From A through Z we’re here to help you with operational excellence vocabulary
When it comes to operational excellence, there’s a lot of different terms and topics to understand. Use the A-Z jump links below to find the terms you curious about:
The things that go on within a process or sub process. They are usually performed by a single unit (a person, a machine, or a department). An activity is usually documented in an instruction.
A baseline is the measurable result for the state prior to the change. It provides a comparison value to the post result and assists in setting realistic and/or aspirational targets. Sampling techniques may be used to keep the baseline collection reasonable in effort.
A benefit is a positive outcome of a change. A benefit is the measurable improvement resulting from an outcome perceived as an advantage by one or more stakeholders and which contributes towards one or more strategic objective(s).
Benefits Realization Management (BRM)
Benefits Realization Management (BRM) provides organizations with a way to measure how projects and programs add value to the organization. Ultimately answers “What is the project or program wanting to achieve?”.
It is a process used by the IRP to ensure that Workday delivers benefits, to UBC, in terms of improvements to business processes. Learn more on the BRM FAQ page.
An individual who receives approximately four weeks of training in DMAIC, analytical problem-solving, and change management methods. A Black Belt is a full-time Six Sigma team leader solving problems under the direction of a Champion.
A rate of improvement at or near 70 percent over baseline performance of the as-is process characteristic.
Cause and Effect Diagram (also known as Fishbone Diagram and Ishikawa Diagram)
A pictorial diagram in the shape of a fishbone showing all possible variables that could affect a given process output measure. Four common categories or “bones” are material, machine, man, and method.
A Champion recognizes, defines, assigns, and supports the successful completion of Six Sigma projects; he/she is accountable for the results of the project and the business roadmap to achieve Six Sigma within their span of control.
Common Causes of Variation
Those sources of variability in a process which are truly random, i.e. inherent in the process itself.
Producing and moving one item at a time (or a small batch) through a process in a continuous manner, with each step producing just what is needed by the next step. Also known as Single-piece flow or make one, move one.
Continuous Improvement is a process of incrementally improving work by enhancing processes or services that generate the most value, and by reducing or eliminating as many waste activities as possible.
The most powerful tool of statistical process control. It consists of a run chart with statistically determined upper and lower control limits and a centerline.
Cost of Poor Quality (COPQ)
The costs associated with any activity that is not doing the right thing right the first time. It is the financial quantification of any waste that is not integral to the product or service which your company provides.
Critical to Quality (CTQ)
Any characteristic that is critical to the perceived quality of the product, process, or system.
Any entity or person who uses or consumes a product or service, whether internal or external to the providing organization.
Cycle Time (CT)
The time it takes one operator to go through all work elements before repeating them. Sometimes referred to as processing time.
Item of work that does not meet customer expectations or defined specifications, such as time, length, color, finish, quantity, temperature, etc.
Deployment (Lean Six Sigma)
The planning, launch, training, and implementation management of a Six Sigma initiative within a company.
Define, measure, analyze, improve, and control (DMAIC) is a data-driven quality strategy used to improve processes. It is an integral part of a Six Sigma initiative, but in general can be implemented as a standalone quality improvement procedure or as part of other process improvement initiatives such as lean.
Defects per million opportunities; the total number of defects observed divided by the total number of opportunities, expressed in parts per million. Sometimes called Defects per Million (DPM).
Defects per unit; the total number of defects detected in some number of units divided by the total number of those units.
Activities within a process that provide necessary support such as order processing, accounts payable, and hiring processes.
Failure Mode and Effects Analysis (FMEA)
A procedure used to identify, assess, and mitigate risks associated with potential product, system, or process failure modes.
Five related Japanese terms all beginning with S that describe workplace practices conducive to visual management and lean production. Translated into English they are Sort, Straighten, Shine, Standardize, and Sustain.
Flowchart (also known as Process Flow Diagram)
A graphic model of the flow of activities, material, and/or information that occurs during a process.
Gemba is a Japanese term meaning “the real place.” In business, gemba refers to the place where value is created. Gemba can really be any site, such as a building site in construction, the sales floor in retail, or somewhere the service provider interacts directly with the customer e.g. a car dealership showroom. The whole point of gemba is that problems in a business process or production line are often easily visible, and the best improvement comes from going to ‘the real place’, where leaders can see the state of the process for themselves.
An individual who receives approximately two weeks of training in DMAIC, analytical problem-solving, and change management methods. A Green Belt is a part-time Six Sigma position that applies Six Sigma to their local area, doing smaller-scoped projects and providing support to Black Belt projects.
