The words the shop floor actually runs on.

21 CFR Part 820

21 CFR Part 820 is the FDA regulation defining quality system requirements for medical device manufacturers selling in the United States. Effective February 2, 2026, it was harmonized with ISO 13485:2016 and renamed the Quality Management System Regulation (QMSR), replacing the former Quality System Regulation.

5S Methodology

5S is a lean method for organizing a workspace by removing unneeded items, arranging necessary items, cleaning, and maintaining these standards.

Additive Manufacturing

Additive manufacturing (AM) is the process of building physical parts directly from 3D model data by joining material layer upon layer, as opposed to subtractive machining or formative molding. ISO/ASTM 52900 defines it across seven process categories, including powder bed fusion and material extrusion.

Advanced Planning and Scheduling (APS)

Advanced Planning and Scheduling (APS) systems use algorithms to analyze materials and capacity, creating optimized production schedules.

Andon

An Andon is a visual alert system on the shop floor that signals a problem with a process or quality.

Application Programming Interface (API)

An Application Programming Interface (API) is a set of rules that allows different software applications to communicate and exchange data with each other.

Assemble-to-Order (ATO)

Assemble-to-Order is a production strategy where products are built from pre-made components after a customer places an order.

Assembly Line

An assembly line is a manufacturing layout where a product moves sequentially from one workstation to the next, with a specific task performed at each stop.

Backflush

Backflushing relieves component inventory automatically from reported output. When a work order records 500 good units, the system multiplies that quantity by the bill of materials and issues the components retroactively, replacing the hand-picked issue transaction that would otherwise be posted part by part.

Bill of Lading (BOL)

A Bill of Lading (BOL) is a required legal document between a shipper and a carrier that details the goods being shipped.

Bill of Materials (BOM)

A bill of materials is the structured list of every component, subassembly, raw material and quantity required to build one unit of a product. It carries part numbers, units of measure, revision levels and the parent-child structure that manufacturing, purchasing and costing all read from.

Bottleneck

A bottleneck is the slowest point in a production process that limits the entire system's output.

Capacity Requirements Planning (CRP)

Capacity requirements planning converts planned and released orders into hours of load at each work center, compares that load period by period against the hours actually available, and exposes the overloads a planner must resolve before the material plan becomes a schedule anyone can run.

Capacity Utilization

Capacity utilization is a metric that measures the percentage of a facility's total potential production output that is actually being used.

Cellular Manufacturing

Cellular manufacturing arranges equipment and workstations in a sequence to enable a smooth flow for a family of similar parts.

Changeover Time

Changeover time is the total time it takes to switch a production line or machine from making one product to another.

Chargeback

A chargeback is a financial penalty a customer deducts from an invoice payment for a supplier's failure to meet specific operational requirements.

Computer-Aided Manufacturing (CAM)

Computer-Aided Manufacturing (CAM) is software that converts CAD geometry into machine-readable instructions, typically G-code, that drive CNC machines through toolpaths, feeds, speeds, and tool changes. CAM defines how a part is physically made, bridging digital design and the shop floor.

Computerized Maintenance Management System (CMMS)

A Computerized Maintenance Management System (CMMS) is software that organizes, schedules, and tracks all maintenance activities for a facility's equipment.

Configure, Price, Quote (CPQ)

Configure, Price, Quote (CPQ) is software that helps sales teams create accurate quotes for complex, customizable products.

Continuous Improvement

Continuous improvement is the practice of making small, ongoing changes to manufacturing processes to increase efficiency and quality.

Contract Manufacturing

Contract manufacturing is a production model in which one company (the customer or OEM) outsources the fabrication, assembly, or packaging of its products to a specialized third party (the contract manufacturer) that builds to the customer's designs and specifications, typically retaining the customer's intellectual property.

