Manufacturing Terms and Definitions Glossary


The Manufacturing Glossary of Terms and Definitions contains a comprehensive listing of common industry terms used to discuss production processes, materials, quality control, supply chain management, maintenance, and operations. It helps teams communicate effectively and improve their understanding of manufacturing-related topics. If you have any terms that you think should be included please submit them through our contact us page  and select “Other” in the dropdown.




Absenteeism: In the manufacturing industry, absenteeism refers to the failure of workers to report to work as scheduled, which can result in decreased productivity, increased costs, and potential safety hazards.

Activity-Based Costing System: Activity-based costing system is a manufacturing cost accounting method that identifies and assigns costs to specific activities and processes, providing a more accurate view of the true cost of production.

Add-On Work: Additional work is added to a maintenance schedule after the scheduled cut-off time.

Advanced Planning And Scheduling System: This is a manufacturing software tool that uses real-time data to optimize production schedules, improve resource utilization, and increase overall efficiency.

Advanced Product Quality Planning: This is a manufacturing methodology that helps to ensure the development of high-quality products by identifying and addressing potential issues in the design, production, and delivery process.

Agile Manufacturing: This refers to the tools, techniques, and initiatives that allow a plant or company to succeed in unpredictable environments by swiftly responding to changing customer needs and unforeseen market shifts through the quick reconfiguration of operations and strategic partnerships. This approach may also include the adoption of mass customization to meet individual customer demands, and the ability to promptly address technical or environmental surprises.

Annual Total Inventory Turns: This is a manufacturing performance metric that measures the number of times a company’s entire inventory is sold and replaced within a year, indicating the efficiency of inventory management and the speed at which products are sold.

Approved Manufacturer List (AML): This is a list of authorized relationships between a manufacturer’s parts and a company’s internally defined parts. These relationships are established by the R&D team, who identify third-party parts that can be used to meet the manufacturing demand for the internal part. 

Approved Vendor List (AVL): A list of all of the suppliers from which materials are purchased.

Assembly Line:  As defined by Wikipedia, it is a method of manufacturing in which parts, typically interchangeable ones, are added in sequential order as the semi-finished assembly moves from one workstation to another. This allows for faster assembly of the finished product with less labor as the parts are mechanically transported to each workstation, rather than workers having to manually transport parts to a stationary assembly point.

Asset Maintenance: The process of maintaining and tracking a company’s assets and effectively using those assets to gain value

Asset Turnover: Asset turnover is a manufacturing financial ratio that measures a company’s ability to generate revenue in relation to its assets, by dividing its total sales by its average total assets, providing insight into how effectively a company is utilizing its resources to generate revenue.



Barcoding: An automatic data-capture technology that allows data to be collected rapidly and accurately from all aspects of a company’s operations, including manufacturing, inspection, transportation, and inventory elements. 

Belt: A Belt is the main component of a conveyor belt system, and it is responsible for carrying the material being transported. It consists of a continuous loop of material that is made from a variety of materials, including rubber, plastic, and metal and is designed to be flexible and durable enough to withstand the stresses of continuous use. 

Benchmarking:  Benchmarking is a manufacturing performance measurement process that involves comparing a company’s products, services, processes, or practices against those of industry leaders or competitors to identify best practices and areas for improvement, with the goal of achieving superior performance and competitiveness.

Bill Of Materials (BOM): This is an extensive list of raw materials, components, and instructions required to construct, manufacture, or repair a product or service. 

Bottleneck: Bottleneck refers to a point in the manufacturing process where production is limited or slowed down due to a constraint, such as a shortage of materials, equipment downtime, or inefficiencies in the production line, which can result in decreased productivity and increased costs.

Breakdown:  Equipment that fails to operate and is considered broken down and is unusable.

Breakdown Maintenance: Maintenance performed on equipment that has broken down and is no longer in operation.



Center Drive & Take-up: A Center Drive & Take-up is a type of conveyor system that uses a motorized pulley to drive the belt from the center of the system. The take-up system, located in the center of the conveyor, maintains proper tension in the belt to prevent slipping or sagging.

Cellular Manufacturing: Cellular manufacturing is a lean manufacturing strategy that involves grouping machines, equipment, and workers into self-contained cells or groups, each dedicated to producing a specific set of products or parts, resulting in reduced lead times, improved quality, increased flexibility, and lower costs.

Change Management: This is the process of creating, reviewing, and gaining formal approval for engineering change requests, change orders, and change notifications.

Change Request: Explains a problem and suggests a solution to remedy the problem. There are multiple types of change requests, including:

  • Document Change Request (DCR).
  • Engineering Change Request (ECR).
  • Field Failure Request (FFR).
  • Manufacturing Change Request (MCR).
  • Supplier Corrective Action Request (SCAR).

Changeover: Changeover, also known as setup or conversion, is the process of preparing a manufacturing production line or machine for a new product, including cleaning, inspection, adjustment, and reconfiguration, to ensure that the equipment is set up properly and efficiently for the new production run.

Compliance: The practice of tracking whether or not a product complies with government-imposed regulations or a company’s self-imposed standards. Some types of compliance requirements are environmental requirements (e.g. RoHS and WEEE) and medical device regulations (e.g. 21 CFR Part 11 and 21 CFR Part 820).

Compliance MarkThis is a physical mark listed on a product or its packaging to show the product’s compliance with a specific requirement (e.g. UL, CE, CCC, FCC, and VCCI).

Computer-Aided Design (CAD): Computer-aided design (CAD) is a manufacturing technology that uses computer software to create, modify, analyze, and optimize product designs, allowing manufacturers to create detailed digital models of products, parts, or components, facilitating rapid prototyping, testing, and modification, and reducing product development time and costs.

Computer-Aided Manufacturing (CAM): Computer-aided manufacturing (CAM) is a manufacturing technology that uses computer software to automate and control manufacturing processes, including planning, design, tooling, machining, and assembly, allowing manufacturers to optimize production efficiency, reduce errors, and increase productivity. CAM systems often integrate with computer-aided design (CAD) systems to provide a seamless end-to-end manufacturing process.

