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Reverse Logistics

Reverse Logistics

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04/24/2013

 
 22 Efcient Purchasing No 1 2005Efcient Purchasing No 1 2005 23
 
 EP glossary 
The EP TLA Task ForceBritish playwright George Bernard Shaw oncereferred to America and Britain as “two countriesseparated by a common language.” But English is generallya second or even third language with the internationalbusiness community where the chances of misunder-standing each other increase with the square of newexpressions introduced in any industry jargon. Within the
The strange wordsof purchasing 
 AA
Award analysis.
 APP
Annual procurement plan.
 APR
Advance purchasing request. Publicrequest for quote/proposal (Rfx) fornew products or services not yet inproduction (see PCR).
 Auction
 
Matches buyers and sellers in any mar-ketplace (or exchange) to transact inany quantity at any time. Allows usersto submit a request for goods andservices to be bid on by suppliers.
B2B Business-to-business
B2C
Business-to-consumer
B2D
Business-to-distributor
B2E
Business-to-employee
B2G
Business-to-government
Batna
Best alternative to negotiatedagreement. Batna is often referred toas the lowest acceptable level for abuyer in a negotiation.
Bid/quote process
Another term for reverse auctions.
BPA
Blanket purchase agreement. A pro-curement vehicle that allows buyersto purchase goods or services at apre-negotiated price with pre-
purchasing profession, for example, even basic terms likeprocurement and purchasing mean different things eitherside of the Atlantic. So don’t be distressed if you comeacross expressions or TLAs (three-letter acronyms) thatyou don’t understand. Look to the list below or ask yourcolleagues – though they probably won’t have a clue,either. This glossary will be continually updated on ourwebsite. Don’t hesitate to e-mail us your own ndings.
negotiated terms. BPAs are usuallyannualized contracts.
Bullwhip effect
A pervasive supply chain problemwhereby order variability grows asdemand signals propagate upstream.Essentially, demand spikes as ordersow back from retailer to distributorto original equipment manufacturersto tier one suppliers, and so on.
BSC
Balanced scorecard. A variant isX-BSC, cross-balanced scorecard.
Buyer-driven auctions
A price-centric auction where buyerslist what they are interested in purcha-sing and sellers enter competing bids.
Cash-to-cash cycles
The time difference between themonetary expenditure for raw anddirect materials and supplies, and thereceipt of payment from the customerfor nished goods. e-commercesoftware companies often claim toreduce cash-to-cash cycle times.
CEM
Contract electronic manufacturer.
Collaboration
The use of Web-based software forthe purpose of sharing informationbetween businesses or organizations.Design collaboration, for example, al-lows engineers at different companiesto share plans and data in real time.
Collaborative commerce
B2B systems that enable companiesto interactively share data, developplans and create products online.
Content
Online materials including publica-tions and catalog data.
Content management
Sometimes called “knowledgemanagement”, content managementis a term often used to refer to theprocess of handling informationpresented in either buy- or sell-sidecatalogs, including part numbers,
descriptions and unit sizes. It also re-fers to the process of capturing, storing,sorting, codifying, integrating, updatingand protecting any and information.
CPFR
Collaborative planning, forecastingand replenishment. A type of soft-ware system that enablesbusinesses to interactively shareproduction, inventory and order in-formation online with their partners.
CRM
Customer relationship management.The use of Web-based software toanalyze customer behavior. CRMsystems generally store customerinformation that is aggregated fromsales calls, purchases and customerservice centers.
CSM
Consumption and specicationmanagement. CSM is the assess-ment of internal demand for externalgoods and services to identify under-lying cost drivers, align purchaseswith business needs, and eliminateunnecessary consumption.
CSR
Corporate social responsibility.
C-suite
Collective expression for membersof the executive leadership team:CEO (Chief executive ofcer), CFO(Chief Financial ofcer), COO (ChiefOperations Ofcer), CIO (ChiefInformation Ofcer), CMO (ChiefMarketing Ofcer), CPO (ChiefProcurement Ofcer) and so on.
Direct goods/services
Goods or services that are partof the production process.
Dynamic commerce
Commerce with no set price. Thisis the big promise of B2B for more
efcient pricing. Examples can befound in auctions and reverse auctions.
E2E
Exchange-to-exchange orenterprise-to-enterprise.
EAI
Enterprise application integration.Generally refers to the ability toshare information between softwaresystems at different companies,specically transmitting data.
EDI
Electronic data interchange. Thetransmission of trade documentselectronically using standardizedformatting.
End-to-end solution
A common e-business buzzword,end-to-end refers to a streamlined,seamless and real-time ow ofinformation and linkages across avalue chain.
EP
Efcient Purchasing magazine
E-procurement
The act of acquiring/procuring/purchasing via an electronic format.
ERP
Enterprise resource planning. A setof applications that automate humanresources and nances as well ashandles tasks such as order proces-sing and production scheduling.For example, orders can be entereddirectly into a company’s planningsystem, for example, and manufac-turing is automatically coordinated.
E-sourcing
Web-based execution of the sourcingprocess for goods and services.
Exchange
Also known as an e-marketplace. AWeb site for buying and selling goodsand services, usually via auctions.
FMA
Financial management and accoun-tability.
FSP
Fulllment service provider. An orga-nization that manages and executespart or all of a company’s fulllmentprocess, using its own assets andresources.
Fulllment
In the world of e-business, fulllmentrefers to the process of shippingan order to a customer, and theautomation of that process.
Horizontal exchange
An e-marketplace that facilitatestransactions for goods and servicesacross several industries.
Host
An organization that installs andmaintains software on behalf of aseparate organization.
Indirect goods/services
Goods or services that are not part ofthe production process.
Industry consortium
An exchange run by several compa-nies within the same industry, that areattempting to streamline the supplychain and aggregate buying power.Typically, members of the consortiumare rivals in the “old economy.”Covisint, for example, comprisesGeneral Motors, Ford and Daimler-Chrysler. According to Federal TradeCommission anti-trust laws, industryconsortia must not discriminateagainst qualied participants.
IPO
Initial public offering. Also internatio-nal purchasing ofce.
JIT
 
