S
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.
Sales
Plan: A time-phased statement of expected
customer orders anticipated to be received (incoming sales, not outgoing
shipment) for each major product family or item. It represents sales and
marketing management's commitment to take all reasonable steps necessary to
achieve this level of actual customer orders. The sales plan is a necessary
input to the production planning process (or sales and operations planning
process). It is expressed in units identical to those used for the production
plan (as well as in sales dollars). Also see: Sales and Operations Planning.
Sales
Planning: The process of determining the
overall sales plan to best support customer needs and operations capabilities,
while meeting general business objectives of profitability, productivity,
competitive customer lead times, and so on, as expressed in the overall
business plan. Also see: Sales and Operations Planning.
Sawtooth
Diagram: A quantity-versus-time graphic
representation of the order point/order quantity inventory system showing
inventory being received, used up, and reordered.
1)
How quickly and efficiently a company can ramp up to meet demand.
2)
How well a solution to a problem will work when the size of the problem increases.
The economies of scale don't really kick in until your reach the critical mass,
then revenues start to increase exponentially.
Scanlon
Plan: A system of group incentives on a
companywide or plantwide basis that sets up one measure that reflects the
results of all efforts. The Scanlon plan originated in the 1930s by Joe Scanlon
and MIT. The universal standard is the ratio of labor costs to sales value
added by production. If there's an increase in production sales value with no
change in labor costs, productivity has increased while unit cost has
decreased.
Scenario Planning: A form of planning in which likely sets of relevant
circumstances are identified in advance, and used to assess the impact of alternative
actions.
SCOR: Supply Chain Operations Reference Model. This is the model
developed by the Supply-Chain Council (SCC), and is build around six major
processes: plan, source, make, deliver, return, and enable. The aim of the SCOR
is to provide a standardized method of measuring supply chain performance, and
to use a common set of metrics to benchmark against other organizations.
Scorecard: A performance measurement tool used to capture a summary of
the key performance indicators (KPIs)/metrics of a company. Metrics
dashboards/scorecards should be easy to read and usually have red, yellow,
green indicators to flag when the company is not meeting its metrics targets.
Ideally, a dashboard/scorecard should be cross functional in nature and include
both financial and non-financial measures. In addition, scorecards should be
reviewed regularly - at least on a monthly basis and weekly in key functions,
such as manufacturing and distribution where activities are critical to the
success of a company. The dashboard/scorecards philosophy can also be applied
to external supply chain partners like suppliers to ensure that their
objectives and practices align. Synonym: Dashboard
Seasonality: A repetitive pattern of demand from year to year (or other
repeating time interval), with some periods considerably higher than others.
Seasonality explains the fluctuation in demand for various recreational
products which are used during different seasons.
Secure Electronic Transaction (SET): In e-commerce, a system of guaranteeing the security of
financial transactions conducted over the Internet.
Self
Billing: A transportation industry strategy
which prescribes that a carrier will accept payment based on the tender
document provided by the shipper.
Self
Correcting: A computer term for an online
process that validates data and won't allow the data to enter the system unless
all errors are corrected.
Selling, General, and Administrative (SG&A)
Expenses: Includes marketing, communication,
customer service, sales, salaries and commissions, occupancy expenses,
unallocated overhead, etc. Excludes interest on debt, domestic or foreign
income taxes, depreciation and amortization, extraordinary items, equity gains
or losses, gain or loss from discontinued operations and extraordinary items.
Serial
Number: A unique number assigned for
identification to a single piece that will never be repeated for similar
pieces. Serial numbers are usually applied by the manufacturer but can be
applied at other points by the distributor or wholesaler. Serial numbers can be
used to support traceability and warranty programs.
Service
Level: A measure (usually expressed as a
percentage) of satisfying demand through inventory or by the current production
schedule in time to satisfy the customer's requested delivery dates and
quantities.
Service Parts Revenue:
The sum of the value of sales made to external customers and the transfer price
valuation of sales within the company of repair or replacement parts and
supplies, net of all discounts, coupons, allowances, and rebates.
