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43 key terms to know in the manufacturing sector

Manufacturing glossary

Confused by all of the three-letter acronyms, abbreviations, or terms used in the manufacturing industry? We compiled a list of commonly used manufacturing abbreviations and acronyms and manufacturing terms for your reference. 

Table of Contents

Key Terms and Definitions


This one, rather than an acronym or term, is a theory. It applies to workplace organization and uses a list of five Japanese words to organize the theory – seiri (sort), seiton (set in order), seiso (shine), seiketsu (standardize), and shitsuke (sustain). Basically, by creating an efficient organization system where everything has a place, it will subsequently create an efficient working environment. Additionally, 5s builds a culture of standardization for how a company, a division, or even a process should operate.

Assembly Line

Most industrial processes include some sort of assembly line. According to Wikipedia“An assembly line is a manufacturing process in which parts (usually interchangeable parts) are added as the semi-finished assembly moves from workstation to workstation where the parts are added in sequence until the final assembly is produced. By mechanically moving the parts to the assembly work and moving the semi-finished assembly from work station to work station, a finished product can be assembled faster and with less labor than by having workers carry parts to a stationary piece for assembly.”

Availability %

This is the actual time a machine is available to produce a product and is given as a percentage of total planned production time. A manufacturing analytics platform can determine the availability of a machine by collecting and calculating downtime using alarms and signals from controls on the equipment and input from operators.

Bill of Materials

In manufacturing, a bill of materials (BOM) is all of the materials and parts needed to complete a particular product.


The term cell is used in the larger concept of cellular manufacturing which is when equipment is arranged in small increments, or a cell, to promote continuous flow production. Most often in a u-shape, the cell is designed to facilitate shorter production times and increased efficiencies between each step.

CMM – Coordinate-measuring Machine

This ensures measurements are correct on a product. If you’re making something out of metal and it has a really tight tolerance, for example if it needs to be perfectly flat, the CMM checks to make sure the measurements are in line with the standard.

Cycle Time

No acronym here, but cycle time is a very common phrase used in the manufacturing sector. It is an essential manufacturing key performance indicator for a number of systems and other calculations. For example, it is used by ERP and MES systems for scheduling, purchasing, and production cost, but is also a key component of calculating OEE. Check out the Cycle Time Formula resource for a deeper dive.


This is the amount of time a plant or particular cell, line, or machine is down, or off-line, and not producing any product.

Finished Goods

In a manufacturing environment, finished goods are the products that have completed all stages of production are now ready to be distributed to customers. Accurately calculating and reporting finished goods inventory helps manufacturers prevent waste by producing too much, calculate profitability once finished goods have been sold or distributed, and improve the production process.

HMI – Human-Machine Interface

This one is somewhat self-explanatory, but it’s the user interface that connects a human user to a machine. For example, the Mingo platform has an HMI component with the operator interface we provide to machine operators to input data during the manufacturing process.

IoT – Internet of Things

A hot buzzword in all types of industries, this term relates to a system of interrelated smart devices. In terms of the manufacturing sector, the internet of things applies to remote monitoring and operations, predictive maintenance and smart asset management, and autonomous manufacturing. Interested in learning more? Check out a post we wrote about the usefulness of IoT in manufacturing.

And, if fact there’s so many definitions of IoT, we’ve compiled a list of how top technology companies and publications define the term, thanks to A Non-Geek’s A-to-Z Guide to the Internet of Things.

  • The IoT links objects to the Internet, enabling data and insights never available before. (Cisco)
  • The network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment. (Gartner)
  • A global infrastructure for the information society, enabling advanced services by interconnecting (physical and virtual) things based on existing and evolving interoperable information and communication technologies. (IoT-GSI)
  • IoT describes a world where just about anything can be connected and communicate in an intelligent fashion. In other words, with the Internet of Things, the physical world is becoming one big information system. (Techopedia)
  • It’s a concept of everyday objects – from industrial machines to wearable devices – using built-in sensors to gather data and take action on that data across a network. (SAS Institute)

IIoT – Industrial Internet of Things

You guessed it, this applies to specifically the industrial sector. As technologies become smarter, manufacturers are figuring out how to apply those technologies to their businesses to create a smart factory. Simply put, IIoT combines machinery with analytics with the people running those factories. Think of it as the pieces of a puzzle all fitting together to create one bigger picture.

