Kashan Malik

 MedAsk (Private) Limited (Subsidiary of Army Welfare Trust) Introduction of Company MedAsk(private) limited is a subsidiary of the Army Welfare Trust. On the orders of the Army High Command, MedAsk (Private) Limited was founded in April 2017 to address the financial needs of the Pakistani Army. In October 2017, the business registered with Pakistan's Securities & Exchange Commission (SECP). AWT consists of 22 Business Units in different sectors and in medical services. A commercial organization called MedAsk intends to work with the concept of public-private partnerships to develop and support the medical services infrastructure in Pakistan. MedAsk aims to initiate several projects in phases that will generate capacity and profits which can be utilized to boost the resources of the Army Medical Corps and the public. Mission. MedAsk provides the public with healthcare that is of the highest caliber, affordable, and in line with morally upstanding worldwide standards. It will develop into a company that the public and commercial sectors can respect and have faith in. Vision. Pakistan Army's top medical facility, the Army Medical Corps, provides care for uniformed personnel as well as their relatives and parents. Eight million people make up the entitled clientele, which has risen significantly and is increasingly challenging to support due to rising healthcare costs and declining resources. The military leadership made the decision to launch MedAsk to investigate specific resource generation options. Objectives. To initiate and effectively manage commercial healthcare and allied projects for resource generation. To extend reliable, affordable, accessible, and quality healthcare products, care, and services. To achieve national outreach for the public at large and the underprivileged. Product and services. Pharmacies, Lab collection centers, diagnostic centers, Consultant clinics, and home deliveries. Market segmentation. MedAsk Pvt. Ltd. has owned pharmacies (Retail & LP throughout Pakistan, the majority are in CMH and MH. To provide its services throughout Pakistan, Medask is now covering all the regions that are reachable and practical for its business strategy. MedAsk has a Pharmacy store at Adyala road which is a new target market outside MH and CMH. MedAsk also has different Labs in Rawalpindi and Haripur regions. MEDASK has a single warehouse in Lalkurti Rawalpindi. Internship Objectives. I was appointed as a supply chain internee at MedAsk under the supervision of Dr. Zeeshan (Supply chain Head) and Dr. Saifi (distribution head). My role there was to enhance my understanding of the Supply chain and to learn about the different operations of the MedAsk Supply chain. I was basically tasked by my supervisors to create a report on the supply chain cycle of MedAsk under their supervision. For that, I needed to have a better understanding of the terminologies which are used in the pharmaceutical supply chain. Also, I needed to have a better understanding of Inventory management and tools to manage inventory. So, I used my Academic knowledge and the guidance of my supervisors. The major objective was to identify potential Gap areas in the supply chain cycle and then was tasked to compare them with current world practices and possible issues in it, and how to resolve them. Learning objectives. I gained knowledge of organizational practices and cultures during my internship. For me, the internship at Medask was a wonderful experience. I now have new perspectives on a variety of prospects for a career in supply chain management and business management thanks to my internship experience. In MedAsk, I have learned about central procurement. I have learned about product purchasing and selling them to customers and why central procurement is effective. It is much more complicated and harder to understand at first. In this organization, I have gained organizational skills and attitude. I learned about how to find possible solutions for bottlenecks using research and by understanding the results of different research and how they can be beneficial to us. During my internship at MedAsk I learned about the pharmaceutical industry and what are the issues it is facing overall and in Pakistan. The major issue of the market is supply and demand and its manipulation and at MedAsk I have learned how to counter it using Central procurement and negotiation power and how to counter them. Gap Areas Analysis. Lead time for some orders is very long and sometimes it even takes 45 days to deliver the order so in that time fulfilling demand for respective pharmacies leads to major issues e.g., losing discounts due to buying from local vendors. If PO is delayed, then it creates a not available situation for some drugs. The stock-out cost, which is the cost of not having a product on the shelf when a patient needs or wants it. This is frustrating to the pharmacist who must explain why the product is not available and is an inconvenience to the patient and prescriber Another issue is the distance of branches from HO and the only warehouse, so it fails to cover the demand of many branches in areas like Multan and others. Most of the staff is just working on a specific manual so there is very less chance of innovation and improvement in the whole process. Also, practices like data entry become issues due to this e.g., if they are following the Simple procedure, it gets difficult for them to change something if required. The order placed goes through different levels of confirmation (Purchaser, DO, procurement officer) although it decreases the chance of mistakes but takes too long in placing an order which slows the process. As dealing with vital drugs there is no specific reorder point, the drugs are procured through the standard process so when there is a shortage in the market it gets difficult to procure those drugs. Controlling the demand and fulfilling it is a huge task and it takes a lot of effort and efficiency to fulfill it in chaotic situations. Managing inventory according to seasonal demand is an issue. Due to the continuous decrease in raw materials for drugs, drug shortages are becoming a major issue. As there are more than 32 outlets and they are in different regions of the country to manage all operations at them is also an issue as the problems like inventory theft, and wrong entries to show sales. Recommendations. MedAsk should calculate reorder points and safety stock levels to avoid out-of-stock costs. They should track inventory in real-time to work with the most up-to-date inventory information and counts. This will help you make better inventory management decisions. By Calculating Reorder points MedAsk will improve its turnover ratio and can make it 9 to 12. To achieve this Medask will need to categorize its inventory using (ABC analysis or VED) and can start by practicing fast-moving products (drugs or surgical) and then can make further strategies by analyzing results in detail. 1) ABC Analysis. In materials management, ABC analysis is an inventory categorization technique. ABC analysis divides an inventory into three categories—"A items" with very tight control and accurate records, "B items" with less tightly controlled and good records, and "C items" with the simplest controls possible and minimal records. ABC Analysis. the Application of Pareto Analysis which states that 20% of stock gives 80% value and the rest 80% of stock gives 20 % value. Pareto Analysis is the principle that states that 80 percent of a project's benefit comes from 20 percent of the work. 2) The VED analysis prioritizes items based on critical service values and the item's shortage cost. The method is used to categorize items into three groups: vital, essential, and desirable. (Aisha K. Nur1, Angga P. Kautsar2, Department of Pharmacology and Clinical Pharmacy, Faculty of Pharmacy, University) Major issues at Medask are the cost of shortages or Inventory distribution directly affecting shipping logistics. A distributed inventory model will allow MedAsk to reduce shipping costs and lead times by storing products closer to consumers in more than one fulfillment center. By distributing the right quantities of inventory to multiple fulfillment centers within a 3PL network, MedAsk can synchronize sales channels with 3PL technology, so that all orders placed are directed to the closest fulfillment center. This allows MedAsk to optimize its shipping strategy, reduce shipping costs, and speed up last-mile delivery, ultimately increasing the speed and flexibility of MedAsk operations. (Pinto Frederic (BA, LL. B, PGDBA, CMILT, CISCP) A crucial part of formulating the operational strategy is prioritizing competitive factors such as quality, cost, flexibility, reliability, and speed. The goal is to develop operations that meet business objectives while minimizing the problems that cause operations inefficiency. Although there are strategies that MedAsk can implement to become an order winner in the market, such as a differentiation strategy, the company differentiates itself by offering superior advantages to its competitors. For instance, adding more variety of drugs and medical equipment to their existing services. Such improved benefits and services generally require a higher price but provide greater flexibility to customers. Such a position is, of course, only sustainable if consumers believe they are getting added value for those higher prices. But it must derive from the achievement of a qualitative advantage from timely and reliable deliveries or from the offer of flexible services that are extremely responsive to customer needs. As MedAsk is starting an online store It must focus on Providing other services Like connecting patients with doctors (Marham Model) through their platform as it is convenient, and customers prefer a single platform where they can get consultancy from doctors and can order medicines from the same platform. (Syed Sarosh Mahdi, Department of Community Dentistry, Jinnah Medical and Dental College, Sohail University, Karachi Pakistan) MedAsk should implement CRM software in their operations, as it will allow MedAsk to focus on their company's relationships with customers, suppliers, etc. With a professional CRM, it is much easier to find new customers not only B2C but also B2B, to gain their trust, provide qualified support, and provide additional services throughout the relationship. As There are drugs that are Lifesaving, MedAsk must make a strategy with the only aim of never letting the life-saving drugs go stock out. As not only it affects the customer but also it leads to Life and death situations for customers. MedAsk must move towards secondary production by creating partnerships with Primary manufacturers as the Summary. Being appointed as a supply chain internee at MedAsk, my role there was to enhance my understanding of the Supply chain and to learn about the different operations of the MedAsk Supply chain. During my internship at Medask, I learned about the pharmaceutical industry and what are the issues it is facing overall and in Pakistan. In this organization, I have gained organizational skills and attitude. The major issue of the market is supply and demand and its manipulation and how to counter it using Central procurement and negotiation power. Also, staying connected with technology and having knowledge of modern practices help you in improving your operations. Organizations need to understand their world of operations. The relative priority of the performance goal is determined by the demand of customers and competitors' actions. Effective market research will help MedAsk identify several competitive factors, such as innovative products and services(telemedicine), a wide range of products and services, low prices, reliable delivery, fast delivery, high quality, and the ability to be flexible in their supply chain. MedAsk’s webpage/application both has sufficient information about their services and is user-friendly. which gives MedAsk a competitive advantage in the market. References. 1) https://www.demandcaster.com/blog/what-is-lead-time-variability-and-how-can-you-beat-it/ 2) https://www.researchgate.net/publication/-_Efficiency_Fast-Moving_Drug_Plan_with_Reorder_Point_Intervention_at_a_Private_Hospital_in_Bandung 3) https://www.researchgate.net/publication/-_Efficiency_Fast-Moving_Drug_Plan_with_Reorder_Point_Intervention_at_a_Private_Hospital_in_Bandung 4) http://cepac.cheme.cmu.edu/pasilectures/pinto/revpaper-NS2.pdf 5) https://www.linkedin.com/pulse/inventory-control-pharmaceutical-supply-chain-pinto/ 6) https://www.ncbi.nlm.nih.gov/pmc/articles/PMC-/ 7) https://roundtablelearning.com/supply-chain-training-everything-you-need-to-know/#:~:text=The%20goal%20of%20supply%20chain,to%20ensure%20processing%20is%20efficient. 8) https://accesspharmacy.mhmedical.com/content.aspx?bookid=509&sectionid=-#- Supply chain cycle. The goal of any supply chain is to make sure the availability of the desired product to its customers with the best quality and at the least cost. At the most basic level, there are five steps in the pharmaceutical supply chain to ensure that drug inventory is readily available for distribution to providers and patients. Any supply chain system runs in two streams, UPSTREAM AND DOWNSTREAM. UPSTREAM The upstream of the supply chain refers to all activities in the supply chain that relate to an organization’s suppliers. This would include all the parties that have to do with things such as raw materials to send to the manufacturers, the manufacturing, and everything to do with the suppliers. Contract Supplier or Tier 1 – The contract supplier is the supplier you have the contract with making the product for you or providing you with raw materials. E.g., for pharmaceuticals raw materials like packaging material or ingredients for drugs. Supplier or Tier 2 – The supplier or Tier 2 supplier is usually the subcontractor or the supplier that helps supply to the leading supplier. In manufacturing drugs or other items, it could be the supplier that supplies the ingredients to make the drugs. DOWNSTREAM. The downstream of the supply chain refers to activities that have to do with distributing and getting the product to the final consumer or customer. Distributor – The person helping you sell your product or brand and ensuring it gets to the retail store and consumer. Retailer – The retail store helping you sell your product to consumers or customers. Customer – The person who purchases your product to use, also known as the end-user or consumer. General supply chain cycle of MedAsk. As MedAsk is a pharmaceutical company whose goal is to make sure the availability of All the vital and desired drugs at all its retail shops and for its customer at the minimum cost, also make sure that every drug is available to customers at any time. MedAsk operations are divided into different segments. Major operations are procurement of drugs from different companies and distributing of them to different sites and Procurement of drugs for own retail shops. Model For Drug distribution. Warehouse. (tier1) Contracts. Upstream for Distribution. (Upstream) Warehouse (tier1) For MedAsk, as it is not in the production of Drugs It Procures Drugs from Manufacturers directly. MedAsk has a contract with selected suppliers which provides them with the required drugs and surgical products. The Drugs are delivered to the warehouse facility, and then from there, delivered on different sites (hospitals, tender based). (tier1). These are the companies for which MedAsk is the main distributor and procures drugs from them. These are the Manufacturing Companies Like Brooks, and Cytec which provide MedAsk with Quality Drugs at the best prices with huge discounts. They deliver directly to the Warehouse or the other facilities. When supplies reach the warehouse further operations are completed from there. Downstream for Distribution. Tier1 (downstream) Warehouse Downstream in the supply chain deals with the distribution of products to customers through different channels. For MEDASK as they are not in production they just procure and distribute. So downstream for MedAsk is the distribution of drugs to hospitals on a tender base and to other Govt and Private Organizations. Tier1) are the Govt Bodies or hospitals which are in contract with MedAsk and according to the contract the drugs and other surgical products are delivered to them from warehouse. This is the Drug distribution operation of MedAsk. Model for Retail shops. For this MedAsk Procure drugs through central procurement which helps MedAsk in managing All Pharmacies through their head office. From there every pharmacy has its own DO which is responsible for the procurement of drugs for the Pharmacy. for retail pharmacy. When the Pharmacy creates its PO, they send it to The DO at head office, and then he places orders according to that PO. Order is placed to the Area suppliers or to the companies which are under the MedAsk banner, but it all depends on the Drugs, as there are very few producers of drugs in Pakistan. After placing the order Drugs are directly delivered to the retail shop by the local supplier or by someone to whom the order is placed. The Delivery of orders varies due to location and depends on the type of PO placed. In distant pharmacies, the orders are usually delivered by local vendors but for specific drugs which have limited suppliers takes up to 2 months to be delivered there. So, the key is to make a PO order considering all the factors before. (Lead time, expiry dates, etc.) Procurement. The procurement cycle includes most of the decisions and actions that determine the specific medicine quantities obtained, prices paid, and quality of medicines received. Procurement is defined here as the process of purchasing supplies directly from national or multinational private or public suppliers; purchasing through global agencies and procurement mechanisms or regional procurement systems; or purchasing from international procurement agents. These sources may be used individually or in combination to meet the entire range of pharmaceutical needs. (MedAsk Procurement cycle) Determine quantities needed It is to determine What type of medicines and what type of supplies are needed to order. This must be done by seeing all factors like considering the lead time and future activities and by accurate Forecasting. This step typically involves delving into the nitty-gritty details of what the business needs, such as the precise technical specifications, materials, part numbers or service characteristics. At this stage, it’s a good idea to consult all business departments affected by the purchasing decision to ensure the procured items accurately reflect the needs of each department. Submit purchase request.  