Glossary of Supply Chain Terms "M"

M

Machine Downtimes: Time during which a machine cannot be utilized. Machine downtimes may occur during breakdowns, maintenance, changeovers, etc.

Macro Environment: The environment external to a business, including technological, economic, natural, and regulatory forces that marketing efforts cannot control.

Maintenance, Repair, and Operating Supplies (MRO): Items used in support of general operations and maintenance, such as maintenance supplies, spare parts, and consumables used in the manufacturing process and supporting operations.

Major Carrier: A for-hire certificated air carrier that has annual operating revenues of $1 billion or more; the carrier usually operates between major population centers.

Make-or-Buy Decision: 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.

Make to Order (Manufacture to Order): A manufacturing process strategy where the trigger to begin manufacture of a product is an actual customer order or release rather than a market forecast. For make-to-order products, more than 20% of the value added takes place after the receipt of the order or release, and all necessary design and process documentation is available at the time of order receipt.

Make to Stock (Manufacture to Stock): A manufacturing process strategy where finished product is continually held in plant or warehouse inventory to fulfill expected incoming orders or releases based on a forecast.

Management of All Logistics: The effective management of all costs associated with logistics functions and activities so as to minimize their sum across the product supply chain.

Manifest: A document which describes individual orders contained within a shipment.

Manufacture Cycle Time: The average time between commencement and completion of a manufacturing process, as it applies to make-to-stock products.

Calculation: [Average # of units in WIP]/[Average daily output in units]

Manufacturer's Representative: One who sells goods for several firms but does not take title to them.

Manufacturing Calendar: A calendar used in inventory and production planning functions that consecutively numbers only the working days so that the component and work order scheduling may be done based on the actual number of workdays available. Synonyms: M-Day Calendar, Planning Calendar, Production Calendar, Shop Calendar

Manufacturing Execution Systems (MES): Programs and systems that participate in shop-floor control, including programmed logic controllers and process control computers for direct and supervisory control of manufacturing equipment; process information systems that gather historical performance information, then generate reports; graphical displays; and alarms that inform operations personnel what is going on in the plant currently and a short history into the past. Quality control information is also gathered - a laboratory information management system may be part of this configuration to tie process conditions to the quality data that are generated. Thereby, cause-and-effect relationships can be determined. The quality data at times affect the control parameters that are used to meet product specifications, either dynamically or offline.

Manufacturing Lead Time: The total time required to manufacture an item, exclusive of lower-level purchasing lead time. For make-to-order products, it's the length of time between the release of an order to the production process and shipment to the final customer. For make-to-stock products, it's the length of time between the release of an order to the production process and receipt into finished goods inventory. Included are order preparation time, queue time, set-up time, run time, move time, inspection time, and put-away time. Synonym: Manufacturing Cycle Time.

Manufacturing Resource Planning (MRP-II): A method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning in dollars, and has a simulation capability to answer what-if questions. It consists of a variety of processes, each linked together: business planning, production planning (sales and operations planning), master production scheduling, material requirements planning, capacity requirements planning, and the execution support systems for capacity and material. Output from these systems is integrated with financial reports, such as business plan, purchase commitment report, shipping budget, and inventory projections in dollars. Manufacturing resource planning is a direct outgrowth and extension of closed-loop MRP.

Mar Ad: See Maritime Administration.

Marginal Cost: The cost to produce one additional unit of output. The change in total variable cost resulting from a one-unit change in output.

Marine Cargo Insurance - Average: A term in marine cargo insurance signifying loss or damage to merchandise.

Marine Cargo Insurance - FPA (Free of Particular Average): A provision in a marine cargo insurance policy that no claim shall be paid for damage to goods in the course of a voyage unless a loss is sustained that totals or exceeds a certain percentage of the value as specified in the policy. The object of such a provision is the avoidance of petty claims.

Marine Cargo Insurance - General Average: A loss arising out of a voluntary sacrifice made of any part of a shipment or cargo to prevent loss of the whole and for the benefit of all persons concerned.

Marine Cargo Insurance - Open Policy: A cargo insurance policy that is an open contract; i.e. it provides protection for all of an exporter's shipments afloat or in transit within a specified geographical trade area for an unlimited period of time, until the policy is cancelled by the insured or by the insurance company. It is "open" because the goods that are shipped are also detailed at that time. This is usually shown in a document called a marine insurance certificate.

Maritime Administration (Mar Ad): A U.S. government agency, not actively involved in vessel operation, that administers laws for maintenance of a merchant marine for the purposes of defense and commerce.

Market Demand: In marketing, the total demand that would exist within a defined customer group in a given geographical area during a particular time period given a known marketing program.

Market Dominance: The absence of effective competition for railroads from other carriers and modes for the traffic to which the rail rate applies. The Staggers Act stated that market dominance does not exist if the rate is below the revenue-to-variable-cost ratio of 160 percent in 1981 and 170 percent in 1983.

Market-Positioned Warehouse: Warehouse positioned to replenish customer inventory assortments and afford maximum inbound transport consolidation economies from inventory origin points with relatively short-haul local delivery.

Market Segment: A group of potential customers sharing some measurable characteristics based on demographics, psychographics, lifestyle, geography, benefits, etc.

Marks and Numbers: Marks and numbers placed on goods used to identify a shipment or parts of a shipment.

Marquis Partners: Key strategic relationships. This has emerged as perhaps the key competitive advantage and barrier to entry of e-marketplaces. Get the big players in the fold first, offering equity if necessary.

