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Thursday, December 29, 2016

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 A condition of being out of date.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.


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.


On-Demand: Pertaining to work performed when demand is present. Typically used to describe products which are manufactured or assembled only when a customer order is placed.

One-Piece Flow: Moving parts through a process in batches of one.

One-Way Networks: The advantages generally lie with either the seller of buyer, but not with both. B2C web sites are one-way networks.

Online: A computer term which describes activities performed using computer systems.

On-Line receiving: A system in which computer terminals are available at each receiving bay and operators enter items into the system as they are unloaded.

Open Policy: See Marine Cargo Insurance

Operating Differential Subsidy (ODS): A payment to an American-flag carrier by the U.S. government to offset the difference in operating costs between U.S. and foreign vessels.

Operating Ratio: A measure of operating efficiency defined as Operating expenses divided by the Operating revenues x 100.

Operational Performance Measurements: (1) In traditional management, performance measurements related to machine worker, or department efficiency or utilization. These performance measurements are usually poorly correlated with organizational performance. (2) In theory of contraints, performance measurements that link causally to organizational performance measurements. Throughput, inventory, and operating expense are examples. Also see: Performance Measures.

Optimization: The process of making something as good or as effective as possible with given resources and constraints.

Order: A type of request for goods or services.

Order Cycle: The time and process involved from the placement of an order to the receipt of the order.

Order Cycle Time: The time that elapses from placement of order until receipt of order. This includes time for order transmittal, processing, preparation, and shipping.

Order Entry and Scheduling: The process of receiving orders from the customer and entering them into a company's order processing system. Orders can be received through phone, fax, or electronic media. Activities may include "technically" examining orders to ensure an orderable configuration and provide accurate price, checking the customer's credit and accepting payment (optionally), identifying and reserving inventory (both on hand and scheduled), and committing and scheduling a delivery date.

Order Fill: A measure of the number of orders processed without stockouts, or the need to back order, expressed as a percentage of all orders processed in the distribution center or warehouse.

Order Management: The planning, directing, monitoring, and controlling of the processes related to customer orders, manufacturing orders, and purchase orders. Regarding customer orders, order management includes order promising, order entry, order pick, pack and ship, billing, and reconciliation of the customer account. Regarding manufacturing orders, order management includes order release, routing, manufacture, monitoring, and receipt into stores or finished goods inventories. Regarding purchase orders, order management includes order placement, monitoring, receiving, acceptance, and payment of supplier.

Order Management Costs: One of the elements comprising a company's total supply chain management costs. These costs consist of the following:
1. New Product Release Phase In and Maintenance: This includes costs associated with releasing new products to the field, maintaining released products, assigning product ID, defining configurations and packaging, publishing availability schedules, release letters and updates, and maintaining product databases.
2. Create Customer Order: This includes costs associated with creating and pricing configurations to order and preparing customer order documents.
3. Order Entry and Maintenance: This includes costs associated with maintaining the customer database, credit check, accepting new orders, and adding them to the order system, as well as later order modifications.
4.Contract/Program and Channel Management: This includes costs related to contract negotiation, monitoring progress, and reporting against the customer's contract, including administration of performance or warranty-related issues.
5. Installation Planning: This includes costs associated with installation engineering, scheduling and modification, handling cancellations, and planning the installation.
6. Order Fulfillment: This includes costs associated with order processing, inventory allocation, ordering from internal or external suppliers, shipment scheduling, order status reporting, and shipment initiation.
7. Distribution: This includes costs associated with warehouse space and management, finished goods receiving and stocking, processing shipments, picking and consolidating, selecting carriers, and staging products/systems.
8. Transportation, Outbound Freight, and Duties: This includes costs associated with all company-paid freight duties from point of manufacturer to end customer or channel.
9. Installation: This includes costs associated with verification of site preparation, installation, certification, and authorization of billing.
10. Customer Invoicing/Accounting: This includes costs associated with invoicing, processing customer payments, and verification of customer receipt.

Order Picking: Assembling a customer's order from items in storage.

Order Processing: Activities associated with filling customer orders.

Ordering Cost: The cost of placing an inventory order with a supplier.

Origin: The place where a shipment begins its movement.

Original Equipment Manufacturer (OEM): A manufacturer that buys and incorporates another supplier's products into its own products. Also, products supplied to the original equipment manufacturer or sold as part of an assembly. For example, an engine may be sold to an OEM for use as that company's power source for its generator units.


Outbound Logistics: The process related to the movement and storage of products from the end of the production line to the end user.

Out-of-Pocket Cost: The cost directly assignable to a particular unit of traffic and which a company would not have incurred if it had not performed the movement.

Outlier: A data point that differs significantly from other data for a similar phenomenon. For example, if the average sales for a product were ten units per month, and one month the product had sales of 500 units, this sales point might be considered an outlier.

Outpartnering: The process of involving the supplier in a close partnership with the firm and its operations management system. Outpartnering is characterized by close working relationships between buyers and suppliers, high levels of trust, mutual respect, and emphasis on joint problem solving and cooperation. With outpartnering, the supplier is not viewed as an alternative source of goods and services (as observed under outsourcing), but rather as a source of knowledge, expertise, and complementary core competencies. Outpartnering is typically found during the early stages of product life cycle when dealing with products that are viewed as critical to the strategic survival of the firm. Also see: Customer-Supplier Partnership.

Outsource: To utilize a third party provider to perform services previously performed in house. Examples include manufacturing of products and call center/customer support.

Outsourced Cost-of-Goods Sold: Operations performed on raw material outside of the responding entity's organization that would typically be considered internal to the entity's manufacturing cycle. Outsourced cost-of-goods sold captures the value of all outsourced activities that roll up as cost-of-goods sold. Some examples of commonly outsourced areas are assembly, test, metal finishing or painting, and specialized assembly process.

Over, Short, and damaged (OS&D): This is typically a report issued at the warehouse when goods are damaged. Used to file a claim with a carrier.

Over-the-Road: A motor carrier operation that reflects long-distance moves; the opposite of local operations.

Owner/Operator: A truck driver who owns and operates his/her tractor/trailer.

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