Gotta Go Lean Blog

Indirect Costs

Indirect costs are those expenses that are not directly attributable to a single cost center or cost object (product line, service, etc.) Indirect costs may include shared resources or overhead. Administrative costs, website costs, IT infrastructure, and similar expenses fall into this category. One of the big challenges with indirect costs is that they cloud the issue of profitability for individual products. Imagine your company has a bustling loading dock that serves the entire company. Read more…

By Jeff Hajek, 10 yearsNovember 10, 2014 ago

Lean Terms

FISH / First In, Still Here

FISH, or “First In, Still Here” is a tongue-in-cheek term for excessive inventory. It is a play on the terms FIFO (first in, first out) and LIFO (last in, first out).

By Jeff Hajek, 10 yearsNovember 8, 2014 ago

Lean Terms

Master Black Belt

A Master Black Belt is an individual who has been certified to train other black belts. Black belts are the trainers and continuous improvement team coaches for a company. Having a Master Black Belt is a credential. It is not a job title. Many who attain that level do, however, end up committed to a career in continuous improvement roles. You might see a Master Black Belt as a Lean Manager, Director of Continuous Improvement, Read more…

By Jeff Hajek, 10 yearsNovember 7, 2014 ago

Lean Terms

Green Belt

A Green Belt is a certification that indicates a person is qualified to lead a Six Sigma project or, less frequently, a kaizen team in Lean. The Belt System Ranks Yellow Belt: Team Participant Green Belt: Team Leader Black Belt: Trainer Master Black Belt: Trains black belts; leads improvement effort The Belt System The full belt system is more commonly used in Six Sigma than Lean, though Master Black Belts are prevalent in both. There Read more…

By Jeff Hajek, 10 yearsNovember 6, 2014 ago

Lean Terms

Yellow Belt

A “Yellow Belt” designates that a person has been trained to participate in a Six Sigma project. In some rare instances, you may also see the yellow belt used in the Lean community. About the Lean/Six Sigma Belt System Note that there is not a formal governing body that manages belt certifications. They may be given by private training companies, professional organizations, or even, in some circumstances, by a company to its own employees. This Read more…

By Jeff Hajek, 10 yearsNovember 6, 2014 ago

Lean Terms

Mode

The mode is the number which appears most frequently in a set of numbers. For a finite data set, as in a sample of measurements, the mode would be the number that appears the greatest number of times. In a distribution curve, the mode is the number that corresponds to the highest point of the curve. In continuous improvement, the mode can be used as an indicator of the central tendency of a process, machine, Read more…

By Jeff Hajek, 10 yearsNovember 4, 2014 ago

Lean Terms

Median

The median is the point at which there are the same number of values above it as there are below it. This can apply to a sample, a full population, or distribution curve. When the data consists of a finite set (rather than a distribution curve), if there is an even number of data points, the median is the average of the two middle points. Example 1: For the following data set… 34,35,35,37,39,40,41 …there are Read more…

By Jeff Hajek, 10 yearsNovember 3, 2014 ago

Lean Terms

Special Cause Variation

Special cause variation is one of the two main categories of variation. Common cause, the other type, is the consistent, recurring fluctuation within a system, sometimes referred to as “noise”. Special cause variation, in layman’s terms, are the spikes that are caused by problems outside of those that regularly affect a process. While most people look at special causes as being something different than common causes, in truth, the only real difference is mathematical. What Read more…

By Jeff Hajek, 10 yearsNovember 2, 2014 ago

Lean Terms

SMART Goals

“SMART” is a commonly used mnemonic device that helps you set effective goals. SMART stands for… Specific Measurable Attainable Relevant Timely Detailed Explanation of SMART Goals Specific: Goals should be well-defined and unambiguous. The person or group the goal is assigned to should also be specified. Measurable: There has to be a way to evaluate the success of a team in reaching its goal. Good goals tend to designate from “A” to “B”, meaning that Read more…

By Jeff Hajek, 10 yearsNovember 2, 2014 ago

Lean Terms

Soft Savings

Soft savings are the intangible benefits of continuous improvement. Contrast this with hard savings which are those that can be directly pointed to as a line item on some sort of financial record such as a receipt or an invoice. Soft savings include things like reduced frustration, improved job satisfaction, shorter lead times, greater trust, and the like. Each is extremely difficult to directly apply dollar values to. All of them, though, do impact the Read more…

By Jeff Hajek, 10 yearsOctober 31, 2014 ago

Lean Terms

Hard Savings

Hard savings are those that are directly linked to reducing to an actual expense. There should be no confusion about how much was actually saved, as there is an invoice, payroll stub, bill, receipt, or the like associated with the expense. Even though there is a specific, quantifiable expense, there can still be some debate as to what the savings can be attributed to. Why does this matter? Well, in the big picture, it doesn’t. Read more…

By Jeff Hajek, 10 yearsOctober 30, 2014 ago

Lean Terms

SWOT Analysis

SWOT analysis stands for strengths, weaknesses, opportunities, and threats. It is a structured approach for assessing a project, new business venture, ongoing concern, or similar situation. By itself, SWOT analysis has limited utility. It has much more value when used with a purpose, such as a product launch, an annual strategy session, or when deciding whether to venture into a new industry. Generally speaking, any tool that structures a planning process has value. It prevents Read more…

By Jeff Hajek, 10 yearsOctober 29, 2014 ago