A management technique used to align an organization and its activities to key business objectives. It is "balanced" because performance objectives are set and measured in the areas of financial, internal processes, and learning and growth, and customer. The four perspectives keep each other in check and avoid unbalanced emphasis on one area at the expense of others.
A statement of the assets, liabilities, and capital of an organization at a point in time.
Data collected to establish the initial capability of a process to meet customer expectations.
Batch and queue
The practice of making large lots of a particular item or performing a single task repeatedly to achieve economies of scale. Working in a batch mode is the opposite of continuous flow, and creates a queue of work-in-process. While the assumption is that batching increases efficiency by spreading times lost to changeover, transportation or preparation, it often increases overall waste. This is because batching requires space to store the in-process goods, additional handling, delays in discovery of defects affecting whole batch, delays in delivery and so forth.
Studying other leading organizations to learn what they do well and to compare this to the performance or maturity level of one's process, products, or other business results.
The best known way of doing something.
An improvement professional with the training, practice and certification in Six Sigma, Lean and Continuous Improvement philosophies, principles, systems, methods and tools. Black belts are well-versed in the DMAIC (define, measure, analyze, improve and control) model for conducting data-driven improvement projects. They are able to identify waste and non-value-added activities and to lead activities to remove them using specific improvement tools. A Black Belt demonstrates team leadership, understands team dynamics and assigns team member roles and responsibilities. Black belts may be in part-time or full-time improvement roles.
See TPM Tag
A process step that limits the volume or capacity of the overall process. Bottlenecks constrain the process and its ability to flow at the rate of customer demand. Named after the idea that no matter the size of a bottle, liquid only flows out as fast as the opening at its neck allows.
A tracking sheets used to monitor an organization's progress towards KPIs. The bowling chart compares the targets to actual performance on a monthly basis. Its name derives from its similar appearance to a bowling scorecard.
A graphical visualization of a data divided into quartiles. Box plots show the center and spread of a data set. It is most useful for comparing two or more strata or data sets.
A one-page report that shows the performance of a value stream in terms of operational metrics, capacity usage, and a summary of the income statement.
See also Lean Accounting
A method to generate useful ideas. Brainstorming sessions are typically done in small groups. It may be silent or vocalized. Ideas are first given freely without criticism, editing or analysis. Once all ideas have been written down, discussion begin. The aim of the approach is to limit self-censoring, encourage creative thinking, and achieve quality of ideas through quantity.
Maintenance performed on a piece of equipment that has broken down, faulted, or otherwise cannot be operated. Although breakdown maintenance is often reactive and not intended, in some cases it is easier and cheaper to “run to failure” and make repairs. When this is true, having an orderly plan for repairing breakdowns is a valid type of planned maintenance.
Specific and measurable objectives that can only be achieved through significant changes to an organization's way of working. Breakthrough objectives may take multiple years to fully achieve. Breakthrough objective may come from a challenge to attain a vision or a higher level of performance, or from need, such as to remain competitive in a changing market.
A process, project, plant or other set of tasks that is constrained by previous work or existing infrastructure.
A set amount of inventory prepared as a hedge against process variation such as supplier unreliability, equipment breakdowns, or high defect rates. The size of the buffer is based on the frequency and duration of the problems resulting from process variation, and to the time of replenishment.
A cycle of experimentation and learning that involves ideation, rapid building of a minimum viable product for that idea, measuring its effectiveness in the market, and learning from that experiment.
See also Minimum Viable Product
A phenomenon in which mismatches between forecasts and actual customer demand result in supply chain inefficiencies. The swings in inventory that results from changes in customer demand as one moves further up the supply chain. The name refers to the resemblance of the inventory swings to the wave motion of a bullwhip.
See also Demand Amplification
A message that relays a sense of urgency to change. The idea is that the current condition, a burning platform, is so unacceptable that we must make the leap and adopt a bold change.
A document, plan or statement to justify a specific improvement or investment to decision makers. A Business Case clarifies the benefits for the customer and the organization, the associated cost of not taking action, the cost and risk of the proposed action, and so forth. The Business Case is often part of a project charter or improvement proposal.
Business Model Canvas
A visual template that guides the development of new business models or the evaluation of existing business models. It was introduced by Alexander Osterwalder in his book Business Model Generation in 2008. The Business Model Canvas helps us to evaluate options for different ways an enterprise can deliver value to its customers, and align their activities around delivering to the customer. This is done by defining the nine building blocks of Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships and Cost Structure.
Business Process Mapping
A set of activities to make visible what a business does, how they do it, who is involved, what customers require, where there are problems, and how success is measured. Business Process Mapping allows a team to see and understand reality in the same way, setting the foundation for improvement.