When need to procure arises, a significant quantity of new supplies or services, they make a formal purchase request (also known as a purchase requisition). A purchase request notifies the company that a need exists, usually via department managers, purchasing staff or the financial team, as well as specifications such as price, time frame needed, quantity and other important things for the purchasing team to keep in mind. The department overseeing the purchase can then approve or deny the purchase request. If approved, the procurement team can proceed with selecting a vendor and making the purchase Choose procurement method. For this we must choose how to procure as there are different methods. E.g. open tender; restricted tender, competitive negotiation, including international or local shopping; and direct procurement. Also Centralized Procurement is being Practiced by many companies across the world as it provides clear image of the Procurement cycle as where the issues are and how to deal with them. Locate and select suppliers. To select supplier, we must investigate few factors which are, Cost, Quality, service, lead time and few others. If the Supplier has a good history, we must research and locate him and then try to keep close Relationship with him. It’s not compulsory to have only one supplier for all the drugs, we must look for better suppliers for each supply or drug but must consider key factors like Cost and Quality as if Quality of Drug is not maintained it can affect end consumer. Specify Contract terms. A contract term is defined as any provision or term that forms part of a contract. Each of these terms provides a contractual obligation and if this is breached, then it can lead to litigation. So, to Procure Drugs and Medicines we must know the terms and conditions which are Put in contracts to avail them from them in future and also to use them in any sort of problems with vendors. Receive and check medicines. Carefully examine deliveries for any errors or damage. Make sure everything is delivered as specified in the PO and that the quality meets or exceeds expectations. Accounts payable should conduct three-way matching by comparing the purchase order, order receipt or packing list and invoice. The goal is to ensure the goods or services received match the purchase order and to prevent payment for unauthorized or inaccurate invoices. Highlight any discrepancies between the three documents and resolve issues before arranging payment. Make Payment. After Checking and receiving the Medicines and making Sure the order is received Completely then payment must be made According to the Contract. Distribute Medicines. After receiving the medicines, we Distribute them to our Pharmacies as per their demand for which we placed order. Collect consumption. After Distribution of Medicines, we must keep track of their Consumption by customers and take a deep look on how much are used, Wasted, Returned. A Firm must make detailed Report on their sales of medicines on any outlet So that they can use that data for future. It’s important to maintain records for the entire procurement process, from purchase requests to price negotiations, invoices, receipts, and everything in between. These records may be useful for multiple reasons. They help the company reorder goods at the right price in the future, as well as assist with auditing processes and calculating taxes. Clear, accurate records can also help resolve any potential disputes. Review Medicine selection. After Record keeping of All the procedures, we then use the Data to review the sales of medicines, loss occurred due to them, also which got returned and all other aspects. After that we make decisions about the Future Procurement of medicines. Purchase order. The purchase order is made using the previous month’s consumption data (which is the number of sales of a specific item). The consumption is calculated using software that gives details insight into all the products e.g., no of items sold, no of present stock, and specific details of dead items. These details are then used by the purchaser at the pharmacy, and he makes a Purchase order which is then monitored at HO by the specific DO of branch. then after verifying and if there are no modification required the order is placed to the company for delivery, but if there are any wrong projections DO guide the purchaser at pharmacy to modify the PO e.g., if the demand for product is of 50 and he places 100 or 25 then DO guides the Purchaser to correct it. There are different POs generated for different products or company. There are three different POs 1) Institutional POs are for companies that have a lead time of 30 days, so the order is made considering lead time and all the factors. The order is placed by compiling the demand of all branches for a specific drug or company and then placed by the procurement officer. 2) Commercial POs. are the POs that have a lead time of 15 days, so Also for them, demand is made considering lead time. Delivery is made through M&P. 3) Franchise POs. are POs that have a lead time of 7 days and are used to fulfill local demands for a specific franchise. MedAsk Also has contracts with pharmaceutical companies which provide MedAsk with an extra bonus for example 8+1, 10+1 over specific products. These terms and conditions are decided between the Supply chain manager and specific company’s management. Due to the central procurement method Central team manages these orders by collecting the overall demand which will be required (seasonal, chaotic situations, necessary product) and then making orders for these products by negotiating and getting maximum discounts. These products are specific drugs and surgical products which are directly delivered to the warehouse and from there these are delivered to local branches or branches nearby. Delivery MedAsk keeps monitoring the delivery process through their head office, The Procurement officer monitors the whole delivery process and makes sure delivery is on time, if the delivery gets delayed or canceled then They fulfill the demand using the local purchase. Raw Materials. The raw material is the drugs and medical equipment they procure from different manufacturers. This is then moved to a warehouse or directly to the retail outlets. These include specific drugs Logistics. Logistics in any supply chain is key to an efficient supply chain. At MedAsk the drugs are procured and usually delivered directly by the supplier to the retail shop but some of the specific drugs and surgical equipment are delivered at the warehouse and from there these products are delivered to the local branches and the nearby branches. Information system. The information system is the key to the supply chain as it provides transparency across the supply chain. Information flow through the whole supply chain allows management to make better decisions and allows the whole chain to benefit from it. At MedAsk in the supply chain information is the key as due to central procurement all the details of daily operations are provided by each department to the procurement, so they use the data to analyze for better procurement and to keep changing strategies with the change in consumption of products. Glossary for Supply chain. Active Inventory. Any item or element of inventory that has been used or sold within a given period. Often set at 12 months. (Rob O’Byrne, logistic bureau) Advanced Shipping Notice (ASN): Detailed shipment information transmitted by the shipper to a customer or consignee in advance of delivery, designating the contents (individual products and quantities of each) and nature of the shipment. In EDI data standards this is referred to as an 856 transaction. May also include carrier and shipment specifics including time of shipment and expected time of arrival. The ASN data can be valuable in providing digital knowledge about what is in a shipment in a way that can be used to eliminate manual data entry of each shipment. (Rob O’Byrne, logistic bureau) Aggregate Inventory Management. The size of many inventories requires that they be broken down into groupings for control. Aggregated inventory is the further collection of these groupings into a single entity to enable the establishment of operating policies, key performance indicators, targets and reports. (,Rob O’Byrne, logistic bureau) Allocated Stock. A part or product that has been reserved, but not yet withdrawn or issued from stock, and is thus not available for other purposes. (Rob O’Byrne, logistic bureau) All-Time Order. The last order for a particular product is in the last phase of its life cycle. This order is of such a size that the stock provided will satisfy all expected future demand (see all tirequirementsent below) for the product concerned. Sometimes known as a life of type order. (Rob O’Byrne, logistic bureau) Accessibility: The ability of a carrier to provide service between an origin and a destination. Accumulation bin: A place, usually a physical location, used to accumulate all components that go into an assembly before the assembly is sent out to the assembly floor. Automated Storage/Retrieval System (AS/RS): A high-density rack inventory storage system with unmanned vehicles automatically loading and unloading products to/from the racks. All-Time Requirement. The total requirement for a particular product to be expected in the future. Normally used for products in the last phase of their life cycles, when production is (nearly) stopped. (Rob O’Byrne, logistic bureau) All-Time Stock. The stock resulting from the assessment of an all-time requirement and delivery of an all-time order. If necessary, controls can be set for such stock to avoid consumption of items for reasons over and above those for which usage was predicted. . (Rob O’Byrne, logistic bureau) Anticipation Stock. Inventory is held in order to be able to satisfy a demand with seasonal fluctuations with a production level that does not fluctuate at all or that varies to a lesser extent than the demand. (Rob O’Byrne, logistic bureau) Availability. The primary measure of system performance relating to the expected percentage of the supported system that will be available at a random point in time and not out of service for lack of spares. (Rob O’Byrne, logistic bureau) Available Stock. The stock available to service immediate demand. ( Kate Vitasek www.scvisions.com) Automatic Relief: A set of inventory bookkeeping methods that automatically adjusts computerized inventory records based on a production transaction. Examples of automatic relief methods are back flushing, direct-deduct, pre-deduct, and post-deduct processing. ( Kate Vitasek www.scvisions.com) ABC Analysis. A form of Pareto analysis applied to a group of products in order to apply selective inventory management controls. The inventory value for each item is obtained by multiplying the annual demand by unit cost and the entire inventory is then ranked in descending order of cost. However, the classification parameter can be varied; for example, it is possible to use the velocity of turnover rather than annual demand value. After-Sale Service: Services provided to the customer after products have been delivered. This can include repairs, maintenance and/or telephone support. (Kate Vitasek www.scvisions.com) Agency tariff: A publication of a rate bureau that contains rates for many carriers. (Kate Vitasek www.scvisions.com) Agility: The ability to successfully manufacture and market a broad range of low-cost, high-quality products and services with short lead times and varying volumes that provides enhanced value to customers through customization. Agility merges the four distinctive competencies of cost, quality, dependability, and flexibility. (Kate Vitasek www.scvisions.com) Agile Manufacturing: Tools, techniques, and initiatives that enable a plant or company to thrive under conditions of unpredictable change. Agile manufacturing not only enables a plant to achieve rapid response to customer needs, but also includes the ability to quickly reconfigure operations-and strategic alliances-to respond rapidly to unforeseen shifts in the marketplace. In some instances, it also incorporates "mass customization" concepts to satisfy unique customer requirements. In broad terms, it includes the ability to react quickly to technical or environmental surprises. . (Kate Vitasek www.scvisions.com) Air Taxi: An exempt for-hire air carrier that will fly anywhere on demand: air taxis are restricted to a maximum payload and passenger capacity per plane. (Kate Vitasek www.scvisions.com) Allocated Item: In an MRP system, an item for which a picking order has been released to the stockroom but not yet sent from the stockroom. (Kate Vitasek www.scvisions.com) Anticipated Delay Report: A report, normally issued by both manufacturing and purchasing to the material planning function, regarding jobs or purchase orders that will not be completed on time and explaining why the jobs or purchases are delayed and when they will be completed. This report is an essential ingredient of the closed-loop MRP system. It is normally a handwritten report. (Kate Vitasek www.scvisions.com) Approved Vendor List (AVL): List of the suppliers approved for doing business. The AVL is usually created by procurement or sourcing and engineering personnel using a variety of criteria such as technology, functional fit of the product, financial stability, and past performance of the supplier. (Kate Vitasek www.scvisions.com). Assembly Line: An assembly process in which equipment and work centers are laid out to follow the sequence in which raw materials and parts are assembled. . (Kate Vitasek www.scvisions.com). Attributes: A label used to provide additional classification or information about a resource, activity, or cost object. Used for focusing attention and may be subjective. Examples are a characteristic, a score or grade of product or activity, or groupings of these items, and performance measures. (Kate Vitasek www.scvisions.com). Audit: The inspection and examination of a process or quality system to ensure compliance to requirements. An audit can apply to an entire organization or may be specific to a function, process or production step. (Kate Vitasek www.scvisions.com). Auto discrimination: The functionality of a bar code reader to recognize the bar code symbology being scanned thus allowing a reader to read several different symbolizes consecutively. (Kate Vitasek www.scvisions.com). Available Inventory: The on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems. Often called "beginning available balance".(Kate Vitasek www.scvisions.com). Automatic Rescheduling: Rescheduling done by the computer to automatically change due dates on scheduled receipts when it detects that due dates and need dates are out of phase. ".(Kate Vitasek www.scvisions.com). ABC Analysis. A form of Pareto analysis applied to a group of products in order to apply selective inventory management controls. The inventory value for each item is obtained by multiplying the annual demand by unit cost and the entire inventory is then ranked in descending order of cost. However, the classification parameter can be varied; for example, it is possible to use the velocity of turnover rather than annual demand value. ABC Classification. The classification of inventory, after ABC analysis, into three basic groups for the purpose of stock control and planning. Although further divisions may be established, the 3 basic categories are designated A, B and C as follows: Active Inventory. Any item or element of inventory which has been used or sold within a given period. Often set at 12 months. Advanced Shipping Notice (ASN): Detailed shipment information transmitted by the shipper to a customer or consignee in advance of delivery, designating the contents (individual products and quantities of each) and nature of the shipment. In EDI data standards this is referred to as an 856 transaction. May also include carrier and shipment specifics including time of shipment and expected time of arrival. The ASN data can be valuable in providing digital knowledge about what is in a shipment in a way that it can be used to eliminate manual data entry of each shipment. Aggregate Inventory Management. The size of many inventories requires that they be broken down into groupings for the purpose of control. Aggregated inventory is the further collection of these groupings into a single entity to enable the establishment of operating policies, key performance indicators, targets and reports. Aggregate Inventory Management enables such things as the overall level of inventory desired to be established and then appropriate controls implemented to ensure that individual operating decisions achieve that goal, at optimum cost. Allocated Stock. A part or product that has been reserved, but not yet withdrawn or issued from stock, and is thus not available for other purposes. All-Time Order. The last order for a particular product in the last phase of its life cycle. This order is of such a size that the stock provided will satisfy all expected future demand (see all time requirement below) for the product concerned. Sometimes known as a life of type order. All-Time Requirement. The total requirement for a particular product to be expected in the future. Normally used for products in the last phase of their life cycles, when production is (nearly) stopped. All-Time Stock. The stock resulting from the assessment of an all-time requirement and delivery of an all-time order. If necessary, controls can be set for such stock to avoid consumption of items for reasons over and above those for which usage was predicted. Anticipation Stock. Inventory held in order to be able to satisfy a demand with seasonal fluctuations with a production level that does not fluctuate at all or that varies to a lesser extent than the demand. Availability. The primary measure of system performance relating to the expected percentage of the supported system that will be available at a random point in time and not out of service for lack of spares. Available Stock. The stock available to service immediate demand. Available to Promise (ATP). The uncommitted portion of a company’s inventory and planned production, maintained in the master schedule to support customer order promising. The ATP quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled. In the first period, ATP includes on-hand inventory less customer orders that are due and overdue. Backflushing. The deduction from inventory, after manufacture, of the component parts used in a parent by exploding the bill of materials by the production total of parents produced. Backhaul Generally a back haul is any return load taken after the delivery has been made. An example of this would be the collection of supplier loads from the supplier by the retailer for delivery into the retailer’s own RDC. Benchmarking: The process of comparing performance against the practices of other leading companies for the purpose of improving performance. Companies also benchmark internally by tracking and comparing current performance with past performance. Benchmarking seeks to improve any given business process by exploiting “best practices” rather than merely measuring the best performance. Best practices are the cause of best performance. Studying best practices provides the greatest opportunity for gaining a strategic, operational, and financial advantage. Beyond Economic Repair (BER). Where the projected cost of repair, normally for a repairable or rotable item, exceeds a management set percentage of the replacement value of the item concerned. Batch Number. A code used to identify the specific production point, for a product or an assembly, in a manufacturing or assembly process. Bill of Material. A listing of components, parts, and other items needed to manufacture a product, showing the quantity of each required to produce each end item. A bill of material is like a parts list except that it usually shows how the product is fabricated and assembled. Also called a product structure record, formula, recipe, or ingredients list. Batch Number. A code used to identify the specific production point, for a product or an assembly, in a manufacturing or assembly process. Back Ordering: A practice of placing a purchase order to a supplier for a product that’s temporarily out of stock in your warehouse and has already been ordered by your customers. Back ordering is usually adopted during times of high demand and for slow-moving products that suddenly see a spike in demand. (Senior Writer & Product Analyst. (Ajay Aadhithya Chandrasekaran) (Zoho.Articles) BILL OF LANDING: A shipping document showing the type of goods, their quantity, and the destination address. It is required whenever goods are transported from one point to another, whether you ship them by land, sea, or air. This document also acts as a legal receipt of payment and has to be signed by all parties who are involved in the shipment: the seller/shipper, the carrier, and the buyer/receiver (when the goods reach them). (Ajay Aadhithya Chandrasekaran) (Zoho.Articles) Blanket order.  A method in which the buyer will agree to buy a certain quantity of one or more items over an agreed-upon period of time (which can range from a few days to several months) without specifying their exact shipment dates at the time of purchase. The vendor can ship the goods in parts and on any convenient dates within this period. This is usually done when the buyer expects an increase in demand for certain products and would like to get a discount for making a larger purchase without locking up all of their capital. (Ajay Aadhithya Chandrasekaran) (Zoho.Articles) Bonded Warehouse: A location managed by the customs office or a government body, where you may store taxable goods and imports subject to duties for business purposes. You only need to pay taxes at the time of removing the goods from the warehouse. This is particularly useful for retailers who import a lot of goods into the country, since it allows them to spread out their tax burden by deferring some tax payments to a later time. (Ajay Aadhithya Chandrasekaran) (Zoho.Articles) Benchmarking: The process of comparing performance against the practices of other leading companies for the purpose of improving performance. Companies also benchmark internally by tracking and comparing current performance with past performance. . (Rob O’Byrne, logistic bureau) Batch Number. A code used to identify the specific production point, for a product or an assembly, in a manufacturing or assembly process. . (Rob O’Byrne, logistic bureau) Bill of Material. A listing of components, parts, and other items needed to manufacture a product, showing the quantity of each required to produce each end item. A bill of material is similar to a parts list except that it usually shows how the product is fabricated and assembled. Also called a product structure record, formula, recipe, or ingredients list. . (Rob O’Byrne, logistic bureau) Buffer stock A buffer stock is a system or scheme which buys and stores stocks at times of good harvests to prevent prices falling below a target range (or price level), and releases stocks during bad harvests to prevent prices rising above a target range (or price level (Economic online.) Backflush: A method of inventory bookkeeping where the book (computer) inventory of components is automatically reduced by the computer after completion of activity on the component's upper-level parent item based on what should have been used as specified on the bill of material and allocation records. This approach has the disadvantage of a built-in differential between the book record and what is physically in stock. Backhaul: The process of a transportation vehicle returning from the original destination point to the point of origin. (Kate Vitasek www.scvisions.com). Back sourcing: Pulling a function back in-house as an outsourcing contract expires. (Kate Vitasek www.scvisions.com). Balance-of-Stores Record: A double-entry record system that shows the balance of inventory items on hand and the balances of items on order and available for future orders. Where a reserve system of materials control is used, the balance of material on reserve is also shown.