Manufacturing Software Glossary

APS (Advanced Planning and Scheduling): Software that generates production schedules while respecting real-world capacity constraints at each work centre. Unlike standard MRP, which assumes infinite capacity, APS produces feasible schedules by sequencing jobs based on actual resource availability, tool availability, and job priorities. APS is typically purchased as a standalone system that integrates with ERP. It requires accurate routing data and standard times to produce reliable schedules.
Availability (OEE): One of the three OEE factors. Availability = (Planned production time − Unplanned downtime) ÷ Planned production time. It captures losses from equipment breakdowns and setup/adjustment time beyond the standard. Planned downtime (breaks, scheduled PM) is excluded from the calculation. See also: OEE.
BOM (Bill of Materials): A structured list of every component, sub-assembly and raw material required to manufacture one unit of a finished product, along with quantities per unit and the level at which each component appears in the product structure. A multi-level BOM shows the complete manufacturing tree: finished product → sub-assemblies → components → raw materials. The BOM is the central data structure in MRP — without accurate BOMs, MRP calculations produce incorrect planned orders.
Bottleneck: The process step, machine or workstation that limits the throughput of the entire production system. A bottleneck is the constraint — it cannot produce fast enough to keep pace with demand (or with upstream processes). In line balancing, a workstation whose cycle time exceeds takt time is a bottleneck. Theory of Constraints (TOC) defines the bottleneck as the weakest link in the system and directs improvement efforts there first. Improving a non-bottleneck resource does not increase overall throughput.
CAPA (Corrective and Preventive Action): A quality management process that investigates the root cause of a nonconformance and implements actions to prevent it from recurring. CAPA has three phases: containment (stop the bleeding), root cause analysis (identify why it happened), and corrective action (change the system so it cannot happen again). CAPA is required by ISO 9001, AS9100, ISO 13485 and FDA quality system regulations. Contrast with NCR, which records that a nonconformance occurred and how the affected product was dispositioned, but does not necessarily require root cause investigation.
CMMS (Computerised Maintenance Management System): Software for managing maintenance operations: asset records, work order creation and tracking, preventive maintenance scheduling, spare parts inventory, and maintenance history reporting. A CMMS enables calculation of metrics like mean time between failure (MTBF), mean time to repair (MTTR), PM compliance rate, and maintenance cost per asset. Contrast with EAM, which covers the full asset lifecycle including capital planning and depreciation. See the CMMS Software guide for selection criteria and pricing.
Cycle time: The actual elapsed time to complete one unit through a process step or workstation. Cycle time is determined by the production process — it is how fast you can produce. Contrast with takt time (how fast you need to produce to meet demand) and lead time (the total elapsed time from order to delivery). A workstation with a cycle time greater than takt time is a bottleneck.
Dispatch list: A prioritised list of work orders for a work centre, showing which jobs to run next and in what sequence. In most ERP systems, the dispatch list is generated from the shop floor module and sorted by a priority rule — typically Critical Ratio (time remaining to due date ÷ remaining work time), earliest due date (EDD), or a manually assigned priority. The dispatch list is the primary tool shop supervisors use to manage day-to-day production sequencing.
EAM (Enterprise Asset Management): Software that manages the full lifecycle of physical assets: procurement, installation, operation, maintenance, depreciation and disposal. EAM is a superset of CMMS — it includes everything CMMS does, plus capital planning, depreciation accounting and integration with financial systems at the asset level. Most small manufacturers need CMMS, not a full EAM system. See the CMMS vs EAM guide for the distinction.
ERP (Enterprise Resource Planning): An integrated software system that manages all core business functions in a single database: production planning (MRP), inventory, purchasing, sales order management, financials (GL, AR, AP), and often HR, CRM and quality modules. The term was coined by Gartner in 1990 to describe the extension of MRP II into a company-wide integrated system. For manufacturing companies, ERP is distinguished from standalone MRP by the integration of financial and non-production functions. See the ERP and MRP guide for selection criteria, pricing and implementation timelines.
EWI (Electronic Work Instructions): Digital documents delivered to a workstation to guide an operator through a manufacturing process, assembly procedure or quality inspection. EWI systems replace paper travellers and binder-based SOPs with revision-controlled digital procedures that can include images, video and mandatory operator sign-offs. Benefits: operators always receive the current revision; sign-offs are captured as electronic records; procedures can be updated from a central location without reprinting. Required for many regulated industries (AS9100, ISO 13485).