A bar chart that depicts the frequencies (by the height of the plotted bars) of numerical or measurement categories.
A cross-functional executive team representing various areas of the company. Its charter is to drive the implementation of Six Sigma by defining and documenting practices, methods, and operating policies.
A resource consumed, utilized, or added to a process or system. Synonymous with X, characteristic, and input variable.
Just-in-Time (JIT) Production
A system of production that makes and delivers just what is needed, just when it is needed, and just in the amount needed.
Kaizen is a Japanese word meaning ‘change for the better’ and is also known as ‘continuous improvement’. It is a mindset or philosophy rather than being a tool to use.
Essentially, Kaizen is a belief that everything can be changed and everything can be more efficient. Creating a Kaizen culture entails using personal ingenuity to identify and solve problems in an organization. The strategy aims to collect knowledge from all employees within an organization to accomplish incremental improvements on a regular basis. What matters is not only the individual, but rather the collective whose collated achievements will be greater.
Kaizen is based on a number of principles, namely:
- Good processes bring good results
- Go see for yourself to grasp the current situation (see gemba)
- Speak with data, manage by facts
- Take action to contain and correct root causes of problems
- Work as a team
- Kaizen is everybody’s business
A group process improvement activity that utilizes a concentrated combined meeting and observation format to create significant improvement in a process within a short period of time.
A signaling device that gives authorization and instructions for the production or withdrawal of items in a pull system.
A business system for organizing and managing product development, operations, suppliers, and customer relations that requires less human effort, less space, less capital, less material, and less time to make products with fewer defects to precise customer desires.
Lean Six Sigma
Lean Six Sigma (LSS) is a combination of Lean and Six Sigma methodologies. Lean focuses on efficiency through eliminating process wastes and adding value, while Six Sigma focuses on quality and consistency through reducing process variation. Together, they guide us in achieving more efficient service delivery and creating a continuous improvement culture across UBC.
Master Black Belt
An individual who has received training beyond a Black Belt. The technical, go-to expert regarding technical and project issues in Six Sigma. Master Black Belts teach and mentor other Six Sigma Belts and support Champions.
Quantitative, qualitative, and binary measures are used to track and assess the status of an outcome against a baseline and desired target. Measures can also be called metrics and KPIs.
A measure that is considered to be a key indicator of performance. It should be linked to goals or objectives and carefully monitored.
One of the most prominent Japanese words associated with Kaizen, Muda’ means waste. The Kaizen philosophy aims at cutting business waste through improving quality, increasing efficiency, reducing overproduction and unnecessary activities. Ultimately, this will result in saving both money and time.
Natural Language Processing
Natural language processing (NLP) is a branch of artificial intelligence dealing with the machine handling of written and spoken human communication. NLP focuses on the interactions between computers and human (natural) languages, notably how to create and run programs that process and analyze large amounts of natural language data. It consists of methods drawn on linguistics and statistics, coupled with machine learning, to model language in the service of automation.
Any activity performed in producing a product or delivering a service that does not add value, where value is defined as changing the form, fit, or function of the product or service and is something for which the customer is willing to pay.
A succinct statement of the goals, timing, and expectations of a Six Sigma improvement project.
The number of characteristics, parameters, or features of a product or service that can be classified as acceptable or unacceptable.
Outcomes are a new measurable operational state achieved as a result of a change in behavior or circumstances.
A resource or item or characteristic that is the product of a process or system. See also CTQ.
A bar chart for attribute (or categorical) data presented in descending order of frequency.
The general principle originally proposed by Vilfredo Pareto (1848-1923) that the majority (80 percent) of influence on an outcome is exerted by a minority (20 percent) of input factors.
Acronym for a process improvement methodology (Plan, Do, Check, Act), created by Walter Shewart in the 1930s. Also referred to as PDSA (Plan, Do, Study, Act).
A translation of a Japanese term meaning “to mistake-proof.”
A succinct statement of a business situation which is used to describe the problem the Six Sigma project is attempting to solve.
A set of activities and material and/or information flow which transforms a set of inputs into outputs for the purpose of producing a product, providing a service, or performing a task.
Process Management System
An approach used by managers and workgroups to ensure that the outputs of their work efforts are:
- Predictable (stable)
- Meeting customer requirements (capable)
- Performed quickly and at low cost (efficient)
- Aligned and optimized to deliver correct results/value to a customer (effective)
- Capable of quickly changing to meet market and customer demands (adaptable)
It is a structured approach to aligning and optimizing how business processes work together to repeatedly and consistently deliver results/value to a customer.
