The Official Supply Chain Dictionary: 8000 Researched Definitions for Industry Best-Practice Globally

THE OFFICIAL

SUPPLY CHAIN DICTIONARY

2014 Edition

SCHUB International

Copyrights

THE OFFICIAL SUPPLY CHAIN DICTIONARY - 2014

By SCHUB International - 2013

Content Copyright © SCHUB International- 2013

ALL RIGHTS RESERVED : Contents of this book may be find general and available free on Internet on the subjective matter. This compilation is copyrighted as it is researched and recompiled by author(s) and therefore, no part of this book as it is may be reproduced or transmitted as it is in any form whatsoever, electronic, or mechanical, including photocopying, recording, or by any informational storage or retrieval system without expressed written, dated and signed permission from the copyright holder. You are free to use the contents without any change on any kind of a document with proper references to the publication.

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DISCLAIMER AND/OR LEGAL NOTICES: The information presented herein represents the views of the author(s) as of the date of publication. Because of the rate with which conditions change, the authors reserve the rights to alter and update contents and opinions based on the new conditions and scientific findings and practical researches. Information on subjective matter is general and any similarity to any text from other publications, and or from free Internet based sources may be a coincidence and authors do not take any responsibility of such similarity.

Published by SCHUB International - Brisbane - Australia

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Contents

Copyrights

Numbers

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

X

Y

Z

Additional On-line Dictionaries / Glossaries

Industry Associations

Key Industry Websites

Industry Publications

Industry Unions

Workplace Safety Resources

Industry Publications

Consultants Directory

Numbers

14 Points - Management practices that allow companies to maximize productivity and quality as defined by Edwards Deming:

Improve services, products, and tools by creating purpose consistency

Implement an updated viewpoint

Stop depending on having to inspect work in order to achieve higher quality

End the process of awarding work on price alone; instead, reduce total cost by working with one particular supplier

Progress regularly each routine for planning, manufacture and productivity

Institute on-the-job learning

Engage in and establish management skills

Eliminate doubt and insecurity

Eliminate boundaries betwixt staff members

Get rid of mottos, persuasion tactics, and posted workplace goals

Do away with number-based quotas for employees and upper-level management eliminate

Encourage job pride by removing the barriers that stand in the way and abolish merit or annual award systems

Establish systems of education and self-betterment to benefit all staff members

Utilize all staff members to achieve the goals set for rebuilding the company

24/7/365 - Refers to operations conducted continuously (all day, every day, all year) without a break for days off or holidays

24/7 - Refers to operations conducted all day, every day of the week

24-hour Manifest Rule (24-hour Rule) - Rule from  U.S. Customs that requires a carrier to turn in the cargo declaration statement a full day before cargo is loaded onto the vessel at any foreign port  

2-way pallet - Skip to Pallet

3D Loading - The 3D loading method is a space-optimizer technique implemented to utilize the simplest, fastest design for a compact arrangement with any 3D-shaped objects (such as boxes) stacked on top of or inside each other, based on 3D and optimal packing systems

3D - Three dimensions.

3PL - Skip to Third Party Logistics

3PL - Refers to Third Party Logistics (skip to relevant description)

4D - Four-directions, such as 4-way entry pallets

4PL - Skip to Fourth Party Logistics

4-way pallet - Skip to Pallet

5-Point Annual Average - Methodology employed often with PMG study information to ascertain averages for 12-month cycles

5-S Program - Method of optmizing areas of work where each of 5 components (sometimes called elements) begin with an S. Components commonly labelled are shine/sweep, sort, standardize, sustain, and systemize. In Great Britain, 5-S is known as 5-C, representing clean/check, clear out, configure, conformity, and custom/practice

Shine representing area cleanliness

Sort meaning keep only what is necessary for operation

Standardize refers to establishing schedules for cleanliness and sorting

Sustain meaning to utlize mechanisms that continue the trend by involving staff members, using in conjunction with the performance measurements method, repetition, and recognition. This program is usually a part of the Lean Manufacturing Initiative. When used without this program, the 5-S/5-C program is efficient and is said to produce high yields, such as diversifying products, lowering costs, increasing quality, ensuring delivery reliability, improving safety, and improving availability ratings

Systemize refers to organizing the workspace so that appropriate personnel can find what is needed for each product easily

80-20 Rule - Refers to the Pareto technique, suggesting that many effects are the result of a few causes (in this case, 80% sales/costs to 20% items. Skip to ABC Classification - Pareto

A

ABC stratification - Categorization method used for inventorying into groups based on specific activity features. Examples include ABC - velocity (times sold), ABC - sales dollars, ABC - quantity sold/consumed, ABC - average inventory investment, and ABC - margin. These are utilized to build inventory planning guidelines, adjust count frequencies for cycles, adjust inventory for optimal order selection, and other inventory-based actions

Activity-based costing - A costing method that divides overhead costs into particular actions (those that drive cost) to more perfectly allocate costs in product costing. Also applied to customer and/or vendor management systems

Actual cost - Inventory-costing methodology using actual cost of materials, machinery, and labor balanced against a particular work order to find the cost of the completed product in a manufacturing environment

ADC - Skip to Automated Data Collection

Advanced planning and scheduling - This software system was designed to blend seamlessly with ERP and MRP systems to improve short-term production planning/scheduling systems, which are particularly inadequate in MRP systems.  APS  systems have far-reaching programming logic that gives them the opportunity to be more effective when dealing with constantly changing consumer demands.

Advanced shipment notification - ASNs are utilized for notification purposes regarding shipments to customers, often including P.O. Box numbers, SKU/lot number, quantity, pallet/container information, and/or carton numbers. They are sometimes paper-based, but electronic options are preferable. ASNs are typically used in conjunction with bar-code compliant labels to allow a consumer to process the shipment to inventory by using a bar code scanner or other automatic data retrieval system.

