APICS Terms 2/2

southern common market (mercosur)

-A market/ customs alliance between Argentina, Brazil, Paraguay, and Uruguay created by the Treaty of Asuncion (1991) - space bufferPhysical space immediately after the

pallet

-A platform designed to be loaded with packages and moved by a forklift

returns inventory costs

-AII of the costs associated with handling returned inventory

public private partnering

-Cooperation between a government entity and one or more private enterprises to perform work or utilize facilities

process integration

-Coordinating operations and consolidating data to simplify processes and increase efficiency

product cost

-Cost allocated by some method to the products being produced - Initially recorded in asset (inventory) accounts, product costs become an expense (cost of sales) when the product is sold

outsourced cost of goods sold

-Costs of goods sold that are not created within the producing company's manufacturing process - Instead, they are outsourced to another company and include the costs of purchasing the service from another company

setup costs

-Costs such as scrap costs, calibration costs, downtime costs, and lost sales associated with preparing the resource for the next product - Syn: changeover costs, turnaround costs

semivariable costs

-Costs that change in increments - They remain fixed over a given range, and outside that range, change to a new level

out of pocket costs

-Costs that involve direct payments such as labor, freight, or insurance, as opposed to depreciation, which does not

total fixed costs

-Costs that remain constant in total regardless of changes in activity

total variable costs

-Costs that vary in total in proportion to changes in activity

offal material

-The byproduct or waste of production processes (e -g -, chips, shavings, turnings)

profit ratio

-Profit divided by sales

supply chain integration

-When supply chain partners interact at all levels to maximize mutual benefit

near critical activity

-ln project management, a project activity with a low slack or float value

little's law

-When a system has fixed capacity and is relatively stable, the lead time and workinprocess (WIP) inventory level are proportional and an increase or decrease in either WIP or lead time will produce a proportional change in the other - The formula forthe law is WIP equals throughput rate multiplied by lead time, or, more generally, total entities equals entities divided by unit time multiplied by total time, live loadSyn: available work

lease

-A rental agreement lasting an extended period

liquid waste generated

-One of the five green SCOR metrics - This includes waste that is either disposed of or released to open water or sewer systems

liquidity

-The ability of a firm to pay debts as they come due

line manager

-A manager involved in managing a department that is directly involved in making a product

lean metric

-A metric that permits a balanced evaluation and responsequality without sacrificing quantity objectives - The types of metrics are financial, behavioral, and coreprocess performance

linear decision rules

-A modeling technique using simultaneous equations (e -g -, the establishment of aggregate workforce levels) based upon minimizing the total cost of hiring, firing, holding inventory, backorders, payroll, overtime, and undertime

mode

-The most common or frequent value in a group of values

shareholder wealth

-The present value of all anticipated payments to the shareholders of a firm

sourcing

-The process of identifying a company that provides a needed good or service

link

-The transportation method used in a logistics system to connect the nodes of the system

long ton

-Two thousand two hundred and forty (2,240) pounds

malcolm baldrige national quality award (mb qa)

-An award established by Congress in 1987 to raise awareness of quality management and to recognize US companies that have implemented successful quality management systems - Up to four awards may be given annually in each of three categories: manufacturing company, service company, and small business - The award is named after the late Secretary of Commerce, Malcolm Baldrige, a proponent of quality management - The US Commerce Department's National Institute of Standards and Technology manages the award, and the American Society for Quality (ASQ) administers it - Syn: Baldrige Award

process selection

-An economic analysis used to decide which process should be used when operations can be performed by more than one process

parts requisition

-An authorization that identifies the item and quantity required to be withdrawn from an inventory - Syn: requisition - See: purchase requisition

purchase requisition

-An authorization to the purchasing department to purchase specified materials in specified quantities within a specified time - See: parts requisition

weighted moving average

-An averaging technique in which the data to be averaged is not uniformly weighted but is given values according to its importance - See: moving average, simple moving average

virtual trading exchange

-An online trading exchange that enables both information integration and collaboration between multiple trading partners

maximum order quantity

-An order quantity modifier, applied after the lot size has been calculated, that limits the order quantity to a preestablished maximum

stock order

-An order to replenish stock, as opposed to a production orderto make a particular productfor a specific customer

value driven enterprise

-An organization that is designed and managed to add utility from the viewpoint of the customer in the transformation of raw materials into a finished good or service

process focused organization

-An organization that is oriented toward executing linked activities that constitute a given endtoend business process with a given set of resources - Responsibilities ofthe members ofthe organization are oriented toward the performance ofthe process that creates the product or service and not toward a product or functional silo - See: process focused, product focused

vertically integrated firm

-An organization with functions that were previously performed by suppliers but are now done internally - See: horizontally integrated firm

material review board (mrb)

-An organization within a company, often a standing committee, that determines the resolution or disposition of items that have questionable quality or other attributes

supply chain continuity

-An organization's strategic and tactical capability to plan for and respond to conditions, situations, and events as necessary in order to continue supply chain operations at an acceptable predefined level

sustainability

-An organizational focus on activities that provide present benefit without compromising the needs of future generations

process organization structure

-An organizational structure in which people are removed from their functional departments and placed into a group that works as a single unit to perform the entire linked process, as opposed to a functional organization in which the activities that make up the process are performed by people in multiple functionally oriented departments

sequential sampling plan

-Controlling quality by repeatedly sampling units and each time making a decision to accept or reject a batch or to continue sampling

subcontractor and supplier networks

-Creating longterm contracts between a manufacturer and several suppliers of parts and components

procurement credit card

-Credit cards with a predetermined credit limit issued to buyers - Syn: corporate purchasing cards

prime operations

-Critical or most significant operations whose production rates must be closely planned

pre transaction elements

-Customer service elements that pertain to the period before a product or service is sold, including flexibility, customer policies, and mission statement

production validation

-Demonstrating that a production process will consistently lead to the expected results

pro forma financial statements

-Financial statements that are based on an assumed scenario rather than an actual experience

production process

-The activities involved in converting inputs into finished goods - See: manufacturing process, transformation process

single minute exchange of die (smed)

-The concept of setup times of less than 10 minutes, developed by Shigeo Shingo in 1970 at Toyota - See: singledigit setup

marketing mix

-The concept that marketing strategy determines product, price, promotion, and channel targets in selected markets

manufacturing capital asset value

-The depreciated value of manufacturing fixed assets, manufacturing cycleSyn: manufacturing lead time

processdesign

-The design ofthe manufacturing method

supply chain management

-The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally

marketing

-The design, pricing, promotion, and distribution of goods to create transactions with businesses and consumers

outbound stockpoint

-The designated locations near the point of use on a plant floor to which material produced is taken until it is pulled to the next operation

primary location

-The designation of a certain storage location as the standard, preferred location for an item

operation reporting

-The recording and reporting of every manufacturing (shop order) operation occurrence on an operationtooperation basis

parallel schedule

-The use of two or more machines or job centers to perform identical operations on a lot of material - Duplicate tooling and setup are required

warehouse automation

-The utilization of mechanical or electronic devices to complete tasks related to storing, retrieving, and moving inventory as a substitute for labor

terminal value

-The value of an operation or entity at the end of the period considered

service parts revenue

-The value of sales of replacement parts to external and internal customers, net of discounts and coupons

supply chain risk

-The variety of possible events and their outcomes that could have a negative effect on the flow of goods, services, funds, or information re

public warehouse

-The warehouse space that is rented or leased by an independent business providing a variety of services for a fee or on a contract basis - These services can include product inspection, product rating, and repackaging - These facilities are typically located near primary roads, railways, or inland waterways to facilitate rapid receiving and shipping of products - Syn: duty paid warehouse

net weight

-The weight of an article exclusive of the weights of all packing materials and containers

tare weight

-The weight of an empty container, obtained by deductingthe net weight of the contents of the container from the gross weight of the full container

scorecard

-This is a performance measurement tool used by a company that summarizes its key performance indicators - Another use of scorecards is to measure the supply chain members and ensure that their performance is meeting company standards

specific identification

-This method keeps track of the units ofthe beginning inventory and the units purchasedthat is, specific identification ofthe purchase cost of each item - This may be done through a coding method or serial number identification

order qualifiers

-Those competitive characteristics that a firm must exhibit to be a viable competitor in the marketplace - For example, a firm may seek to compete on characteristics other than price, but in order to qualify to compete, its costs and the related price must be within a certain range to be considered by its customers - Syn: qualifiers - See: order losers, orderwinners

project phase

-in project management, a set of related project activities that usually go together to define a project deliverable

secure electronic transaction (set)

-ln ecommerce, a system for guaranteeing the security of financial transactions conducted over the internet

secure server

-ln ecommerce, a web serverthat protects users' messages from interception while being transmitted over the internet

profitability index

-ln financial management, the net present value of a projected stream of income from a project (potential investment) divided by the investment in the project - It is used to select among competing potential investments

signed message

-ln information systems, a message forwhich the sender can be authenticated

start date

-ln project management, the time an activity begins may be defined as an actual start date or a planned start date

planned value

-ln project management, the total value (including overhead) of approved estimates for planned activities

scope

-ln project management, the totality of products to be created by a project

project scope

-ln project management, the work required to create a product with given features and options

repair bill of material

-ln remanufacturing, the bill of material defining the actual work required to return a product to service - Constructed based on inspection and determination of actual requirements - See: disassembly bill of material

product/servicehierarchy

-ln sales and operations planning, a general approach to dividing products or services into families, brands, and subfamilies for various planning levels - This ensures that a correct topdown or bottomup approach is taken to grouping (or aggregating) demand at each subsequent level - Forecasts are more accurate the higher up the product hierarchy they are developed consequently, forecasts should usually be driven down from the top

life cycle analysis

-A quantitative forecasting technique based on applying past patterns of demand data covering introduction, growth, maturity, saturation, and decline of similar products to a new product family

linear regression

-A statistical data technique that expresses a variable as a linear function of an independent variable - Linear regression can be used to develop forecasting models

lot number

-A unique identification assigned to a homogeneous quantity of material - Syn: batch number, mix number

liabilities

-An accounting/financial term (balance sheet classification of accounts) representing debts or obligations owed by a company to creditors - Liabilities may have a shortterm time horizon, such as accounts payable, or a longerterm obligation, such as mortgage payable or bonds payable - See: assets, balance sheet, debt, owner's equity

logistics data interchange (ldi)

-The electronic transmission of logistics information via computer systems

loading port

-The port where cargo is loaded onto an exportingvessel

linehaul

-The portion of a transportation journey that moves between two transportation terminals - It is distinguished from and excludes the pickup and delivery portions of a journey used to acquire or distribute LTL freight - For motor carrier transportation, the shipment is loaded in a semipermanent trailer configuration that maximizes the amount of freight that each driver can legally haul over that portion of the journey - This may involve hauling multiple trailers

multifactor productivity

-Sometimes also referred to as multiplefactor productivity a measure of productivity of two or more inputs such as labor, capital costs, energy, and materials - See: singlefactor productivity

requirementsdefinitions

-Specifying the inputs, files, processing, and outputs for a new system, but without expressing computer alternatives and technical details

parameter design

-Specifying the product characteristics and production process that will create the expected product performance

traffic department

-The area of an organization that plans and executes shipping requirements

proportional rate

-A lower rate applied to specific parts of a shipment instead of charging the entire rate for only one part of the shipment

machining center

-A machine capable of performing a variety of metal, wood, or plastic removal operations on a part, usually operated by numerical control

micro landbridge traffic

-A multimodal transportation solution that moves goods over water and then land, with the final destination inland - See: minilandbridge traffic

level demand strategy

-A strategy of keeping capacity level and not variable with demand, levelingSyn: resource leveling, level loadingSyn: load leveling

product differentiation

-A strategy of making a product distinct from the competition on a nonprice basis such as availability, durability, quality, or reliability

multinational strategy

-A strategy to outcompete rivals that focuses on opportunities to achieve

uniform delivered pricing

-A type of geographic pricing policy in which all customers pay the same delivered price regardless of their location - A company allocates the total transportation cost among all customers

movement inventory

-A type of inprocess inventory that arises because of the time required to move goods from one place to another

product focused production

-A type of operation designed to process only a few different products, which are usually produced for inventory production rates tend to be greater than the demand rate

price analysis

-The examination of a seller's price proposal or bid by comparison with price benchmarks, without examination and evaluation of all of the separate elements of the cost and profit making up the price in the bid

standardized work

-A work process that is always carried out exactly the same way, preferably using the current best known way underwhich the output can be achieved

voucher

-A written document that bears witness to, or vouches for, something - A voucher generally is an instrument that shows services performed or goods purchased and authorizes payment to the supplier

warranty costs

-AI I ofthe costs associated with a warranty these include shipping, receiving, repairing, replacement, and the materials needed for repair or replacement

n7

-Abbreviation for seven new tools of quality

no touch exchange ofdies(nted)

-The exchange of dies without human intervention -Syn: c chart, numberof affected units chartSyn: np chart

output standard

-The expected number of units from a process against which actual output will be measured

material requisition

-The first step to placing a replenishment order initiated by the material user

order shipment

-Activity that extends from the time the order is placed upon the vehicle for movement until the order is received, verified, and unloaded at the buyer's destination

supervisor estimate

-An estimate, made by a knowledgeable manager, of the labor required for an operation

value chain analysis

-An examination of all links a company uses to produce and deliver its products and services, starting from the origination point and continuing through delivery to the final customer

selling expense

-An expense or class of expense incurred in selling or marketing (e -g -, salespersons' salaries and commissions, advertising, samples, shipping costs)

waterspider

-An expert worker who makes the rounds of workstations and provides assistance as needed - The waterspider knows all processes well enough to take over if necessary - At Toyota, this position is a prerequisite to supervision and management positions

warranty of merchantability

-An implied warranty that goods are fit for the use to which they are generally applied

project team

-An inclusive term incorporating the workers assigned to the project, the project managers, and sometimes the project sponsor

management by walking around (mbwa)

-The management technique of managers touring a facility on a regular basis to talk with workers and staff about problems, trends, and potential solutions

shortage cost

-The marginal profit that is lost when a customer orders an item that is not immediately available in stock

product positioning

-The marketing effort involved in placing a product in a market to serve a particular niche orfunction - Syn: service positioning

market strategy

-The marketing plan to support the business strategy

pacing process

-The process in a production line used to signal all other processes in line ofthe time to produce another unit - It generally is the final process, but it does not have to be

projected available balance

-An inventory balance projected into the future - It is the running sum of onhand inventory minus requirements plus scheduled receipts and planned orders - Syn: projected available inventory

wall to wall inventory

-An inventory management technique in which material enters a plant and is processed through the plant into finished goods without ever having entered a formal stock area

perpetual inventory

-An inventory recordkeeping system where each transaction in and out is recorded and a new balance is computed

waiver

-Authorization to accept an item that, during production or upon inspection, is found to depart from specified requirements, but nevertheless is considered suitable for use as is or after rework - walkthroughSyn: pilot test

open to receive

-Authorization to receive goods, such as a blanket release, firm purchase order item, or supplier schedule - Opento

total make cycle time

-Average cumulative processing time between a part entering a manufacturing system and completion of manufacturing activities (not including packaging)

total cumulative manufacturing cycle time

-Average time between a part entering a manufacturing system and completion of final packaging

many to many communications

-CommunicationCommunication that enables many people to exchange information with many other people

shipper carriers

-Companies that ship goods in their own vehicles - Many large retailers are shippercarriers because they own their own fleets

processcontrollers

-Computers designed to monitor the manufacturing cycle during production, often with the capability to modify conditions in order to bring the production back to within prescribed ranges

offline

-Computerwork completed when disconnected eitherfrom the internet orfrom an intranet - This term also describes anytime a person, operation, orwork center not accessible or operating

materials system

-Connecting material flows contained in a production system

post transaction elements

-Customer services that are provided after a product or service is sold, includingwarranties, returns, and complaint resolution

passive data gathering

-Data gathered when a customer initiates the transaction process by filling out a card or sending an email - The firm develops the feedback form but the customer initiates the use of it

policies

-Definitive statements of what should be done in the business

supplier clustering

-Deliberately sole sourcing remote suppliers within a small geographical area to facilitate joint shipments of what would otherwise be lessthantruckload quantities

time definite services

-Delivery of goods and services where an agreement has been reached on the day and time ofthe delivery

usage rate

-Demand per product per unit of time

sequencing

-Determiningthe order in which a manufacturing facility is to process a number of different jobs in order to achieve certain objectives

product and market focus

-Developing products based on dimensions like service to similar customers, volume, or customization

networking

-Developing relationships with people who may be able to enhance the performance of duties or responsibilities

sensors

-Devices that can monitor differences in conditions to control equipment on a dynamic basis

multimedia files

-Digitized image, video, and audio files that can be retrieved and converted to a form usable by a human

prime costs

-Direct costs of material and labor - Prime costs do not include general, sales, or administrative costs

warehouse management and transportation execution systems

-Logistics information systems that initiate and control the movement of materials between supply chain partners

mixed manufacturing

-Make to stock and make to order manufacturing using a single plant and set of equipment

multisourcing

-Procurement of a good or service from more than one independent supplier - Syn: multiple sourcing - Ant: single sourcing - See: dual sourcing

specialization

-Producing a limited product line in order to focus on a product or a process - Specialization is often intended to improve productivity and reduce costs

shrinkage

-Reductions of actual quantities of items in stock, in process, or in transit - The loss may be caused by scrap, theft, deterioration, evaporation, and so forth

parent/child relationship

-Refers to the logical linkage between higher and lowerlevel items in the bill of material

responsiveness

-Refers to the speed or promptness with which an organization or supply chain provides products and services to the customer - A SCOR performance attribute

simple regression

-Regression analysis involving only one independentvariable

quality engineering

-The engineering discipline concerned with improving the quality of products and processes

performing organization

-The enterprise directly involved in the execution of work

population

-The entire set of items from which a sample is drawn

macro environment

-The environment external to a business including technological, economic, natural, and regulatory forces that marketing efforts cannot control

major setup

-The equipment setup and related activities required to manufacture a group of items in sequence, exclusive of the setup required for each item in the group

standard allowance

-The established or accepted amount by which the normal time for an operation is increased within an area, plant, or industry to compensate for the usual amount of personal, fatigue, and unavoidable delaytimes

replenishment

-Relocating material from a bulk storage area to an order pick storage area and documenting this relocation

unplanned repair

-Repair and replacement requirements that are unknown until remanufacturing teardown and inspection

rework

-Reprocessingto salvage a defective item or part

priority rules

-Simple heuristics used to select the order in which jobs will be processed

project calendar

-A calendar of working days and nonworking days that shows when scheduled activities are idle - Typically, it includes holidays and weekends - See: resource calendar

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 - Syn: Mday calendar, planning calendar, production calendar, shop calendar - See: resource calendar

partfamily

-A collection of parts grouped for some managerial purpose

risk response plan

-A document defining known risks including description, cause, likelihood, costs, and proposed responses - It also identifies current status on each risk

time card

-A document recording attendance time, often used for indicating the number of hours for which wages are to be paid - Syn: clock card

setup time

-The time required for a specific machine, resource, work center, process, or line to convert from the production of the last good piece of item A to the first good piece of item B - Syn: setup lead time

procurement lead time

-The time required to design a product, modify or design equipment, conduct market research, and obtain all necessary materials - Lead time begins when a decision has been made to accept an order to produce a new product and ends when production commences - Syn: procurement cycle, total procurement lead time - See: timetomarket

process hours

-The time required to perform any specific operation or task needed to process the product

material index

-The total of raw material weights divided by final product weight

worker productivity

-The value of total goods and services produced by an employee divided by the labor hours required to produce those goods and services

present value

-The value today of future cash flows - For example, the promise of $10 ayearfrom now is worth something less than $10 in hand today

repeatability of measurement

-The variation in measurements obtained when one measurement instrument is used several times by an appraiser while measuring the identical characteristic on the same part

return goods handling

-The work a company puts into accepting returned goods from its customers

primary work center

-The work center where an operation on a manufactured part is normally scheduled to be performed - Ant: alternate work center

line scrap

-The worth of work in process and raw materials scrapped because of faulty processing as a percentage of the total value of production at standard cost

uncertainty

-Unknown future events that cannot be predicted quantitatively within useful limits for exam pie, an accident that destroys facilities, a major strike, or an innovation that makes existing products obsolete

pareto analysis

-Use of the Pareto principle in prioritizing or ranking a range of items to separate the vital few from the trivial many - See: 8020

upstream

-Used as a relative reference within a firm or supply chain to indicate moving in the direction of the raw material supplier

place utility

-Usefulness to the customer created by having the product delivered to a desired location

third party registration system

-Using an outside party (rather than the buyer) to determine the adequacy of a seller's product quality - If several buyers use the same thirdparty system, such as IS09000, the seller avoids having multiple audits

transportation requirements planning (trp)

-Using existing MRP, DRP, or ERP databases to plan transportation requirements based on actual demand

schedule harmony

-ln supply chains, the arrival of goods at a transfer point with a small buffer time in front of their departure via a different transportation mode

limited liability company

-ln the United States, a business organization that, as with a corporation, enjoys limited liability yet is not a taxable entity, limited life materialMaterial having a finite shelf life

national labor relations board (nlrb)

-ln the United States, the federal agency that regulates labor law

performance measure

-ln a performance measurement system, the actual value measured for the criterion - Syn: performance measurement - See: performance criterion, performance measurement system, performance standard

overhead allocation

-ln accounting, the process of applying overhead to a product on the basis of a predetermined rate

toc performance measures

-ln the theory of constraints, throughput, inventory, and operating expense are considered performance measures that link operational decisions to organizational profit - TOFCAbbreviation for trailer on a flatcar

undesirable effects (ude)

-ln theory of constraints, those negative aspects of an environment that are noted so that a current reality tree may be constructed

normal time

-ln time study, adjusting the actual time observed by a factor called pace rating - See: pace rating

machine flexibility

-ln workcell design, choosing between generalpurpose machinery versus specialpurpose machinery so that the lowest cost and most adaptability is achieved

transactions

-lndividual events reported to the system (e -g -, issues, receipts, transfers, adjustments)

smoothing inventories

-lnventories used when upstream production levels are less than downstream demand

nervousness

-ln an MRP system, a state in which minor changes in higherlevel (e -g -, level 0 or 1) records or the master production schedule cause significant timing or quantity changes in lowerlevel (e -g -, level 5 or 6) schedules and orders - Syn: system nervousness

replanningfrequency

-ln an MRP system, the amount of time between successive runs of the MRP model - If the planner does not run MRP frequently enough, the material plan becomes inaccurate because material requirements and inventory status change with the passage of time

lot cost

-ln cost accounting, those costs associated with processing a common lot or quantity of parts having the same specifications

visits

-ln ecommerce, the set of requests made by one user at one website - If there is no activity within a given time frame (usually 30 minutes), the visit is considered closed

licensing

-Paying a fee for permission to manufacture and sell a product created by another

load

-The amount of planned work scheduled for and actual work released to a facility, work center, or operation for a specific span of time - Usually expressed in terms of standard hours of work or, when items consume similar resources at the same rate, units of production

legal environment

-The governmental restrictions placed on an organization regarding the goods and services provided by the business for example, environmental regulations, export/import restrictions, safety regulations, and mandated deregulations

load distance analysis

-ln layout analysis, a method of choosing a facility layout based on selecting the layout with the shortest product or material travel per time period

logical relationship

-ln project management, a dependency between two activities or between a milestone and an activity - The four possible relationships are (1) finishtostartactivity A must be finished before activity B can start (2) finishtofinishactivity A must be finished before activity B can finish (3) starttostartactivity A must start before activity B can start and (4) starttofinish activity A must start before activity B can finish

longest

-tasktime (LTT) heuristicThe method of attaching additional jobs to a workstation based on priority order, with the longest task scheduled first

location tag

-A barcoded sign situated at a warehouse location - The location number can be read or scanned

legacy systems

-A computer application program that is old and interfaces poorly with other applications but is too expensive to replace - It often runs on antiquated hardware

logbook

-A daily record kept by an interstate driver of time and miles driven and dutyrelated and nondutyrelated activities

locator file

-A file used in a stockroom (or anywhere) providing information on where each item is located - See: locator system

level production method

-A production planning method that maintains a stable production rate while varying inventory levels to meet demand - Syn: level strategy, production leveling - See: level schedule, level production scheduleSyn: level schedule

learning management system

-A software system for delivering and managing education and training within an organization

leveraged buyout (lbo)

-A takeover of a company using borrowed funds where assets of the acquired company are used as partial collateral for the loan

lessee

-An entity to which a lease is given

linefunctions

-Areas involved in daily operations - Logistics line functions include inventory control, order processing, warehousing, and packaging

liquidity ratio

-Financial ratios that are indicators of a firm's ability to retire shortterm financial obligations

process

-1) A planned series of actions or operations (e -g -, mechanical, electrical, chemical, inspection, test) that advances a material or procedure from one stage of completion to another - 2) A planned and controlled treatment that subjects materials or procedures to the influence of one or more types of energy (e -g -, human, mechanical, electrical, chemical, thermal) for the time required to bring about the desired reactions or results

open order

-1) A released manufacturing order or purchase order

predecessor activity

-1) In project management, in an activityonarrow network, the activity that enters a node - 2) In project management, in an activityon

variance

-1) The difference between the expected (budgeted or planned) value and the actual - 2) In statistics, a measurement of dispersion of data - See: estimate of error

profit margin

-1) The difference between the sales and cost of goods sold for an organization, sometimes expressed as a percentage of sales - 2) In traditional accounting, the product profit margin is the product selling price minus the direct material, direct labor, and allocated overhead forthe product, sometimes expressed as a percentage of selling price

process control

-1) The function of maintaining a process within a given range of capability by feedback, correction, and so forth - 2) The monitoring of instrumentation attached to equipment (valves, meters, mixers, liquid, temperature, time, etc -) from a control room to ensure that a highquality product is being produced to specification, process control chartSyn: control chart

material planner

-1) The person normally responsible for managing the inventory levels, schedules, and availability of selected items, either manufactured or purchased - Syn: inventory planner - 2) In an MRP system, the person responsible for reviewing and acting on order release, action, and exception messages from the system - Syn: parts planner, planner, material planningSyn: inventory planning

scor novice

-A SCOR competency level - A novice is an untrained beginner new to the field or activity - A novice needs standard/written procedures or step to make judgments based on a problem situation - Novicescan neitherjudgewhetherthe instructions are working nor judge which ones are important, because they have no context to assess them against

public ownership

-A business formed under law as a separate legal entity and forwhich stock is publicly traded - See: partnership, private ownership

vehicle

-A carrying and power unit to move goods - Includes all forms of transportation means except pipeline - The carrier generally owns or leases vehicles, but a shipper also may own or lease

specific performance

-A contract remedy requiring defendants to do what they have contracted to do

offer

-A contractual communication that proposes definite terms - A contract is created if the other party accepts those terms

material definition

-A definition of the properties and characteristics of a substance

on time in full (otif)

