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Rev. Mar. 31, 2016

A Glossary of Lean Terms

Lean practice may be defined as the relentless pursuit of the elimination of waste. Through the
continuous refinement of practices and procedures, lean management seeks to produce more goods more
quickly while using fewer resources—less factory space, fewer worker movements, and fewer assembly steps.
Although often associated with manufacturing—Toyota and Danaher are proponents—it is also applied in
service settings such as Capital One Financial Corporation.

This note reviews some common Lean1 terms. Regardless of the terms used, the key to success in a Lean
conversion or turnaround is execution. Leaders must function as both trainers and cheerleaders, and
operators must be completely assured that the program is a permanent fixture in the company. Only
unanimous commitment will allow the process to function properly.

5S

5S is a method of organizing, cleaning, developing, and sustaining a more efficient process. It refers to
the following five terms:

1. Seiri (sort and eliminate): Eliminate everything useless in the process. If it doesn’t add value, remove
it.
2. Seiton (set in order): Everything has a place. Place tools and parts in order to create the greatest ease
of use.
3. Seiso (shine/clean): Check and maintain the process and the equipment.
4. Seiketsu (standardize/maintain): Regularly conduct the first three Ss. This is achieved through
routines and systematic order and maintenance policies.
5. Shitsuke (sustain/discipline): Management is responsible for making sure the daily 5S discipline is
maintained through training, empowerment, and discipline.

Andon Board

An andon system is one that monitors the status of the process through signals. A green signal means the
process is flowing smoothly. A yellow signal means the system requires monitoring. A red signal means the
system needs immediate attention.

1 In keeping with its Less is More ethos, the lean philosophy has come to be represented by the word itself, sometimes capitalized.

This note was prepared by Harry “Mac” Russell (MBA ’07) under the supervision of Professor Elliott N. Weiss. Copyright  2007 by the University of
Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to [email protected]. No
part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying,
recording, or otherwise—without the permission of the Darden School Foundation.

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In the Toyota factory, an andon cord hangs parallel to the assembly line. If a worker spots a problem, he
or she pulls the andon cord, which lights a yellow signal to alert supervisors. The assembly line continues to
move. Supervisors have until the car reaches the end of the worker’s station to correct the problem and reset
the andon board to green. If the problem is not corrected before the car reaches the end of the worker’s
station, a red signal is illuminated and the line stops. This system allows quality issues to be identified early in
the process before an enormous amount of rework is required.

An andon system can be applied to both product and service industries. The key to success is to provide
the worker with the authority to signal that a problem has been spotted so that the line can be stopped when
necessary.

Gemba

“Going to the gemba” means to get a firsthand look, to go to the shop floor. This is generally the first step
in understanding the process flow and identifying muda. Going to the gemba may take time and should
consist of observation only, so that any subsequent decision is based on a thorough understanding of the
process.

Heijunka

Heijunka (“leveling”) is a workload stabilization strategy often used in conjunction with takt time. By
scheduling production in a repetitive sequence, recurring daily variations are smoothed over to facilitate the
meeting of longer-term demand. It is common to convey the leveling process through the use of a heijunka
box.

Assuming a batch size of 50, if you received three orders from three different companies—100 units of
X, 100 units of Y, and 200 units of Z—heijunka would level the weekly production schedule as follows: X, Z,
Y, Z, X, Z, Y, Z.

Kaizen

Kaizen is the idea of continual improvement of the process, of every step in the process through relentless
evaluation. The improvement could come in the form of resources, time, or quality. This should not be
confused with a kaizen event, where a single workstation or process is the focal point and the project of
improvement is not part of the daily routine. Kaizen is meant to occur every day. It should be part of
everyone’s daily routine to look for ways to improve the process.

An improvement can be as complex as rearranging equipment to realign workflow or as simple as adding

lights that enable workers to reduce their process time.

Muda

Non-value-added work, or any non-value-adding activity in the process. Muda has been further divided
into the following seven categories:

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Overproduction

Producing ahead of demand or producing in excess of demand. Overproduction can be recognized by variation in
the workflow, excessive finished-goods inventory, and large batch sizes. Overproduction can result from an
absence of procedural standards, poor forecasting, and lengthy setup times.

