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.
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.
Tare
Weight: The weight of a substance obtained
by deducting the weight of the empty container from the gross weight of the
full container.
Target
Costing: A target cost is calculated by
subtracting the desired profit margin from an estimated or market-based price
to arrive at a desired production, engineering, or marketing cost. This may not
be the initial production cost, but one expected to be achieved during the
mature production stage. Target costing is a method used in the analysis of
product design that involves estimated a target cost, then designing the
product/service to meet that cost.
Tariff: A tax assessed by a government on goods entering or leaving
a country. The term is also used in transportation in reference to the fees and
rules applied by a carrier for its services.
Tender: The document which describes a business transaction to be
performed.
Theory of Constraints (TOC): A production management theory which dictates that volume
is controlled by a series of constraints related to work center capacity,
component availability, finance, etc. Total throughput cannot exceed the
capacity of the smallest constraint, and any inventory buffers or excess
capacity at non-related work center is waste.
Third Party Logistics:
Outsourcing all or much of a company's logistics operations to a specialized
company.
Third Party Logistics Provider (3PL): A firm which provides multiple logistics services for use
by customers. Preferably, these services are integrated or bundled together, by
the provider. These firms facilitate the movement of parts and materials from
suppliers to manufacturers, and finished products from manufacturers, and
finished products from manufacturers to distributors and retailers. Among the
services they provide are transportation, warehousing, cross docking, inventory
management, packaging, and freight forwarding.
Throughput: A measure of warehousing output volume (weight, number of
units). Also, the total amount of units received, plus the total amount of
units shipped divided by two.
TMS: See Transportation Management System
TOC: See Theory of Constraints
Total Annual Sales: Total Annual Sales are Total Product Revenue plus
post-delivery revenues (e.g., maintenance and repair or equipment, system
integration) royalties, sales of other services, spare parts revenue, and
rental/lease revenues.
Total Cost Analysis: A
decision-making approach that considers minimization of total costs and
recognizes the inter-relationship among system variables, such as
transportation, warehousing, inventory, and customer service.
Total
Cost Curve: 1) In cost-volume-profit
(break-even) analysis, the total cost curve is composed of total fixed and
variable costs per unit multiplied by the number of units provided. Break-even
quantity occurs where the total cost curve and total sales revenue curve
intersect.2) In inventory theory, the total cost curve for an inventory item is
the sum of the costs of acquiring and carrying the item.
Total Cost of Ownership (TCO): Total cost of a computer asset throughout its life cycle,
from acquisition to disposal. TCO is the combined hard and soft costs of owning
networked information assets. "Hard" costs include items such as the
purchase price of the asset, implementation fees, upgrades, maintenance,
contracts, support contracts, disposal costs, and license fees that may or may
not be up-front or charged annually. These costs are considered "hard
costs" because they are tangible and easily accounted for.
Total Cumulative Manufacture Cycle Time: Average time between commencement of upstream processing
and completion of final packaging for shipment operations as well as release of
approval for shipment. Does not include WIP storage time.
Calculation: [Average # of units in
WIP]/[Average daily output in units] - WIP days of supply
Total Make Cycle Time: The average processing time between commencement of
upstream processing and completion of all manufacturing process steps up to,
but not including, packaging and labeling operations (i.e., from start of
manufacturing to final formulated product ready for primary packaging.) Does
not include hold or test and release times. Calculation: [Average # of units
in active manufacturing]/[Average daily output in units.]
Total Product Revenue: The total value of sales made to external customers plus
the transfer price valuation of intra-company shipments, net of all discounts,
coupons, allowances, and rebates. Includes only the intra-company revenue for
product transferring out of an entity, installation services if these services
are sold bundled with end products, and recognized leases to customers
initiated during the same period as revenue shipments, with revenue credited at
the average selling price.
Note: Total Product Revenue excludes post-delivery revenues
(maintenance and repair of equipment, system integrations), royalties, sales of
other services, spare parts revenue, and rental/lease revenues.
Total Productive Maintenance (TPM): Team-based maintenance process designed to maximize machine
availability and performance and product quality.
Total Supply Chain Management Cost (five elements): Total cost to manage order processing, acquire materials,
manage inventory, and manage supply chain finance, planning, and IT costs as
represented as a percent of revenue. Accurate assignment of IT-related cost is
challenging. It can be done using activity-based costing methods, or more
traditional-based approaches. Allocation based on user counts, transaction
counts, or departmental headcounts are reasonable approaches. The emphasis
should be on capturing all costs, whether incurred in the entity completing the
survey or in a supporting organization on behalf of the entity. Reasonable
estimates founded in data were accepted as means to assess overall performance.
