Glossary of Terms (Manufacturing)

Below is a glossary of terms related to general manufacturing, designed to assist you when communicating with your cut and sew manufacturer.

Familiarize yourself with these terms to enhance collaboration and ensure clarity in your discussions. See also our Textiles and Leather glossary of terms.

Advanced Product Quality Planning - A methodology in manufacturing that aims to produce high-quality products by identifying and addressing potential issues during the design, production, and delivery stages.

Agile Manufacturing - This approach uses tools, techniques, and initiatives to enable a company to quickly respond to changing customer demands and market conditions by adapting operations and forming strategic partnerships.

Alternative Components (ALTS) - These are parts that can replace originally specified components without impacting performance, utilized to reduce costs or lead times.

Approved Manufacturer List (AML) - A list that outlines approved relationships between third-party parts and a company’s internal components, determined by the R&D team to meet production requirements.

Approved Vendor List (AVL) - A list of approved suppliers from which a company purchases materials.

Assembly Line - A production method where parts are added to a semi-finished product as it moves through various workstations, enhancing speed and reducing labor costs through mechanical part transportation.

Bill of Materials (BOM) - A comprehensive list detailing all materials and parts required for producing a specific product.

Benchmarking - A process of comparing a company's products, services, and practices with those of the industry leaders or competitors to identify areas for improvement and achieve superior performance.

Bottleneck - A stage in the manufacturing process where production slows down or is limited by factors such as material shortages or equipment inefficiencies, leading to decreased productivity and higher costs.

Computer Aided Design (CAD) - Specialized software that helps in designing parts or workpieces.

Change Request - Proposals for modifications to the manufacturing process or equipment.

Contract Manufacturer (CM) - A firm that manufactures specific components or products under contract for other companies.

Commercialization - The process of introducing a new product into the market.

Costed Bill of Materials - A bill of materials that includes the cost for each component.

Change Management - The formal process for reviewing and approving changes in engineering requests, orders, and notifications.

Changeover - The process of preparing a production line or machine for a new product run, involving cleaning, inspection, adjustments, and reconfigurations.

Compliance - Adherence to regulations and company standards, ensuring product safety and quality.

Corrective Action/Protective Action (CAPA) - Practices aimed at investigating and addressing product failures to correct current issues and prevent future ones.

Corrective Action Request (CAR) - Documentation of problems with a product, requesting corrective actions.

Customer Lead Time -The time span from when a customer places an order to when they receive the product.

Customer Reject Rate (PPM) - A quality metric that measures the number of products rejected by customers per million shipped.

Cycle Time - The total time required to complete one cycle of an operation from start to finish, measuring process efficiency and productivity.

Days of Inventory - A measure used to determine how many days a company's current inventory will support its daily operations, calculated by dividing the average inventory on hand, including raw materials, work-in-progress, and finished goods, by the daily usage rate.

Estimated Annual Usage (EAU) - The total expected annual consumption of a material or component, calculated by multiplying the amount used by its unit cost.

Electronic Data Interchange (EDI): A digital communication system between companies that uses standardized document formats and protocols to enhance speed, accuracy, and efficiency in exchanging business documents like purchase orders and invoices.

Enterprise Resource Planning (ERP) - Advanced software that integrates various business functions including materials management, production, sales, distribution, and human resources, providing comprehensive monitoring and control across geographically dispersed operations.

Finished Goods - Products that have completed all production stages and are ready to be shipped and sold to customers, crucial for managing production efficiency and profitability.

Intellectual Property (IP) - Legal rights assigned to unique ideas, including patents and copyrights, with industrial property encompassing patents for new inventions and designs.

Inventory Turn Rate - A metric indicating how often a company’s inventory is sold and replaced over a period, a key indicator of asset management efficiency.

JIT Delivery - The practice of delivering materials and parts in small, frequent batches directly aligned with production schedules, optimizing manufacturing efficiency and reducing inventory costs.

Kaizen - This approach involves a systematic method for process improvement, executed by the people directly involved with those processes, using straightforward analysis techniques. It highlights ongoing enhancement and promotes an immediate, action-driven mindset.

