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| validation |
Confirmation by examination and provision of objective evidence that the particular requirements for a specific intended use can be consistently fulfilled. |
| valuation |
The assignment of dollars to units, as in multiplying on-hand inventory quantities by the standard cost, or open customer order units by list price. |
| value added work |
Work that the customer is willing to pay for. A transformation of the shape or function of the material/information in a way that the customer will pay for. |
| value added tax (VAT) |
A general consumption tax for the production and distribution of goods and services, added as a percentage charge based on price that reflects the incremental value added by a given activity. |
| value analysis |
Analyzing the value stream to identify value added and non-value added activities. The organized use of methodologies that focus on the function of a material, process or service in providing value to the customer. It attempts to define cost, quality and customer acceptance parameters in determining the value and possible redesign or reengineering of a given function. |
| value chain |
The linked set of activities within a supply chain that actively add value to the end product, as opposed to support or reporting activities. |
| value engineering |
An organized methodology that identifies and selects the lowest lifecycle cost options in design, materials and processes that achieves the desired level of performance, reliability and customer satisfaction. It seeks to eliminate unnecessary costs in the above areas and is often a joint effort with cross-functional internal teams and relevant suppliers. |
| value stream |
The set of specific actions required to bring a specific product through three critical management tasks of any business: Problem-solving, Information management and physical transformation. |
| value stream mapping |
A technique used in lean manufacturing that maps the flow of material and data, and associated time requirements. from initial supplier to end customer for a given business process. Used to define improvement areas and sources of waste. |
| variability |
The characteristic of a product or process in which parameters fluctuate to a significant degree but do not typically trend in a specific direction. Reduction of variability is a priority in systems that attempt to ensure consistent quality and reduce lead times. |
| variable control chart |
A chart presenting actual data from quality tests that shows the range, upper and lower limits, and deviation characteristics of a set of observations. |
| variable cost |
A cost for material, labor or overhead that changes in a traceable and measurable way due to changes in the volume of production units or operating hours in a given period. |
| variable lead time |
Lead time for a manufactured or purchased item that varies due to changes in quantity or process constraints. |
| variable overhead |
Overhead costs that change as a result of changes in production volume, but can not be directly traced to a given product or line. Ex.- utility costs that increase for a given facility in proportion to increased overall levels of production. |
| variance |
The difference between a standard or expected value and the actual result, and often characterized as favorable or unfavorable. |
| variation |
The inevitable difference among individual outputs of a process. The sources of variation can be grouped into two major classes: Common Causes and Special Causes. |
| velocity costing |
An overhead allocation method based on overall cycle time as opposed to volume or number of units. It focuses on time as a factor in competition, and the consumption of resources of all types as time passes. |
| vendor |
An external supplier of goods or services. |
| vendor certification |
The verification of vendor processes, delivery cycle and quality levels that allow that supplier to be categorized as an acceptable provider of a specific material or service, as determined by the customer. It may include the pre-certification of parts shipped as having acceptable quality and the elimination of incoming inspection when received. |
| vendor restocking |
A version of vendor-managed inventory (VMI) where the supplier physically restocks required parts at the production point. |
| vendor scheduling |
The sharing of internal schedules, often as generated by MRP, for specified items with a vendor, instead of placing individual purchase orders as required. A vendor schedule is often divided into zones, such as a firm commitment zone in which the customer will pay for any vendor production against that schedule, an information zone which projects requirements that authorize the vendor to purchase raw material but not add labor, and an information zone that gives forecasted long-term requirements but does not make a commitment. |
| vendor-managed inventory (VMI) |
An inventory planning and fulfillment technique in which a supplier is responsible for monitoring and restocking customer inventory at the appropriate time to maintain predefined levels. The vendor is given access to current customer inventory, forecast and sales order information and initiates replenishment as required. |
| verification |
The act of reviewing, inspecting, testing, checking, auditing, or otherwise establishing and documenting whether items, processes, services, or documents conform to specified requirements. |
| vertical format |
A display method used for MRP or other output reports in which dates are sequenced along the left margin and horizontal headings are used for gross requirements, scheduled receipts and other information. A vertical format normally only displays data for individual days where activity occurs, and does not group days into time buckets of weeks or months as in the use of a horizontal format. |
| vertical handling |
When tasks are assigned in such a way that the materials processes are being progressively worked towards completion, this is vertical handling. This in contrast to horizontal handling which only focuses on the output of a specific process. |
| visibility |
The degree of insight into future requirements, or the key factors that will impact system performance. |
| visual controls |
Various tools of visual management such as color-coding, charts, andons, schedule boards, labels and markings on the floor. |
| visual inspection |
Human inspection of items or processes for color, scratches or other parameters that does not involve the use of equipment. |
| visual management |
When the normal state and abnormal state can be clearly and visually defined, visual management is possible. In visual management, simple visual tools are used to identify the target state, and any deviance is met with corrective action. |
| visualization tool |
A training or measurement tool that provides a graphic display of data or concepts to increase understanding. |
| voice of the business |
The stated mission, goals and business objectives of an organization. This collection of specific, documented statements of intent are the guidelines by which linkages are established between Six Sigma projects and targeted levels of improvement. The Voice of the Business should outline exactly what it is the business does, as well as how the business intents to accomplish its mission. Combined with the Voice of the Customer, the Voice of the Business plays an important role in defining potential Six Sigma projects. |
| voice of the customer (VOC) |
A systematic, institutionalized approach for eliciting and analyzing customers’ requirements. In six sigma and other quality improvement programs, the identification and prioritization of true customer needs and requirements through the use of focus groups, interviews and other methods. |
| voice of the process |
Statistical data that is feedback to the people in the process to make decisions about the process stability and/or capability as a tool for continual improvement. See Statistical Process Control). |
| volume flexibility |
The ability of a process to handle large variations in volume without significant changes in time or facility requirements. |
| volume test |
The verification that a new system or program will adequately process expected transaction volumes while providing acceptable response time. Volume tests of batch programs are required to estimate nightly and weekend runs and determine system availability. |
| voucher number |
An internal number assigned in accounts payable to track and reference one or more invoices. |
