Reference

The manufacturing glossary.

A practitioner's glossary of manufacturing terms: OEE, takt time, Cpk, MRR, chip load, MRP, EOQ, and more, each with a concrete definition, formula, and a

Overall Equipment Effectiveness (OEE)

  • A single percentage that measures how much of the planned production time is truly productive. It multiplies three factors: availability (uptime versus planned time), performance (actual speed versus rated speed), and quality (good parts versus total parts). A world-class OEE is around 85 percent; most plants run 45 to 65 percent.
  • OEE = Availability x Performance x Quality

Takt Time

  • The pace at which you must complete one unit to meet customer demand, calculated as available production time divided by demand. If a line has 27,000 seconds available in a shift and must build 450 units, takt time is 60 seconds per unit. It sets the drumbeat every station must match.
  • Takt = Available time / Customer demand

Cycle Time

  • The actual time it takes to produce one unit at a process, measured from start to start of consecutive units. Cycle time must be at or below takt time to keep up with demand. It excludes waiting and queue time, which are counted separately in lead time.

Lead Time

  • The total elapsed time from order release to completion, including queue, setup, run, wait, and move time. In most shops value-added run time is only 10 to 20 percent of lead time, with the rest spent waiting, which is why lead-time reduction focuses on queues rather than machine speed.

Process Capability (Cpk)

  • A measure of how well a process fits inside its specification limits, accounting for centering. A Cpk of 1.33 is a common minimum for capable processes and corresponds to roughly 63 defective parts per million; 1.67 is often required for safety-critical features.
  • Cpk = min[(USL - mean), (mean - LSL)] / (3 x sigma)

Sigma Level

  • A count of how many standard deviations fit between the process mean and the nearest specification limit, used to express defect rate. Six Sigma corresponds to 3.4 defects per million opportunities once the standard 1.5 sigma long-term shift is included.

First Pass Yield (FPY)

  • The share of units that pass every step correctly the first time, with no rework or scrap. It is the product of the yield at each step, so a five-step line at 98 percent each yields only about 90 percent overall. FPY exposes hidden rework that final yield hides.

Scrap Rate

  • The percentage of produced material or parts discarded as unusable. It is tracked by cause code rather than as a single number, because setup scrap, defect fallout, and kerf loss each respond to different fixes. Scrap cost includes material, labor, and machine time already invested.

Material Removal Rate (MRR)

  • The volume of material a cutting tool removes per unit time, in cubic inches or cubic centimeters per minute. For milling it is width of cut times depth of cut times feed rate. MRR drives spindle horsepower demand and roughing cycle time.
  • MRR (milling) = Width x Depth x Feed rate

Surface Feet per Minute (SFM)

  • The speed of the cutting edge relative to the workpiece, the anchor value for every speeds-and-feeds calculation. It comes from the tool and material pairing, not the machine. Carbide in aluminum runs 800 to 1000 SFM; the same tool in stainless drops to 150 to 300 SFM.
  • RPM = (SFM x 3.82) / diameter

Chip Load

  • The thickness of material each cutting edge removes per revolution, also called feed per tooth. It is the real design variable behind feed rate. Too light a chip load rubs and work-hardens the material; too heavy chips the edge. Typical values run 0.001 to 0.006 inch depending on tool diameter.
  • Feed rate = RPM x flutes x chip load

Kerf

  • The width of material removed by a cutting process such as sawing, laser, plasma, or waterjet. Kerf must be accounted for in nesting and cut lists because it becomes scrap on every cut. A 0.06 inch kerf across hundreds of cuts adds up to real yield loss on a sheet.

Draft Angle

  • The taper designed into the walls of a molded or cast part so it releases cleanly from the tool. A common rule is one degree of draft per inch of depth, with textured surfaces needing more. Too little draft causes drag marks, ejector-pin stress, and longer cycle times.

Clamp Tonnage

  • The force an injection molding or stamping press applies to keep the tool closed against internal pressure. For injection molding it is estimated as projected part area times cavity pressure, typically 2 to 5 tons per square inch. Undersized tonnage causes flash; oversized wastes energy and machine capacity.

Geometric Dimensioning and Tolerancing (GD&T)

  • A symbolic language on engineering drawings that defines allowable variation in form, orientation, location, and runout relative to datums. GD&T communicates function precisely, so a hole is toleranced by true position rather than by two independent coordinate dimensions.

First Article Inspection (FAI)

  • A full dimensional and material verification of the first part from a new or changed production process, documented against every drawing requirement. FAI proves the process can make a conforming part before a full run is authorized, and is a standard requirement in aerospace and automotive.

Production Part Approval Process (PPAP)

  • The automotive-standard package a supplier submits to prove it can consistently make a part to specification, including the FAI, control plan, process capability studies, and measurement system analysis. Approval is required before a supplier ships production volumes.