AIDC - Automatic ID and Data Collection. Skip to Automated Data Collection

Allocations - These refer to the actual demand as generated by sales and work orders for a particular item, but the terms and processing controlling the allocation will differ between software systems. Typically, the allocation is a cumulative amount of demand for a product from a particular facility, and this method may also be called normal, soft, soft- or regular-commitment allocation. On the other hand, terms such as firm applied to allocation indicate specific products in a specific place, such as an allocation based on a serial number. These are also called specific, frozen, hard, hard-commitment, hold, or reserved inventory allocations. Standard allocations indicate demand, while firm allocations hold the inventory in reserve for a particular order.

APS - Skip to Advanced Planning and Scheduling

ASN - Skip to Advanced Shipment Notifications

ASP - (Application Service Provider) - A unique take on marketing software that allows the ASP to own the software license and live in the system whereas the customer leases the rights to use this software. Application Service Providers may be manufacturers for the software or even a third party corporation, and the benefits are diverse, including decreased upfront expenses, faster utilization time, and decrease in the need for IS personnel internally or hardware for mainframes and servers. SaaS and on-demand software have come forward to describe something similar to ASP technology.

ASRS - Skip to Automated Storage/Retrieval Systems

ABB - Abbreviation meaning Activity-Based Budgeting

ABC analysis - Synonym for ABC Classification

ABC classification - Classifying a particular group

ABC inventory control -  Approach to inventory control

ABC - Abbreviation meaning Activity-Based Cost accounting

ABM - Abbreviation meaning Activity-Based Management

Autodiscrimination - The method by which a bar-code scanner reads the bar-code being scanned and allowing the machine to compare multiple symbolic languages at the same time.

Automated data collection - Hardware/software systems that are utilized to sort out transaction histories for warehouse and manufacturing environments. The system may include stationary terminals, moveable terminals or computers, RF machines, and/or a variety of bar-code scanning units (also known as automated data capturing or AIDC)

Automated guided vehicle system (AGVS) - AGVS indicates vehicles that are programmable for driving without guidance to specific places and to carry out designated functions according to that programming. The method of guidance could include floor wiring, optical methods, and similar ideas. Skip to Automated Guided Vehicle 

Automated storage and retrieval systems - A technique in which specific racks have specific predesignated retrieval units that operate horizontally and/or vertically along that rack to pick and put away cargo. These are also known as ASRS, Unit- or mini-load ASRS, or AS/RS

Available to promise - Method that accounts for receipts scheduled in the future, plus time phasing, in addition to simple available factors, and may be calculated by the day or other predetermined time period (month, semiannually, yearly, for example).

Time period one takes inventory you already have and factors receipts that have been scheduled for the first period, deducting what has been set aside on the schedule for that period and a specific number of future periods.

Time period two and so on that do not have receipts scheduled have the same number of products, items, or tools available to schedule as the period before. Starting a new period with scheduled receipts leads to a new calculation, without regard to what is available to promise from a previous time period.

Many variations exist for determining availability to promise, and each of these work separately from allocation systems, which is known to create some conflict. Skip to Available, Allocations

Available - Referring to the inventory status as it pertains to the ability for sale or useability by means of availability calculations. The method of calculation may differ from one system to the next but the simplest and most efficient methods take away current allocations related to inventory holds from the actual on-hand amounts. For instance, quantity available equals amount on-hand minus the number on hold and number promised for sale or current production

Average cost - Cost method for inventory that redetermines the item’s receipt cost by taking an average of the actual cost against the cost of on-hand inventory using the ABC classification method. Skip to 80-20, Pareto analysis, or Pareto’s Law

Abnormal demand - Any period that sees a level of demand greater than the norm as established by management, whether it comes from a new consumer, increased orders from current consumers, or decreased orders from the same. The company must take care to gauge the type of demand accurately though, such as a change in volume, product mix, or order timing. Skip to Outlier

ABP - Activity Based Planning

Absentee rate - Ratio that compares the number of employee workdays lost against the actual number of employee workdays throughout a particular period, typically one month

Absorption costing - Inventory valuation approach that assigns variable costs and a percentage of fixed costs to a production unit. Fixed costs are usually assigned to output units based on direct labor or machine hours or material cost. Synonymous with allocation costing, skip to Activity-based Costing

Accelerated depreciation - Method of depreciation that involves increased write-offs during the initial years of a particular asset’s life and decreased write-offs at a later date, lowering the asset’s value faster than depreciation methods that are straight-line

Acceptable quality level (AQL) - When considering a continuous lot series, AQL is a level of quality that represents the limit of acceptable process average for the purpose of inspection sampling

Acceptable sampling plan - Particular plan that represents the size of samplings and related acceptance or rejection criterio that should be utilized

Acceptance criteria - Requirements and/or conditions for performance that have to be satisfied prior to product/project acceptance

Acceptance number -

Acceptance sampling number used as a cutoff for the lot’s acceptance or rejection, such as rejection the lot after XX imperfections; or

Test statistic value dividing all possible values for regions of rejection or acceptance

Acceptance plan - Method for determining what product lots are accepted or rejected based on sample information. Skip to Acceptance sampling

Acceptance sampling -

Process of inspecting a few goods as a representative sample instead of inspecting the whole lot. With this process, the entire lot is judged on the representative sample, regardless of the quality of the other portions of the lot.

Attribute sampling indicates searching for the inclusion or exclusion of something specific in the units to be inspected, such as a particular defining characteristic

Variables sampling means that a specific characteristic is examined and measured (and recorded) and assigned a numerical value. When using this method, the company usually as a predetermined scale to refer to

Method of random sample measurement for lots and batches of a product based on predefined standards

Accept - Noting an item as being received whole and without defect

Accessory - Choices or features that are additional to a good or service available to a consumer as a customization option for the end result. These enhance the capability range of a product but are not required for basic functionality. For many corporations, accessories do not have to be ordered with the basic product and can be purchased later, but some require the customization at the time of the base model purchase. Skip to Feature

Accident prevention - Applying scientific or technical premises, such as education or training for detecting, analysing, and minimizing dangers for the purpose of reducing accidents

Acclimatization - Changing to adapt with the workplace environment in an emotional, physiological, or behavioral manner, with the right performance based on suitable workplace acclimatization, especially essential fundamentals from the lighting to the height of the seats. Humidity and temperature are also key physiological factors 

Account manager - A member of management with direct responsibility for a consumer’s attention

Accountability - Having to answer for, but not personally liable for, specific work or jobs. This is often shared but can not be passed to someone else

Accounting - The process of preserving, scrutinizing, and describing the fiscal data and standing of a company

Accounts payable - The actual worth of services and items for which remuneration has not been paid

Accounts receivable - The actual value of items sent or services given to a consumer but not yet paid, including an allowance for negative debts

Accreditation - Licensure or certification from a well-known peer for a function, capability, feasibility, or dependability of a business, service, person, or group for providing a specific action or operation required.

