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Glossary of Manufacturing - Manufacturing terms Category: Agriculture and Industry Date & country: 27/04/2011, USA Words: 2096

Change Over:
The action of converting a machine from its state of manufacture for Product A to its required state of manufacture for Product B. Synonymous with "Set Up".

Chapter 11:
Shorthand for a provision in the US insolvency code whereby, on application to the court, an insolvent company is permitted to continue trading but is under no obligation to pay creditors' invoices dated from before the protection came into force. It must pay invoices on or from that date however. (Suppliers in these circumstances usually insist o...

Charge:
a liability or financial obligation placed on a company, secured in some agreed way against the company's assets. (In everyday life, our mortgage is a charge against our house - we cannot sell the house without discharging the outstanding mortgage.)

Chauvenet's Criterion:
A test put forward by William Chauvenet (*) to decide whether a seemingly unusual experimental reading/measurement should be rejected as an error or accepted for what it is and incorporated with other readings. Chauvenet's criterion involves calculating the number of standard deviations (ie probability) that the suspect measurement lies from the m...

Check Digit:
In order to verify the validity of a numeric code, a simple arithmetic procedure may be applied to the digits which constitute the code in order to derive a further number. When this further number (or part of it) is appended to the end of the original code, it is said to be a check digit. For example, a check digit may be derived by the addition ...

Check Standard:
A stable, well-understood in-house physical standard that is re-measured at intervals to ensure that the measurement process remains in a state of statistical control. The difference between a check standard and a further reference material, such as a customer's sample, is the level of certification and traceability to some agreed, accepted standa...

CHEP:
Commonwealth Handling and Equipment Pool, an Australian Government intiative begun at the end of WWII to deal with the huge surplus of materials handling equipment and military pallets at the time, and leading to the world's first national pallet standardisation. The Anglo-Australian company Brambles now manages this scheme, and operates an intern...

Chi Squared Test:
A statistical test to decide whether a series of observations or the results of an experiment fall into the pattern of a specific theoretical distribution, such as the Normal, Binomial or Poisson distribuion. The test proceeds by comparing the actual achieved results to the distribution of values that would have been obtained had they followed the...

Chi:
a Greek letter formed somewhat like a capital "X", spelled "chi" but pronounced "kai" (hence the abbreviation in English of Christmas as Xmas).

Chiemgauer:
a type of schwundgeld launched in January 2003 in Rosenheim, near Munich, Germany.

CI:
Continuous Improvement (see continuous improvement, or the Channel Islands.

CIDM:
Computer-Integrated Decision Making.

CIGS:
(1) CuInGaSe2, a semiconductor compound that absorbs light by freeing electrons. The semiconductor can be embedded on a polymer base to form a 'revolutionary' form of solar panel. It is hoped that such panels will be capable of reducing the cost of solar power generated electricity to below $1 per watt, opening the way to cheap, plentiful power. (...

CIPS:
Chartered Institute of Purchasing & Supply, a much respected UK professional institute located at Easton House, Easton on the Hill, Stamford, Lincolnshire PE9 3NZ (UK), PEs, phone 01780-756777, web site http://www.cips.org.

Circulating density:
a notion encountered in logistics to denote the degree to which distribution infrastructure (ie vehicles, FLTs and so on) is actually engaged in useful work carrying goods. For example, backhaul increases circulating density.

CIRM:
Certified in Integrated Resource Management, personal certification obtainable through APICS (the American Production & Inventory Control, Society).

City (of London):
An area of London of about one square mile, located around and to the east of St Paul's Cathedral. There are virtually no residential properties in the City - instead, the area houses almost all of the UK's financial, banking and brokerage businesses. The City has a working population of 500,000 and its services contribute 19% to the UK's GDP. It ...

Class A:
A company that has installed MRP with maximum possible success - see ABCD Checklist.

CLASS:
Capacity Loading And Sequence Scheduling - finite scheduling software.

Classification (of a Job):
A simple qualitative job evaluation technique carried out as follows. First, a small number of representative key jobs are described and considered. Second, job grades are allocated to these key jobs. Third, the remaining non-key jobs within the company are discussed and compared to the key jobs, and assigned grades accordingly.

Climate Change:
see Global Warming.

Clock-Card:
A card usually about 8" x 3" used by an employee in conjunction with a special clock (a "time clock") for recording the time of his arrival at, and time of departure from, work. (Hence "clocking on" and "clocking off" - arriving at work and departing therefrom.)