-A delivery scoring system in which a target delivery goalusually expressed as a percentageis set, and the deliverer tries to meet that delivery goal fully and by the delivery date

market positioned strategy

-A location strategy that focuses on the customer by placingwarehouses closer to the customer - See: productpositioned strategy - Warehouse positioned to replenish customer inventory assortments and to afford maximum inbound transport consolidation economies from inventory origin points with relatively shorthaul local delivery, market reachSyn: market penetration, market researchSyn: marketing research

toyota production system (tps)

-A manufacturing methodology developed at Toyota that has evolved into the concepts of just in time and lean manufacturing

product diversification

-A marketing strategy that seeks to develop new products to supply current markets

order policy

-A set of procedures for determining the lot size and other parameters related to an order - See: lot sizing

seven new tools (n7)

-A set of quality improvement tools developed by the Union of Japanese Scientists and Engineers (JUSE) - The N7 are affinity diagram, interrelationship digraph, matrix diagram, tree diagram, prioritization matrix, process decision program chart, and activity network diagram - See: basic seven tools of quality

locator system

-A system for maintaining a record of the storage locations of items in inventory - See: locator file

production system

-A system that accepts inputs and converts them to the desired outputs

pallet jack

-A type of materials handling equipment that combines pallets horizontally but has no lifting capability

virtual inventory system

-A virtual system that enables supply chain partners to share data in a central database

queue

-A waiting line - In manufacturing, the jobs at a given work center waiting to be processed - As queues increase, so do average queue time and workinprocess inventory

serial shipping container code

-An 18character designation identifying boxes or pallets that are part of a shipment covered by an automated shipment notice

planned receipt

-An anticipated receipt against an open purchase order or open production order - Syn: planned order receipt

lessor

-An entity that gives a lease

marketing research

-The systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services - Such research may be undertaken by impartial agencies or by business firms or their agents - Marketing research includes several types: (1) market analysis (product potential is a type) is the study of the size, location, nature, and characteristics of markets (2) sales analysis (or research) is the systematic study and comparison of sales (or consumption) data (3) consumer research (motivation research is a type) is concerned with the discovery and analysis of consumer attitudes, reactions, and preferences

retirement of debt

-The termination of a debt obligation by appropriate settlement with the lender - Understood to be in full amount unless partial settlement is specified

technologies

-The terms, concepts, philosophies, hardware, software, and other attributes used in a field, industrial sector, or business function

waittime

-The time a job remains at a work center after an operation is completed until it is moved to the next operation - It is often expressed as a part of move time

review period

-The time between successive evaluations of inventory status to determine whether to reorder - See: replenishment period

speed of design process

-The time frame within which a product or service is designed to satisfy customer needs and regulations and fieldtested before entering a market

start manufacture to order complete manufacture

-The time from when the manufacturing of an order starts until an order is ready to be shipped to the customer

time to reliably replenish (trr)

-The time in which a part can reliably be obtained if necessary

order transmittal

-The time interval between a customer placing an order and when the seller receives it

plant rate

-The total value added by a plant divided by the total direct labor hours in a particular time period - This percentage allows the scheduling at the roughcut and capacity requirements level of the plan, plant within a plantSyn: factory within a factory

unit of measure (purchasing)

-The unit used to purchase an item - This may or may not be the same unit of measure used in the internal systems - For example, purchasing buys steel by the ton, but it may be issued and used in square inches - Syn: purchasing unit of measure

noise

-The unpredictable or random difference between the observed data and the true process -

substitution

-The use of a nonprimary product or component, normally when the primary item is not available

work sampling

-The use of a number of random samples to determine the frequency with which certain activities are performed

upgrade

-improvement in operating characteristics

net operating cash flow

-ln finance management, the difference between cash inflow and cash outflow for a given period - It is found by taking the change in net operating profit after taxes and adding the change in depreciation then subtracting the increase in net working capital requirements

retention efficiency

-ln marketing, a measurement of how well a company creates repeat customers

project plan

-ln project management, a document that has been approved by upper management for use in executing and controlling a project - It documents assumptions, facilitates communication, and documents the approved budget and schedule - May exist at a summary or a detailed level

work breakdown structure

-ln project management, a hierarchical description of a project in which each lower level is more detailed - See: project summary work breakdown structure

milestone schedule

-ln project management, a highlevel schedule displaying important deliverables

node

-ln project management, a point connected by arrows in a network

milestone

-ln project management, an important event in a project, usually the realization of a significant deliverable

minimum weight

-ln transportation, the rate discount volume

metered issues

-lssues of parts or materials from stores in quantities that correspond to the rate at which materials are used

repairables

-ltems that are technically feasible to repair economically

time phase mrp

-phased MRP begins with the items listed on the MPS and determines (1) the quantity of all components and materials required to fabricate those items and (2) the date that the components and material are required - Timephased MRP is accomplished by exploding the bill of material, adjusting for inventory quantities on hand or on order, and off setting the net requirements by the appropriate lead times

unplanned issue

-An issue transaction that updates the quantity on hand but forwhich no allocation exists

maintenance, repair, and overhaul (mro)

-An item for reprocessing in the remanufacturing industry

model number

-An item number for a finished good - This number may encompass other parts, such as a user's manual

retrofit

-An item that replaces components originally installed on equipment a modification to inservice equipment

tariff

-An official schedule of taxes and fees imposed by a country on imports or exports

vertical marketplace

-An online marketplace connecting buyers and sellers within the same industry - It enables lower prices by lowering transaction costs

scheduled receipt

-An open order that has an assigned due date - See: open order

time ticket

-An operat orentered labor claim

variable cost

-An operating cost that varies directly with a change of one unit in the production volume (e -g -, direct materials consumed, sales commissions)

replacement order

-An order for the replacement of material that has been scrapped

risktolerance

-An organization's or stakeholder's readiness to accept a threat or potential negative outcome in order to achieve its objectives - RMAAbbreviation for return material authorization

small group improvement activity

-An organizational technique for involving employees in continuous improvement activities - See: quality circle

vendor

-Any seller of an item in the marketplace

strategic benchmarking

-Benchmarking how others compete - Often involves benchmarking across industries - See: benchmarking

product benchmarking

-Benchmarking used for new product design or for a product upgrade - Often includes reverse engineering (dismantling) competing products to determine their strengths and weaknesses

merchants

-Buyers who purchase for the purpose of reselling

usage variance

-Deviation ofthe actual consumption of materials as compared to the standard

schedule activity

-Du ring a project, a specific piece of work performed that has estimated costs, duration, and resource requirements

schedule performance index (spi)

-Earned value (EV) divided by planned value (PV), which measures a project's schedule efficiency

schedule variance (sv)

-Earned value (EV) minus planned value (PV), which measures a project's schedule performance

pick and place

-Equipmentthat picks up parts from one station on an assembly line and places them on the next

transportation brokers

-Firms that find shipments for carriers for a fee

producer's risk ( )

-For a given sampling plan, the probability of not accepting a lot, the quality of which has a designated numerical value representing a level that is generally desired to accept - Usually the designated value will be the acceptable quality level (AQL) - See: type I error

tardiness

-For jobs that are late, the delivery date minus the due date - See: earliness, lateness

reprocessed material

-Goods that have gone through selective rework or recycle

nondurable goods

-Goods whose serviceability is generally limited to a period of less than three years (such as perishable goods and semidurable goods)

segment customers

-Grouping customers by common characteristics to facilitate sales

virtual reality

-Hardware and software that create an apparently real environment

secondary highways

-Highways that are predominantly rural in nature

surrogate driver

-In activity based cost accounting, a substitute for the best possible driver that is useful because it is less costly and almost as accurate

total cost concept

-In logistics, the idea that all logistical decisions that provide equal service levels should favor the option that minimizes the total of all logistical costs and should not be used on cost reductions in one area (such as lower transportation charges) alone

recovery time

-In periods of insufficient capacity, jobs back up indefinitely - This leads to increased lead times and missed due dates - Recovery time is a period of time when capacity exceeds demand to allow the system to empty out - If there is not enough recovery time before the next episode of insufficient capacity, inprocess inventory and lead times continue to grow

portfolio

-In project management, a collection of projects that are grouped to facilitate management - They are not necessarily interdependent - POSAbbreviation for point of sale

point of sale information

-Information about customers collected at the time of sale

penetration pricing

-Introducing a product below its longrun price to secure entry into a market

obsolete inventory

-Inventory items that have met the obsolescence criteria established by the organization - For example, inventory that has been superseded by a new model or otherwise made obsolescent - Obsolete inventory will never be used or sold atfull value - Disposing of the inventory may reduce a company's profit

point of use storage

-Keeping inventory in specified locations on a plant floor near the operation in which it is to be used

quality, cost, delivery (qcd)

-Key measurements of customer satisfaction - Kaizen activity strives to improve these measurements

marquis partners

-Key strategic relationships - By partneringwith big players, via equity offerings if necessary, a company creates barriers to entry into supply chain relationships for competitors

responsible landfill

-Landfill operations designed to turn waste into recoverable resources, minimize the amount of space consumed, and maximize the operational life of the landfill

voluntary layoff

-Layoffs where the employees are given the option of taking a nonpaid leave from their work for a short, specified period of time

on thejob training (ojt)

-Learning the skills and necessary related knowledge useful forthejob atthe place ofwork orpossibly while atwork

transportation legal classifications

-Legal regulatory classification of transportation by product, shipping size, rates, carriers, and types of services

product positioned strategy

-Locating operations close to the sources of supply - See: marketpositioned strategy

reserved material

-Material on hand or on order that is assigned to specific future production or customer orders - Syn: allocated material, assigned material, obligated material

scrap

-Material outside of specifications and possessing characteristics that make rework impractical

probability

-Mathematically, a number between 0 and 1 that estimates the fraction of experiments (if the same experiment were being repeated many times) in which a particular result would occur - This number can be either subjective or based upon the empirical results of experimentation - It can also be derived for a process to give the probable outcome of experimentation

scorprocesses

-One of the four parts of the SCOR framework - This section contains the standard descriptions of management procedures and their relationships

practices

-One of the four parts of the SCOR framework that contains management activities producing significantly better process performance

rope

-One of the three devices required for proper management of operations - (The othertwo are drum and buffer -) The rope is the information flow from the drum to the front ofthe line (material release), which chokes the release of materials to match the flow through the constraint

solid waste generated

-One ofthe five green SCOR metrics that measures the total solid waste generated by the process

market surveys

-Questionnaires designed to get feedback from potential customers about demand for a product or service

multiple phase queuing system

-Queuing system that performs a service in two or more sequential steps when there are several waiting lines - Syn: multiphase system - See: channel, queuing theory

open system architecture

-The capability of software and diverse hardware environments to communicate with each otherthrough the use of standard messaging and protocols, respectively

modification flexibility

-The capability of the transformation process to quickly implement minor product design changes

product grade

-The categorization of goods based upon the range of specifications met during the manufacturing process

unit of driver measure

-The common unit of measure used to group similar processes so comparisons can be made easily

skew

-The degree of nonsymmetry shown by a frequency or probability distribution

startup costs

-The extra operating costs to bring the plant or product onstream incurred between the completion of construction and the start of normal operations - In addition to the difference between actual operating costs during that period and normal costs, they include employee training, equipment tests, process adjustments, salaries and travel expense of temporary labor staff and consultants, report writing, poststartup monitoring, and associated overhead - Additional capital required to correct plant problems may be included - Startup costs are sometimes expensed overthe lifetime ofthe asset(s) - statement of cash flowsSyn: funds flow statement

outbound consolidation

-The gathering of a number of small shipments to a variety of customers into a larger load, which is then shipped to a point near the customers where it is broken down for delivery

seculartrend

-The general direction ofthe longrun change in the value of a particular time series

stock split

-The issuance of new shares to stoc

parent item

-The item produced from one or more components - Syn: parent

transportation mode

-The manner in which an item is transported

punitive damages

-The money awarded a plaintiff not as paymentforthe plaintiff's losses, but as punishment for the defendant's conduct

manual rescheduling

-The most common method of rescheduling open orders (scheduled receipts) - Under this method, the MRP system provides information on the part numbers and order numbers that need to be rescheduled - Due dates and order quantity changes required are then analyzed and changed by material planners or other authorized persons - Syn: planner intervention - Ant: automatic rescheduling

period capacity

-The number of standard hours of work that can be performed at a facility or work center in a given time period

shipping lead time

-The number of working days normally required for goods to move between a shipping and receiving point, plus acceptance time in days at the receiving point

sole source supplier

-The only supplier capable of meeting (usually technical) requirements for an item - See: singlesource supplier

operational availability

-The portion of time a system is available to sustain operations in full

tactical planning

-The process of developing a set of tactical plans (e -g -, production plan, sales plan, marketing plan) - Two approaches to tactical planning exist for linking tactical plans to strategic plansproduction planning and sales and operations planning - See: operational planning, strategic planning, tactical plan

market targeting

-The process of developing measurements of the desirability of given market segments and deciding in which market segments to compete

what if analysis

-The process of evaluating alternate strategies by answering the consequences of changes to forecasts, manufacturing plans, inventory levels, and so forth - See: simulation

transportation management

-The process of executing requirements for the planning, scheduling, and budgeting of transportation assets, services, and related systems of the shipping process through delivery

target marketing

-The process of focusing marketing activities specifically on those people who are most likely to buy a company's products and services - Data gathered on people who use the internet enables companies to identify and focus on more likely candidates

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 viewed not 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 duringthe early stages of the product life cycle when dealing with products that are viewed as critical to the strategic survival of the firm -

order promising

-The process of making a delivery commitment (i -e -, answeringthe question, When can you ship?) - For make to order products, this usually involves a check of uncommitted material and availability of capacity, often as represented by the master schedule availabletopromise

quality control

-The process of measuring quality conformance by comparing the actual with a standard for the characteristic and taking corrective actions on the difference - See: quality assurance/contol - quality control circleSyn: quality circle

operational planning

-The process of setting goals and targets and establishing measures constrained by and targeted for achieving the strategic and tactical plans - See: operational plan, strategic planning, tactical planning

value stream

-The processes of creating, producing, and delivering a good or service to the market - For a good, the value stream encompasses the raw material supplier, the manufacture and assembly ofthe good, and the distribution network - For a service, the value stream consists of suppliers, support personnel and technology, the service producer, and the distribution channel - May be controlled by a single business or a network of several businesses

queue length

-The quantity of items in a queue that are awaiting service

throughput

-The rate at which the system generates goal units - Because throughput is a rate, it is always expressed for a given time periodsuch as per month, week, day, or even minute - If the goal units are money, throughput is an amount of money per time period - In that case, throughput is calculated as revenues received minus totally variable costs divided by units of the chosen time period

operation/processyield

-The ratio of usable output from a process, process stage, or operation to the input quantity, usually expressed as a percentage

manufacturing cycle efficiency

-The ratio of valueadded time to manufacturing lead time or cycle time - Manufacturing cycle time can be improved by the reduction of manufacturing lead time by eliminating nonvalueadded activities such as inspecting, moving, and queuing

tracking signal

-The ratio ofthe cumulative algebraic sum of the deviations between the forecasts and the actual values to the mean absolute deviation - Used to signal when the validity of the forecasting model might be in doubt - See: forecast error, mean absolute deviation

queue ratio

-The ratio ofthe hours of slack within the job to the queue originally scheduled

transmission acknowledgement

-The receiver of a transmission notifies the sender that the transmission was received errorfree

material receipt inspection

-The receiving department compares the incoming material to the purchase order to verify that the correct material and quantity have been received - The material is then inspected for quality and general condition - A material receipt report is prepared and copies are distributed to the appropriate departments such as purchasing and accounting

tool calibration frequency

-The recommended length of time between tool calibrations - Normally expressed in days

product audit

-The reinspection of any product to verify the adequacy of acceptance or rejection decisions made by inspection and testing personnel

vertical dependency

-The relationship between a parent item and a component in its bill of material that defines the need forthe component based on producing the parent, without regard to the

point of sale (pos)

-The relief of inventory and computation of sales data at the time and place of sale, generally through the use of bar coding or magnetic media and equipment

repetitive manufacturing

-The repeated production ofthe same discrete products orfamilies of products - Repetitive methodology minimizes setups, inventory, and manufacturing lead times by using production lines, assembly lines, or cells - Work orders are no longer necessary production scheduling and control are based on production rates - Products may be standard or assembled from modules - Repetitiveness is not a function of speed orvolume -Syn: repetitive process, repetitive production - See: project manufacturing, repetitive processSyn: repetitive manufacturing, repetitive productionSyn: repetitive manufacturing

operating exposure

-The risk introduced by flexible exchange rates when operating in the global environment, including their effect on production, storage, and buying and selling prices

order priority

-The scheduled due date to complete all the operations required for a specific order

resource limited scheduling

-The scheduling of activities so that predetermined resource availability pools are not exceeded - Activities are started as soon as resources are available (with respect to logical constraints), as required by the activity - When not enough of a resource exists to accommodate all activities scheduled on a given day, a priority decision is made - Project finish may be delayed, if necessary, to alter schedules constrained by resource usage

operations sequence

-The sequential steps for an item to follow in its flow through the plant - This information is normally maintained in the routing file - For instance, Operation 1: cut bar stock Operation 2: grind bar stock Operation 3: shape Operation 4: polish Operation 5: inspect and send to stock

manufacturing process

-The series of operations performed upon material to convert it from the raw material or a semifinished state to a state of further completion - Manufacturing processes can be arranged in a process layout, product layout, cellular layout, or fixedposition layout - Manufacturing processes can be planned to support make to stock, make to order, assembletoorder, and so forth, based on the strategic use and placement of inventories - See: production process, transformation process

local measures

-The set of measurements that relates to a resource, operation, process, or part and usually has low correlation to global organization measures - Examples are errors per printed page, departmental efficiency, and volume discounts

operational plan(s)

-The set of shortrange plans and schedules detailing specific actions - Operational plans are more detailed than strategic and tactical plans and cover a shortertime horizon

supply chain community

-The set of trading partners and nominal trading partners that define a complete supply chain

quarantine

-The setting aside of items from availability for use or sale until all required quality tests have been performed and conformance certified

vision

-The shared perception of the organization's futurewhat the organization will achieve and a supporting philosophy - This shared vision must be supported by strategic objectives, strategies, and

life testing

-The simulation of a product's life under controlled realworld conditions to see if it holds up and performs as required

multiprocessing

-The simultaneous use by a computer of two or more central processing units, with each executing its own instruction set and each controlled by a single operating system

statistical control

-The situation where variations among the observed samples can be attributed to a constant system of chance causes

ramp rate

-The speed atwhich a company expands or grows - Syn: growth trajectory

queuing analysis

-The study of waiting lines - See: queuing theory

overall value at risk (var)

-The sum of the probability of risk events times the monetary impact of the events can impact any core supply chain functions (e -g - plan, source, make, deliver, and return) or key dependencies

preferred supplier

-The supplier of choice

materials handling system

-The system of transportation that receives, moves, and delivers materials during the production or distribution process

mission

-The overall goal(s) for an organization set within the parameters of the business scope

reach

-The percentage of target customers who receive an advertising message

single level backflush

-A form of backflush that reduces inventory of only the parts used in the next level down in an assembly or subassembly

project life cycle

-1 n project management, a set of project phases (objectives definition, requirements definition, external and internal design, construction, system test, and implementation and maintenance), whose definition is determined by the needs of those controlling the project

utilization

-1) A measure (usually expressed as a percentage) of how intensively a resource is being used to produce a good or service - Compares actual time used to available time - Traditionally, calculated as the ratio of direct time charged (run time plus setup time) to the clock time available - Utilization is a percentage between 0 percent and 100 percent that is equal to 100 percent minus the percentage of time lost due to the unavailability of machines, tools, workers, and so forth - See: efficiency, lost time factor, productivity - 2) In the theory of constraints, activation of a resource that productively contributes to reaching the goal - Overactivation of a resource does not productively utilize a resource - See: available time

waste exchange

-1) Arrangement in which companies exchange their wastes forthe benefit of both parties - 2) An exchange service of valuable information between generators and potential users of industrial and commercial wastes, whereby a beneficial use rather than disposal is the end result - This service identifies both the producers and potential markets for byproducts, surpluses, unspent materials, and otherformsof solid waste that is no longer needed

terminal handling charges

-1) Carrier charges dependent on the numberof times a shipment must be loaded, handled, and unloaded - Cost can be reduced by consolidating shipments into fewer parcels or by shipping in truckload quantities - 2) For shipping lines, the costs of paying container terminals for unloading and loading during shipment - These costs are borne by the shipping lines at the port of

routing

-1) Information detailing the method of manufacture of a particular item - It includes the various work centers involved, and the standards for setup and run - In some companies, the routing also includes information on tooling, operator skill levels, inspection operations and testing requirements, and so on

simple interest

-1) Interest that is not compounded (i -e -, interest not added to the incomeproducing investment or loan) - 2) The interest charged under the condition that interest in any time period is only charged on the principal

supplier

-1) Provider of goods or services - See: vendor - 2) Seller with whom the buyer does business, as opposed to vendor, which is a generic term referring to all sellers in the marketplace

random events

-1) occurrences that have no discernable pattern - 2) In statistics, unexplained movements occurring in historical (time series) data - See: random variation

pup

-A 28 foot trailer, usually used in trucking enterprises

obeya

-A Japanese word meaning big room a command center

measures constraint

-A common misnomer - Bad measures are not the constraint - Rather, bad measures hinder effective constraint management by inhibiting the ability to fully exploit and/or subordinate to the constraint

overload

-A condition in which the total hours of work outstanding at a work center exceed that work center's capacity

separable cost

-A cost that is assignable to a given portion of a business

service vs. investment chart

-A curve showing the amount of investment that will be required to give various levels of customer service - Typical investments include inventory, infrastructure, and other resources to improve customer service

marginal analysis

-A decision rule that optimality occurs where incremental revenue equals incremental cost

packingslip

-A document that itemizes in detail the contents of a particular package, carton, pallet, or containerforshipmentto a customer -The detail includes a description ofthe items, the shipper's or customer's part number, the quantity shipped, and the stockkeeping units (SKUs) ofthe items shipped

picking list

-A document that lists the material to be picked for manufacturing or shipping orders - Syn: disbursement list, material list, stores issue order, stores requisition

service level agreement (sla)

-A document that represents the terms of performance for organic support

receiving report

-A document used by the receiving function of a company to inform others of the receipt of goods purchased

relationship map

-A graphic map of the relationship between the business functions - It shows the inputs and outputs flow across functions - It is useful to show how processes are currently performed, disconnections in processes, and proposed processes - Relationship maps show the products and services of a given unit, how work flows through organizational boundaries, and the relationships between functions represented by boxes in the map

process flow diagram

-A graphical and progressive representation of the various steps, events, and tasks that make up an operations process - Provides the viewer with a picture of what actually occurs when a product is manufactured or a service is performed

organization chart

-A graphical depiction of relationships between people who work together

sample average

-A key measure that represents the central tendency of a sample

semiprocessflow

-A manufacturing configuration in which most jobs go through the same sequence of operations even though production is in job lots

vertical marketing system

-A marketing system thatfocusesonthe means to reduce the traditional independence of indirect channels - The system strategically seeks to increase the integration and interdependence of channels by unitingthem with common objectives and team management (e -g -, franchising, cooperatives, vertical integration)

picker topart system

-A materials handling approach for order picking in which the picker goes to the product location (e -g -, forklifts, order picking trucks)

part to picker system

-A materials handling approach for order picking where the pick location is brought to the order picker (e -g -, carousels)

matrix

-A mathematical array having one, two, and sometimes more dimensions, into which collections of data may be stored and processed

probability and impact matrix

-A matrix combining two dimensions of risk: (1) the likelihood of an event's occurrence and (2) the impact if the event occurs

stockout percentage

-A measure ofthe effectiveness with which a company responds to actual demand or requirements - The stockout percentage can be a comparison of total orders containing a stockout to total orders, or of line items incurring stockouts to total line items ordered during a period - One formula is stockout percentage = (1 customer service ratio) * 100 percent - Ant: customer service ratio, stockout probabilitySyn: cycle service level

profitability

-A measure ofthe excess income over expenditure during a given period of time

pre deduct inventory transaction processing

-A method of inventory bookkeeping where the book (computer) inventory of components is reduced before issue, at the time a scheduled receipt for their parents or assemblies is created via a bill ofmaterial explosion - This approach has the disadvantage of a builtin differential between the book record and the amount of inventory physically in stock - See: backflush -

retail method

-A method of inventory valuation in which the value is determined by applying a predetermined percentage based on retail markup to the retail price, to determine its inventory value based on cost

replacement cost systems

-A method of inventory valuation that assigns an item cost based on the next item price incurred

production sharing

-A network of companies that participates in product design, production, marketing, distribution, and service

supplier number

-A numerical code used to distinguish one supplierfrom another

shrinkage factor

-A percentage factor used to compensate for the expected loss during the manufacturing cycle of an item - This factor differs from the scrap factor in that it affects all components of the item, where the scrap factor relates to only one component's usage - Syn: shrinkage rate, shrinkage rateSyn: shrinkage factor - SICAbbreviation for standard industrial classification

retainage

-A percentage of a contract value that is withheld pending project completion and approval

program manager

-A person assigned program management responsibilitiesforthe implementation activities associated with a new or ongoing product or service offering to customers - See: program management

warehouse

-A place to receive, store, and ship materials

quality at the source

-A producer's responsibility to provide 100 percent acceptable quality material to the consumer of the material - The objective is to reduce or eliminate shipping or receiving quality inspections and line stoppages as a result of supplier defects

production forecast

-A projected level of customer demand for a feature (option, accessory, etc -) of a make to order or an assembletoorder product -order, planning bill of material, twolevel master schedule - Used in two level master scheduling, it is calculated by netting customer backlog against an overall family or product line master production schedule and then factoringthis product's availabletopromise by the option percentage in a planning bill of material

quality characteristic

-A property of a product or service that is important enough to count or measure - See: performance measurement system, quality chartSyn: Q chart

wide area network (wan)