Accumulation bin - A physical area that is used to gather different parts of a product before they are sent to an assembly location. Skip to Assembly bin

Accuracy - The margin of error or conformity to a specific rule, but different than precision.

Acid test ratio - The same as: quick asset ratio

Acknowledgment - Used to advise a buyer or consumer of the receipt of their respective order, implying the supplier’s acceptance or approval of that order in most cases

Acquisition cost - Required cost for obtaining at least one unit of a particular item. Formula: Order quantity x Unit cost = Acquisition cost. Skip to Ordering Cost

Action message - System output identifying an action or corrective measure necessary to resolve an ongoing or future issue. Synonyms include Exception message and Action report

Action report - Synonym of Action Message

Activation - Implementing a specific resource

Active data gathering - Information collected when the company starts a conversation with a consumer

Active inventory - Using a specific time period as a base, all raw materials, unfinished work, and finished products that can be used to fill a customer order or satisfy a purpose within the company

Active load - Scheduled work that is not necessarily on-hand

Activity analysis - Describing and identifying an activity within the company to ascertain activity-based cost as it relates to project management

Activity attributes - All of the factors that make up an activity that can be carried out, including before-, after-, and supplemental activities

Activity -

Those jobs or activities carried out to or for a resource and necessary for production of the company’s services and goods for activity-based accounting. Can be an individual, tool, or place, and usually lumped together by type and set apart for specific projects

As it relates to project management, a facet of work in a given project, with an expected time length, cost, and expended resource information. For large projects, synonymous with Major Activity

Activity-based budgeting (ABB)  - For activity-based accountancy, a budgeting routine employing information about activities and individual relationships to predict workload and asset requirements in developing a business plan. Costs show the predicted consumption and cost of supplies using forecast workload like a basis. The company is able to use overall performance to calculate in  success in establishing and pursuing strategical goals; this activity is part of the activity-based preparation process.

Activity-based cost accounting - Method of cost accounting that builds up expenses related to jobs done and utilizes cost drivers to distribute these expenses to items or other media, including consumers, markets, or jobs. It tries to distribute operating costs on a practical bases instead of direct labor or machinery hours. Synonyms with Activity-based Cost Accounting and Activity-Based Costing, skip to Absorption Costing

Activity-Based Costing (ABC) - Method of cost accounting that builds up expenses related to jobs done and utilizes cost drivers to distribute these expenses to items or other media, including consumers, markets, or jobs. It tries to distribute operating costs on a practical bases instead of direct labor or machinery hours

Activity code - Value that permits sorting or reorganizing activities throughout reports as they relate to project management

Activity definition - Specific work that will be completed to fulfill a job that has been promised for delivery

Activity dictionary - As part of activity-based cost accounting, a guideline of customary definitions of certain activities such as descriptions, company process, functionality, cost drivers, and other important information in activity-based planning

Activity driver - As part of activity-based cost accounting, a benchmark of demands placed on an action by specified cost objects. Its function is to allocate activity costs to target cost objects

Activity duration - The intended difference between the commencement and completion dates of a job activity.

Activity identifier - An exclusive alphanumeric system that distinguishes one project activity from all other activities.

Activity level - An explanation of how mechanical one activity is to modifications in the level of a different activity or cost object.

Activity list - Documentation of scheduled activities in a job, including an activity explanation and identifier.

Activity network diagram - One of seven new quality tools, this is a drawing that includes nodes that symbolize operations to be completed and arrows indicative of priority relationships. This diagram represents all activities to be completed to finalize a project. Also called a critical path diagram/PERT chart

Activity ratio - A monetary ratio to establish how an organization’s assets perform in relation to the profits the resources generate. They include inventory turnovers, receivables conversion periods, fixed-asset turnovers, and return-on-asset

Activity resource estimating - Calculating the kinds and amounts of assets that will be required for a variety of project activities

Activity sequencing - The method of defining and recording dependence amongst project activities

Activity-based costing model - As part of activity-based cost accounting, a representation, by period, of resource costs produced due to activities related to commodities or services or other things causing the activity to be performed

Activity-based costing system - Activity-based cost accounting model that jointly defines information on an organization’s income, performance, drivers, items, and measurements

Activity-based management (ABM) - Using activity-based costing data regarding cost pools and drivers, activity investigation, and business methods of identifying business strategies; improving product design, manufacturing, and allocation; and removing waste from operations. Skip to Activity-based cost accounting

Activity-based planning (ABP) - As it relates to activity-based cost accounting, a systematic definition of action and resource needs (for both monetary and working systems) based on potential demand for goods or services by identifiable consumer needs. Need for resources is related to resource accessibility; facility overages and shortfalls are rectified. Activity-based budgets are derived from the production of ABP

Activity-on-arc network - A method for demonstrating a project system by allowing each arc to stand for an action. Synonym: AOA

Activity-on-arrow network (AOA) - A project management system in which time passage, by means of activities, happens on arrows. The commencement of an activity is indicated by the arrow’s tail, while the end of the activity is indicated by the arrow’s tip. The cycle of the arrows indicates the series of activities. Arrows are linked by nodes, usually circles. Synonym: Activity-on-arc Network, Arrow diagram method, and Event-on-arrow network

Activity-on-node network (AON) - A project management system in which time passage, by means of activities, happens on circles known as nodes. Nodes contain a number indicating the expected length of the activity it indicates, and the nodes are joined by arrows that identify priority relationships. Synonyms: Eventon-node network and Precedence diagram method