Shared
Services: Consolidation of a company's
back-office processes to form a spinout (0r a separate "shared
services" unit to be run like a separate business), providing services to
the parent company and sometimes, to external customers. Shared services
typically lower overall cost due to the consolidation, and may improve support
as a result of focus.
Shareholder
Value: Combination of profitability
(revenue and costs) and invested capital (working capital and fixed capital).
Shelf
Life: The amount of time an item may be
held in inventory before it becomes unusable. Shelf life is a consideration for
food and drugs which deteriorate over time, and for high-tech products which
become obsolete quickly.
Shingo's Seven Wastes:
Shigeo Shingo, a pioneer in the Japanese just-in-time philosophy, identified
seven barriers to improving manufacturing. They are the waste of
overproduction, waste of waiting, waste of transportation, waste of stocks,
waste of motion, waste of making defects, and waste of the processing itself.
Shipper-Carriers: Shipper-carriers (also called private carriers) are
companies with goods to be shipped that own or manage their own vehicle fleets.
Many large retailers, particularly groceries and "big box" stores,
are shipper-carriers.
Shipping: The function that performs the tasks for the outgoing
shipment of parts, components, and products. It includes packaging, marking,
weighing, and loading for shipment.
Shipping
Lane: A predetermined, mapped route on
the ocean that commercial vessels tend to follow between ports. This helps
ships avoid hazardous areas. In general transportation, the logical route
between the point of shipment and the point of delivery used to analyze the
volume of shipment between two points.
Shipping
Manifest: A document that lists the pieces in
a shipment. A manifest usually covers an entire load regardless of whether the
load is to be delivered to a single destination or many destinations. Manifests
usually list the items, piece count, total weight, and the destination name and
address for each destination in the load.
Shop Floor Production Control
Systems: The systems that assign priority to
each shop order, maintaining work-in-process quantity information, providing
actual output data for capacity control purposes, and providing quantity by
location by shop order for work-in-process inventory and accounting purposes.
Shrinkage: Reductions of actual quantities of items in stock, in
process, or in transit. The loss may be caused by scrap, theft, deterioration,
evaporation, etc.
Six-Sigma
Quality: A term generally used to indicate
that a process is well controlled, I.e., tolerance limits are +-6 sigma (3.4
defects per million events) from the centerline in a control chart. The term is
usually associated with Motorola which named one of its key operations
initiatives Six-Sigma Quality.
Skills Matrix: A visible means of displaying people's skill levels in
various tasks. Used in a team environment to identify the skills required by
the team and which team members possess those skills.
Slotting: Warehouse slotting is defined as the placement of products
within a warehouse facility. Its objective is to increase picking efficiency
and reduce warehouse handling costs through optimizing product location and
balancing the workload.
Small Group Improvement Activity: An organizational technique for involving employees in
continuous improvement activities. Also see: Quality Circle.
Specific, Measurable, Achievable,
Realistic, Time Based (SMART): A shorthand description of a way of setting
goals and targets for individuals and teams.
Spam: A computer industry term referring to the act of sending
identical and irrelevant postings to many different newsgroups or mailing
lists. Usually this posting is something that has nothing to do with the
particular topic of a newsgroup or of no real interest to the person on the
mailing list.
Split
Delivery: A method by which a larger quantity
is ordered on a purchase order to secure a lower price, but delivery is divided
into smaller quantities and is spread out over several dates to control
inventory investment, save storage space, etc.
Spot
Demand: Demand with a short lead time
that's difficult to estimate. Usually supply for this demand is provided at a
premium price. An example of spot demand would be when there's a spiked demand
for building materials as a result of a hurricane.
Staging: Pulling material for an order from inventory before the
material is required. This action is often taken to identify shortages, but it
can lead to increased problems in availability and inventory accuracy. Also
see: Accumulation Bin
Stakeholders: People with a vested interest in a company, including
manager, employees, stockholders, customers, suppliers, and others.
