lead times by using production lines, assembly lines, or cells. Work orders are no longer necessary; production scheduling and control are based on production rates. Products may be standard or assembled from modules. Repetitive is not a function of speed or volume. Syn: repetitive process, repetitive production. See: project manufacturing.
Syn: repetitive manufacturing.
Syn: repetitive manufacturing.
A method of setting the value of inventories based upon the cost of the next purchase.
Replacement cost systems
A method of inventory valuation that assigns an item cost based on the next item price incurred.
The percentage of time on average that an item will require replacement. The replacement factor is also expressed as a percentage applied to the quantity per assembly on the bill of material. It is useful for forecasting materials and capacity requirements for planning purposes. See: occurrence factor, repair factor.
An order for the replacement of material that has been scrapped.
Parts that can be used as substitutes that differ from completely interchangeable service parts in that they require some physical modification—e.g., boring, cutting, or drilling—before they can replace the original part.
In an MRP system, the amount of time between successive runs of the MRP model. If the planner does not run MRP frequently enough, the material plan becomes inaccurate as material requirements and inventory status change with the passage of time.
Relocating material from a bulk storage area to an order pick storage area, and documenting this relocation.
Syn: replenishment period.
Replenishment lead time
The total period of time that elapses from the moment it is determined that a product should be reordered until the product is back on the shelf available for use. Syn: reorder cycle.
Replenishment order quantity
Syn: reorder quantity.
The time between successive replenishment orders. Syn: replenishment interval. See: review period.
Goods that have gone through selective rework or recycle.
Request for information (RFI)
An inquiry to a potential supplier about that supplier’s product or service for potential use in the business. The inquiry can provide certain business requirements or be of a more general exploratory nature. See: request for proposal (RFP).
Request for proposal (RFP)
A document used to solicit vendor responses when the functional requirements and features are known but no specific product is in mind. Syn: invitation for bid (IFB). See: request for information (RFI).
Request for quote (RFQ)
A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors.
Syn: capacity required.
Specifying the inputs, files, processing, and outputs for a new system, but without expressing computer alternatives and technical details.
The process of calculating the demand for the components of a parent item by multiplying the parent item requirements by the component usage quantity specified in the bill of material. Syn: explosion.
The capability to determine the source of demand requirements through record linkages. It is used in analyzing requirements to make adjustments to plans for material or capacity. See: pegging.
Syn: parts requisition.
Accommodating unavailability of equipment by quickly and easily using alternate machines in the processing sequence.
The process of changing order or operation due dates, usually as a result of their being out of phase with when they are needed.
A fundamental assumption of MRP logic that existing open orders can be rescheduled in nearer time periods far more easily than new orders can be released and received. As a result, planned order receipts are not created until all scheduled receipts have been applied to cover gross requirements.
Research and development (R&D)
A function that performs basic and applied research and develops potential new products.
Organizations intermediate in the manufacturing and distribution process, such as wholesalers and retailers.
The process of designating stock for a specific order or schedule. See: allocation.
Material on hand or on order that is assigned to specific future production or customer orders. Syn: allocated material, assigned material, obligated material.
Syn: safety stock.
Syn: process time.
Anything that adds value to a good or service in its creation, production, or delivery.
Simultaneous need for a common resource. Syn: concurrency.
The objects that are linked to an activity that consumes resources at a specified rate. For example, a resource driver is a purchase order (the object), that when placed (the activity), consumes hours (the rate) of purchasing (the resource).
The process of scheduling (and rescheduling) the start and finish dates of operations (or activities) to achieve a consistent rate of resource usage so that resource requirements do not exceed resource availability for a given time period. Syn: leveling.
The scheduling of activities so that predetermined resource availability pools are not exceeded. Activities are started as soon as resources are available (with respect to logical constraints), as required by the activity. When not enough of a resource exists to do all tasks on a given day, a priority decision is made. Project finish may be delayed, if necessary, to alter schedules constrained by resource usage.
1) The planning and validation of all organizational resources. 2) The effective identification, planning, scheduling, execution, and control of all organizational resources to produce a good or service that provides customer satisfaction and supports the organization’s competitive edge and, ultimately, organizational goals. 3) An emerging field of study emphasizing the systems perspective, encompassing both the product and process life cycles, and focusing on the integration of organizational resources toward the effective realization of organizational goals. Resources include materials; maintenance, repair, and operating supplies; production and supporting equipment; facilities; direct and indirect employees; staff; administrative and professional employees; information; knowledge; and capital. Syn: integrated resource management.
Capacity planning conducted at the business plan level. The process of establishing, measuring, and adjusting limits or levels of long-range capacity. Resource planning is normally based on the production plan but may be driven by higher level plans beyond the time horizon for the production plan, e.g., the business plan. It addresses those resources that take long periods of time to acquire. Resource planning decisions always require top management approval. Syn: resource requirements planning. See: capacity planning, long-term planning.
The standard hours of load placed on a resource by time period. Production lead-time data are taken into account to provide time-phased projections of the capacity requirements for individual production facilities. See: bill of resources, capacity planning using overall factors, product load profile, rough-cut capacity planning.
Resource requirements planning
Syn: resource planning.
The elapse of time or average delay between the initiation of a transaction and the results of the transaction.
A liability to perform assigned duties and activities for which the assignee is held answerable. It constitutes an obligation or accountability for performance.
A business that takes title to products and resells them to final consumers.
A method of inventory valuation in which the value is determined by applying a predetermined percentage based on retail markup to the retail price, to determine its inventory value based on cost.
In marketing, a measurement of how well a company creates repeat customers.