Activity-System Maps - Diagrams depicting how a company’s plan is delivered via a set of customized activities. The map helps the most important operational processes of the company adjust to operational priorities. Competitive advantage originates from the way business activities strengthen each other

Actual cost of work performed - Direct costs as a result of, and including indirect costs, for finishing work in a specific timeframe, which will be reconciled with the worker’s financial records for incurred costs and audited by the consumer

Actual cost system - Cost system collecting costs in the past as they relate to production and allocating indirect costs to those products depending on individual cost and actual volume of that product

Actual costs - All work hours, materials, and overhead costs associated with a job as it progresses throughout production

Actual demand - Made up of consumer requests, sometimes including promised items, components, and raw materials for production/distribution. This uses up the forecasted amount, based on the rules sleected for a predetermined timeline

Actual duration - length of time between the real starting date of a job or job portion and today’s date for activities in progress, and/or the length of time between a project’s start and finish dates

Actual finish date - In management terms, the actual completion date for a project

Actual start date - In management terms, the actual start date for a specific project

Actual volume - Real output defined as a capacity volume and used to calculate varaiance as compared to practical (demonstrated) and budgeted capacities

Adaptable Web site - In the e-Commerce industry, those websites that are customizable for the visitor

Adaptive control -

A control system’s power to modify its own settings to respond to measurable changes in the conditions of operation

Machine control units having feeds and/or speeds that are not permanent. Control units, working from feedback sensors, are able to optimize positive situations by automatically speeding or slowing the machination parameters. This method ensures optimal tool life, surface finish, machine expense, and rate of production

Adaptive smoothing - Exponential smoothing with an automatically-adjusting smoothing method in conjunction with forecast problem management

Adaptive Web site - Those webistes in e-Commerce that record

Additives - Special classes of components as characterized by use in small amounts or introduction to the processing cycle once the initial stage has completed

Adjudicate - An issue that is heard and decided through a legal dispute

Adjustable capacity - Those capacity items which could change short-term, such as equipment or labor

Administrative contracting officer -  Government employee who guarantees conformity to contract terms and conditions

Advance material request - Requesting materials prior to the public appearance of the official product design. This premature release is necessary due to extensive lead times

Advance ship notice (ASN) - Electronic data interchange (EDI) of shipment notice for product.

Advanced planning and scheduling (APS) - Systems that manage investigation and planning of manufacturing and logistics throughout short, intermediate, and continuing timeframes. It describes a computer program using sophisticated mathematical algorithms or logic to execute optimization or reproduction of limited capacity schedue, source, capital plans, resource plans, forecast, and demand management. Techniques concurrently consider a variety of constraints and industry rules to provide synchronized plans and schedules, resolution support, available-to-promise, and capable-to-promise capacity. APS usually produces and calculates numerous scenarios. Management can then select one scenario to make use of as the official plan. The five main aspects of APS systems are demand, productin, distribution, and transportation planning

Advanced planning system (APS) - Synonym: APS

Advertising - Paid marketing campaigns of a nonpersonal type

Affidavit - Sworn statement on paper

Affinity diagram - Total quality management tool through which employees working silently produce ideas and afterwards classify said ideas

Affirmative action - Hiring policy requiring employers to examine the staff for inadequate representation of protected classes, including recruitment of minorities and members of protected classes, restructuring management attitudes or bias toward them, removing prejudiced employment practices, and giving special treatment to those protected classes

After-sale service - Synonymous with Field Service

Agent - A person who acts at the behest of another when dealing with a third party, such as a sales or purchasing agent

Aggregate demand - Demand grouped (e.g., all sedans) for the purpose of making predictions or plans. Skip to Aggregate forecast

Aggregate forecast - Timephased sales estimate for product/product family grouping created by a facility or company and presented as units or dollars, or both, the aggregate forecast is utilized for sales/production/operations planning purposes. Skip to Product Group Forecast

Aggregate inventory management - Setting an overall dollar value for desired inventory and establishing controls to attain this goal

Aggregate inventory - A grouping inventory method for items/products that involves several  stockkeeping units. Skip to Base Inventory Level

Aggregate lead time - Synonymous with Cumulative Lead Time

Aggregate plan - Plan incorporating budgeted levels of completed goods, inventory, production backlogs, and modifications in the workforce to back a production strategy. Utilizes aggregated information (such as product line or family) instead of product information, which is the foundation of the name aggregate plan

Aggregate planning - Process that creates strategic plans to maintain the organization’s business plan. This type of planning typically includes the development, analysis, and maintenance of all plans for total sales and production and targeted inventory/customer backlogs for product families. A production plan is the end result of an aggregate planning method. There are two approaches to aggregate planning: production planning and sales/operations planning. Skip to Production Planning, sales and operations planning, sales plan

Aggregate production plan (APP) - Long-term plan used to establish total future production timing and quantity for product families. Synonymous with Long-term Production Plan

Aggregate reporting - General process hour reports that allow the system to allocate the actual hours to particular products run throughout that period based on standards. May also be called gang reporting, or the reporting of total workforce hours

Aggregate unit of capacity - Pooled capacity measuring unit when differing outputs are present

Agility - The capability of successfully manufacturing and marketing an all-inclusive range of low-cost and high-quality products/services with short lead times and changing volumes that provide better value to consumers by means of customization. Agility combines the four distinguishing competencies of cost, quality, dependability, and flexibility

AGVS - Automated Guided Vehicle System

AI - Artificial intelligence.

AIDC - Automatic identification and data capture.

AIS - Automated information system.