-A public or private data communication system for linking computers distributed over a large geographic area

run

-A quantity of production being processed

service blueprint

-A service analysis method that allows service designers to identify processes involved in the service delivery system, isolate potential failure points in the system, establish time frames for the service delivery, and set standards for each step that can be quantified for measurement

neural network

-A software system loosely based on how the brain works - It tries to simulate the multiple layers of elements called neurons - Each neuron is tied to several neighbors with a value that signifies the strength ofthe connections - Learning is accomplished by changing the values to cause the network to report appropriate results - Neural networks have been used for market forecasts and other applications

predetermined time standards

-A table of times of basic motions used to prepare artificial standards (i -e -, without direct observation of a worker) - See: therbligs - predictable maintenanceSyn: predictive maintenance

modular bill of material

-A type of planning bill that is arranged in product modules or options - It is often used in companies where the product has many optional features (e -g -, assembletoorder companies such as automobile manufacturers) - See: pseudo bill of material

tracking capacity strategy

-Adding capacity in small amounts to attempt to respond to changing demand in real time in the marketplace - This approach may satisfy total demand and help minimize unit costs, but it can be difficult in some situations to add incremental amounts of capacity, especially if the

value of service pricing

-Allowing the market to determine the price

pseudo bill of material

-An artificial grouping of items that facilitates planning - See: modular bill of material, phantom bill of material, planning bill of material, super bill of material

pick totrailer

-An order picking system that allows the pickerto transfer materials to the trailerfrom the pick source without any confirmation/checking stages

order multiples

-An order quantity modifier applied after the lot size has been calculated that increases the order quantity to a predetermined multiple

rush order

-An order that for some reason must be fulfilled in less than normal lead time

total line haul cost

-Basic costs of carrier operation to move a container of freight, including drivers' wages and usage depreciation, which vary with the distance shipped and the cost per mile

truckload (tl) carriers

-Carriers that deliver/charge only forfull truckload shipments

mapping

-Drawing the processes or relationships that form an organization's business process

operating profit margin ratio

-Earnings before interest and taxes divided by sales

nonexempt positions

-Employees not meeting the test of executive, supervisory, or administrative personnel who are paid overtime, as defined by the Fair Labor Standards Act - See: nonexempt employee

plant finished goods

-Finished goods inventory held in the plant rather than being shipped to a customer

part

-Generally, a material item that is used as a component and is not an assembly, subassembly, blend, intermediate, etc

performance rating

-Observation of worker performance that rates the productivity of the workers as a percentage of the standard or normal worker performance

technical components

-Parts that are difficult to make, have long lead times, and require expert knowledge to produce - Generally are produced by only a few suppliers because of these characteristics - Toolingto produce these products usually is owned by the customer to avoid proprietary or patent issues

supply rate

-Production rate, or quantity of units per unit of time, sent to inventory

market driven

-Responding to customers' needs

probabilistic demand models

-Statistical procedures that represent the uncertainty of demand by a set of possible outcomes (i -e -, a probability distribution) and that suggest inventory management strategies under probabilistic demands

working stock

-Stock, located in a facility, that is used to fulfill demand

setup flexibility

-The ability for changeover to a different product to take place with little delay, setup lead timeSyn: setup time

source

-The activities involved in scheduling product deliveries, receiving products, verifying products, transferring (moving) products, and authorizing supplier payment - Activities associated with supplier search, qualification, and contract negotiation are not described using these process elements

market penetration

-The degree to which a product has been accepted by the marketplace - Syn: market reach

short term planning

-The function of adjusting limits or levels of capacity within relatively short periods of time, such as parts of a day, a day, or a week

single digit setup (sds)

-The idea of performing setups in less than 10 minutes - See: singleminute exchange of die

one touch exchange of die (oted)

-The ideal of reducing or eliminating the setup effort required between operations on the same equipment - An exchange performed in a single motion rather than in multiple steps

potency

-The measurement of active material in a specific lot, normally expressed in terms of an active unit - Typically used for such materials as solutions

warehouse demand

-The need for an item to replenish stock at a branch warehouse - Syn: branch warehouse demand

repairfactor

-The percentage of time on average that an item must be repaired for return to a serviceable condition - The repair factor is also expressed as a percentage applied to the quantity per assembly on the bill of material - It is useful for forecasting materials and capacity requirements for planning purposes - Syn: frequency of repair - See: occurrence factor, replacement factor

replacement factor

-The percentage of time on average that an item will require replacement - The material - It is useful for forecasting materials and capacity requirements for planning purposes - See: occurrence factor, repair factor

percent value added time

-The percentage of total cycle time that is spent on activities that provide value to the product or customer

message distribution

-The software component of electronic commerce that enables the sending and receiving of messages

scheduled load

-The standard hours of work required by scheduled receipts (i -e -, open production orders)

slip sheet

-Thin sheets of fiberboard or plastic on which product is stacked, used as an alternative to wood pallets because they take up little space in warehouses or shipping containers - that is held level but leaves some openings to meet unexpectedly high levels of demand - Part of the extra capacity planning process

tangibles

-Things that can be quantitatively measured or valued, such as the costs of physical assets - A dimension of service quality referring to the physical appearance ofthe service facility, including the personnel and equipment

planningvalues

-Values that decision makers use to translate the sales forecast into resource requirements to determine the feasibility and costs of alternative approaches

spread

-Variability of an action - Often measured by the range or standard deviation of a particular dimension - SPTAbbreviation for shortest processing time rule - SQCAbbreviation for statistical quality control - SQLAbbreviation for structured query language

natural variations

-Variations in measurements that are caused by environmental elements and cannot be removed - See: common cause variability

social responsibility

-commitment by top management to behave ethically and to contribute to community development - This may also entail improving the workforce's quality of life

smoothing constant

-ln exponential smoothing, the weighting factor that is applied to the most recent demand, observation, or error - In this case, the error is defined as the difference between actual demand and the forecast for the most recent period - The weighting factor is represented by the symbol a - Theoretically, the range of a is 0 -0 to 1 - Syn: alpha factor, smoothingfactor - smoothingfactorSyn: smoothing constant

operating efficiency

-A ratio (represented as a percentage) of the actual output of a piece of equipment, department, or plant as compared to the planned or standard output

margin

-A ratio of an organization's operating profit to revenues, measuring management's ability to control operating expenses

performance efficiency

-A ratio, usually expressed as a percentage, of the standard processing time for a part divided by its actual processing time - Setups are excluded from this calculation to prevent distortion - A traditional definition includes setup time as part of operation time, but significant distortions can occur as a result of dependent setups -

standardized ingredient

-A raw ingredient that has been preprocessed to bring all its specifications within standard ranges before it is introduced to the main process - This preprocessing minimizes variability in the production process

unplanned receipt

-A receipt transaction that updates the quantity on hand but forwhich no order exists

product genealogy

-A record, usually on a computer file, of the history of a product from its introduction into the production process through its termination - The record includes lot or batch sizes used, operations performed, inspection history, options, and where used information

production line

-A series of pieces of equipment dedicated to the manufacture of a specific number of products orfamilies

will call

-A service process that allows customers to walk up to the seller's facility and pick up the parts they have previously ordered

reverse logistics service

-A service that arranges for the disposal of returned products

venture team

-A set of individuals assigned outside normal channels to develop ideas for new products

operating expense

-AII the money an organization spends in generating goal units

terms and conditions

-AII the provisions and agreements of a contract

teardown

-AII work items required between the end of one operation or job and the start of setup for the nextoperation orjob, both jobs requiring the same machinery orfacilities - See: teardown time

qcd

-Abbreviation for quality, cost, delivery -Abbreviation for quickresponse program

network logic

-Activity dependencies that make up a project schedule network diagram

treasury stock

-Common stock that has been repurchased by the issuing company

one toone marketing

-A marketing strategy for sending a particular message to a single customer, often assisted by a marketing database

pickup and delivery costs

-Carrier charges for each shipment pickup and the weight of that shipment - Costs can be reduced if several smaller shipments are consolidated and picked up in one trip

possession utility

-Product desirability created by marketing efforts

production time

-Setup time plus total processing time, where total processing time is processing time per piece multiplied by the number of pieces

supply chain visibility

-Sharing information throughout the supply chain to create transparency among supply chain partners for example, the ability of supply chain partners to access demand and production information from trading partners

line loading

-The loading of a production line by multiplying the total pieces by the rate per piece for each item to come up with a finished schedule for the line

shipping point

-The location from which material is sent - Ant: receiving point

receiving point

-The location to which material is being shipped - Ant: shipping point

sample size

-The number of elements selected for analysis from the population

order consolidation profile

-The process of filling the entire order of one customer by bringing all parts of the order together in one place - These items may or may not come from different places or departments

order batching

-The process of gathering a group of orders or data before sending them out to the next stage

outsourcing

-The process of having suppliers provide goods and services that were previously provided internally - Outsourcing involves substitutionthe replacement of internal capacity and production by that of the supplier - See: subcontracting

provisioning

-The process of identifying and purchasingthe support items and determiningthe quantity of each support item necessary to operate and maintain a system

purchasing

-The term used in industry and management to denote the function of and the responsibility for procuring materials, supplies, and services

replenishment period

-The time between successive replenishment orders - Syn: replenishment interval - See: review period

process time

-The time during which the material is being changed, whether through a machining operation or an assembly - Syn: residence time

release to start manufacturing

-The time it takes from when an order is released until the beginning of the manufacturing process - This delay occurs because of the movement of materials and the changing of lines - It is nonproductive time that increases lead time

order interval

-The time period between the placement of orders

service rate

-ln queuing theory, the rate at which arrivals are processed through the production or service system the number of processed arrivals per unit of time - See: queuing theory

vision statement

-An organization's statement of its vision - See: vision

relevant range

-The range of activity planned for a firm

run time

-The time required to process a piece or lot at a specific operation - Run time does not include setup

marginal product

-ln economics, the additional quantity of total output following from a oneunit increase in variable input - See: law of diminishing marginal returns

market value added

-ln financial management, the surplus of a firm's equity over the capital that has been invested in the firm

ubiquity

-ln inventory control, a raw material that is found at all locations

less than container/carload (lcl

-1) A small shipment that does not fill the container/railcar - 2) A shipment of insufficient weight to qualify for a carload quantity rate discount

line

-1) A specific physical space for the manufacture of a product that in a flow shop layout is represented by a straight line - In actuality, this may be a series of pieces of equipment connected by piping or conveyor systems - 2) A type of manufacturing process used to produce a narrow range of standard items with identical or highly similar designs - Production volumes are high, production and material handling equipment is specialized, and all products typically pass through the same sequence of operations

logistics

-1) In a supply chain management context, it is the subset of supply chain management that controls the forward and reverse movement, handling, and storage of goods between origin and distribution points - 2) In an industrial context, the art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities - 3) In a military sense (where it has greater usage), its meaning can also include the movement of personnel

level schedule

-1) In traditional management, a production schedule or master production schedule that generates material and labor requirements that are as evenly spread overtime as possible - Finished goods inventories bufferthe production system against seasonal demand - See: level production method - 2) In JIT, a level schedule (usually constructed monthly) in which each day's customer demand is scheduled to be built on the day it will be shipped - A level schedule is the output of the loadleveling process

line of balance planning

-A project planning technique using a leadtime offset chart and a chart of required final assembly completions to graph a third bar chart showingthe numberof each component that should be completed to date - This bar chart forms a descending line, and aggregate component completions are then plotted against this line of balance - This is a crude form of material planning

logistics strategy

-A plan for the logistics elements of a businessincluding warehousing, information systems, and transportationthat is aligned with the overall business strategy - See: strategic plan

leg

-A portion of a complete trip

lot

-A quantity produced together and sharing the same production costs and specifications - See: batch

local rate

-A rate pertaining to two points served by a single carrier

logistics channel

-A set of supply chain partners who participate in storage, transportation, and communications that contribute to the flow of goods

location grid

-A layout of a warehouse used to improve inventory management and cycle counting

life cycle costing

-ln evaluating alternatives, the consideration of all costsincluding acquisition, operation, and disposition coststhatwill be incurred over the entire time of product ownership

level of effort

-ln project management, support activity (e -g -, customer liaison) that is not easily measured by discrete accomplishment - It usually has a uniform work rate

log normal distribution

-A continuous probability distribution where the logarithms of the variable are normally distributed

line of credit

-A contract that enables a company to borrow funds at any time up to a predetermined limit

loss to society

-According to Genichi Taguchi, a loss to society occurs whenever a dimension of a product differs from its target value - This loss increases with the square of the deviation from the target - According to this concept, a loss to society occurs even though a dimension is within tolerance as long as the dimension is not exactly on the target - For example, a loss to society might occur because an assembly made of components that are within specification, but not exactly on target, wears out faster than an assembly composed of components that are all exactly on the target

lot number control

-Assigning a unique number to each instance of receipt and carrying forth that number into subsequent manufacturing processes so that, in review of an end item, each lot consumed from raw materials through end item can be identified as having been usedforthe manufacture of this specific end item lot

long term planning

-Business planning that addresses the strategic needs of the organization - See: business plan, resource planning

leveraging purchase volume

-Buying in large quantities to take advantage of volume price or shipping discounts

level

-Every part or assembly in a product structure is assigned a level code signifying the relative level at which that part or assembly is used within the product structure - Often the end items are assigned level 0, with the components and subassemblies going into it assigned level 1, level 2, and so on - The MRP explosion process starts at level 0 and proceeds downward one level at a time

loss leader pricing

-Pricing some products below cost to attract customers into the store, in the expectation that they will buy other items as well

scheduler

-A general term that can refer to a material planner, dispatcher, or a combined function

variable

-A quantity that can assume any of a given set of values

prime rate

-The interest rate charged by banks to their most preferred customers

run out list

-1) A list of items to be scheduled into production in sequence by the dates at which the present available stock is expected to be exhausted - 2) A statement of ingredients required to use up an available resource (e -g -, how much y resource is required to consume 300 pounds of x)

tool order

-A document authorizing issue of specific tools from the tool crib or other storage - Syn: tool issue order

sponsor

-A person who provides financial support, in cash or in kind

surplus

-A situation in which an oversupply exists

strategic performance measurements

-Measurements that relate to the longterm goals of a business - Examples include profitability, market share, growth, and productivity - See: global performance measurements, operational performance measurements

net operating profit after taxes (nopat)

-Operating profit less applicable taxes

search models

-Operations research models that attempt to find optimal solutions with adaptive searching approaches

promissory note

-An agreement to pay a stipulated amount during an agreed time period

vertical merger

-An alliance of two firms where one firm is a supplier to the other

shippingtolerance

-An allowable deviation that the supplier can ship over or under the contract quantity

swot analysis

-An analysis of the strengths, weaknesses, opportunities, and threats of and to an organization - SWOT analysis is useful in developing strategy -rope, kanban, synchronous scheduling

trend analysis

-An analysis to determine whether trend (general upward or downward change) exists in data - See: trend forecasting models

methods study

-An analysis to improve the efficiency ofwork by studying the existing method to identify and eliminate wasted motion

progressive operations

-Passing work from station to station

ways

-Paths over which a carrier operates, including rightofway, roadbed, tracks, and other physical facilities - May be owned by the government, privately held by the carrier, or provided by nature - webcastingSyn: push technology

pre receiving

-Paying for materials before receipt to prepare for incoming products and goods

progress payments

-Payments arranged in connection with purchase transactions requiring periodic payments in advance of delivery for certain amounts or for certain percentages of the purchase price

linear trend forecasting

-Using simple linear regression to estimate future trends

schedule chart

-Usually a large piece of graph paper used in the same manner as a control board - Where the control board often uses strings and markers to represent plans and progress, the schedule chart is typically filled in with pencil - See: control board

material constraint

-Usually a misnomer - Material shortages are rarely the constraint rather, temporary material shortages hinder effective constraint management by inhibiting the ability to fully exploit and/or subordinate to the constraint

strategic quality planning

-Weaving quality considerations into strategic business plans -term relationships with trading partners who can help the purchaser mppt nrnfitahilitv and pi iqtnmpr qatisfartinn onak

substitutability

-When a buyer can purchase similar products from different suppliers - Increases the buyer's power because the buyer doesn't have to rely onjust one supplier

transparency

-When a company allows outsiders, typically customers, to see some internal information (typically regarding an order) without giving any more than the outsider requires

time utility

-When a delivery gets to a customer at exactly the right time (not early, not late)

market dominance

-When a firm has very little competition

maverick spending

-When employees or managers purchase from nonqualified suppliers and bypass established purchasing procedures

seasonal component

-A component of demand, usually describingthe impact on demand of variations that occur because of the time of year (quarter, month, week) - See: decomposition, time series analysis, seasonal harmonicsSyn: harmonic smoothing

withdrawal kanban

-An indicator that a container can be transported between work areas

return on net assets

-Profit divided by assets excluding depreciation

netting

-The process of calculating net requirements

part coding and classification

-A method used in group technology to identify the physical similarity of parts

sequential

-ln numeric sequence, usually in ascending order

whatyou see is whatyou get (wysiwyg)

-Computer jargon that means the file appears to the editor exactly the same way that it appears to the end user

paymentterms

-Conditions surrounding payment for a sale, providing a time frame in which a customer can pay without late penalties or additional fees - See: terms and conditions

second tier suppliers (or customers)

-A supplier's suppliers (or customer's customers)

purchased part

-An item sourced from a supplier

n

-Sample size (the number of units in a sample)

merger

-The acquisition of the assets and liabilities of one company by another

product group forecast

-A forecast for a number of similar products - See: aggregate forecast, product group

uniform product code

-A retail product numbering and bar coding system that identifies the item and the manufacturer

visual inspection

-inspection performed without test instruments

production material

-Any material used in the manufacturing process

negligence

-Causing injury to another by failing to use reasonable care

systems audit

-The audit of any activity that can affect final product quality

nonexempt employee

-A person filling a nonexempt position - See: nonexempt positions

pallet rack

-A single or multiplelevel structure for storage used to support high stacking of palletized loads

short shipment

-A situation in which a piece of freight designated by the shipping document is missingfrom delivery

muri

-A Japanese word meaning strain or overburden

mura

-A Japanese word meaning unevenness or variability

sensei

-A Japanese word meaningteacheroronewith experience

star

-A slang term used to refer to a highgrowth, highprofitmargin product - See: growth

open office

-An office with movable partitions and furniture that deemphasizes the compartmentalization of people

subcontracting

-Sending production work outside to another manufacturer

passive tag

-A RFID tagthat does not send out data and is not selfpowered - See: radio frequency identification (RFID) tag

standard service

-Service that is the same for most customers

trend component

-A component of demand, usually describing the impact of increasing or decreasing growth on demand - See: time series analysis

pure services

-Services that result in few or no tangible products to the customer (e -g -, education)

service reliability

-A dimension of service quality referring to the capability of a service provider to perform dependably and accurately

order cost

-A direct labor cost incurred when a purchaser places an order

value based management (vbm)

-The concept of satisfying customers to create shareholder wealth

planned issue

-A disbursement of an item predicted by MRP through the creation of a gross requirement or allocation - Syn: controlled issue

stockout

-A lack of materials, components, or finished goods that are needed - See: backorder

master pack

-A large, protective box used to contain smaller boxes - This reduces materials handling activities

steady state

- The state occurring when the variables that define the behavior of a system or process are behaving naturally as if operating for some time - In simulations, data is not collected until after this state is reached - See: transient state

maximum allowable cost

-1 n service organizations, the limit of reimbursement allowed by an agency for the cost of a supply item

redundancy

-1) A backup capability, coming eitherfrom extra machines orfrom extra componentswithin a machine, to reduce the effects of breakdowns - 2) The use of one or more extra or duplicating components in a system or equipment (often to increase reliability)

record

-1) A collection of data fields arranged in a predefined format - 2) A set of related data that a computer program treats as a unit

master contract

-1) A contract that lays out the general provisions of a longterm agreement and governs most of the details of future individual contracts or purchase ordersfor a period of time - 2) In relation to unionized labor, the contract between the labor union and the employer - Syn: master service agreement

statement of work

-1) A description of products to be supplied under a contract - 2) In project management, the first project planning document that should be prepared - Describes the purpose, history, deliverables, and measurable success indicators for a project - 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 validated for management, staff, and review groups, the statement of work should be a persuasive document

target market

-1) A fairly homogeneous group of customers to whom a company wishes to appeal - 2) A definable group of buyers to which a marketer has decided to market

partnership

-1) A form of business ownership that is not organized as a separate legal entity (i -e -, unincorporated business), but entailing ownership by two or more persons - 2) In a supply chain, a relationship based on trust, shared risk, and rewards aimed toward achieving a competitive advantage -

return material authorization (rma)

-1) A form that must be completed that describes the product returned and why it was returned - 2) A number given to authorize the acceptance of returned items - 3) The signatory authorization that is normally required to return the goods

product profiling

-1) A graphical device used to ascertain the level of fit between a manufacturing process and the orderwinning criteria of its products - Can be used at the process or company level to compare the manufacturing capabilities with the market requirements to determine areas of mismatch and identify steps needed for realignment - 2) Removing material around a predetermined boundary by means of numerically controlled machining - The numerically controlled tool path is automatically generated on the system

learning organization

-1) A group of people who have woven a continuous, enhanced capacity to learn into the corporate culture - 2) An organization in which learning processes are analyzed, monitored, developed, and aligned with competitive goals

operation

-1) A job or task, consisting of one or morework elements, usually done essentially in one location - 2) The performance of any planned work or method associated with an individual, machine, process, department, or inspection - 3) One or more elements that involve one of the following: the intentional changing of an object in any of its physical or chemical characteristics the assembly or disassembly of parts or objects the preparation of an object for another operation, transportation, inspection, or storage planning, calculating, or giving or receiving information

tree diagram

-1) A management technique used to analyze a situation in increasing detail - The full range of tasks to be accomplished to achieve a primary goal and supporting subgoal may be illustrated - 2) In the theory of constraints, a diagram relating effects to underlying causes - See: current reality tree, future reality tree

order fill rate

-1) A measure of customer orders fulfilled from stock, usually expressed as a percentage - In a make to stock company, this percentage usually represents the number of items or dollars (on one or more customer orders) that were shipped on schedule for a specific time period, compared to the total that were supposed to be shipped in that time period - 2) In a make to order company, usually some comparison of the number of jobs or dollars shipped in a given time period (e -g -, a week) compared to the number of jobs or dollars that were supposed to be shipped in that time period

seasonal index

-1) A number used to adjust data to seasonal demand - 2) Manipulations to the buffer size that affect inventory positions by adjusting buffers to follow seasonal patterns - Syn: seasonal adjustment - See: base series

mapi method

-1) A procedure for equipment replacement analysis sponsored by the Machinery and Allied Products Institute - 2) A method of capital investment analysis that has been formulated by the Machinery and Allied Products Institute - This method uses a fixed format and provides charts and graphs to facilitate calculations - A prominent feature of this method is that it explicitly includes obsolescence

prototype

-1) A product model constructed fortesting and evaluation to see how the product performs before releasing the product to manufacture - 2) Model consisting of all files and programs needed for a business application

prototyping

-1) A specialized product design and development process for developing a working model of a product - 2) A specialized system development process for performing a determination where user needs are extracted, presented, and developed by buildingaworking model of the system - Generally, these tools make it possible to create all files and processing programs needed forthe evaluation of a business application in a matter of days or hours

sampling

-1) A statistical process where generalizations regarding an entire body of phenomena are drawn from a relatively small number of observations - 2) In marketing, the delivery of free trial goods to consumers

proxy

-1) A written document authorizing an agent to vote a shareholder's stock at a shareholder meeting - 2) The agent designated in 1)

materials requisition

-1) An authorization that identifies the items and quantities to be withdrawn from inventory - 2) An authorization that identifies the items and quantities to be included in a purchase order - Syn: production materials requisition

standard

-1) An established norm against which measurements are compared - 2) An established norm of productivity defined in terms of units of output per set time (units/hour) or in standard time (minutes per unit) - 3) The time allowed to perform a specific job including quantity ofwork to be produced - See: standard time

remanufacturing

-1) An industrial process in which wornout products are restored to likenew condition - In contrast, a repaired product normally retains its identity, and only those parts that have failed or are badly worn are replaced or serviced - 2) The manufacturing environment where wornout products are restored to like

stock keeping unit (sku)