Computer-Aided Process Planning (CAPP): Computer-aided process planning (CAPP) is a manufacturing technology that uses computer software to create and optimize manufacturing process plans, including selecting the best manufacturing methods, tools, equipment, and materials for each step of the production process, based on product design specifications and manufacturing constraints, resulting in reduced lead times, improved quality, and increased efficiency in the manufacturing process.

Computer-Integrated Manufacturing (CIM): Computer-integrated manufacturing (CIM) is a manufacturing technology that uses computer software and hardware to integrate and automate all aspects of the manufacturing process, including product design, production planning, scheduling, materials handling, quality control, and logistics, resulting in improved efficiency, reduced costs, and increased productivity. CIM systems often involve the use of advanced technologies, such as robotics, artificial intelligence, and the Internet of Things (IoT), to enable seamless communication and data sharing between all stages of the manufacturing process.

Computerized Maintenance Management Systems (CMMS): Computerized maintenance management systems (CMMS) are manufacturing software applications that help companies manage and track their maintenance activities, including scheduling preventive maintenance tasks, managing work orders, tracking inventory and spare parts, monitoring equipment performance, and generating reports, resulting in improved equipment reliability, reduced downtime, and increased productivity. CMMS systems may integrate with other manufacturing software applications, such as enterprise resource planning (ERP) systems and computer-aided design (CAD) systems. Article How CMMS Resolve Manufacturing Maintenance Problems

Computerized Process Simulation: Computerized process simulation is a manufacturing technology that uses computer software to create virtual models of manufacturing processes, including product design, production planning, scheduling, and optimization, allowing manufacturers to test and optimize their processes before implementing them in the real world, resulting in reduced development time, improved quality, and increased efficiency in the manufacturing process. Process simulation often involves the use of advanced technologies, such as artificial intelligence, machine learning, and 3D modeling, to provide a realistic and accurate representation of the manufacturing process.

Computerized Statistical Process Control (SPC): This is a manufacturing technology that uses computer software to monitor, measure, and analyze manufacturing processes in real-time, using statistical methods to detect and correct variations and defects, resulting in improved product quality, reduced waste, and increased efficiency. Computerized SPC systems often integrate with other manufacturing software applications, such as computer-aided manufacturing (CAM) systems and computerized maintenance management systems (CMMS), to provide a comprehensive view of the manufacturing process.

Concurrent Engineering:  Concurrent engineering is a manufacturing methodology that emphasizes the simultaneous design and development of products and their manufacturing processes, with the goal of optimizing product design for manufacturability, reducing time-to-market, and increasing efficiency and quality. Concurrent engineering involves cross-functional collaboration between different departments, such as design, engineering, manufacturing, and quality control, and may involve the use of advanced technologies, such as computer-aided design (CAD), computer-aided manufacturing (CAM), and computerized process simulation, to enable seamless communication and data sharing throughout the product development process.

Continuous-Replenishment Programs: Continuous-replenishment programs are manufacturing supply chain management systems that use real-time inventory monitoring and automated ordering to ensure that materials and products are continuously replenished as they are consumed, resulting in reduced inventory carrying costs, increased supply chain efficiency, and improved customer satisfaction. Continuous-replenishment programs often involve the use of advanced technologies, such as radio-frequency identification (RFID) and electronic data interchange (EDI), to enable seamless communication and data sharing between suppliers and manufacturers.

Contract Manufacturer (CM): This is a firm hired by a company to manufacture or assemble its product or part of its product.

ConveyorConveyors are a critical tool used in various industries, such as manufacturing, food processing, packaging, and transportation, to move items efficiently and quickly. These mechanical devices, which can come in different forms such as belts, roller, or screw conveyors, transport goods and materials from one place to another, typically in a straight line or through a series of changes in direction. They can be customized to fit specific production and material handling needs, and play a vital role in modern production and logistics processes, enabling businesses to move goods faster, reduce labor costs, and increase productivity.

Core Competency: The core activities of a manufacturing plant or company are those essential processes, functions, and operations that generate the highest return on investment or are closely linked with the enterprise’s core market. These activities represent the vital components of the company’s success and are critical to its ongoing growth and competitiveness.

Coordinate-Measuring Machine (CMM): To ensure product measurements are accurate, a Coordinate Measuring Machine (CMM) is used. In cases where a metal product requires precise measurements, such as perfect flatness, the CMM is utilized to verify whether the measurements align with established standards.

Corrective Action/Protective Action (CAPA): A good manufacturing practice (GMP) concept, in which product failures are investigated in an attempt to correct their current occurrence (corrective action) and/or prevent similar occurrences in the future (protective action).

Corrective Action Request (CAR): A change request that documents problems with a product.

Cost Of Quality: Cost of quality in manufacturing refers to the total expenses incurred by a company in ensuring that its products or services meet the desired level of quality. These costs can be divided into two categories: prevention costs and appraisal costs. Prevention costs are those expenses incurred in preventing defects from occurring, such as training, quality planning, and process improvement. Appraisal costs are those expenses incurred in detecting and correcting defects before they reach the customer, such as inspection, testing, and auditing. The cost of quality also includes the costs associated with internal and external failures, such as scrap, rework, warranty claims, and customer complaints. By analyzing and reducing the cost of quality, manufacturing companies can improve their profitability, enhance customer satisfaction, and increase their competitiveness in the marketplace.

Cpk:  Cpk is a statistical measure used in manufacturing to assess the capability of a process to produce products or services that meet the desired level of quality. Cpk measures the relationship between the variability of a process and its tolerance limits, and it is calculated using a formula that takes into account the mean, standard deviation, and specification limits of the process. A Cpk value of 1.0 indicates that the process is capable of producing products that meet the specification limits, while higher values indicate that the process is more consistent and less prone to producing defects. Cpk is used to monitor and improve the performance of manufacturing processes, and it is often included in quality control and Six Sigma methodologies.