CLT:
cumulative lead time - usually, the total leadtime of all stages of manufacture to make a product ab initio.

CM:
Contract Manufacturing, or Change Management.

CMOS:
Complementary Metal Oxide Semiconductor, a family of low power microchips used to store and process digital data.

CMRP:
Capacitated Materials Requirements Planning.

CN:
customer needs.

CNC:
Computer Numerical Control.

CNG:
Compressed Natural Gas - a fuel having the advantages of cleanliness, safety and low cost.

COA:
Continuous Ordering Agreement. See Stage Deliveries.

COB:
Chip On Board.

COBOL:
COmmercial and Business Oriented Language, a procedural computer language especially geared to the programming and production of reports, presentations and so on, rather than to the programming of scientific calculations. COBOL was devised and developed by the late Capt. Grace Hopper (USN). The most used version of COBOL is COBOL 85, although a la...

COC:
cost of conformance, a notion seeming to contradict Crosby's maxim that quality is free.

COD:
Cash On Delivery.

Code 39:
a bar coding system capable of encoding both numbers and letters.

Co-Determination:
A personnel policy which permits employees to participate actively in 'shaping' their work environment. Co-determination is brought about through company agreements with trade unions, by establishing for employees legal rights and by other informal ad hoc arrangements. The policy is most associated with German industry.

COGS:
Cost Of Goods Sold.

Coincidence:
(1) "the fact or condition or being concident - that is, occupying the same place or being exactly contemporaneous" (OED); (2) "occurence or existence at the same time" (OED); (3) "God's way of remaining anonymous" (A.Einstein, attrib.)

Coinciding Indicator:
In sales or economic forecasting, two phenomena may occur in tandem, so that observation of one allows one to infer that the other phenomenon is also occurring. A flipant but correct example is the occurrence of heavy rain and the sudden demand for umbrellas. A more useful example is the degree of industrial "activity" (which is difficul...

Cold Stores:
A storage area maintained at a cool or cold temperature. A first critical factor in its operation is the activity taking place at the door, since the entry of warm air will allow ice to form, this being then expensive to remove. Conveyor tunnels and air locks are required. A second factor is the exposure of FLTs (*) and racking to the cold, since ...

Collaborative Forecasting:
Akin to consensus forecasting and Delphi forecasting, but with input from customers as well. More broadly, collaborative forecasting is also taken to mean demand forecasting carried out as a joint exercise by participants in a supply chain (eg suppliers, manufacturers and customers). As with Delphi, the value of this type of collaborative forecast...

COMAH:
Control of Major Accident Hazards.

Co-Managed Stock:
see Stock (Co-Managed).

Commercial Terminology:
the visitor to this Glossary is referred to the "Investor Words" Internet site.

Commission:
Typically, a cash bonus paid to a salesman on his achieving an actual sale, the size of the bonus depending on the value of the sale See bonus schemes.

Commodity:
Commodities are primary products at the 'bottom' of the supply chain such as metal, crops and oil, sold in worlwide markets. Because the sources of commodities are essentially limited by the amounts that can be supplied (ie by the limitations of mines, estates and oil wells), the prices of commodities are liable to very large fluctuations as deman...

Common Carrier:
In distribution, a haulier whose vehicles are for hire to the public.

Common Causes (of Variation):
A manufacturing process or system of procedures will not produce end results absolutely and exactly as intended. Instead, the end results will exhibit variation from the ideal (possibly extremely minute variation), due to "common causes". Common causes of variation are causes inherent in the process or system itself. (The variation is du...

Common Law:
In Britain, Australia, Canada, The United States, New Zealand etc, common law is unwritten law based on ancient practice and universal usage. Although unwritten, common law is embodied in court decisions relating to past cases. Particular branches of the common law are the Law of Contract, and Tort.

Common Parts:
In conjunction with assemble-to-order, a component or part is common if it is used in all of the final variants of the product that may be specified by the customer. The determination of which parts are common is a necessary precursor to the adoption of assemble-to-order planning.

Companies Act 1862:
In the mid 19th century, 9 statutes were passed in Britain relating to the formation and regulation of joint stock companies. (A joint stock company is one where the shares are variously held by several owners). These culminated in 1862 with the first ever Act permitting the formation of a public company with full juridic personality and limited l...

Companies Act 1985:
A major Companies Act consolidating the extant legislation of all previous companies acts. Nowadays, this Act is the major reference point for company law. Legal cases involving company law are heard in the Court of Chancery, a division of the High Court.