Algorithm - A prearranged collection of well-defined rules or processes for solving a problem in a limited number of steps

Alliance development - Strengthening the capability of a strategic supplier

Allocated item - In MRP systems, an item that has been released to the stockroom through a picking order but has not yet been sent from the stockroom

Allocated material - Synonymous with Reserved Material

Allocation costing - Synonymous with Absorption Costing

Allocation -

The categorization of quantities of items that have been set aside for specific orders but not yet released from the stockroom to the production floor, also called an uncashed stockroom requisition

A process used to allocate material in short supply. Synonymous with Assignment. Skip to Reservation

Allocative efficiency - Using resources to produce the goods and services in highest demand from consumers

Allowable cost - Reasonable costs exclusively permitted under Federal Acquisition Regulation (FAR) requirements

Allowance - In work measurement: a time value or percentage of time through which normal time is increased, or an amount of nonproductive time applied, in order to balance justifiable causes/policy requirements that require performance time not precisely measured for each component or task. Usually incorporates irregular elements, incentive opportunity on machine-controlled time, minor inevitable delays, rest time to overcome tiredness, and time for personal needs. From an assembly perspective, the minimum clearance or maximum intrusion distance between two adjoining objects

Allowed time - Normal time value increased by suitable allowances

Alpha factor - Synonymous with Smoothing Constant

Alternate feedstock - A backup supply of an item/product/service that acts either as a replacement or alternate equipment

Alternate operation - Substitute for a standard step in the manufacturing process. Antonym for Primary Operation

Alternate routing - Route that is usually less ideal than a primary route but results in a matching item. It may be maintained in the computer or off-line by means of manual methods, but the computer software must be able to recognize alternate routings for particular jobs

Alternate work center - A work center where a maneuver is not usually performed but could be performed. Antonyms with Primary Work Center

American National Standards Institute (ANSI) -  The parent organization of the interindustry electronic interchange of the business transaction standard. The ANSI is the clearinghouse on U.S. electronic data interchange standards

American Society for Quality (ASQ) - Founded in 1946, a non-profit educational association with more than 100,000 individual and organizational members interested in quality improvement

American Society for Quality Control (ASQC) -  Skip to American Society for Quality

American Standard Code for Information Interchange (ASCII) - Standard 7-bit character code used by a computer manufacturer to represent 128 characters for information interchange among data processing/communications systems and other information system equipment. An eighth bit is added as a uniformity bit to test a string of ASCII characters for correct transmission

Amortization - Process of recovering (by means of expensing) a monetary investment over a period of time. Skip to Capital Recovery

Analog - As applied to an electrical or computer system, the capability of representing data in continuously varying physical phenomena (as in a voltmeter) and converting them into numbers

Analysis of variance (ANOVA) - A statistical analysis system that estimates what portion of variation in a dependent variable is caused by variation in one or more independent variables. It also produces a number used to infer whether any or all of the independent-dependent variable relationships have statistical significance (i.e., have not been caused by randomness in the data)

Analytic workplace design - A design based on established biomechanical and behavioral concepts, including the known operating characteristics of people. Produces a workplace situation well within the range of human capacity and does not generally require modification, improvement, or preliminary experimental mock-up

Analyze phase - One of the six sigma phases of quality. It consists of defining performance objective, identifying independent variables, and analyzing sources of variability. Skip to design-measure-analyze- improve-control process

Andon -

An electronic board that provides visibility of floor status and supplies information to help coordinate the efforts to linked work centers. Signal lights are green (running), red (stop), and yellow (needs attention).

A visual signaling system.

Annual inventory count - Synonymous with Physical inventory

Annualized contract - A negotiated agreement with a supplier for one year that sets pricing, helps ensure a continuous supply of material, and provides the supplier with estimated future requirements

Annual percentage rate - In finance, the rate of interest paid for a loan after compounding is considered. Synonymous with effective interest rate

Annual physical inventory - Synonymous with Physical inventory

Annuit - A stream of fixed payments for a stipulated time, yearly or at other intervals

ANOVA - Analysis of Variance

ANSI - American National Standards Institute

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. This report explains 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. Synonymous with Delay report

Anticipation inventories - Additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations

AOA - Activity-on-arrow network

AON - Activity-on-node network

AOQ - Average outgoing quality

AOQL - Average outgoing quality limit

APICS - Founded in 1957 as the American Production and Inventory Control Society, APICS The Association for Operations Management builds operations management excellence in individuals and enterprises through superior education and training, internationally recognized certifications, comprehensive resources, and a worldwide network of accomplished industry professionals

APP - Aggregate production plan

Apparent authority - Authority perceived by a third party to flow from a principal to an ostensible agent when in fact no agency relationship exists

Appellant - One who appeals a court decision to a higher authority

Application package - A computer program or set of programs designed for a specific application

Application service provider (ASP) - A firm that produces outsourced services for customers

Applications software - A computer program or set of programs designed to assist in the performance of a specific task, such as word processing, accounting, or inventory management. Synonymous with Application system

Application system - A set of programs of specific instructions for processing activities needed to compute specific tasks for computer users, as opposed to operating systems that control the computer’s internal operations

Appraisal -

An evaluation of employee performance.

In TQM, the formal evaluation and audit of quality.

Appraisal costs - Those costs associated with the formal evaluation and audit of quality in the firm

Appreciation of a currency - An increase in the buying power of a country’s currency in terms of other countries’ goods and services

APR - Annual percentage rate

AQL - Acceptable quality level

Arbitrage - Risk-free buying of an asset in one market and simultaneous selling of an identical asset at a profit in another market

Arbitration - The process by which an independent third party is brought in to settle a dispute or to preserve the interest of two conflicting parties

Arithmetic mean - Synonymous with mean

Arrival - In queuing theory, a unit that arrives for service, such as a person or part

Arrival date - The date purchased material is due to arrive at the receiving site. The arrival date can be input, it can be equal to the current due date, or it can be calculatedfrom the ship date plus transit time. Skip to due date

Arrival rate - In queuing theory, the value or distribution describing how often a person or thing arrives for service

Arrow -

In activity-on-arrow networks, the graphic presentation of an activity. The tail of the arrow represents the start of the activity. The head of the arrow represents the finish. Unless a timescale is used, the length of the arrow stem has no relation to the duration of the activity. Length and direction of the arrow are usually a matter of convenience and clarity.

In activity-on-node networks, an arrow represents a precedence requirement.