Finite capacity scheduling: A scheduling method that respects actual capacity limits at each work centre when generating a production schedule. Unlike infinite capacity scheduling (standard MRP), finite scheduling queues and sequences jobs based on available capacity, producing a feasible schedule that can realistically be executed. Finite scheduling requires accurate work centre capacity data and routing times. Contrast with infinite capacity scheduling. See the Production Planning guide.
5S: A workplace organisation methodology from the Toyota Production System, consisting of five steps: Sort (remove unnecessary items), Set in order (assign a defined location to every remaining item), Shine (clean to operational standard), Standardise (document the standard condition), and Sustain (audit and maintain the standard). 5S creates the visual baseline from which abnormalities become visible and from which further lean improvements can be made. See the Lean Operations guide.
Gemba: From the Japanese word for "the real place" — in manufacturing context, the shop floor where value is created. "Gemba walk" refers to the practice of managers and engineers going to the actual place where work is done to observe processes, identify waste and understand problems directly rather than from reports or office data. A core practice in lean management.
Infinite capacity scheduling: The standard scheduling method used by MRP, which generates planned orders and work orders based on lead time offsets without considering whether enough capacity exists at each work centre to perform the work. The result is often an overloaded schedule at bottleneck resources. Planners must manually review a Capacity Requirements Planning (CRP) report to identify overloads and adjust the schedule. Contrast with finite capacity scheduling.
ISO 9001: The international standard specifying requirements for a Quality Management System (QMS). Published by the International Organization for Standardization (ISO), the current version is ISO 9001:2015. It uses the Plan-Do-Check-Act framework and is based on seven quality management principles. ISO 9001 certification is issued by accredited third-party certification bodies (registrars) following a two-stage audit process. It is the most widely adopted management system standard in the world. See the Quality Management guide.
JIT (Just-in-Time): A production philosophy, originating from the Toyota Production System, of producing exactly what is needed, in exactly the right quantity, at exactly the right time — with zero inventory of items produced before they are needed. JIT aims to eliminate waste in the form of excess inventory. In practice, small manufacturers implement JIT principles through kanban systems, takt time-based scheduling, short changeovers (SMED), and supplier delivery agreements rather than as a complete system. Requires high process stability and reliable supplier performance.
Kanban: A pull-based production control method that uses visual signals (originally physical cards) to authorise production or replenishment. In a kanban system, downstream processes pull from upstream processes only when they consume material — the kanban signal authorises the upstream process to replenish what was consumed. This limits work-in-process (WIP) inventory to a defined number of kanbans and prevents overproduction. Kanban works well for repetitive production with stable demand; it is less effective for high-mix, low-volume environments. See the Lean Operations guide.
Lead time: The total elapsed time from an order being placed (or a need being identified) to the order being fulfilled. Manufacturing lead time includes queue time at each work centre, setup time, run time, move time and inspection time. Customer-facing lead time also includes order processing, material procurement and shipping. Lead time is often much longer than the sum of processing times because most of the elapsed time is spent waiting in queues. Contrast with cycle time and takt time.
Line balancing: The process of distributing work tasks across workstations so that each workstation's cycle time is as equal as possible and no workstation exceeds takt time. A well-balanced line maximises throughput and minimises idle time. Line balance efficiency = Sum of all workstation cycle times ÷ (Number of workstations × Bottleneck cycle time). Use the takt time and line balancing calculator to assess your line balance.
MES (Manufacturing Execution System): Software that manages and tracks the execution of production work orders at the shop-floor level in real time. MES sits between ERP (which plans production) and the control layer (PLCs, SCADA). Core MES functions include work order management, labour and material tracking, quality data collection at process steps, electronic work instructions, and performance analysis (OEE). Full MES implementations are typically large-scale projects. Many small manufacturers achieve adequate shop-floor visibility through their ERP's shop-floor module plus low-cost machine monitoring, without a separate MES. See the MES and Production Tracking guide.
MPS (Master Production Schedule): A time-phased plan specifying what finished products will be built and when, over a planning horizon (typically 4–12 weeks for short-cycle manufacturers). The MPS drives MRP: it is the top-level demand input from which MRP calculates component and material requirements. The MPS represents a commitment — changing it mid-horizon creates cascading schedule disruptions. Managing the MPS includes freezing the near-term horizon (the "firmed zone") to avoid unnecessary churn.
MRP (Material Requirements Planning): A calculation system that determines what materials to order and when, by exploding the Bill of Materials (BOM) against the Master Production Schedule (MPS) and offsetting by component lead times. MRP output: planned purchase orders (for purchased items) and planned work orders (for manufactured components). MRP was developed in the 1960s and remains the operational core of virtually all manufacturing ERP systems. For a manufacturer without ERP, standalone MRP software provides BOM management, scheduling and purchasing planning without the broader financial integration of ERP. See the ERP and MRP guide.