Companies House:
The office of the Registrar of Companies, now situated for social engineering reasons in Cardiff (having moved there from London, where it rightly belongs).

Competency-based Pay:
Pay awarded to an employee on the basis of his acquisition of a relevant skill or his acquisition of relevant knowledge. An example in UK manufacturing would be increased pay awarded to an employee for obtaining the diploma of the Institute of Operations Management or somesuch.

Competent Person:
This definition has been put forward by the HSE (2003): A competent person is one with sufficient professional or technical training, knowledge, actual experience and authority to enable him to: (1) carry out his assigned duties at the level of responsibility allocated to him; (2) to understand fully any potential hazards related to the work (or e...

Component:
A single item formed by the application of an engineering operation on a yet more basic component. Components are typically fitted together to form a sub-assembly or, perhaps, an assembly (see assembly).

Computer Aided Design:
The use of computer software to assist in product design - for example, by the performance of calculations and by enabling final designs to be represented by 3D images on the VDU screen. See particularly Isodraw.

CONC:
cost of non-conformance, a figure estimated by the quality guru Armand Feigenbaum to be 15% to 40% of turnover, and generally guessed at about 30%.

Conceptual Design:
The conceptual design document describes how a product under design is to work - how it will be put together and how the components which constitute it will function so as to deliver the requirements laid down in the PDS (see Product Design Specification). Again, as with the PDS, conceptual design is not detailed design, although the end result her...

Concurrent Engineering:
synonomous with Simultaneous Engineering, qv.

Condition (of a contract):
One or more conditions are central requirements in a contract between two (or more) parties. An obvious example of a condition in a contract to purchase goods from a supplier is the identity of the goods to be supplied - if the wrong goods are sent, it may make no sense to persevere with the contract. (Compare warranty, an incidental requirement - ...

Conference:
See Shipping Conference.

Conforming Unit:
A manufactured part conforming to specifications. See Non-Conforming Unit.

Consensus Forecasting:
A means of preparing sales forecasts over a specified time by combining the predictions of sales personnel, the totals arrived at then being successively scrutinised by sales management and corporate planners. See also Delphi Forecasting and Collaborative Forecasting.

Consideration (legal):
(see also "contract"). Consideration has been defined as The thing given or done by the promisee in exchange for the promise. In manufacturing, that is typically the money to be paid by the buyer in exchange for the goods to be supplied. Executory consideration refers to the exchange of promises - ie to deliver and pay at some point in t...

Consignment Note:
A formal note from a supplier to a purchaser verifying that goods being despatched have been consigned to a third party for delivery (ie consigned to a haulier or distribution organisation).

Consignment Stock:
See Stock (Consignment).

Consistency:
a match of characteristics with those described in documentation, advertising, deadlines and industry standards.

Consolidation Centre:
A node within a supply and distribution network used to effect the consolidation of many small incoming lots of material into fewer, larger loads for efficient onward despatch. Thus deliveries from Suppliers A, B and C, intended for Factory X, may be consolidated at the Consolidation Centre into a single container for economic onward delivery to X....

Consumable:
A component or raw material widely and frequently used throughout the manufacturing site. Examples of consumables might be fuel, screws, wire, grease and cloth. It is not uncommon to control consumables by a two-bin system, thus ensuring that they are replenished in a timely fashion but without the maintenance of stock records or some elaborate re...

Consumed Forecast:
(see also Error Addback). When the projected stock balance is calculated in the course of master schedule management, the calculation is made by adding to the stock or projected stock any master scheduled lot size and subtracting from it the forecast of demand. However, while this is correct and satisfactory in a make-to-stock environment, in make...

Consumer Protection Act, 1987:
An act relating to the supply of goods and services, including their hire. The supply of goods under this Act relates only to consumers, not to industrial users.

Consumer Tolerance:
(see also LD50 and Loss to Society) Although there are strict physical limits of quality and product performance for the engineer or manufacturer, the consumer may be willing to tolerate actual performance and quality outside such limits. Taguchi maintained that as far as departure of performance from the ideal was concerned, the consumer's limits...

Consumer:
An everyday purchaser of goods, a retail shopper. The concept of a private consumer is recognised legally - for example, in The Consumer Protection Act , The Unfair Contract Terms Act and under consumer rights. See also Returns Management.

Consumer's Risk:
The risk inherent in a sampling plan that an incoming lot of parts that it was intended should be rejected will, in fact, be accepted. (See also Producer's Risk.)