(Kate Vitasek www.scvisions.com). Balance to Ship (BTS): Balance or remaining quantity of a promotion or order that has yet to ship .(Kate Vitasek www.scvisions.com). Bar Code: A symbol consisting of a series of printed bars representing values. A system of optical character reading, scanning, and tracking of units by reading a series of printed bars for translation into a numeric or alphanumeric identification code. A popular example is the UPC code used on retail packaging. . (Kate Vitasek www.scvisions.com). Bar code scanner: A device to read bar codes and communicate data to computer systems. (Kate Vitasek www.scvisions.com). Barge: The cargo-carrying vehicle used primarily by inland water carriers. The basic barges have open tops, but there are covered barges for both dry and liquid cargoes. (Kate Vitasek www.scvisions.com). Barrier to Entry: Factors that prevent companies from entering into a particular market, such as high initial investment in equipment. (Kate Vitasek www.scvisions.com). Base Demand: The percentage of a company's demand that is derived from continuing contracts and/or existing customers. Because this demand is well known and recurring, it becomes the basis of management's plans. (Kate Vitasek www.scvisions.com). Base Inventory Level: The inventory level made up of aggregate lot-size inventory plus the aggregate safety stock inventory. It does not take into account the anticipation inventory that will result from the production plan. The base inventory level should be known before the production plan is made. (Kate Vitasek www.scvisions.com). Base Stock System: An inventory system in which a replenishment order is issued each time a withdrawal is made, and the order quantity s equal to the amount of the withdrawal. This type of system is also referred to as a par-stock system (bringing stock back to par level) (Kate Vitasek www.scvisions.com). Block chain technology (BT) has the main characteristic of distributed shared ledger that makes all parties in the SC network able to access data. In this it gets difficult to edit so once a ledger is updated no one can change it. (www.researchgate.com) Batch Picking: A method of picking orders in which order requirements are aggregated by product across orders to reduce movement to and from product locations. The aggregated quantities of each product are then transported to a common area where the individual orders are constructed. (Kate Vitasek www.scvisions.com). Benchmark: A measured, "best in class" achievement; a reference or measurement standard for comparison; this performance level is recognized as the standard of excellence for a specific business process. Any metric which is being used to compare actual performance against. (Kate Vitasek www.scvisions.com). Benefit-cost ratio: An analytical tool used in public planning; a ratio of total measurable benefits divided by the initial capital cost. (Kate Vitasek www.scvisions.com). Best-in-Class: An organization, usually within a specific industry, recognized for excellence in a specific process area. (Kate Vitasek www.scvisions.com). B2B – (business-to-business dealings) where a business buys goods from another business B2C – (business-to-customer dealings) where a final consumer buys a good from a business Backorder – a situation where the demand of a customer cannot be met from stock, but the customer waits for the good to come into stock Batching Rule – a rule for minimizing the MRP costs by making larger batches form several small ones Bill of Materials – a list of all materials that make up a certain product, and the order in which the materials are used Break Bulk – the process in which an item is broken down into smaller amounts before delivery to customers Business Strategy – the strategic ideas and decisions that affect a business as a whole Beta release: A pre-released version of a product that is sent to customers for evaluation and feedback. (Kate Vitasek www.scvisions.com). Bilateral Contract: An agreement wherein each party makes a promise to the other party. (Kate Vitasek www.scvisions.com). Bill of Activities: A listing of activities required by a product, service, process output or other cost object. (Kate Vitasek www.scvisions.com). Bill of activity attributes could include the volume and or cost of each activity in the listing (Kate Vitasek www.scvisions.com). Bill of Lading (BOL): A transportation document that is the contract of carriage containing the terms and conditions between the shipper and carrier. (Kate Vitasek www.scvisions.com). Bill of Material (BOM): A structured list of all the materials or parts and quantities needed to produce a particular finished product, assembly, subassembly, or manufactured part, whether purchased or not. (Kate Vitasek www.scvisions.com). Blanket Purchase Order: A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Often blanket orders cover only one item with predetermined delivery dates. (Kate Vitasek www.scvisions.com). Blanket Release: The authorization to ship and/or produce against a blanket agreement or contract. (Kate Vitasek www.scvisions.com). Blanket Rate: A rate that does not increase according to the distance the commodity is shipped (Kate Vitasek www.scvisions.com). Bonded Warehouse: Warehouse approved by the Treasury Department and under bond/guarantee for observance of revenue laws. Used for storing goods until duty is paid or goods are released in some other proper manner. (Kate Vitasek www.scvisions.com). Book Inventory: An accounting definition of inventory units or value obtained from perpetual inventory records rather than by actual count. (Kate Vitasek www.scvisions.com). Bottleneck: A constraint, obstacle or planned control that limits throughput or the utilization of capacity (Kate Vitasek www.scvisions.com). Box-Jenkins Model: A forecasting method based on regression and moving average models. The model is based not on the regression of independent variables, but on past observations of the item to be forecast at varying time lags and on previous error values from forecasting. (Kate Vitasek www.scvisions.com). Break-Bulk: The separation of a single consolidated bulk load into smaller individual shipments for delivery to the ultimate consignees. This is preceded by a consolidation of orders at the time of shipment, where many individual orders which are destined for a specific geographic area are grouped into one shipment to reduce cost (Kate Vitasek www.scvisions.com). Break-Even Point: The level of production or the volume of sales at which operations are neither profitable nor unprofitable. The break-even point is the intersection of the total revenue and total cost curves. (Kate Vitasek www.scvisions.com). Buffer: A number of materials awaiting further processing. It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center (Kate Vitasek www.scvisions.com). Bulk area: A storage area for large items which at a minimum are most efficiently handled by the pallet load. (Kate Vitasek www.scvisions.com). Bulk storage: The process of housing or storing materials and packages in larger quantities, generally using the original packaging or shipping containers or boxes. (Kate Vitasek www.scvisions.com). Bullwhip Effect: It happens when the distributor sees the increase and expands its purchase order with the manufacturer to anticipate increased requests from other retailers as well. The manufacturer increases its manufacturing run in anticipation of greater product requests in the future. The bullwhip effect can be eliminated by synchronizing the supply chain. (Kate Vitasek www.scvisions.com). Business Activity Monitoring (BAM): A term that refers to capturing operational data in real-time or close to it, making it possible for an enterprise to react more quickly to events. This is typically done through software and includes features to provide aalerts/notificationswhen specific events occur. (Kate Vitasek www.scvisions.com). Business Logistics: The systematic and coordinated set of activities required to provide the physical movement and storage of goods (raw materials, parts, finished goods) from vendor/supply services through company facilities to the customer (market) and the associated activities-packaging, order processing, etc.-in an efficient manner necessary to enable the organization to contribute to the explicit goals of the company. (Kate Vitasek www.scvisions.com). Buyer Behavior: The way individuals or organizations behave in a purchasing situation. The customer-oriented concept finds out the wants, needs, and desires of customers and adapts the resources of the organization to deliver need-satisfying goods and services. (Kate Vitasek www.scvisions.com). Consignment. consignments are individual shipments made to the consignee.  This term has more than one meaning. Most often it means the act of placing your goods in the care of a third-party warehouse owner (known as the consignee) who maintains them for a fee. In addition to storing the goods, the consignee may sell or ship them to customers on your behalf for a fee. (Ajay Aadhithya Chandrasekaran (Zoho.Articles) Cross Docking: Cross-docking is a practice in logistics of unloading materials from a manufacturer or mode of transportation directly to the customer or another mode of transportation, with little or no storage in between Category A distinct, separate, and manageable group of products that are perceived by consumers to be interrelated. (Kate Vitasek www.scvisions.com). Category Management. The management of groups of products that are interchangeable, or substitutable, in meeting consumer needs as opposed to the traditional concentration on individual products and brands. (Kate Vitasek www.scvisions.com). Central Distribution Centre A warehouse that is the sole stocking point for the distribution system that it serves. Grocery manufacturers commonly have central (or national) distribution centers, stocked by various manufacturing points and serving various retailer distribution warehouses. See National distribution centers. (Kate Vitasek www.scvisions.com). Co-Managed Inventory. A support arrangement similar to Vendor Managed Inventory but where replacement orders for the vendor-owned stock are agreed upon by the beforeor to delivery. (Kate Vitasek www.scvisions.com). Component. A part, ingredient, or subassembly that is both a component to a higher level part and a parent part to other components (Kate Vitasek www.scvisions.com). Component Part. Raw material, ingredient, part, or subassembly that goes into a higher level assembly, compound, or another part. (Kate Vitasek www.scvisions.com). Composite Delivery A multi-temperature distribution center. The receipt, storage, and handling of products would typically take place in a variety of on-site chambers each operating at a specific temperature. (Kate Vitasek www.scvisions.com). Composite Distribution Centre (CDC) A multi-temperature distribution center. The receipt, storage, and handling of products would typically take place in a variety of on-site chambers each operating at a specific temperature. (Kate Vitasek www.scvisions.com). Consignment Stock. The stock of goods held by an external customer is still the property of the supplier but for which payment is only made when stock is sold or used by the customer. (Kate Vitasek www.scvisions.com). Consolidation The loading of two or more suppliers ‘deliveries to a retailer’s RDC (Regional Distribution Center) on a single vehicle. This aims to improve load utilization and also improve unloading time at the RDC. (Kate Vitasek www.scvisions.com). Consolidation Centers Depots that store and/or process stock (see cross docking) into full loads for delivery to retailer RDCs (Regional Distribution Centers). (Kate Vitasek www.scvisions.com). Consumable. Classification of stock used to describe items or products that are tonsumed in use e.g. paper, oil, grease etc. Co,st to Serve. Is a Supply Chain analytical approach, utilizingactivity-basedd cost techniques thatidentifys the costs of servicing specific customers, with specific products, by allocating costs to customers, products ,and channels. Can-order Point: An ordering system used when multiple items are ordered from one vendor. The can-order point is a point higher than the original order point. When any one of the items triggers an order by reaching the must-order point, all items below their can-order point are also ordered. The can-order point is set by considering the additional holding cost that would be incurred should the item be ordered early. Capacity: The physical facilities, personnel, and process available to meet the product or service needs of customers. Capacity generally refers to the maximum output or producing ability of a machine, a person, a process, a factory, a product, or a service. Capacity Management: The concept that capacity should be understood, defined, and measured for each level in the organization to include market segments, products, processes, activities, and resources. In each of these applications, capacity is defined in a hierarchy of idle, non-productive, and productive views. Cargo: A product shipped in an aircraft, railroad car, ship, barge, or truck. Carload Lot: A shipment that qualifies for a reduced freight rate because it is greater than a specified minimum weight. Since carload rates usually include minimum rates per unit of volume, the higher LCL (less than carload) rate may be less expensive for a heavy but relatively small shipment. Carrier: A firm that transports goods or people via land, sea ,or air. Cartel: A group of companies that agree to cooperate, rather than compete, in producing a product or service, thus limiting or regulating competition. Cell: A manufacturing or service unit consisting of several workstations, and the materials transport mechanisms and storage buffers that interconnect them Cellular manufacturing: A manufacturing approach in which equipment and workstations are arranged to facilitate small-lot, continuous-flow production. In a manufacturing "cell," all operations necessary to produce a component or subassembly are performed nearby, thus allowing for quick feedback between operators when quality problems and other issues arise. Workers in a manufacturing cell typically are cross-trained and, therefore, able to perform multiple tasks as needed. Centralized Dispatching: The organization of the dispatching function into one central location. This structure often involves the use of data collection devices for communication between the centralized dispatching function, which usually reports to the production control department, and the shop manufacturing departments. Certificate of Compliance: A supplier's certification that the supplies or services in question meet specified requirements. Certificate of Origin: An international business document that certifies the country of origin of the shipment. Certificated carrier: A for-hire air carrier that is subject to economic regulation and requires an operating certification to provide service. Certified Supplier: A status awarded to a supplier who consistently meets predetermined quality, cost, delivery, financial, and count objectives. Incoming inspection may not be required. Challenge and Response: A method of user authentication. The user enters an ID and password and, in return, is issued a challenge by the system. The system compares the user's response to the challenge to a computed response. If the responses match, the user is allowed access to the system. The system issues a different challenge each time. In effect, it requires a new password for each logon. Change Order: A formal notification that a purchase order or shop order must be modified in some way. This change can result from a revised quantity, date, or specification by the customer; an engineering change; a change in inventory requirement date; etc. Changeover: Process of making necessary adjustments to change or switchover the type of products produced on a manufacturing line. Changeovers usually lead to downtime and for the most part, companies try to minimize changeover time to help reduce costs. Channel Conflict: This occurs when various sales channels within a company's supply chain compete with each other for the same business. An example is where a retail channel competes with a web basedweb-basedset up by the company. Channel Partners: Members of a supply chain (i.e. suppliers, manufacturers, distributors, retailers, etc.) who work in conjunction with one another to manufacture, distribute, and sell a specific product. Channels of Distribution: Any series of firms or individuals that participates in the flow of goods and services from the raw material supplier and producer to the final user or consumer. Chock: A wedge, usually made of hard rubber or steel, that is firmly placed under the wheel of a trailer, truck, or boxcar to stop it from rolling. Civil Aeronautics Board: A federal regulatory agency that implemented economic regulatory controls over air carriers. Class Rate: A rate constructed from a classification and a uniform distance system. A class rate is available for any product between any two points Classification: An alphabetical listing \of commodities, the class or rating into which the commodity is placed, and the minimum weight necessary for the rate discount; used in the class rate structure. Classification yard: A railroad terminal area where rail cars are grouped to form train units. Cluster Picking: Cluster picking is a methodology of picking into multiple order containers at one time. The containers could be totes containing order batches, discrete order shippers, or discrete order totes. Coastal carriers: Water carriers that provide service along coasts serving ports on the Atlantic or Pacific oceans or the Gulf of Mexico. Co-destiny: The evolution of a supply chain from intra-organizational management to inter-organizational management Co-Packer: A contract co-packer produces goods and/or services for other companies, usually under the other company's label or name. Co-Packers are more frequently seen in CPG and Foods. Co-Managed Inventory (CMI): Inventory management refers to the process of ordering, storing, using, and selling a company's inventory. This includes the management of raw materials, components, and finished products, as well as the warehousing and processing of such items. Code: A numeric, or alphanumeric, representation of text for exchanging commonly used information. For example commodity codes, carrier codes, Commercial Zone: The area surrounding a city or town to which rates quoted for the city or town also apply; the area is defined by the ICC. Commodity: An item that is traded in commerce. The term usually implies an undifferentiated product competing primarily on price and availability. Commodity Rate: A rate for a specific commodity and its origin-destination. Commodities clause: A clause that prohibits railroads from hauling commodities that they produced, mined, owned, or had an interest in. Common Carrier: Transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided. A common carrier must obtain a certificate of public convenience and necessity from the Federal Trade Commission for interstate traffic. Common cost: A cost that cannot be directly assignable to particular segments of the business but that is incurred for the business as a whole. Consolidation: Combining two or more shipments to realize lower transportation rates. Inbound consolidation from vendors is called make-bulk consolidation; outbound consolidation to customers is called breakbulk consolidation. Consumer-Centric Database: Database with information about a retailer's consumers, used primarily for marketing and promotion. Consumer Packaged Goods (CPG): Consumable goods such as food and beverages, footwear and apparel, tobacco, and cleaning products. In general, CPGs are things that get used up and have to be replaced frequently, in contrast to items that people usually keep for a long time, such as cars and furniture. Container Security Initiative (CSI): U.S. Customs program to prevent global containerized cargo from being exploited by terrorists. Designed to enhance the security of sea cacontainersiner. Continuous Flow Distribution (CFD): The streamlined pull of products in response to customer requirements while minimizing the total costs of distribution. Continuous Flow Manufacturing: A production system organized and sequenced according to the steps involved in the manufacturing process where the product moves seamlessly and continuously through the entire manufacturing process. Continuous Improvement (CI): A structured measurement-driven process that continually reviews and improves performance. Continuous Replenishment: Continuous replenishment is a strategy in which businesses share inventory information with suppliers, allowing those suppliers to automatically replenish inventory when needed. Automating inventory replenishment helps reduce logistics and warehousing costs and aligns production with demand. Continuous Replenishment Planning (CRP): A program that triggers the manufacturing and movement of a products through the supply chain when the identical product is purchased by an end user. Contract: An agreement between two or more competent persons or companies to perform or not perform specific acts or services or to deliver merchandise. A contract may be oral or written. A purchase order, when accepted by a supplier, becomes a contract. Acceptance may be in writing or by performance, uless the purchase order requires acceptance in writing. Contract Carrier: A carrier that does not serve the general public, but provides transportation for hire for one or a limited number of shippers under a specific contract. Contract Line Items Number (CLIN): Specific items or services separately priced under a contract. Contractor Logistics Support (CLS): A term in performance-based logistics that refers to support in which maintenance operations for a particular military system are performed exclusively by contract support personnel. 