Arrow diagram - A technique to determine the relationships and precedence of different activities and thetime estimate for project completion

Arrow diagram method - Synonymous with activity-on-arrow network

Artificial intelligence (AI)  -

Computer programs that can learn and reason in a manner similar to humans. The problem is defined in terms of states and operators to generate a search space that is examined for the best solution. In contrast, conventional programming collects and processes data by algorithm or fixed step-by-step procedures.

An area in computer science that attempts to develop AI computer programs.

ASCII - American Standard Code for Information Interchange

ASEAN - Association of Southeast Asian Nations

ASN - Advance ship notice

ASP - Application service provider

ASQ - American Society for Quality

ASQC - American Society for Quality Control

AS/RS - Automated storage/retrieval system.

Assays - Tests of the physical and chemical properties of a sample

Assemble-to-order: - A production environment where a good or service can be assembled after receipt of a customer’s order. The key components (bulk, semifinished, intermediate, subassembly, fabricated, purchased, packing, and so on) used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product. Synonymous with finish-to-order. Skip to Make-to-order, and Make-to-stock

Assembly - A group of subassemblies and/or parts that are put together and that constitute a major subdivision for the final product. An assembly may be an end item or a component of a higher level assembly

Assembly bin - Synonymous with Accumulation bin

Assembly chart - Overview of a product containing assembly and subassembly operations, materials, and components

Assembly lead time - The time that normally elapses between the issuance of a work order to the assembly floor and work completion

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. See: line, production line

Assembly order - A manufacturing order to an assembly department authorizing it to put components together into an assembly. Skip to Blend order

Assembly parts list - As used in the manufacturing process, a list of all parts (and subassemblies) that make up a particular assembly. Skip to Batch card, Manufacturing order

Assets - An accounting/financial term (balance sheet classification of accounts) representing the resources owned by a company, whether tangible (cash, inventories) or intangible (patent, goodwill). Assets may have a short term time horizon - such as cash, accounts receivable, and inventory - or a long-term value (such as equipment, land, and buildings). Skip to Balance sheet, Liabilities, Owner’s equity

Asset value - The adjusted purchase price of the asset plus any costs necessary to prepare the asset for use

Assignable cause - A source of variation in a process that can be isolated, especially when its significantly larger magnitude or different origin readily distinguishes it from random causes of variation. Synonymous with Special cause. Skip to Common causes, Assignable variation

Assignable variation - Variation made by one or more causes that can be identified and removed. Skip to Assignable cause, Common causes

Assigned material - Synonymous with Reserved material

Assignee - One who receives a transfer of contract rights from a party to the contract

Assignment - Synonymous with Allocation

Assignor - One who sells contract rights to a third person

Association of Southeast Asian Nations(ASEAN) - An association of ten nations that was created in 1967 with the purpose of strengthening cultural, social, and economic development of the area

Associative forecasting - Uses one or more variables that are believed to affect demand in order to forecast future demand

Assortment warehousing - A warehousing technique that stores the goods close to the customer to ensure short customer lead times

Assumed receipt - A receiving technique based on the assumption that a shipment is as expected. Receiving personnel do not verify the delivery quantity. This technique is used to eliminate invoices

Assurance - The ability of employees to inspire trust and confidence

ATP - Available-to-promise

Attachment - An accessory that has to be physically attached to the product. Skip to Feature

Attractability efficiency - In e-commerce, a measure of how well an organization persuades people who are aware of its Web site to actually use the site. Skip to Conversion efficiency

Attractor - In information systems, a website that, over time, continues to attract a large number of visitors

Attribute -

Quality control value that is either a yes/ no value or is counted rather than being measured on a continuous scale. See: variable, attribute data.

A description of an item or service that specifies either a presence or an absence, such as on-time versus late

Attribute data - ­­­ Go/no-go information. The control charts based on attribute data include percent chart, number of affected units chart, count chart, count-perunit chart, quality score chart, and demerit chart. Skip to Attribute, Attribute inspection

Attribute inspection - Inspection for a go/no-go decision or yes/no decision or to count the number of defects on a unit. Skip to Attribute, Attribute data

Attrition factor - The budget fraction apportioned for replacement personnel training because of projected personnel losses

Audit - An objective comparison of actions to policies and plans

Authentication - In information systems, the act of identifying a person or confirming the source of a message

Authentication key - In information systems, a key that ensures that data in an electronic business transaction are not changed. It can also be used as a form of digital signature

Authorized deviation - Permission for a supplier or the plant to manufacture an item that is not in conformance with the applicable drawings or specifications

Automated assembly system - A system that produces completed products or assemblies without the contribution of direct labor

Automated data capture system - Any device, such as a bar-code reader or optical character reader, that mechanizes the entry of information into an information system

Automated flow line - A production line that has machines linked by automated parts transfer and handling machines

Automated guided vehicle system (AGVS) - A transportation network that automatically routes one or more material handling devices and positions them at predetermined destinations without operator intervention

Automated information system (AIS) - Computer hardware and software configured to automate calculating, computing, sequencing, storing, retrieving, displaying, communicating, or otherwise manipulating data and textual material to provide information

Automated process controls system - A system that can measure the performance of a process, compare the result to predetermined standards, and then make adjustments to the process

Automated quality control inspection system - A system that employs machines to help inspect products for quality control

Automated storage/retrieval system (AS/RS) - A high-density, rack inventory storage system with vehicles automatically loading and unloading the racks

Automatic identification and data capture (AIDC) - A set of technologies that collect data about objects and then send these data to a computer without human intervention

Automatic identification system (AIS) - A system that can use various means to sense and load data in a computer.

