ERP Glossary - K: Kaizen to KPI
In manufacturing, the philosophy of continuous process improvement using analytical tools and methodologies. Kaizen is a Japanese word meaning "improvement".
A clearly visual indicator of when it is time to replenish an inventory. As inventory is consumed, a kanban signal - whether it is a bin card, an aisle flag, or an electronic computer message communicates - the need to begin replacement production. Kanban signals are seen as a "pull" system, maintaining equilibrium by replacing inventory at the same rate it is consumed.
An assembly process - often performed in a distribution center - in which different products are combined and packaged. For instance, a tool manufacturer might kit the same screwdriver as an individual screwdriver, part of a three pack, part of a six pack, or part of variety tool pack. Kitting allows manufacturers to increase their product offering complexity without increasing their manufacturing complexity.
Knowledge management is a strategy to capture, organize, and make available for easy retrieval the collective knowledge of an organization's individuals. Wikipedia has become one of the world's most popular knowledge management applications.
KPI (Key Performance Indicator)
Key performance indicators are intended to be unambiguous mathematical measurements of job performance. Revenue is a KPI of sales, inventory is a KPI of supply chain management, and profit is a KPI of business leadership. In a perfect world, all KPI are aligned around an organization's strategic objectives.
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