1) CLS (Cost Plus): used for transitional support while cost and resource baselines are being tracked and defined. 2) CLS (Fixed Price): Used when cost and resource baselines are well-documented, cost and pricing risk are minimal, and both DoD and contractor can define price, incentives, and performance outcomes with a high degree of confidence. Core Process: That unique capability that is central to a company's competitive strategy. Cost, Insurance, Freight (CIF): A freight term indicating that the seller is responsible for the cothe marine insurance, and freight charges on an ocean shipment of goods. Critical Success Factors (CSF): Necessary conditions for success that can be measured quantitatively for effectiveness, economy, and efficiency; those few areas where satisfactory performance is essential for a business to succeed; characteristics, conditions, or variables that have a direct influence on a customer's satisfaction with a specific business process; the set of things that must be done right if a vision is to be achieved. Cross-Shipment: Material flow activity where materials are shipped to customers from a secondary shipping point rather than from a preferred shipping point. Cross Sell: The practice of attempting to sell additional products to a customer during a sales call. For example, when the CSR presents a camera case and accessories to a customer that is ordering a camera Cumulative Lead Time: The total time required to source components, build and ship a product. Currency adjustment factor (CAF): An added charge assessed by water carriers for currency value changes. Customer Acquisition or Retention: The rate by which new customers are acquired, or existing customers are retained. A key selling point to potential marquis partners. Customization: Creating a product from existing components into an individual order. Cycle Inventory: An inventory system where counts are performed continuously, often eliminating the need for an annual overall inventory. It is usually set up so that A items are counted regularly (i.e., every month), B items are counted semi-regularly (every quarter or six months), and C items are counted perhaps only once a year. Cube Utilization: In warehousing, a measurement of the utilization of the total storage capacity of a vehicle or warehouse. Cyclical Demand: A situation where demand patterns for a product run in cycles driven by seasonality or other predictable factors. Category Management. The management of groups of products that are interchangeable, or substitutable, in meeting consumer needs as opposed to the traditional concentration on individual products and brands. Central Distribution Centre A warehouse that is the sole stocking point for the distribution system that it serves. Grocery manufacturers commonly have central (or national) distribution centres, stocked by various manufacturing points and serving various retailer distribution warehouses. See National distribution centers. Co-Managed Inventory. A support arrangement Similar to Vendor Managed Inventory but where replacement orders for the vendor-owned stock are agreed by the user prior to delivery. Component. A part, ingredient, or subassembly that is both a component to a higher-level part, and a parent part to other components. Component Part. Raw material, ingredient, part, or subassembly that goes into a higher-level assembly, compound, or other part. Composite Delivery A multi-temperature distribution centre. The receipt, storage and handling of products would typically take place in a variety of on-site chambers each operating at a specific temperature. Composite Distribution Centre (CDC) A multi-temperature distribution centre. The receipt, storage and handling of products would typically take place in a variety of on-site chambers each operating at a specific temperature. Consignment Stock. The stock of goods held by an external customer which is still the property of the supplier but for which payment is only made when stock is sold or used by the customer. Consolidation The loading of two or more suppliers ‘deliveries to a retailer’s RDC on a single vehicle. This aims to improve load utilisation and also improve unloading time at the RDC. Consolidation Centers Depots that store and/or process stock (see cross docking) into full loads for delivery to retailer RDCs. Cost to Serve. Is a Supply Chain analytical approach, utilising activity-based cost techniques that identifies the costs of servicing specific customers, with specific products, by allocating costs to customers, products and channels. Cross Docking A system where products for store orders are not put away into the warehouse racking for later picking but are processed into store orders on arrival at the RDC. This can entail breaking down the inward delivery into store ready consignments or if the consignments are pallet sized moving the pallets across the docking area for loading onto the store delivery vehicle. This movement of product across warehouse vehicle docking bays gives the process its name De-Coupling Stock. Inventory accumulated between dependent activities in the goods flow to reduce the need for completely synchronized operations. Deduct Point. The point in the production process up to which all the parts assumed to have been used (as defined in the bill of material) are “backflushed”, (automatically deducted) from the inventory records. Also see Backflushing. Demand Driven Supply Chains. This is where a supply system is in direct response to a single point of demand. All the components across a supply chain are synchronized to meet the demand that it is trying to fulfill. Dependent Demand. A classification used in inventory control where the demand for one item has a direct mathematical relationship with the demand for another higher level or parent component and where the demand for that item is ultimately dependent on the demand for the higher level or parent item. Deterministic Inventory Control Models. An inventory control system where all the variables and parameters used are known or can be calculated with certainty. The rate of demand for items, and the associated inventory costs, are assumed to be known with assurance and the replenishment lead time is assumed to be constant and independent of demand. Direct Store Delivery (DSD). Delivery by suppliers directly to their customers retail outlet, rather than via the retailers DC. Deadstock. Dead stock refers to any unsold items which are lying in your warehouse or your store for a long time. Dead stock is detrimental to any business because it not only takes up valuable space but also acts as a bad investment for your company. Distribution Requirement Planning DRPI. The function of determining the need to replenish inventory at branch warehouses over a forward time. A time-phased order point approach is used where planned orders at branch warehouse level are exploded via MRP logic to become gross requirements on the supplying source enabling the translation of inventory plans into material flows. In the case of multi-level distribution networks, this explosion process can continue down through the various levels of regional warehouses, master warehouse, factory warehouse etc and become input to the master production schedule. Data Communications: The electronic transmission of data, usually in computer readable form, using a variety of transmission vehicles and paths. Data Mining: The process of studying data to search for previously unknown relationships. This knowledge is then applied to achieving specific business goals. Data Warehouse: A repository of data that has been specially prepared to support decision-making applications Decision Support System (DSS): Software that speeds access and simplifies data analysis, queries, etc. within a database management system. Demand: What customers or users actually want. Typically associated with the consumption of products or services as opposed to a prediction or forecast. Demand Pull: Demand-pull describes a supply chain where the trigger for supply is customer demand. As an example, at the start of a new academic year, a university bookshop stocking a popular text places a requisition card halfway down the pile. Demand Sensing: Using channel data to reduce latency in sensing customer buying trends. Demand-Side Analysis: Techniques such as market research, surveys, focus groups, and Performance / cost modeling used to identify emerging technologies. Demand Shaping: Using programs, including price, new product launch, trade and sales incentives, promotions, and marketing programs, to increase what customers want to buy. Demand Signal: A signal from a consumer, customer or using operation that triggers the issue of product or raw material. The demand signal is most efficiently an electronic data transmission, but could be a physical document, Kanban or telephone call. Demand Supply Balancing: The process of identifying and measuring the gaps and imbalances between demand and resources in order to determine how to best resolve the variances through marketing, pricing, packaging, warehousing, outsource plans or some other action that will optimize service, flexibility, costs, assets (or other supply chain inconsistencies) in an iterative and collaborative environment. Demurrage: The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. Denied Party List (DPL): A list of organizations that are unauthorized to submit a bid for an activity or to receive a specific product. For example, some countries have bans for certain products such as weapons or sensitive technology. Depot: A location where a substance is stored usually for later utilization. A Repair Depot is a location/facility where assets are rebuilt or repaired. Detention: The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. Differential: A discount offered by a carrier that faces a service time disadvantage over a route. Differentiation: In the postponement supply chain model, this is the point where an end product assumes unique characteristics through final assembly configuration and/or packaging. Digital Signature: Electronically generated, digitized (as opposed to graphically created) authorization that is uniquely linkable and traceable to an empowered officer. Direct Product Profitability (DPP): Calculation of the net profit contribution attributable to a specific product or product line. Direct Production Material: Material that is used in the manufacturing/content of a product (example: Purchased parts, solder, SMT glues, adhesives, mechanical parts etc. Bill-of-Materials parts, etc.) Disaster Recovery Planning: Contingency planning specifically related to recovering hardware and software (e.g. data centers, application software, operations, personnel, telecommunications) in information system outages. Distribution Center (DC): The warehouse facility which holds inventory from manufacturing pending distribution to the appropriate stores. Distribution Channel: One or more companies or individuals who participate in the flow of goods and services from the manufacturer to the final user or consumer. Dock-to-Stock: A program by which specific quality and packaging requirements are met before the product is released. Pre-qualified product is shipped directly into the customer's inventory. Dock-to-stock eliminates the costly handling of components, specifically in receiving and inspection and enables product to move directly into production Dock-to-Stock Cycle Time: The elapsed time beginning with the delivery of goods from the supplier and ends when those goods are put away in the warehouse and recorded into the inventory management system. Dock receipt: A receipt that indicates an export shipment has been delivered to a steamship company by a domestic carrier. Double Stack: Two containers, one on top of the other, loaded on a railroad flatcar; an intermodal service. Downstream: Referring to the demand side of the supply chain. One or more companies or individuals who participate in the flow of goods and services moving from the manufacturer to the final user or consumer. Drayage: Transportation of materials and freight on a local basis, but intermodal freight carriage may also be referred to as drayage. Driving time regulations: Rules administered by the U.S. Department of Transportation that limit the maximum time a driver may drive in interstate commerce; both daily and weekly maximums are prescribed. Drop and Hook: An arrangement among shipper, carrier and consignee whereby the carrier leaves a trailer filled with freight at a destination and hooks up and hauls away an empty trailer. Drop Yard: Temporary “parking lots” for containers or cargo, located off the wharves and sometimes next to rail yards or import warehouses. Dual Operation: A motor carrier that has both common and contract carrier operating authority. Dual Rate System: An international water carrier pricing system where a shipper signing an exclusive use agreement with the conference pays a lower rate (10% to %15) than non-signing shippers for an identical shipment. Dumping: Selling goods below costs in selected markets. Dunnage: The packing material used to protect a product from damage during transport. Drop shipment: A situation where one of your vendor’s ships goods directly to your customers, on your behalf. Here, the customer will not know your vendor and will be making all payments to you, while you will be paying your vendor and still making a profit. This is useful for selling slow-moving items with a long product life, without bearing the burden of storage and maintenance yourself. Ajay Aadhithya Chandrasekaran (Zoho.Articles) Economic Order Interval (EOI). In fixed order interval systems, the interval between orders that will minimise the total inventory cost, under a given set of circumstances, obtained by trade off analysis between the cost of placing an order and the cost of holding stock Expression Of Interest (EOI). Often the first stage in outsourcing which involves a summary of the requirements being distributed to potential suppliers of goods and/or services. Economic Order Quantity (EOQ). In fixed order quantity systems, the size of an order that minimizes the total inventory cost, under a given set of circumstances, obtained by trade off analysis between the cost of placing an order and the cost of holding stock. Economic Stock. The sum of the physical stock and the goods ordered but not yet received, minus the goods sold but not yet delivered for which a company carries risk in respect of a drop in price and unmarketability. Effective Stock. The sum of the physical stock of a particular product and the quantity of that product ordered for a particular period, but not yet received. Efficient Consumer Response (ECR). An initiative whereby elements of the supply chain work together to fulfill consumer wishes better, faster and at less cost. Electronic Commerce (E Commerce). A way to execute transactions and share information with other businesses, consumers or with government by using computer and telecommunication networks, including the Internet. Electronic Data Interchange (EDI). The computer-to-computer exchange of structured data for automatic processing. Enterprise Requirement Planning (ERP). A further extension of MRP II whereby a single system embraces and integrates all aspects of business operations into a single database application. European Article Numbering (EAN). An international standard of product identification used in the grocery and retail areas of business. Excess Stock. Any quantity of inventory, either held or on order, which exceeds known or anticipated forward demand to such a degree that disposal action should be considered. Early Supplier Involvement (ESI): The process of involving suppliers early in the product design activity and drawing on their expertise, insights, and knowledge to generate better designs in less time and designs that are easier to manufacture with high quality. Earnings Before Interest and Taxes (EBIT): A measure of a company's earning power from ongoing operations, equal to earnings (revenues minus cost of sales, operating expenses, and taxes) before deduction of interest payments and income taxes. Economic Order Quantity (EOQ): An inventory model that determines how much to order by determining the amount that will meet customer service levels while minimizing total ordering and holding costs. Economic Value Added (EVA): A measurement of shareholder value as a company's operating profits after tax, less an appropriate charge for the capital used in creating the profits. Economy of Scale: A phenomenon whereby larger volumes of production reduce unit cost by distributing fixed costs over a larger quantity. Electronic Signature: A form of authentication that provides identification and validation of a transaction by means of an authorization code identifying the individual or organization. Encryption: The transformation of readable text into coded text for security purposes. End-of-Life Inventory: Inventory on hand that will satisfy future demand for products that are no longer in production at your entity. Differs from obsolete inventory due to an expected future requirement. End Item: A product sold as a completed item or repair part; any item subject to a customer order or sales forecast. Enterprise Resource Planning (ERP) System: A class of software for planning and managing "enterprise-wide" the resources needed to take customer orders, ship them, account for them and replenish all needed goods according to customer orders and forecasts. Often includes electronic commerce with suppliers. Examples of ERP systems are the application suites from SAP, Oracle, PeopleSoft and others. Ergonomic: The science of creating workspaces and products which are human friendly to use Evaluated Receipts Settlement (ERS): A process for authorizing payment for goods based on actual receipts with purchase order data, when price has already been negotiated. The basic premise behind ERS is that all of the information in the invoice is already transmitted in the shipping documentation. Therefore, the invoice is eliminated and the shipping documentation is used to pay the vendor. EDI: Electronic Data Interface is a method of transferring transactions from one computer system to another, by converting the data into a standard that can be easily