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| objective evidence |
Data supporting the existence or verity of something, |
| obsolescence |
The degradation in the value and usefulness of a resource based on its age, replacement by newer technology, lack of demand or other factor that may require a partial or total writeoff of its currently-stated value. |
| OED |
See “outer exchange of die” and “external setup". |
| off the shelf |
Systems and software programs that can be used as is, without further development or modification. |
| offload |
To move a production or logistics requirement from the primary to an alternate resource due to capacity or timing constraints. Cost reporting systems segregate the variances caused by resource offloading (a substitution variance) vs. the over- or under-usage of a standard resource (an efficiency variance). |
| offset |
The difference in the start or release of a task or order and its finish based on duration or lead time. |
| offshore |
Production and operating or technical support facilities located in a foreign country, normally in a different continent. |
| on order |
The total quantity of material on open purchase, production or replenishment orders- total scheduled receipts. |
| on-time delivery |
The receipt of scheduled shipments on the expected date, or defined as being within an allowable early/late tolerance. Some measurements include adherence to a specified delivery time of day due to unloading or space constraints. |
| one piece flow |
One piece flow production is when parts are made one at a time and passed on to the next process. Among the benefits of one-piece flow are 1) the quick detection of defects to prevent a large batch of defects, 2) short lead-times of production, 3) reduced material and inventory costs, and 4) design of equipment and workstations of minimal size. |
| one sided alternative |
The value of a parameter which has an upper bound or a lower bound, but not both. |
| one-touch exchange of die (OTED) |
A setup reduction goal that reduces the process to a single step, or one touch. |
| on-hand inventory |
The physical or perpetual quantity of current inventory. |
| online analytic processing (OLAP) |
Tools and methods that extract and perform multidimensional data analysis and enable a variety of views, such as rotation, summarization and trend analysis. |
| open order |
A released order not yet shipped (customer order) or received into stock (production, purchase or replenishment order). |
| open period(s) |
An accounting period not yet closed as a result of the month- end process that is still available for transactions and adjustments. |
| open room effect |
This common practice in Japanese offices involves taking down the walls and cubicles of an office and laying all of the desks out into one big 'open room'. This saves space and improves communication between those performing related tasks and creates a sense of teamwork. |
| operating expenses |
The money the required for the system to convert inventory into throughput. Operations, work or steps taken to transform material from raw materials to finished product. [See Process, Sub-Process] |
| operation |
A production step or activity with a defined start and stop time that may be composed of individual tasks but is not broken down into smaller increments in rate and capacity calculations. Unlike designating material used on a bill of material, a product routing has flexibility in grouping or splitting individual operations based on the commonality of the resources and rates involved. |
| operation backflushing |
The process of backflushing one or more operations on a routing based the designation of pay-points, or reporting operations. In a routing with three operations and only the last coded as a pay-point, no production is manually reported at the first two operations; if 100 units are reported at the third the system will assume 100 units were also produced at the first two operations and material and earned hour transactions are generated using the standard. Similar to material backflushing in that fewer manual transactions are required, with the tradeoff of assuming operations were performed at standard. |
| operation priority |
The positioning of an operation in a queue or list based on its status relative to meeting a due date, and its effect on later operations. |
| operation sequence |
The numerical designation in a routing that indicates the order in which operations are performed. |
| operation time |
The elapsed time for an operation that includes setup and run hours, but does not include queue or move time. |
| operation where-used |
A list of all products processed through a given operation. Useful in tracing impacts when the operation rate or process changes. |
| operator cycle time |
The time it takes for a worker or machine operator to complete a sequence of operations, including loading and unloading, but not including waiting time. |
| opportunity cost |
The amount of income lost as a result of not choosing the best alternative from a group of investment choices. |
| option |
An available choice within a feature category, as in the ten colors of paint offered for a given car model. The combination of options selected for a given order determine the end item configuration and sometimes change its final price or standard cost. Often used in assemble-to-order (ATO) environments. |
| order |
A single entry and/or document that specifies items, services, prices, dates and quantities and has a specific identifier for referencing or tracing. |
| order book |
A listing of open (unshipped) customer orders, normally time-phased and valued at actual individual order prices, that may include margin and profitability analysis. |
| order entry and billing |