Cross-Functional Teams: Cross-functional teams refer to groups of individuals from different functional areas within a company or organization who come together to collaborate and work on a specific project or task. These teams bring together individuals with diverse backgrounds, expertise, and perspectives, enabling them to address complex problems and challenges from a variety of angles. By involving members from different departments or disciplines, cross-functional teams can help break down silos, foster communication, and collaboration, and promote a more integrated and holistic approach to problem-solving. In manufacturing, cross-functional teams can be used to streamline processes, improve quality, reduce costs, and drive innovation.

Cross-Training: Skill-development practices that require or encourage production workers and other employees to master multiple job skills, thus enhancing workforce flexibility.

Customer Leadtime: Refers to the duration between when an order is placed by a customer and when the finished product is delivered to them.

Customer Reject Rate (PPM): A metric used to evaluate product quality by calculating the number of finished units that are rejected or returned by customers, expressed as parts per million. This measure should include units that are reworked by customers and applies to all shipped units, including parts.

Customer Retention Rate: The percentage of customers who continue to do business with a company over a specified period, usually three years. It is calculated by dividing the number of customers who were active three years ago and are still active by the total number of customers who were active three years ago.

Cycle Time:  Cycle time: The amount of time required to complete a single cycle of a process or operation, from start to finish. It includes all processing time as well as any waiting or delay time. It is a critical measure of efficiency and productivity in manufacturing and other business processes.

Days Of Inventory: This refers to a metric used to calculate the number of days that a company’s inventory can sustain its daily operations. This is calculated by dividing the average inventory on hand, which includes raw materials inventory, work-in-progress inventory, finished goods inventory, or total inventory, by the average daily usage.

Demand-Driven Scheduling Systems: These are software systems that optimize manufacturing techniques based on demand, ensuring that production matches customer orders in real-time.

Design For Assembly: This refers to the practice of designing products in a way that prioritizes ease and cost-effectiveness of the assembly during the product design stage. The goal is to simplify the assembly process and reduce the time and cost required to build the product.

Design Ror Logistics: This practice focuses on optimizing the physical handling and distribution of a manufactured product during the product design stage. The goal is to make sure the product can be easily transported, stored, and delivered to the end customer while minimizing logistics costs.

Design For Manufacturability: This practice emphasizes ease, cost, and quality of manufacturing during the product design stage. The goal is to make sure the product can be easily and efficiently produced while maintaining the highest possible quality standards.

Design For Procurement: This practice involves collaborating effectively with suppliers and sourcing personnel during the product design stage to identify and incorporate technologies or designs that can be used in multiple products. The aim is to facilitate the use of standardized components to achieve economies of scale and ensure continuity of supply.

Design For Quality: This refers to the practice of prioritizing quality assurance and ensuring that customer perception of product quality is considered as an integral part of the design process. The goal is to design products that meet or exceed customer expectations and deliver exceptional value.

Design For Recycling/Disposal: This practice focuses on considering the ultimate disposal and recycling of the manufactured product during the product design stage. The aim is to design products that are environmentally friendly and can be disposed of or recycled easily and efficiently while minimizing waste and reducing the impact on the environment.

Design Of ExperimentsThis is a methodology used by process designers to determine the optimal product/process parameters by conducting a limited number of experiments involving combinations of variables. The primary objective is to identify the most critical variables for quality control or those that can be easily modified to reduce overall process variance in a complex process.

Discrete Manufacturing: This refers to the production or assembly of parts and finished products that can be identified as distinct units using serial numbers or other labeling methods. These products are typically measurable in numerical quantities rather than by weight or volume, and the focus is on producing them efficiently and with high quality.

Downtime: This is the amount of time a plant or particular cell, line, or machine is down, or off-line, and not producing any product. Get some valuable tips.



Economic Value Added (EVA): EVA is a metric used to measure the wealth created for shareholders by an investment center.

Electronic Data Interchange (EDI): EDI refers to information-system linkages based on communication protocols and document formats that enable computer-to-computer communications between companies. This technology not only speeds up communication but also eliminates the need for re-keying of information and reduces the likelihood of errors. Typical EDI applications include purchase orders, invoices, and other transactions exchanged between a customer and supplier company. EDI communications are often facilitated through “electronic mailbox” systems on third-party value-added networks or over the Internet.

Empowered Natural Work Teams: These are teams that share a common workspace and/or responsibility for a particular process or process segment. Such teams typically have clearly defined goals and objectives related to day-to-day production activities such as quality assurance and meeting production schedules. They also have the authority to plan and implement process improvements. Unlike self-directed teams, empowered work teams typically do not assume traditional “supervisory” roles.

Enterprise Integration (EI): EI refers to the broad implementation of information technology to connect various functional units within a business enterprise. On a wider scale, EI may also integrate strategic partners in an inter-enterprise configuration. In a manufacturing enterprise, EI may be seen as an extension of CIM that integrates financial or executive decision-support systems with manufacturing tracking and inventory systems, product data management, and other information systems.

Enterprise Resource Planning (ERP): ERP is an extension of MRP II software designed to operate on enterprise-wide computing platforms. ERP systems typically claim the ability to achieve tighter (or “seamless”) integration between a greater variety of functional areas, including materials management, supply-chain management, production, sales and marketing, distribution, finance, field service, and human resources. They also provide information linkages to help companies monitor and control activities in geographically dispersed operations.

Expert Systems: These are software-based “artificial intelligence” systems that capture the knowledge and experience of experts in a specialized field and make that expertise available to less-skilled personnel.

Extranet: An extranet is an exclusionary network that operates like the Internet and securely connects customers and suppliers to a corporate or plant intranet to access information deemed sharable by the intranet operators.



Finished Goods: In the context of manufacturing, finished goods refer to products that have undergone all stages of production and are now prepared for distribution to customers. Precisely calculating and reporting finished goods inventory aids manufacturers in preventing waste resulting from overproduction, gauging profitability upon sale or distribution of finished goods, and enhancing the production process.