Retirement of debt
The termination of a debt obligation by appropriate settlement with the lender. Understood to be in full amount unless partial settlement is specified.
An item that replaces components originally installed on equipment; a modification to in-service equipment.
Return on assets (ROA)
Net income for the previous 12 months divided by total assets. See: return on owner’s equity (ROE).
Return on investment (ROI)
A financial measure of the relative return from an investment, usually expressed as a percentage of earnings produced by an asset to the amount invested in the asset.
Return on owner’s equity (ROE)
A financial measurement of how successful a company is in creating income for the owners of the organization. A comparison of the ROE with the ROA indicates the effectiveness of financial leverage employed by the firm. The measurement is calculated by dividing the net income by average owner’s equity. See: return on assets (ROA).
Return to supplier
Material that has been rejected by the buyer’s inspection department and is awaiting shipment back to the supplier for repair or replacement.
The income received by a company from sales or other sources, such as stock owned in other companies.
The process of disassembling, evaluating, and redesigning a competitor’s product for the purpose of manufacturing a product with similar characteristics without violating any of the competitor’s proprietary manufacturing technologies.
Reverse flow scheduling
A scheduling procedure used in some process industries for building process train schedules that starts with the last stage and proceeds backward (countercurrent to the process flow) through the process structure.
A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycling.
The time between successive evaluations of inventory status to determine whether to reorder. See: replenishment period.
A number or letter representing the number of times a part drawing or specification has been changed.
Reprocessing to salvage a defective item or part.
Rework lead time
The time required to rework material in-house or at a supplier’s location.
A manufacturing order to rework and salvage defective parts or products. Syn: repair order, spoiled work order.
Abbreviation for request for proposal.
Abbreviation for request for quote.
Right the first time
A term used to convey the concept that it is beneficial and more cost-effective to take the necessary steps the first time to ensure that a good or service meets its requirements than to provide a good or service that will need rework or not meet customers’ needs. In other words, an organization should engage in defect prevention rather than defect detection.
Risk adjusted discount rate
A discount rate that is higher for more risky projects and lower for less risky projects.
A review of the uncertainty associated with the research, development, and production of a product, service, or project.
Risk management planning
The process of defining how to identify and minimize risk factors for a project.
The process of reducing the risk among customers by pooling stock in centralized warehouses. Statistically speaking, when one customer demands a large amount of a particular product, another customer demands only a little of the same product. The total inventory to maintain the customer service level is smaller, on average, with a centralized warehouse because the risk of a product stockout is pooled across all the customers.
Risk response plan
A document defining known risks including description, cause, likelihood, costs, and proposed responses. It also identifies current status on each risk.
Risk response planning
The process of developing a plan to avoid risks and to mitigate the effect of those that cannot be avoided.
Abbreviation for return on assets.
Replacing activities previously performed by humans with mechanical devices or robots that can be either operated by humans or run by computer. Hard-to-do, dangerous, or monotonous tasks are likely candidates for robots to perform.
The condition of a product or process design that remains relatively stable with a minimum of variation even though factors that influence operations or usage, such as environment and wear, are constantly changing.
Abbreviation for return on owner’s equity.
Abbreviation for return on investment.
Root cause analysis
Analytical methods to determine the core problem(s) of an organization, process, product, market, etc. See: current reality tree, five why’s, stratification analysis.
In the theory of constraints’ drum-buffer-rope system, the rope consists of the minimum set of instructions to ensure that (1) nonconstraint resources are used (and not overactivated or misallocated); and (2) material is released into the system and flows to the buffers in a way that supports the planned overall system throughput.
Rough-cut capacity planning (RCCP)
The process of converting the master production schedule into requirements for key resources, often including labor, machinery, warehouse space, suppliers’ capabilities, and, in some cases, money. Comparison to available or demonstrated capacity is usually done for each key resource. This comparison assists the master scheduler in establishing a feasible master production schedule. Three approaches to performing RCCP are the bill of labor (resources, capacity) approach, the capacity planning using overall factors approach, and the resource profile approach. See: bill of resources, capacity planning, capacity planning using overall factors, product load profile, resource profile.
1) Information detailing the method of manufacture of a particular item. It includes the operations to be performed, their sequence, the various work centers involved, and the standards for setup and run. In some companies, the routing also includes information on tooling, operator skill levels, inspection operations and testing requirements, and so on. Syn: bill of operations, instruction sheet, manufacturing data sheet, operation chart, operation list, operation sheet, route sheet, routing sheet. See: bill of labor, bill of resources. 2) In information systems, the process of defining the path a message will take from one computer to another computer.
A quantity of production being processed.
A graphical technique that illustrates how a process is performing over time. By statistically analyzing a run chart, a process can be determined to be under or out of control. The most common types of data used to construct the charts are ranges, averages, percentages/counts, and individual process attributes (e.g., temperature). See: C chart, P chart, R chart, U chart, X-bar chart.
Running sum of forecast errors
The arithmetic sum of the differences between actual and forecasted demand for the periods being evaluated.
Syn: manufacturing order.
1) A list of items to be scheduled into production in sequence by the dates at which the present available stock is expected to be exhausted. 2) A statement of ingredients required to use up an available resource, e.g., how much “a” resource is required to consume 300 pounds of “x.”
A log-type document used in continuous processes to record raw materials used, quantity produced, in-process testing results, etc. It may serve as an input document for inventory records.
Syn: standard batch quantity.
Syn: run time.
The time required to process a piece or lot at a specific operation. Run time does not include setup time. Syn: run standards.
An order that for some reason must be fulfilled in less than normal lead time.