Corrective and Preventive Action (CAPA)

Corrective and Preventive Action (CAPA) is a documented quality process that investigates a nonconformity, eliminates the root cause so it cannot recur, and acts on potential problems before they occur. Corrective action responds to what happened; preventive action addresses what could happen.

Cost of Goods Sold (COGS)

Cost of Goods Sold (COGS) represents the direct costs of producing the goods sold by a business.

Cycle Time

Cycle time is the total time required to complete all the steps of a process for one unit of production.

Demand Planning

Demand planning is the process of forecasting future customer demand for products to guide production and inventory decisions.

Digital Twin

A digital twin is a virtual model of a physical object or process that is updated with real-time data from its physical counterpart.

Discrete Manufacturing

Discrete manufacturing is a production method that creates distinct, countable items like cars, computers, or furniture.

Downtime

Downtime is any period when a machine or production line is scheduled to run but is not producing goods.

Economic Order Quantity (EOQ)

Economic Order Quantity (EOQ) is the ideal order size a company should purchase to minimize its total inventory costs, including holding and ordering costs.

Electronic Data Interchange (EDI)

Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard electronic format.

Electronics Manufacturing Services (EMS)

Electronics Manufacturing Services (EMS) is the outsourced design, assembly, testing, and fulfillment of electronic products on behalf of original equipment manufacturers. EMS providers build printed circuit board assemblies and finished box-build products under contract, letting OEMs avoid owning factories.

Engineer-to-Order (ETO)

Engineer-to-Order (ETO) is a production method where a product is designed and manufactured only after a customer order is received.

Enterprise Resource Planning (ERP)

Enterprise Resource Planning (ERP) is a software system that integrates a company's core business functions into a single, shared database.

Failure Mode and Effects Analysis (FMEA)

Failure Mode and Effects Analysis (FMEA) is a structured method for identifying and preventing potential failures in a product or process before they occur.

Finished Goods

Finished goods are products that have completed all manufacturing processes and are ready to be sold to customers.

First Article Inspection (FAI)

First article inspection (FAI) is the documented verification that a production part meets every dimension, note, and requirement on its drawing, performed on the first piece produced by the released process, tooling, and operators that will make the rest of the run.

First Expired, First Out (FEFO)

First Expired, First Out is an inventory management method that prioritizes using materials with the earliest expiration date first.

First Pass Yield

First Pass Yield is the percentage of products that meet quality standards after a single process step, without needing any rework or repair.

First-In, First-Out (FIFO)

First-In, First-Out (FIFO) is an inventory management method where the first materials received are the first ones used in production or shipped.

Flexible Manufacturing System (FMS)

A Flexible Manufacturing System (FMS) is an integrated group of computer-controlled CNC machines linked by an automated material-handling system and a central controller, designed to produce a changing mix of part styles in low-to-medium volumes with minimal manual changeover.

Good Manufacturing Practice (GMP)

Good Manufacturing Practice (GMP) is a system of rules and procedures that ensures products are consistently made and controlled according to quality standards.

Human-Machine Interface (HMI)

A Human-Machine Interface (HMI) is a screen or dashboard that allows an operator to interact with and control a machine or production line.

Industrial Internet of Things (IIoT)

The Industrial Internet of Things (IIoT) is a network of connected sensors and devices on industrial equipment that collect and share data over the internet.

Industry 4.0

Industry 4.0 is the use of automation and data exchange to create smart, connected manufacturing environments.

International Organization for Standardization (ISO)

The International Organization for Standardization (ISO) is a global body that develops and publishes standards for products, services, and systems.

Internet of Things (IoT)

The Internet of Things (IoT) is a network of physical devices connected to the internet to collect and share data.

Inventory Turnover Ratio

The inventory turnover ratio measures how many times a company sells and replaces its inventory over a specific period.

Job Costing

Job costing accumulates the direct material, direct labor and applied overhead consumed by one identifiable job and compares that total against what was quoted. It produces a per-job margin instead of a plant-wide average, which is how shops learn which work earns money and which quietly loses it.