Consuming Site:
The factory site using Material M, as described under Multi-Site Netting (qv). See also Originating Site.

Containers (ISO):
a standard container measuring 8' (wide) x 8' (high) x one of four standard lengths (10', 20', 30' and 40'). The ISO container is a type of unit load. The manufacturer wishing to despatch his goods overseas by container contacts a container base. The container is delivered by vehicle. It is packed and sealed, and returned to the container base. It...

Contango:
the opposite of backwardation (qv). The situation existing when a commodity futures price is above the spot price, so that, as the maturity of the future approaches, the futures price falls until, at maturity, it has fallen to the same value as the spot price.

Continuous Improvement:
see kaizen (which has a slightly different flavour to CI). CI is a quasi-philosophy of quality and a principle of lean manufacture that holds that further improvements are alway possible to a manufacturing process or procedure and should always be sought, evaluated and implemented. The status quo is never acceptable. Means of following the CI philo...

Continuous Production:
Usually, but not necessarily, the manufacture of free flowing material in a lengthy production run (rather, say, than the manufacture of discrete items in a separate lot). An example of continuous production is the bottling of Glenmorangie Highland Malt Whisky by the distillery responsible for eventual sale to its highly discriminating, and very c...

Contract (legal):
An agreement between two or more parties for the supply of goods or the performance of a service. To be legally enforceable, there must be an offer (to supply), an acceptance of the offer and consideration (qv). Consideration is the prospect of money, and its existence proves that the agreement is a traditional bargain. The law encompassing contrac...

Contract Costing:
See Costing (Contract).

Contract Price Adjustment:
See CPA.

Contribution Costing:
Synonymous with Costing (Variable) - qv.

Control Account:
Used in Integrated Accounting, qv.

Control Board:
See planning board.

Control Chart:
See Variable Control Chart, Attribute Control Chart, Control Chart, Number Percentage Chart and U-Chart.

Control Limits:
Two horizontal lines are drawn on a control chart denoting the upper control limit (UCL) and the lower control limit (LCL). The sample-means and the ranges drawn on the chart every so often must lie within these limits. If they do so, the process is behaving normally and is said to be under control. If any point lies outside either of the limits, ...

Controlled Convergence:
A method advocated by the product design expert Stuart Pugh as a means of evaluating how well a product design meets the specifications originally aimed for. In his book on product design, Pugh also advocates controlled convergence as a way of deciding between many alternative design solutions. For an alternative, not dissimilar means of deciding ...

Convertible Loan Stock:
Loan stock issued by a company that can be converted to ordinary shares at a specified future date at a price set at the time of issue.

Convertible Preference Shares:
Preference shares which can optionally be converted to ordinary shares (allowing the shareholder the initial security of the preference share dividend and the option of cashing in on the hoped for rise in value of the ordinary share).

COO:
Cost of Ownership.

COPICS:
Communications Oriented Production Information and Control System, a major and much respected manufacturing software planning system developed by IBM in the 1970s, and also the title of a set of 7 comprehensive booklets covering the same subject matter, also published by IBM in the 1970s.

COPQ:
Cost of Poor Quality - see (The) Hidden Factory.

Co-Product (in Materials Planning):
Two different products may both be manufactured by the same production process, both products being required in further stages of production. (Contrast the manufacture of a by-product, where the second product, the by-product, is not required.) The planning of co-products is difficult and usually entails specialist software, such as a "process...

Co-products:
the joint, simultaneous production of two or more products as the result of a single manufacturing operation. An example in the chemical industry is the producion of sodium and chlorine from the electrolysis of sodium chloride (ie salt). The planning of co-product production can be somewhate involved, since the demands for the two products are dif...

Corn Laws:
A system of tariffs protecting British agriculture from foreign imports, as a result of which British manufacturing exports were inhibited. The Corn Laws were famously repealed in 1846, ushering in an era of free trade (qv).

Corporate Culturism:
a hot topic of HR conversation in the 1980s. The corporate culture is one that emphasises the adoption of shared values and common assumptions about what is "the right way" to achieve company success. The adoption of corporate culturism is said to benefit the manufacturing concern by putting organisational objectives before the self inte...

Corporation Tax:
In the UK, a government tax levied on the profits of a company.

Corrective Maintenance:
one of the components of TPM, and concerned with the carrying out of investigations into past trouble and malfunctions with a view to changing procedures in operation or making equipment modifications. In addition, corrective maintenance is concerned with the need for actual repairs to get machines back and running after a breakdown (also referred...