Manufacturing Glossary

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A

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• Accounts  -  An account is a right to receive payment for goods sold or leased, or for services rendered, where these rights are not evidenced by an instrument or by chattel paper. 
• Accounts Payable  -  The money that your business owes for goods and services.
• Accounts Receivable  -  The amount of money due your business for goods and services that you have provided.
• Advanced Product Quality Planning  -  A structured method of defining and establishing the steps necessaty to assure that a product satisfies the customer.
• Apprenticeship  -  A form of on-the-job training for practitioners that will give them a license or journeyman's level of competencies.
• Approved Manufacturer List  -  A set of approved relationships between manufacturer parts and a company's internal parts.
• Approved Vendor List  -  Ensures purchased products arrive on time and meet your quality control.
• Assembly Bill of Materials  -  A list of the items and resources that are required to assemble the parent item.

B

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• Bill of Materials  -  A list of parts, raw materials, and accessories, descriptions, part name, part number, quantity, reference designation, procurement type, that make up the assembly or entire product.
• Bill of Materials Level  -  The place occupied by a part on the ranking of the bill of materials.
• Bookkeeper  -  Someone who is in charge of maintaining your business’s books.
• Bookkeeping  -  The act of recording the accounts, financial transactions, and other information related to your business.
• Bottleneck  -  Any point at which movement is slowed because demand placed on a resource is greater than capacity.

C

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• Capitol  -  The financial assets your business owns, which can include monetary funds as well as physical entities, such as manufacturing equipment or buildings.
• Capital Expenditure  -  The amount of money that needs to be spent on a project to see it from design through completion.
• Cash Flow  -  The money that is going in and out of your business.
• Change Request  -  Outlines a problem and proposes an action to address the problem.
• Changeover  -  The time required to modify a system or workstation, including teardown and setup.
• Chart of Accounts  -  A report that lists all user accounts in a general ledger.
• Configurable Bill of Materials  -  Contains all the components that are required for manufacturing the material to the customer's detailed requiremenrs.
• Contract Manufacturer  -  A third-party manufacturer of parts or products for a company.
• Corrective Action/Protective Action  -  Investigates and solves problems, identifies causes, and takes corrective action to solve the problem.
• Corrective Action Request  -  Sent to a supplier when an item or process needs a remedy.
• Cost of Quality  -  The sum of all costs associated with conformance and nonconformance.
• Cycle Time  -  The time it takes one part to be processed at an individual process step.

D

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• Deliverable  -  Any unique and verifiable product, result, or capability to perform a service that is performed to complete a process, phase, or project.
• Debit  -   It refers to any record of money that is flowing into an account.  A debit can also be a record of any asset your business receives.
• Design Deliverables  -  Technical drawings and schematics, presentations, reports, and specifications for engineering.
• Design History File  -  Contains or references the records necessary to demonstrate that the design was developed in accordance with the approved design plan.
• Device Master Record  -  A record of all information about how a product was produce, including drawings, instructions, and any other records.
• Direct Labor  -  The time spent by one or more production workers on filling a specific manufacturing order.
• Diversification  -  Helps your business manage risk, letting you allocate capital across various assets.
• Document Control  -  The function of management and controlling product documentation.
• Down Day  -  A day when the facility, entire shop floor, or a specific work place is not in production.

E

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• Earned Value  -  The measure of work performed in terms of the budget authorized for that work.
• Economic Order Quantity  -  The ideal order quantity that a company should make for its inventory given a set cost of production.
• Engineering Bill of Materials  -  Specifies parts or assemblies designed by the engineering department.
• Engineering Change Notice  -  A form that communicates the details of an approved change to someone who needs to know about the change.
• Engineering Change Request  -  A suggestion that can be submitted to management to solve a problem or make improvement to a product.
• Expenses  -  The costs to run your business.  Expenses can be broken into four categories: fixed expenses, variable expenses, accrued expenses, and operating expenses.