MTBF (Mean Time Between Failures): The average time a piece of equipment operates between unplanned failures. MTBF = Total operating time ÷ Number of failures in the same period. MTBF is a key metric for evaluating equipment reliability and for setting preventive maintenance intervals. A rising MTBF after a maintenance improvement indicates the intervention was effective. MTBF is meaningful only for repairable systems; for non-repairable components, the relevant metric is MTTF (Mean Time to Failure).
MTTR (Mean Time to Repair): The average time required to restore a piece of equipment to service after a failure. MTTR = Total repair time ÷ Number of repairs. MTTR includes diagnosis, parts retrieval, repair and restart. Reducing MTTR requires: spare parts availability at or near the equipment, trained maintenance technicians, clear diagnostic procedures, and effective work order systems. MTTR and MTBF together determine the availability factor in OEE.
NCR (Nonconformance Report): A document recording that a product, process, material or service did not conform to the specified requirement. An NCR captures: what was found, where, when, how many units are affected, and how the nonconforming items were dispositioned (use-as-is, rework, return to supplier, scrap). An NCR can be closed once the product is dispositioned. If the nonconformance is significant or recurring, a CAPA should be initiated to investigate and eliminate the root cause. Contrast with CAPA.
OEE (Overall Equipment Effectiveness): A metric for measuring manufacturing productivity, defined as: OEE = Availability × Performance × Quality. Availability captures downtime losses; Performance captures speed losses; Quality captures defect losses. The widely cited world-class OEE benchmark is 85%, per the OEE Foundation and Nakajima's original research. Most manufacturers measuring OEE for the first time score 35–65%. OEE is most useful as a trend metric — tracking improvement over time — rather than as an absolute target. Use the free OEE calculator to compute your score with a full loss breakdown. See the Lean Operations guide for context on OEE benchmarks.
Performance (OEE): One of the three OEE factors. Performance = (Total parts produced × Ideal cycle time) ÷ Run time. It captures losses from running slower than the design speed (reduced speed) and from minor stoppages under a few minutes that are too brief to log as downtime but collectively reduce output. A performance factor below 90% typically indicates either that operators are not running at design cycle time or that frequent micro-stoppages are going unrecorded. See also: OEE.
PM (Preventive Maintenance): Scheduled maintenance tasks performed at defined intervals — based on calendar time, machine running hours, cycles or other meters — to prevent equipment failure rather than react to it. PM tasks include lubrication, filter changes, inspection, calibration, belt and seal replacement, and other life-limited component changes. PM is managed in a CMMS. The goal is to increase MTBF and reduce unplanned downtime. PM compliance rate = (PMs completed on time ÷ PMs scheduled) × 100. A rate below 80% usually indicates either understaffing or an overloaded PM schedule.
Quality (OEE): One of the three OEE factors. Quality = Good parts ÷ Total parts produced. It captures losses from process defects (scrap and rework during steady-state production) and from startup/ramp-up yield losses after a changeover or breakdown. A quality factor below 98–99% for a typical discrete manufacturing process usually warrants investigation using SPC or process capability analysis. See also: OEE.
QMS (Quality Management System): The documented set of policies, processes, procedures and records that an organisation uses to direct and control quality across product design, production, inspection and delivery. A QMS can be informal (a set of documented procedures) or formally certified to a standard such as ISO 9001 (general manufacturing), AS9100 (aerospace), ISO 13485 (medical devices) or IATF 16949 (automotive). QMS software automates the QMS workflow: document control, NCR/CAPA management, audit scheduling, supplier management and training records. See the Quality Management guide.
Reorder point (ROP): The inventory level at which a replenishment order should be placed, calculated to cover demand during the supplier's lead time plus a safety stock buffer. Formula: ROP = (Average daily demand × Lead time in days) + Safety stock. When on-hand inventory drops to the reorder point, a purchase order or work order is triggered. ROP systems are used for independent-demand items (finished goods or service parts) that are replenished continuously. See the Production Planning guide for a worked safety stock example.
Safety stock: Inventory held in excess of average expected demand to protect against variability in demand or supplier lead time. Safety stock = Z × σ × √LT, where Z is the service level factor (1.645 for 95% service level), σ is the standard deviation of demand per unit time, and LT is the lead time in the same units. Higher safety stock provides higher service levels but increases carrying costs. See the Production Planning guide for a worked example.
