Alba Consulting - Glossary

Consulting services in ERP/MRPII systems, lean manufacturing and operations management.



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Glossary (and Comments)

This page attempts to give a succinct explanation of some of the current 'modern' concepts that are, many times, seen as a panacea to our manufacturing problems.  I have also offered my own viewpoint on some of these concepts, which are often applied incorrectly by inexperienced consultants with minimal manufacturing experience, leaving the company frustrated, disillusioned and reluctant to try other improvement approaches.

Group Technology

Group Technology was initially developed in Russia in the mid to late 30s (before my time I might add).  In the late 60s and throughout the 70s it was very big in the UK and was very enthusiastically received.

Group technology has been defined as the manufacture of (similar) families of components in groups of machines.  This was contrary to the current practices of using “functional” layouts where machines were grouped by function with the result that jobs traveled randomly all over the shop with resultant delays and general confusion.

Group Technology introduced the concept of Cellular Manufacturing (this name is more commonly used in the US), where components were manufactured in one area (or cell), by one team, under the supervision of one leader.  Benefits quickly realized were better quality, reduced travel distance and time, reduced inventory and improved throughput time.  

Economic Order Quantity (EOQ)

The Economic Order Quantity (EOQ) is a scientifically proven formula that determines the lot size which minimizes the cost of set-ups with the inventory carrying cost.  The cost curve is fairly flat at the EOQ point, so the lot size can vary by about plus or minus 15% without having a large impact on the cost.  We all know that when the setup time is significant, then it is necessary to run larger lot sizes to spread the set up cost over a larger number of pieces.  Thus reducing the set up cost makes it more economically feasible to run smaller lot sizes.

Setup Reduction

Reduction in set up cost can be achieved by the use of scheduling by similar tool set ups, by reducing the variety of tooling, eliminating small inconsistencies in product design, and also by designing tools and fixtures for a quick “plug and play “ set up. 


The rest of the page, below, is not finished yet.



Six Sigma 

Lean Manufacturing 



Production Flow Analysis (PFA) 

Tooling Analysis

Pareto Analysis (80/20 rule)

Concurrent Engineering







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