Process mining uses event logs generated by enterprise systems such as Workday, Planon, or others to rebuild a virtual view of a business process. It helps organizations discover the as-is state of business processes as well as identify new opportunities for optimization and automation.
Process owners have responsibility for process performance and resources. They provide support, resources, and functional expertise to Six Sigma projects. They are accountable for implementing developed Six Sigma solutions in their process.
Production Lead Time (PLT)
The time it takes one piece to move all the way through a process, from start to finish. Also referred to as throughput time.
A well-defined, documented improvement effort that states a business problem in quantifiable terms and with known expectations.
A written declaration of the purpose and expected result of a project.
Activity required to correct defects produced by a process.
Robotic Process Automation (RPA)
In its simplest form, robotic process automation (RPA) is the automation of repetitive tasks that humans would normally do. RPA can automate both front and back-office processes, including tasks that happen all the time like filling out forms, transferring data from one system to another or taking notes.
A basic graphical tool that charts a characteristic’s performance over time. Glossary of Lean Six Sigma General Terms
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Sigma Score (Z)
A commonly used measure of process capability that represents the number of short term standard deviations between the center of a process and the closest specification limit. Sometimes referred to as Sigma level or simply Sigma.
Acronym for a visual representation of a process or system (Supplier, Input, Process, Output, Customer).
Six Sigma (6σ)
Six Sigma is a set of management techniques intended to improve business processes by greatly reducing the probability that an error or defect will occur. The term six sigma comes from the bell curve used in statistics, where one sigma symbolizes a single standard deviation from the mean. If the process has six sigmas, three above and three below the mean, the defect rate is classified as “extremely low.”
Six Sigma (System)
A proven set of analytical tools, project management techniques, reporting methods, and management techniques combined to form a powerful problem-solving and business improvement methodology.
Six Sigma (Statistic)
A quality standard of just 3.4 defects per one million opportunities; 99.9996 percent perfect.
Method to establish performance expectations; acronym stands for Specific, Measureable, Agreed-upon, Realistic, Time-specific.
Illustrates the physical flow of a person, product, or information as it moves through multiple steps in a process. It’s called the Spaghetti Diagram because the documented routes often look like a plate of spaghetti.
Establishing precise procedures for each worker’s activities in a process based on three elements: takt time, work sequence, and standard inventory.
Statistical Process Control (SPC)
The use of basic graphical and statistical methods for measuring, analyzing, and controlling the variation of a process for the purpose of continuously improving the process. A process is said to be in a state of statistical control when it exhibits only random variation.
An individual or entity responsible for providing an input to a process in the form of resources or information.
A target communicates the desired result that is expected after the change is effectively implemented. Action should be taken when results are not on track to meet the target. Targets should be reviewed and refined on an annual basis to drive continuous improvement.
The speed at which an area needs to operate during normal working hours in order to meet demand. Takt time is independent of process capability and cycle time.
Takt Time = Regular Available Time/Period (Shift)
Units Produced/Period (Shift)
The individual elements and/or subsets of an activity. Normally, tasks relate to how someone or some machine performs a specific assignment.
Theory of Constraints
A management philosophy that concentrates on removing or managing constraints to improve throughput of a process.
Value-Added Cycle Time (VCT)
Value-Added Time divided by Production Lead Time.
Value-Added Time (VAT)
The time of those elements that actually transform the product in a way that the customer is willing to pay for.
All of the actions, both value-creating and non-value-creating, required in bringing a product from concept to development and from order to delivery.
Value Stream Mapping (VSM)
A simple diagram of every step involved in the material and information flows needed to bring a product from order to delivery.
Work system that allows immediate assessment of the current state of operational performance.
Voice of the business; represents the needs of the business and the key stakeholders of the business. It is usually items such as profitability, revenue, growth, market share, etc.
Voice of the customer; represents the expressed and non-expressed needs, wants, and desires of the recipient of a process output, a product, or a service. It is usually expressed as specifications, requirements, or expectations.
Voice of the process; represents the performance and capability of a process to achieve both business and customer needs. It is usually expressed in some form of an efficiency and/or effectiveness metric.
Waste represents material, effort, and time that does not add value in the eyes of key stakeholders (customers, employees, investors).
An individual who received white belt training and has a basic understanding of Lean & Six Sigma. White Belts can not only assist with change management within an organization but also participate in local problem solving teams that support projects.
An individual who receives approximately one week of training in problem-solving and process optimization methods. Yellow Belts participate in process management activities, participate on Green and Black Belt projects, and apply concepts to their work areas and their jobs.