-1) An inventory item - For example, a shirt in six colors and five sizes represents 30 different SKUs - 2) In a distribution system, an item at a particular geographic location - For example, one product stocked at the plant and at six different distribution centers would represent seven SKUs - stockless productionSyn: just in time

perfect order

-1) An order in which the seven Rs are satisfied: the right product, the right quantity, the right condition, the right place, the right time, the right customer, and the right cost - 2) A fulfillment metric used to measure order proficiency i -e -, the order meets the following criteria: on time, complete, accurate, and undamaged

work order

-1) An order to the machine shop for tool manufacture or equipment maintenance not to be confused with a manufacturing order - Syn: work ticket - 2) An authorization to start work on an activity (e -g -, maintenance) or product

productivity

-1) An overall measure of the ability to produce a good or a service - It is the actual output of production compared to the actual input of resources - Productivity is a relative measure across time or against common entities (labor, capital, etc -) - In the production literature, attempts have been made to define total productivity where the effects of labor and capital are combined and divided into the output - One example is a ratio that is calculated by adding the dollar value of labor, capital equipment, energy, and material, and so forth and dividing it into the dollar value of output in a given time period - This is one measure of total factor productivity - 2) In economics, the ratio of output in terms of dollars of sales to an input such as direct labor in terms of the total wages - Known as single factor productivity or partial factor productivity

waste

-1) Any activity that does not add value to the good or service in the eyes ofthe consumer - 2) A byproduct of a process or task with unique characteristics requiring special management control - Waste production can usually be planned and somewhat controlled - Scrap is typically not planned and may result from the same production run as waste - See: h37nrdm is waste

product

-1) Any good or service produced for sale, barter, or internal use - 2) One of the four Ps (product, price, place, and promotion) that constitute the set of tools for directing the business offering to the customer - The product can be promoted as a distinctive item - See: four Ps

work rules

-1) Compensation rules concerning such issues as overtime, vacation, and shift premiums - 2) Between employee and employer, job rights and obligation rules, such as performance standards, promotion procedures, job descriptions, and layoff rules - Work rules are usually a part of a union contract and may include a code of conduct for workers and language to ensure decent conditions and health standards

turnkey system

-1) Computer packages that are already prepared by a hardware manufacturer or software house and are ready to run - 2) Any system of machines that is ready for immediate use

serviceability

-1) Design characteristic that facilitates the easy and efficient performance of service activities - Service activities include those activities required to keep equipment in operating condition, such as lubrication, fueling, oiling, and cleaning - 2) A measurement of the degree to which servicing of an item will be accomplished within a given time under specified conditions - See: maintainability - 3) The competitive advantage gained when an organization focuses on aspects such as the speed and courtesy with which customer complaints and questions are answered, following up with customers after the sale to ensure satisfaction, and offering onsite service for product repairs - 4) Measure of repairs and maintenance based on cost, speed, and convenience

profit

-1) Gross profit is earnings from an ongoing business after direct costs of goods sold have been deducted from sales revenue for a given period - 2) Operating profit is earnings or income after all expenses (selling, administrative, depreciation) have been deducted from gross profit - 3) Net profit is earnings or income after adjusting operating profit for miscellaneous income, expenses (patent royalties, interest, capital gains, etc -), and tax

scalability

-1) How effectively a company can grow its business in order to meet demand - 2) How effectively the solution to a problem can be scaled up as the problem's size increases

reorder quantity

-1) In a fixed reorder quantity system of inventory control, the fixed quantity that should be ordered each time the available stock (onhand plus onorder) falls to or belowthe reorder point - 2) In a variable reorder quantity system, the amount ordered from time period to time period varies - Syn: replenishment order quantity

value added

-1) In accounting, the addition of direct labor, direct material, and allocated overhead assigned at an operation - It is the cost rollup as a part goes through a manufacturing process to finished inventory - 2) In current manufacturing terms, the actual increase of utility from the viewpoint of the customer as a part is transformed from raw material to finished seen by the customer - The objective is to eliminate all non valueadded activities in producing and providing a good or service

pilot test

-1) In computer systems, a test before final acceptance of a new business system using a subset of data with engineered cases and documented results - 2) Generally, production of a quantity to verify manufacturability, customer acceptance, or other management requirements before implementation of ongoing production - Syn: pilot, walkthrough

total cost curve

-1) In costvolumeprofit (breakeven) analysis, the total cost curve is composed of total fixed and variable costs per unit multiplied by the number of units provided - Breakeven quantity occurs where the total cost curve and total sales revenue curve intersect - See: breakeven chart, break

safety stock

-1) In general, a quantity of stock planned to be in inventory to protect against fluctuations in demand or supply - 2) In the context of master production scheduling, the additional inventory and capacity planned as protection against forecast errors and shortterm changes in the backlog - Overplanning can be used to create safety stock - Syn: buffer stock, reserve stock - See: hedge, inventory buffer

service industry

-1) In its narrowest sense, an organization that provides an intangible product (e -g -, medical or legal advice) - 2) In its broadest sense, all organizations except farming, mining, and manufacturing - Includes retail trade wholesale trade transportation and utilities finance, insurance, and real estate construction professional, personal, and social services and local, state, and federal governments, service levelSyn: level of service

push system

-1) In production, the production of items at times required by a given schedule planned in advance - 2) In material control, the issuing of material according to a given schedule or issuing material to a job order at its start time - 3) In distribution, a system for replenishing field warehouse inventories where replenishment decision making is centralized, usually at the manufacturing site or central supply facility - See: pull system

pull system

-1) In production, the production of items only as demanded for use orto replace those taken for use - See: pull signal - 2) In material control, the withdrawal of inventory as demanded by the using operations - Material is not issued until a signal comes from the user - 3) In distribution, a system for replenishing field warehouse inventories where replenishment decisions are made at the field warehouse itself, not at the central warehouse or plant

successor activity

-1) In project management, in an activityonarrow network, the activity (arrow) that departs a node - 2) In project management, in an activityon

task

-1) In project management, the lowest level to which work can be subdivided on a project - 2) In activitybased cost accounting, a task, a subdivision of an activity, is the least amount ofwork - Tasks are used to describe activities

network design

-1) In supply chain management, the design of a supply chain's sourcing, manufacturing, and distribution facilities and information flows to meet the organization's strategic goals - These strategic goals can include being efficient, responsive, customerfocused, or some other mix of priorities - The design includes determining the best locations, numbers, sizes, capacities, capabilities, and ownership models of facilities to support these goals - 2) In logistics, the design and periodic review of inbound and outbound transportation networksall types of warehouses by number, location, size, layout, and optimum mix of inventory levels per locationto meet the organization's strategic goals - Considerations are made to balance tradeoffs between warehouse costs, transportation times and expenses, and customer service goals

parts bank

-1) In the narrow sense, an accumulation of inventory between operations that serves to keep a subsequent operation running despite there being interruptions in the preceding operations - See: buffer - 2) In the larger sense, a stockroom orwarehouse - The implication is that the contents of these areas should be controlled like the contents of a bank

pooling

-1) In transportation, placing shipments from multiple companies together in the same shipment in order to reduce the costs of each shipment - 2) In production, that action that combines in parallel previously independent processes to reduce the total variance compared to the variances that would occur when the processeswere independent - POPAcronym for point of purchase

operational performance measurements

-1) Intraditional 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 constraints, performance measurements that link causally to organizational performance measurements - Throughput, inventory, and operating expense are examples - See: global performance measurements, local performance measurements, strategic performance measurements

linearity

-1) Production at a constant quantity - 2) Use of resources at a level rate, typically measured daily or more frequently

overpack

-1) Reducing total shipping costs by reducing the peritem shipping cost - This is done by including multiple smaller items in one larger box - 2) Nesting or packing items into a larger container or box to simplify handling or provide additional protection against damage during shipment

withdrawal

-1) Removal of material from stores - 2) A transaction issuing material to a specific location, run, or schedule

sales promotion

-1) Sales activities that supplement both personal selling and marketing, coordinate the two, and help to make them effective (e -g -, displays)

stores

-1) Stored materials used in making a product - 2) The room where stored components, parts, assemblies, tools, fixtures, and so forth are kept, stores issue orderSyn: picking list

turnover

-1) Syn: inventory turnover - 2) In the United Kingdom and certain other countries, annual sales volume

physical inventory

-1) The actual inventory itself - 2) The determination of inventory quantity by actual count - Physical inventories can be taken on a continuous, periodic, or annual basis - Syn: annual inventory count, annual physical inventory - See: periodic inventory

systems analysis

-1) The analyzing in detail of the information needed for an organization, the characteristics and components ofthe current method of problem solving that encompasses the identification, study, and evaluation of interdependent parts and their attributes that function in an ongoing process and that constitute an organic whole

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

line balancing

-1) The balancing of the assignment of the tasks to workstations in a manner that minimizes the number of workstations and minimizes the total amount of idle time at all stations for a given output level - In balancing these tasks, the specified time requirement per unit of product for each task and its sequential relationship with the othertasks must be considered - See: uniform plant loading - 2) A technique for determining the product mix that can be run down an assembly line to provide a fairly consistent flow ofwork through that assembly line at the planned line rate

obsolescence

-1) The condition of being out of date - A loss of value occasioned by new developments that place the older property at a competitive disadvantage - A factor in depreciation - 2) A decrease in the value of an asset brought about by the development of new and more economical methods, processes, or machinery - 3) The loss of usefulness or worth of a product or facility as a result of the appearance of better or more economical products, methods, or facilities

salvage value

-1) The cost recovered or that could be recovered from used property when removed, sold, or scrapped - A factor in appraisal of property value and in computing depreciation - 2) The market value of a machine or facility at any point in time - Normally, an estimate of an asset's net value at the end of its estimated life

time value of money

-1) The cumulative effect of elapsed time on the money value of an event, based on the earning power of equivalent invested funds - See: future worth, present value - 2) The interest rate that capital is expected to earn

operation due date

-1) The date when an operation should be completed so that its order due date can be met - It can be calculated based on scheduled quantities and lead times - 2) A job sequencing algorithm (dispatching rule) giving earlier operation due dates higher priority

performance

-1) The degree to which an employee or group applies skill and effort to an operation or task as measured against an established standard - 2) One of the eight dimensions of quality that refers to product attributes pertaining to the functioning of a product (e -g -, horsepower, signal to noise ratio, decibel output) - 3) One of the four parts of the SCOR framework - This section contains the standard metrics to describe process performance and define strategic goals

operations research

-1) The development and application of quantitative techniques to the solution of problems - More specifically, theory and methodology in mathematics, statistics, and computing are adapted and applied to the identification, formulation, solution, validation, implementation, and control of decisionmaking problems - 2) An academic field of study concerned with the development and application of quantitative analysis to the solution of problems faced by management in public and private organizations - Syn: management science

production capability

-1) The highest sustainable output rate that could be achieved for a given product mix, raw materials, worker effort, plant, and equipment - 2) The collection of personnel, equipment, material, and process segment capabilities - 3) The total of the current committed, available, and unattainable capability of the production facility - The capability includes the capacity of the resource

network

-1) The interconnection of computers, terminals, and communications channels to facilitate file and peripheral device sharing as well as effective data communication - 2) A graph consisting of nodes connected by arcs

receipt

-1) The physical acceptance of an item into a stocking location - 2) The transaction reporting of this activity

resource management

-1) The planning and validation of all organizational resources - 2) The effective identification, planning, scheduling, execution, and control of all organizational resources to produce a good or service that provides customer satisfaction and supports the organization's competitive edge and ultimately, its organizational goals - 3) An emerging field of study emphasizing the systems perspective, encompassing both the product and process life cycles, and focusing on the integration of organizational resources toward the effective realization of organizational goals - Resources include materials maintenance, repair, and operating supplies production and supporting equipment facilities direct and indirect employees staff administrative and professional employees information knowledge and capital - Syn: integrated resource management

operations management

-1) The planning, scheduling, and control of the activities that transform inputs into finished goods and services - 2) A field of study that focuses on the effective planning, scheduling, use, and control of a manufacturing or service organization through the study of concepts from design engineering, industrial engineering, management information systems, quality management, production management, inventory management, accounting, and other functions as they affect the operation, operations plan

production management

-1) The planning, scheduling, execution, and control of the process of converting inputs into finished goods - 2) A field of study that focuses on the effective planning, scheduling, use, and control of a manufacturing organization - Examines concepts from design engineering, industrial engineering, management information systems, quality management, inventory management, accounting, and otherfunctionsto determine how they affect the transformation process

statistical control charts

-A chart on which data is collected from physical measurements or customer surveys, and plotted so that conformance to specifications or customer satisfaction can be tracked and improved

reliability

-1) The probability that a product will perform its specified function under prescribed conditions without failure for a specified period of time - 2) A design parameter that can be made part of a requirements statement - 3) A SCOR performance attribute - The reliability attribute addresses the ability to perform tasks as required - Reliability focuses on the predictability of the outcome of a process - Typical metrics forthe reliability attribute include on time, the right quantity, and the right quality - Reliability is a customer focused attribute - See: mean time between failures, mean time forfailures

standardization

-1) The process of designing and altering products, parts, processes, and procedures to establish and use standard specifications for them and their components - 2) Reduction of the total numbers of parts and materials used and products, models, or grades produced - 3) The function of bringing a raw ingredient into standard (acceptable) range per the specification before introduction to the main process

supply

-1) The quantity of goods available for use - 2) The actual or planned replenishment of a product or component - The replenishment quantities are created in response to a demand for the product or component or in anticipation of such a demand, supply baseSyn: supplier base

overrun

-1) The quantity received from manufacturing or a supplier that is in excess ofthe quantity ordered - 2) The condition resulting when expenditures exceed the budget

velocity

-1) The rate of change of an item with respect to time - See: inventory turnover, lead time - 2) In supply chain management, a term used to indicate the relative speed of all transactions, collectively, within a supply chain community - A maximum velocity is most desirable because it indicates higher asset turnover for stockholders and faster ordertodelivery response for customers

safety factor

-1) The ratio of average strength to the worst stress expected - It is essential that the variation, in addition to the average value, be considered in design - 2) The numerical value used in the service function (based on the standard deviation or mean absolute deviation of the forecast) to provide a given level of customer service - For example, if the item's mean absolute deviation is 100 and a -95 customer service level (safety factor of 2 -06) is desired, then a safety stock of 206 units should be carried - This safety stock must be adjusted if the forecast interval and item lead times differ - Syn: service factor - See: service function

recycle

-1) The reintroduction of partially processed product or carrier solvents from one operation or task into a previous operation - 2) A recirculation process

operation priority

-1) The relative importance an operation is given based on its scheduled due date and/or start date, usually as determined by the backscheduling process - 2) The relative importance a job is given in a queue of jobs by a priority dispatching heuristic such as shortest processing time first or least slack remaining first

opportunity cost

-1) The return on capital that could have resulted had the capital been used for some purpose otherthan its present use - 2) The rate of return investors must earn to continue to supply capital to a firm

product life cycle

-1) The stages a new product goes through from beginning to end (i -e -, the stages that a product passes through from introduction through growth, maturity, and decline) - 2) The time from initial research and development to the time at which sales and support of the product to customers are withdrawn - 3) The period of time duringwhich a product can be produced and marketed profitably

simulation

-1) The technique of using representative or artificial data to reproduce in a model various conditions that are likely to occur in the actual performance of a system - Frequently used to test the behavior of a system under different operating policies - 2) Within MRP II, using the operational data to perform whatif evaluations of alternative plans to answer the question, Can we do it? If yes, the simulation can then be run in the financial mode to help answerthe question,Dowe really want to? See: whatif analysis

rapid prototyping

-1) The transformation of product designs into physical prototypes - Rapid prototyping relies on techniques such as crossfunctional teams, data sharing, and advanced computer and communication technology (e -g -, CAD, CAM, stereolithography, data links) - Rapid prototyping involves producing the prototype on production equipment as often as possible - It improves product development times and allows for cheaper and faster product testing, assessment ofthe ease of assembly and costs, and validation before actual production tooling - 2) The transformation of system designs into computer system prototypes with which the users can experiment to determine the adequacy of the design to address their needs - See: 3D printing

sunk cost

-1) The unrecovered balance of an investment - It is a cost, already paid, that is not relevant to the decision being made about the future - 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

tolerance limits

-1) The upper and lower extreme values permitted by the tolerance - 2) In work measurement, the limits between which a specified operation time value orotherwork unitwill be expected to vary - See: lower specification limit, upper specification limit - Syn: specification limits

setup

-1) The work required to change a specific machine, resource, work center, or line from making the last good piece of item A to making the first good piece of item B - 2) The refitting of equipment to neutralize the effects of the last lot produced (e -g -, teardown of the justcompleted production, preparation of the equipment for production of the next scheduled item) - Syn: changeover, turnaround, turnaround time

production part approval process (ppap)

-A Big Three automotive process outlining requirements for approval of production parts - Its purpose is to measure whether a supplier can, with regularity, fulfill these requirements

sigma

-A Greek letter (£) commonly used to designate the standard deviation of a population

nemawashi

-A Japanese word meaning getting a group to agree on a strategy before beginningto implement it

scor beginner

-A SCOR competency level - A beginner has not fully mastered work skills and has a limited situational perception of work activities - A beginner is familiar with the basic process and can sequence the steps - The experienced beginner remains taskoriented rather than goaloriented, but is starting to get some perspective - A beginner treats all aspects of work treated separately with equal importance

scor proficient

-A SCOR competency level - A proficient professional sees the situation as a whole and acts from personal knowledge and conviction - Proficient company professionals prioritize the importance of situations and use their knowledge and skills to focus on problem solving

scor competent

-A SCOR competency level - It represents an employee who acts consciously to satisfactorily perform longterm goals and plans - At this level, an employee is goaloriented and able to figure out a sequence of tasks to accomplish a goal

scor expert

-A SCOR competency level - The expert has an intuitive understanding of the situation and zooms in on the central aspects to apply analytical reasoning, problemsolving techniques, and leadership - Experts understand what is possible and apply experience and knowledge to master new situations

scor competency level

-A SCOR measure that describes the level or state of qualification to perform a certain role or tasks

occupational safety and health act (osha)

-A US law that applies to all employers in the United States who are engaged in interstate commerce - Its purpose is to ensure safe and healthful working conditions by authorizing enforcement of the standards provided underthe act

securities and exchange commission (sec)

-A US the securities industry - The SEC was created by the Securities Exchange Act of 1934 with a mission to protect investors maintain fair, orderly, and efficient markets and facilitate capital formation

redundant component

-A backup part of a machine or product

pareto chart

-A bar graph that displays the results of a Pareto analysis - It may or may not display the 8020 variation, but it does show a distinct variation from the few compared to the many

modes of transportation

-A basic method of moving items - Modes include road, rail, air, water (ocean or inland waterway), pipeline, intermodal, and courier or parcel services

managerial accounting

-A branch of accounting that uses techniques such as breakeven analysis, costvolumeprofit analysis, makebuy analysis, and others to provide information used in daytoday decision making

private brand

-A brand applied by a distributor rather than a manufacturer

mix

-A breakdown of the total demand or production that identifies different products in an aggregate demand or production run

time based competition (tbc)

-A broadbased corporate strategy that emphasizes time as the vehicle for achieving and maintaining a sustainable competitive edge - Its characteristics are: the lead time reductions must be achieved through system/process analysis (the processes must be changed to reduce lead times) - Reductions in lead times are achieved by changingthe processes and the decision structures used to design, produce, and deliver products to the customers - Involves design, manufacturing, and logistical processes

step budget

-A budget that establishes the anticipated targets at which an operation will perform for each step or level of production - Can be likened to several different fixed budgets - A useful method because most of the manufacturing overhead expenditures vary in steps, not as a straight line - See: flexible budget

partner relationship management (prm)

-A business strategy and set of application tools designed to increase the longterm value of a firm's customer channel network through partner recruitment, development, and profiling timely communication of marketplace opportunities sales management services management collaboration to improve sales, productivity, and competitiveness and metrics ensuring that each trading partner contributes to customer satisfaction

service bureau model

-A business strategy in which a company outsources certain products and services from another company - The company prefers to concentrate on its core business ratherthan expending resources on the outsourced item

retailer

-A business that takes title to products and resells them to final consumers

third party logistics (3pl)

-A buyer and supplier team with a third party that provides product delivery services - This third party may provide added supply chain expertise

pallet positions

-A calculation that determines the space needed forthe number of pallets for inventory storage or transportation based on a standard pallet size - Pallet dimensions vary around the globe, but are typically a constant in regional markets - The term is frequently used to quote storage and transportation rates

resource calendar

-A calendar of working days and nonworking days that shows when resources are idle - Typically, the calendar includes holidays and weekends - See: manufacturing calendar -rope

match capacity strategy

-A capacity strategy that strikes a balance between the lead and lag capacity strategies by adding capacity at approximately the rate of actual demand increase

stores ledger card

-A card on which records of the items on hand and on order are maintained, stores requisitionSyn: picking list

transport stocks

-A carrier material designed to move solids in solution or slurry orto dilute ingredients to safe levels for reaction

variation

-A change in data, a characteristic, or a function that is caused by one of four factors: special causes, common causes, tampering, or structural variation

matrix bill of material

-A chart made up from the bills of material for a number of products in the same or similar families - It is arranged in a matrix with components in columns and parents in rows (or vice versa) so that requirements for common components can be summarized conveniently

process chart

-A chart that represents the sequence of work or the nature of events in process - It serves as a basis for examining and possibly improving the way the work is carried out - Syn: operations process chart - See: flow process chart, process flow

option

-A choice that must be made by the customer or company when customizingthe end product - In many companies, the term option means a mandatory choice from a limited selection - See: feature

optimization models

-A class of mathematical models used when the modelerwishes to find the ideal (maximum or minimum) value of some objective function subject to a set of constraints

scor performance attribute

-A classification for metrics used to formulate strategic direction - The SCOR performance attributes are reliability, responsiveness, agility, cost, and asset management efficiency

specification

-A clear, complete, and accurate statement ofthe technical requirements of a material, an item, or a service, and ofthe procedure to determine if the requirements are met - specification limitsSyn: tolerance limits

manufacturing planning and control system (mpc)

-A closedloop information system that includes the planningfunctions of production planning (sales and operations planning), master production scheduling, material requirements planning, and capacity requirements planning - Once the plan has been accepted as realistic, execution begins - The execution functions include inputoutput control, detailed scheduling, dispatching, anticipated delay reports (department and supplier), and supplier scheduling - A closedloop MRP system is one example of a manufacturing planning and control system

risk category

-A cluster of risk causes with a label such as external, environmental, technical, or organizational

parttype

-A code for a component within a bill of material (e -g -, regular, phantom, reference)

lot size code

-A code that indicates the lotsizing technique selected for a given item - Syn: order policy code

parameter

-A coefficient appearing in a mathematical expression, each value of which determines the specific form of the expression - Parameters define or determine the characteristics or behavior of something, as when the mean and standard deviation are used to describe a set of data

time and attendance

-A collection of data relating to an employee's record of absences and hours worked

virtual supply chain

-A collection of firms that typically exists for only a short period - Virtual supply chains are more flexible than traditional supply chains, but less efficient

manufacturing strategy

-A collective pattern of decisions that acts upon the formulation and deployment of manufacturing resources - To be most effective, the manufacturing strategy should act in support of the overall strategic direction of the business and provide for competitive advantages (edges)

warranty

-A commitment, either expressed or implied, that a certain fact regardingthe subject matter of a contract is presently true or will be true - The word should be distinguished from guarantee, which means a contract or promise by an entity to answerforthe performance of a product or person - See: general warranty, guarantee, special warranty

web services

-A common internet or intranet framework that enables the movement of data from one supply chain application to another, without the requirement for a direct connection between the two applications and without regard to the underlying operating system forthose applications

policy constraint

-A common misnomer - Bad policies are not the constraint rather, they hinder effective constraint management by inhibiting the ability to fully exploit and/or subordinate to the constraint

procurement services provider

-A company that has product, sourcing, and supply management knowledge acts as an outsourced process by other companies and provides procurement help - Most often used as a thirdparty process by companies where procurement is a significant part of business, but the company lacks the expertise to effectively manage the process

trading company

-A company that introduces foreign buyers and sellers and arranges all product export/ import details, documentation, and transportation

single source supplier

-A company that is selected to have 100 percent of the business for a part although alternate suppliers are available - See: solesource supplier

third party logistics company

-A company that manages all or part of another company's product delivery operations

multinational corporation

-A company with capital investments in more than a single country

threshold costs

-A company's variable costs, which must be covered for a company to continue to stay in business

quick response manufacturing

-A companywide strategy to cut lead times in all phases of manufacturing and office operations - With its roots in the timebased competition strategies, quickresponse manufacturing focuses on the relentless pursuit of lead time reduction - Using manufacturing resources planning for higher

make or buy cost analysis

-A comparison of all the costs associated with making an item versus the cost of buying the item

percent completed

-A comparison of work completed to the current projection of total work, percent of fillSyn: customer service ratio

piece rate pay system

-A compensation system based upon volume of output of an individual worker - pieceworkWork done on a piece rate - piggybackSyn: trailer on a flatcar - pilotSyn: pilot test

reverse logistics

-A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycling

random component

-A component of demand usually describingthe impact of uncontrollable variation on demand - See: decomposition, time series analysis

strategic sourcing

-A comprehensive approach for locating and sourcing key material suppliers, which often includes the business process of analyzing totalspendformaterial spend categories - Includes a focus on the development of long perspective, includes automation of requests for quote (RFQ), requests for proposal (RFP), electronic auctioning (eauction or reverse auction), and contract management processes

supplier relationship management (srm)

-A comprehensive approach to managing an enterprise's interactions with the organizations that supply the goods and services the enterprise uses - The goal of SRM is to streamline and make more effective the processes between an enterprise and its suppliers - SRM is often associated with automating procuretopay business processes, evaluating supplier performance, and exchanging information with suppliers - An eprocure

nomogram

-A computational aid consisting of two or more scales drawn and arranged so that the results of calculations may be found by the linear connection of points on them - Historically, it was used for calculating economic lot sizes or sample sizes for work measurement observations - Also called an alignment chart

warehouse management system (wms)

-A computer application system designed to manage and optimize workflows and the storage of goods within a warehouse - Often interfaces with automated data capture and enterprise resources planning systems

transportation management system (tms)

-A computer application system designed to manage transportation operations - Typically offer modules focused on specific functions, such as intermodal transportation, import/export management, fleet service management, and load planning and optimization

server

-A computer or software package that provides a specific kind of service to client software running on other computers - The term can refer to a particular piece of software for example, a web server or the machine on which the software is running - A single server machine could have several different server software packages running on it, thus providing many different servers to clients on the network

perpetual inventory record

-A computer record or manual document on which each inventory transaction is posted so that a current record of the inventory is maintained

scarcity

-A concept central to economics that means less of a good is freely available than consumers would like

pareto's law

-A concept developed by Vilfredo Pareto, an Italian economist, that states that a small percentage of a group accounts for the largest fraction of its impact or value - In an ABC classification, for example, 20 percent of the inventory items may constitute 80 percent ofthe inventory value - See: ABC classification, 8020

one piece flow

-A concept in which items are processed directly from one step to the next, one unit at a time - This helps to shorten lead times and lines of communication, thus more quickly identifying problems

taguchi methodology

-A concept of offline quality control methods conducted at the product and process design stages in the product development cycle - This concept, expressed by Genichi Taguchi, encompasses three phases of product design: system design, parameter design, and tolerance design - The goal is to reduce quality loss by reducing the variability of the product's characteristics during the parameter phase of product development -

materials efficiency

-A concept that addresses the efficiency with which materials are obtained, converted, and shipped in the overall purchasing, production, and distribution process - It can be considered as a companion concept to labor efficiency, and it becomes potentially more significant as the materials portion of cost of goods sold continues to grow

participative design/engineering

-A concept that refers to the simultaneous participation of all the functional areas of the firm in the product design activity - Suppliers and customers are often also included - The intent is to enhance the design with the inputs of all the key stakeholders - Such a process should ensure that the final design meets all the needs ofthe stakeholders and should ensure a product that can be quickly brought to the marketplace while maximizing quality and minimizing costs

undertime

-A condition occurringwhen more personnel are on the payroll than are required to produce the planned output

non vesseloperating common carrier (nvocc)

-A consolidator of ocean freight shipments that operates similarly to a freight forwarder and issues its own bills of lading, thus acting as a carrier even though it does not own the means of transportation being used - NOPATAcronym for net operating profit after taxes

surge tank

-A container to hold output from one process and feed it to a subsequent process - It is used when line balancing is not possible or practical or only on a contingency basis when downstream equipment is nonoperational

ocean bill of lading

-A contract between an ocean carrier and a shipper arrangingfor carriage of freight - It provides evidence of the carrier's receipt of the cargo and lists the origin and destination ports, rates, quantities, weight, and any special handling requirements - The shipper is responsible for all losses other than for negligence on the part of the ocean carrier - OCRAbbreviation for optical character recognition - ODAbbreviation for organizational development - ODDAbbreviation for earliest operation due date

trading partner agreement

-A contract between trading partners that describes all facets of their business together - A legal and binding agreement suitable for legal purposes as well as standard working agreements

q chart

-A control chart for evaluating the stability of a process in terms of a quality score - The quality score is the weighted sum ofthe count of events of various classifications, where each classification is assigned a weight - Syn: quality chart, quality score chart - QFDAbbreviation for quality function deployment - QRMAbbreviation for quickresponse manufacturing - QRP

u chart

-A control chart for evaluating the stability of a process in terms of the average count of events of a given classification per unit occurring in a sample - Syn: countperunit chart

multivariate control chart

-A control chart for evaluating the stability of a process in terms of the levels of two or more variables or characteristics

p chart

-A control chart for evaluating the stability of a process in terms of the percentage of the total number of units in a sample in which an event of a given classification occurs over time - P charts are used where it is difficult or costly to make numerical measurements orwhere combining multiple types of defects into one measurement is desired - Syn: percent chart

np chart

-A control chart for evaluating the stability of a process in terms of the total number of units in a sample in which an event of a given classification occurs - Syn: number of affected units chart - NSNAbbreviation for national stock number - NTEDAbbreviation for notouch exchange of dies, number defective chart

trend control chart

-A control chart in which the deviation ofthe subgroup average (Xbar) from an expected trend in the process level is used to evaluate the stability of a process

r chart

-A control chart in which the subgroup range, R, is used to evaluate the stability of the variability within a process - Syn: range chart

servo system

-A control mechanism linking a system's input and output, designed to feed back system output data to regulate the operation of the system - SETAcronym for secure electronic transaction

open to buy

-A control technique used in aggregate inventory management in which authorizations to purchase are made without being committed to specific suppliers - These authorizations are often reviewed by management using such measures as commodity in dollars and by time period -receive represents nearterm impact on inventory and is often monitored as a control technique in aggregate inventory management - The total of opentoreceive, other longerterm purchase commitments, and opento

vertical marketing

-A coordinated product marketing system, with activities undertaken by one company, fora supply chain

traveler

-A copy ofthe manufacturing order that actually moves with the work through the shop

publicly traded corporation

-A corporation whose stock is available on a national exchange

process costing

-A cost accounting system in which the costs are collected by time period and averaged over all the units produced duringthe period - This system can be used with either actual or standard costs in the manufacture of a large number of identical units