Kaizen Event - A focused initiative, usually spanning a few days, where a team from various departments, including potentially non-production staff, works together to plan and execute substantial process improvements, achieving significant performance enhancements.

Kanban Signal - A method used to notify suppliers or upstream production stages to replenish a limited stock of components or subassemblies as part of a just-in-time inventory system. Today, Kanban signals may include the use of empty bins and electronic messages, in addition to traditional kanban cards.

Kitting - In this process, assemblers receive a container with all necessary parts required for assembling a product, thereby eliminating the need for frequent retrieval of inventory and tools. Each kit is delivered to its point of use along the production line.

Lean Manufacturing - A continuous improvement strategy in manufacturing that focuses on minimizing waste to enhance efficiency and reduce costs, thereby increasing profitability more effectively than through sales growth alone.

Manufacturing Bill of Materials (MBOM) - This document includes detailed information on all parts and assemblies needed to build a complete product ready for shipment, as well as all packaging materials needed for distribution.

Minimum Order Quantity (MOQ) - The smallest number of a specific product that a supplier is willing to sell.

Make to Assemble (MTA) - A production approach where parts are pre-manufactured but the assembly of the final product is postponed until an order is received, allowing for some customization.

Make To Order (MTO) - This manufacturing process involves producing items specifically upon receiving a customer's order, often allowing for high personalization and tailoring to unique specifications.

Make To Stock (MTS) - A traditional manufacturing strategy that involves producing goods ahead of time based on demand forecasts. This method requires accurate forecasting to avoid excess inventory or stock shortages.

Manufacturing Cost - These are the costs directly related to producing goods, including direct and indirect labor, equipment upkeep, manufacturing support, and overhead. It excludes non-production costs like sales or the cost of purchased materials.

Manufacturing Cycle Time - The time it takes from when a customer order is released to the production floor until the product is fully manufactured, assembled, and tested. This timeframe does not include initial order processing or engineering time for custom designs.

Manufacturing Deviation - A temporary alteration in production methods or procedures, such as using a substitute part, which can be either planned or unplanned.

Manufacturing Order - Official documents that authorize the manufacturing of specified quantities of parts or products, also known as batch cards, job orders, production orders, run orders, shop orders, or work orders.

Manufacturing Order Receipt - A document that applies costs of materials, labor, and machine use in work-in-process (WIP) to the finished goods received in inventory.

Manufacturing Order Routing - This is the process followed to fulfill a specific manufacturing order, detailing all necessary requirements including labor, machine time, and materials, also known as "manufacturing routing."

Manufacturing Picklist - A list detailing the items and quantities needed to complete a manufacturing order.

New Product Development (NPD) - This is the initial phase of developing a product that involves numerous iterations to refine the design before transitioning to operations.

New Product Introduction (NPI) - Similar to NPD, NPI focuses on coordinating operations teams and supply chain partners around the finalized product design to optimize production planning and scale-up.

North American Industry Classification System (NAICS) - A classification system used by the governments of the U.S., Mexico, and Canada that categorizes business establishments by type of economic activity. It supersedes the U.S. Standard Industrial Classification (SIC) system, covering manufacturers with codes that begin with numbers 31 to 33.

Original Design Manufacturer (ODM) - A company that designs and manufactures products based on their own specifications.

Occupational Safety and Health Administration (OSHA) - A U.S. government agency established in 1970 under the Occupational Safety and Health Act to ensure safe and healthy working conditions by setting and enforcing standards and providing training, education, and assistance.

Off-the-Shelf - A product that is available for immediate purchase and use without modifications.

On-Time Delivery Rate - The percentage of customer orders that are delivered within the agreed timeframe.

Operation Code - Codes that specify different manufacturing processes required to produce the final product or parent item.

Order Fill Rate - The ratio of the total number of complete customer sales orders to the annual total of sales orders.

Order-To-Shipment Leadtime - The duration from when an order is placed on the shop floor to when it is shipped, including any storage time in finished goods inventory.