Standard Components:
Components (parts) of a product for which there is an abundance of suppliers.
Not difficult to produce. An example would be a power cord for a computer.
Standard Cost Accounting System: A cost accounting system that uses cost units determined
before production for estimating the cost of an order or product. For
management control purposes, the standards are compared to actual costs, and
variances are computed.
Statement of Work (SOW): 1) A description of products to be supplied under a
contract. A good practice is for companies to have SOWs in place with their
trading partners - especially for all top suppliers. 2) In projection
management, the first project planning document that should be prepared. It
describes the purpose, history, deliverables, and measurable success indicators
for a project. It captures the support required from the customer and
identifies contingency plans for events that could throw the project off
course. Because the project must be sold to management, staff, and review
groups, the statement of work should be a persuasive document.
Statistical Process Control (SPC): A visual means of measuring and plotting process and
product variation. Results are used to adjust variables and maintain product
quality.
Stickering: Placing customer-specific stickers on boxes of product. An
example would be where Wal-Mart has a request for their own product codes to be
applied to retail boxes prior to shipment.
Stock-Keeping Unit (SKU):
A category of unit with a unique combination of form, fit, and function (i.e.,
unique components held in stock). To illustrate: If two items are
indistinguishable to the customer, or if any distinguishing characteristics
visible to the customer are not important to the customer so that the customer
believes the two items to be the same, these two items are part of the same
SKU.
As a further illustration: consider a computer company that allows customers to
configure a complete computer from a selection of standard components. For
example, they can choose from three keyboards, three monitors, and three CPUs.
Customers may also individually buy keyboards, monitors, and CPUs. If the stock
were held at the configuration component level, the company would have nine
SKUs. If the company stocks at the component level, the company would have 36
SKUs. (9 component SKUs + 3*3*3 configured product SKUs.) If, as part of a
promotional campaign, the company also specially packaged the products, the company
would have a total of 72 SKUs.
Straight
Truck: Straight trucks do not have a
separate tractor and trailer. The driving compartment, engine and trailer are
one unit.
Strategic
Alliance: Business relationship in which two
or more independent organizations cooperate and willingly modify their business
objectives and practices to help achieve long-term goals and objectives.
Sub-Optimization: Decisions or activities in part made at the expense of the
whole. An example of sub-optimization is where a manufacturing unit schedules
production to benefit its cost structure without regard to customer
requirements or the effect on other business units.
Subcontracting: Sending production work outside to another manufacturer.
This can involve specialized operations such as plating metals or complete
functional operations. Also see: Outsource.
Subhauler: A subhauler drives a tractor under contract for a company.
Usually a subhauler is an owner/operator or a small company.
Sunk
Cost: 1) The unrecovered balance of an
investment. It's a cost already paid that is not relevant to the decision
concerning the future that is being made. Capital already invested that for
some reason cannot be retrieved.2) A past cost that has no relevance with
respect to future receipts and disbursements of a facility undergoing an
economic study. This concept implies that since a past outlay is the same
regardless of the alternative selected, it should not influence the choice
between alternatives.
1) A provider of goods or services. Also
see: Vendor.
2) A seller with whom the buyer does
business, as opposed to vendor, which is a generic term referring to all
sellers in the marketplace.
Supplier Certification:
Certification procedures verifying that a supplier operates, maintains,
improves, and documents effective procedures that relate to the customer's
requirements. Such requirements can include cost, quality, delivery,
flexibility, maintenance, safety, and ISO quality and environmental standards.
Supplier-Owned Inventory:
A variant of Vendor-Managed Inventory and Consignment Inventory. In this case
the supplier not only manages the inventory, but also owns the stock close to
or at the customer location until the point of consumption or usage by the
customer.
Supply
Chain: (1) Starting with unprocessed raw
materials and ending with the final customer using the finished goods, the
supply chain links many companies together. (2) The material and informational
interchanges in the logistical process, stretching from acquisition of raw
materials to delivery of finished products to the end user. All vendors,
service providers, and customers are links in the supply chain.