Just-in-time inventory. An inventorysystem model based on the idea thatdemand and supply channels can becoordinated to the point that desireditems arrive just in time for use, therebysignicantly reducing inventory levels.
KPI
Key performance indicator.
LCCS
Low-cost country sourcing.
LLP
 
Lead logistics provider. An organizationthat manages a full scope of logisticsservices for a company by aggregatingand coordinating the services of multi-ple logistics service providers.
Logistics
The processes involved in transfer-ring goods through manufacture,storage and transportation to busi-ness customers and end consumers.
Logistics visibility provider
An Internet-based service that provi-des integration to and captures datafrom logistics service providers;cleanses, veries and analyzes thedata; and reports on logistics activitiesto facilitate supply chain visibility.
Maverick buying
Any company or employee purchasethat does not meet a company’spurchasing policy. This includesusing off-contract methods of procu-rement and non-authorized purcha-ses. Also called rogue purchasing.
MRO
Maintenance, repair and operations.MRO products are goods and ser-vices purchased by a company thatare not used in production or offeredfor resale. Typical MRO purchasesinclude manufacturing supplies,computers and ofce supplies.
MSA
Master service agreement.
Neutral exchange
An exchange run by a company thatclaims to have no vested interest inan industry.
NPC
Non-price criteria.
OEM
Original equipment manufacturers.
Order/demand capture
These systems obtain informationabout a specic customer order asit happens. The software aggregatesand evaluates customer orders andcalculates how much of what pro-duct should be made in the future.
OTS
Off the shelf products
P2P
Peer-to-peer: Electronic le swap-ping systems that allow users toshare les, computing capabilities,networks, bandwidth and storage.
PCR
Purchasing change request. RFx foran existing service or product for apotential renegotiation with currentsupplier.
PPT
Purchasing productivity tracking.
Private exchange
An exchange run by a single entity/company.
 22 Efcient Purchasing No 1 2005Efcient Purchasing No 1 2005 23

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