OEE
Overall Equipment Effectiveness. A composite index measuring the real performance of an asset against its maximum theoretical potential. OEE = Availability × Performance × Quality. An OEE of 100% implies production at maximum nominal speed, for all planned time, with zero scrap or rework. Commonly used world-class benchmark: ≥85% for discrete manufacturing (illustrative; actual target varies by industry and asset type).
TPM
Total Productive Maintenance. A systematic maintenance approach involving all employees (production, maintenance, engineering) in the goal of maximising equipment efficiency, eliminating the Six Big Losses, and achieving zero breakdowns and zero micro-stoppages. TPM pillars include autonomous maintenance, planned maintenance, focussed improvement, and training.
SMED
Single Minute Exchange of Die. A lean methodology for reducing machine setup (changeover) time to less than 10 minutes ("single digit minutes"). The technique separates internal activities (performable only with the machine stopped) from external activities (performable during production) and converts as many internal activities as possible to external.
DMAIC
Define-Measure-Analyze-Improve-Control. The five-phase Six Sigma framework for improving existing processes. Define: clarifies the problem and objectives. Measure: quantifies current performance. Analyze: identifies root causes. Improve: implements solutions. Control: sustains results over time.
MTBF
Mean Time Between Failures. A statistical measure of the reliability of a component or system: the average operating time elapsed between consecutive failures. MTBF = Total Operating Time / Number of Failures. The higher the MTBF, the greater the system reliability.
MTTR
Mean Time To Repair. A measure of corrective maintenance efficiency: the average time required to restore functionality after a failure, from detection to completion of repair. MTTR = Total Repair Time / Number of Failures.
WIP
Work In Process (also Work In Progress). All materials and semi-finished goods currently being processed or waiting between process stations. According to Little's Law (WIP = Throughput × Lead Time), reducing WIP directly lowers lead time. High WIP levels indicate flow imbalances or bottlenecks in the production process.
JIT
Just-In-Time. A production system aiming to produce and deliver exactly the quantity required, at the required location, at the required time - eliminating inventory as a buffer. JIT is one of the two pillars of the Toyota Production System, enabled by reliable processes, rapid setups, and supplier synchronisation.
5S
Sort, Set in Order, Shine, Standardise, Sustain - a workplace organisation methodology. Sort: remove the unnecessary. Set in Order: a place for everything, everything in its place. Shine: clean and inspect. Standardise: document best practices. Sustain: discipline to maintain improvements. Known by their Japanese initials: Seiri, Seiton, Seiso, Seiketsu, Shitsuke.
VSM
Value Stream Mapping. A lean visual analysis tool mapping the flow of materials and information from raw material input to customer delivery. The "current state" map shows the existing situation with all waste; the "future state" map designs the optimised flow.
BOM
Bill of Materials. A hierarchically structured list of all components, sub-assemblies, raw materials, and quantities required to produce one unit of finished product. The BOM is the fundamental document for MRP, production planning, and cost calculation.
MRP
Material Requirements Planning. A software system that, starting from the master production schedule (MPS), the BOM, and inventory records, calculates net material requirements and generates production and purchase order proposals. It is the central logic of every manufacturing ERP system.
MPS
Master Production Schedule. The plan specifying which finished goods to produce, in what quantities, and in which time periods. The MPS is the primary input to MRP and must balance forecasted demand, confirmed customer orders, and available production capacity.
ERP
Enterprise Resource Planning. An integrated business management system connecting production, purchasing, warehousing, finance, sales, and HR on a single shared platform. In manufacturing, ERP integrates MRP, order management, cost accounting, and quality management.
SPC
Statistical Process Control. The use of statistical methods (control charts, capability indices) to monitor a production process in real time, distinguish common-cause from special-cause variation, and prevent defect production before it occurs.
FMEA
Failure Mode and Effects Analysis. A systematic quality prevention tool that identifies potential failure modes of a product or process, evaluates severity, probability of occurrence and detectability, and prioritises corrective actions via RPN (Risk Priority Number) calculation.
RPN
Risk Priority Number. A risk indicator in FMEA calculated as the product of Severity (S), Occurrence (O), and Detection (D), each typically rated on a 1-10 scale. RPN = S × O × D. A high RPN indicates that the failure mode requires priority corrective action.
APQP
Advanced Product Quality Planning. A structured framework for quality planning during new product development and industrialisation, originating in the automotive industry. The five phases cover planning, product design, process design, validation, and feedback. Outputs include FMEA, control plan, and PPAP.
PPAP
Production Part Approval Process. An automotive industry standard (AIAG) defining the requirements a supplier must demonstrate to have a part or production process approved before starting serial deliveries. PPAP includes physical samples, dimensional analysis, PFMEA, control plan, MSA, and capability study.
MSA
Measurement System Analysis. A set of statistical techniques (Gauge R&R, bias, linearity, stability) for evaluating the adequacy of a measurement system: how much of the measured variability is attributable to the real process versus the measurement system itself. An acceptable MSA requires that measurement system variability be below a tolerable percentage of process variability or tolerance.
Cpk
Process Capability Index (centred). Cpk measures the effective capability of a process considering both spread and centring: Cpk = min[(USL – μ)/(3σ), (μ – LSL)/(3σ)]. Cpk ≥ 1.33 is the common minimum target; Cpk ≥ 1.67 for critical characteristics. Contrast with Cp (which measures only spread, not centring).
KPI
Key Performance Indicators. Quantitative metrics measuring achievement of a process or organisation's goals. In manufacturing, typical KPIs include OEE, defect rate (PPM/DPMO), OTIF (On Time In Full), lead time, and cost per unit. KPIs should be SMART (Specific, Measurable, Achievable, Relevant, Time-bound).
PPM
Parts Per Million. A unit of defect rate measurement used in manufacturing, corresponding to the number of defective pieces per million pieces produced. Six Sigma targets ≤3.4 DPMO. In automotive supply, acceptable levels are typically in the range of tens of PPM.
DPMO
Defects Per Million Opportunities. A defect rate measure normalised for product complexity: DPMO = (Number of Defects / Number of Opportunities) × 1,000,000. Six Sigma corresponds to 3.4 DPMO. DPMO allows comparison of processes with different complexity levels.
Takt Time
Takt Time (from German "Takt" = beat, rhythm). Available production time divided by customer demand in the period: Takt = Available Time / Demand. Takt time is the market-imposed pace for production - every station must complete its work within this interval to satisfy demand without over- or under-production.