 |
| labor content |
syn: labor cost. |
| labor cost |
The portion of a manufactured item's standard or actual cost attributed to the usage of direct labor, as specified by the hours consumed times the pay rate per hour. |
| labor efficiency variance |
The cost variance created by using more or less actual labor hours than the standard labor hours for a given amount of production, while assuming the actual pay rate equaled the standard pay rate. |
| labor grade |
A labor classification that indicates capabilities and sometimes an associated pay range and ranking against other labor grades. |
| labor-intensive |
A product or product line that requires a higher usage of direct labor as compared to other products that make more use of automation. Labor- intensive products may be candidates for outsourcing unless there is a unique skill set required. |
| labor rate variance |
The cost variance created by reporting labor hours with a pay rate higher or lower than the standard pay rate, while assuming the actual hours worked were equal to the standard. |
| labor utilization |
The measure of the labor hours recorded against production activities vs. the hours available or scheduled for a given period. |
| labor work center |
A work center where the specified capacity is constrained by labor availability instead of machine availability. |
| ladder |
In project management, a set of parallel activities that begin or stop at the same time. |
| lag time |
The period of time after processing is complete that a given item is not available for usage due to curing, drying or other requirement that does not involved active use of resources. |
| lagging indicator |
An economic or other indicator that changes value after the underlying conditions it measures have begun to exhibit a trend. Lagging indicators may confirm the existence of a condition or trend, but are not used for prediction. |
| landed cost |
The total standard or actual cost for an imported purchased item, composed of the vendor cost, transportation charges, duties, taxes, broker fees and any other or charges. The total landed cost of an import item must be considered in evaluating foreign vs. domestic purchase decisions. |
| last in first out (LIFO) |
A usage rule and accounting and other systems that assumes the last item brought into inventory (or into a queue) will be the first one used. During periods of rising prices, it has the effect of charging increases to the current period instead of subsequent periods. |
| late finish date |
The latest date a project task or activity can be completed without delaying the entire project. |
| late start date |
The latest date a project task or activity can begin without delaying the entire project. |
| lateness |
The degree to which an order or project task is past its due or scheduled date. Some systems prioritize action messages based on the items most late, or past due. |
| layer |
To separate discrete levels from the total of a given item, based on time, specific batch identifier, or some other factor. On-hand inventory is sometimes layered to isolate the specific timing of the costs that created the total. |
| LCL |
Lower control limit (see Control limit) |
| lead time offset |
MRP processing logic that defines the release date of a planned order by determining the planned receipt date and backing up as required by the defined lead time. |
| leading indicator |
An economic or other indicator that changes in advance of a new trend or condition and can be used in prediction. |
| lead time |
The total amount of time between the recognition of a required task, operation or process and its completion. Elements of lead time can include order entry, material accumulation, machine setup, queue, processing, move and other activities, which can be classified by systems that seek to eliminate waste as valued-added (processing that actively adds value as perceived by the customer) and non value-added. |
| leaf |
In a decision tree, a final node that is not split into further nodes. |
| lean enterprise |
A Lean Enterprise is an organization that is engaged in the endless pursuit of waste elimination. A Lean Enterprise has a culture that does not tolerate waste of any kind. |
| lean enterprise transformation |
Developing a culture that is intolerant to waste in all of its forms. A successful Lean Transformation should result in a Lean Enterprise, an organization that is engaged in the endless pursuit of waste elimination. |
| lean manufacturing |
A overall methodology that seeks to minimize the resources required for production by eliminating waste (non-value added activities) that inflate costs, lead times and inventory requirements, and emphasizing the use of preventive maintenance , quality improvement programs, pull systems and flexible work forces and production facilities. |
| least squares |
An estimating model that determines parameter weights based on the set that minimizes the sum of the squared deviation of predicted values from a line or set of observed values. |
| legacy system |
An existing or inherited system used to run significant business functions that will be used as the base for conversion to or integration with a new system. Legacy systems are typically replaced due to technical or functional obsolescence, or because the organization owning the system has been acquired. |
| less than truckload (LTL) |
A small shipment that does not qualify for full truckload (FTL) rates based on weight or volume, and normally has a longer delivery time due to consolidation with other LTL shipments. |
| level inventory plan |
A plan that varies production levels in order to maintain a specific, even level of inventory over a given period of time, due to storage or other considerations. |
| level production plan |
A production plan that varies the level of inventory in order to maintain an even production level for a given period. Level production plans may be a result of facility restraints, or to accommodate seasonal demand. |
| level |
The presentation of single or multiple part numbers in a bill of material that describes how an assembly is put together through level codes. The finished or end item is typically coded as level 0, which denotes the highest level in a bill of material, and its immediate components are coded as level 1. If a level 1 component is a subassembly, its immediate components are coded as level 2, and so on. An indented bill of material is normally used in representing levels. |
| leveling |
Smoothing out the production schedule by averaging out both the volume and mix of products. Production leveling allows a consistent workflow, reducing the fluctuation of customer demand with the eventual goal of being able to produce any product any day. |
| life cycle cost |
The analysis of cost issues over the entire life cycle of a given product, rather than a specific fiscal period. It includes factors based on product life cycle stage (introduction, growth, maturity, decline) and all research and development, design, marketing, production and logistics costs. A cross-functional approach used in investment and facility decisions. |
| limit function |
Action which sets a high or low limit on any signal within the controller. |
| limiting operation |