Job Shop

A job shop is a manufacturing facility that produces small batches of custom products based on specific customer orders.

Just-In-Time (JIT)

Just-In-Time is a production strategy where items are created or delivered only as they are needed, minimizing inventory.

Kaizen

Kaizen is a philosophy of making continuous, small improvements in processes and products, involving all employees.

Kanban

Kanban is a scheduling system that uses visual signals to trigger the movement of materials and work through a manufacturing process.

Key Performance Indicator (KPI)

A Key Performance Indicator (KPI) is a measurable value used to track progress toward a specific manufacturing goal.

Landed Cost

Landed cost is the total expense of a product, including its purchase price, shipping, insurance, duties, and other fees, until it arrives at the buyer's facility.

Last-In, First-Out (LIFO)

Last-In, First-Out (LIFO) is an inventory management method that assumes the last items added to stock are the first ones to be sold or used.

Lead Time

Lead time is the total time elapsed from when a customer places an order to when they receive the finished product.

Lean Manufacturing

Lean manufacturing is a production method focused on maximizing customer value by systematically eliminating waste from processes.

Lot Traceability

Lot traceability is the ability to resolve any finished unit backward to the specific material lots, work orders, and operations that produced it, and any material lot forward to every unit it ended up in. It is what makes a recall bounded instead of total.

Machine Learning in Manufacturing

Machine learning in manufacturing uses historical production data to find patterns, make predictions, and automate decisions on the shop floor.

Maintenance, Repair, and Operations (MRO)

Maintenance, Repair, and Operations (MRO) refers to the supplies, spare parts, tools, and consumables that keep production equipment and facilities running but never become part of the finished product. MRO covers indirect materials and the upkeep activities that consume them.

Make to Order (MTO)

Make to Order (MTO) is a production strategy where manufacturing starts only after a confirmed customer order is received.

Make-to-Stock (MTS)

Make-to-Stock (MTS) is a production strategy where items are manufactured based on demand forecasts to maintain a stock of finished goods.

Manufacturing Cell

A manufacturing cell is a dedicated arrangement of machines and workstations for producing a family of similar parts.

Manufacturing Execution System (MES)

A Manufacturing Execution System (MES) is software that tracks and documents the transformation of raw materials into finished goods in real time.

Manufacturing Overhead

Manufacturing overhead is the sum of all indirect production costs that cannot be traced to a single unit or job, such as factory rent, equipment depreciation, utilities, indirect labor, and maintenance. It is also called factory overhead, and the two terms are interchangeable.

Mass Production

Mass production is the high-volume manufacture of standardized, interchangeable products in a continuous flow, typically on assembly lines using specialized equipment and division of labor to drive down unit cost through economies of scale.

Master Production Schedule (MPS)

A detailed plan that specifies what end products to build, how many are needed, and when they are needed.

Material Requirements Planning (MRP)

Material requirements planning is a time-phased calculation that explodes a production schedule through bills of materials, nets the result against on-hand and on-order stock, then offsets each shortfall by its lead time to produce dated purchase order and work order recommendations for every component in the structure.

Material Review Board (MRB)

A Material Review Board (MRB) is a cross-functional team that evaluates nonconforming material and decides its disposition, typically scrap, rework, repair, use-as-is, or return to vendor. It controls how off-spec parts are handled before they reach production or the customer.

Mean Time Between Failures (MTBF)

Mean Time Between Failures (MTBF) is the average time a piece of equipment operates before it breaks down.

Mean Time to Repair (MTTR)

Mean Time to Repair (MTTR) is the average time required to fix a failed piece of equipment and return it to service.

Medical Device Classification

Medical Device Classification is the FDA's risk-based system that assigns every device to Class I, II, or III based on the regulatory controls needed to assure its safety and effectiveness. Higher classes carry higher risk and stricter premarket requirements, from general controls to full premarket approval.