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,

theory of constraints (toc) accounting

-A cost and managerial accounting system that accumulates costs and revenues into three areasthroughput, inventory, and operating expense - Does not create incentives (through allocation of overhead) to build up of actual revenues and costs than traditional cost accounting, and is closerto a cash flow concept of income than is traditional accounting - Provides a simplified and more accurate form of direct costing that subtracts true variable costs (those costs that vary with throughput quantity) - Unlike traditional cost accounting systems in which the focus is generally placed on reducing costs in all the various accounts, the primary focus of TOC accounting is on aggressively exploitingthe constraint(s) to make more money for the firm - Syn: constraint accounting, throughput accounting

learning curve

-A curve reflecting the rate of improvement in time per piece as more units of an item are made - A planning technique, the learning curve is particularly useful in projectoriented industries in which new products are frequently phased in - The basis for the learning curve calculation is that workers will be able to produce the product more quickly after they get used to making it - Syn: experience curve, manufacturing progress curve

total cost of quality curve

-A curve that suggests there is some optimal quality level, Q* - The curve is calculated by adding costs of internal and external failures, prevention costs, and appraisal costs - The optimal quality level occurs where this curve reaches a minimum point - It is a single turning point curve that always has a minimum

outlier

-A data point that differs significantly from other data for a similar phenomenon - For example, if the average sales for a product were 10 units per month, and one month the product had sales of 500 units, this sales point might be considered an outlier - See: abnormal demand

risk acceptance

-A decision to take no action to deal with a risk or an inability to format a plan to deal with the risk

structured problem solving

-A defined process applied to determine, evaluate, and resolve an identified problem - The methodology includes (1) the collection of factual data, (2) defining why the situation is a problem, (3) defining a concise definition of what the problem is, (4) generation of possible solutions without discussing solutions at this time, (5) evaluation of the pros and cons of each option within the organization's objectives and feasibility, and (6) implementation of the solution selected

traffic

-A department or function charged with the responsibility for arranging the most economic classification and method of shipment for both incoming and outgoing materials and products

stockpoint

-A designated location in an active area of operation into which material is placed and from which it is taken - A way of tracking and controlling active material - Not necessarily a stockroom isolated from activity

union free

-A designation that indicates that a company or operation does not have a union contract, union shopA facility in which all hourly employees

valid schedule

-A detailed, feasible calendar of specific items flowing into and through a factory

wand

-A device connected to a bar code reader to identify a barcode

process map

-A diagram of the flow of a production process or service process through the production system - Standardized symbols are used to designate processing, flow directions, branching decisions, input/output, and other aspects ofthe process

project network

-A diagram showing the technological relationships among activities in a project

value engineering and/or analysis

-A disciplined approach to the elimination of waste from products or processes through an investigative process that focuses on the functions to be performed and whether such functions add value to the good or service

price break

-A discount given for paying early, buying in quantity, and so forth - See: discount, pricebreak modelSyn: quantity discount model

terminal delivery allowance

-A discount provided if freight is delivered to or picked up from the carrier's terminal

risk adjusted discount rate

-A discount rate that is higher for more risky projects and lower for less risky projects

upside supply chain flexibility

-A discrete measurement of the amount of time it takes a supply chain to respond to an unplanned 20 percent increase in demand without service or cost penalty

upside supply chain adaptability

-A discrete measurement ofthe quantity of increased production a supply chain can achieve and sustain for 30 days

slack time rule

-A dispatching rule that directs the sequencing of jobs based on slack time - Slack time is calculated as (days left until due date multiplied by hours per day) minus standard hours of work left on a specific job - For example, (5 * 8)12 = 28 hours of slack - The smaller the amount of slack time for a specific job, the higherthe priority that job becomes in the sequence

shortest processing time (spt) rule

-A dispatching rule that directs the sequencing of jobs in ascending order by processing time - If this rule is followed, the most jobs at a work center per time period will be processed - As a result, the average lateness of jobs at that work center is minimized, but some jobs will be very late - Syn: smallest processing time rule

multilevel where used

-A display for a component listing all the parents in which that component is directly used and the next higherlevel parents into which each of those parents is used, until ultimately all toplevel (level 0) parents are listed

multilevel bill of material

-A display of all the components directly or indirectly used in a parent, together with the quantity required of each component - If a component is a subassembly, blend, intermediate, etc -, all its components and all their components also will be exhibited, down to purchased parts and raw materials

stock dividend

-A dividend paid to shareholders in stock rather than cash

waybill

-A document containing a list of goodswith shipping instructions related to a shipment

web page

-A document containing hypertext links to certain other documents (including multimedia documents)

material safety data sheet (msds)

-A document that is part of the materials information system and accompanies the product - Prepared by the manufacturer, the MSDS provides information regarding the safety and chemical properties and (if necessary) the longterm storage, handling, and disposal of the product - Among otherfactors, the MSDS describes the hazardous components of a product how to treat leaks, spills, and fires and how to treat improper human contactwith the product

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 orto many destinations - Manifests usually list the items, piece count, total weight, and the destination name and address for each destination in the load

moveticket

-A document used in dispatching to authorize or record movement of a job from one work center to another - It may also be used to report other information, such as the actual quantity orthe material storage location

requestfor quote (rfq)

-A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors, required capacitySyn: capacity required

request for proposal (rfp)

-A document used to solicit vendor responses when the functional requirements and features are known but no specific product is in mind - Syn: invitation for bid (IFB) - See: request for information (RFI)

manufacturing order

-A document, group of documents, or schedule conveying authority for the manufacture of specified parts or products in specified quantities

part period balancing (ppb)

-A dynamic lotsizing technique that uses the same logic as the least total cost method, but adds a routine called look ahead/ look back - When the look ahead/look back feature is used, a lot quantity is calculated, and before it is firmed up, the next or the previous period's demands are evaluated to determine whether it would be economical to include them in the current lot - See: discrete order quantity, dynamic lot sizing, part recordSyn: item record

least unit cost

-A dynamic lotsizingtechnique that adds ordering cost and inventory carrying cost for each trial lot size and divides by the number of units in the lot size, picking the lot size with the lowest unit cost - See: discrete order quantity, dynamic lot sizing

least total cost

-A dynamic lotsizingtechnique that calculates the order quantity by comparing the setup (orordering) costs and the carrying cost forvarious lot sizes and selects the lot size where these costs are most nearly equal - See: discrete order quantity, dynamic lot sizing

system layout planning (slp)

-A facility layout methodology that develops the layout of a facility by considering the importance of proximity of each department to the other departments, system nervousnessSee: nervousness

serverfactory

-A facility making minor improvements to products set up primarily to avoid the host country's barriers to trade

value stream mapping

-A lean production tool to visually understand the flow of materials from supplier to customer that includes the current process and flow as well as the valueadded and nonvalueadded time of all the process steps - Used to lead to reduction of waste, decrease flow time, and make the process flow more efficient and effective

scrapfactor

-A factor that expresses the quantity of a particular component that is expected to be scrapped upon receipt from a vendor, completion of production, or while that component is being built into a given assembly - It is usually expressed as a decimal value - For a given operation or process, the scrap factor plus the yield factor is equal to 1 - For example, if the scrap factor is 30 percent (or -3), then theyield is 70 percent (or -7) - In manufacturing planning and control systems, the scrap factor is usually related to a specific item in the item master, but may be related to a specific component in the product structure - For example, if 50 units of a product are required by a customer and a scrap factor of 30 percent (ayield of 70 percent) is expected, then 72 units (computed as 50 units divided by -7) should be started in the manufacturing process - Syn: scrap rate - See: yield, yield factor, scrap rate

trust

-A fiduciary relationship in which the trustee holds ownership for the benefit of another party (benefactor)

return on owner's equity (roe)

-A financial measurement of how successful a company is in creating income for the owners of the organization - A comparison of the ROE with the ROA indicates the effectiveness of financial leverage employed by the firm - The measurement is calculated by dividing net income by average owner's equity - See: return on assets (ROA)

product marketfocused organization

-A firm in which individual plants are dedicated to manufacturing a specific product or product group

supply chain mastery

-A firm's ability to achieve superior results through exceptional management of revenue generation, segmented supplier and customer management, collaboration and information sharing, risk management, data analysis, and appropriate use of technology

random variation

-A fluctuation in data that is caused by uncertain or random occurrences

time series forecasting

-A forecasting method that projects historical data patterns into the future - Involves the assumption that the nearterm future will be like the recent past

moving average forecast

-A forecasting technique that uses a simple moving average or a weighted moving average projected forward as a forecast

summarized where used

-A form of an indented whereused bill of material that shows all parents in which a given component is used, the required quantities, and all the nextlevel parents until the end item is reached - Unlike the indented where

sole proprietorship

-A form of business in which one person has ownership and control - See: corporation, partnership

private ownership

-A form of business ownership in which the business is either owned by a single person (proprietorship) or organized under law as a separate legal entity but forwhich company stock is not publicly traded - See: partnership, public ownership -owned warehouse

optional replenishment model

-A form of independent demand item management model in which a review of inventory on hand plus inventory on order is made at fixed intervals - If the actual quantity is lower than some predetermined threshold, a reorder is placed for a quantity M minus x, where M is the maximum allowable inventory and x is the current inventory quantity - The reorder point R may be deterministic or stochastic, and in either instance is large enough to cover the maximum expected demand duringthe review interval plus the replenishment lead time - The optional replenishment model is sometimes called a hybrid system because it combines certain aspects of the fixed reorder cycle inventory model and the fixed reorder quantity inventory model - See: fixed reorder cycle inventory model, fixed reorder quantity inventory model, hybrid inventory system, independent demand item management models

summarized bill of material

-A form of multilevel bill of material that lists all the parts and their quantities required in a given product structure - Unlike the indented bill of material, it does not list the levels of manufacture and lists a component only once for the total quantity used -used, it does not list the levels of manufacture

rolling wave planning

-A form of planning where the work to be performed in the near term is planned in detail and longerterm work is planned at a lesser level of detail

multiple regression models

-A form of regression analysis where the model involves more than one independent variable, such as developing a forecast of dishwasher sales based upon housing starts, gross national product, and disposable income

survey research

-A form of research (frequently used in marketing research) where data is collected by mailing questionnaires to a group of people within a target audience - See: marketing research

observational research

-A form of research (frequently used in marketing research) where data is gathered by direct observation of consumers in the marketplace - See: marketing research

relationship marketing

-A form of target marketing in which the type and time of communications are determined by the customer - Syn: permission marketing

short sea shipping

-A form of water transportation that does not cross an ocean, but instead utilizes coastal and inland waterways to move shipments from maritime ports to their destination - Often used as an alternative to road transportation

union contract

-A formal contract between a company and the union representing its employees, usually covering two to six years, that covers all aspects of pay, working conditions, and strike options

procedure manual

-A formal organization and indexing of a firm's procedures - Manuals are usually printed and distributed to the appropriate functional areas

master schedule

-A format that includes time periods (dates), the forecast, customer orders, projected available balance, availabletopromise, and the master production schedule - It takes into account the forecast the production plan and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals - See: master production schedule

stock record card

-A ledger card that contains inventory status for a given item

plan do check act cycle

-A four step process for quality improvement - In the first step (plan), a plan to effect improvement is developed - In the second step (do), the plan is carried out, preferably on a small scale - In the third step (check), the effects of the plan are observed - In the last step (action), the results are studied to determine what was learned and what can be predicted - The plandocheckaction cycle is sometimes referred to as the Shewhart cycle (because Walter A - Shewhart discussed the concept in his book, Statistical Method from the Viewpoint of Quality Control) or as the Deming circle (because W - Edwards Deming introduced the concept in Japan and the Japanese subsequently called it the Deming circle) - Syn: plandocheck

un global compact management model

-A framework for guiding companies through the process of formally committing to, assessing, defining, implementing, measuring, and communicating the United Nations Global Compact and its principles

rail waybill

-A freight document that indicates goods have been received for shipment by rail - The shipper receives a copy as a receipt for acceptance - RAMAbbreviation for responsibility assignment matrix

racking

-A function performed by a rackjobbera fullfunction intermediary who performs all regular warehousingfunctions and some retail functions, typically stocking a display rack

research and development (r&d)

-A function that performs basic and applied research and develops potential new products

reschedulingassumption

-A fundamental assumption of MRP logic that existing open orders can be rescheduled in nearer time periods far more easily than new orders can be released and received - As a result, planned order receipts are not created until all scheduled receipts have been applied to cover gross requirements

order

-A general term that may refer to such diverse items as a purchase order, shop order, customer order, planned order, or schedule

process flow scheduling

-A generalized method for planning equipment usage and material requirements that uses the process structure to guide scheduling calculations - Used in the flow environments common in process industries

network planning

-A generic term for techniques that are used to plan complex projects - Two of the best known network planningtechniques are the critical path method (CPM) and the program evaluation and review technique (PERT)

work in process (wip)

-A good or goods in various stages of completion throughout the plant, including all material from raw material that has been released for initial processing up to completely processed material awaitingfinal inspection and acceptance as finished goods inventory - Many accounting systems also include the value of semifinished stock and components in this category - Syn: inprocess inventory - workloadSyn: load

value stream map

-A graph displaying the sequence of operations needed to produce and deliver a product or service

planogram

-A graph or map of allotted shelf space based on an analysis of sales data indicating the best arrangement of products on a store shelf

operating characteristic curve (oc curve)

-A graph used to determine the probability of accepting lots as a function of the quality level of the lots or processes when usingvarious sampling plans - There are three types: (1) Type A curves, which give the probability of acceptance for an individual lot comingfrom finite production (will not continue in the future) (2) Type B curves, which give the probability of acceptance for lots comingfrom a continuous process and (3) Type C curves, which, for a continuous sampling plan, give the longrun percentage of product accepted during the sampling phase

probability tree

-A graphic display of all possible outcomes of an event based on the possible occurrences and their associated probabilities

operation setback chart

-A graphical display of the bill of materials and leadtime information provided by the routing for each part - The horizontal axis provides the lead time from raw materials purchase to component manufacture to assembly of the finished product -rope, orderoriented finite loading, operation sheetSyn: routing

run chart

-A graphical technique that illustrates how a process is performing over time - By statistically analyzing a run chart, a process can be determined to be under or out of control - The most common types of data used to construct the charts are ranges, averages, percentages/counts, and individual process attributes (e -g -, temperature) - Syn - run diagram - See: C chart, P chart, R chart, U chart, Xbar chart, run diagramSyn: run chart

scatter chart

-A graphical technique to analyze the relationship between two variables - Two sets of data are plotted on a graph, with the y axis used for the variable to be predicted and the x axis used for the variable to make the prediction - The graph will show possible relationships (although two variables might appear to be related, they might not bethose who know most about the variables must make that evaluation) - The scatter chart is one of the seven tools of quality - Syn: cross plot, scatter diagram, scatterplot - scatter diagramSyn: scatter chart - scatterplotSyn: scatter chart

matrix diagram

-A graphical technique used to analyze the relationship between two related groups of ideas

network diagram

-A graphical tool that shows the dependencies between activities in a project i -e -, which activities precede other activities and which can be done in parallel

master planning

-A group of business processes that includes the following activities: demand management (which includes forecasting and order servicing) production and resource planning and master scheduling (which includes the master schedule and the roughcut capacity plan)

patent

-A legal document giving exclusive rights to the production, use, sale, or other action regarding a product or process

nongovernmental organization (ngo)

-A legally constituted organization that operates independently from any government - The term is usually applied only to organizations that pursue some wider social aim with political aspects, but that are not overtly political organizations such as political parties - These types of organizations may be called civil society organizations or other names in some jurisdictions

lean enterprise

-A group of individuals, functions, and sometimes legally separate but operationally synchronized organizations - The value stream defines the lean enterprise - The objectives of the lean enterprise are to correctly specify value to the ultimate customer, and to analyze and focus the value stream so that it does everything from product development and production to sales and service in a way that actions that do not create value are removed and actions that do create value proceed in a continuous flow as pulled by the customer - Lean enterprise differs from a virtual corporation in which the organizational membership and structure keep changing

systems network

-A group of interconnected nodes - Implies redundancy in connections and some means (e -g -, machines) for implementing the connection

production lot

-A group of materials that is processed in one stage of production and put in inventory for further production (or for shipment to customers)

market segment

-A group of potential customers sharing some measurable characteristics based on demographics, psychographics, lifestyle, geography, benefits, and so forth

product line

-A group of products associated by function, consumer group, distribution channel, manufacturing characteristics, or price range - Typically reflects the marketing and sales aspects of a product or service (similar in customer needs) and used in aggregate planning, marketing, costing, and sales planning - See: product family, product group

product family

-A group of products or services that pass through similar processing steps, have similar characteristics, and share common equipment prior to shipment or delivery to the customer - Can be different overlapping product lines that are produced in one factory and often used in production planning (or sales and operations planning) - See: product line

private carrier

-A group that provides transportation exclusively within an organization - Ant: common carrier

master planning of resources

-A grouping of business processes that includes the following activities: demand management (the forecasting of sales, the planning of distribution, and the servicing of customer orders) sales and operations planning (sales planning, production planning, inventory planning, backlog planning, and resource planning) and master scheduling (the preparation of the master production schedule and the roughcut capacity plan)

material class

-A grouping of materials with similar characteristics for planning and scheduling purposes

platform products

-A grouping of products to share common parts, components, and characteristics (a common platform), so that design and production resources can be used to reduce cost and time to market

resource breakdown structure

-A hierarchical structure that breaks resources into categories and types can be useful for plan resource schedules, including human resources

local area network (lan)

-A highspeed data communication system for linking computer terminals, programs, storage, and graphic devices at multiple workstations distributed over a relatively small geographic area such as a building or campus

systems view

-A holistic approach to management that considers how actions impact the production process - Included within the system are suppliers, product design, process design, the production process, distribution, and customers

theory of constraints (toc)

-A holistic management philosophy developed by Dr - Eliyahu M - Goldratt, based on the principle that complex systems exhibit inherent simplicity - Even a very complex system comprising thousands of people and pieces of equipment can have, at any given time, only a very, very small number of variablesperhaps only one, known as a constraintthat actually limit the ability to generate more of the system's goal

paired cell overlapping loops of cardswith authorization (polca)

-A hybrid pushpull system where the push authority is generated by a highlevel material requirements plan (MRP) - Developed to be used with quick response manufacturing (QRM) in cellular manufacturing environments - See: QRM

panel consensus

-A judgmental forecasting technique by which a committee, sales force, or group of experts arrives at a sales estimate - See: Delphi method, management estimation

management estimation

-A judgmental forecasting techniquewhereby responsible individuals predict the demand for new products or alter a quantitative forecast for existing products largely on the basis of experience and intuition - Other judgmental forecastingtechniques may be used in combination with management estimation to improve the accuracy of the estimate - See: Delphi method, historical analogy, panel consensus, pyramid forecasting

two card kanban system

-A kanban system where a move card and production card are employed - The move card authorizes the movement of a specific number of parts from a source to a point of use - The move card is attached to the standard container of parts during movement of the parts to the point of use - The production card authorizes the production of a given number of parts for use or replenishment - Syn: dualcard kanban system - See: onecard kanban system

one card kanban system

-A kanban system where only a move card is employed - Typically, the work centers are adjacent therefore, no production card is required - In many cases, squares located between work centers are used as the kanban system - An empty square signals the supplying work center to produce a standard container of the item - Syn: singlecard kanban system - See: twocard kanban system

sample standard deviation

-A key measure that represents the spread or dispersion of a sample

warehouse receiving

-A key process in warehouse operation that ensures the correct product has been received, in the right quantity, in the right condition, and atthe right time

palletticket

-A label to track palletsized quantities of end items produced to identify the specific sublot with specifications determined by periodic sampling and analysis during production

smart label

-A label with an embedded radio frequency identification (RFID) tag - SMEDAbbreviation for singleminute exchange of die

past due order

-A line item on an open customer order that has an original scheduled ship date that is earlier than the current date - Syn: delinquent order, late order, backorder - See: backlog

master production schedule (mps)

-A line on the master schedule grid that reflects the anticipated build schedule for those items assigned to the master scheduler - The master scheduler maintains this schedule, and in turn, it becomes a set of planning numbers that drives material requirements planning - It represents what the company plans to produce, expressed in specific configurations, quantities, and dates - The MPS is not a sales item forecast that

transportation method

-A linear programming model concerned with minimizing the costs involved in supplying requirements to several locations from several sources with different costs related to the various combinations of source and requirement locations

process list

-A list of operations and procedures in the manufacture of a product - It may also include a statement of material requirements

parts list

-A list of parts, materials, and components required to make an item - See: single level bill of material

project team directory

-A list of team member names, roles, and communication information

webdirectory

-A list of web pages that is structured hierarchically

packing list

-A list showing merchandise packed, a copy of which is sent to the consignee to help verify the shipment - Often used as part ofthe order picking and processing

work center where used

-A listing (constructed from a routing file) of every manufactured item that is routed (primary or secondary) to a given work center

mix ticket

-A listing of all the raw materials, ingredients, components, and so on that are required to perform a mixing, blending, or similar operation - This listing is often printed on a paper ticket, which also may be used as a turnaround document to report component quantities actually used, final quantity actually produced, etc - This term is often used in batch process or chemical industries - See: assembly parts list, batch card, blend formula, manufacturing order

product configuration catalog

-A listing of all upperlevel configurations contained in an enditem product family - Its application is most useful when there are multiple enditem configurations in the same product family - Used to provide a transition linkage between the end item level and a two level master production schedule - Also provides a correlation between the various units of upper level product definition

product load profile

-A listing of the required capacity and key resources needed to manufacture one unit of a selected item orfamily -The resource requirements are further defined by a leadtime offset to predict the impact of the product on the load ofthe key resources by specific time period - The product load profile can be used for roughcut capacity planningto calculate the approximate capacity requirements ofthe master production schedule - See: bill of resources, resource profile, roughcut capacity planning

mixed loads

-A load having both regulated and exempt items in the same vehicle

stop sequence

-A loading procedure in which the first stop is loaded last

virtual cell

-A logical ratherthan physical grouping of manufacturing resources - Resources in virtual cells can be dispersed throughout a facility - Product mix changes may change the layout of a virtual cell - This technique is used when it is not practical to move the equipment

transportation cycle time

-A logistics performance measure ofthe lead time required fora productto reach its final destination the time between leaving a warehouse and arriving at the destination

run sheet

-A logtype document used in continuous processes to record raw materials used, quantity produced, inprocess testing results, and so on - It may serve as an input document for inventory records, run sizeSyn: standard batch quantity, run standards

lot for lot (l4l)

-A lotsizing technique that generates planned orders in quantities equal to the net requirements in each period - See: discrete order quantity

master file

-A main reference file of information, such as the item master file orwork center file - See: detail file, item master file

throughputaccounting

-A management accounting method based on the belief that because every system has a constraint that limits global performance, the most effective way to evaluate the impact that any proposed action will have on the system as a whole is to look at the expected changes in the global measures of throughput, inventory, and operating expense, throughput timeSee: cycle time

visual management

-A management system whereby every metric that matters, standardized work, and improvement approaches are displayed on the shop floor and in the office

random access

-A manner of storing records in a computerfile so that an individual record may be accessed without reading other records, random causeSyn: common causes

original equipment manufacturer (oem)

-A manufacturerthat 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 -

synchronized production

-A manufacturing management philosophy that includes a consistent set of principles, procedures, and techniques where every action is evaluated in terms of the global goal ofthe system - Both kanban, which is a part ofthe JIT philosophy, and drumbufferrope, which is a part ofthe theory of constraints philosophy, represent synchronized production control approaches - Syn: synchronous manufacturing - See: drumbuffer

straight line depreciation

-A method of depreciation whereby the amount to be recovered (written off as an expense) is spread uniformly overthe estimated life of the asset in terms oftime periods - See: depreciation, straightline scheduleSyn: gapped schedule

split lot

-A manufacturing order quantity that has been divided into two or more smaller quantities, usually after the order has been released - The quantities of a split lot may be worked on in parallel, or a portion of the original quantity may be sent ahead to a subsequent operation to be worked on while work on the remainder of the quantity is being completed at the current operation - The purpose of splitting a lot is to reduce the lead time of the order, spoiled work orderSyn: rework order

rework order

-A manufacturing order to rework and salvage defective parts or products - Syn: repair order, spoiled work order

remanufacturing resource planning

-A manufacturing resource planning system designed for remanufacturing facilities

overlapped schedule

-A manufacturing schedule that overlaps successive operations - Overlapping occurs when the completed portion of an order at one work center is processed at one or more succeeding work centers before the pieces left behind are finished at the preceding work centers - Syn: lap phasing, operation overlapping, telescoping - See: send ahead - Ant: gapped schedule, overlapped production

primary operation

-A manufacturing step normally performed as part of a manufacturing part's routing - Ant: alternate operation

seller's market

-A market condition in which goods cannot easily be secured (purchased) and when the economic forces of business tend to cause goods to be priced at the supplier's estimate of value

pure oligopoly

-A market in which a few companies produce essentially the same product or service and market it within a given area - A company is forced to price its product at the going rate unless it can differentiate its product - See: industry structure types

monopolistic competition

-A market in which many competitors offer partially differentiated products or services within a given geographical area - Most competitors focus on market segments where they can meet customers' needs somewhat better than their competitors - See: industry structure types

pure competition

-A market in which many competitors offer undifferentiated products or services within a given geographical area - Competitors are forced to accept the market price for their product - See: industry structure types

pure monopoly

-A market in which only one firm provides a particular product or service within a given area - The monopoly may be regulated or unregulated - See: industry structure types

product manager concept

-A marketing method in which a manager is given complete responsibility for managing the introduction, stocking policy, marketing, and sales of a specific product

market segmentation

-A marketing strategy in which the total market is disaggregated into submarkets, or segments, that share some measurable characteristic based on demographics, psychographics, lifestyle, geography, benefits, and so forth

wagner whitin algorithm

-A mathematically complex, dynamic lotsizing technique that evaluates all possible ways of ordering to cover net requirements in each period ofthe planning horizon to arrive at the theoretically optimum ordering strategy forthe entire net requirements schedule

uniform resource locator (url)

-A means of locating web pages regardless of where they are on the internet

numerical control (nc)

-A means of operating a machine tool automatically by the use of coded numerical instructions

vendor managed inventory (vmi)