SMED (Single-Minute Exchange of Die): A methodology developed by Shigeo Shingo for reducing the time required to change over a machine or production line from one product to another. "Single-minute" means achieving changeover in less than 10 minutes. The core technique is converting internal setup (tasks that require the machine to be stopped) to external setup (tasks performed while the machine is still running). SMED enables smaller production batches, lower WIP inventory, and faster response to demand changes. See the Lean Operations guide for the four-step SMED process.
SOP (Standard Operating Procedure): A documented procedure defining the steps required to complete a specific task consistently and correctly. SOPs are a foundational element of a QMS — they define the standard method, prevent knowledge loss when employees leave, and provide a basis for training new operators. In a documented QMS, SOPs are version-controlled and require formal review and approval before release. Electronic work instruction (EWI) systems digitise SOPs and deliver the current revision to operators at the workstation.
SPC (Statistical Process Control): The use of statistical methods — primarily control charts — to monitor a manufacturing process and detect when it is drifting out of control or producing results inconsistent with normal variation. The key distinction: common cause variation (normal, random variation inherent in every process) vs special cause variation (a signal that something unusual has changed). Control charts plot measurements over time with a centreline (mean) and control limits (typically ±3 standard deviations). Points outside the control limits, or non-random patterns inside them, indicate special causes requiring investigation. Common chart types include X-bar and R, X-bar and S, I-MR, p-chart and np-chart. See the Quality Management guide.
Takt time: The rate at which one unit must be produced to meet customer demand, calculated as: Takt time = Available production time ÷ Customer demand (in the same period). For example, if you have 450 minutes of production time per day and customer demand is 90 units per day, takt time = 450 ÷ 90 = 5 minutes per unit. Takt time is a constraint set by the customer — it tells you the pace the production system must sustain. A workstation with a cycle time greater than takt time is a bottleneck. Use the free takt time calculator. See also: cycle time, lead time.
TOC (Theory of Constraints): A management philosophy developed by Eliyahu Goldratt (The Goal, 1984) based on the principle that every system has at least one constraint that limits its output. The TOC improvement cycle: (1) Identify the constraint. (2) Exploit the constraint (maximise its output without additional investment). (3) Subordinate everything else to the constraint (do not produce faster than the constraint can absorb). (4) Elevate the constraint (add capacity if needed). (5) Repeat. In a production context, TOC leads to Drum-Buffer-Rope scheduling, where the constraint (drum) sets the pace, a time buffer protects it, and a rope limits the rate of releasing work into the system.
TPM (Total Productive Maintenance): A maintenance strategy that integrates operator involvement with traditional maintenance department activities, with the goal of achieving near-zero unplanned downtime and near-zero defects caused by equipment condition. TPM is structured around eight pillars, the most commonly implemented being Autonomous Maintenance (operators perform routine cleaning, inspection and minor maintenance on their own equipment), Focused Improvement (cross-functional kaizen teams attack specific losses), and Planned Maintenance (CMMS-supported PM programme). OEE is the primary performance metric of a TPM programme. Source: Nakajima, S. (1988).
VSM (Value Stream Mapping): A lean tool for diagramming the flow of material and information required to bring a product from raw material to the customer. A VSM shows each process step with its cycle time, changeover time, uptime and operator count; inventory quantities between steps; and information flows (schedules, orders, forecasts). The current-state VSM reveals waste — particularly the inventory between steps that drives long lead times. The future-state VSM designs the improved flow. VSM is a planning and improvement tool, typically done in a 1–2 day workshop with a cross-functional team. See the Lean Operations guide.
WIP (Work in Process / Work in Progress): Inventory that has been released to the shop floor for production but has not yet been completed as a finished good. High WIP levels indicate long queues at work centres, long manufacturing lead times, and often poor schedule adherence. Lean manufacturing aims to minimise WIP through pull systems (kanban), small batch sizes and short changeovers (SMED). In job costing, WIP is the accumulated direct labour, material and overhead cost of uncompleted jobs — high WIP also creates complexity in financial reporting.
Work order (WO): An authorisation document that initiates a manufacturing job, a maintenance task or a service activity. In manufacturing, a production work order specifies: what to build, how many, when it is needed, the routing (sequence of operations), the materials required (from the BOM), and the work centres involved. Work orders are created by MRP (planned orders converted to released work orders) or manually for custom jobs. Shop-floor tracking records actual start/finish times, labour hours and material usage against the work order, enabling job costing and production performance measurement.

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