Hidden Factory

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The term “Hidden Factory” is used to designate all work performed above and beyond entitlement, to produce a good unit of output, and that is not explicitly shown in any report (cost, accounting, performance, etc.). The un-documented parts of a process.


the hidden factory

The hidden factory is typically all process activities that are not a part of the documented process.

Reference: The Vision of Six Sigma


A. The Visible Factory;

B. The Hidden Factory. This term is closely related to the concepts of productivity, value and money. There is no absolute definition of what constitutes a hidden factory.

It depends on what is measured and how we measure it. As a general guideline, if cost, time, etc, is not clearly identified in any report such as timecards, productivity reports, accounting reports, etc., it is part of the hidden factory.

Entitlement is the amount of work actually needed to produce a good unit where work is synonym of value-added, money, time, etc.

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