Glossary of Supply Chain Terms "Z"

Z

Zone of Rate Flexibility: Railroads may raise rates by a percentage increase in the railroad cost index that the ICC determines; the railroads could raise rates by 6 percent per year through 1984 and 4 percent thereafter.

Zone of Rate Freedom: Motor carriers may raise or lower rates by 10 percent in one year without ICC interference; if the rate change is within the zone of freedom, the rate is presumed to be reasonable.

Zone of Reasonableness: A zone or limit within which air carriers may change rates without regulatory scrutiny; if the rate change is within the zone, the new rate is presumed to be reasonable.

Glossary of Supply Chain Terms "Y"

Y

Yield: The ratio of usable output from a process to its input.

Glossary of Supply Chain Terms "X"

X

X12: The ANSI standard for inter-industry electronic interchange of business transactions.

XML: *See Extensible Markup Language (XML)

 

Glossary of Supply Chain Terms "W"

W

Wall-to-Wall Inventory: An inventory management technique in which material enters a plant and is processed through the plant into finished goods without ever having entered a formal stock area.

WAN: Wide Area Network.

Warehouse: Storage place for products. Principal warehouse activities include receipt of product, storage, shipment, and order picking.

Warehousing: The storage (holding) of goods.

Warehouse Management System (WMS): The systems used in effectively managing warehouse business processes and direct warehouse activities, including receiving, putaway, picking, shipping, and inventory cycle counts. Also includes support of radio frequency communications, allowing real-time data transfer between the system and warehouse personnel. they also maximize space and minimize material handling by automating putaway processes.

Glossary of Supply Chain Terms "V"

V

Valuation Charges: Transportation charges to shippers who declare a value of goods higher than the value of the carriers' limits of liability.

Value Added: Increased or improved value, worth, functionality, or usefulness.

Value-Added Network (VAN): A company that acts as a clearinghouse for electronic transactions between trading partners. A third party supplier that receives EDI transmissions from sending trading partners and holds them in a mailbox until retrieved by the receiving partners.

Value-Added Productivity Per Employee: Contribution made by employees to total product revenue minus the material purchases divided by total employment. Total employment is total employment for the entity being surveyed. This is the average full-time equivalent employee in all functions, including sales and marketing, distribution, manufacturing, engineering, customer service, finance, general and administrative, and other. Total employment should include contract and temporary employees on a full-time equivalent (FTE) basis.

Calculation: Total Product Revenue-External Direct Material/[FTEs]

Glossary of Supply Chain Terms "U"

U

Ubiquity: A raw material that is found at all locations.

UCC: See: Uniform Code Council (UCC); also see: EAN.UCC.

ULD: See Unit Load Device (ULD).

Umbrella Rate: An ICC ratemaking practice that held rates to a particular level to protect another mode's traffic.

UN/SPSC: See United Nations Standard Product and Service Code (UN/SPSC).

Unbundled Payment/Remittance: The process where payment is delivered separately from its associated detail.

UNECE: United Nations Economic Commission for Europe.

Glossary of Supply Chain Terms "T"

T

Tactical Planning: The process of developing a set of tactical plants (e.g., production plan, sales plan, marketing plan, and so on). Two approaches to tactical planning exist for linking tactical plans to strategic plans - production planning and sales and operations planning. Also see: Sales and Operations Planning.

Tact Time: See Takt Time

Taguchi Method: A concept of offline quality control methods conducted at the product and process design states in the product development cycle. This concept, expressed by Genichi Taguchi, encompasses three phases of product design, parameter design, and tolerance design. The goal is to reduce quality loss by reducing the variability of a product's characteristics during the parameter phase of product development.

Takt Time: Sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean production system. It's computed as the available production time divided by the rate of customer demand. For example, assume demand is 10,000 units per month, or 500 units per day, and planned available capacity is 420 minutes per day. The takt time = 420 minutes per day/500 units per day = 0.84 minutes per unit. This takt time means that a unit should be planned to exit the production system on average every 0.84 minutes.

Glossary of Supply Chain Terms "S"

S

S&OP: See Sales and Operations Planning.

SAE: Society of Automotive Engineers

Safety Stock: The inventory a company holds above normal needs as a buffer against delays in receipt of supply or changes in customer demand.

Salable Goods: A part of assembly authorized for sale to final customers through the marketing function.

Sales and Operations Planning (S&OP): A strategic planning process that reconciles conflicting business objectives and plans future supply chain actions. S&OP usually involves various business functions, such as sales, operations, and finance to agree on a single plan/forecast that can be used to drive the entire business.

Sales Mix: The proportion of individual product-type sales volumes that make up the total sales volume.

Glossary of Supply Chain Terms "R"

R

Radio Frequency (RF): A form of wireless communications that lets users relay information via electromagnetic energy waves from a terminal to a base station which is linked, in turn, to a host computer. The terminal can be placed at a fixed station, mounted on a forklift truck, or carried in a worker's hand. The base station contains a transmitter and receiver for communication with the terminal. RF systems use either narrow-band or spread-spectrum transmissions. Narrow-band data transmissions move along a single limited radio frequency, while spread-spectrum transmissions move across several different frequencies. When combines with a bar code system of identifying inventory items, a radio frequency system can relay data instantly, thus updating inventory records in so-called real time.

Radio Frequency Identification (RFID): The use of radio frequency technology such as RFID tags and tag readers to identify objects. Objects may include virtually anything physical, such as equipment, pallets of stock, or even individual units of product.

Ramp Rate: A statement which quantifies how quickly you grow or expand an operation growth trajectory. Can refer to sales, profits, or margins.

Rationing: The allocation of product among customers, or components among manufactured goods during periods of short supply. When price is used to allocate product, it's allocated to those willing to pay the most.

Glossary of Supply Chain Terms "Q"

Q

QFD: See Quality Function Deployment (QFD).

QR: See Quick Response (QR).

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 on a product attribute.

3) User-based quality is fitness for use.

4) Manufacturing-based quality is conformance to requirements.

5) Value-based quality is the degree of excellence to an acceptable price.

Also, quality has two major components:

a) quality of conformance - quality is defined by the absence of defects.

b) quality of design - quality is measured by the degree of customer satisfaction with a product's characteristics and features.

Glossary of Supply Chain Terms "P"

P

P & D: Pickup and delivery.

P2P: See Path to Profitability (P2P).

Packing List: A document containing information about the location of each Product ID in each package. It allows the recipient to quickly find the item he or she is looking for without a broad search of all packages. It also confirms the actual shipment of goods on a line item basis.

Pallet: The platform which cartons are stacked on and then used for shipment or movement as a group. Pallets may be made of wood or composite materials.

Pallet Wrapping Machine: A machine that wraps a pallet's contents in stretch-wrap to ensure safe shipment.

Parcel Shipment: Parcels include small packages like those typically handled by providers such as UPS and FedEx.

Glossary of Supply Chain Terms "O"

O

Obsolete Inventory: Inventory for which there is no forecast demand expected. A condition of being out of date. A loss of value occasioned by new developments that place the oldeer property at a competitive disadvantage.

Ocean Bill of Lading: The bill of lading issued by the ocean carrier to its customer.

Ocean Carrier: An enterprise that offers service via ocean (water) transport.

OEM: See Original Equipment Manufacturer (OEM).

Offer: See Tender.

Offline: A computer term which describes work done outside of the computer system or outside of a main process within the corporate system.

Offshore: Utilizing an outsourcing service provider located in a country other than where the client is located.