All estimates reflected fully-burdened actuals inclusive of salary, benefits,
space and facilities, and general and administrative allocations.
Calculation: [Order Management Costs + Material Acquisition Costs +
Inventory Carrying Costs + Supply-Chain Related Finance and Planning Costs +
Total Supply Chain-Related IT Costs]/[Total Product Revenue]
(Please see individual component
categories for component detail and calculations.)
Total Supply Chain Response Time: The time it takes to rebalance the entire supply chain
after determining a change in market demand. Also, a measure of a supply
chain's ability to change rapidly in response to marketplace changes.
Calculation: [Forecast Cycle Time] + [Re-Plan Cycle Time] +
[Intra-Manufacturing Re-Plan Cycle Time] + [Cumulative Source/Make Cycle Time]
+ [Order Fulfillment Lead Time]
Total Test Release Cycle Time: The average total test and release time for all tests,
documentation reviews, and batch approval processes performed from start of
manufacturing to release of final packaged product for shipment.
Calculation: [Average number of units in test and release]/[Average
daily output in units]
Touch
Labor: The labor that adds value to the
product - assemblers, welders, packagers, etc. This does not include indirect
resources like material handlers who move and stage product, and mechanical and
electrical technicians who maintain equipment.
Tracing: The practice of relating resources, activities, and cost
objects using the drivers underlying their cost causal relationships. The
purpose of tracing is to observe and understand how costs are arising in the
normal course of business operations. Synonym: Assignment.
Traceability: 1) The attribute allowing the ongoing location of a
shipment to be determined. 2) The registering and tracking of parts, processes,
and materials used in production, by lot or serial number.
Trading
Partner: Companies that do business with
each other via EDI (e.g., send and receive business documents such as purchase
orders).
Trading Partner Agreement:
The written contract that spells out agreed upon terms between EDI trading
partners.
Traffic: A department or function charged with the responsibility of
arranging the most economic classification and method of shipment for both
incoming and outgoing materials and products.
Trailer on a Flat Car (TOFC): A specialized form of containerization in which motor and
rail transport coordinate. Synonym: Piggyback.
Transaction: A single completed transmission, e.g., transmission of an
invoice over an EDI network. Analogous to usage of the term in data processing
in which a transaction can be an inquiry or a range of updates and trading
transactions. The definition is important for EDI service operators who must
interpret invoices and other documents.
Transaction
Set: Commonly used business transactions
(e.g., purchase order, invoice, etc.) organized in a formal, structured manner
consisting of a transaction set header control segment, one or more data
segments, and a transaction set trailer control data segment.
Transactional Acknowledgement: Specific transaction sets, such as the Purchase Order
Acknowledgement (855), that both acknowledges receipt of an order and provides special
status information, such as reschedules, price changes, back order situation,
etc.
Transparency: The ability to gain access to information without regard to
the system's landscape or architecture. An example would be where an online
customer could access a vendor's web site to place an order and receive
availability information supplied by a third party outsource manufacturer or
shipment information from a third party logistics provider. Also see:
Visibility.
Transportation Management System: A computer system designed to provide optimized
transportation management in various modes along with associated activities,
including managing shipping units, labor planning and building, shipment
scheduling through inbound, outbound, intra-company shipments, documentation
management (especially when international shipping is involved), and third
party logistics management.
Transportation Planning:
The process of defining an integrated supply chain transportation plan and
maintaining the information which characterizes total supply chain
transportation requirements, and the management of transporters, both inter-
and intra- company.
Transportation Planning Systems: The systems used in optimizing assignments from plants to
distribution centers, and from distribution centers to stores. The systems
combine moves to ensure the most economical means are employed.
Trend: General upward or downward movement of a variable over time
such as demand for a product. Trends are used in forecasting to help anticipate
changes in consumption over time.
Trend Forecasting Models:
Methods for forecasting sales data when a definite upward or downward pattern
exists. Models include double exponential smoothing, regression, and triple
smoothing.
Truck Stop Electrification (TSE): Provides power outlets at truck parking spaces in which
truck drivers can simply plug in, and turn off their engines, rather than idle
their truck engine.
Truckload Carriers (TL):
Trucking companies which move full truckloads of freight directly from the
point of origin to destination.
Truckload
Lot: A truck shipment that qualifies for
a lower freight rate because it meets a minimum weight and/or volume.
1) Typically refers to inventory
turnover
2) In the United Kingdom and certain
other countries, turnover refers to annual sales volume. Also see: Inventory Turns.
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