Flexible Conveyor:  A flexible conveyor, also known as an expandable conveyor, is a type of conveyor system that can be expanded or contracted to fit the needs of a particular application. This type of conveyor typically consists of a series of interconnected rollers or skate wheels that can be adjusted to the desired length, allowing it to be easily moved and adjusted as needed. Flexible conveyors are commonly used in warehouse and distribution facilities, as well as in shipping and receiving areas where they can help to streamline the handling of products and materials.

Finished-Goods Turn Tate: This is a measure of asset management calculated by dividing the total value of annual shipments at plant cost (for the most recent full year) by the average value of finished-good inventory. This includes the cost of materials, labor, and plant overhead.

Finite Capacity Scheduling: These are software-based systems that allow the simulation of production scheduling and determination of delivery dates based on the actual unit/hour capacity at each step in the production routing. These scheduling systems typically run on desktop computers and adjust for “infinite capacity” assumptions found in traditional MRP II systems.

Finite Element Analysis (FEA): This is a mathematical method for analyzing stress used in product design software to graphically analyze a model’s reactions under various load conditions.

First-Pass Yield: This measures the percentage of finished products that meet all quality-related specifications at the final test point. When calculating the yield for components, it measures the percentage that meets all quality-related specifications at a critical test point without being scrapped, rerun or reworked. In process industries, yield is often calculated as the percentage of output that meets target-grade specifications, excluding saleable “off-grade” products.

5S ( Sort, Shine, Set in Order, Standardize, and Sustain): A method of creating a clean and orderly workplace that exposes waste and errors. The 5S method is widely translated as Sort, Shine, Set in Order, Standardize, and Sustain.  

Flexible Assembly Systems: These are automated assembly equipment and/or cross-trained work teams that can accommodate a variety of product configurations in small lots.

Flexible Machining Systems: These are automated machining tools that can be quickly reprogrammed to handle the production of a variety of products or component configurations in small batches.

Flexible Manufacturing System (FMS): An FMS is composed of automated manufacturing equipment and/or cross-trained work teams that are designed to accommodate small-lot production of a variety of products or part configurations. It typically includes computer-based machine tools with integrated material handling that are capable of producing a family of similar parts.

Focused-Factory Production: A plant configuration and organization structure that creates self-contained “mini-businesses,” each with a specific product line or customer focus. Each unit has control over support activities such as maintenance, manufacturing engineering, purchasing, scheduling, and customer service. A single plant can be divided into several focused-factory units, which are designed around process flows.

Forecast/Demand Management Software: This is a type of software that provides input to master production scheduling systems and helps optimize inventory planning. It considers historical demand trends and may calculate the impact of planned sales promotions, price reductions, and other factors that cause spikes in demand levels.



Good Manufacturing Practice (GMP): This is a set of guidelines for how to manage each aspect of production and testing that can impact the quality of a product. GMPs are part of a quality system covering the manufacture and testing of active pharmaceutical ingredients, diagnostics, foods, pharmaceutical products, and medical devices.  

Gravity Conveyor: A gravity conveyor is a type of conveyor system that uses the force of gravity to move products or materials from one location to another. This type of conveyor typically consists of a series of rollers or skate wheels that are mounted on a slight incline or decline, allowing products to move freely along the conveyor without the need for external power or control. Gravity conveyors are commonly used in shipping and receiving areas, as well as in production or assembly lines where materials need to be moved between workstations.



Human-Machine Interface (HMI): An HMI (Human-Machine Interface) is a user interface that enables human operators to interact with machines. For instance, in the Mingo platform, the HMI component includes an operator interface that allows machine operators to input data throughout the manufacturing process.



In-Plant Defect Rate: This refers to the proportion of components in manufacturing and assembly that fail quality tests at any stage of the production process, expressed as parts per million (ppm).

Internet Of Things (IoT): This term relates to a system of interrelated smart devices. In terms of the manufacturing sector, the internet of things applies to remote monitoring and operations, predictive maintenance and smart asset management, and autonomous manufacturing.

Inventory Turn Rate: This is a measure of asset management capability (see “annual total inventory turns”).

ISO 9000: An international quality-process auditing program, based on a series of standards published by the International Standards Organization in Geneva, Switzerland, through which manufacturing plants receive certification attesting that their stated quality processes are adhered to in practice.

ISO 13485: An International standards organization 13485) Quality system standards and guidelines for the development of medical devices.

ISO 14000: Standards and guidelines defined by the International Standards Organization for environmental management systems.



JIT/Continuous-Flow Production: This refers to the implementation of “just-in-time” techniques aimed at reducing lot sizes, setup times, work-in-process inventory, waste, non-value-added activities, and manufacturing cycle time while improving throughput. This production system often utilizes “pull” signals to initiate production activity, as opposed to work-order (“push”) systems that rely on forecasted demand. Pull systems are often triggered by a customer order/shipment date, leading to final assembly, and thus replenishment of component WIP inventory at upstream stages of production.

JIT Delivery: This involves the delivery of parts and materials in small lots, frequently and timed to the needs of the production system.



Kaizen: This refers to a structured and methodical approach to process improvement by the individuals who are directly involved in those processes, utilizing simple analysis techniques. This approach emphasizes continuous improvement and an immediate action-oriented mindset.

Kaizen Event: This is a concentrated effort, typically lasting for several days, in which a team collaborates to plan and implement significant process changes that result in a notable improvement in performance. Participants come from different areas of the organization and may include non-production personnel.

Kanban Signal: This is a technique for communicating to suppliers or upstream production operations that it is time to restock a limited inventory of components or subassemblies in a just-in-time system. Although the original system in Japan used cards, today’s Kanban Signals include empty containers and electronic messages, among others.

Kitting: Kitting is a process where assemblers are given containers of all parts needed for the production of a product. Kitting eliminates the need for constant movement inventory and tools, as all items or subassemblies are placed into a kit for production. The kit is placed at the point of use through the production line where it will be used. 