New Product Introduction (NPI)

New Product Introduction (NPI) is the structured, cross-functional process that moves a product from concept and design through prototyping, validation, and pilot builds into repeatable full-rate production, ensuring the design can be manufactured at quality, cost, and volume targets.

Nonconformance Report (NCR)

A nonconformance report (NCR) is the quality record raised when material, a part, or a process output fails to meet its drawing, specification, or acceptance criteria. It identifies the defect, quantifies how much is affected, segregates the suspect material, and carries the authorized disposition.

On Time In Full (OTIF)

On Time In Full (OTIF) is a supply chain metric that measures whether an order was delivered to the customer at the agreed-upon time and with the correct quantity.

On-Time Delivery (OTD)

On-Time Delivery (OTD) is a performance metric that measures the percentage of orders shipped to customers on or before the promised delivery date.

Order-to-Cash (O2C)

Order-to-Cash (O2C) is the entire business process covering all steps from receiving a customer order to collecting the payment.

Original Design Manufacturer (ODM)

An Original Design Manufacturer (ODM) is a company that designs and manufactures a product that another company then rebrands and sells as its own. The ODM owns the design and intellectual property; the buyer typically adds branding, packaging, and minor customizations.

Original Equipment Manufacturer (OEM)

An Original Equipment Manufacturer (OEM) is a company that produces parts or equipment used in another company's end product.

Overall Equipment Effectiveness (OEE)

Overall Equipment Effectiveness (OEE) is a single percentage that multiplies availability, performance, and quality to show how much of the planned production time a machine spent making good parts at its rated speed. A score of 100 percent means no stops, no slow running, and no defects.

Poka-Yoke

Poka-Yoke is a lean manufacturing method that uses simple mechanisms to prevent human errors from occurring in a process.

Predictive Maintenance

Predictive maintenance uses data analysis and monitoring tools to detect potential equipment failures before they happen.

Preventive Maintenance (PM)

Preventive Maintenance (PM) is regularly scheduled work performed on equipment to lessen the likelihood of it failing.

Process Manufacturing

Process manufacturing is a production method that creates goods by mixing ingredients or raw materials using a formula or recipe.

Procure-to-Pay (P2P)

Procure-to-Pay is the complete process of acquiring goods or services, from the point of order to the final payment.

Product Information Management (PIM)

Product Information Management (PIM) is the process of managing all the data required to market and sell products through various distribution channels.

Product Lifecycle Management (PLM)

Product Lifecycle Management (PLM) is the discipline and software for managing a product's data, processes, and decisions across its entire lifecycle, from concept and design through engineering, manufacturing, service, and end of life, keeping CAD, BOMs, and change records as a single source of truth.

Production Line

A production line is a factory setup where a product moves through a sequence of stations to be built.

Production Planning

Production planning is the process of deciding what to produce, in what quantity, and when, to meet customer demand using available resources.

Production Scheduling

Production scheduling is the process of assigning specific jobs to specific resources and work centers over a specific period of time.

Programmable Logic Controller (PLC)

A programmable logic controller (PLC) is a rugged industrial computer that automates and controls machines and processes on the shop floor.

Purchase Order (PO)

A purchase order (PO) is a commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.

Quality Management System (QMS)

A Quality Management System (QMS) is a set of documented policies, processes, and procedures for achieving consistent product quality.

Real-Time Monitoring

Real-time monitoring is the continuous collection and display of data from shop floor operations as they happen.

Reorder Point (ROP)

The reorder point is the inventory level that triggers a new order to replenish a specific item.

Root Cause Analysis (RCA)

Root Cause Analysis (RCA) is a structured method used to find the underlying reason a problem occurred to prevent it from happening again.

Routing

A routing is the ordered sequence of operations required to make a part, with each operation naming the work center that performs it, the setup time to prepare, the run time per piece, and any tooling, instructions or inspection the step requires.