The systems and functions used to accept and validate customer orders, communicate pricing and availability, and generate timed picking, shipping and invoicing updates and documents as required. |
| order point |
A specified inventory level used to trigger a reorder when the total of current on-hand inventory and open scheduled receipts falls below that level. The order point is set to cover demand expected until the order is received, and often includes a buffer based on past variability in the demand or the lead time. |
| order point system |
A reorder system that places orders when on-hand and scheduled receipts reaches a predefined level, instead of using requirements suggested by MRP from a bill of material explosion. An order point system normally is used to trigger a single order when needed, but may also be time-phased in projecting inventory levels in the future based on forecast demand in multiple periods and triggering multiple orders as needed. |
| order pooling |
The combination of multiple orders for picking and loading, based on destination, size, priority and other parameters. |
| order quantity modifier |
A rule that supersedes an originally-calculated lot size. For example, a fixed lot size rule of 50 with a minimum order quantity modifier of 200 would generate a suggested order of 200 even if requirements were below that level, and above the minimum would increment 50 at a time as required (250, 300, etc.). |
| order quantity |
syn: lot size. |
| order release |
The time and process required to evaluate requirements, create orders in a system and notify the source of supply. |
| ordering cost |
The total of all costs associated with the creation and release of a purchase order and its receipt, inspection and putaway as required. In calculating order quantities, the cost of placing a large number of individual orders is balanced against the cost of carrying inventory due to placing fewer orders with larger quantities on each. |
| ordinal data |
Data represented by individual values that can be ordered or assigned a specific rank on a scale. |
| ordinate |
The vertical axis of a graph. |
| original equipment manufacturer (OEM) |
An organization that markets a product composed of components and subsystems manufactured by other companies under its own name and brand. |
| out of sequence |
A production operation or project task begun before its predecessor has been started, as in activities reported against operation 40 on a routing when operation 20 and 30 have not been reported (assuming that operation backflushing is not being used). |
| outer exchange of die |
Activities that setup or prepare production equipment for the next job while the equipment is still processing the current job. External activities avoid setup downtime, as opposed to internal setup activities that require the equipment to be idle. Moving set-up activities from internal to external in order to reduce machine down time is a central activity of set-up reduction and SMED. Also called external setup. |
| outlier |
An observed value so far removed from the normal distribution that it may be considered an abnormality or one-time event, and is often not included in future calculations based on that set of data. |
| outbound logistics |
The processes and network used to pick, ship, track and store if necessary items ordered by customers, distribution centers and other supply chain partners. |
| output module |
This module may contain a digital-to-analog converter. Signals from this module go to the final control element which makes the required change to the process. |
| output |
The result generated by a process than transforms an input. |
| outside operation |
A routing operation performed by a vendor instead of using internal resources. Outside operation costs are often quoted in terms of lots or units processed, and material used may either be transferred from the customer facility or drop shipped from another vendor but is owned by the customer. |
| outsourcing |
The ongoing use of an external third party instead of an internal resource which may include production of a single operation, a product or an entire line, shipping and order fulfillment, product design, network infrastructure support or many other functions. Outsourced functions are normally outside an organization's core competencies and are done to reduce cost, reduce lead time, improve quality or achieve some other stated goal. |
| overflow location |
An inventory stock location, often assigned on a random basis, used when the primary or dedicated location is not able to handle seasonal or other temporary requirements. |
| overhead |
Business operating costs that can not be meaningfully or economically traced to specific products or services, which include manufacturing overhead, selling expenses, general and administrative expenses, and others. |
| overhead rate |
A percentage or fixed-dollar amount that allocates department or product overhead expenses to production on a labor hour, machine hour, labor dollar, material dollar or unit basis. Higher overhead rates indicate the grouping of a greater number of costs or pools on a general basis, and less identification of the direct drivers of those costs. (syn: burden rate) |
| overlapping operations |
Operations in which material produced by an initial work center is begun to be processed by the next work center before the entire batch or run is finished at the first. Done as a result of order quantity volumes and process constraints, and to reduce total lead time. |
| overlay |
To combine a new set of data with an existing database, and define controls and verification techniques for duplicate records and missing fields. |
| overrun |
Production over the desired order or schedule amount, or costs incurred in excess of budget. |
| overstated |
An MPS or other production schedule that contains planned quantities above what can actually be produced due to capacity or material constraints. |
