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A manufacturing procedure which provides for a rapid and efficient way of converting a manufacturing process from running the current product to running the next product.
Leasing both the truck and driver from one source.
When an organization deliberately chooses to use one supplier to provide a product or service, even though there are other suppliers available.
Inventory models used to define economical or profit maximizing lot-size quantities when an item is ordered or produced only once, e.g., newspapers, calendars, tax guides, greeting cards, or periodicals, while facing uncertain demands.
A term used generally 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 operational initiatives Six-Sigma Quality.
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 have those skills.
The use or two drivers to operate a truck equipped with a sleeper berth; while one driver sleeps in the berth to accumulate the mandatory off-duty time, the other driver operates the vehicle.
A term used to describe a motor carrier relay terminal operation where one driver is substituted for another who has accumulated the maximum driving time hours.
Similar to a pallet, the slip sheet, which is made of cardboard or plastic, is used to facilitate movement of unitized loads.
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.
Dry commodities that are made into a liquid form by the addition of water or other fluids to permit movement by pipeline.
An organizational technique for involving employees in continuous improvement activities.
Mode of transportation where the unit being transported meets all of the following descriptions
A label that has an RFID tag integrated into it. SMED
Private initiative of the Strategic Council on Security Technology, an assembly of executives from port operators, major logistics technology providers, transportation consultancies, and former generals and public officials. Aims to enhance the safety, security and efficiency of cargo containers and their contents moving through the global supply chain into U.S. ports.
Refers to systems that allow members of a specific site to learn about other members' skills, talents, knowledge, or preferences. Commercial examples include Facebook and LinkedIn. Some companies use these systems internally to help identify experts.
The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of that of the local community and society at large. It’s responsible production, socially responsible labor relations, community involvement, environmental cognizance, and sustainability.
A professional association engaged in the advancement of logistics technology and management.
When there is only one supplier for a product or service, and no alternate suppliers are available.
Separating items (parcels, boxes, cartons, parts, etc.) according to their intended destination within a plant or for transit.
The process of identifying, evaluating, and establishing supply of goods or services. This includes selecting suppliers, negotiating contracts, and establishing payment terms.
Choices made by a company regarding where and how to obtain necessary inputs for production. It could involve deciding between different suppliers or between producing a component in-house or outsourcing it.
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.
A geographical region that has economic laws that are more liberal than a country's typical economic laws. The category 'SEZ' covers a broad range of more specific zone types, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free Ports, Urban Enterprise Zones and others. Usually the goal of an SEZ structure is to increase foreign investment.
A common carrier trucking company that has authority to haul a special commodity; there are 16 special commodities, such as household goods, petroleum products, and hazardous materials.
A warehouse that is used to store products that require unique types of facilities, such as grain (elevator), liquid (tank), and tobacco (barn).
A shorthand description of a way of setting goals and targets for individuals and teams.
A "first" or "front" page that you often see on some websites, usually containing a "click-through" logo or message, or a fancy Flash presentation, announcing that you have arrived. The main content and navigation on the site lie "behind" this page (a.k.a. the homepage or "welcome page").
A process used to fill orders for quantities less than a full case thereby requiring ordered items to be picked from a case or some similar container.
A method by which a larger quantity is ordered on a single purchase order to secure a lower price, but delivery is divided into smaller quantities and spread out over several dates to control inventory investment, save storage space, etc.
To move a trailer or boxcar into place for loading or unloading.
Demand, having a short lead time that is 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.
A railroad track that connects a company's plant or warehouse with the railroad's track; the cost of the spur track and its maintenance is borne by the user.
Products for which demand does not fluctuate widely at specific points during the year.
An intermodal flat car designed to place one container on top of another for better utilization and economics. Also referred to as a well car because the cars are lowered in the center to allow clearance when moving under low-lying structures.
The support activities of planning and analysis provided to assist line managers with daily operations. Logistics staff functions include location analysis, system design, cost analysis, and planning.
1) Pulling material for an order from inventory before the material is required. Staging is a means to ensure that all required materials are and will be available for use at time of assembly. The downside to staging is that it creates additional WIP inventory and reduces flexibility. 2) Placing trailers.
People with a vested interest in a company, including managers, employees, stockholders,
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.
A cost accounting system that uses cost units determined before production for estimating the cost of an order or product inventory. For management control purposes, the standards are compared to actual costs, and variances are computed.
Measures of dispersion for a probability distribution. The variance is the average squared difference of a distribution from the distribution's mean (average) value. The standard deviation is defined mathematically as the square root of the variance, and is thereby expressed in the same units as the random variable that's described by the probability distribution. A distribution that varies widely about its mean value will have a larger standard deviation/variance than a distribution with less variation about its mean value.
Classification codes that are used to categorize companies into industry groupings.
Average lead-time from the time manufacturing begins to the time end products are ready for shipment, including the following sub-elements
The time period between the placement of orders.
An alternative Section C document that expresses both technical and management requirements in the form of performance objectives. In these cases, the offeros are expected to prepare the Statement of Work in response to the SOO.
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.