-A means of optimizing supply chain performance in which the supplier has access to the customer's inventory data and is responsible for maintainingthe inventory level required by the customer - Accomplished by a process in which resupply is performed by the vendor through regularly scheduled reviews of the onsite inventory - The onsite inventory is counted, damaged or outdated goods are removed, and the inventory is restocked to predefined levels - The vendor obtains a receipt for the restocked inventory and accordingly invoices the customer - See: continuous replenishment

personnel class

-A means to describe a grouping of people with similar characteristics for purposes of scheduling and planning

on time schedule performance

-A measure (percentage) of meeting the customer's originally negotiated delivery request date - Performance can be expressed as a percentage based on the number of orders, line items, or dollar value shipped on time - OOPAbbreviation for objectoriented programming

worker efficiency

-A measure (usually computed as a percentage) of worker performance that compares the standard time allowed to complete a task to the actual worker time to complete it - Syn: labor efficiency

level of service

-A measure (usually expressed as a percentage) of satisfying demand through inventory or by the current production schedule in time to satisfy the customers' requested delivery dates and quantities - In a make to stock environment, level of service is sometimes calculated as the percentage of orders picked complete from stock upon receipt of the customer order, the percentage of line items picked complete, or the percentage of total dollar demand picked complete - In make to order and designtoorder environments, level of service is the percentage of times the customer requested or acknowledged date was met by shipping complete product quantities

quick asset ratio

-A measure of a firm's financial stability - It is defined as (current assets minus inventory) divided by current liabilities - A value greater than 1 is desirable - Syn: quick ratio, acid test, acid test ratio

line efficiency

-A measure of actual work content versus cycle time of the limiting operation in a production line - Line efficiency (percentage) is equal to the sum of all station task times divided by the longest task time multiplied by the number of stations - In an assembly line layout, the line efficiency is 100 percent minus the balance delay percentage

perfect orderfulfillment

-A measure of an organization's ability to deliver a perfect order

machine utilization

-A measure of how intensively a machine is being used - Machine utilization compares the actual machine time (setup and run time) to available time

total factor productivity

-A measure of productivity (of a department, plant, strategic business unit, firm, etc -) that combines the individual productivities of all its resources, including labor, capital, energy, material, and equipment - These individual factor productivities are often combined by weighting each according to its monetary value and then addingthem - Forexample, if material accounts for 40 percent of the total cost of sales, labor 10 percent of the total cost of sales, and other resources 60 percent, total factor productivity = -4 (material productivity) + -1 (labor productivity) + -6 (other resource productivity)

return on working capital

-A measure of profit on the amount of cash consumed - Calculated as aftertax operating income divided by networking capital

mean absolute percent error (mape)

-A measure of statistical variation in a forecast - Computed by dividing each absolute forecast error by the actual demand, multiplying that by 100 to get the absolute percentage error, and computing the average

mean squared error (mse)

-A measure of statistical variation in a forecast - Computed by squaring the forecast errors and then taking the average of the squared errors

record accuracy

-A measure of the conformity of recorded values in a bookkeeping system to the actual values for example, the onhand balance of an item maintained in a computer record relative to the actual onhand balance of the items in the stockroom

manufacturability

-A measure ofthe design of a product or process in terms of its ability to be produced easily, consistently, and with high quality

value added productivity per employee

-A measure that is determined by three things: total output of a company, materials purchased, and total employment - Found by subtracting materials purchased from total output and then dividing that number by total employment - Allows a company to understand easily how much production the typical employee is producing

value index

-A measure that uses the performance and importance scores for various dimensions of performance for an item or service to calculate a score that indicates the overall value of the item or service to a customer

measurement ton

-A measurement equivalent to 40 cubic feet - A factor in water transportation ratesetting, measure of serviceSyn: level of service

standard deviation

-A measurement of dispersion of data orof avariable -The standard deviation is computed by finding the differences between the average and actual observations, squaring each difference, adding the squared differences, dividing by n 1 (for a sample), and taking the square root of the result - See: estimate of error

standard error

-A measurement of the variability of statistics such as the sample mean - See: estimate of error, standard hoursSyn: standard time

twenty foot equivalent unit (teu)

-A measurement used to describe the carrying capacity of a cargo ship or a terminal's handing capacity - One TEU equals a standard 20 ft - x 8 ft - x 8 ft - (length x width x height) shipping container

optical character recognition (ocr)

-A mechanized method of collecting data involving the reading of hand printed material or special character fonts - If handwritten, the information must adhere to predefined rules of size, format, and locations on the form

parking lot

-A meeting device whereby offagenda items are noted for possible inclusion in future agendas - Often a flip chart or whiteboard is used

rescheduling notice

-A message from planning system software to change the planned start and/ or finish date of an order - This often is the result of a change in plans of a parent item - See: nervousness

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 spread out over several dates to control inventory investment, save storage space, and so forth

life cycle analogy method

-A method for forecasting the life cycle of a new product or service, including the introduction, growth, maturity, and decline phases - In addition to time frames, this qualitative technique tries to estimate demand levels

manufacturing resource planning (mrp 11)

-A method for the effective planning of all resources of a manufacturing company - Ideally, it addresses operational planning in units and financial planning in dollars, and has a simulation capability to answer whatif questions - It is made up 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 the 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

periodic replenishment

-A method of aggregating requirements to place deliveries of varying quantities at evenly spaced time intervals rather than variably spaced deliveries of equal quantities

run out method

-A method of assigning available production or storage capacity to products based on the product's demand and inventory level -Syn: run time

online processing

-A method of computer processing in which data is processed immediately on entry into the computer

operation costing

-A method of costing used in batch manufacturing environments when the products produced have both common and distinguishing characteristics for example, suits - The products are identified and costed by batches or by production runs, based on the variations

least squares method

-A method of curve fitting that selects a line of best fit through a plot of data to minimize the sum of squares of the deviations of the given points from the line - See: regression analysis

units of production depreciation

-A method of depreciation whereby the amount to be recovered (written off as a period expense) is calculated based on the estimated life of the equipment in units to

vertical display

-A method of displaying or printing output from an MRP system where requirements, scheduled receipts, projected balance, and so forth are displayed vertically - Vertical displays are often used in conjunction with bucketless systems - Ant: horizontal display

total value analysis

-A method of economic analysis in which a model expresses the dependent variable of interest as a function of independent variables, some of which are controllable

skill based compensation

-A method of employee compensation that bases the employee's wage rate on the number of skills the employee is qualified to perform - People who are qualified to do a wider variety of skills are paid more - See: labor grade

payback

-A method of evaluating an investment opportunity that provides a measure of the time required to recover the initial amount invested in a project

second order smoothing

-A method of exponential smoothing for trend situations that employs two previously computed averages, the singly and doubly smoothed values, to extrapolate into the future - Syn: double smoothing

triple smoothing

-A method of exponential smoothing that accounts for accelerating or decelerating trends, such as would be experienced in a fad cycle - Syn: thirdorder smoothing

plan for every part (pfep)

-A method of materials management which involves the use of kanban signals to suppliers for replenishment along with timed delivery routes and supermarket locations broken down by value stream - Consolidated information stored in a single record that contains everything needed to know about a part to plan it effectively - It includes usage, container information, storage location, item description, and supplier or procurement information

open account payment

-A method of payment for goods shipped in advance of payment, in which the seller or exporter sends the buyer or importer an invoice requesting payment by a certain date

pick tovoice system

-A method of performing orderpicking activities in a warehouse or distribution center usingverbal commands - Syn: voicebased picking

overlapped production

-A method of production in which completed pieces of a production lot are processed at one or more succeeding stations while remaining pieces continue to be processed at the original workstation - See: overlapped schedule

wave picking

-A method of selecting and sequencing picking lists or items to minimize the waiting time ofthe delivered material - Shipping orders may be picked in waves combined by common carrier or destination, and manufacturing orders in waves related to work centers

replacement cost

-A method of setting the value of inventories based upon the cost of the next purchase

parallel conversion

-A method of system implementation in which the operation of the new system overlaps with the operation of the system being replaced - The old system is discontinued only when the new system is shown to be working properly, thus minimizing the risk and negative consequences of a poor system implementation

risk pooling

-A method often associated with the management of inventory risk - Manufacturers and retailers that experience high variability in demand for their products can pool together common inventory components associated with a broad family of products to buffer the overall burden of having to deploy inventory for each discrete product

weighted factor rating model

-A method to analyze the advantages of various locations along several qualitative and quantitative dimensions

single sourcing

-A method whereby a purchased part is supplied by only one supplier - Traditional manufacturers usually have at least two suppliers for each component part they purchase to ensure continuity of supply and (more so) to foster price competition between the suppliers - A JIT manufacturer frequently has only one supplierfor a purchased part so close relationships can be established with a smaller number of suppliers - These close relationships (and mutual interdependence) foster high quality, reliability, short lead times, and cooperative action - Ant: multisourcing - See: sole source

location audit

-A methodical verification of the location records for an item or group of items in inventory to ensure that when the record shows an item's location, it is, in fact, in that location

quality function deployment (qfd)

-A methodology designed to ensure that all the major requirements ofthe customer are identified and subsequently met or exceeded through the resulting product design process and the design and operation ofthe supporting production management system - QFD can be viewed as a set of communication and translation tools - QFD tries to eliminate the gap between what the customer wants in a new product and what the product is capable of delivering - QFD often leads to a clear identification ofthe major requirements ofthe customers - These expectations are referred to as the voice of the customer (VOC) - See: house of quality

lean six sigma

-A methodology that combines the improvement concepts of lean and six sigma

total waste management (twm)

-A methodology that enables finding solutions to waste issues while keeping in mind financial elements and the business case

six sigma

-A methodology that furnishes tools for the improvement of business processes - The intent is to

on time delivery

-A metric measuring the percent of receipts that were received on time by customers - See: ontime in full

silo effect

-A mindset affecting an organization in which departments or groups do not share information, goals, priorities, tools and/or processes with other departments or functions - Sometimes referred to as a siloed organization

simple moving average

-A moving average where the oldest data point is dropped and the newest data point is included in the calculation - All data points are assigned equal weights - See: moving average, weighted moving average

purchasing agent

-A person authorized by the company to purchase goods and services forthe company

mini landbridge traffic

-A multimodal transportation solution that moves goods over water and then land, with the final destination being on the opposite coast - See: microlandbridge traffic

portal

-A multiservice website that provides access to data that may be secured by each user's role - Users can aggregate data and perform basic analysis - Portal ownership can be independent, private, or consortiumbased - Business portals are often connected with a customer relationship management or supplier relationship management system - Portals can include structured data such as ERP information, pictures, and documents - Unlike exchanges or marketplaces, portals generally can display and aggregate data without integration between application software

prerequisite tree (prt)

-A necessitybased logic diagram that facilitates answering the third question in the change sequence: How do we effect the change? Shows the relationship between the injections, desirable effects or ambitious target, and the obstacles that block the implementation of the injections - Includes the intermediate objectives required to overcome the obstacles and shows the sequence in which they must be achieved for successful implementation

network loop

-A network path that crosses the same activity or node twice - A network loop cannot be analyzed by the critical path method, critical chain, orothertraditional network schedule analysis techniques

value added network (van)

-A network, often supporting EDI, providing services additional to those provided by common carriers

national association of purchasing management (napm)

-A nonprofit society for purchasing managers and others, now known as the Institute for Supply Management (ISM)

time bucket

-A number of days of data summarized into a columnar or rowwise display - For example, a weekly time bucket contains all the relevant data for an entire week - Weekly time buckets are considered to be the largest possible (at least in the near and medium term) to permit effective MRP

revision level

-A number or letter representing the number of times a part drawing or specification has been changed

low level code

-A number that identifies the lowest level in any bill of material at which a particular component appears - Net requirements for a given component are not calculated until all the gross requirements have been calculated down to that level - Lowlevel codes are normally calculated and maintained automatically by the computer software - Syn: explosion level

risk rating

-A numerical assessment of the risk associated with a supplier, customer, or product, normalized and used for comparison purposes

shop packet

-A package of documents used to plan and control the shop floor movement of an order - The packet may include a manufacturing order, operations sheets, engineering blueprints, picking lists, move tickets, inspection tickets, and time tickets

quality lossfunction

-A parabolic approximation ofthe quality loss that occurs when a quality characteristic deviates from its target value - The quality loss function is expressed in monetary units: The cost of deviating from the target increases quadratically as the quality characteristic moves farther from the target - The formula used to compute the quality loss function depends on the type of quality characteristic being used - The quality loss function was first introduced in this form by Genichi Taguchi

mental model

-A paradigm of how the world works formed by a person's experiences and assumptions

queue discipline

-A parameter in queuing theory that determines the order in which customers are to be served

master schedule item

-A part number selected to be planned by the master scheduler - The item is deemed critical in its impact on lowerlevel components or resources such as skilled labor, key machines, or dollars - Therefore, the master scheduler, not the computer, maintains the plan for these items - A master schedule item may be an end item, a component, a pseudo number, or a planning bill of material

nonsignificant part number

-A part number that is assigned to each part but does not convey any information about the part - Nonsignificant part numbers are identifiers, not descriptors - Ant: significant part number -added activities

significant part number

-A part number that is intended to convey certain information, such as the source of the part, the material in the part, orthe shape ofthe part - Using numbers to represent this information usually makes these part numbers longer than corresponding nonsignificant part numbers - Ant: nonsignificant part number

salable goods

-A part or assembly authorized for sale to final customers through the marketingfunction

machine productivity

-A partial productivity measure - The rate of output of a machine per unit of time compared to an established standard or rate of output - Machine productivity can be expressed as output per unit of time oroutput per machine hour - See: labor productivity, productivity

management by objectives (mbo)

-A participative goalsetting process that enables the manager or supervisorto construct and communicate the goals ofthe department to each subordinate - Atthe same time, the subordinate is able to formulate personal goals and influence the department's goals

normal distribution

-A particular statistical distribution where most of the observations fall fairly close to one mean, and a deviation from the mean is as likely to be plus as it is to be minus - When graphed, the normal distribution takes the form of a bellshaped curve - normalizeTo adjust observed data to a standard base

limited partnership

-A partnership having two types of partners: (1) limited partners contribute assets to the company without participating in management (2) general partners manage the company and are responsible for all debts

order backlog

-A past due order or open order yet to be f u Ifi I led - Syn: backlog

payforknowledge

-A pay restructuring scheme by which competent employees are rewarded forthe knowledge they acquire before or while working for an organization, regardless of whether such knowledge is actually being used at any given time

supplier scheduler

-A person whose main job is working with suppliers regardingwhat is needed and when - Are in direct contact with both MRP and the suppliers - Do the material planning for the items under their control, communicate the resultant schedules to their assigned suppliers, do followup, resolve problems, and advise other planners and the master schedulerwhen purchased items will not arrive on time to support the schedule - Normally organized by commodity, as are the buyers - Using the supplier scheduler approach frees buyers from daytoday order placement and expediting, giving them more time to do cost reduction, negotiation, supplier selection, alternate sourcing, and so forth - Syn: planner/buyer, vendor scheduler

measure phase

-A phase in the six sigma designmeasureanalyzeimprovecontrol process during which current performance is evaluated - See: designmeasureanalyzeimprovecontrol process

lean production

-A philosophy of production that emphasizes the minimization of the amount of all the resources (includingtime) used in the various activities of the enterprise - It involves identifying and eliminating nonvalueadding activities in design, production, supply chain management, and dealing with customers - Lean producers employ teams of multiskilled workers at all levels of the organization and use highly flexible, increasingly automated machines to produce volumes of products in potentially enormous variety - Lean production contains a set of principles and practices to reduce cost through the relentless removal of waste and through the simplification of all manufacturing and support processes - Syn: lean, lean manufacturing

periodic inventory

-A physical inventory taken at some recurring interval (e -g -, monthly, quarterly, or annual physical inventory) - See: physical inventory, periodic maintenanceSyn: preventive maintenance

pick tolight

-A pick system that uses software to light up displays at each pick location and determines how much needs to be picked - The pickers use this as their requirement to pull for that particular order to set of orders

serpentine picking

-A picking technique aimed at reducing travel time by 50 percent and improving the flow of pickers down each aisle - This technique involves picking from both sides of each aisle as the picker goes down it - This is in contrast to picking from one side of the aisle and then crossing to the other side

profit sharing

-A plan by which employees receive compensation above their normal wages, based on company profitability - The purpose is to motivate employees and recognize their efforts

production schedule

-A plan that authorizes the factory to manufacture a certain quantity of a specific item - Usually initiated by the production planning department

scenario planning

-A planning process that identifies critical events before they occur and uses this knowledge to determine effective alternatives

short range planning horizon

-A planning/forecasting time frame encompassing a few days to at most a few weeks

offshore factory

-A plant that imports or acquires locally all components and then exports the finished product

planning time fence

-A point in time denoted in the planning horizon of the master scheduling process that marks a boundary inside of which changes to the schedule may adversely affect component schedules, capacity plans, customer deliveries, and cost - Outside the planning time fence, customer orders can be booked and changes to the master schedule can be made within the constraints of the production plan - Changes inside the planning time fence must be made manually by the master scheduler - Syn: planning fence - See: cumulative lead time, demand time fence, firm planned order, planned order, planning horizon, time fence

timefence

-A policy orguideline established to note where various restrictions or changes in operating procedures take place - For example, changes to the master production schedule can be accomplished easily beyond the cumulative lead time, while changes inside the cumulative lead time become increasingly more difficult to a pointwhere changes should be resisted - Time fences can be used to define these points - See: demand time fence, hedge, planning time fence, timenow dateSyn: data date

sample

-A portion of a universe of data chosen to estimate some characteristics about the whole universe - The universe of data could consist of sizes of customer orders, number of units of inventory, number of lines on a purchase order, and so forth

lost sale

-A potential sale that was not completed, usually due to lack of availability of the item in question

plan

-A predetermined course of action over a specified period of time that represents a projected response to an anticipated environment to accomplish a specific set of adaptive objectives

seasonality

-A predictable repetitive pattern of demand measured within ayear where demand grows and declines - These are calendarrelated patterns that can appear annually, quarterly, monthly, weekly, daily and/or hourly - Syn: seasonal variation - See: base series, seasonal stockSyn: seasonal inventory, seasonal variationSee: seasonality

quantity discount

-A price reduction allowance determined by the quantity or value of a purchase

purchase price discount

-A pricing strategy in which a seller offers a customer a cheaper price in exchange for purchasing more goods

short haul discrimination

-A pricing strategy in which more is charged for a shorter haul than for a longer haul, when the route and the delivery are the same - Used to push the longhaul process

reasonable rate

-A pricing strategy that allows a company to profit but not to achieve monopolistic profits - Normally determined by industry pricing analysis

optical character

-A printed character frequently used in utilities billing and credit applications that can be read by a machine without the aid of magnetic ink

thomas register or thomasnet®

-A privately produced reference set that includes a listing of part suppliers by product type and geographic area

simplification

-improving quality and cutting costs by removing complexity from a product or service

newsvendor problem

-A problem in inventory management dealing with determiningthe single period (e -g -, day or week) order quantity thatwill minimize the cost of sometimes having too much inventory and sometimes having too little - This is sometimes referred to as the newsvendor model

simplex algorithm

-A procedure for solving a general linear programming problem

process capability analysis

-A procedure to estimate the parameters defining a process - The mean and standard deviation ofthe process are estimated and compared to the specifications, if known - This comparison is the basis for calculating capability indexes - In addition, the form ofthe relative frequency distribution ofthe characteristic of interest may be estimated - Syn: capability study - See: process capability

process flow analysis

-A procedure to evaluate the effectiveness of a sequence of business activities - The analysis determines which elements ofthe flow are value added and eliminates those that are not, determines which parts of the process can be automated, evaluates activities as to whether they contribute to the core competencies of the business or are candidates for outsourcing, and designs a structure forthe remaining activities ofthe process to improve productivity

mixed flow scheduling

-A procedure used in some process industries for building process train schedules that start at an initial stage and work toward the terminal process stages - This procedure is effective for scheduling where several bottleneck stages may exist - Detailed scheduling is done at each bottleneck stage

planning and control process

-A process consisting of the following steps: plan, execute, measure, and control

split case order picking

-A process for filling lessthanfuII case orders - Requires items to be picked from a case or other container

registration to standards

-A process in which an accredited, independent thirdparty organization conducts an onsite audit of a company's operations which the company wants to be registered - Upon successful completion of the audit, the company receives a certificate indicating that it has met the standard requirements

sequential development process

-A process in which the product or services idea must clear specific hurdles before it can go on the next development phase

out of control process

-A process in which the statistical measure being evaluated is not in a state of statistical control (i -e -, the variations among the observed sampling results can be attributed to a constant system of chance causes) - Ant: incontrol process

one lessatatime

-A process of gradually reducing the lot size of the number of items in the manufacturing pipeline to expose, prioritize, and eliminate waste

returns management process

-A process of handling returns that includes environmentally sound disposal or recycling, composition of repair instructions, warranty repairs, and collection of return data

rationalization exercise

-A process of reducing the population of figures such as stockkeeping unit counts orsupplier lists

supply chain operations reference (scor) model

-A process reference model developed and endorsed by the APICS Supply Chain Council (SCC) as the standard cross industry diagnostic tool for supply chain management - The SCOR model describes the business activities associated with satisfying a customer's demand, which include plan, source, make, deliver, and return - Use ofthe model includes analyzing the current state of a company's processes and goals, quantifying operational performance, and comparing company performance to benchmark data - SCOR has developed a set of metrics for supply chain performance, and APICS SCC members have formed industry groups to collect best practices information that companies can use to evaluate their supply chain performance

value chain initiative

-A process that combines software, hardware, and supply chain companies to develop an integrated system to support software sharing among diverse applications

primary process

-A process that performs the main valueadded activities of an organization

put to light

-A process that uses lights to ensure materials are placed in the correct locations - Also used to ensure that picked items are placed correctly

production planning

-A process to develop tactical plans based on setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned levels of sales (sales plan or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc -, as expressed in the overall business plan - The sales and production capabilities are compared, and a business strategy that includes a sales plan, a production plan, budgets, pro forma financial statements, and supporting plans for materials and workforce requirements, and so on, is developed - A primary purpose is to establish production rates that will achieve management's objective of satisfying customer demand by maintaining, raising, or lowering inventories or backlogs, while usually attempting to keep the workforce relatively stable - Because this plan affects many company functions, it is normally prepared with information from marketing and coordinated with the functions of manufacturing, sales, engineering, finance, human resources, etc -

sales and operations planning (s&op)

-A process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customerfocused marketing plans for new and existing products with the management of the supply chain - The process brings together all the plans forthe business (sales, marketing, development, manufacturing, sourcing, and financial) into one integrated set of plans - S&OP is performed at least once a month and is reviewed by management at an aggregate (product family) level - The process must reconcile all supply, demand, and new product plans at both the detail and aggregate levels and tie to the business plan - It is the definitive statement of the company's plans for the near to intermediate term, covering a horizon sufficient to plan for resources and to support the annual business planning process - Executed properly, the S&OP process links the strategic plans for the business with its execution and reviews performance measurements for continuous improvement - See: aggregate planning, executive sales and operations planning, production plan, production planning, sales plan, tactical planning

postponement

-A product design or supply chain strategy that deliberately delays final differentiation (assembly, production, packaging, tagging, etc -) until the latest possible time in the process - This shifts product differentiation closer to the consumer to reduce the anticipatory risk, eliminating excess inventory in the form of finished goods in the supply chain

standardized product

-A product that can be made in large quantities, or continuously, because it has very few product designs

promotional product

-A product that is subject to wide fluctuations in sales because it is usually sold at a reduced price or with some other sales incentive

off grade

-A product whose physical or chemical properties fall outside the acceptable ranges

process flow production

-A production approach with minimal interruptions in the actual processing in any one production run or between production runs of similar products - Queue time is virtually eliminated by integrating the movement ofthe product into the actual operation of the resource performing the work

machine center

-A production area consisting of one or more machines (and, if appropriate for capacity planning, the necessary support personnel) that can be considered as one unit for capacity requirements planning and detailed scheduling

manifest system

-A production control system where the exact sequence of items to be assembled is required

package to order

-A production environment in which a good or service can be packaged after receipt of a customer order - The item is common across many different customers packaging determines the end product

make to order

-A production environment where a good or service can be made after receipt of a customer's order - The final product is usually a combination of standard items and items customdesigned to meet the special needs of the customer - Where options or accessories are stocked before customer orders arrive, the term assembletoorder is frequently used - Syn: producetoorder - See: assembletoorder, make to stock

machine limited capacity

-A production environment where a specific machine limits throughput of the process - See: constraint, throughput

make to stock

-A production environment where products can be and usually are finished before receipt of a customer order - Customer orders are typically filled from existing stocks, and production orders are used to replenish those stocks - Syn: producetostock - See: assembletoorder, make to order

reproducibility

-A production program's ability to regularly produce products ofthe correct quantity and quality

part standardization

-A program for planned elimination of superficial, accidental, and deliberate differences between similar parts in the interest of reducing part and supplier proliferation

workaround

-A project management technique that provides a response to a negative risk or event that has happened - A workaround is different from a contingency plan because a workaround is not planned before the risk event occurs

three point estimate

-A project management technique that uses three cost or duration estimates to stand forthe optimistic (0), most likely (M), and pessimistic (P) situation - The mean value (MV) is often found using MV = (0 + 4M + P) * 6 - This technique can improve the accuracy of cost or duration estimates when underlying assumptions are uncertain

synchronous control

-A pulltype production control system that is based on setting production rates and feeding work into production to meet the planned rates, then monitoring and controlling production

open end purchase order

-A purchase agreement similarto a blanket purchase orderthat provides the added convenience of being able to negotiate additional items and expiration dates

spot buy

-A purchase made on a onetime basis for standard offtheshelf material or equipment

traveling purchase requisition

-A purchase requisition designed for repetitive use - After a purchase order has returned to the originator, who holds it until a repurchase ofthe goods is required - The name is derived from the repetitive travel between the originating and purchasing departments -

spend analysis

-A purchasing activity in which a firm explores its spending patterns to identify opportunities to reduce costs or improve quality - Part of value analysis as well as costbenefit analysis

paperless purchasing

-A purchasing operation that does not employ purchase requisitions or hardcopy purchase orders - In actual practice, a small amount of paperwork usually remains, normally in the form of the supplierschedule

single sampling plan

-A quality control method of taking only one sample and then making a decision to accept or reject a batch of items

value perspective

-A quality perspective that holds that quality must be judged, in part, by how well the characteristics of a particular product or service align with the needs of a specific user

profound knowledge

-A qualityrelated concept created by W - Edwards Deming - The four aspects of profound knowledge are appreciation of a system, knowledge about variation, theory of knowledge, and psychology

sawtooth diagram

-A quantityversustime graphic representation of the order point/order quantity inventory system showing inventory being received and then used up and reordered

single channel, singlephase system

-A queuing system that has only one channel for arrivals to enter and only one phase to completely service the arrival

reneging

-A queuing theory term for leaving a line after entering it but before receiving service - See: balking, reorder cycleSyn: replenishment lead time, reorder point (ROP)Syn: order point

outof stock

-A situation in which there is no inventory at a location available for sale to the customer - See: stockout

pro forma invoice

-A quote provided by a seller/exporter prior to the delivery of products or services, informingthe buyer/importerof the price - This document is submitted to customs for valuation purposes

tapering rate

-A rate structure in which a shipping rate increases as the distance shipped increases, but the increases are not directly correlated to the increase in the distance shipped

product life cycle operations reference (plcor)