read by all systems. It is generally used in places where the exchange of information between two or more parties happens on paper. It could be used in cases where printed copies of invoices or orders are sent by a seller to a third party logistics provider for fulfilment. Ajay Aadhithya Chandrasekaran (Zoho.Articles) Final Assembly: The highest level assembled product, as it is shipped to customers. This terminology is typically used when products consist of many possible features and options that may only be combined when an actual order is received. Finished Goods Inventory (FG or FGI): Products completely manufactured, packaged, stored, and ready for distribution Finite Scheduling: A scheduling methodology where work is loaded into work centers such that no work center capacity requirement exceeds the capacity available for that work center FIFO: FIFO stands for “first in, first out” and assumes the first items entered into your inventory are the first ones you sell. Ajay Aadhithya Chandrasekaran (Zoho.Articles) FEFO. First Expired, First Out is a term used in field inventory management to describe a way of dealing with the logistics of products that have a limited shelf life. These items include perishable products or consumer goods with a specified expiration date. Fixed-Location Storage: A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. Although more space is needed to store parts than in a random-location storage system, fixed locations become familiar, and therefore a locator file may not be needed. First Pass Yield: The ratio of usable, specification conforming output from a process to its input, achieved without rework or reprocessing. Fixed-Period Requirements: A lot-sizing technique that sets the order quantity to the demand for a given number of periods. Fixed Costs: Costs, which do not fluctuate with business volume in the short run. Fixed costs include items such as depreciation on buildings and fixtures. Fixed Interval Inventory Model: A setup wherein each time an order is placed for an item, the same (fixed) quantity is ordered. Fixed Order Quantity: A lot-sizing technique in MRP or inventory management that will always cause planned or actual orders to be generated for a predetermined fixed quantity, or multiples thereof if net requirements for the period exceed the fixed order quantity. Fixed Overhead: Fixed overheads are costs that remain constant every month and do not change with changes in business activity levels. Examples of fixed overheads include salaries, rent, property taxes, depreciation of assets, and government licenses. Flexible Specialization: A strategy based on multi-use equipment, skilled workers and innovative senior management to accommodate the continuous change that occurs in the marketplace. Flow Rack: Storage rack that utilizes shelves (metal) that are equipped with rollers or wheels. Such an arrangement allows product and materials to "flow" from the back of the rack to the front and therein making the product more accessible for small-quantity order-picking Forecast: An estimate of future demand. A forecast can be constructed using quantitative methods, qualitative methods, or a combination of methods, and it can be based on extrinsic (external) or intrinsic (internal) factors. Various forecasting techniques attempt to predict one or more of the four components of demand: cyclical, random, seasonal, and trend. Foreign Trade Zone (FTZ): An area or zone set aside at or near a port or airport, under the control of the U.S. Customs Service, for holding goods duty-free pending customs clearance. Forklift truck: A machine-powered device that is used to raise and lower freight and to move freight to different warehouse locations. Four Wall Inventory: The stock which is contained within a single facility or building. 4PL organization is often a separate entity established as a joint venture or long-term contract between a primary client and one or more partners; 2) 4PL organization acts as a single interface between the client and multiple logistics service providers; 3) All aspects (ideally) of the client's supply chain are managed by the 4PL organization; and, 4) It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure. Forty-foot Equivalent Unit (FEU): A standard size intermodal container Free Time: The period of time allowed for the removal or accumulation of cargo before charges become applicable. Free Trade Zone (FTZ): Also known as an export processing zone (EPZ), one or more special areas of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments. Freezing Inventory Balances: In most cycle counting programs the term "freezing" refers to copying the current on-hand inventory balance into the cycle count file. Freight Bill: The carrier's invoice for transportation charges applicable to a freight shipment. Freight Consolidation: The grouping of shipments to obtain reduced costs or improved utilization of the transportation function. Consolidation can occur by market area grouping, grouping according to scheduled deliveries, or using third-party pooling services such as public warehouses and freight forwarders. Fully Allocated Cost: The variable cost associated with a particular unit of output plus an allocation of common cost Fungible: A fungible item is one which could be exchanged with another equal part or quantity with no significant difference, and still satisfies the obligation, a commodity is a fungible item. Factory Gate Pricing. An initiative driven by retailers to drive out transportation costs and to improve the efficiency within the primary segment of the supply chain. The retailer generally takes over the management of the primary (inbound) transport and deducts the cost of this transport from the supplier’s product price. See also Primary Freight. Family Group. A group of related products for which demand can be aggregated in order to assess overall demand for the material or parts which make up the family group products. Fill Rate. An item-based measurement that shows the percentage of demands that were met at the time they were placed. Fill rate only measures what happens when demands occur. Finished Goods. Inventory to which the final increments of value have been added through manufacturing. Finished Goods Stock. Stock that is available for supply to an external consumer, including items that have been supplied but not invoiced to an external consumer. Stock Valuation – The method of valuing stocks which assumes that the oldest stock is consumed first and thus issues are valued at the oldest price. Stock Rotation – The method whereby the goods which have been longest in stock are delivered (sold) and/or consumed first. First Pick Ratio. During order picking, the percentage of orders or lines for which 100% completion was achieved from the primary location or picking face. In Process Goods. Partially completed final products that are still in the production process either as an accumulation of partially completed work or the queue of material awaiting further processing. Inactive Inventory. Stock of items that have not been used for a defined period. Inco Terms. These are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities and clarify when the ownership of the merchandise takes place. They are used in conjunction with a sales agreement or other method of transacting the sale. Independent Demand. A classification used in inventory control systems where the demand for any one item has no relationship with the demand for any other item and variations in demand occur because of random influences from the marketplace. Intermediate Product. A product for which independent demand can exist and for which there is also demand as part of another higher level product e.g.: a single can and a multi-can pack or a sub-assembly spare and the major assembly of which it forms part. Inventory. A term used to describe: all the goods and materials held by an organisation for future sale or use a list of items held in stock Inventory Control. Consists of all the activities and procedures used to control and maintain the right amount of each item in stock or to provide the required level of service at minimum cost. Inventory Modelling. The evaluation of alternative inventory design characteristics or inventory parameters using analytical or simulation processes to assist management decisions. Inventory Policy. A statement of a company’s goals and approach to inventory management. Inventory Process. Any business process that involves inventory. Includes the receiving of parts, putting them away, and their storage, withdrawal, issue, and movement through work-in process, while simultaneously tracking their movement and maintaining records of those events and their effects. Inventory Records. Records that reflect how much and what kind of inventories a company has on hand, committed (allocated) to work in process, and on order. Inventory Shrinkage. Losses resulting from scrap, deterioration, pilferage, etc Inventory Usage. The value of the number of units, or quantity, of an inventory item (stock usage) consumed over a period of time. Inventory Value. The value of inventory at either cost or market value. The value of the inventory is usually computed on a First In First Out (FIFO) or Last In First Out (LIFO) or average cost basis. Issues based supply chain development. This is an approach that is used to first make an assessment of the problems, issues and root causes in a supply chain and then uses the root causes to understand the strategic gaps in the supply chain. Issue Tickets. An authorisation to withdraw allocated stock items from the stockroom. When presented to the stockroom, they can be exchanged for the parts designated. Issuing Documents. The physical documents that communicate specifically how much of what needs to be issued to where. Issue lists, issue tickets, and issue decks are all forms of issuing documents. EXW – Ex Works — Title and risk pass to buyer including payment of all transportation and insurance cost from the seller’s door. Used for any mode of transportation. FCA – Free Carrier — Title and risk pass to buyer including transportation and insurance cost when the seller delivers goods cleared for export to the carrier. Seller is obligated to load the goods on the Buyer’s collecting vehicle; it is the Buyer’s obligation to recieve the Seller’s arriving vehicle unloaded. FAS – Free Alongside Ship –Title and risk pass to buyer including payment of all transportation and insurance cost once delivered alongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller. FOB – Free on Board and risk pass to buyer including payment of all transportation and insurance cost once delivered on board the ship by the seller. Used for sea or inland waterway transportation. CFR – Cost and Freight — Title, risk and insurance cost pass to buyer when delivered on board the ship by seller who pays the transportation cost to the destination port. Used for sea or inland waterway transportation. CIF – Cost, Insurance and Freight — Title and risk pass to buyer when delivered on board the ship by seller who pays transportation and insurance cost to destination port. Used for sea or inland waterway transportation. CPT – Carriage Paid To — Title, risk and insurance cost pass to buyer when delivered to carrier by seller who pays transportation cost to destination. Used for any mode of transportation. CIP – Carriage and Insurance Paid To –Title and risk pass to buyer when delivered to carrier by seller who pays transportation and insurance cost to destination. Used for any mode of transportation. DAF – Delivered at Frontier — Title, risk and responsibility for import clearance pass to buyer when delivered to named border point by seller. Used for any mode of transportation. DES – Delivered Ex Ship — Title, risk, responsibility for vessel discharge and import clearance pass to buyer when seller delivers goods on board the ship to destination port. Used for sea or inland waterway transportation. DEQ – Delivered Ex Quay (Duty Paid) — Title and risk pass to buyer when delivered on board the ship at the destination points by the seller who delivers goods on dock at destination point cleared for import. Used for sea or inland waterway transportation. DDU – Delivered Duty Unpaid — Title, risk and responsibility of import clearance pass to buyer when seller delivers goods to named destination point. Used for any mode of transportation. Buyer is obligated for import clearance. DDU – Delivered Duty Unpaid — Seller fulfills his obligation when goods have been made available at the named place in the country of importation DDP – Delivered Duty Paid — Title and risk pass to buyer when seller delivers goods to named destination point cleared for import. Used for any mode of transportation. Gap analysis: The process of determining and documenting the variance (gap) between goals and current performance. Gateway: The connection that permits messages to flow freely between two networks. General-merchandise Warehouse: A warehouse that is used to store goods that are readily handled, are packaged, and do not req1ire a controlled environment. Global Positioning System (GPS): A system which uses satellites to precisely locate an object on earth. Used by trucking companies to locate over-the-road equipment. Global Trade Item Number (GTIN): A unique number that comprises up to 14 digits and is used to identify an item (product or service) upon which there is a need to retrieve pre-defined information that may be priced, ordered or invoiced at any point in the supply chain. Green field: A method used to launch a new process or initiative where no others of that type have previously existed Grid Technique: A quantitative technique to determine the least-cost center, given raw materials sources and markets, for locating a plant or warehouse. Gross Inventory: Value of inventory at standard cost before any reserves for excess and obsolete items are taken Gross Margin: The difference between total revenue and the cost of goods sold. Indicates the profit a business makes on its cost of sales. In other words, the amount of gross profit per $1 of turnover the business is earning. Gross National Product (GNP): A measure of a nation's output; the total value of all final goods and services produced during a period. Gross weight: The total weight of the vehicle and the payload of freight or passengers Guaranteed Loans: Loans made to railroads that are cosigned and guaranteed by the federal government. Handling Costs: The cost involved in moving, transferring, preparing, and otherwise handling inventory. Hedge Inventory: A form of inventory buildup to buffer against some event that may not happen. Hedge inventory planning involves speculation related to potential labor strikes, price increases, unsettled governments, and events that could severely impair a company's strategic initiatives. Risk and consequences are unusually high, and top management approval is often required. Honeycombing: 1) The practice of removing merchandise in pallet load quantities where the space is not exhausted in an orderly fashion. Household goods warehouse: A warehouse that is used to store household goods. Hub: A large retailer or manufacturer having many trading partners. A reference for a transportation network as in "hub and spoke" which is common in the airline and trucking industry Human-machine Interface: Any point where data is communicated from a worker to a computer or from a computer to a worker. Data entry programs, inquire programs, reports, documents, LED displays, and voice commands are all examples of human-machine interfaces. Hybrid Inventory System: An inventory system combining features of the fixed reorder quantity inventory model and the fixed reorder cycle inventory model. Inventory: Raw materials, work in process, finished goods and supplies required for creation of a company's goods and services; The number of units and/or value of the stock of goods held by a company. Import: Movement of products from one country into another. The import of automobiles from Germany to the U.S. is an example Import/Export License: Official authorization issued by a government allowing the shipping or delivery of a product across national boundaries. In Bond: Goods are held or transported In-Bond under customs control either until import duties or other charges are paid, or to avoid paying the duties or charges until a later date. Inbound Logistics: The movement of materials from suppliers and vendors into production processes or storage facilities. Incentive Rate: A rate designed to induce the shipper to ship heavier volumes per shipment Indirect Cost: A resource or activity cost such as operation costs and overhead that cannot be directly traced to a final cost object since no direct or repeatable cause-and-effect relationship exists. An indirect cost uses an assignment or allocation to transfer cost. Information systems (IS): Managing the flow of data in an organization in a systematic, structured way to assist in planning, implementing, and controlling. Inland Carrier: An enterprise that offers overland service to or from a point of import or export. Insourcing: The opposite of outsourcing, that is, a serve performed in-house. Integrated Logistics: A comprehensive, system-wide view of the entire supply chain as a single process, from raw materials supply through finished goods distribution. All functions that make up the supply chain are managed as a single entity, rather than managing individual functions separately. Intercoastal carriers: Water carriers that transport freight between East and West Coast ports, usually by way of the Panama Canal. Intercorporate hauling: A private carrier hauling the goods of a subsidiary and charging the subsidiary a fee: this is legal if the subsidiary is wholly owned (100%) or if the private carrier has common carrier authority. Interline: Two or more motor carriers working together to haul the shipment to a destination. Carrier equipment may be interchanged from one carrier to the next, but usually the shipment is rehandled without the equipment. Intrastate Commerce: The transportation of persons or property between points within a state. A shipment between two points within a state may be interstate if the shipment had a prior or subsequent move outside of the state and the intent of the shipper was an interstate shipment at the time of shipment. Inventory Deployment: A technique for strategically positioning inventory to meet customer service levels while minimizing inventory and storage levels. Excess inventory is replaced with information derived through monitoring supply, demand and inventory at rest as well as in motion. Inventory Turns: This ratio measures how many times a company's inventory has been sold (turned over) during a period of time. For Joint Cost: A type of common cost where products are produced in fixed proportions, and the cost incurred to produce on product necessarily entails the production of another; the backhaul is an example. Joint Rate: A rate over a route that involves two or more carriers to transport the shipment. Just-in-Time (JIT): An inventory control system that controls material flow into assembly and manufacturing plants by coordinating demand and supply to the point where desired materials arrive just in time for use. An inventory reduction strategy that feeds production lines with products delivered "just in time". Developed by the auto industry, it refers to shipping goods in smaller, more frequent lots. Kaizen: The Japanese term for improvement; continuing improvement involving everyone-managers and workers. In manufacturing, kaizen relates to finding and eliminating waste in machinery, labor, or production methods. Labor Management System (LMS): A software solution which provides a means of defining / documenting the most appropriate means of performing a process or task, provides an engineered methodology for calculating standard which show how long a task should take to complete and includes tools which can be used for planning activities and reporting performance against standards. Lading: The cargo carried in a transportation vehicle. Laid-down cost: The sum of the product and transportation costs. The laid-down cost is useful in comparing the total cost of a product shipped from different supply sources to a customer's point of use. Land Bridge: The movement of containers by ship-rail-sip on Japan-to-Europe moves; ships move containers to the U.S. Pacific Coast, rails move containers to an East Coast port, and ships deliver containers to Europe. Landed Cost: Cost of product plus relevant logistics costs such as transportation, warehousing, handling, etc LIFO: known as “last in, first out,” assumes the most recent items entered into your inventory will be the ones to sell first. Ajay Aadhithya Chandrasekaran (Zoho.Articles) Lead