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The Complete Lean Shop
Glossary - O

Objective - A specific statement of a desired short-term condition or achievement; includes measurable end results to be accomplished by specific teams or individuals within time limits.

Observation - An observation is a single piece of data, usually a count or a measurement. It is also known as a reading.

- Availability X Performance Rate X Quality Rate. OR OEE is a percentage derived by multiplication of the three ratios for the factors mentioned above. The OEE percentage is used for analysis and Benchmarking.

Off-Line Experimentation
- A method for determining the best configurations of processes. Usually uses a design of experiments (DOE) format such as the taguchi method or plackett-burman experiments.

One-Piece Flow -
The opposite of batch and queue; instead of building many products and then holding them in line for the next step in the process, products go through each step in the process one at a time, without interruption. Meant to improve quality and lower costs.

One-Touch Exchange of Dies -
The reduction of die setup to a single step. Also see “single-minute exchange of dies,” “internal setup” and “external setup.”

On-the-Job Training -
 Training that an employee receives at work during the normal work day.

Operating Characteristic (OC) Curve -
 (1) An assessment of the probability of accepting a shipment, given the existing level of quality of the shipment. (2) A graph to determine the probability of accepting lots as a function of the lots’ or processes’ quality level when using various sampling plans. There are three types: type A curves, which give the probability of acceptance for an individual lot coming from finite production (will not continue in the future); type B curves, which give the probability of acceptance for lots coming from a continuous process; and type C curves, which (for a continuous sampling plan) give the long-run percentage of product accepted during the sampling phase.

Operating Expenses -
The money required for a system to convert inventory into throughput.

Operating Results
- Measures that are important to monitoring and tracking the effectiveness of a company’s operations.

Operational Auditing
- Modern auditing practices that focus on operational efficiencies.

Operational Definition
- (1) "...Puts communicable meaning into a concept." "An operational definition is one that reasonable men can agree on." (Dr. Deming) example: customer and supplier agree to a defined method by which an item or group of items can be determined to meet requirements or not. (2) When applied to data collection, it is a clear, concise, and detailed definition of a measure. It ensures that those collecting data do so consistently. (3) An exact description of how to derive a value for a characteristic you are measuring. It includes a precise definition of the characteristic and how, specifically data collectors, should measure characteristics. Used to remove ambiguity and ensure all data collectors have the same understanding. Reduces chances of disparate results between collectors after Measurement System Analysis.

Operations -
Work or steps to transform raw materials to finished product.

Operations Flow Charting (OFC) - An extremely valuable and practical tool used to identify and challenge Non-Value-Adding Activity to design more efficient processes.

Opportunity - Any area within a product, process, service, or other system where a defect could be produced or where you fail to achieve the ideal product in the eyes of the customer. In a product, the areas where defects could be produced are the parts or connection of parts within the product. In a process, the areas are the value added process steps. If the process step is not value added, such as an inspection step, then it is not considered an opportunity. An opportunity is anything that you inspect, measure, or test on a unit that provides a chance of allowing a defect.

- Achievement of the aim of a system; when all processes and sub-systems within an organization or system work together to create results that are congruent with the system's or organization's aim [see also sub-optimization].

Orchestra Director
- Deming uses the example of an orchestra to make the point that the individual components of any system must work together to accomplish the aim of the system...They cannot each be just doing their individual best. In any organization, it is the top person's job to be the "orchestra director"...To see that all the components work together toward the aim.

Ordinal Data -
 Ranked information.

- group of people and facilities with an arrangement of responsibilities, authorities and relationships - acc to ISO 9000:2005, 3.3.1

Organizational Design
- The process of defining the best structure to meet company objectives.

Organizational Learning
- The sum of the changes in knowledge among the employees of a firm.

Organizational Structure
- arrangement of responsibilities, authorities and relationships between people - acc to ISO 9000:2005, 3.3.2

Original Equipment Manufacturer (OEM) -
A company that uses product components from one or more other companies to build a product that it sells under its own company name and brand. Sometimes mistakenly used to refer to the company that supplies the components.

Orthogonal Arrays
- Experimental design tools that ensure independence between iterations of an experiment.

Out of Spec -
A term that indicates a unit does not meet a given requirement or specification.

- (1) An observation that is many standard deviations from the mean. It is sometimes tempting to discard outliers, but this is imprudent unless the cause of the outlier can be identified, and the outlier is determined to be spurious. Otherwise, discarding outliers can cause one to underestimate the true variability of the measurement process. (2) An outlier is a point on a chart that does not fall into the pattern of the rest of the data.

Out-of-Control - When applied to a control chart, out of control means that at least one special cause of variation is present.

Out-of-Control Process - A process in which the statistical measure being evaluated is not in a state of statistical control. In other words, the variations among the observed sampling results can be attributed to a constant system of chance causes. Also see “in-control process.”

Output - The result of a process. The deliverables of the process; such as products, services, processes, plans, and resources.

Outputs -
Products, materials, services or information provided to customers (internal or external), from a process.

- To send out (work, for example) to an outside provider or manufacturer in order to cut costs. Plating has been an outsourced 'service' for some years for many companies now because of the risks and the environmental aspects, rules and regulations. The emphasis is on the movement of work or product originally performed by the customer to an outside company to reduce costs. Many tend to use some terms interchangeably. ISO 9001:1994 used supplier and subcontractor to designate Tier 1 and Tier 2 suppliers without regard to the definitions. TS may do likewise, so you should ask your registrar how they define it. For discussion, also see: Outsource - Outsourcing - Subcontracting - Definition - TS 16949 and ISO 9001

Over The Wall Syndrome
- Difficulties that arise when different types of professionals working in totally different departments in the same firm. Lack of communication is typically the primary failure mode.

Overall Equipment Effectiveness (OEE) -
(1) The Combined Measurement of Equipment Availability, Performance Rate and Quality Rate: A key measurement in "Total Productive Maintenance" (TPM). OEE is an essential measurement for determining the effectiveness of your equipment and beginning to understand where up-time improvements are possible. (2) The product of a machine’s operational availability, performance efficiency and first-pass yield. (3) The overall performance of a single piece of equipment or even an entire factory, will always be governed by the cumulative impact of the three OEE factors: Availability, Performance Rate and Quality Rate.

Overcontrol - Over reaction to a set of data. For example, in a control chart, it would be reacting to a common cause as if it were a special cause.

Over-the-Wall Syndrome - Difficulties that arise when different types of engineers work in totally different departments in the same firm.