Labor Turnover Rate: This is a measure of a plant’s ability to retain workers, expressed as a percentage of the production workforce that annually departs, regardless of the reason (layoff, quit, retirement, buyout, transfers, etc.). High turnover rates often indicate employee dissatisfaction with either working conditions or compensation.

Lean Manufacturing: Lean manufacturing is a practice that aims to reduce wasted time, effort, and other resources in the production process without sacrificing productivity and efficiency. Lean manufacturing is built on the idea that the reduction of waste can be more profitable than an increase in sales. 

Lineshaft: A lineshaft conveyor is a type of conveyor system where a long, rotating shaft runs beneath the length of the conveyor, transmitting power to a series of rollers that move the product along the conveyor. The rollers are connected to the shaft via belts or chains, which are driven by a motor located at one end of the conveyor.



Machine Availability: The term “machine availability” refers to the amount of time a machine is actually accessible for product production, typically expressed as a percentage of the total planned production time. A manufacturing analytics platform can assess machine availability by gathering and analyzing data on machine downtime, which is derived from equipment controls, operator input, and alarms.

Machine Vision: Optical systems in which video equipment is used to guide robotic or automated equipment during production operations; also, computerized visual inspection systems are used for quality control.

Make to Assemble (MTA): This is a production process that involves having pre-made parts available but deferring the assembly of finished products until an order has been received. This allows for some level of customization, although not to the same extent as a make-to-order approach.

Make To Order (MTO): This is a manufacturing process that involves producing a product only after a customer has placed an order. These products are often highly personalized and tailored to meet the specific requirements of each customer. Examples include customized furniture or bespoke vehicles.

Make To Stock (MTS): This is a traditional manufacturing strategy where products are manufactured and stocked in anticipation of customer demand. This approach relies heavily on accurate forecasting, which can be challenging. Inaccurate forecasting can result in excess inventory or stock shortages.

Manufacturing Cost: Manufacturing cost refers to the expenses associated with manufacturing operations, including direct and indirect labor, equipment maintenance and repair, manufacturing support and overhead, and quality-related costs. However, it does not include costs related to non-production functions such as sales, or purchased materials costs.

Manufacturing Cycle Time: This is the duration from when a customer order is released to the production floor for a particular product until the manufacturing, assembly, and testing of that product are completed. It does not include front-end order-entry time, engineering time for custom configurations, or time spent in finished goods inventory.

Manufacturing Deviation: This is a temporary change in production or a manufacturing procedure. An example is the use of a substitute part. Deviations may be planned or unplanned.

Manufacturing Execution System (MES): This is a software-based system that serves as a bridge between planning and administrative systems and the production floor. It can link production schedules generated by MRP II to process control software and performs functions such as planning, scheduling, production tracking and monitoring, equipment control, maintaining product histories, and quality management. MES is an essential component of computer-integrated manufacturing.

Manufacturing Order: A set of documents conveying the authority to manufacture parts or products in specified quantities. Manufacturing orders are also called batch cards, job orders, production orders, run orders, shop orders, or work orders.

Manufacturing Order Receipt: A document where material, labor, and machine costs in WIP are applied to finished goods that are received in inventory. Costs for backflushed materials, labor, and machine time also are applied to the cost of the finished goods.

Manufacturing Order Routing: A routing used to complete a specific manufacturing order, which includes all the necessary requirements to fill the order, such as workers, machine time, and raw materials. Also known as “manufacturing routing.”

Manufacturing Picklist: A list of the items and quantities of items that are required to fill a manufacturing order.

Mean Time Between Failures  (MTBF): A KPI that measures equipment reliability and the amount of time that elapses between one failure and the next.

Mean Time Between Repairs (MTBR): A KPI that defines the average time that equipment is operating between breakdowns or stoppages.

Mean Time to Repair (MTR or MTTR): Key Performance Indicator (KPI) that represents the average time required to troubleshoot and repair failed equipment and return it to normal operating conditions. MTTR gives organizations a more accurate analysis of how well their teams are responding to repairs and equipment problems.

Manufacturing Resources Planning (MPR II): These systems translate forecasts into master production schedules, maintain bills of material (lists of product components), create work orders for each step in the production routing, track inventory levels, coordinate materials purchases with production requirements, generate “exception” reports identifying expected material shortages or other potential production problems, record shop-floor data, collect data for financial reporting purposes, and other tasks depending on the configuration of the MRP II package.

Motorized Roller: Chain: A motorized roller chain is a type of conveyor system that uses a continuous chain of motorized rollers to move products along the conveyor line. This type of system is commonly used in warehouse and distribution facilities due to its ability to transport heavy loads and its ease of maintenance.  

MRP Shortage: A lack of resources to produce the required amount of an item to fill outstanding orders. Manufacturing orders can be entered regardless of the current stock of available materials.



North American Industry Classification System (NAICS): This is a coding system of the U.S., Mexican, and Canadian governments that identifies specific economic sectors. It replaces the U.S. Standard Industrial Classification (SIC) system. Coding for most manufacturers encompasses the 6-digit subsets of numbers 31 through 33.

Natural Work Team: This refers to a group of employees, typically comprised of hourly personnel, who work together in a shared workspace and are collectively responsible for a specific process or segment of a process.




Occupational Safety and Health Administration (OSHA): This is a United States government agency that is responsible for ensuring safe and healthy working conditions for employees. OSHA was created in 1970 through the Occupational Safety and Health Act, and it sets and enforces safety standards, provides training and education, and conducts inspections to ensure that employers are following safety regulations.

Off-the-Shelf: This is an item that is procured from a supplier as-is, with no modifications.

Online Order Entry System: This is a computer-based tool that allows distributors, field sales representatives, and even customers to place orders directly, via the internet or a corporate intranet, without the need for an inside salesperson to intervene. Users may access a designated webpage, select a sales-order-entry option, and the system often includes a product configurator and pricing engine, which may also be linked to production scheduling systems.

On-Time Delivery Rate: The on-time delivery rate is the percentage of products ordered by customers that are delivered by the specified time or date.