Supply Chain Design:
The determination of how to structure a supply chain. Design decisions include
the selection of partners, the location and capacity of warehouse and
production facilities, the products, the modes of transportation, and
supporting information systems.
Supply Chain Execution (SCE): The ability to move the product out of the warehouse door.
This is a critical capacity and one that only brick-and-mortar firms bring to
the B2B table. Dot coms have the technology, but that's only part of the
equation. The need for SCE is what is driving the dot coms to offer equity
partnerships to the wholesale distributors.
Supply Chain Event Management (SCEM): SCEM is an application that supports control processes for
managing events within and between companies. It consists of integrated
software functionality that supports five business processes: monitor, notify,
simulate, control, and measure supply chain activities.
Supply Chain Integration (SCI): Likely to become a key competitive advantage of selected
e-marketplaces. Similar concept to the back-end integration, but with greater
emphasis on the moving of goods and services.
Supply Chain Inventory Visibility: Software applications that permit monitoring events across
a supply chain. These systems track and trace inventory globally on a line-item
level, and notify the user of significant deviations from the plans. Companies
are provided with realistic estimates of when the material will arrive.
Supply Chain Management (SCM): Supply chain management encompasses the planning and
management of all activities involved in sourcing and procurement, conversion,
and all logistics management activites. Importantly, it also includes
coordination and collaboration with channel partners, which can be suppliers,
intermediaries, third party service providers, and customers. In essence,
supply chain management integrates supply and demand management within and
across companies. Supply chain management is an integrating function with
primary responsibility for linking major business functions and business
processes within and across companies into a cohesive, high-performing business
model. It includes all of the logistics managment activities noted above, as
well as manufacturing operations, and it drives coordination of processes and
activities with and across marketing, sales, product design, finance, and
information technology. — as defined by the Council of Supply Chain Management Professionals (CSCMP)
Supply Chain Network Design Systems: The systems employed in optimizing the relationships among
the various elements of the supply chain manufacturing plants, distribution
centers, points of sale, as well as raw materials, relationships among product
families, and other factors to synchronize supply chains at a strategic level.
Supply Chain-Related Finance and Planning Cost Element: One of the elements comprising a company's total supply
chain management costs. These costs consist of the following:
1. Supply-Chain Finance Costs: Costs associated with paying invoices, auditing physical
counts, performing inventory accounting, and collecting accounts receivable.
Does NOT include customer invoicing/accounting costs (See Order Management
Costs).
2. Demand/Supply Planning Costs: Costs associated with forecasting developing finished goods,
intermediate, subassembly or end-item inventory plans, and coordinating
demand/supply.
Supply Chain-Related IT Costs: Information technology (IT) costs (in US dollars)
associated with major supply chain management processes as described below.
These costs should include:
* Development costs (costs incurred in process reengineering, planning,
software development, installation, implementation, and training associated
with new and/or upgraded architecture, infrastructure, and systems to support
the described supply chain management processes),
* Execution costs (operating costs to support supply chain process users,
including computer and network operations, EDI and telecommunications services,
and amortization/depreciation of hardware)
* Maintenance costs (costs incurred in problem resolution, troubleshooting,
repair, and routine maintenance associated with installed hardware and software
for described supply chain management processes. Includes costs associated with
database administration systems configuration control, release planning, and
management).
These costs are associated with the
following processes:
PLAN
1. Product Data Management - Product phase-in/phase-out and release; post-introduction
support and expansion; testing and evaluation; end-of-life inventory
management. Item master definition and control.
2. Forecasting and Demand/Supply
Manage and Finished Goods -
Forecasting; end-item inventory planning, DRP, production master scheduling for
all products, all channels.
SOURCE
1. Sourcing/Material Acquisition - Material requisitions, purchasing, supplier quality
engineering, inbound freight management, receiving, incoming inspection,
component engineering, tooling acquisition, accounts payable.
