SCM Supply Chain Management Definitions & Terms :Supply Chain Management, SCRC Articles Library
SCM Supply Chain Management Definitions & Terms: Supply Chain Management Articles
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Cost
See: Activity-based Cost Accounting, Activity-based Management, Cost System Design, Target Costing, Total Costs, Total Cost of Ownership
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Training
Managers must ensure that appropriate personnel receive periodic training with respect to the organization’s ethical and professional standards. Supply managers should ensure that their personnel receive training on current thinking…
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Total Productive Maintenance (TPM)
Preventive maintenance plus continuing efforts to adapt, modify, and refine equipment to increase flexibility, reduce material handling, and promote continuous flows. It is operator-oriented maintenance with the involvement of all qualified employees in all maintenance activities. Source: http://www.apics.org/ (10th ed.)
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Total Cost of Ownership (TCO)
In supply chain management, the total cost of ownership of the supply delivery system is the sum of all the costs associated with every activity of the supply stream. The…
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Total Costs
The sum of the variable, fixed and semivariable costs (costs that cannot be classified as variable or fixed ) comprises total costs. As the volume of production increases, total costs…
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Target Costing
It is the process of designing a product to meet a specific cost objective. Target costing involves setting the planned selling price, subtracting the desired profit as well as marketing and distribution costs, thus leaving the required manufacturing or target cost. Source for above definitions: http://www.apics.org/ (10th ed.)
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Channel management
The management of firms or individuals that participate in the flow of goods and services from the raw material supplier and producer to the final user or customer. Source: http://www.apics.org/ (10th ed.)
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Globalization
See: Currency Conversion, Language
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Warehouse Management Layouts
This refers to the configuration of the warehouse site with lines, storage areas, aisles, etc. Layout or storage plan of a warehouse should be planned to facilitate product flow. Special…
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Supply Chain Design
Supply chain design involves 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. Source: http://www.apics.org/ (10th ed.)
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Supplier Performance Evaluation
The main objective of the supplier evaluation process is to reduce purchase risk and maximize the overall value of the purchaser. It typically involves evaluating, at a minimum, supplier quality,…
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Supply Chain Inventory Visibility
Software applications that permit monitoring events across a supply chain. These systems track and trace inventory globally on a line-item level and notify the user of significant deviations from plans. Companies are provided with realistic estimates of when material will arrive. Source: http://www.apics.org/ (10th ed.) See: Inventory Management Systems
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Supplier Intelligence
Supplier Intelligence is the purposeful, coordinated and ethical monitoring of strategic suppliers, within a specific marketplace.
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Supplier Integration in New Product Development
Supplier integration into new product/process/service development suggests that suppliers are providing information and directly participating in decision making for purchases used in the new product/process/service. This integration can occur during…
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Supplier Development Training
Education and training is the most common approach to supplier development and improvement. A purchaser may provide training in statistical process control, quality improvement techniques, just-in-time delivery or any other…
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Strategic Alliance
A relationship formed by two or more organizations that share (proprietary), participate in joint investments, and develop linked and common processes to increase the performance of both companies. Many organizations form strategic alliances to increase the performance of their common supply chain. Source: http://www.apics.org/
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Statistic Quality Control
See: Quality Programs
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Supplier-Customer Partnership
A long-term relationship between a buyer and a supplier characterized by teamwork and mutual confidence. The supplier is considered an extension of the buyer’s organization. The partnership is based on…
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Statement of Work (S.O.W)
The most critical ingredient of a successful procurement of services is the development and documentation of the requirements – the statement of work. The S.O.W. identifies what the contractor is…
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Specifications
Specifications are the most detailed method of describing requirements. Various types of design specifications are the detailed descriptions of the materials, parts, and components to be used in making a…
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Sourcing Strategy
A successful sourcing strategy requires a thorough understanding of a company’s business strategy, the resources required to deliver that strategy, the market forces and the unique risks within the company…
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Six Sigma
See: Quality Programs
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Service Level Agreement
Service-level agreements (SLAs) are contracts between service providers and customers that define the services provided, the metrics associated with these services, acceptable and unacceptable service levels, liabilities on the part…
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Scheduling
Scheduling involves taking decisions regarding the allocation of available capacity or resources (equipment, labor and space) to jobs, activities, tasks or customers over time. Scheduling thus results in a time-phased…
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Reverse Logistics
A supply chain that is dedicated to the reverse flow of products and materials for returns, repair, remanufacture, and/or recycling. Source: http://www.apics.org/ (10th ed.)
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Relationship Management
See: Agreements, Collaboration, Contract, Joint Venture, Strategic Alliance, Supplier-Customer Partnership
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Quality Programs
Some of quality programs that are currently used include: Total Quality Management (TQM): TQM is a management approach to long-term success through customer satisfaction. TQM is based on the participation…
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Quality
Conformance to requirements or fitness for use. Quality can be defined through five principal approaches: (1) Transcendent quality is an ideal, a condition of excellence. (2) Product-based quality is based…
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Promotions
One of the four P’s (product, price, place, and promotion) that constitute the set of tools used to direct the business offering to the customer. Promotion is the mechanism whereby…
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Purchase Requirements
See: Specifications, Industry Standards, Statement of Work, Service Level Agreement
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Project Management
Project management is the application of knowledge, skills, tools and techniques to a broad range of activities in order to meet the requirements of the particular project. A project is…
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Program Management
The coordinated management of a portfolio of projects to achieve a set of business objectives is called program management. Or, a program might refer to an ongoing set of activities internal to the organization, for example, a Total Quality Management program, workplace safety program, supplier development program, etc. Source: http://www.mapnp.org/library/prog_mng/prog_mng.htm
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Preventative Maintenance
The activities, including adjustments, replacements, and basic cleanliness, that forestall machine breakdowns. The purpose is to ensure that production quality is maintained and that delivery schedules are met. In addition, a machine that is well cared for will last longer and cause fewer problems. Source:http://www.apics.org/ (10th ed.)