The bottleneck or constraining resource in a linked series of resources. The production rate of the set of resources is effectively the production rate of the limiting operation. |
| line balancing |
The process of aligning operations within a specific production line, and feeder lines to consuming lines, that minimizes fluctuations in production levels and operation downtime. |
| line charts |
Charts used to track the performance without relationship to process capability or control limits. |
| line of sight |
Network communication systems that require a direct, unblocked path to transmit data. |
| line |
syn: production line. |
| linear regression |
The best fit of sample data points to a linear model by minimizing the sum of the squares of deviations between the points and the line. |
| linearity |
The degree to which a set of production or other data has a flat distribution around the centerline, and does not exhibit wide variations in a given time period. |
| link |
To connect two or more resources or systems so that the output of one becomes input to another on a recurring basis, or directly affects its performance. |
| Little's Law |
Provides an equation for relating Lead Time, Work-in-Process (WIP) and Average Completion Rate (ACR) for any process. Named after the mathematician who proved the theory, Little's Law states: Lead Time = WIP (units) / ACR (units per time period). Knowing any two variables in the equation allows the calculation of the third. Reducing WIP while maintaining the same ACR reduces lead time. Similarly, improving the process to increase ACR while maintaining the same WIP also reduces Lead Time. This applies to any process - manufacturing, transactional, service or design. If it is difficult to relate WIP to a given process, try using TIP instead (Things-in-Process). Example: A quoting department can complete 4 quotes per day (ACR), and there are 20 quotes (TIP) in various stages in the department. Applying Little's Law:
Lead Time = TIP/ACR = 20 quotes/4 quotes/day = 5 days. |
| load leveling |
The process of rearranging demand (in terms of orders or a schedule) so that it is evenly distributed for a given time period. |
| load profile |
A numerical or bar graph report of planned and actual capacity requirements for a given resource, that may include pegging to show the individual order sources of the demand. |
| load |
The amount of planned and actual demand placed on a resource for a given time period that determines its requirements and can be used in calculating over- or under-capacity situations. |
| load-load |
A method of conducting single-piece flow, where the operator proceeds form machine to machine, taking the part form one machine and loading it into the next. [Same as Chaku-Chaku] |
| location |
A separate, named space that may contain multiple items but is considered as a single entity by locator and warehouse management systems in specifying height, depth, weight allowed, and other factors. |
| locator system |
The system used to track individual assigned and actual inventory stocking locations, and determining location naming conventions. |
| lockbox |
A remote secure location, such as a post office box, where customers send payments instead of to corporate headquarters, and where a local financial institution receives those payments and transfers to the vendor account. A system used to speed up the cash collection cycle. |
| logarithm |
An exponent used in mathematical equations to express the level of a variable quantity (or, the power to which a number must be raised to produce a specific result). |
| logic diagram |
A schematic representation of the elements in a defined system that defines their interrelationships and the rules for their interaction. Often used in electronic design and/or test systems. |
| logical relationship |
The connection of two variables or project tasks based on a direct cause or dependency, rather than coincidence. |
| logistics network |
The linked set of resources used in moving and storing material at the required location and time, which can be classified as external (vendors, customers, distribution centers and transportation providers) and internal (production, material movement and storage). |
| Lorenz curve |
The graphical representation of the level of equality between two sets of data (as in cumulative percentage of population and cumulative percentage of net income). Perfect equality is represented as a 45 degree angle. |
| lost sales analysis |
The function of classifying the reasons why orders or quotes were cancelled before delivery could take place, which may include pricing, shipment date, program change, or other issues. |
| lost time |
Time planned for production operations that did not occur due to unscheduled problems such as machine downtime, material or personnel availability, or other situations. |
| lot |
A production run or batch that can be isolated from other runs and identified with a specific set of material, production facility and process characteristics. |
| lot ID |
The identifier assigned for a specific production lot or batch and used in subsequent material transactions and tracing activities. |
| lot size rule |
The rule or code used to specify the lot size for a specific item, such as lot-for-lot, fixed quantity, fixed period, or other. |
| lot size |
The quantity of a planned or actual order for purchased or production items, calculated as a result of lot size rules that consider the reason for the order (to order or to stock) and the costs created by the tradeoff in creating and setting up orders vs. carrying inventory for a period of time. |
| lot tracking |
The process of tracking a given material lot up (into upper level items and customer/interplant orders) or down (into the lower level lots it consumed when produced, or the lot received from a vendor). Physical and system controls are required to provide the true source and destination of a given lot in a product recall or similar situation. |
| lot-for-lot |
A lot size method in which the suggested quantity is equal to the net requirement for a given day, and is not rounded up to a minimum or multiple. A lot-for-lot technique will generate a greater volume of orders than a fixed lot size system, with smaller quantities per order and a smaller inventory investment due to ordering exact requirements only. |
| low level code |
A numerical code that specifies the lowest level a given item exists on any bill of material in the system. MRP processing logic gathers gross requirements from all successively-lower levels in the bill of material until the lowest level is reached before netting against inventory and incoming receipts to generate net requirements. |
| lower control limit (LCL) |
The measurement point below the centerline in a process control chart or report that indicates an out-of-bounds condition or warning signal. |
| lower level (item) |
A component or material (child) used in the production of an upper level item (parent). |
| LSL |
Lower specification limit (see Specification) |
| lumpy demand |
Demand that is uneven in terms of timing and quantity variations, and may require more investment in inventory or a longer response time than predictable, even demand. |