Logistics Partner (LLP): An organization that organizes other 3rd party logistics partners for outsourcing of logistics functions. Lead Time: The total time that elapses between an order's placement and its receipt. It includes the time required for order transmittal, order processing, order preparation, and transit. HS: The Harmonized Set of Codes is a system of internationally accepted codes that help businesses and government bodies identify items while buying or selling them globally. These codes normally range from 4 to 10 digits, depending on where they are used. Ajay Aadhithya Chandrasekaran (Zoho.Articles) IMDG codes: The International Maritime Dangerous Goods code was adopted under the 1960 SOLAS (Safety of Life at Sea) convention. It provides guidelines for safe handling of flammable, explosive, corrosive or radioactive materials and helps prevent incidents of hazardous accidents and pollution that can occur during transportation of these goods. Ajay Aadhithya Chandrasekaran (Zoho.Articles) JIT (just in time) Just-in-time is an inventory optimization method where every batch of items arrives” just in time” to fulfil the needs of the next stage, which could be either a shipment or a production cycle. Ajay Aadhithya Chandrasekaran (Zoho.Articles) Landed Cost: The total cost of ownership of an item. This includes the cost price, shipping charges, custom duties, taxes and any other charges that were borne by the buyer. Ajay Aadhithya Chandrasekaran (Zoho.Articles) Least Total Cost: A dynamic lot-sizing technique that calculates the order quantity by comparing the setup (or ordering) costs and the carrying cost for various lot sizes and selects the lot size where these costs are most nearly equal. Least Unit Cost: A dynamic lot-sizing technique that adds ordering cost and inventory carrying cost for each trial lot size and divides by the number of units in the lot size, picking the lot size with the lowest unit cost. Less-Than-Carload (LCL): Shipment that is less than a complete rail car load (lot shipment). Lessee: A person or firm to whom a lease is granted. Letter of credit: An international business document that assures the seller that payment will be made by the bank issuing the letter of credit upon fulfillment of the sales agreement. Leverage: Taking something small and exploding it. Can be financial or technological. Lift-On Lift-Off: Vessel of which the loading and discharging operations are carried out by cranes and derricks. Lift Truck: Vehicles used to lift, move, stack, rack, or otherwise manipulate loads. Material handling people use a lot of terms to describe lift trucks, some terms describe specific types of vehicles, others are slang terms or trade names that people often mistakenly use to describe trucks. Lighter: A flat-bottomed boat designed for cross-harbor or inland waterway freight transfer. Line Scrap: Value of raw materials and work-in-process inventory scrapped as a result of improper processing or assembly, as a percentage of total value of production at standard cost. Liner Service: International water carriers that ply fixed routes on published schedules. Link: The transportation method used to connect the nodes (plants, warehouses) in a logistics system. Load Factor: A measure of operating efficiency used by air carriers to determine the percentage of a plane's capacity that is utilized, or the number of passengers divided by the total number of seats. Load Tendering: The practice of providing a carrier with detailed information and negotiated pricing (the tender) prior to scheduling pickup. This practice can help assure contract compliance and facilitate automated payments (self billing) Local Rate: A rate published between two points served by one carrier. Local Service Carriers: An air carrier classification of carriers that operate between areas of lesser and major population centers. These carriers feed passengers into the major cities to major hubs. Locational Determinant: The factors that determine the location of a facility. For industrial facilities, the determinants include logistics. Logbook: A daily record of the hours an interstate driver spends driving, off, duty, sleeping in the berth, or on duty but not driving. Logistics Channel: The network of supply chain participants engaged in storage, handling, transfer, transportation, and communications functions that contribute to the efficient flow of goods. Logistics Service Provider (LSP): Any business which provides logistics services. Includes those businesses typically referred to as 3PL, 4PL, LLP, etc. Services may include provisioning, transport, warehousing, packaging, etc. Lot Control: A set of procedures (e.g., assigning unique batch numbers and tracking each batch) used to maintain lot integrity from raw materials, from the supplier through manufacturing to consumers. Lot-for-Lot: A lot-sizing technique that generates planned orders in quantities equal to the net requirements in each period. Lot Size: Set quantity of goods to be purchased or produced at one time in anticipation of use or sale in the future. Machine Downtimes: Time during which a machine cannot be utilized. Machine downtimes may occur during breakdowns, maintenance, changeovers, etc. Macro Environment: The environment external to a business including technological, economic, natural, and regulatory forces that marketing efforts cannot control Mainframe: A term sometimes generically used to refer to an organization's central computer system. Specifically, the largest class of computer systems manufactured. Make-to-Order (Manufacture-to-order): A manufacturing process strategy where the trigger to begin manufacture of a product is an actual customer order or release, rather than a market forecast. For Make-to-Order products, more than 20% of the value-added takes place after the receipt of the order or release, and all necessary design and process documentation is available at time of order receipt Manifest: A document which describes individual orders contained within a shipment. Manufacturer's Representative: One who sells goods for several firms but does not take title to goods or possibly not even handle them Marginal Cost: The cost to produce one additional unit of output. The change in total variable cost resulting from a one-unit change in output. Marine Insurance: Insurance to protect against cargo loss and damage when shipping by water transportation. Market Demand: In marketing, the total demand that would exist within a defined customer group in a given geographical area during a particular time period given a known marketing program. Market Segment: A group of potential customers sharing some measurable characteristics based on demographics, psychographics, lifestyle, geography, benefits, etc Materials Management: Inbound logistics from suppliers through the production process. The movement and management of materials and products from procurement through production. Materials Requirements Planning (MRP): A decision-making methodology used to determine the timing and quantities of materials to purchase. Maximum Inventory: The planned maximum allowable inventory for an item based on its planned lot size and target safety stock. Maximum Order Quantity: An order quantity modifier applied after the lot size has been calculated, that limits the order quantity to a pre-established maximum. Merger: The combination of two or more carriers into one company for the ownership, management, and operation of the properties previously operated on a separate basis. Minimum Weight: The shipment weight specified by the carrier's tariff as the minimum weight required to use the TL or CL rate; the rate discount volume. Mixed Loads: The movement of both regulated and exempt commodities in the same vehicle at the same time. Move Ticket: A document used to move inventory within a facility. Warehouse management systems use move tickets to direct and track material movements. In a paperless environment the electronic version of a move ticket is often called a task or a trip. (key terms) Material Requirements Planning (MRP I). A system to support manufacturing and fabrication organisations by the timely release of production and purchase orders using the production plan for finished goods to determine the materials required to make the product. Orders for dependent demand items are phased over time to ensure that the flow of raw materials and in-process inventories matches the production schedules for finished products. The 3 key inputs are the master production schedule, inventory status records and product structure records. Manufacturing Resource Planning (MRP II). A method for the effective planning of all the resources of a manufacturing company. Ideally it addresses operational planning in units, financial planning in money, and has a simulation capability to answer what if questions. It is made up of a variety of functions, each linked together: business planning, master (or production) planning, master production scheduling, material requirements planning, capacity requirements planning and the execution systems for capacity and priority. Outputs from these systems would be integrated with financial reports such as the business plan, purchase commitment report, shipping budget, stock projections in money etc. Manufacturing resource planning is a direct out-growth and extension of material requirements planning (MRP-1). Make to Order. A manufacturing process strategy where the trigger to begin manufacture of a product is an actual customer order or release rather than a market forecast. Make to Stock. A manufacturing process strategy where finished product is continually held in plant or warehouse inventory to fulfill expected incoming orders or releases based on a forecast Materials Management. The planning, organisation and control of all aspects of inventory embracing procurement, warehousing, work-in-progress, shipping, and distribution of finished goods. Maximum Stock. The upper limit, expressed in quantitative, financial or time-based terms, to which the stock of an item should normally be allowed to rise. Maximum Order. Quantity An order quantity which, in principle, must not be exceeded. Minimum Order. The smallest order quantity which, in principle, is allowed. Minimum Stock. A control limit within a stock control system which could indicate the point at which an order should be placed, or indicate if stocks are too low, for a specific item Net Asset Turns: The number of times you replenish your net assets in your annual sales cycle. A measure of how quickly assets are used to generate sales. Net Landed Costs: The cost of the product in addition to the relevant logistics cost such as transportation and handling. Node: A fixed point in a firm's logistics system where goods come to rest; includes plants, warehouses, supply sources, and markets. Noncertified carrier: A for-hire air carrier that is exempt from economic regulation. Obsolescence: A loss in the utility or value of property that results over time from intrinsic limitations (as outmoded facilities) or external circumstances. Obsolete Inventory: Inventory for which there is no forecast demand expected. A condition of being out of date. A loss of value occasioned by new developments that place the older property at a competitive disadvantage. On-Demand: Pertaining to work performed when demand is present. Typically used to describe products which are manufactured or assembled only when a customer order is placed. May also refer to computer applications which are accessed remotely via a subscription service where charges for use are incurred as opposed to paying a set period fee. On-Hand Balance: The quantity shown in the inventory records as being physically in stock. On Time Delivery: A metrics which is defined as % of receipts that were received by the customers on time. Open to Buy (OTB): A budgeting and procurement guide used by many retailers to establish appropriate procurement and inventory levels based on projected sales. Usually set at a category or higher level rather than at the individual SKU level. Operational Availability: The percent of time that a system is available for a mission or the ability to sustain operations tempo. Order Batching: Practice of compiling and collecting orders before they are sent in to the manufacturer. Order Cycle: The time and process involved from the placement of an order to the receipt of the shipment Order Interval: The time period between the placement of orders Order Point - Order Quantity System: The inventory method that places an order for a lot whenever the quantity on hand is reduced to a predetermined level known as the order point. Order Receipt to Order Entry Complete: Average lead-time from receipt of a customer order to the time that order entry is complete, including the following sub-elements: order revalidation, product configuration check, credit check, and order scheduling. Out Of Stock: The state of not having inventory at a location and available for distribution or for sell to the consumer (zero inventory). Outbound Logistics: The process related to the movement and storage of products from the end of the production line to the end user. Outsource: To utilize a third-party provider to perform services previously performed in-house. Examples include manufacturing of products and call center/customer support. Outsourced Cost of Goods Sold: Operations performed on raw material outside of the responding entity's organization that would typically be considered internal to the entity's manufacturing cycle. Outsourced cost of goods sold captures the value of all outsourced activities that roll up as cost of goods sold. Over, short and damaged (OS&D): This is typically a report issued at warehouse when goods received are more or less than indicated by the packing slip, or are damaged. Used to file claim with carrier. (key terms) Obsolete Stock. Stock held within an organisation where there is no longer any organisational reason for holding the stock. Obsolescent Stock. Parts which have been replaced by an alternative but which may still be used until stock is exhausted. Off the Shelf Satisfaction. See Fill Rate Off Shoring. This generally refers to the outsourcing (off shore) of manufacturing and production. On-hand Balance. The quantity of an item shown in the inventory records as being physically in stock. Opening Stock. The stock of an item at the beginning of an inventory accounting period of time. Order Lead Time. The total internal processing time necessary to transform a replenishment quantity into an order and for the transmission of that order to the recipient. Order Picking. Collecting items from a storage location to satisfy a shop or customer order. Order Point Inventory System. An inventory control system for independent demand items where a reorder requirement is generated and sent to a supplier when the on-hand inventory balance reaches a specified level. Outsourcing. An arrangement whereby an external party or ‘contractor’ undertakes certain business processes on behalf of their client. In Supply Chain this would typically be warehousing and transport. Package to Order: A production environment in which a good or service can be packaged after receipt of a customer order. The item is common across many different customers; packaging determines the end product. Packing List: List showing merchandise packed and all particulars. Normally prepared by shipper but not required by carriers. Copy is sent to consignee to help verify shipment received, it may be inside of the box or attached to the outside in a clear envelope. Pallet: The platform which cartons are stacked on and then used for shipment or movement as a group. Pallets may be made of wood or composite materials Pallet Ticket: A label to track pallet-sized quantities of end items produced to identify the specific sublot with specifications determined by periodic sampling and analysis during production. Pareto: the Pareto Principle. The 80/20 Rule (also known as the Pareto principle or the law of the vital few & trivial many) states that, for many events, roughly 80% of the effects come from 20% of the causes. So, we can say 80% of the profits comes from 20% of the stock. Pay-on-Use: Pay-on-Use is a process where payment is initiated by product consumption, i.e., consignment stock based on withdrawal of product from inventory. This process is popular with many European companies. Payroll: Total of all fully burdened labor costs, including wage, fringe, benefits, overtime, bonus, and profit sharing. Peak demand: The time period during which the quantity demanded is greater than during any other comparable time period.s Pegging: A technique in which a ERP system traces demand for a product by date, quantity, and warehouse location. Performance Measurement Units: Specific measurements such as time, cost, error rates, accuracy rates, and milestones Permit: A grant of authority to operate as a contract carrier Perpetual Inventory: An inventory record keeping system where each transaction in and out is recorded and a new balance is computed. Physical Distribution: The movement and storage functions associated with finished goods from manufacturing plants to warehouses and to customers; also, used synonymously with business logistics. Physical Supply: The movement and storage functions associated with raw materials from supply sources to the manufacturing facility. Pick List: A list of items to be picked from stock in order to fill an order; the pick list generation and the picking method can be quite sophisticated. Pick on Receipt: Product is receipted and picked in one operation (movement); therefore, the product never actually touches the ground within the warehouse. It is unloaded from one vehicle and re-loaded on an outbound vehicle. Related to Cross Docking. Pick-to-Clear: A method often used in warehouse management systems that directs picking to the locations with the smallest quantities on hand. Place Utility: A value created in a product by changing its location. Transportation creates place utility. Plant Finished Goods: Finished goods inventory held at the end manufacturing location. Point Of Sale (POS): The time and place at which a sale occurs, such as a cash register in a retail operation, or the order confirmation screen in an on-line session. Supply chain partners are interested in capturing data at the POS, because it is a true record of the sale rather than being derived from other information such as inventory movement Pooling: A shipping term for the practice of combining shipment from multiple shippers into a truckload in order to reduce shipping charges Port authority: A state or local government that owns, operates, or otherwise provides wharf, dock, and other terminal investments at ports. Postponement: The delay of final activities (i.e., assembly, production, packaging, etc.) until the latest possible time. A strategy used to eliminate excess inventory in the form of finished goods which may be packaged in a variety of configurations and to maximize the opportunity to provide a customized end product to the customer. Pre-Expediting: The function of following up on open orders before the scheduled delivery date, to ensure the timely delivery of materials in the specified quantity. Present Value: Today's value of future cash flows, discounted at an appropriate rate Primary-business Test: A test used by the ICC to determine if a trucking operation is bona fide private transportation; the private trucking operation must be incidental to and in the furtherance of the primary business of the firm. Private Carrier: A carrier that provides transportation service to the firm and that owns or leases the vehicles and does not charge a fee. Private motor carriers may haul at a fee for wholly-owned subsidiaries. Private Label: Products that are designed, produced, controlled by, and which carry the name of the store or a name owned by the store; also known as a store brand or dealer brand. An example would be Wal-Mart's "Sam's Choice" products. Product Characteristics: All of the elements that define a product's character, such as size, shape, weight, etc. Profitability Analysis: The analysis of profit derived from cost objects with the view to improve or optimize profitability. Multiple views may be analyzed, such as market segment, customer, distribution channel, product families, products, technologies, platforms, regions, manufacturing capacity, etc. Public Warehouse: A business that provides short or long-term storage to a variety of businesses usually on a month-to-month basis. A public warehouse will generally use their own equipment and staff however agreements may be made where the client either buys or subsidizes equipment (key terms) Parent Part. Any finished goods, end item, or part that is mixed, fabricated, assembled, stirred, or