Process Improvement Vocabulary

A set of vocabulary flashcards defining key terms and strategies related to business process improvement and operations management.

Output Rate

Amount of products/ services produced by a business process per unit of time

Throughput Rate (aka Flow rate)

Rate at which units flow through a specific activity in the process.

Process Capacity

Maximum output rate of a business process per unit of time

Capacity Utilization

Percentage of process capacity that is actually used ($\text{Output rate}/ \text{process capacity}$)

Lead Time

Average time required for a process to unfold (From start to end)

Activity Time

Average time required for a specific activity in the process

Activity Resource Requirements

Average unit of resources required for a specific activity in the process

Zero-based start

Every outcome is eliminated and to be reincorporated, justifications must be made

Evaluated Receipt Settlement

Payment without an invoice, which involves counting the quantity of goods received and paying based on agreed upon unit price.

Digitization of outcomes

Where physical documents are transferred to digital documents; electronic outcomes are cheaper to store, copy and distribute.

Horizontal harmonization

Standardizing the documents or products along the same business process, such as structuring quotes, orders and invoices in the same way.

Vertical harmonization

Standardizing and integrating processes that take place in parallel for economies of scale, such as integrating processes from multiple channels (online/offline) or different product lines.

Lean Management

A method to identify all non-value adding activities and eliminating them.

Pull principle

A just in time production approach where processes follow a principle that avoids under or over production, which should prevent bottlenecks.

Automation of activities

Substituting manual activities with the appropriate IT applications where labour is replaced with a robot/ computer.

Parallel Routing of activities

Also known as “Simultaneous Engineering”, this involves trying to perform sequential activities in parallel, provided interdependencies and resource requirements are managed.

Substitution of activities

Replacing time-consuming activities to increase the probability of more efficient pathways.