Automatic relief - A set of inventory bookkeeping methods that automatically adjusts computerized inventory records based on a production transaction

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. Antonyms with Manual rescheduling

Automation - The substitution of machine work for human physical and mental work, or the use of machines for work not otherwise able to be accomplished, entailing a less continuous interaction with humans than previous equipment used for similar tasks

Autonomation - Automated shutdown of a line, process, or machine upon detection of an abnormality or defect

Autonomous work group - A production team that operates a highly focused segment of the production process to an externally imposed schedule but with little external reporting, supervision, interference, or help

Auxiliary item - An item required to support the operation of another item

Availability - The percentage of time that a worker or machine is capable of working

Available capacity - Synonyms with Capacity Available

Available inventory - The on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems. Also known as Beginning available balance. Synonyms with Beginning available balance, and Net inventory

Available time - The number of hours a work center can be used, based on management decisions regarding shift structure, extra shifts, regular overtime, observance of weekends and public holidays, shutdowns, and the like. Skip to Capacity available, and Utilization

Available-to-promise (ATP) - The uncommitted portion of a company’s inventory and planned production maintained in the master schedule to support customerorder 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. Three methods of calculation are used: discrete ATP, cumulative ATP with look-ahead, and cumulative ATP without look-ahead. Skip to Discrete available-to-promise, and Cumulative available-to-promise

Available work - Work that is actually in a department ready to be worked on as opposed to scheduled work that may not yet be physically on hand. Synonyms with Live load

Average chart - A control chart in which the subgroup average is used to evaluate the stability of the process level. Synonyms with X-bar chart

Average collection period - Synonyms with Receivables conversion period

Average cost per unit - The estimated total cost, including allocated overhead, to produce a batch of goods divided by the total number of units produced

Average cost system - In cost accounting, a method of inventory valuation for accounting purposes. Average cost provides a valuation between last-in, first-out and firstin, first-out methods. Skip to First in, first out; last in, first out

Average fixed cost - The total fixed cost divided by units produced

Average forecast error -

The arithmetic mean of the forecast errors.

The exponentially smoothed forecast error. Skip to Bias, and Forecast error

Average inventory - One-half the average lot size plus the safety stock, when demand and lot sizes are expected to be relatively uniform over time. The average can be calculated as an average of several inventory observations taken over several historical time periods. When demand and lot sizes are not uniform, the stock level versus time can be graphed to determine the average

Average outgoing quality (AOQ) - The expected average quality level of outgoing product for a given value of incoming product quality

Average outgoing quality limit (AOQL) - The maximum average outgoing quality over all possible levels of incoming quality for a given acceptance sampling plan and disposal specification

Average total cost - The ratio of total costs (the sum of total fixed costs and total variable costs) over units produced

Average variable cost - The ratio of total variable costs over units produced

Avoidable cost - A cost associated with an activity that would not be incurred if the activity was not performed

Avoidable delay - The delay controlled by a worker and therefore not allowed in the job standard

Award audits - Site visits associated with award programs, such as the Malcolm Baldrige National Quality Award or similar state-sponsored award programs

Awareness efficiency - In e-commerce, a measurement of how well an organization informs people who have access to the Web that the organization’s website exists

Abandonment -  The decision of a carrier to give up or to discontinue service over a route

ABB -  Skip to Activity Based Budgeting

ABC -  Skip to Activity Based Costing

ABC Costing -  Skip to Activity Based Costing

ABC Model -  In cost management, a representation of resource costs during a time period that are consumed through activities and traced to products, services, and customers or to any other object that creates a demand for the activity to be performed

ABC System -  In cost management, a system that maintains financial and operating data on an organization’s resources, activities, drivers, objects and measures.

ABI -  Skip to Automated Broker Interface

ABM -  Skip to Activity Based Management

ABP -  Skip to Activity Based Planning

Absorption Costing -  In cost management, an approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit of production. The fixed costs are usually allocated to units of output on the basis of direct labor hours, machine hours, or material costs. Synonym: "Allocation Costing"

Accessorial charges -  A charge for services over and above transportation charges such as: inside delivery, heading, sort and segregate, heating, storage, etc. Skip to Upcharges

ACD -  Skip to Automated Call Distribution

ACE -  Skip to Automated Commercial Environment

ACH -  Skip to Automated Clearinghouse

Acquisition Cost -  In cost accounting, the cost required to obtain one or more units of an item

Activation -  In constraint management, the use of non-constraint resources to make parts or products above the level needed to support the system constraint(s). The result is excessive work-in-process inventories or finished goods inventories, or both

Active Stock -  Goods in active pick locations and ready for order filling

Activity Analysis -  The process of identifying and cataloging activities for detailed understanding and documentation of their characteristics. An activity analysis is accomplished by means of interviews, group sessions, questionnaires, observations, and reviews of physical records of work

Activity Based Budgeting (ABB) -  An approach to budgeting where a company uses an understanding of its activities and driver relationships to quantitatively estimate workload and resource requirements as part of an ongoing business plan. Budgets show the types, number of and cost of resources that activities are expected to consume based on forecasted workloads. The budget is part of an organization’s activity-based planning process and can be used in evaluating its success in setting and pursuing strategic goals

Activity Based Costing (ABC) -  A methodology that measures the cost and performance of cost objects, activities and resources. Cost objects consume activities and activities consume resources. Resource costs are assigned to activities based on their use of those resources, and activity costs are reassigned to cost objects (outputs) based on the cost objects proportional use of those activities. Activity-based costing incorporates causal relationships between cost objects and activities and between activities and resources

Activity Based Costing Model -  In activity-based cost accounting, a model, by time period, of resource costs created because of activities related to products or services or other items causing the activity to be carried out

Activity Based Costing System -  A set of activity-based cost accounting models that collectively define data on an organization’s resources, activities, drivers, objects, and measurements.

Activity-Based Management (ABM) -  A discipline focusing on the management of activities within business processes as the route to continuously improve both the value received by customers and the profit earned in providing that value. ABM uses activity-based cost information and performance measurements to influence management action.See also Activity-Based Costing

Activity Based Planning (ABP) -  Activity-based planning (ABP) is an ongoing process to determine activity and resource requirements (both financial and operational) based on the ongoing demand of products or services by specific customer needs. Resource requirements are compared to resources available and capacity issues are identified and managed. Activity-based budgeting (ABB) is based on the outputs of activity-based planning.

Activity Dictionary -  A listing and description of activities that provides a common/standard definition of activities across the organization. An activity dictionary can include information about an activity and/or its relationships, such as activity description, business process, function source, whether valueadded, inputs, outputs, supplier, customer, output measures, cost drivers, attributes, tasks, and other information as desired to describe the activity.