Open Platform Communications (OPC): This is a set of standards used for industrial telecommunications. According to Wikipedia, it specifies the “communication of real-time plant data between control devices from different manufacturers.

Operation Code: Operation codes define the various processes that are performed to manufacture the final product or parent item

Operational Technology (OT): This refers to the software used by personnel on the factory floor to control and adjust machine processes in a plant or factory. For example, the software may regulate the use of valves or pumps.

Order Fill Rate: Annual sales orders filled completely divided by the total annual number of sales orders.

Order-To-Shipment Leadtime: The time from when a specific order is released to the shop floor until that order is shipped to the customer, including any storage time in finished goods inventory.

Order-To-Delivery Leadtime: The time from when a specific customer order is received by the plant until the product is delivered to the customer, including any warehousing, cross-docking, and transportation time.

Original Equipment Manufacturer (OEM): The original manufacturer of a product that may be sold or marketed by another company.

Overall Equipment Effectiveness (OEE): This is a prominent metric used in the manufacturing industry to evaluate the effectiveness of machines. It measures availability, performance, and quality, and these factors are multiplied together using a formula developed by Toyota to obtain a single metric. OEE plays a crucial role in the production of goods, and it is important for manufacturers to understand its significance.



Pallet Pro:  Pallet Pro is a term that can refer to a range of products and services related to pallets, such as pallet manufacturing equipment, pallet recycling machines, or software for pallet management. The specific meaning of the term will depend on the context in which it is used.

Parent Item: Describes an item that contains another item (i.e. a child item) in its bill of materials. An assembly-component or assembly-subassembly relationship can be described as a parent-child relationship.

Part Name: A unique name assigned to a part.

Part Number: A unique numerical value assigned to a part. 

Pathway(TM) Lineshaft: A Pathway Lineshaft conveyor is a type of roller conveyor that uses a central shaft to drive a series of rollers, which in turn move the products along the conveyor. The key difference between Pathway Lineshaft and other roller conveyors is that it uses a unique drive system that allows multiple rollers to be driven from a single motor, resulting in more efficient and cost-effective operation. This type of conveyor is also typically quieter and requires less maintenance than other types of roller conveyors.

Pick-To-Ship Lead Time: The time period starting from when an order is released to be picked from inventory until the order is shipped.

Technologies For Planning And Scheduling: Diverse software-based systems for advanced planning, scheduling, and optimization.

Performance %: Often also referred to as throughput, performance measures the actual cycle time versus the ideal cycle time. The performance of a machine, cell, or line indicates the ability to meet the schedule or deliver to customers on time. Manufacturing analytics software can calculate performance by collecting part or product counts from the machines and comparing them against the ideal cycle time in the system.

Planned Maintenance (PM): Scheduled maintenance activities carried out according to a documented plan of tasks, skills, and resources. 

Planned Maintenance Optimization: A process for improving maintenance strategies based on existing preventive maintenance (PM) routines and available failure history.

Planned Maintenance Percentage (PMP): This is a percentage that documents the amount of maintenance time used towards planned maintenance tasks, which is measured against the total amount of maintenance hours in a given time period (weeks, months, years).

Poka-Yoke: The objective of “fail-safing” techniques is to prevent errors or defects in the production process as early as possible. This can be achieved by implementing methods such as requiring completed components to pass through a customized opening to ensure that dimensions are within tolerance limits and checking equipment operating conditions prior to making a part. The ultimate goal is to minimize the need for rework and improve overall quality.

Pop-Up Transfer: A Pop-up Transfer is a component of a conveyor belt system that allows the smooth transfer of products from one conveyor line to another. It consists of a section of the conveyor belt that can be raised or lowered to allow products to move onto or off of the transfer. The pop-up transfer helps to maintain the speed and direction of the conveyor belt, reducing the risk of damage to the products being transported.

Power Conveyor: A power conveyor is a type of conveyor system that uses motors or other power sources to move products or materials from one location to another. Power conveyors can come in many different forms, including belt conveyors, roller conveyors, and chain conveyors, among others. These types of conveyors are often used in manufacturing and distribution facilities to automate the movement of products and materials, helping to increase efficiency and productivity.

Power Feeder: A Power Feeder is a device used in conveyor belt systems to supply a controlled flow of material to the belt. It typically consists of a motorized roller or belt that rotates at a consistent speed, moving the material onto the conveyor belt at a predetermined rate.

Precision Maintenance:  Performing maintenance tasks so they are always done with consistency, accuracy, and in line with industry best practices.

Predictive Maintenance (PdM):  A type of condition-based maintenance where assets/equipment are monitored with sensor devices that provide data (: Vibration Analysis, Sonic Testing, Dye Testing, Infrared Testing, Thermal Testing, Coolant Analysis, Teratechnolog) about the asset’s condition which is used to predict when the asset will require maintenance.

Premium Freight: This refers to a shipping method that involves expedited or rushed delivery of goods to customers. This method is used when there is a need to speed up the delivery of a product to meet a customer’s urgent demand or deadline. Premium Freight typically incurs additional costs, such as higher transportation fees, overtime labor costs, and other related expenses. These additional costs are added to the standard cost of filling a customer order and are ultimately passed on to the customer.

Preventive Maintenance (PM): Proactive maintenance that is regularly performed on a piece of equipment to lessen the likelihood of it failing. It is performed while the equipment is still in operation so that it does not break down unexpectedly.

Programmable Logic Controller (PLC): PLC is an industrial computer that works to control a computer system in an industrial organization. These systems have been adapted for the control of manufacturing processes, such as assembly lines, machines, robotic devices, or any activity that requires high reliability, ease of programming, and process fault diagnosis is known as a programmable logic controller (PLC) or programmable controller.  Guide to PLC

Proactive Environmental Practices: The voluntary implementation of advanced environmental practices by plant management, aimed at reducing pollutants, emissions, and other environmental impacts, before regulatory requirements are imposed.