Operators waiting

Inefficient work sequence. Operators waiting for material or equipment setup and equipment sitting idle while
other equipment is used are examples of this type of muda. Variation in production, lengthy setup times, poor
equipment maintenance, and low staffing all cause operators to wait.

Excess transport

Workflow is neither direct nor smooth. Workflow with multiple zigzag movements and multiple material-
storage racks creates inefficiencies that cause excess transport.

Processing waste

Overprocessing in the system that adds no value to the product. Redundant processes and continuous changes in
quality standards are characteristics of processing waste. They are caused by such things as unclear customer
standards and poor process design.

Unnecessary inventory

Inventory in excess of immediate needs.

Unnecessary operator motion

Non-value-adding movement by the operators. Material that is widely dispersed and excessive bending and
reaching by the operator are examples of this type of muda. Poor work-center layout and poor storage
procedures are causes of unnecessary operator motion.

Defects

Rework and scrap. Excessive scrap and customer complaints are indicative of defects. Improper material
and poor-quality workmanship/design are causes of this type of muda.

Many organizations add an eighth category of muda:

Untapped creativity of the work force

Ideas for process improvement from frontline workers are not sought out or utilized.

Kanban

The term kanban, which combines the Japanese words kan (“card”) and ban (“signal”), refers to a
scheduling system that can be applied to both information and material flow inside and outside the process.
Cards, containers, or markings are used to direct the flow of material or information through the process.

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Examples:
 A workstation uses bins as its kanban. A worker has two bins for the same part. When one bin is empty,
the worker places it in a visible location as a signal to the parts runner, who refills it while the worker
draws from the second bin.
 A company uses a card as its kanban. A manufacturer of MP3 players stores raw materials it receives
from suppliers in bins. When a bin is empty, a card is placed on a scheduling board so everyone can
see what part needs to be ordered and its status.
 A mark on a pantry shelf can be used as a kanban. Let’s say you store open jars of peanut butter in the
cupboard and new jars in the pantry. By marking an X under the jar in the pantry, you signal the need
to buy more peanut butter when you see the X (because you opened the new jar and put it in the
cupboard).

Poka-yoke

A poka-yoke is a Lean process method that mistake-proofs a system. The idea is to understand why a
mistake occurs and then identifying ways to prevent it from reoccurring. This method blames mistakes on the
method, not the worker. One example is an automated parts-ordering system used on U.S. Navy ships that
requires every pertinent block on the screen to be filled in before the order will advance to the next level,
ensuring that the proper material is being ordered in a timely manner. Poka-yoke processes should make
mistakes difficult to occur, but when they do, readily apparent.

SMED

SMED (single-minute exchange of die) refers to the reduction of setup time in changeovers. There are
various approaches to streamlining changeovers. One approach is one-motion setups, where the changeover
process is reduced from several steps to one. Another is to separate internal setup from external setup—to
proceed to setup while the previous operation is still running.

Takt Time

Takt time is simply the rate of customer demand measured in time units. To find takt time, divide
Available Daily Production Time by Daily Customer Demand. Takt time determines the rate at which
products should be produced. It should establish the rhythm of the entire factory. Determining takt time
allows managers to schedule daily requirements accurately, smooth production rates, and reduce work in
progress.

If a customer demands 80 units a day and the factory operates 480 minutes a day, then takt time is 6. In
order to meet demand, the factory must essentially produce one unit every six minutes.

Waste

Lean identifies three types of waste:

Muda: Non-value-added work, or any non-value-adding activity in the process.

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Muri: Overburden on the worker resulting from poor management practices.

Mura: Unevenness in scheduling (variation).

Muda has been further divided into seven categories (see separate entry for Muda).

Additional Reading

 Jeffrey K. Liker and David Meier, The Toyota Way Fieldbook (New York: McGraw-Hill, 2005).
 James Womack and Daniel Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation,
2nd edition (New York: Free Press, 2003).
 Freddy Ballé and Michael Ballé, The Gold Mine: A Novel of Lean Turnaround (Cambridge, MA: Lean
Enterprise Institute, 2005).

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