Make to Assemble (MTA)

There are a couple of different types of manufacturing production processes. A make to assemble (MTA) strategy focuses on having readily made parts available but does not start making the finished product until an order has been placed. This allows for some customization, but not full customization like the make-to-order stategy.

Make to Order (MTO)

In manufacturing, this is a process where a product is only made after an order has been placed by a customer. Typically, these are highly customized and personalized products made to fit a customer’s specifications. Think about a custom piece of furniture or even a custom car – these are both examples of a made-to-order (MTO) product.

Make to Stock (MTS)

This is a traditional strategy followed by many manufacturers. Make to stock (MTS) creates inventory in anticipation of customer demand. This strategy does require an accurate forecast which is not always easy to do. If the forecast is wrong, manufacturers can be left with too much inventory or too little.

MTBF – Mean Time Between Failures

This is the expected time between inherent failures of a machine or machinery. It is calculated by averaging the time between those failures. However, the definition of failure is completely dependent on each company as a failure may be defined differently from one company to the next. If you have recently switched jobs, the methodology for calculating failure will remain the same, but the factors of determining a failure may differ.

MTTR – Mean Time to Repair

MTTR and MTBF go hand-in-hand because while MTBF calculates the average time between failures, MTTR calculates the average time it takes to repair that failure. Again, this calculation varies from one company to the next.

OEE – Overall Equipment Effectiveness

The most well-known metric in the manufacturing industry evaluates availability, performance, and quality to determine machine effectiveness. Using a formula developed by the automotive manufacturer Toyota, OEE is calculated by multiplying all of those factors together to get one single metric. Learn more about the OEE and the part it plays for manufacturers and the production of goods.

OPC – Open Platform Communications

A series of standards that apply to industrial telecommunication, OPC specifies “communication of real-time plant data between control devices from different manufacturers”, according to Wikipedia.

OT – Operational Technology

Used by hands on the factory floor, OT is the software tasked with changing machine processes in a plant or factory. For example, the software can control the use of valves or pumps.


Created by world-renowned Italian economist, Vilfredo Pareto, the Pareto principle states that 80% of consequences come from 20% of causes. In manufacturing, the principle can be applied to analyzing downtime. Generally speaking, 20% of causes affect 80% of downtime. Using data science, manufacturers can determine the top issues affecting performance. This data can be displayed in a Pareto Chart in real-time with Mingo.

Performance %

Often also referred to as throughput, performance measures the actual cycle time versus the ideal cycle time. Performance of a machine, cell, or line indicates the ability to meet the schedule or deliver to customers on time. Manufacturing analytics software can calculate performance by collecting part or product counts from the machines and compare them against the ideal cycle time in the system.

PLC – Programmable Logic Controller

Basically, this is a computer that has been modified or programmed, to be used for the manufacturing process. The controllers can specifically automate processes of production, machine function, or even an entire line.


A Japanese term meaning “mistake-proofing”, Poka-Yoke pertains to any process in Lean manufacturing that helps avoid mistakes. Its sole purpose is to eliminate human error by correcting or preventing defects in products.

Quality %

This refers to the quality of the products currently being produced by a machine. Manufacturers rely on a set of metrics to determine the quality of a product. With manufacturing analytics, it’s possible to calculate the Quality of a part by collecting part count and reject reason codes then augment this information with input from human operators.

SPC – Statistical Process Control

Using, you guessed it, statistics, SPC helps to monitor and control processes. Using that data, solutions for any potential production issues can be determined.

Takt Time

This is the average time between the start of production of one machine and the start of the production of another machine. There is a specific formula used to calculate takt time which we will discuss in-depth in another post.

Time Study

A time study analyzes every step of the manufacturing process to determine on average how long each step takes.

TPM – Total Productive Maintenance

Simply put, TPM is designed to increase the efficiency of the equipment. It is geared towards preventive maintenance on machinery and is often spearheaded by the machine operators themselves.