blended from one or more other components. Pareto Principle. The heuristic rule which states that where there is a large number of contributors to a result, the majority of the result is due to a minority of the contributors.. Sometimes known as the 80/20 rule) which states that, in many cases, approximately 80% of the turnover (stock etc.) can be ascribed to approximately 20% of the customers, articles or orders. The actual ratio in a particular case can be determined by ranking the customers and products etc. in order of magnitude and then calculating what percentage of the turnover (stock etc.) corresponds to 10%, 20% 30% etc. of the customer and products etc. The basis of ABC analysis. Part Number. A unique identification number allocated to a specific part either by the manufacturer or user of the part. Perpetual Inventory System. An inventory control system where a running record is kept of the amount of stock held for each item. Whenever an issue is made, the withdrawal is logged and the result compared with the re-order point for any necessary re-order action. Periodic Inventory. An inventory control system classification for independent demand items where the number of items held is reviewed at a fixed time interval and the size of any resultant order depends on the stock on hand at the time of the review. Pick Face. The primary location in a warehouse at which order picking, of less than pallet loads, is undertaken. Picking List. An output from an inventory control system designating those items, by part number, description and quantity, to be picked from stock to satisfy customer demand. Pipeline Stocks. The products which are currently being moved from one location to another. Primary Freight (Strategy). An imitative driven by retailers to drive out transportation costs and to improve the efficiency within the primary segment of the supply chain. The retailer generally takes over the management of the primary (inbound) transport and deducts the cost of this transport from the supplier’s invoice based on an agreed cost per pallet or case. See also Factory Gate Pricing. Primary Transport. The transport ‘leg’ from the Supplier to the Customer. Normally viewed as being from the supplier’s distribution centre (DC) to the customer’s DC. See also secondary transport. Probabilistic (or Stochastic) Inventory Control. Models An inventory control system where all the variables and parameters used are treated as random variables. It is assumed that the average demand for items is approximately constant over time and that it is possible to state the probability distribution of the demand, particularly during the lead time for replenishment. Product Group. See Family Group Production Lead Time. The time taken to manufacture or produce an item after an external order has been received until the item is available for packing. Proof of Delivery (POD). Information supplied by the carrier containing the name of the person who signed for the shipment, the time and date of delivery and other shipment delivery-related information. Purchasing Price. See Unit Cost Pull System. A system where orders for an end item are pulled through the facility to satisfy demand for the end item. An examples of pull system is the JIT Kanban process. Purchasing Lead Time (PLT). The length of time between the decision to purchase an item and its actual addition to stock. Purchase Price. See Unit Cost Purchasing Lead Time (PLT). The total length of time between the decision to purchase an item and its availability for dispatch from the supplier concerned (that is, the sum of the order lead-time, the production lead time and any time necessary for packing or preparation for dispatch of a specific order). Push System. A system where orders are issued for completion by specified due dates, based on estimated lead-times, or where the flow of material in a product structure is controlled and determined by the lower levels. Put Away Rules. The internal rules and procedures for positioning stock in a warehouse or store after goods inward processing Quality Circle In quality management, a small group of people who normally work as a unit and meet frequently to uncover and solve problems concerning the quality of items produced, process capability or process control. Also see: Small Group Improvement activity Quality Control (QC) The management function that attempts to ensure that the goods or services manufactured or purchased meet the product or service specifications Quality Function Deployment (QFD) A structured method for translating user requirements into detailed design specifications using a continual stream of “what-how” matrices. QFD links the needs of the customer (end user) with design, development, engineering, manufacturing and service functions. It helps organizations seek out both spoken and unspoken needs, translate these into actions and designs, and focus various business functions towards achieving this common goal Quantitative Forecasting Techniques An approach to forecasting where historical demand data is used to project future demand. Extrinsic and intrinsic techniques are typically used. Also see: Extrinsic Forecasting Method, Intrinsic Forecasting Method Purchase Order (PO): The purchaser's authorization used to formalize a purchase transaction with a supplier. The physical form or electronic transaction a buyer uses when placing order for merchandise. Purchasing: The functions associated with buying the goods and services required by the firm. Raw Materials (RM) Crude or processed material that can be converted by manufacturing, processing, or combination into a new and useful product. Real-Time The processing of data in a business application as it happens—as contrasted with storing data for input at a later time (batch processing). Reasonable Rate A rate that is high enough to cover the carrier’s cost but not too high to enable the carrier to realize monopolistic profits. Receiving The function encompassing the physical receipt of material, the inspection of the incoming shipment for conformance with the purchase order (quantity and damage), the identification and delivery to destination, and the preparation of receiving reports. Receiving Dock Distribution center location where the actual physical receipt of the purchased material from the carrier occurs. Reconsignment A carrier service that permits changing the destination and/or consignee after the shipment has reached its originally billed destination and paying the through rate from origin to destination Reorder point: A predetermined inventory level that triggers the need to place an order. This minimum level provides inventory to meet anticipated demand during the time it takes to receive the order Replenishment: The process of moving or re-supplying inventory from a reserve (or upstream) storage location to a primary (or downstream) storage/picking location, or to another mode of storage in which picking is performed. Request for Information (RFI): A document used to solicit information about vendors, products, and services prior to a formal RFQ/RFP process. Request for Proposal (RFP): A document, which provides information concerning needs and requirements for a manufacturer. This document is created in order to solicit proposals from potential suppliers. For, example, a computer manufacturer may use a RFP to solicit proposals from suppliers of third party logistics services. Request for Quote (RFQ): A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors. Retailer: A business that takes title to products and resells them to final consumers. Examples include Wal-Mart, Best Buy, and Safeway, but also include the many smaller independent stores. Return Goods Handling: Processes involved with returning goods from the customer to the manufacturer. Products may be returned because of performance problems or simply because the customer doesn't like the product. Return on Assets (ROA): Financial measure calculated by dividing profit by assets. Return on Net Assets: Financial measure calculated by dividing profit by assets net of depreciation. Return on Sales: Financial measure calculated by dividing profit by sales. Provides information on how much profit is being produced per dollar of sales. Return to Vendor (RTV): Material that has been rejected by the customer or the buyer's inspection department and is awaiting shipment back to the supplier for repair or replacement. Reverse Auction: A type of auction where a select group of suppliers bids competitively for an order posted by the buyer (opposite of a regular auction, where buyers are bidding to buy products). The buyer may choose the lowest bid or may split the purchase among several of the suppliers. As bidding continues, the prices decline. Reverse Engineering: A process whereby competitors' products are disassembled & analyzed for evidence of the use of better processes, components & technologies. Reverse Logistics: A specialized segment of logistics focusing on the movement and management of products and resources after the sale and after delivery to the customer. Includes product returns for repair and/or credit. Root Cause Analysis: Analytical methods to determine the core problem(s) of an organization, process, product, market, etc. ( key terms) Radio Frequency Identification (RFID). The attachment of transponders (which may be read only or read/write) to products, as an alternative to linear bar codes, to enable product identification some distance from the scanner or when out of line of sight. Random Sample Cycle Counting. A method in which the particular parts to be counted are selected from the population of part numbers in a manner that has no inherent bias. In this selection process, each part number has an equal chance of being selected. Rapid Acquisition of Manufactured Parts (RAMP). A make to order process to reduce the purchasing lead time for long lead time manufactured parts whereby Product Data is held in STEP (the international standard for exchange of manufacturing product data) by the customer and exchanged, in electronic format, when an order is placed. Raw Material. Stock or items purchased from suppliers, to be input to a production process, and which will subsequently modified or transformed into finished goods. Redundant Stock. Parts used in manufacture which have been removed from a bill of material by technical change or modification action. Redundant parts may also be obsolete if they are no longer used for any other application in the inventory concerned. Regional Distribution Centre (RDC) A warehouse operated by or on behalf of a retailer that serves a number of stores in a specific area with a range of product types and temperature bands. Repair Turn Round Time (RTRT). See Turn Around Time Repairable Period (RP). The total out of service time, including transit time, from when a repairable component becomes unfit for use until the time it is returned to stock and is available for further use. Repairable Item. An inventory item that is not normally consumed in use but one which will be repaired and re-used as part of the normal stock policy for that item. Such items have a repair lead-time as well as a procurement lead-time. Repair Turn Round Time (RTRT). See Turn Around Time Repair Period (RP). The total out of service time, including transit time, from when a repairable component becomes unfit for use until the time it is returned to stock and is available for further use. Re-Order Level (ROL) (or Re-Order Point – ROP). The calculated level of stock within an inventory control system to which the quantity of a specific item is allowed to fall before replenishment order action is generated. Re-Order Quantity, Replenishment Order Quantity. The calculated order quantity necessary to replenish stocks at a given point in time. The method of calculation, and the timing of the order, will vary depending on the type of inventory control system in use. Quantity based systems are checked continually to determine if an order should be placed; time based systems only have a count of stock at predetermined intervals and orders placed as required; a distribution system plans orders to meet distribution needs; and production based systems only order stock to meet manufacturing requirements. Reorder Costs. The total cost of placing a repeat order for an item either externally on a supplier or for internal manufacture. The costs may include elements to cover: order preparation, administration, IT overheads, correspondence, telephone, transportation, goods inward processing, inspection and for manufacture, batch et up costs and other production overheads. Replenish to Demand. See Make to Order Replenishment Lead-time. See Total Lead-time Retail Buying Alignment. This is where the retail buying function is totally integrated to supply chain activity so that a buyer understands and makes decisions within the context of an optimised supply chain model. Reverse Logistics. The requirement to plan the flow of surplus or unwanted material or equipment back through the supply chain after meeting customer demand. Review Interval. The time between assessing order requirements in a fixed order interval system. Rotable. An repairable inventory item that can be repeatedly restored to a fully serviceable condition and re-used over the normal life cycle of the parent equipment to which it is related. Such items have a repair lead time as well as a procurement lead time and normally have a serial number that is retained throughout the rotable life regardless of the extent of replacement of its component parts. Rounding Order Quantity. That element of an order that has been added to the basic order quantity to meet a constraint imposed by the manufacturer or to optimize overall supply chain costs. Routing. A process of optimizing transport delivery routes to make better use of time and capacity to reduce overall costs. This type of fleet optimization is generally supported with specialist software tools. Early tools used what was called the ‘travelling salesman’ algorithm. Safety Stock: The inventory a company holds above normal needs as a buffer against delays in receipt of supply or changes in customer demand. Sales Cycle Time: Measures the time required for a product to sell out completely from the store/shelf i.e., beginning from the day it enters the floor. Service Level: A measure (usually expressed as a percentage) of satisfying demand through inventory or by the current production schedule in time to satisfy the customer's requested delivery dates and quantities. Spot Demand: Demand with a short lead time that's difficult to estimate. Usually supply for this demand is provided at a premium price. An example of spot demand would be when there's a spiked demand for building materials as a result of a hurricane. Staging: Pulling material for an order from inventory before the material is required. This action is often taken to identify shortages, but it can lead to increased problems in availability and inventory accuracy Separable Cost: A cost that can be directly assignable to a particular segment of the business. Shelf life: The amount of time an item may be held in inventory before it becomes unusable. Shelf life is a consideration for food and drugs which deteriorate over time, and for high tech products which become obsolete quickly. Shipper: The party that tenders goods for transportation. Shipping: The function that performs tasks for the outgoing shipment of parts, components, and products. It includes packaging, marking, weighing, and loading for shipment. Short Shipment: Piece of freight missing from shipment as stipulated by documents on hand. Shrinkage: Reductions of actual quantities of items in stock, in process, or in transit. The loss may be caused by scrap, theft, deterioration, evaporation, etc. Single Sourcing: When an organization deliberately chooses to use one supplier to provide a product or service, even though there are other suppliers available. Slotting: Warehouse slotting is defined as the placement of products within a warehouse facility. Its objective is to increase picking efficiency and reduce warehouse handling costs through optimizing product location and balancing the workload. Slurry: Dry commodities that are made into a liquid form by the addition of water or other fluids to permit movement by pipeline. Smart Label: A label that has an RFID tag integrated into it. Sortation: Separating items (parcels, boxes, cartons, parts, etc.) according to their intended destination within a plant or for transit. Special-Commodities Carrier: A common carrier trucking company that has authority to haul a special commodity; there are 16 special commodities, such as household goods, petroleum products, and hazardous materials. Special-Commodity Warehouses: A warehouse that is used to store products that require unique types of facilities, such as grain (elevator), liquid (tank), and tobacco (barn). Special Economic Zone (SEZ): A geographical region that has economic laws that are more liberal than a country's typical economic laws. The category 'SEZ' covers a broad range of more specific zone types, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free Ports, Urban Enterprise Zones and others. Usually the goal of an SEZ structure is to increase foreign investment. Split Case Order Picking: A process used to fill orders for quantities less than a full case thereby requiring ordered items to be picked from a case or some similar container. Stable Demand: Products for which demand does not fluctuate widely at specific points during the year. Stakeholders: People with a vested interest in a company, including managers, employees, stockholders, customers, suppliers, and others. Standard Industrial Classification (SIC): Classification codes that are used to categorize companies into industry groupings. Stevedores: Labor management companies that provide equipment and hire workers to transfer containers and cargo between ships and docks. Stock Out: A term used to refer to a situation where no stock was available to fill a request from a customer or production order during a pick operation. Stockout Cost: The opportunity cost associated with not having sufficient supply to meet demand Strategy: A specific action to achieve an objective. Strategic Planning: Looking one to five years into the future and designing a logistical system (or systems) to meet the needs of the various businesses in which a company is involved. Strategic Variables: The variables that effect change in the environment and logistics strategy. The major strategic variables include economics, population, energy, and government. Subcontracting: Sending production work outside to another manufacturer. This can involve specialized operations such as plating metals, or complete functional operations. Substitutability: The ability of a buyer to substitute the products of different sellers. Sunk Cost: The unrecovered balance of an investment. It is a cost, already paid, that is not relevant to the decision concerning the future that is being made. Capital already invested that for some reason cannot be retrieved. Supplier: A provider of goods or services. Supplier Certification: Certification procedures verifying that a supplier operates, maintains, improves, and documents effective procedures that relate to the customer's requirements. Such requirements can include cost, quality, delivery, flexibility, maintenance, safety, and ISO quality and environmental standards. Supplier On Time Delivery: A metric which measures the performance of a supplier/vendor on his delivery commitment and to what extent he is matching with the lead times expressed in % terms Supplier Service Level: A metric which Helps measure the overall performance of a supplier. It Measures the ability of the business suppliers to provide their goods at the agreed times, quantity, and quality. Supply Chain: starting with unprocessed raw materials and ending with the final customer using the finished goods, the supply chain links many companies together. Supply Chain Integration (SCI): Supply chain integration is a process where all the parties involved with the fulfillment of a product are integrated into a single system. This requires significant coordination and alignment to ensure everyone is effectively always working toward the same goal. Supply Chain Design: The determination of how to structure a supply chain. Design decisions include the selection of partners, the location and capacity of warehouse and production facilities, the products, the modes of transportation, and supporting information systems. Supply Chain Execution (SCE): The ability to move the product out the warehouse door. This is a critical capacity and one that only brick-and-mortar firms bring to the B2B table. Dot-coms have the technology, but that's only part of the equation. The