Mean Time Between Failures (MTBF)

  • The average operating time between failures of a repairable asset, a core reliability metric. A higher MTBF means fewer breakdowns. It is paired with MTTR to model availability and to size spare-parts inventory and maintenance staffing.
  • MTBF = Total operating time / Number of failures

Mean Time to Repair (MTTR)

  • The average time to restore a failed asset to service, including diagnosis, repair, and testing. Lower MTTR raises availability. Together MTBF and MTTR give availability as MTBF divided by the sum of MTBF and MTTR.
  • Availability = MTBF / (MTBF + MTTR)

Material Requirements Planning (MRP)

  • A method that explodes a production schedule through the bill of materials to calculate what components to buy or build and when. It nets gross requirements against on-hand inventory and scheduled receipts, then offsets by lead time so material arrives just before it is needed.

Economic Order Quantity (EOQ)

  • The order size that minimizes the combined cost of ordering and holding inventory. It rises with demand and order cost and falls as holding cost increases. EOQ is the classic trade-off between ordering too often and carrying too much stock.
  • EOQ = sqrt(2 x demand x order cost / holding cost)

Reorder Point (ROP)

  • The inventory level that triggers a replenishment order, set to cover demand during the supplier lead time plus a safety buffer. With demand of 40 units per day and a 12 day lead time, the base reorder point is 480 units before safety stock.
  • ROP = (Daily demand x Lead time) + Safety stock

Safety Stock

  • Extra inventory held to absorb variability in demand and supply lead time and to protect a target service level. It is often set as a service factor times the standard deviation of demand over lead time; a 95 percent service level uses a factor of about 1.65.

Work in Process (WIP)

  • The inventory of partially finished units between the start and end of production. By Little's Law, average WIP equals throughput times lead time, so cutting WIP shortens lead time at a fixed throughput. Excess WIP hides quality problems and ties up cash.
  • WIP = Throughput x Lead time

Throughput

  • The rate at which a system produces finished goods, set by its slowest resource, the bottleneck. Improving a non-bottleneck station does not raise throughput. It is measured in units per hour or per shift and is the numerator of most productivity metrics.

Bottleneck

  • The resource with the least capacity in a process, which sets the throughput of the whole line. An hour lost at the bottleneck is an hour lost for the entire system, so scheduling, buffering, and improvement effort concentrate there first.

Changeover Time

  • The time to switch a machine or line from making the last good part of one product to the first good part of the next. SMED techniques target reducing it below ten minutes by converting internal setup steps, done while stopped, into external steps done while running.

Single-Minute Exchange of Die (SMED)

  • A lean method for cutting changeover time to under ten minutes by separating internal setup, which requires the machine stopped, from external setup, which can be prepared in advance. Faster changeovers enable smaller batches and lower inventory.

Design for Manufacturability (DFM)

  • The practice of designing parts so they are easy and cheap to make, by simplifying geometry, relaxing non-critical tolerances, standardizing features, and choosing processes early. Most of a part's cost is locked in during design, so DFM has the highest leverage on unit cost.

Design for Assembly (DFA)

  • The practice of designing products so they are quick and error-proof to assemble, by reducing part count, adding self-locating features, and enabling one-direction assembly. Fewer parts means fewer purchase orders, less inventory, and lower labor time.

Kaizen

  • The practice of continuous, incremental improvement driven by the people who do the work. Rather than large projects, kaizen makes many small changes to eliminate waste, often in short focused events on the shop floor.

Kanban

  • A pull-based signaling system that authorizes production or replenishment only when downstream demand consumes stock. A card, bin, or electronic signal caps work in process and prevents overproduction, keeping inventory tied to actual consumption.

Poka-Yoke

  • A mistake-proofing device or design that makes an error impossible or immediately obvious, such as a fixture that only accepts a part in the correct orientation. It targets the defect at its source rather than catching it later in inspection.

Andon

  • A visual signaling system, often a light or board, that lets any operator flag a problem and, when needed, stop the line so it is fixed immediately. Andon makes abnormalities visible in real time rather than letting defects flow downstream.

Jidoka

  • The principle of building in the ability of a machine or operator to stop automatically when a defect or abnormality occurs, so bad parts are not passed on. It separates human work from machine work and prevents mass production of defects.

Value Stream

  • The full set of steps, both value-adding and wasteful, required to bring a product from raw material to the customer. Value stream mapping documents material and information flow to expose where lead time and inventory accumulate.

Yield

  • The fraction of input material or units that becomes good, sellable output. For material-heavy processes yield is dominated by nesting and scrap; for assembly it is dominated by defect and rework rates. Every point of yield is direct margin.

Uptime

  • The percentage of scheduled time that equipment is available and running, the availability factor inside OEE. Downtime is split into planned events like changeovers and unplanned events like breakdowns, each tracked separately to target the right fix.

Last reviewed 2026-05-12.