-A reference model for innovation, product, and portfolio management - Spans all product life cycle activities, from the first idea to broad adoption in the mass market - Applicable to the life cycles of both products and service offerings

milk run

-A regular route for pickup of mixed loads from several suppliers - For example, instead of each of five suppliers sending a truckload per week to meet the weekly needs of the customer, one truck visits each of the suppliers on a daily basis before delivering to the customer's plant - Five truckloads per week are still shipped, but each truckload contains the daily requirement from each supplier - See: consolidation

system

-A regularly interacting or interdependent group of items forming a unified whole toward the achievement of a goal

standard ratio

-A relationship based on a sample distribution by valuefora particular company - When the standard ratio for a particular company is known, certain aggregate inventory predictions can be made (e -g -, the amount of inventory increase that would be required to provide a particular increase in customer service)

strategic alliance

-A relationship formed by two or more organizations that share information (proprietary), participate in joint investments, and develop linked and common processes to increase the performance of both companies - Many organizations form strategic alliances to increase the performance of their common supply chain

supplier managed inventory

-A relationship where the buyer maintains inventory, usually at its facility, and provides the supplier information about the amount of stock on hand - It is the responsibility of the supplier to monitor this information and send replacement items when the inventory reaches a particular level

pilot lot

-A relatively small preliminary order for a product - The purpose of this small lot is to correlate the product design with the development of an efficient manufacturing process

rapid replenishment

-A replenishment strategy in which the supplier prepares shipments at predetermined intervals and varies the quantity based on reactive maintenance

program directive

-A report by the program manager to inform supporting departments concerning an active or planned program or project

stock status

-A report showing the inventory on hand and usually showing the inventory on order and some sales or usage history for the products it covers

over, short, and damaged (os&d) report

-A report submitted by a freight agent showing discrepancies in billing received and actual merchandise received

risk register

-A report that has summary information on qualitative risk analysis, quantitative risk analysis, and risk response planning - This register contains all identified risks and associated details

model

-A representation of a process or system that attempts to relate the most important variables in the system in such away that analysis of the model leads to insights into the system - Frequently, the model is used to anticipate the result of a particular strategy in the real system

process train

-A representation of the flow of materials through a process industry manufacturing system that shows equipment and inventories - Equipment that performs a basic manufacturing step, such as mixing or packaging, is called a process unit - Process units are combined into stages, and stages are combined into process trains - Inventories decouple the scheduling of sequential stages within a process train, process yieldSee: yield

tracer

-A request to a transportation line to trace a shipment to expedite its movement or to verify delivery

pegged requirement

-A requirement that shows the nextlevel parent item (or customer order) as the source ofthe demand

recovery

-A reverse logistics strategy forthe activities involved in the collection of used and discarded on reuse, repair, refurbishment, remanufacturing, recycling, or disposal - The objective is to recover as much of the economic value as possible, reduce waste, and minimize environmental impact

risk analysis

-A review ofthe uncertainty associated with the research, development, and production of a product, service, or project

supply chain stress testing

-A rigorous analytical process of assessing plausible risks of all companies linked to a supply chain - With the objective of chain solvency now and in the future, analysis pertains to factors over which management has control, represented by a combination of financial ratios and models - Factors out of management control are forces of nature, like labor disruptions and war - Stress testing a supply chain involves quantitative methods that are fairly uniform and qualitative analysis that may vary from one situation to another

network chain

-A route through a chain involving multiple network paths, with switching of paths due to resource conflicts

planned order release

-A row on an MRP table that is derived from planned order receipts by takingthe planned receipt quantity and offsetting to the left by the appropriate lead time - See: order release

point ofpurchase (pop) display

-A sales promotion tool located at a checkout counter

regularized schedule

-A schedule having certain items produced at regular intervals

overstated master production schedule

-A schedule that includes either past due quantities or quantities that are greater than the ability to produce, given current capacity and material availability - An overstated MPS should be made feasible before MRP is run

reverse flow scheduling

-A scheduling procedure used in some process industries for building process train schedules - Starts with the last stage and proceeds backward (countercurrent to the process flow) through the process structure

systems thinking

-A school of thought that focuses on recognizing the interconnections between the parts of a system and synthesizing them into a unified view of the whole

random sample

-A selection of observations taken from all the observations of a phenomenon in such a way that each chosen observation has the same possibility of selection

module

-A selfcontained unit of a computer program that communicates with other parts of the program solely through inputs and outputs

supplier alternate

-A seller other than the primary one - The supplier alternate may or may not supply the items purchased, but is usually approved to supply those items

random numbers

-A sequence of integers or group of numbers (often in the form of a table) that show absolutely no relationship to each other anywhere in the sequence - At any point, all values have an equal chance of occurring, and they occur in an unpredictable fashion

operation number

-A sequential number, usually two, three, or four digits long (such as 010,020,030), that indicates the sequence in which operations are to be performed within an item's routing

manufacturing

-A series of interrelated activities and operations involving the design, material selection, planning, production, quality assurance, management, and marketing of discrete consumer and durable goods

transit privilege

-A service provided by a shipper that allows the purchasing company to stop a shipment midroute to allow changes to the delivery, but to pay the nonstop rate

order point

-A set inventory level where, if the total stock on hand plus on order falls to or below that point, action is taken to replenish the stock - The order point is normally calculated as forecasted usage duringthe replenishment lead time plus safety stock

market

-A set of buyers and sellers exchanging products - Prices tend to equalize through ongoing exchanges between buyers and sellers - Markets include institutional markets, government markets, industrial markets, and consumer markets - See: consumer market, government market, industrial market, institutional market

time series

-A set of data that is distributed overtime, such as demand data in monthly time periods - Various patterns of demandseasonal, trend, cyclical, and randommust be considered in time series analysis

manufacturing instruction

-A set of detailed instructions for carrying out a manufacturing process - It is usually referenced by the routing and thus can simplify the content of the routing

marketing channel

-A set of organizations through which a good or service passes as it goes from a raw state to the final consumer - See: channels of distribution, distribution channel

lot control

-A set of procedures (e -g -, assigning unique batch numbers and tracking each batch) used to maintain lot integrity from raw materials from the supplier through manufacturing to consumers

organization for economic cooperation and development (oecd) guidelinesfor multinational enterprises

-A set of recommendations on responsible business conduct addressed by governments to multinational enterprises (MNEs) operating in orfrom adhering countries that encourage and maximize the positive impact MNEs can make to sustainable development and enduring social progress - See: multinational corporation

operating system

-A set of software programs that controls the execution of the hardware and application programs - The operating system manages the computer and network resources through storage management, disk input/output, communications linkages, program scheduling, and monitoring system usage for performance and cost allocations

material requirements planning (mrp)

-A set of techniques that uses bill of material data, inventory data, and the master production schedule to calculate requirements for materials - It makes recommendations to release replenishment orders for material - Further, because it is timephased, it makes recommendations to reschedule open orders when due dates and need dates are not in phase

roll on/rolloff container ship

-A ship that allows trailers to be driven on and off without the use of cranes

less than container load (lcl)

-A shipment that occupies less than the maximum cubic or weight capacity of a container and therefore is shipped in the same container with other LCL cargo - See: lessthantruckload

road waybill

-A shipping document used to control shipments of goods for road transport - The document travels with the shipment and serves as a receipt for goods and evidence of the contract of carriage

routing guide

-A shippingtool used to manage logistics activities for shipments between two points - It contains mode and carrier information, freight rates, and service requirements

unitload

-A shippingunit made up of a number of items bulky material arranged or constrained so the mass can be picked up or moved as a single unit - Reduces material handling costs - Often shrinkpacked on a pallet before shipment

production kanban

-A signal, usually a card, used to trigger the production of a part, production lead timeSyn: manufacturing lead time, production levelSyn: production rate, production levelingSyn: level production method

visual review system

-A simple inventory control system where the inventory reordering is based on actually looking at the amount of inventory on hand - Usually used for lowvalue items, such as nuts and bolts - See: twobin inventory system -Abbreviation for vendorowned inventory, voicebased pickingSyn: picktovoice system

reference capacity model

-A simulation model with accurate operational details and demand forecasts that can provide practical capacity utilization predictions - Various alternatives for system operation can be evaluated effectively

quality circle

-A small group of people who normally work as a unit and meet frequently to uncover and solve problems concerningthe quality of items produced, process capability, or process control - Syn: quality control circle - See: small group improvement activity

pilot plant

-A smallscale production facility used to develop production processes and to manufacture small quantities of new products for field testing and so forth - Syn: semiworks

software asaservice (saas)

-A software licensing and distribution model that provides access to applications via the internet on a subscription basis - A service provider hosts the application at a web browser - Often referred to as on demand software and used by companies to avoid purchasing, implementing and maintenance costs

relational database

-A software program that allows users to obtain information drawn from two or more databases that are made up of twodimensional arrays of data

paired cell overlapping loops of cards (polc)

-A special material control and replenishment system developed to be used with quick response manufacturing in cellular manufacturing environments - A hybrid pushpull system where the push authority to proceed is generated by highlevel manufacturing resources planning - See: quickresponse manufacturing

prioritization matrix

-A special type of matrix chart used to show the priorities of items by applying criteria and weighting factors to each item

reactor

-A special vessel to contain a chemical reaction

trailer on a flatcar (tofc)

-A specialized form of containerization in which motor and rail transport coordinate - Syn: piggyback

workcenter

-A specific production area, consisting of one or more people and/or machines with similar capabilities, that can be considered as one unit for purposes of capacity requirements planning and detailed scheduling - Syn: load center, work center scheduleSyn: dispatch list

shipping lane

-A specific route that ocean liners take between ports to help traffic flow and to avoid the most dangerous areas of the ocean

peak demand

-A specific time when the quantity demanded isgreaterthan at all other times

transit time

-A standard allowance that is assumed on any given order for the movement of items from one operation to the next - Syn: travel time

unit of measure conversion

-A standard conversion ratio that a company or its computer system uses to quickly enter in the amount delivered based on a known quantity within each unit of measure (e -g -, a case of soda contains 24 cans)

metric

-A standard of measurement used to monitor performance

loose standard

-A standard time greater than that required by a qualified worker with normal skill and effort

right to work state

-A state that allows workers to choose whether or not to join a union

workers' compensation

-A stateadministered program whereby employees are guaranteed medical coverage and replacement of earnings in case they are injured on the job, and companies are limited as to their liability for such jobrelated injuries - Formerly known asworkmen's compensation

product specification

-A statement of acceptable physical, electrical, and/or chemical properties or an acceptable range of properties that distinguish one product orgrade from another

quotation

-A statement of price, terms of sale, and description of goods or services offered by a supplier to a prospective purchaser a bid - When given in response to an inquiry, it is usually considered an offer to sell - See: bid

strategic mission

-A statement of the future business scope of an enterprise - Incorporates what is being satisfied (customer needs), who is being satisfied (customer groups), and how the company creates value for the customer (processes, technologies, and core competencies)

production report

-A statement of the output of a production facility for a specified period - The information normally includes the type and quantity of output workers' efficiencies departmental efficiencies costs of direct labor, direct material, and the like overtime worked and machine downtime

touches

-A statistic that is used to determine efficiency for costing/pricing functions - A touch occurs anytime a labor activity is utilized during the manufacturing or service creation process - Generated the term touch labor for direct labor personnel

regression analysis

-A statistical technique for determiningthe best mathematical expression describing the functional relationship between one response and one or more independent variables - See: leastsquares method

stratification analysis

-A statistical tool for determining root causes in which observed historical data is separated by particular characteristics to determine the effect of each characteristic upon the observed results - See: root cause analysis

statute of limitations

-A statute restricting the length oftime in which a lawsuit may be filed

returns

-A step in the reverse logistics process where a customer sends a product back for any of several possible reasons including the product being defective, damaged, out of season, or outdated (endoflife), or that it failed to meet expectations or rpnrp<pntprl pypprs invpntnrv

recalls

-A step in the reverse logistics process where parts or products are returned due to a product defect or potential hazard resulting from government regulations or liability concerns

shop order close out station

-A stocking point on the shop floor where completed production of components is transacted (received) into and subsequently transacted (issued) to assembly or other downstream operations - This technique is used to reduce material handling by avoidingthe need to move items into and out of stockrooms while simultaneously enabling a high degree of inventory record accuracy

rack

-A storage device for handling material in pallets - A rack usually provides storage for pallets arranged in vertical sections with one or more pallets to a tier - Some racks accommodate more than one palletdeep storage

store

-A storage point located upstream of a work station, intended to make it easier to see customer requirements

random location storage

-A storage technique in which parts are placed in any space that is empty when they arrive at the storeroom - Although this random method requires the use of a locator file to identify part locations, it often requires less storage space than a fixedlocation storage method - Syn: floating inventory location system, floating storage location - See: fixedlocation storage

multicountry strategy

-A strategy in which each country market is selfcontained - Customers have unique product expectations that are addressed by local production capabilities - Syn: multidomestic strategy

proactive

-A strategy of anticipating issues and presenting beneficial solutions to the customer

low cost provider strategy

-A strategy of offering the lowest prices in the market to gain share and increase sales volume in industries composed of numerous players offering the same type of products

tiered workforce

-A strategy used to vary workforce levels, where additional fulltime or parttime employees are hired during peak demand periods while a smaller permanent staff is maintained yearround - This technique is used heavily in perishable seasonal goods industries (e -g -, chocolate production, nursery plants)

oriented architecture (soa)

-A style of information technology (IT) design that guides all aspects of creating and using business services throughout their life cycles, as well as defining and provisioning the IT infrastructure that enables different computer applications to exchange data and participate in business processes, regardless of the operating systems or programming languages underlying those applications

monte carlo simulation

-A subset of digital simulation models based on random or stochastic processes

storage costs

-A subset of inventory carrying costs, including the cost of warehouse utilities, material handling personnel, equipment maintenance, building maintenance, and security personnel

planned order

-A suggested order quantity, release date, and due date created by the planning system's logic when it encounters net requirements in processing MRP - In some cases, it can also be created by a master scheduling module - Planned orders are created by the computer, exist only within the computer, and may be changed or deleted by the computer during subsequent processing if conditions change - Planned orders at one level will be exploded into gross requirements for components at the next level - Planned orders, alongwith released orders, serve as input to capacity requirements planning to show the total capacity requirements by work center in future time periods - See: planning time fence

total cost of quality

-A sum that includes costs associated with rework, scrap, warranty costs, and other costs associated with preventing or resolving quality problems

supplier partner

-A supplier organization with which a company has formed a customersupplier partnership - See: outpartnering

weighted point plan

-A supplier selection and rating approach that uses the input gathered in the categorical plan approach and assigns weights to each evaluation category - A weighted sum for each supplier is obtained and a comparison made - The weights used should total 100 percent for all categories

sub tier supplier

-A supplier who delivers a product to a direct supplier of the customer -node network, the activity at the tip of the arrow

m4sc

-A supply chain management reference model for describing processes, spanning activities from interpretation of business strategy to assigning critical supply chain resources - By describing supply chain management using process building blocks, the model can be used to identify and address critical supply chain management deficiencies

overstock

-A supply or quantity of inventory in excess of demand or requirements

modular system

-A system architecture design in which related tasks are grouped in selfcontained packages - Each package, or module, of tasks performs all of the tasks related to a specific function - Advances in functions can be implemented without affecting other packages or modules because of the loose couplingwith other modules - One example is a multitiered architecture in which application business rules are separated from the data management rules - Another example is a clientserver architecture in which user interface tasks are separated from the application software - See: open system architecture

performance measurement system

-A system for collecting, measuring, and comparing a measure to a standard for a specific criterion for an operation, item, good, service, business, etc - A performance measurement system consists of a criterion, a standard, and a measure - Syn: metrics - See: performance criterion, performance measure, performance standard

shop floor control

-A system for using data from the shop floor to maintain and communicate status information on shop orders (manufacturing orders) and on work centers - Shop floor control can use order control or flow control to monitor material movement through the facility - The major subfunctions of shop floor control are: (1) assigning priority of each shop order (2) maintaining workingprocess quantity information (3) conveying shop order status information to the office (4) providing actual output data for capacity control purposes (5) providing quantity by location by shop orderforworkinprocess inventory and accounting purposes and (6) providing measurement of efficiency, utilization, and productivity of the workforce and machines - The major subfunctions forflow control are based primarily on production rates and feedingwork into production to meet these planned rates, then monitoring and controlling production

nominal group technique

-A technique, similar to brainstorming, used by teams to generate ideas on a particular subject - Team members are asked to silently come up with as many ideas as possible, writing them down - Each member is then asked to share one idea, which is recorded - After all the ideas are recorded, they are discussed and prioritized by the group

parallel implementation strategy

-A system implementation technique whereby the current system and the new system are both executed for some period of time - The results ofthe two systems are compared to ensure that the new system is executing properly - When a level of confidence is built that the new system is executing properly, the old system is turned off and the new system becomes the designated business system

supplier owned inventory

-A system in which the supplier not only controls the inventory, but also owns it and keeps it close to the consumer until it is purchased by the consumer - Falls within the supplier managed inventory umbrella

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 universal standard is the ratio of labor costs to sales value added by production - If there is an increase in production sales value with no change in labor costs, productivity has increased while unit cost has decreased

quick response program (qrp)

-A system of linking final retail sales with production and shipping schedules back through the chain of supply employs pointofsale scanning and electronic data interchange, and may use direct shipment from a factory to a retailer

methods time management (mtm)

-A system of predetermined motiontime standards - A procedure that analyzes and classifies the movements of any operation into certain human motions and assigns to each motion a predetermined time standard selected by the nature of the motion and the conditions under which itwill be made

participative management

-A system that encompasses various activities of high involvement in which subordinates share a significant degree of decisionmaking powerwith their immediate superiors - Participative management draws on the rationale that everyone in an organization is capable of and willing to help guide and direct the organization toward agreedon goals and objectives

product data management (pdm)

-A system that tracks the configurations of parts and bills of material and also the revisions and history of product designs - It facilities the design release, distributes the design data to multiple manufacturing sites, and manages changes to the design in a closedloop fashion - It provides the infrastructure that controls the design cycle and manages change

radio frequency identification (rfid)

-A system using electronic tags to store data about items - Accessing or retrieving this data is accomplished through a specific radio frequency and does not require close proximity or lineofsight access - See: active tag, passive tag, semipassive tag

product configurator

-A system, generally rulebased, to be used in designtoorder, engineer to order, or make to order environments where numerous product variations exist - Product configurators perform intelligent modeling of the part or product attributes and often create solid models, drawings, bills of material, and cost estimates that can be integrated into CAD/CAM and MRP II systems as well as sales order entry systems

quality audit

-A systematic, independent examination and review to determine whether quality activities and related results comply with planned arrangements and whetherthese arrangements are implemented effectively and are suitable to achieve the objectives

probability distribution

-A table of numbers or a mathematical expression that indicates the frequency with which each of all possible results of an experiment should occur

problem solving storyboard

-A technique based on the plan/do/check/action problemsolving process - The steps being taken and the progress toward the resolution of a problem are continuously planned and updated

output control

-A technique for controlling output where actual output is compared to planned output to identify problems at the work center orfacility

sensitivity analysis

-A technique for determining how much an expected outcome or result will change in response to a given change in an input variable - For example, given a projected level of resources, determiningthe effect on net income if variable costs of production increased 20 percent

lot size inventory management interpolation technique (limit)

-A technique for looking at the lot sizes for groups of similar products to determine the effect economic lot sizes will have on the total inventory, total setup costs, and machine availability

optical scanning

-A technique for machine recognition of characters by their images

operations sequencing

-A technique for shortterm planning of actual jobs to be run in each work center based upon capacity (i -e -, existing workforce and machine availability) and priorities - The result is a set of projected completion times for the operations and simulated queue levels for facilities

shelf life control

-A technique of physical firstin, firstout usage aimed at minimizing stock obsolescence

processor dominated scheduling

-A technique that schedules equipment (processor) before materials - Facilitates scheduling equipment in economic run lengths and the use of lowcost production sequences - A scheduling method used in some process industries - See: materialdominated scheduling

material dominated scheduling (mds)

-A technique that schedules materials before processors (equipment or capacity) - This technique facilitates the efficient use of materials - MDS can be used to schedule each stage in a process flow scheduling system - MRP systems use materialdominated scheduling logic - See: processordominated scheduling

superflush

-A technique to relieve all components down to the lowest level usingthe complete bill of material, based on the count of finished units produced or transferred to finished goods inventory

process decision program chart

-A technique used to show alternate paths to achieving given goals - Applications include preparing contingency plans and maintaining project schedules

strict liability

-A tort doctrine requiring those engaging in very hazardous activities or those manufacturingvery hazardous items be held to a high standard of conduct

supply chain event management (scem)

-A term associated with supply chain management software applications, where users have the ability to flag the occurrence of certain supply chain events to trigger some form of alert or action within another supply chain application - SCEM can be deployed to monitor supply chain business processes such as planning, transportation, logistics, or procurement - Can also be applied to supply chain business intelligence applications to alert users to any unplanned or unexpected event

total quality management (tqm)

-A term coined to describe Japanesestyle management approaches to quality improvement - Since then, total quality management (TQM) has taken on many meanings - Simply put, TQM is a management approach to longterm success through customer satisfaction - TQM is based on the participation of all members of an organization in improving processes, goods, services, and the culture in which they work - The methods for implementing this approach are found in teachings of such quality leaders as Philip B - Crosby, W - Edwards Deming, Armand V - Feigenbaum, Kaoru Ishikawa, J -M - Inran and Rpnirhi Tncn irhi

prepaid

-A term denoting that transportation charges have been or are to be paid at the point of shipment by the sender

production planning and control strategies

-A term planning and shortterm control capabilities for strategic and operational considerations by management - These strategies help firms develop systems that enable them to exploit market opportunities while satisfying manufacturing process requirements - element of manufacturing strategy that includes the design and development of manufacturing planning and control systems in relation to the following considerations: (1) market related criteriathe required level of delivery speed and reliability in a given market segment (2) process requirement criteriaconsistency between process type (job shop, repetitive, continuous, etc -) and the production planning and control system and (3) organization control levels systems capable of providing long inventory levels, and backlog - Companies can use a chase, level, or hybrid production planning method -

seiton

-A term that refers to neatness in the workplace that is achieved by straightening offices and work areas - See: five Ss

seiri

-A term that refers to organizing or throwing away things that are not needed - See: five Ss

seiketsu

-A term that refers to standardization (e -g -, standard locations for tools and equipment) - See: five Ss

seiso

-A term that states that a productive workplace is found through cleanliness - See: five Ss

vital few, useful many

-A term used by J -M - Juran to describe his use ofthe Pareto principle in quality management, which he first described in 1950 - (The principle was used much earlier in economics and inventory control methodologies -) The principle suggests that most effects come from relatively few causes that is, 80 percent of the effects come from 20 percent of the possible causes - The 20 percent of the possible causes are referred to as the vital few the remaining causes are referred to as the useful many - When Juran first defined this principle, he referred to the remaining causes as the trivial many, but since no problems are trivial in quality assurance, he changed it to useful many - VMIAbbreviation forvendormanaged inventory - VOCAbbreviation forvoice ofthe customer - VOI

prevention versus detection

-A term used to contrast two types of quality activities - Prevention refers to those activities designed to prevent nonconformances in goods and services - Detection refers to those activities designed to detect nonconformances already in goods and services - Syn: designing in quality versus inspecting in quality

right the first time

-A term used to convey the concept that it is beneficial and more costeffective to take the necessary steps the first time to ensure that a good or service meets its requirements than to provide a good or service that will need rework or not meet customers' needs - In otherwords, an organization should engage in defect prevention rather than defect detection

out of spec

-A term used to indicate that a unit does not meet a given specification

materiel

-A term, used more frequently in nonmanufacturing organizations, to refer to the equipment, apparatus, and supplies used by an organization

quality trilogy

-A threepronged approach to managing quality proposed by Joseph Juran - The three legs are quality planning (developing the products and processes required to meet customer needs), quality control (meeting product and process goals), and quality improvement (achieving unprecedented levels of performance)

production standard

-A time standard to produce piece parts and assemblies

project model

-A timephased project planning and control tool that itemizes major milestones and points of user approval

sales plan

-A timephased statement of expected customer orders anticipated to be received (incoming sales, not outgoing shipments) for each major product family or item - Represents sales and marketing management's commitment to take all reasonable steps necessary to achieve this level of actual customer orders - Is a necessary input to the production planning process (or sales and operations planning process) - Expressed in units identical to those used forthe production plan (as well as in sales dollars) - See: aggregate planning, production plan, production planning, sales and operations planning

schedule

-A timetable for planned occurrences (e -g -, shipping schedule, master production schedule, maintenance schedule, supplier schedule) - Some schedules include the starting and ending time for activities (e -g -, project schedule)

risk breakdown structure

-A tool that helps identify potential project risks, organized by risk categories and subcategories

waste hierarchy

-A tool that ranks waste management options according to what is most environmentally sound - Gives top priority to preventing waste in the first place and can be applied to various applications

responsibility assignment matrix (ram)

-A tool to ensure that each component ofwork in a project is assigned to a responsible person

quality policy

-A topmanagement statement of the overall quality direction of an organization as required by ISO 9001

private trading exchange (ptx)