Safety Stock

Safety stock is inventory held above expected demand during replenishment to absorb variability in usage and lead time. It buys coverage when a forecast runs high or a delivery runs late, converting a would-be stockout into a drawdown that replenishment quietly refills.

Sales and Operations Planning (S&OP)

Sales and Operations Planning (S&OP) is a management process that aligns a company's sales forecasts with its production, inventory, and supply chain plans.

Scrap Rate

Scrap rate is the percentage of material that is wasted during a manufacturing process and cannot be used in a finished product.

Shop Floor

The shop floor is the physical area in a manufacturing plant where production activities convert raw materials into finished goods.

Single-Minute Exchange of Die (SMED)

Single-Minute Exchange of Die (SMED) is a lean manufacturing method for reducing the time it takes to complete an equipment changeover.

Six Sigma

Six Sigma is a data-driven methodology for process improvement that aims to reduce defects to fewer than 3.4 per million opportunities.

Standard Operating Procedure (SOP)

A Standard Operating Procedure (SOP) is a document with step-by-step instructions for performing a routine task.

Statistical Process Control (SPC)

Statistical Process Control (SPC) is a method of quality control that uses statistics to monitor and manage a manufacturing process.

Stock Keeping Unit (SKU)

A Stock Keeping Unit (SKU) is a unique alphanumeric code assigned to a specific product variant to track inventory.

Stockout

A stockout is a situation where the inventory for a requested item is completely depleted.

Supervisory Control and Data Acquisition (SCADA)

A system of software and hardware that allows operators to monitor and control industrial processes in real time.

Supply Chain Management (SCM)

Supply Chain Management (SCM) is the process of managing the flow of goods, data, and finances related to a product from procurement to final delivery.

Takt Time

Takt time is the interval at which a finished unit must leave the line to meet customer demand, found by dividing net available production time by the number of units customers require in that time. It is set by demand, never by how fast a machine can run.

Theory of Constraints (TOC)

The Theory of Constraints is a method for improving system performance by identifying and managing the single biggest limiting factor, or constraint.

Third-Party Logistics (3PL)

A service that allows a manufacturer to outsource operational logistics, from warehousing to delivery.

Throughput

Throughput is the rate at which a system produces finished goods over a specific period.

Total Cost of Ownership (TCO)

Total Cost of Ownership (TCO) is the full lifetime cost of an asset, including its purchase price, operating expenses, and disposal fees.

Total Manufacturing Cost (TMC)

Total Manufacturing Cost (TMC) is the sum of all costs a manufacturer incurs to produce goods during a period: direct materials, direct labor, and manufacturing overhead. It captures everything consumed on the shop floor before accounting for changes in work-in-process inventory.

Total Productive Maintenance (TPM)

Total Productive Maintenance (TPM) is a strategy that makes equipment maintenance a shared responsibility for all employees to improve productivity.

Traceability

Traceability is the ability to track a product's history, location, and components from raw materials to the final customer.

Value Stream Mapping

Value Stream Mapping is a flowcharting method used to illustrate, analyze, and improve the steps required to deliver a product or service.

Warehouse Management System (WMS)

A Warehouse Management System (WMS) is software that directs and optimizes warehouse operations from receiving to shipping.

Work Cell

A work cell is a specific arrangement of machines, tools, and personnel on the shop floor designed to produce a product or a family of similar products.

Work in Process (WIP)

Work in process is the accumulated cost of material, labor, and applied overhead sitting in jobs that have been started but not finished. It is both a balance sheet inventory account and the running value of everything open on the floor.

Work in Progress (WIP)

Work in progress is the amount of work that has been started and not yet finished, counted as jobs or units rather than valued in currency. It is the quantity a shop manages to control lead time, and it is the lever behind every kanban limit.

Work Order (WO)

A work order is the internal document that authorizes a shop to build a specific quantity of a specific item by a specific date. It names the bill of materials and routing to use, reserves the material, and collects the labor, machine time and scrap reported against the job.