F

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• Facilities  -  Buildings that are built, installed or established to serve a particular use.
• Fast Tracking  -  A schedule compression technique in which activities or phases normally done in sequence are performed in parallel for at least a portion of their duration.
• Fill Order  -  An order that has had all its requirements met and can be closed.
• Finished Goods  -  An item that is manufactured for sale.
• Fixed Assets  -  Fixed assets are any physical or tangible items that have monetary value and are purchased and owned by the business to support its operations.
• Fixed Expenses  -  Fixed expenses cost the same amount each month. Examples include rent, property taxes, or insurance premiums.
• Float  -  The amount of time that a schedule activity can be delayed without delaying the early start date of any successor or violating a schedule constraint.
• Forecast  -  An estimate of how much of an item should be produced over a specific period of time.

G

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• Good Manufacturing Practice  -  A system of processes, procedures, and documents that help ensure that the products are consistantly produces and controlled according to quality standards.

H

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• Hours per Shift  -  The amount of time per shift actually spent working on the assigner task.

I

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• Income Statement  -  Sometimes called a profit and loss statement.  This financial statement shows your expenses, revenues, and profits over a specific accounting period. 
• Indirect Labor  -  The time spent on tasks that are not directly related to filling a specific manurfacturing order.
• Interest Coverage Ratio  -  How many times a company can pay its interest expenses from its earnings.
• Internal Growth Rate  -  The highest rate of growth a company is able to achieve without using any external funds.
• Inventory  -  The assets that a company has purchased to sell to its customers that remain unsold.
• Inventory Turnover  -  The number of times a business sells or uses inventory over the course of a defines time period.
• Item Type  -  A code to designate the accounting class for the item, such as discontinued, inventory, and miscelaneous charges.

J

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• Just-in-time Manufacturing  -  A production model in which items are created to meet demand, not created in surplus of in advance of need.

K

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• Key Performance Indicators  -  Calculations that helps you measure the sucess about the performance of the line, plant, and/or company.
• Kit  -  A group of finished items that compose a set.
• Kitten  -  A process where assemblers are given containers of all parts needed for the production of a product.

L

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• Labor Force Participation Rate  -  The porporation of the total working age population that is available to work as part of the labor market.
• Labor Time  - The number of employee hours required to complete the operation.
• Lead Time  -  The time between a customer's initial purchase and the delivery of the product.
• Lean Manufacturer  -  A practice that shortens the time between the customer order, the product built and shipment, by eliminating sources of waste.
• Liability  -  All debts that a company has yet to pay.
• Liquidation  -  The act of dissolving a business by converting assets into cash to pay off debts.

M

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• Machinability Index  -  Used to compare the machinability of different materials in the various cutting process.
• Made to Order  -  An order fulfillment method for made items. 
• Made to Spec  -  A term that describes a product that is made ot the specification of an internal design or by a supplier.
• Maintenance Backlog  -  Maintenance that has not been performed yet.
• Maintenance Inspection  -  The process of evaluation the condition of an asset or piece of equipment.
• Maintenance Log  -  A detailed document that records all maintenance tasks that have been performed on an asset or piece of equipment.
• Maintenance Planning  -  A defined process used to develope an action plan that includes all maintenance, repair, and construction work.
• Maintenance Schedule  -  The routine maintenance and/or inspections that are preformed during a given time frame to repair and upkeep assets and equipment.
• Maintenance Shut-down  -  A temporary closure of a building or department to perform maintenance.
• Maintenance Troubleshooting  -  The process of identifying problems when the issue is not immediately obvious.
• Manufacturing Bill of Materials  -  A list of all sub-assemblies or items essential to produce a shippable finished product.
• Manufacturing Overhead  -  All indirect costs incured during the production process that can not be traced to the object cost.
• Marginal Product of Labor  -  The additional production a company experiences by adding one unit of labor.
• Market Share  -  The percentage of sales of a product in units, or dollors relative to all sales of a product.
• Markup  -  A markup of price spread is the difference between the selling price of a product and the cost incured to manifacture it.
• Material Test Report  -  A quality assurance document in the steelmaking industry that certifies a material's compliance with approperate ASTM standards, applicable dimensions, and physical and chemical specifications.
• Merchandise Inventory Turnover Ratio  -  Measures how well a company is turning their inventory into sales.
• Multi-level Bill of Materials  -  A list of all components directly or indirectly involved in building the parent part, togeather with the required quantity for each item.