Mass Customization: The creation of a high-volume product with large variety so that a customer may specify his or her exact model out of a large volume of possible end items, while manufacturing cost is low because of the large volume. An example is a personal computer order in which the customer may specify processor speed, memory size, hard disk size and speed, removable storage device characteristics, and many other options when PCs are assembled on one line and at a low cost.

Master Air Waybill (MAWB): The bill of lading issued by air carriers to their customers.

Material Acquisition Costs: One of the elements comprising a company's total supply chain management costs. These costs consist of the following:

1. Materials (Commodity) Management and Planning: All costs associated with the supplier sourcing, contract negotiation and qualification, and the preparation, placement, and tracking of a purchase order - including all costs related to buyer/planners.

2. Supplier Quality Engineering: The costs associated with the determination, development/certification, and monitoring of suppliers' capabilities to fully satisfy the applicable quality and regulatory requirements.

3. Inbound Freight and Duties: Freight costs associated with the movement of material from a vendor to the buyer, including all associated administrative tasks. Duties are those fees and taxes levied by government for moving purchased material across international borders. Customs broker fees should also be included in this category.

4. Receiving and Put Away: all costs associated with taking possession of material and storing it. Note - inventory-carrying costs are normally covered in a separate worksheet. 5. Incoming Inspection: All costs associated with the inspection and testing of received materials to verify compliance with specifications.

Materials Handling: The physical handling of products and materials between procurement and shipping.

Material Index: The ratio of the sum of the localized raw material weights to the weight of the finished product.

Materials Management: Inbound logistics from suppliers through the production process. The movement and management of materials and products from procurement through production.

Materials Planning: The materials management function that attempts to coordinate materials supply with materials demand.

Material Requirements Planning (MRP): A decision-making methodology used to determine the timing and quantities of materials to purchase.

Matrix Organizational Structure: An organization structure in which two (or more) channels of command budget responsibility, and performance measurement exist simultaneously. For example, both product and functional forms of organization could be implemented simultaneously; in other words, the product and functional managers have equal authority and employees report to both managers.

MAWB: See Master Air Waybill.

Maximum Order Quantity: An order quantity modifier applied after the lot size has been calculated that limits the order quantity to a pre-established maximum.

m-Commerce: Mobile commerce applications involve using a mobile phone to carry out financial transactions. This usually means making a payment for goods or transferring funds electronically. Transferring money between accounts and paying for purchases are electronic commerce applications. An emerging application, electronic commerce has been facilitated by developments in other areas in the mobile world, such as dual slot phones and other smarter terminals, and more standardized protocols which allow greater interactivity and therefore, more sophisticated service.

Mean: The arithmetic average of a group of values. Synonym: Arithmetic Mean.

Measurement Ton: Forty cubic feet; used in water transportation ratemaking.

Median: The middle value in a set of measured values when the items are arranged in order of magnitude. If there is no single middle value, the median is the mean of the two middle values.

Merge In Transit: The process of "merging" shipments from suppliers and going directly to the buyer or to the store, bypassing the seller. A "drop shipment" from several vendors to one buyer.

Merger: The combination of two or more carriers into one company that will own, manage, and operate the properties that previously operated separately.

MES: See Manufacturing Execution Systems (MES).

Message: The EDIFACT term for a transaction set. A message is the collection of data, organized in segments, exchanged by trading partners engaged in EDI. Typically, a message is an electronic version of a document associated with a common business transaction, such as a purchase order or shipping notice. A message begins with a message header segment, which identifies the start of the message (e.g., the series of characters representing one purchase order). The message header segment also carries the message type code, which identifies the business transaction type. EDIFACT's message header segment is called UNH; in ANSI X12 protocol, the message header is called ST. A message ends with a message trailer segment, which signals the end of the message (e.g., the end of one purchase order). EDIFACT's message trailer is labeled UNT; the ANSI X12 message trailer is referred to as SE.

Metrics: See Performance Measures.

Micro-Land Bridge: An intermodal movement in which the shipment is moved from a foreign country to the U.S. by water and then moved across the U.S. by railroad to an interior, non-port city, or vice versa for exports from a non-port city.

Mileage Allowance: An allowance, based upon distance, that railroads give to shippers using private railcars.

Mileage Rate: A rate based upon the number of miles the commodity is shipped.

Mini-Land bridge: An intermodal movement in which the shipment is moved from a foreign country to the U.S. by water and then moved across the U.S. by railroad to a destination that is a port city, or vice versa for exports from a U.S. port city.

Minimum Weight: The shipment weight the carrier's tariff specifies as the minimum weight required to use the TL or CL rate; the rate discount volume.

Mixed Loads: The movement of both regulated and exempt commodities in the same vehicle at the same time.

Mode: See Transportation Mode.

Modal Split: The relative use that companies make of transportation modes; the statistics include ton-miles, passenger-miles, and revenue.

Motor Carrier: An enterprise that offers service via motor carriage.

Movement of Goods: The transfer of goods from one location to another.

MRO: See Maintenance, Repair, and Operating Supplies (MRO).

MRO items: Maintenance, repair, and operating items--office supplies, for example.

MRP: See Material Requirements Planning (MRP).

MRP-II: See Manufacturing Resource Planning.

MSDS: See Material Safety Data Sheet.

Multi-Currency: The ability to process orders using a variety of currencies for pricing and billing.

Multi-Language: Pertaining to the ability to process orders in many different country-specific languages using voice and text.

Multinational Company: A company that both produces and markets products in different countries.

Multiple-Car Rate: A railroad rate that is lower for shipping more than one carload at a time.

Multi-Skilled: Pertaining to individuals who are certified to perform a variety of tasks.

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