Order-To-Delivery Leadtime - The time taken from receiving a customer order at the plant to when it is delivered to the customer, including warehousing, cross-docking, and transportation.

Original Equipment Manufacturer (OEM) - The manufacturer of a product that is marketed under another company's brand.

Product Lifecycle Management (PLM) - The process of managing the entire lifecycle of a product from inception through engineering design and manufacture to service and disposal.

Prototype - An initial model of a product used as a base for further design and development.

Parent Item - An item in a bill of materials that includes one or more child items in its composition.

Part Name - The unique identifier given to a specific part.

Part Number - A unique numerical identifier assigned to a part.

Premium Freight - An expedited shipping method used to meet urgent delivery requirements, typically at a higher cost.

Process Manufacturing - The production of goods in batch processes where the products cannot be broken down into distinct items and are typically transformed by chemical or thermal processes.

Product Development Cycle - The period from the start of product design to its availability on the market, also known as time to market.

Pull System - A workflow control method where materials are pulled as needed through the production process, often regulated by kanban signals, contrasting with push systems.

Rework - Repairing flawed products so they can pass the final inspection.

Request for Information (RFI) - An initial document utilized by companies unfamiliar with the market they intend to enter.

Request for Proposal (RFP) - A document that solicits solutions from vendors to address a customer's problems or business needs, typically following an RFI.

Request for Quote (RFQ) - A comprehensive document that specifies the exact requirements and costs for a product or service, often providing more precise cost details than an RFP.

Return Material Authorization (RMA) - Approval from a manufacturer allowing a customer to return products that fail to meet the required standards.

Rapid Prototyping - Techniques for quickly creating physical models from CAD designs, typically using computerized systems. Stereolithography, which uses lasers to form plastic models by hardening liquid resin, is one example.

Raw-Materials Turn Rate - A measure of asset management, calculated by dividing the total annual shipments' value at plant cost by the average cost of raw materials, including materials, labor, and overhead.

Stock Keeping Unit (SKU): - A unique identifier for tracking inventory in databases, invoices, or orders.

Standard Operating Procedure (SOP) - Detailed instructions designed to help workers perform complex routines consistently and efficiently.

Sub-Assembly - A component built separately but intended to be integrated into a larger final product.

Supplier - A provider of goods or services to another entity.

Scrap/Rework Costs - Expenses related to discarded materials and the correction of defective products to meet inspection standards.

Supplier Partnerships - Collaborative agreements with suppliers to enhance operations and performance through shared information and problem-solving.

Supplier Corrective Action Request (SCAR) - A request outlining issues with a supplier's parts or processes and seeking resolution.

Supply Chain - The series of processes involved in the production and distribution of a product, from manufacturing to delivery.

Tolerance - Specified allowable dimensions for manufacturing a part to ensure it meets design requirements.

Tooling - Equipment and tools used to manufacture consistent and quality parts.

Time to Market (TTM) - The duration from starting product design to its availability on the market.

Turnkey - A comprehensive solution that includes all aspects of manufacturing and supply chain management.

Cutting Table - A flat surface, often used as a work or conveyor area, which can be made from materials like wood, metal, or glass.

Takt Time - The rate of production needed to meet customer demand, calculated by dividing available shift time by the number of products required.

Time Study - An analysis to determine the average duration of each step in a manufacturing process.

Total Logistics Costs - The complete expenses involved in the storage, transportation, and delivery of products.

Total Quality Management (TQM) - An organizational approach to enhance all aspects of quality and customer satisfaction across all levels of a company.

Unit of Measure (UOM) - A standard quantity used to quantify inventory, such as pieces, kilograms, meters, etc.

Vendor Managed Inventory (VMI) - A system where suppliers maintain inventory levels on-site, ensuring availability and reducing stock shortages.

World-Class Manufacturer - A term denoting manufacturers at the forefront of industry standards, recognized for delivering superior value.

Work-In-Process Inventory (WIP) - The total value of incomplete goods within a manufacturing process, calculated at plant cost, including materials, labor, and overhead.

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