Manufacturing Glossary

Safety stock is extra inventory kept on hand to reduce the risk of a stockout caused by supply and demand volatility.

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

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) is a lean manufacturing method for reducing the time it takes to complete an equipment changeover.

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

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

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

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

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

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

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.