Problem-Solving Methodologies: Various approaches to addressing and resolving problems, are typically used by individuals or teams within an organization. Examples include the Deming Circle (Plan-Do-Check-Act), which is widely regarded as a key aspect of effective teamwork.

Process Manufacturing: The production of products, such as chemicals, beverages, and food items, in batch quantities, rather than as discrete units. Process manufacturing often involves the use of inputs such as heat, pressure, or time to achieve thermal or chemical conversion.

Product Data Management (PDM): Software-based systems that enable the integration, management, and organization of product-related data from multiple sources, both internal and external, across different departments, divisions, geographic locations, and computer platforms. PDM typically incorporates CAD files, manufacturing data, and other product-related information to streamline engineering design processes, ensure access to accurate and up-to-date product information, and enhance cross-functional communication.

Product Development Cycle: The time period from the initiation of design and development work to the commercial availability of the final product. This is also commonly referred to as “time to market.”

Productivity Change: The overall change in plant-wide value-added per employee over the course of a year, based on the total number of employees in the plant, not just direct labor. Value-added is calculated by subtracting the cost of purchased materials, components, and services from the total value of shipments. Some manufacturers may prefer to use an alternative calculation method, such as “increase in sales per employee.

Process Manufacturing: Process manufacturing is also known as batch manufacturing is the production of products that are unable to be separated into physically distinct items. Products produced in process manufacturing are referred to as “batches.” Examples of this include oil which cannot be separated into physically distinct products or identified by a serial number, but can be identified by the batch it was produced in. With process manufacturing the final product is unable to be disassembled into its original raw material. 

Pull System: A method for controlling workflow and prioritizing tasks, in which processes that require materials or attention draw these resources from feeding processes or storage areas as needed. This is typically accomplished through the use of “kanban” signals, as opposed to “push” systems in which materials are processed and pushed to the next stage regardless of actual need.




Quality %: Machine product quality refers to the level of excellence of the products being produced by a machine. To assess product quality, manufacturers use a set of metrics. By leveraging manufacturing analytics, it becomes feasible to determine the quality of a part by gathering part count and reject reason codes and complementing this data with input from human operators.

Quality Function Deployment (QFD): This is an approach to quality improvement that focuses on understanding and analyzing customer needs at the design stage to translate them into specific product and process requirements for the supplier organization, with the aim of delivering products or services that meet or exceed customer expectations.

Quick-Changeover Methods: Refers to a set of techniques aimed at reducing the time it takes to change over equipment setups. These techniques, such as SMED (single-minute exchange of dies), aim to improve equipment flexibility, reduce lot sizes, and shorten lead times.

QS 9000: This is a widely recognized quality certification program for suppliers in the automotive industry. It builds on the ISO 9000 quality management standard as a baseline and includes additional requirements specific to the automotive industry.




Rapid Prototyping: Refers to various techniques used to quickly convert CAD-generated product designs into accurate physical models, typically utilizing computer-controlled systems. Stereolithography is an example of this process, where laser beams guided by CAD designs create precise plastic models by polymerizing and fusing liquid resins into a laminated composite of very thin slices.

Raw-Materials Turn Rate: This is a metric used to measure asset management by dividing the value of total annual shipments at plant cost by the average raw-material value at plant cost. This includes material, labor, and plant overhead.

Real-Time Feedback: This is the instantaneous communication of electronically captured data, such as quality data, to process operators or equipment to enable rapid or automated adjustments that keep production processes operating within quality parameters.

Redline: This is the marking of an assembly drawing or bill of materials (BOM) to indicate a modification.

Return On Invested Capital (ROIC): This is a measure of how effectively a company uses the money (borrowed or owned) invested in its operations. It is calculated as net operating profit after taxes divided by capital invested.

Rolled-Throughput Yield, (Multiple-Point Yield): This is a measure that multiplies quality yield values at various points in a production process, not just at the end of the line. This helps to make problem areas within a process more visible.




Safety Improvement Programs: These are practices implemented to continuously enhance safety within a plant or across a company. These may include safety teams, safety awareness programs and communications, safety training, safety “days,” and setting continuous improvement goals that target safety metrics such as OSHA incidents or lost-workday rates.

Scrap/Rework Costs: These are the costs incurred due to wasted parts or materials during the production process, as well as the cost of repairing defective products so that they can pass final inspection.

Self-Directed Natural Work Teams: These are almost autonomous teams consisting of empowered employees, including hourly workers, that share a common workspace and/or responsibility for a particular process or process segment. These teams usually have the authority for day-to-day production activities, many supervisory responsibilities, such as job assignments, production scheduling, maintenance, materials acquisition, training, quality assurance, performance appraisals, and customer service. Often referred to as “self-managed” work teams. All self-directed teams are empowered.

Shop-Floor Data Collection: This is the automated collection of data on factory-production activities, including units produced, labor hours per unit or customer order, time and date of specific production activities, maintenance, and quality data.

SKU: (Stock keeping unit) A unique sales stock identifier usually controlled by the business side of a company. A SKU is generally disassociated from the engineering definition and engineering change controls for a product.

Statistical Process Control (SPC): This is the use of variation analysis, with manual or computerized control charts, to quickly detect non-normal variations in a process. SPC charts often display upper and lower limits for part characteristics or process parameters, showing trends over time and indicating when limits were exceeded or approached and corrective actions were needed. In some closed-loop systems, adjustments are made automatically when readings indicate that a control limit is being approached.

Standard Operating Procedure (SOP): Standard Operating Procedure (SOP) is a written document or instruction detailing the steps and activities included in a process or procedure. Standards of operation increase efficiency through the detailed instructions of a process. By following these standards, managers can ensure manufacturing regulations are met while increasing performance and quality assurance. 

Supplier JIT Deliveries: Delivery of parts and materials in small lots — and on a frequent basis — timed to the needs of the production system.

Supplier Partnerships: These are agreements with suppliers that link operations, openly share information, and mutually solve problems and issues while approving joint performance. They usually include multi-year purchase agreements.

