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A functional layout is a workplace organization in which processes are organized by the type of work (function), rather than by value stream or in a cellular configuration where sequential process steps are located in close proximity. In a functional layout, for example, the cutting machines would be in one Read more…
“Full-time equivalent”, or “FTE” is a way to normalize staffing decisions. In the modern workforce, particularly in administrative environments, employees perform multiple functions or don’t work standard 9-to-5 schedules. Using FTE to determine the size of the workforce assigned to a process makes accurate productivity and cost measures possible. A Read more…
Businesses have an incredible amount of information flowing into them. It is often impractical for people to process the data and make quick assessments and corrections to the business without some sort of simplification tool. One such tool is the dashboard. It is simple view of the key metrics of Read more…
The activity ratio is a measure of how quickly work moves through a process. It is simply the sum of the process times divided by the total lead time. For example, if the processing time was 30 minutes and the lead time was 2 hours, the activity ratio would be Read more…
The Balanced Scorecard is a management tool developed by Robert Kaplan and David Norton and published in their book titled The Balanced Scorecard. The book focuses on four areas: Financial performance Customer knowledge Internal business processes Learning and growth The term “balanced”, as explained in their preface, is many faceted. Read more…
A future state value stream map (VSM) is simply a projection of how a value stream should look in the future, generally 6 to 12 months. When a current state value stream map is created, problem areas become apparent. The bottlenecks where inventory piles up, processes with poor quality, and Read more…
Murphy’s law has been stated in various ways, but essential boils down to “If something can go wrong, it will.” There are many addendums to the law, such as “in the worst possible way” or “at the worst possible time”. The origin of Murphy’s law is somewhat murky but seems Read more…
Like many Japanese terms surrounding continuous improvement, there are several slight variations of translations of these three terms. In general, muda is the most commonly used of this group of terms. In practice, it has come to mean “waste”. Muda really means wasteful activity. Mura means the waste of inconsistency Read more…
Often, something occurs over a short period, but needs to be compared to a full year. This is known as annualizing. An example: You are applying for auto insurance, and the agent asks you what your yearly mileage is. You know that you drove 1,000 miles in the last month. Read more…