need for SCE is what is driving the Dot-coms to offer equity partnerships to the wholesale distributors. Supply Chain Resiliency: A term describing the level of hardening of the supply chain against disasters Supply Chain Strategy Planning: The process of analyzing, evaluating, defining supply chain strategies, including network design, manufacturing and transportation strategy and inventory policy. Supply Planning: The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level, horizon and interval. Supply Warehouse: A warehouse that stores raw materials. Goods from different suppliers are picked, sorted, staged, or sequenced at the warehouse to assemble plant orders. Support Costs: Costs of activities not directly associated with producing or delivering products or services. Examples are the costs of information systems, process engineering and purchasing. Surcharge: An add-on charge to the applicable charges; motor carriers have a fuel surcharge, and railroads can apply a surcharge to any joint rate that does not yield 110% of variable cost. Sustainability: Corporate sustainability refers to efforts a company makes related to conducting business in a socially and environmentally responsible manner. It includes elements including sustainable development, corporate social responsibility (CSR), stakeholder concerns, and corporate accountability. SWOT Analysis: An analysis of the strengths, weaknesses, opportunities, and threats of and to an organization. SWOT analysis is useful in developing strategy. Synchronization: The concept that all supply chain functions are integrated and interact in real time; when changes are made to one area, the effect is automatically reflected throughout the supply chain. (key terms) Safety Stock. The stock held to protect against the differences between forecast and actual consumption, and between expected and actual delivery times of procurement orders, to protect against stockouts during the replenishment cycle. In calculating safety stock, account is taken of such factors as service level, expected fluctuations of demand and likely variations in lead time. Sales Forecast. The prediction, projection or estimation of expected sales over a specified future time period. Sample Stability. If a sample produces a particular result, and by increasing the sample size it continues to produce the same result, the sample has stability and can be assumed to be representative of the population. This is an important characteristic when the population size is unknown or extremely large. Seasonal Stock. See Anticipation Stock Secondary Transport. The transport ‘leg’ from a distribution centre (DC) to the customer. For example from the retailer DC to the retail store. Selective inventory Control. The application of varying levels of control to the total inventory to enable managers to concentrate on significant matters (see ABC analysis and ABC classification). Service Differentiation. Is a Supply Chain management approach that aims to reduce costs by identifying customer service needs and ensuring that customers are not unnecessarily over or under serviced. Shelf-ready packaging (SRP) refers to the preparation of a product so that it is delivered to a retailer in a ready-to-sell merchandised unit. Products which come in SRP can be easily placed on the shelf without the need for unpacking or repacking. SRP covers all types of packaging designed for the retail outlet. It is not limited to packaging which goes on the shelf; it also includes sales support mechanisms in all major distribution channels. Slotting. A method of optimising the ‘pick path’ in a warehouse, by ensuring that frequently selected items are closer to the despatch area, or lower down in high rise facilities. Significant time and cost saving results if this is done well. Stock Site. A location at which stock is held. Stock Turn. The number of times that an inventory turns over during the year and normally obtained by dividing the average inventory value into the annual cost of sales. i.e. Annual sales at cost / average inventory value. Stocktaking. A physical count of products actually held in stock as a basis for verification of the stock records and accounts. Stock Turnover (or Stock Turn). A widely used measure of inventory performance expressed as the ratio of the cost of units sold to the average value of stock. Stock Types. The products which are determined for delivery from stock. Strategic Stock. The stock of goods of essential importance for the continuation of the production process and which is built up in order to compensate for long hold-ups of incoming goods (caused by strikes and political difficulties etc. in a particular country or region). Supply-Chain. The total sequence of business processes, within a single or multiple enterprise environments, that enable customer demand for a product or service to be satisfied. Supply-Chain Management (SCM). Organisation of the overall business processes to enable the profitable transformation of raw materials or products into finished goods and their timely distribution to meet customer demand. Supply chain sustainability: is the management of environmental, social and economic impacts and the encouragement of good governance practices, throughout the lifecycles of goods and services. The objective of supply chain sustainability is to create, protect and grow long-term environmental, social and economic value for all stakeholders involved in bringing products and services to market. Tactical Planning: The process of developing a set of tactical plans (e.g., production plan, sales plan, marketing plan, and so on) Tapering rate: A rate that increases with distance but not in direct proportion to the distance the commodity is shipped Tare Weight: The weight of a substance, obtained by deducting the weight of the empty container from the gross weight of the full container. Target Costing: A target cost is calculated by subtracting a desired profit margin from an estimated or a market based price to arrive at a desired production, engineering, or marketing cost. This may not be the initial production cost, but one expected to be achieved during the mature production stage Tariff: A tax assessed by a government on goods entering or leaving a country. The term is also used in transportation in reference to the fees and rules applied by a carrier for its services Tasks: The breakdown of the work in an activity into smaller elements. Task interleaving: A method of combining warehouse picking and put away. Warehouse Management Systems (WMS) use logic to direct a lift truck operator to put away a pallet in route to the next pick Tender: The document which describes a business transaction to be performed. Document issued by the company for suppliers to fulfill company’s demand. Terminal Delivery Allowance: A reduced rate offered in return for the shipper of consignee tendering or picking up the freight at the carrier’s terminal TEU: See Twenty-foot Equivalent Unit Third-Party Logistics (3PL): Outsourcing all or much of a company’s logistics operations to a specialized company. Third-Party Warehousing: The outsourcing of the warehousing function by the seller of the goods Time Fence: A policy or guideline established to note where various restrictions or changes in operating procedures take place. Time-Definite Services: Delivery is guaranteed on a specific day or at a certain time of the day. Total Annual Material Receipts: The dollar amount associated with all direct materials received from January 1 to December 31. Total Annual Sales: Total Annual Sales are Total Product Revenue plus post-delivery revenues (e.g., maintenance and repair of equipment, system integration) royalties, sales of other services, spare parts revenue, and rental/lease revenues. Total Average Inventory: Average normal use stock, plus average lead stock, plus safety stock. Total Cost Analysis: A decision-making approach that considers minimization of total costs and recognizes the interrelationship among system variables such as transportation, warehousing, inventory, and customer service. Total Cost of Ownership (TCO): Total cost of a computer asset throughout its lifecycle, from acquisition to disposal. TCO is the combined hard and soft costs of owning networked information assets. 'Hard' costs include items such as the purchase price of the asset, implementation fees, upgrades, maintenance contracts, support contracts, and disposal costs, license fees that may or may not be upfront or charged annually. These costs are Total Productive Maintenance (TPM): Team based maintenance process designed to maximize machine availability and performance and product quality Total Quality Management (TQM): A management approach in which managers constantly communicate with organizational stakeholders to emphasize the importance of continuous quality improvement. Total Supply-Chain Management Cost (5 elements): Total cost to manage order processing, acquire materials, manage inventory, and manage supply-chain finance, planning, and IT costs, as represented as a percent of revenue Total Supply Chain Response Time: The time it takes to rebalance the entire supply chain after determining a change in market demand. Also, a measure of a supply chain’s ability to change rapidly in response to marketplace changes Tracing: Determining where a shipment is during the course of a move. Traceability: The attribute allowing the ongoing location of a shipment to be determined Trading Partner Agreement: The written contract that spells out agreed upon terms between EDI trading partners Traffic Management: The management and controlling of transportation modes, carriers and services. Tramp: An international water carrier that has no fixed route or published schedule; a tramp ship is chartered for a particular voyage or a given time period. Transaction Set ID: A three-digit numerical representation that identifies a transaction set. Transit privilege: A carrier service that permits the shipper to stop the shipment in transit to perform a function that changes the commodity’s physical characteristics but to pay the through rate. Transit Time: The total time that elapses between a shipment's pickup and delivery Transparency: The ability to gain access to information without regard to the systems landscape or architecture. In supply chain transparency is having a clear view of whole supply chain cycle. Transportation Cycle Time: A performance measure of the logistics service provider / transporter. The lead time taken by the product to reach the destination, The difference between the day it leaves the warehouse and the day it reaches its destination. Time to Serve Is a Supply Chain analytical approach that identifies the lead time at various points in the Supply Chain in order to assess the total cost and service impact of lead time changes. Total Acquisition Cost (TAQ). The sum of all the costs to an organisation of carrying an item in stock including reorder, carrying and shortage costs. Total Lead-time. The total time between the decision to place a replenishment order until its availability for use. That is, the sum of Order Lead-time, Purchasing Lead-time, Transit Time and any Goods Inward Lead-time for that replenishment order. Traceability. The identification of goods or material used in manufacturing or processing to enable the relevant production batch and material source to be traced in case of subsequent defects. Transaction. Recording of a material movement or an adjustment event that impacts on a stock position. Transit Time. The time taken to move goods physically between different locations in a supply chain or laterally to another facility. Turn Around Time (TAT). The total time taken to repair a component at the repair location, including waiting time but excluding transit time. Two Dimensional Bar Code (2D Bar Code). Codes in which information is placed in two dimensions and read from side to side, and up and down, by special scanning equipment and which can be read, even if partially damaged Transportation Management System (TMS): A computer system designed to provide optimized transportation management in various modes along with associated activities, including managing shipping units, labor planning and building, shipment scheduling through inbound, outbound, intra-company shipments, documentation management (especially when international shipping is involved), and third party logistics management. Transportation Mode: The method of transportation: land, sea, or air shipment. Transportation Research Forum: A professional association that provides a forum for the discussion of transportation ideas and research techniques. Transit Time: The total time that elapses from pickup to delivery of a shipment Trend Forecasting Models: Methods for forecasting sales data when a definite upward or downward pattern exists. Models include double exponential smoothing, regression, and triple smoothing Truckload Carriers (TL): Trucking companies, which move full truckloads of freight directly from the point of origin to destination Turnover: Typically refers to Inventory Turnover. In the United Kingdom and certain other countries, turnover refers to annual sales volume. Twenty-foot Equivalent Unit (TEU): Standard unit for counting containers of various capacities and for describing the capacities of container ships or terminals. One 20 Foot ISO container equals 1 TEU. One 40 Foot ISO container equals two TEU. A 20-foot container is typically 8.5 feet tall and 8 feet wide outside and has an internal capacity of 1170 square feet Two-bin system: An inventory ordering system in which the time to place an order for an item is indicated when the first bin is empty. The second bin contains sufficient supply until the order is received. Ubiquity: A raw material that is found at all locations Umbrella rate: An ICC rate-making practice that held rates to a particular level to protect the traffic of another mode Unit Cost: The cost associated with a single unit of product. The total cost of producing a product or service divided by the total number of units. Unit of Measure (UOM): The unit in which the quantity of an item is managed, e.g., pounds, each, box of 12, package of 20, or case of 144. Unit Train: An entire, uninterrupted locomotive, care, and caboose movement routed between an single origin and destination. Unitize: To consolidate a number of packages into one unit; the several packages are strapped, banded, or otherwise attached together. Unitization: In warehousing, the consolidation of several units into larger units for fewer handlings. Unplanned Order: Orders which are received that do not fit into the volumes prescribed by the plans developed from forecasts. Upsell: The practice of attempting to sell a higher-value product to the customer. Upstream: Refers to the supply side of the supply chain. Upstream partners are the suppliers who provide goods and services to the organization needed to satisfy demands which originate at point of demand or use, as well as other flows such as return product movements, payments for purchases, etc. Unit. The standard size or quantity of a stock item. Unit Cost. The cost to an organization of acquiring one unit, including any freight costs, if obtained from an external source or the total unit production cost, including direct labor, direct material and factory overheads, if manufactured in-house. Unit of Measure. The standard unit of an item used in the stock account and to construct order quantities. Vendor Hub. Third party operation of a warehouse, funded by suppliers, containing Vendor-Owned stock for delivery to a customer (See Lineside Warehouse). Vendor Managed Inventory (VMI). An element of inventory stocked by one organisation but where the forecast demand, and required stock levels to meet that demand, are calculated by the manufacturer or distributor of the stock items concerned Validation: To check whether a document is the correct type for a particular EDI system, as agreed upon by the trading partners, in order to determine whether the document is going to or coming from an authorized EDI user. Value Analysis: A method to determine how features of a product or service relate to cost, functionality, appeal and utility to a customer Value Chain: A series of activities, which combined, define a business process; the series of activities from manufacturers to the retail stores that define the industry supply chain. Value Stream: All activities, both value added and nonvalue added, required to bring a product from raw material state into the hands of the customer, bring a customer requirement from order to delivery and bring a design from concept to launch. Vendor Code: A unique identifier, usually a number and sometimes the company's DUNS number, assigned by a Customer for the Vendor it buys from Vendor-Managed Inventory (VMI): The practice of retailers making suppliers responsible for determining order size and timing, usually based on receipt of retail POS and inventory data. Virtual Corporation: The logical extension of our partnering. With the virtual corporation, the capabilities and systems of the firm are merged with those of the suppliers, resulting in a new type of corporation where the boundaries between the suppliers’ systems and those of the firm seem to disappear Visibility: The ability to access or view pertinent data or information as it relates to logistics and the supply chain, regardless of the point in the chain where the data exists. Vision: The shared perception of the organization’s future—what the organization will achieve and a supporting philosophy. This shared vision must be supported by strategic objectives, strategies, and action plans to move it in the desired direction. Wall-to-Wall Inventory: An inventory management technique in which material enters a plant and is processed through the plant into finished goods without ever having entered a formal stock area. Warehouse: Storage place for products. Principal warehouse activities include receipt of product, storage, shipment, and order picking Warranty Costs: Includes materials, labor, and problem diagnosis for products returned for repair/refurbishment. Wiggle Factor. A term used in route & fleet planning that converts the ‘straight line’ distance between two points to an approximation of the actual road distance. 1.2 is commonly used in Urban areas. Work in Progress WIP. The total amount of work in processing, between production stages or subject to a waiting time. Work in Progress Stock. The stock of products and/or materials and components which are still in the production department and are not, or are no longer, included in the stock in the store. Working Stock. The stock of materials, components and sub-assemblies (excluding safety stock) held in advance of demand so that ordering can done on a lot size rather than on an as needed basis. In other words, the normal stocks formed by products arriving in large regular orders to meet smaller, more frequent customer demand. Also known as cycle stock or lot size stock. Waterway use tax: A per-gallon tax assessed barge carriers for use of the waterways. Weight Break: The shipment volume at which the LTL charges equal the TL charges at the minimum weight. Will Call: The practice of taking orders that will be picked up at the selling facility by the buyer. An area where buyers can pick up an order at the selling facility. This practice is widely used in the service parts business Work Breakdown Structure (WBS): A complete line by line breakdown of the products, services, and activities that will be required to fulfill a contractual obligation. Work-in-Process (WIP): Parts and subassemblies in the process of becoming completed finished goods. Work in process generally includes all of the material, labor and overhead charged against a production order which has not been absorbed back into inventory through receipt of completed products. Yard Management System (YMS): A system which is designed to facilitate and organize the coming, going and staging of trucks and trucks with trailers in the parking "yard" that serves a warehouse, distribution or manufacturing facility. Yield: The ratio of usable output from a process to its input. Zone of Rate Freedom: Motor carriers are permitted to raise or lower rates by 10% in one year without ICC interference; if the rate change is within the zone of freedom, the rate is presumed to be reasonable. Zone Picking: A method of subdividing a picking list by areas within a storeroom for more efficient and rapid order picking. A zone-picked order must be grouped to a single location and the separate pieces combined before delivery or must be delivered to different locations, such a work centers. References. Supply chain Glossary. (polarislogisticsgroup) Public resources Glossary.com Supply Chain Management Dictionary (springer.com)