A method for achieving quality control in processes. The technique hinges on the observation that any process is subject to seemingly random variations, which are said to have common causes, and non-random variations, which are said to have special causes. SPC relies on measuring variation in output and setting control limits based on observations of variations arising solely from common causes. A process that is "in control" is expected to generate output that is within the control limits.
Collective rate-making bodies for liner water carriers.
Labor management companies that provide equipment and hire workers to transfer containers and
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.
Models where uncertainty is explicitly considered in the analysis.
A distinct type of item for sale, such as a product or service, and all attributes associated with the item that distinguish it from other items.
A term used to refer to a situation where no stock was available to fill a request from a customer or production order during a pick operation. Stock outs can be costly, including the profit lost for not having the item available for sale, lost goodwill, substitutions.
Moving shipments through regular channels at an accelerated rate; to take extraordinary action
A practice whereby the buyer negotiates a price for the purchases of annual requirements of MRO items and the seller holds inventory until the buyer places an order for individual items.
The opportunity cost associated with not having sufficient supply to meet demand.
The function associated with the storage and issuing of items that are frequently used.
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.
Looking one to five years into the future and designing a logistical system (or systems) to
The process of determining long-term supply requirements, finding sources to fulfill those needs, selecting suppliers to provide the services, negotiating the purchase agreements and managing the suppliers' performance. Focuses on developing the most effective relationships with the right suppliers, to ensure that the right price is paid and that lifetime product costs are minimized. It also assesses whether services or processes would provide better value if they were outsourced to specialist organizations.
The variables that effect change in the environment and logistics strategy. The major strategic variables include economics, population, energy, and government.
A specific action to achieve an objective.
A form of pallet packaging similar to stretch wrap. With the stretch hood method a machine feeds a length of plastic sleeve over the pallet while at the same time stretching it wide enough to fit. After the sleeve is placed it is cut and sealed at the top creating a water tight enclosure, the stretchers release the film allowing it to shrink and hold the pallet contents.
Clear plastic film that is wrapped around a unit load or partial load of product to secure it. The wrap is elastic.
Decisions or activities in a 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.
Sending production work outside to another manufacturer. This can involve specialized operations such as plating metals, or complete functional operations.
The ability of a buyer to substitute the products of different sellers.
1) The unrecovered balance of an investment. It is 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.
A for-hire air carrier subject to economic regulations; the carrier has no time schedule or designated route; service is provided under a charter or contract per plane per trip.
1) A provider of goods or services. Also see
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.
A Key indicator of On-Time Product Deliveries, in terms of whether the lead times are being met and product is reaching the market at the right time. Time required for a supplier to complete a single cycle, beginning with receipt of an order and ending with the fulfillment of the order
A metric which measures the performance of a supplier/vendor on his delivery commitment and to what extent he is matching with the lead times expressed in % terms.
The costs associated with the determination, development/certification, and monitoring of suppliers' capabilities to fully satisfy the applicable quality and regulatory requirements.
A metric which Helps measure the overall performance of a supplier. It Measures the ability of the business suppliers to provide their goods at the agreed times, quantity,and quality.
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.
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.
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.
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
The ability to move the product out 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.
The use of financial instruments and techniques to optimize working capital and cash flow in the supply chain, benefiting both buyers and suppliers.
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.
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 plans. Companies are provided with realistic estimates of when material will arrive.
Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. 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 and high-performing business model. It includes all of the logistics management 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.
The interconnected system of suppliers, manufacturers, distributors, retailers, and customers involved in the production, distribution, and sale of a product or service.
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.
The process of analyzing and redesigning the supply chain network to optimize the location of facilities, transportation routes, and inventory levels to minimize costs and maximize efficiency.
This is the model developed by the Supply-Chain Council SCC and is built around six major processes
A term describing the level of hardening of the supply chain against disasters.
The process of identifying, assessing, and mitigating potential risks and disruptions in the supply chain, safeguarding the continuity of operations and customer service.
The process of process of analyzing, evaluating, defining supply chain strategies, including network design, manufacturing and transportation strategy and inventory policy.
The ability to track and monitor inventory, shipments, and processes in real-time across the entire supply chain, providing insights into performance and identifying areas for improvement.
Of equal importance to Variability, Velocity and Volume in the elements of the Supply Chain. The term evaluates the supply chain based on the level of acceptance of the five steps of disaster logistics being planning, detection, mitigation, response and recovery.
One of the elements comprising a company's total supply-chain management costs. These costs consist of the following
Information Technology (IT) costs associated with major supply-chain management processes as described below. These costs should include
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.
A warehouse that stores raw materials. Goods from different suppliers are picked, sorted, staged, or sequenced at the warehouse to assemble plant orders.
The expenses linked to the settlement of bills, the examination of physical inventory, the execution of inventory accounting, and the retrieval of accounts receivable. The exclusion of client invoicing and accounting charges is evident (refer to Order Management charges).
Indirect costs refer to the expenses incurred in activities that are not directly linked to the production or delivery of products or services. Illustrative instances are the expenditures associated with information systems, process engineering, and procurement.