Often used in conjunction with capacity, the term “capacity utilization” is a percentage or KPI that shows the amount of total capacity that is being used at a particular time.

See How Accurate Cycle Time Can Improve Efficiency

Accurately setting cycle time to monitor and measure the entire production process is the key to success for manufacturers.

What are the Most Common Manufacturing Software Terms I Should Know?

Terms, acronyms, and manufacturer abbreviations galore, how could there possibly be more information to know? To get a better understanding of the manufacturing industry, you also need to have a clear understanding of the most common software used in factories, especially considering the industry is quickly transforming technologically.

We’ve mentioned it before, but, Industry 4.0 is rapidly arriving, and to keep up with the changing landscape, manufacturers are increasingly trying to implement manufacturing software to create a smart factory. But, what are these types of software and how do they help manufacturers with production of goods?

Lucky for you, we’ve created a simple guide to help.

BI – Business Intelligence

Business intelligence software (BI) is analytics that provides insights into processes, but many of these solutions are very general. They are not specifically built for an industry that produces goods like manufacturing. These types of systems lack the ability to track many essential KPIs integral to the manufacturing sector.

CAD – Computer-Aided Design and CAM – Computer-Aided Manufacturing

The two terms mean virtually the same thing. CAD and CAM both apply to the beginning to the end process of designing the manufacturing production procedure. Specifically, CAD and CAM software are used to “design prototypes, finished products, and production runs.”

CMMS – Computerized Maintenance Management System

As the name implies, this specific software deals with the maintenance side of manufacturing. In basic terms, the software will help simplify and manage maintenance work orders.

CMS – Content Management System

Used for developing a website, or any other need for content, a CMS is a computer software database that manages all content.

ERP – Enterprise Resource Planning

A massive, highly robust software platform, an ERP is designed for all facets of a company – everything from the plant floor to accounting. It is designed to keep larger manufacturers organized regardless of the task at hand.

LMS – Lab Management Software

If you work in specific industries, such as food or chemicals, testing the product is mandatory. The LMS is used in a lab setting to make sure the food or chemical product is safe, formulas are correct, and there’s nothing wrong with it. The LMS also helps define the tests the need to be conducted as well as tracking the quality testing.

MES – Manufacturing Execution System

The MES is a specific computerized system is designed to track and document the processes of manufacturing, from the beginning stages of raw materials to the end stages of a completed product.

MRP – Material Requirements Planning

Nowadays, an MRP is integrated into a larger ERP system because it keeps the processes more organized. But, basically, an MRP tracks and organizes all materials related to the production process so it is only used on the factory floor.

PLM – Product Lifecycle Management

The goal of PLM is to manage the lifecycle of a product from start to finish, including the information, processes, and people needed to manufacture the product.

QMS – Quality Management System

A collection of business processes and policies, a QMS is primarily focused on planning and execution, primarily for the manufacturer’s customer base.

SCADA – Supervisory Control and Data Acquisition

It is an encompassing control system of software and hardware. SCADA allows an organization to control various processes, locally or remotely, of manufacturing, monitor and gather data, interact with machine parts via HMI software, and keep a detailed record of all interactions.

WMS – Warehouse Management System

You guessed it; WMS is a software system that manages a supply chain and warehouse. Essentially, it tracks and processes all of the warehouse operations from the time goods enter the warehouse until they move out, including the raw materials needed to make a product.

Questions about Manufacturing Terms? Let us Know!

All of this software can be utilized on its own, but it can create a more efficient, productive factory floor when integrated.

Our goal of this post was to give you a broad understanding of the most commonly used terms, but if you still feel a bit lost, don’t fret. (Don’t worry – we have all been there at one point because let’s be honest, there are just a lot of shortened names and three-letter acronyms to learn.) If you need more information, check out this guide from Tech Target. It’s incredibly helpful and will help to fill any gaps.


About the Author

Bryan sapot

Bryan Sapot is a lifelong entrepreneur, speaker, CEO, and founder of Mingo. With more than 24 years of experience in manufacturing technology, Bryan is known for his deep manufacturing industry insights.

Throughout his career, he’s built products and started companies that leveraged technology to solve problems to make the lives of manufacturers easier. Follow Bryan on LinkedIn here.