2. Component and Supplier Management
- Part number cross references,
supplier catalogs, approved vendor lists.
3. Inventory Management - Perpetual and physical inventory controls and tools.
MAKE
1. Manufacturing Planning - MRP, production scheduling, tracking, manufacturing engineering, manufacturing documentation management, inventory/obsolescence tracking.
1. Manufacturing Planning - MRP, production scheduling, tracking, manufacturing engineering, manufacturing documentation management, inventory/obsolescence tracking.
2. Inventory Management - Perpetual and physical inventory controls and tools.
3. Manufacturing Execution - MES detailed and finite interval scheduling, process
controls, and machine scheduling. DELIVER
1. Order Management - Order entry/maintenance, quotes, customer database, product/price database, accounts receivable, credits and collections, invoicing.
1. Order Management - Order entry/maintenance, quotes, customer database, product/price database, accounts receivable, credits and collections, invoicing.
2. Distribution and
Transportation Management - DRP, shipping, freight management, traffic
management.
3. Inventory Management - Perpetual and physical inventory controls and tools.
4. Warehouse Management - Finished goods, receiving and stocking, pick/pack.
5. Channel Management - Promotions, pricing and discounting, customer satisfaction
surveys.
6. Field Service/Support - Field service, customer and field support, technical
service, service/call management, returns, warranty tracking.
EXTERNAL ELECTRONIC INTERFACES
Plan/Source/Make/Deliver - Interfaces, gateways, and data repositories created and maintained to exchange supply chain-related information with the outside world. E-commerce initiatives. Includes development and implementation costs.
Plan/Source/Make/Deliver - Interfaces, gateways, and data repositories created and maintained to exchange supply chain-related information with the outside world. E-commerce initiatives. Includes development and implementation costs.
Note: Accurate assignment of IT-related cost is challenging. It
can be done using activity-based costing methods or using other approaches,
such as allocation based on user counts, transactions counts, or departmental
headcounts. The emphasis should be on capturing all costs. Costs for any
outsourced IT activities should be included.
Supply Chain Strategic Planning: The process of analyzing, evaluating, and defining supply
chain strategies, including network design, manufacturing and transportation
strategy, and inventory policy.
Supply
Planning: The process of identifying,
prioritizing, and aggregating, as a whole with constituent parts, all sources
of supply that are required and add value in the supply chain of a product or
service at the appropriate level, horizon, and interval.
Supply
Warehouse: A warehouse that stores raw
materials. Goods from different suppliers are picked, sorted, staged, or
sequenced at the warehouse to assemble plant orders.
Support
Costs: Costs of activities not directly
associated with producing or delivering products or services. Examples are the
costs of information systems, process engineering, and purchasing. Also see:
Indirect Cost.
Surrogate [item] Driver:
In ABC costing, a substitute for the ideal cost driver, but closely correlated
to the ideal driver, where [item] is Resource, Activity, or Cost Object. A
surrogate driver is used to significantly reduce the cost of measurement while
not significantly reducing accuracy. For example, the number of production runs
is not descriptive of the material-disbursing activity, but the number of
production runs may be used as an activity driver if material disbursements
correlate well with the number of production runs.
Sustaining Activity: An
activity that benefits an organizational unit as a whole, but not any specific
cost object.
SWOT
Analysis: An analysis of the strengths,
weaknesses, opportunities, and threats of and to an organization. SWOT analysis
is useful in developing strategy.
Synchronization: The concept that all supply chain functions are integrated
and interact in real time; when changes are made to one area, the effect is
automatically reflected throughout the supply chain.
24/7/365: Referring to operations that are conducted 24 hours a day,
7 days a week, 365 days per year, with no breaks for holidays, etc.
3D
Loading: 3D loading is a method of space
optimizing designed to help quickly and easily plan the best compact
arrangement of any 3D rectangular object set (boxes) within one or more larger
rectangular enclosures (containers). It's based on three-dimensional,
most-dense packing algorithms.
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