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Office politics are the unwritten rules of interactions in an organization. Social politics form in any group of people that interact regularly. Families have politics. Cliques in schools are a form of politics. And, of course, coworkers have a set of norms that they operate under. Office politics are commonly Read more…
Days sales of inventory (DSI) is an accounting measure that gives an idea of how much inventory is on hand in a company. A large number means the company is generally inefficient at turning raw materials into profit. The formula for DSI is: The average inventory is calculated as follows: Read more…
A sunk cost is an expense that has already been incurred and has no bearing on future decisions. Imagine that you are working on restoring an old car and have budgeted $2000 to complete the project. After all the repairs are made and you turn the key, you hear nothing. Read more…
A job shop is a flexible production operation that builds to order. They specialize in (but are not limited to) low volume, high-mix work. They often do custom production rather than manufacture standard parts. A job is a discrete unit of work—same product, same setup—of a specified quantity. A job Read more…
An acceptable quality level (AQL) is the percentage of defects allowed for a lot before it is rejected by a customer. Due to the size of most lots and the costs of 100% inspections, the quality of an incoming lot is frequently assessed with a sampling plan. The AQL will Read more…
Curiosity is the desire to learn more, or the state of dissatisfaction with a lack of knowledge. It is also a fundamental part of any problem solving mentality. Curiosity provides the drive to follow up on an issue once it is identified. It gives the spark that makes people continue Read more…
A line stop is exactly what it sounds like. A team member presses a button that prevents an assembly line from advancing. This typically happens for one of two main reasons. Someone discovered a quality issue. Someone was not finished with their work. Other reasons might include maintenance problems, misplaced Read more…
Takt time is the required pace of production to meet customer demand. It is calculated by dividing the working time available, generally for that shift, by the customer demand during that time period. Despite its apparent simplicity, it is one of the most misunderstood terms in continuous improvement. It is Read more…
The 1/3 – 2/3 rule of planning simply says that leaders should take a third of the time until a deadline to make a plan, and then provide their subordinates with the remaining time to develop their own plans and execute them. It is a simple rule of thumb that Read more…
Change management is a fairly large field of study that deals with effectively and efficiently introducing changes into an organization. When changes occur, there are some predictable sequences of events that follow. Understanding this process will help smooth transitions that are associated with continuous improvement. Change has two main components. Read more…
CLOSED MITT is an acronym used to categorize waste. It expands on the traditional 7 Wastes that are frequently used in Lean efforts. The origin of CLOSED MITT is unknown, but it has grown in use over the years. Since its early days, it has come into fairly common mention Read more…
Communication is the act of transferring information and ideas from person to person. It comes in many forms. Face-to-face conversations. E-mails. Phone. Voicemail. Non-verbal communication (i.e. rolling of eyes). Pictures painted on the walls of caves. Even chalk marks on park benches can be a form of communication between covert Read more…