Activity Driver -  The best single quantitative measure of the frequency and intensity of the demands placed on an activity by cost objects or other activities. It is used to assign activity costs to cost objects or to other activities.

Activity Level -  A description of types of activities dependent on the functional area. Product-related activity levels may include unit, batch, and product levels. Customer-related activity levels may include customer, market, channel, and project levels.

Activity Network Diagram -  An arrow diagram used in planning and managing processes and projects.

Activity Ratio -  A financial ratio used to determine how an organization’s resources perform relative to the revenue the resources produce. Activity ratios include inventory turnover, receivables conversion period, fixed-asset turnover, and return on assets.

Actual Cost System -  A cost system that collects costs historically as they are applied to production and allocates indirect costs to products based on the specific costs and achieved volume of the products.

Actual Costs -  The labor, material, and associated overhead costs that are charged against a job as it moves through the production process.

Actual Demand -  Actual demand is composed of customer orders (and often allocations of items, ingredients, or raw materials to production or distribution). Actual demand nets against or consumes the forecast, depending upon the rules chosen over a time horizon. For example, actual demand will totally replace forecast inside the sold-out customer order backlog horizon (often called the demand time fence), but will net against the forecast outside this horizon based on the chosen forecast consumption rule.

Actual to Theoretical Cycle Time -  The ratio of the measured time required to produce a given output divided by the sum of the time required to produce a given output based on the rated efficiency of the machinery and labor operations.

Adaptive Control -

The ability of a control system to change its own parameters in response to a measured change in operating conditions.

Machine control units in which feeds and/or speeds are not fixed. The control unit, working from feedback sensors, is able to optimize favorable situations by automatically increasing or decreasing the machining parameters. This process ensures optimum tool life or surface finish and/or machining costs or production rates.

Adaptive Smoothing -  In forecasting, a form of exponential smoothing in which the smoothing constant is automatically adjusted as a function of one or many items, for example, forecast error measurement, calendar characteristics (launch, replenishment, end of life), or demand volume.

Advance Material Request -  Ordering materials before the release of the formal product design. This early release is required because of long lead times.

Advanced Shipping Notice (ASN) -  Detailed shipment information transmitted to a customer or consignee in advance of delivery, designating the contents (individual products and quantities of each) and nature of the shipment. May also include carrier and shipment specifics including time of shipment and expected time of arrival. See also: Assumed Receipt

After-Sale Service -  Services provided to the customer after products have been delivered. This can include repairs, maintenance and/or telephone support. Synonym: Field Service

Agency Tariff -  A publication of a rate bureau that contains rates for many carriers.

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.

Agglomeration -  A net advantage gained by a common location with other companies.

Aggregate Forecast -  An estimate of sales, often time phased, for a grouping of products or product families produced by a facility or firm. Stated in terms of units, dollars, or both, the aggregate forecast is used for sales and production planning (or for sales and operations planning) purposes.

Aggregate Inventory -  The inventory for any grouping of items or products involving multiple stockkeeping units. Also see: Base Inventory Level

Aggregate Inventory Management -  Establishing the overall level (dollar value) of inventory desired and implementing controls to achieve this goal.

Aggregate Plan -  A plan that includes budgeted levels of finished goods, inventory, production backlogs, and changes in the workforce to support the production strategy. Aggregated information (e.g., product line, family) rather than product information is used, hence the name aggregate plan.

Aggregate Planning -  A process to develop tactical plans to support the organization’s business plan. Aggregate planning usually includes the development, analysis, and maintenance of plans for total sales, total production, targeted inventory, and targeted customer backlog for families of products. The production plan is the result of the aggregate planning process. Two approaches to aggregate planning exist - production planning and sales and operations planning.

Aggregate Tender Rate -  A reduced rate offered to a shipper who tenders two or more class-rated shipments at one time and one place.

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.

AGVS - See Automated Guided Vehicle System

Air Cargo -  Freight that is moved by air transportation.

Air Cargo Containers -  Containers designed to conform to the inside of an aircraft. There are many shapes and sizes of containers. Air cargo containers fall into three categories:

air cargo pallets

lower deck containers

box type containers.

Airport and Airway Trust Fund -  A federal fund that collects passenger ticket taxes and distributes those funds for various airport facilities.

Air Taxi -  An exempt for-hire air carrier that will fly anywhere on demand, but these are restricted to a maximum payload and passenger capacity per plane.

Air Transport Association of America -  A U.S. airline industry association.

Air Waybill (AWB) -  A bill of lading for air transport that serves as a receipt for the shipper, indicates that the carrier has accepted the goods listed, obligates the carrier to carry the consignment to the airport of destination according to specified conditions.

Alaskan carrier - A for-hire air carrier that operates within the state of Alaska.

Alert -  See Action Message

Algorithm -  A clearly specified mathematical process for computation; a set of rules, which, if followed, give a prescribed result.

All-cargo Carrier -  An air carrier that transports cargo only.

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.

Allocation -

In cost accounting, a distribution of costs using calculations that may be unrelated to physical observations or direct or repeatable cause-and-effect relationships. Because of the arbitrary nature of allocations, costs based on cost causal assignment are viewed as more relevant for management decision-making.

In order management, allocation of available inventory to customer and production orders.

Allocation Costing -  See Absorption Costing

Alpha Release - A very early release of a product to get preliminary feedback about the feature set and usability.

Alternate Routing -  A routing, usually less preferred than the primary routing, but resulting in an identical item. Alternate routings may be maintained in the computer or off-line via manual methods, but the computer software must be able to accept alternate routings for specific jobs.

American Customer Satisfaction Index (ACSI) -  Released for the first time in October 1994, an economic indicator and cross industry measure of the satisfaction of U.S. household customers with the quality of the goods and services available to them - both those goods and services produced within the United States and those provided as imports from foreign firms that have substantial market shares or dollar sales. The ACSI is co-sponsored by the University of Michigan Business School, ASQ and the CFI Group.

American Society for Testing and Materials (ASTM) -  Not-for-profit