N

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• New Product Developement  -  The total process that takes a service or a product from concept to market.
• New Product Introduction  -  All the activities within an organization to define, develope and launch a new or improved product.

O

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• Off-the-shelf  -  An item that is producedfrom a supplier as-is, with no modifications.
• Operating Expenses  -  Operating expenses are expenses that are paid as part of a business’s day-to-day operations.  This includes equipment, inventory, payroll, and marketing costs.
• Operating Income  -  The revenue after deducting all the operating expenses.
• Operating Leverage  -  Balances the mix of fixed and variable costs in its operations.
• Opportunity Gap  -  The difference between what an asset is capable of producing and what it actually produces.
• Original Equipment Manufacturer  -  A company that manufacturers a product that is sold to another company.
• Output  -  The number of parts produced during a given time.
• Outsourced Service  -  A service that is part of the manufacturing processes that is purchased from the vender.
• Overall Equipment Effectiveness  -  Measures the efficiency and effectiveness of a process.
• Overhead  -  Costs incured that cannot be directly related to the prducts or serviced produced.

P

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• Parent Item  -  An item that contains another item in the bill of materials.
• Part Name  -  A unique name assigned to a part.
• Part Number  -  A unique numerical value assigned to a part.
• Performance  -  Anything that causes the manufacturing process to run at less than maximum possible speed.
• Pick-to-ship Cycle Time  -  The period from when an order is released to be picked until the time the order has shipped.
• Planned Maintenance  -  Scheduled maintenance activities carried out according to a documented plan of tasks, skills, and resources.
• Plant Maintenance  -  A set of activities that are necessary to keep machinery, parts, and types of equipment in good operating conditions to avoid production stoppage and loss.
• Point of Use  -  Ensures people have exactly what they need to do their job, the right work instructions, parts, tools and equipment.
• Posting  -  The act of recording entries in a ledger.
• Posting Payrool  -  Depending on the size of the company, it may choose to outsource its payroll and taxes to a company that specializes in these fields.
• Predetermined Overhead Rate  -  The allocation rate that is assigned to products or job orders at the beginning of a project.
• Preventative Maintenance  -  Maintenance activities performed by machine operators at regularly scheduled intervals to keep equipment in good working order.
• Principle  -  The amount borrowed.
• Process  -  Also called procedure, an operation or an activity.
• Process Control  -  The monitoring of the production process through software.
• Process Security  -  A type of security that allows you to restrict authority for completing a manufacturing process. 
• Product  -  Something that is produced.
• Product Data Management System  -  System used to hold mechanical CAD files, including parts and assembly models as well as drawing files.
• Product Developement Process  -  Begins with market research and idea generation, and ends with a successful product offered to the general public.
• Production Lifecycle Management  -  Management of the products records, including bill of materials, specifications, changes and revisions from beginning to end.
• Productivity  -  A measure of work effectiveness that businesses.
• Project Manager  -  The stakeholder assigned by the performing organization to manage the work required to achieve the project objectives.
• Promise Date  -  The date that the customer has been told to expect to receive the order.
• Protective Device  -  Assets and devices used to protect equipment, machinery, components to reduce the consequences of equipment failure.
• Prototype  -  A sample built of a product.
• Pull Production  -  The process in which products are made only when the customer has ordered a product, and not before.
• Purchase  -  When a business buys goods or services.
• Purchase Order  -  A commercial document submitted by a buyer requesting a vendor or supplier to provide goods and/or services.
• Push Production  -  The process in which products are made using customer estimates rather than the customer has ordered a product, and not before.

Q

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• Quality  -  The ratio between good count produced and the total units that were started.
• Quality Assurance  -  Ensures you are doing the right thing the right way.
• Quality Control  -  Ensures that the results of what you have done is what is expected.
• Quantity to Fill  -  An amount of a product that was ordered but has not been received.
• Quality Management System  -  A framework for product and service developement that optimizes for the continuous improvement of quality.
• Quarterly Statement  -  These statements may resemble an annual report.  However, there are some major differences.  For various reasons, estimations are made for most key figures on the quarterly reports which are more accurately depicted in the annual report.
• Quick Ratio  -  Measures the ability of an individual or business to pay for current liabilities.
• Quote  -  When a business needs services or parts they can shop around and ask for suppliers to provide a written cost for the parts or services.