Supplier Corrective Action Request (SCAR): This is a change request describing an issue with a part, process, or component from a supplier and asking for a resolution. A SCAR sometimes includes details about how the complaint should be addressed.

Supply Chain: The supply chain is the sequence of processes involved in the manufacturing, transportation, and selling of a product. Supply chain activities 

Supply-Chain/Logistics Systems: These are a class of manufacturing software designed to optimize scheduling and other activities throughout the supply chain, including transportation and distribution functions, to improve efficiency and reduce costs.




Table Top: The table top is a term commonly used to refer to the surface of a table, which can be made of various materials such as wood, metal, or glass. It can also refer to a type of conveyor system that uses a flat surface with raised edges to transport products.

Takt Time: The optimal frequency of production required to meet customer demand, calculated by dividing the available work time per shift by actual customer demand. For instance, if an 8-hour, one-shift operation has 435 minutes of available time (480 minutes minus two 15-minute breaks and a 15-minute cleanup period) and the daily demand is 1,305 products, then the takt time of the operation would be 20 seconds.

Time Study: A time study analyzes every step of the manufacturing process to determine on average how long each step takes.

TL 9000: A quality system certification program developed by the Quality Excellence for Suppliers of Telecommunications Leadership Forum for the telecommunications industry. The program builds upon the ISO 9000 family of standards and includes specific performance metrics and a formal benchmarking mechanism.

Time To Market (TTM): The period of time from the development of a product concept to the availability of the finished product. It starts when a development project has been agreed to and resources have been committed and ends when the final product is shipped to customers. For more information, please see this article:  

Title 21 CFR Part 11: Code of Federal Regulations that deals with the Food and Drug Administration (FDA) guidelines on electronic records and electronic signatures in the United States. Defines the criteria under which electronic records and electronic signatures are considered to be trustworthy, reliable, and equivalent to paper records. 

Title 21 CFR Part 820: Quality system regulation set forth by the United States Food and Drug Administration (FDA). The purpose is to ensure that quality systems involved in the manufacture of pharmaceutical products and medical devices are appropriate for the specific items designed or manufactured.

Total Cost Of Quality: The total cost of poor quality or product failures, including scrap, rework, and warranty costs, as well as expenses incurred to prevent or resolve quality problems, including the cost of the inspection.

Total Logistics Costs:  The overall cost for inbound delivery and storage of material and parts, plus the cost to store, transport, and deliver (and potentially set up) the final product to the customer. Calculating and monitoring such costs demonstrates that management is focused not only on improving efficiencies within the factory but also on the entire order-fulfillment process.

Total Productive Maintenance (TPM): A comprehensive program to maximize equipment availability, where production operators are trained to perform routine maintenance tasks regularly while technicians and engineers handle more specialized tasks. The scope of TPM programs includes unscheduled maintenance prevention (through the selection of easy-to-service equipment), equipment improvements, preventive maintenance, and predictive maintenance (determining when to replace components before they fail).

Total Quality Management (TQM): A company-wide approach to improving all aspects of quality and customer satisfaction, including fast response and service, as well as product quality. TQM begins with top management and assigns responsibility to all employees and managers who can impact quality and customer satisfaction. It uses a variety of quality tools, such as QFD, Taguchi methods, SPC, corrective-action response teams, cause-and-effect analysis, problem-solving methodologies, and fail-safing.

Transitional Work Program: A program that provides various options to assist an injured worker in gradually performing the duties of a targeted job.



Unit Of Measure (UCM): This describes how manufacturers use or buy a part. The most common UOM is “each,” but standard measures like feet, inches, pints, drops, boxes, etc. can also be used.

Utilization: Often used in conjunction with capacity, the term “capacity utilization” is a percentage or KPI that shows the amount of total capacity that is being used at a particular time.




Value-Added Per Employee: Calculated by subtracting the cost of purchased materials, components, and services from the value of shipments divided by the number of employees. See “productivity change.”

Vendor-Managed Inventory: A purchasing arrangement in which on-site vendors or “resident suppliers” manage and replenish materials, components, or subassemblies, taking responsibility for their availability according to prearranged agreements with the plant.

Visibility Systems: Visual systems that use standard layouts, signal lights, kanban systems, or other methods to provide quick communication and allow anyone familiar with the work to understand its status and condition at a glance, or to respond to work priorities. These systems are typically located on the plant floor, design areas, or elsewhere and rely on line of sight to execute communication rapidly.

Voice Recognition/Response: Computerized systems that can recognize or synthesize human voices for various purposes, such as capturing verbalized data for quality control or inventory tracking, activating equipment through spoken commands, or converting computer data into audible information. These systems are particularly useful when operators’ hands are busy or when quick response times are needed.



Wear Strip Deck: A Wear Strip Deck is a component of a conveyor belt system that consists of a series of plastic or metal strips that are attached to the top of the conveyor frame. These strips help to reduce friction and wear on the conveyor belt by creating a smooth, low-friction surface for the belt to slide on.

WIP Turn Rate: A metric that measures the rate at which work-in-process flows through a manufacturing plant. It is typically calculated by dividing the total annual shipment value at plant cost for the most recent year by the average WIP value at plant cost.

World-Class Manufacturer: An industry term used to describe manufacturers who achieve superior results in various manufacturing metrics, which can vary from industry to industry. It is generally used to identify companies that are recognized as leaders in their field, delivering the highest value at a given price point.

Work-In-Process Inventory (WIP): The value or amount of materials, components, and subassemblies that are partially completed between the raw material/purchased component stage and the finished goods stage. This value should be calculated at the plant cost, including material, direct labor, and overhead.






Yield Improvement: A metric that measures the percentage reduction in rejects over a five-year period. 




ZPS: ZPA stands for “Zone Powered Accumulation” and is a type of conveyor system that allows products to accumulate in zones along the conveyor line, controlled by sensors and powered rollers. This type of system is often used in manufacturing and distribution facilities to automate the movement of products and increase efficiency.

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