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Performance Measurement
Supplier performance measurement and evaluation includes the methods and techniques used to collect information that can be used to measure, rate or rank supplier performance on a continuous basis. The…
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Outbound Logistics
The process related to the storage and movement of the final product and related information flows from the end of the production line to the end user. Sources: Christopher, M. (1998). Logistics and Supply Chain Management: Strategies for reducing cost and improving service, (2nd Ed.). New York: Prentice Hall. http://www.esri.com/industries/logistics/glossary.html#f-l
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Order management
Order management involves the seamless integration of orders from multiple channels with inventory databases, data collection, order processing including credit card verification, fulfillment systems and returns across the entire fulfillment…
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Operating Policies and Procedures
Definitive statements of what should be done in the business, and a formal organization and indexing of a firm’s procedures. They are usually outlined in manuals which are printed and distributed to the appropriate functional areas. Source: APICS (8th ed.)
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Negotiation
Negotiation is a process of formal communication where two or more people come together to seek mutual agreement over an issue or issues. Negotiation is particularly appropriate when issues besides…
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New Product Development
See: Lead Times/Cycle Times, Supplier Integration in New Product Development
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Market Analysis
See: Business-to-Business, Channel Management, Customer Relationship Management (CRM), Customer Value, Promotions
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Maintenance
See: Preventative Maintenance, Total Product Maintenance (TPM)
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Manufacturing Layout Strategy
An element of manufacturing strategy. It is the analysis of physical capacity, geography, functional needs, corporate philosophy, and product-market/process focus to systematically respond to required facility changes driven by organizational, strategic, and environmental considerations. Source: http://www.apics.org/ (10th ed.)
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Manufacturing
See: Lean Manufacturing, Manufacturing Layout Strategy, Reverse Logistics, Order Management, Scheduling
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Logistics Management
Logistics management is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory (and the related information flows) through the organization and its marketing…
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Logistics Information Systems
Converting data to information, portraying it in a manner useful for decision making, and interfacing the information with decision-assisting methods are considered to be at the heart of an information…
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Legal Issues
Purchasing law has been primarily developed from laws regarding contracts. In order for a contract to be valid, four conditions must be present: 1) Parties with full contractual capacity should…
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Lean Manufacturing
A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. It involves identifying and eliminating…
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Lead Times/Cycle Times
1) A span of time required to perform a process (or series of operations). 2) In a logistics context, the time between recognition of the need for an order and…
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Language
Differences in culture, language, dialects or terminology may result in miscommunication and cause problems. While both parties may think that they understand what the other party has said, a true…
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Joint Venture
An agreement between two or more firms to risk equity capital to attempt a specific business objective. Source: http://www.apics.org/
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Inventory Positioning
Inventory positioning refers to the selective location of various items in the product line in plant, regional, or field warehouses. Inventory positioning has a bearing on facility location decision, and therefore, must be considered in the logistics strategy. Source: Ballou, R.H. (1999). Business Logistics Management. (4th ed.). Upper Saddle River, New Jersey: Prentice Hall.
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Inventory
1) Those stocks or items used to support production (raw materials and work-in-process items), supporting activities (maintenance, repair, and operating supplies), and customer service (finished goods and spare parts). Demand…
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Interplant Transfer
The shipment of a part or product by one plant to another plant or division within the corporation. Source: http://www.apics.org/ (10th ed.)
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Insource vs Outsource
The act of deciding whether to produce an item internally or buy it from an outside supplier. Factors to consider in the decision include costs, capacity availability, proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing. Source: http://www.apics.org/ (10th ed.)
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Information Technology
The technology of computers, telecommunications, and other devices that integrate data, equipment, personnel, and problem-solving methods in planning and controlling business activities. Information technology provides the means for collecting, storing,…
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Industry Standards
An industrial standard is a uniform identification that is agreed on. Industrial standardization can be defined as the process of establishing agreement on uniform identifications for definite characteristics of quality, design, performance, quantity, service, etc. Source: Dobler, D.W., & Burt, D.N. (1996). Purchasing and Supply Management. (6th ed.). New York: McGraw Hill.
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Information Sharing
A strategic partnering relationship between suppliers and buyers is characterized by a willingness to be open, and to share forecasted demand and cost data as well as the benefits resulting…
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Inbound Logistics
Following the receipt of materials, parts or resale products from external suppliers, the subsequent storage, handling, and transportation requirements to facilitate either manufacturing or market distribution constitute inbound logistics. Source: Bowersox, D.J., Closs, D.J., & Cooper, B.M. (2002). Supply Chain Logistics Management. Burr Ridge, Boston: McGraw Hill. See: Interplant Transfer, Outbound Logistics
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Forecast Sharing
A supply partnership between a buyer and supplier is based on mutual interdependency and respect and calls for information sharing between the involved parties. By sharing its demand forecast with…
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Forecasting Methods
Qualitative forecasting techniques An approach to forecasting that is based on intuitive or judgmental evaluation. It is used generally when data are scarce, not available, or no longer relevant. Common…