R

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• Rebuild  -  Restoring an item to an acceptable condition in accordance with the origional design.
• Receipt  -  A written acknowledgment showing that payment has been made or a given sum of money received.
• Receivable  -  Accounts that are due to be paid by the customers of a business.
• Reconcile  -  The process of matching one set of figures or documents with another set of figures or documents.
• Refund  -  A refund can be provided to or from another business if bills have been overpaid.
• Refurbish  -  Clean, refine, reconditioned, renovated parts to make the parts usable.
• Replaced Item  -  An item in a mass uptate to bill of materials that is removed from the bills of materials.
• Retention Ratio  -  Measures the amount of earnings retained by a company after dividends have been paid out.
• Return  -  An item or merchandise returned by a customer to your company.
• Revenue  -  The total amount of income generated by the sale of goods and services to its customers and clients.
• Route Cause Analysis  -  The process of discovering the root causes of problems in order to identify appropriate solutions.
• Run Time  -  The scheduled production time and its running.
• Running Maintenance  -  Can be done while equipment is still operating.
• Running Maintenance Tasks  -  Tasks that are performed on a regular basis.
• Run-to-failure  -  No scheduled maintenance plan beyond replacement ehen if fails.

S

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• Safety  -  A measure and practice taken to protect against emotional, financial, physical, social and other types of accidents or damage to an individual or individuals.
• Sales Bill of Materials  -  Provides information about a product in the sales stage.
• Sales Order  -  A request for goods or services.
• Salvage Value  -  The effective life usage got equipment such as machinery. vehicles, etc.
• Scheduled Maintenance  -  Pre-planned tasks performed on a maintenance schedule to keep assets in good operating condition.
• Scheduled Operating Time  -  The percentage of time when an asset is scheduled to be in operation and is available to operate.
• Scheduled Work Order  -  A work order that has been planned and included on a maintenance schedule.
• Setup Time  -  The number of hours needed to prepare the work area prior to the operation.
• Shipping Date  -  The date when a sales order leaves your warehouse or office. 
• Shipping Method  -  The manner in which the items are transported from the supplier to be manufacturer.
• Shrinkage  -  The loss of materials.
• Shutdown  -  The period of time that equipment is out of service.
• Shutdown Maintenance  -  Maintenance that can only be done while equipment is shutdown.
• Single-level Bill of Materials  -  A simple list of of parts, not ment for a complex product list.
• SKU  -  A unique numerical sales stock identifier usually controlled by the business side if the company.
• Spare Parts Inventory  -  Having the right stock of critical parts available while keeping the costs of inventory parts and supplies at a minimum.
• Stakeholder  -  A person or group who has intrests that may be affected by an initiative or influence over it.
• Standard Operating Procedure  -  A set of clearly written instructions which outline the steps or tasks needed to complete a job.
• Standby  -  Assets installed or available but not being used.
• Statement  -  A report that displays financial information.
• Supplier  -  A person or company that supplies goods or services to a manufacturer.
• Supply Chain  -  A sequence of processes involved in the manufacturing, transportation and selling of a product.

T

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• Total Material Costs  -  All the manufacturing raw or direct material costs for a given product or a certain service.
• Trial Balance  -  The balance of accounts in all nominal ledgers. The total sum of the debit side should balance with that of the credit side.

U

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W

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• Warehouse Racking  -  A system of shelves, configurations and location of the physical structure needed to store inventory.
• Welding  -  The fabrication process that fuses like materials togeather by heating them to a suitable temperatures, this can be acomplished by brazing, soldering or welding.
• Workflow  -  A step-by-step process that allows you to understand how components must come togeathed to produce a finished product.
• Work in Progress  -  Items between machines or equipment waiting to be processed.
• Work Load  -  The amount of work units assigned to a resource over a period of time.
• Work Package  -  A deliverable at the lowest level of the work breakdown structure, when that deliverable may be assigned to another person.
• Workpiece  -  A piece being worked on.
• Workplace Safety  -  The working environment at a company, that includes the health, safety, and well-being of it's employees.
• Worksheet  -  Usually a spreadsheet that includes a business’s list of accounts, account balances, adjustments, and adjusted balances.

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