-A trade exchange hosted by a single company to facilitate collaborative ecommerce with its trading partners - As opposed to public emarketplaces, a private exchange provides the host company with control over many factors, including who may participate (and in what manner), how participants may be connected, and what contents should be presented (and to whom) - The ultimate goal might be to improve supply chain efficiencies and responsiveness through improved process visibility and collaboration, advanced integration platforms, and customization capabilities, private warehouseA company

planned issue receipt

-A transaction that updates the onhand balance and the related allocation or open order

virtual factory

-A transformation process most frequently found underthe virtual corporation - Involves merging the capabilities and capacities of the firm with those of its suppliers - Typically, the components provided by the suppliers are those that are not related to a core competency of the firm, while the components managed by the firm are related to core competencies - One characteristic of the virtual factory is that it can be restructured quickly in response to changing customer demands and needs

truckload lot

-A truck shipment that qualifies for a lower freight rate because it meets a minimum weight and/orvolume

time and materials (t&m) contract

-A type of contract that is a hybrid between costreimbursable and fixedtime contracts

process focused production

-A type of factory operation that requires frequent machine changeover and produces small batches of unique products that flow along different paths

two bin inventory system

-A type of fixedorder system in which inventory is carried in two bins - A replenishment quantity is ordered when the first bin (working) is empty - Duringthe replenishment lead time, material is used from the second bin - When the material is received, the second bin (which contains a quantity to cover demand during lead time plus some safety stock) is refilled and the excess is put into the working bin - At this time, stock is drawn from the first bin until it is again exhausted - Also used loosely to describe any fixedorder system even when physical bins do not exist - Svn: hin reserve svstem - See: visual

product based layout

-A type of layout where resources are arranged sequentially according to the steps required to make a particular complex product

project based layout

-A type of layoutwhere the good or product is stationary and the workers come to the site to work on it

process focused

-A type of manufacturing organization in which both plant and staff management responsibilities are delineated by the production process - A highly centralized staff coordinates plant activities and intracompany material movements - This type of organization is best suited to companies whose dominant orientation is to a technology or material and whose manufacturing processes tend to be complex and capital

product focused

-A type of manufacturing organization in which both plant and staff responsibilities are delineated by product, product line, or market segment - Management authority is highly decentralized, which tends to make the company more responsive to market needs and more flexible when introducing new products - This type of organization is best suited to companies whose dominant orientation is to a market or consumer group and where flexibility and innovation are more important than coordinated planning and tight control - See: process focused, processfocused organization

project manufacturing

-A type of manufacturing process used for large, often unique, items or structures that require a custom design capability (engineertoorder) - This type of process is highly flexible and can cope with a broad range of product designs and design changes - Usually uses a fixedposition type layout - See: batch (fourth definition), continuous production, job shop (second definition), process manufacturing, project, repetitive manufacturing

motion study

-A type of methods study focused on therbligs (basic hand and body movements) - See: therblig

min max system

-A type of order point replenishment system where the minimum (min) is the order point, and the maximum (max) is the order up to inventory level - The order quantity is variable and is the result of the max minus available and onorder inventory - An order is recommended when the sum of the available and onorder inventory is at or below the min

predictive maintenance

-A type of preventive maintenance based on nondestructive testing and statistical analysis, used to predict when required maintenance should be scheduled - Syn: predictable maintenance

modular architecture

-A type of product architecture where the functional pieces correspond to physical pieces - The different physical pieces have their own function, and there is little interaction between them

quasi manufacturing

-A type of service operation that closely resembles a manufacturing process focus is on production process, technology, costs, and quality

poisson distribution

-A type of statistical distribution frequently used to model the arrival of customers or entities into a queuing system

preferred stock

-A type of stock entitling the owner to dividends before common stockholders are entitled to them

sales order number

-A unique control number assigned to each new customer order, usually during order entry - It is often used by order promising, master scheduling, cost accounting, invoicing, and so forth

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, including by the distributor orwholesaler

material lot

-A uniquely identifiable amount of a material - Describes the actual quantity or amount of material available, its current state, and its specific property values

material sublot

-A uniquely identifiable subset of a material lot containing quantity and location - A sublot may be a single item

manhour

-A unit of measure representing one person workingforone hour -The combination of n people workingforh hours produces nh manhours - Frequent qualifications to the definition include (1) designation of work effort as normal effort and (2) designation of time spent as actual hours

vestibule training

-A variant of job rotation in which a separate work area is set up for a trainee so that the actual work situation does not pressure the trainee - Examples are cockpit simulators and other machine simulators

probable scheduling

-A variant of scheduling that considers slack time to increase or decrease the calculated lead time of an order - Interoperation and administrative lead time components are expanded or compressed by a uniform stretchingfactor until no difference exists between the schedule of operations obtained by forward and backward scheduling - See: lead time scheduling

qs 9000

-A variation of ISO 9000 certification with additional requirements tailored for the automobile industry, including suppliers - QS 9000 is being superseded by ISO/ TS16949, which incorporates many European standards - See: ISO 9000, ISO/TS16949

quantity discount model

-A variation of the economic order quantity model in which the assumption of a single price is relaxed and there is a schedule of prices based on specific volumes - Syn: pricebreak model

production reporting and status control

-A vehicle to provide feedback to the production schedule and allow for corrective action and maintenance of valid onhand and onorder balances - Normally includes manufacturing order authorization, release, acceptance, operation start, delay reporting, move reporting, scrap and rework reporting, order closeout, and payroll interface - Syn: manufacturing order reporting, shop order reporting

skills matrix

-A visual tool to show the skilIs/skill levels of employees - Used primarily when forming a team so the leader knows what skills are necessary to accomplish the team's goals - Also used when implementing a fullcross training process to ensure that all workers are cross trained to the same levels

united nations global compact

-A voluntary initiative whereby companies embrace, support, and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, the environment, and anticorruption

multiple channel queuing system

-A waiting line system that has parallel waiting lines with queues

product positioned warehouse

-A warehouse located close to the manufacturing plants that acts as a consolidation point for products

supermarket approach

-A way of managing inventory and improving picking by making all parts easy to take off of a shelf, much like the shelves of a supermarket - Inventory is then restocked in such away that employees always have easy access

ton mile

-A way to measure the transportation of freight - It is the multiplication of weight being transported (in tons) by the distance it is being transported (in miles) - Heavily used in rail and ship

push back rack

-A wheeled rack structure on which palletized materials are stored and pushed up a slightly sloping ramp from which they can eventually slide down to an aisle

sa8000

-A widely recognized international standard for managing human rights in the workplace - It provides an auditable framework for assuring that social accountability is being stewarded by an organization - SaaSAbbreviation for softwareasa

project summary work breakdown structure

-A work breakdown structure that is developed down to the subproject level of detail - See: work breakdown structure

order processing and communication

-AII activities needed to fill customer orders

order preparation

-AII activities relating to the administration, picking, and packaging of individual customer or work orders

period costs

-AII costs related to a period of time rather than a unit of product (e -g -, marketing costs, property taxes)

variable overhead

-AII manufacturing costs, other than direct labor and direct materials, that vary directly with production volume - Variable overhead is necessary to produce the product, but cannot be directly assigned to a specific product

returns processing cost

-AII of the costs associated with dealing with returned items after they have been received - These costs occur when returned items are repaired, discarded, or replaced

lsl

-Abbreviation for lower specification limit - LTLAbbreviation for less than truckload - LTPDAbbreviation for lot tolerance percent defective - LTTAbbreviation for longesttasktime, lumpy demandSyn: discontinuous demand

sg&a

-Abbreviation for selling, general and administrative

srm

-Abbreviation for supplier relationship management

rerouting flexibility

-Accommodating unavailability of equipment by quickly and easily using alternate machines in the processing sequence

open period

-Accounting time period forwhich the books will still accept adjusting entries and postings - Ant: closed period

optimization

-Achieving the best possible solution to a problem in terms of a specified objective function

sipoc

-Acronym for supplier, input, process, output, customer (pronounced syepahk)

tampering

-Action taken to compensate for variation within the control limits of a stable system - Tampering increases ratherthan decreases variation, as evidenced in the funnel experiment - See: funnel experiment

unfair labor practice

-Activities by management or laborthatviolatethe National Labor Relations Act - Failure to bargain in good faith is an example

support functions

-Activities such as accounting and information systems that do not directly participate in production but that are nevertheless essential

voice ofthe customer (voc)

-Actual customer descriptions in words for the functions and features customers desire for goods and services - In the strict definition, as related to quality function deployment (QFD), the term customer indicates the external customer of the supplying entity

upcharges

-Additional charges added to a delivered bill that were not included in the original contract - Occur because of unforeseen increases in the deliverer's cost base

machine attachments

-Additional machine parts that decrease the time needed to complete a task and the level of human involvement required

stakeholder relationship management

-Addressing and managing the competing priorities, needs, and concerns of internal and external stakeholders in a proactive and sustained manner, resulting in decreased cost and enhanced stakeholder acceptance or buy in

order quantity modifiers

-Adjustments made to a calculated order quantity - Order quantities are calculated based upon a given lotsizing rule, but it may be necessary to adjust the calculated lot size because of special considerations (scrap, testing, etc -)

unplanned order

-After a forecast has been developed, an unplanned order is any order outside this forecast

summaryjudgment

-Ajudicial rulingthat no essential facts are in dispute and that one party to the suit merits judgment as a matter of law - sum of deviationsSyn: cumulative sum

project management body of knowledge (pmbok)

-All the knowledge within the project management profession - Includes all published and unpublished material, knowledge that rests with practitioners and academics, and practices that range from traditional to innovative

strategic partnerships

-Alliances with top supplier and buyer performers to enhance a firm's performance

tolerance

-Allowable departure from a nominal value established by design engineers that is deemed acceptable for the functioning of the good or service over its life cycle

under capacity scheduling

-Allowing more time than should be necessary to complete a day's work - As a result, a daily quota is met more often and workers have time to cross train or perform maintenance on their tools and machines

private label

-Also known as store or dealer brands, these are products that are designed and produced by one company but carry the name of the store that sells them - Oftentimes called generic to the purchaser

riskappetite

-Amount and type of risk that an organization is willing to pursue or retain

regeneration mrp

-An MRP processing approach where, to maintain valid priorities, the master production schedule is totally reexploded down through all bills of material - New requirements and planned orders are completely recalculated or regenerated at that time - Ant: net change MRP

semipassive tag

-An RFID tag that sends out data, is selfpowered, and widens its range by harnessing

net profit

-An absolute measure of financial performance that is calculated as the difference between revenues and expenses - In throughput accounting, net profit is calculated as throughput minus operating expense

project costing

-An accounting method of assigning valuations generally used in industries where services are performed on a project basis - Each assignment is unique and costed without regard to other assignments - Examples are shipbuilding, construction projects, and public accounting firms - Project costing is different from process costing, where the products to be valued are homogeneous

noncurrent assets

-An accounting/financial term (balance sheet classification of accounts) representing the longterm resources owned by a company, including property, plant, and equipment

owner's equity

-An accounting/financial term (balance sheet classification of accounts) representing the residual claim by the company's owners or shareholders, or both, to the company's assets less its liabilities - See: assets, balance sheet, liabilities

operating assets

-An accounting/financial term representing the resources owned by a company for productive purposes (to generate a profit), including cash, accounts receivable, inventories, equipment, and facilities

scor

-An acronym for Supply Chain Operations Reference model

raci (responsible, accountable, consulted, and informed) analysis

-An acronym used to describe a document that identifies who is Responsiblewho is Accountable who should be Consulted and who should be kept Informed for various aspects of a project or process

uniform warehouse receipts act

-An act that regulates public warehousing it sets up the legal responsibilities of warehouse managers and determines the receipts that can be issued

non valueadded

-An activity that does not add value to a product for example, moving the product from one work center to another inside a facility - One aspect of continuous improvement is the elimination or reduction of nonvalue

viral marketing

-An advertisement that is embedded into webbased technology (e -g -, email or popup ads) that can easily move through the internet and get in front of the target audience, who may never have seen it otherwise

north american free trade agreement (nafta)

-An agreement amongthe United States, Canada, and Mexico to promote economic prosperity by reducing trade barriers

price prevailing at date of shipment

-An agreement between a purchaser and a supplier that the price of the goods ordered is subject to change at the supplier's discretion between the date the order is placed and the date the supplier makes shipment the subsequently established price is the contract price

systems concept

-An attempt to create the most efficient complete system as opposed to the most efficient individual parts - A whole process or whole company operating system that is driven by cause and effect

price protection

-An agreement between a supplier and a purchaser to grant the purchaser any reduction in price that the supplier may establish on its goods before shipment of the purchaser's order or to grant the purchaserthe lower price should the price increase before shipment - Price protection is sometimes extended for an additional period beyond the date of shipment

trade bloc

-An agreement between countries intended to reduce or remove barriers to trade within member countries - Frequently, but not always, those countries are geographically close - Examples of trade blocs are the European Economic Community and the North American Free Trade Agreement (NAFTA) - Syn: trading bloc

sale and leaseback

-An agreement by which a firm first sells its assets to a financial institution and then leases these same assets from the financial institution

quality tree

-An analytical tool thatvisualizes quality being composed of four layers of achievement: (1) inspection, (2) process measurement and improvement, (3) process control, and (4) design for quality

technical/office protocol (top)

-An applicationspecific protocol based on open systems interconnection (OSI) standards - Designed to allow communication between computers from different suppliers in the technical development and office environments

manufacturing automation protocol (map)

-An applicationspecific protocol based on the International Organization for Standardization's open systems interconnection (OSI) standards - It is designed to allow communication between a company's computers and computers from different vendors in the manufacturing shop floor environment

net change mrp

-An approach in which the material requirements plan is continually retained in the computer - Whenever a change is needed in requirements, open order inventory status, or bill of material, a partial explosion and netting is made for only those parts affected by the change - Ant: regeneration MRP

triple bottom line (tbl)

-An approach that measures the economic, social, and environmental impact of an organization's activities with the intent of creating value for both its shareholders and society

what if simulation

-An approach to conducting a whatif analysis usually found in MRP II and ERP systems

qualitative forecastingtechniques

-An approach to forecasting that is based on intuitive or judgmental evaluation - It is used generally when data is scarce, not available, or no longer relevant - Common types of qualitative techniques include personal insight, sales force estimates, panel consensus, market research, visionary forecasting, and the Delphi method - Examples include developing longrange projections and new product introductions -based quality is the degree of excellence at an acceptable price - Also, quality has two major components: (1) quality of conformancequality is defined by the absence of defects, and (2) quality of designquality is measured by the degree of customer satisfaction with a product's characteristics and features

quantitative forecasting techniques

-An approach to forecasting where historical demand data is used to project future demand - Extrinsic and intrinsic techniques are typically used - See: extrinsic forecasting method, intrinsic forecasting method

simplex method

-An approach to solving linear programming models

strategic business unit (sbu)

-An approach to strategic planning that develops a plan based on products - A company's products are typically grouped into strategic business units (SBUs) with each SBU evaluated in terms of strengths and weaknesses visavis similar business units made and marketed by competitors - The units are evaluated in terms of their competitive strengths, relative advantages, life cycles, and cash flow patterns

performance measurement baseline

-An approved plan used to compare against actual execution to identify variances for management control

movingaverage

-An arithmetic average of a certain number (n) ofthe most recent observations - As each new observation is added, the oldest observation is dropped - The value of n (the number of periods to use for the average) reflects responsiveness versus stability in the same way that the choice of smoothing constant does in exponential smoothing - There are two types of moving average: simple and weighted - See: simple moving average, weighted moving average

planning bill of material

-An artificial grouping of items or events in bilIofmaterial format used to facilitate master scheduling and material planning - It may include the historical average of demand expressed as a percentage of total demand for all options within a feature or for a specific end item within a product family - Used as the quantity per in the planning bill of material - Syn: planning bill - See: hedge, option overplanning, production forecast, pseudo bill of material

proprietary assembly

-An assembly designed by a manufacturer that may be serviced only with component parts supplied by the manufacturer and whose design is owned or licensed by its manufacturer

mixed model assembly line

-An assembly line with more than one type of model passing through it

subassembly

-An assembly that is used at the next level of the bill of material to build another assembly

profit center

-An assigned responsibility center that has authority to affect both the revenues earned and the costs incurred by and allocated to the center - Operational effectiveness is evaluated in terms ofthe amount of profit generated

letter of credit (l/c)

-An assurance by a bank that payment will be made as long as the sales terms agreed to by the buyer and seller are met - This method of payment for sales contracts provides a high degree of protection for the seller

special warranty

-An assurance that the product is fit forthe specific purpose forwhich the product will be used - See: general warranty, warranty

taskinterleaving

-An attempt at reducing/eliminating deadheading (i -e -, driving an empty materialhandling vehicle) - A warehouse management system directs a materialcarrying vehicle to put away materials as it goes to pick up other materials

programmable logic controller (plc)

-An electronic device that is programmed to test the state of input process data and to set output lines in accordance with the input state, thus providing control instructions or branching to another set of tests - Programmable controllers provide factory floor operations with the ability to monitor and rapidly control hundreds of parameters such as temperature and pressure

scanner

-An electronic device that optically converts coded information into electrical control signals for

manufacturing layout strategies

-An element of manufacturing strategy - It is the analysis of physical capacity, geography, functional needs, corporate philosophy, and productmarket/process focus to systematically respond to required facility changes driven by organizational, strategic, and environmental considerations

manufacturing volume strategy

-An element of manufacturing strategy that includes a series of assumptions and predictions about longterm market, technology, and competitive behavior in the following areas: (1) the predicted growth and variability of demand (2) the costs of building and operating different sized plants (3) the rate and direction of technological improvement (4) the likely behavior of competitors and (5) the anticipated impact of international competitors, markets, and sources of supply - It is the sequence of specific volume decisions over time that determines an organization's longterm manufacturing volume strategy

shape

-An element of variability results that measures the output of a process - If a process results in product dimensions falling within a bellshaped curve, then the process is running normally

sales representative

-An employee authorized to accept a customer's order for a product - Sales representatives usually go to the customer's location when industrial products are being marketed

total employee involvement (tei)

-An empowerment program in which employees are invited to participate in actions and decision making that were traditionally reserved for management

project

-An endeavor with a specific objective to be met within predetermined time and dollar limitations and that has been assigned for definition or execution - See: project manufacturing, project management

single integrator solution

-An enterprise resources planning implementation chosen entirely from one vendor

process oriented

-An environment in which the focus is on the interrelated processes in a business - It includes the activities to transform inputs into outputs that have value

standard output

-An estimate of what should be produced, given a certain level of resources - Can be stated in units per hour or units per period (day, shift, etc -)

red bead experiment

-An experiment developed by W - Edwards Deming to illustrate the impossibility of putting employees in rank order of performance - The experiment shows that it would be a waste of management's time to try to find out why one worker produced more errors than another management should instead improve the system, making it possible for everyone to achieve higher quality

material specification

-An explanation of the characteristics of material to be produced or purchased

shipper's export declaration (sed)

-An export/import document prepared by the shipper before a shipment can be exported and presented to a government authority of the country in which the shipper resides - Specifies details on the goods to be shipped, including their value, weight, and destination

type ii error

-An incorrect decision to accept something when it is unacceptable - See: consumer's risk

type i error

-An incorrect decision to reject something (such as a statistical hypothesis or a lot of products) when it is acceptable - See: producer's risk

profitability ratio

-An indicator of whether or not a company is generating profits at an acceptable rate - It includes such measurements as return on total assets, return on equity, and profit margin

turnover ratio

-An indicator of whether or not a company is using its assets efficiently - It is measured by dividing sales by average assets during a particular period

request for information (rfi)

-An inquiry to a potential supplier about that supplier's product or service for potential use in the business - The inquiry can provide certain business requirements or be of a more general

multimedia

-An interactive combination of two or more ofthe followingtext, graphics, video, audio, and animation all controlled by a personal computer

reverse auction

-An internet auction in which suppliers attempt to underbid their competitors - Company identities are known only by the buyer

prediction

-An intuitive estimate of demand taking into account changes and new factors influencing the market, as opposed to a forecast, which is an objective projection of the past into the future

stabilization stock

-An inventory that is carried on hand above the base inventory level to provide protection against incurring overtime or downtime

variable costing

-An inventory valuation method in which only variable production costs are applied to the product fixed factory overhead is not assigned to the product - Traditionally, variable production costs are direct labor, direct material, and variable overhead costs - Variable costing can be helpful for internal management analysis but is not widely accepted for external financial reporting - For inventory order quantity purposes, however, the unit costs must include both the variable and allocated fixed costs to be compatible with the otherterms in the order quantity formula - For makeorbuy decisions, variable costing should be used rather than full absorption costing - Syn: direct costing

training aid

-An item to enhance training, usually minor in nature - Training aids may include charts, graphs, slides, and schematics

tender offer

-An offer by an organization to buy a block of shares directly from shareholders of another organization

matrix organizational structure

-An organizational 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 simultaneouslythat is, the product and functional managers have equal authority and employees report to both managers

subplant

-An organizational structure within a factory consisting of a compact entrepreneurial unit that is either processoriented or productoriented and is structured to achieve maximum productivity

predetermined motion time

-An organized body of information, procedures, techniques, and motion times employed in the study and evaluation of manual work elements - It is useful in categorizing and analyzing all motions into elements whose unit times are computed according to such factors as length, degree of muscle control, and precision - The element times provide the basis for calculating a time standard for the operations - Syn: synthetic time standard

skills inventories

-An organized file of information on each employee's skills, abilities, knowledge, and experience, usually maintained by a personnel office - See: labor grade

source document

-An original written or printed record of some type that is to be converted into machinereadable form

wandering bottleneck

-An undesirable effect in which the bottleneck moves relatively frequently from one resource to another

online receiving

-An unloading process characterized by computers or terminals wherever shipments are received and employees enter delivery data into the system as the shipments are unloaded

time series analysis

-Analysis of any variable classified by time in which thevaluesofthe variable are functions ofthe time periods - Time series analysis is used in forecasting - A time series consists of seasonal, cyclical, trend, and random components - See: cyclical component, random component, seasonal component, trend component

root cause analysis

-Analytical methods to determine the core problem(s) of an organization, process, product, market, and so forth - See: current reality tree, five whys, stratification analysis - ROPAbbreviation for reorder point

product layout

-Another name for flow process layout - A system that is set up for a limited range of similar products - Focusedfactory production is also considered to be in this category - See: flow processing, focused factory

smoothing models

-Another name for forecasting models that utilize moving averages - The forecast is smoothed in the sense that averages have less variability than individual periods

network path

-Any continuous series of project activities connected by precedence relationships in a project schedule network diagram

proprietary data

-Any financial, technical, or other information that is developed at the expense of the person or other entity submitting it and deemed to be of strategic or tactical importance to the company - It may be offered to customers on a restricteduse basis, protection timeSyn: safety lead time

trading partner

-Any organization external to the firm that plays an integral role within the supply chain community and whose business fortune depends on the success ofthe supply chain community

nominal trading partner

-Any organization external to the firm that provides an essential material or service, but whose financial success is largely independent of the financial success of the supply chain community

nonconforming material

-Any raw material, part, component, or product with one or more characteristics that depart from the specifications, drawing, or other approved product description

partial order

-Any shipment received or shipped that is less than the amount ordered

pull signal

-Any signal that indicates when to produce or transport items in a pull replenishment system - For example, injustintime production control systems, a kanban card is used as the pull signal to replenish parts to the using operation - See: pull system

resource

-Anything that adds value to a good or service in its creation, production, or delivery

order losers

-Areas or aspects of an organization in which poor performance can cause loss of business - For example, failure to meet customer expectations with delivery of the product is an order loser - See: order qualifiers, order winners

scan based trading (sbt)

-As an item is sold, scanned information is sent to the manufacturer and creates a replacementorderof that item - Used often in large retail store chains as well as large volume product producers

responsible procurement

-Assuring the use of ethical sources of goods and services where a firm does business to bring about a positive impact and minimize the negative impact on societies and environments including reduce, reuse, and recycle of materials - Includes processes for identifying, assessing, and managing the environmental, social, and ethical risk in the supply chain - Syn: environmentally responsible purchasing

product quality

-Attribute that reflects the capability of a product to satisfy customers' needs

supplier audit

-Auditing supplier processes as part of a supplier development system

mean time for failures (mtff)

-Average time for failure of a nonrepairable product (expected life) or average time to first failure of a repairable product - See: reliability

line haul costs

-Basic costs of carrier operation to move a container of freight, including drivers'wages and usage depreciation - These vary with the cost per mile, the distance shipped, and the weight moved, line itemOne item on an order, regardless of quantity

scheduling rules

-Basic rules that can be used consistently in a scheduling system - Scheduling rules usually specify the amount oftime to allow for a move, queue, load calculation, and so forth - Syn: scheduling algorithm

process benchmarking

-Benchmarking focused on the target firm's business processes (including process flows, operating systems, and process technologies) - See: benchmarking

stockless purchasing

-Buying material, parts, supplies, and so on for direct use by the departments involved, as opposed to receiving them into stores and subsequently issuingthem to the departments - The intent is to reduce inventory investment, increase cash flow, reduce material handling and storage, and provide better service - See: docktostock inventory, stock numberSyn: item number

resource planning

-Capacity planning conducted at the business plan level - The process of establishing, measuring, and adjusting limits or levels of longrange capacity - Resource planning is normally based on the production plan but may be driven by higherlevel plans beyond the time horizon of the production plan (e -g -, the business plan) - It addresses those resources that take long periods of time to acquire - Resource planning decisions always require top management approval - Syn: resource requirements planning - See: capacity planning, longterm planning -Syn: resource

proof of delivery (pod)

-Carrier's records indicating the person signing for delivery with the date, time, and other related information

riskavoidance

-Changing a plan to eliminate a risk or to protect plan objectives from its impact

user friendly

-Characteristic of computer software or hardware that makes it easy for the user or operator to use the programs or equipment with a minimum of specialized knowledge or recourse to operating manuals

standard industrial classification (sic)

-Classification codes that are used to categorize companies into industry groupings

use as is

-Classification for material that has been declared to be unacceptable per the specifications, yet can be used

pattern recognition

-Classifying raw data based on experience or statistical information

merge in transit

-Combining shipments from several vendors at an intermediate point of shipment and delivering the combined load to the customer

operating leverage

-Comparing an organization's annual sales to its annual costs

standard components

-Components of a finished product that are easy to manufacture and are made by many suppliers, making them more of commodity to buy at low cost

remanufactured parts

-Components or assemblies that are refurbished or rebuilt to perform the original function - Syn: refurbished goods, refurbished parts -new condition

plant layout

-Configuration of the plant site with lines, buildings, major facilities, work areas, aisles, and other pertinent data such as department boundaries

quality

-Conformance to requirements or fitness for use - Quality can be defined through five principal approaches: (1) Transcendent quality is an ideal a condition of excellence - (2) Productbased quality is based on a product attribute - (3) Userbased quality is fitness for use - (4) Manufacturingbased quality is conformance to requirements - (5) Value

total cost consideration

-Considering all cost impacts, rather than just one cost impact, on customer service improvement -even point - 2) In inventory theory, the total cost curve for an invpntnrv itpm iqthp cuim nf thp nnqts nf annnirina

total costs

-Consideringall cost impacts, rather than just one cost impact, on customer service improvement

organizational environment

-Consists of an external environment (e -g -, laws and regulations, technology, economy, competition) and an internal environment (e -g -, the domain of products and services to be provided, the processes to be executed, the organizational structure) - See: external environment, internal environment

shared services

-Consolidation of support processes to form a separate unit to provide services to the parent company and external customers - This lowers costs and may improve support because the shared services unit is more focused

reserve

-Contingency funds set aside to mitigate risk

shojinka

-Continually balancingthe number of workers in a work center to meet demand with a minimum number of workers to improve flow - It requires a line designfor example, Ushapedthat supports varying the number of workers, shop calendar

upper control limit (ucl)

-Control limit for points above the central line in a control chart

lower control limit (lcl)

-Control limit for points below the central line in a control chart

schedule control

-Control of a plant floor by schedules ratherthan by job orders (called order control) - Schedules are derived by taking requirements over a period of time and dividing by the number of workdays allowed to run the parts or assemblies - Production completed is compared with the schedule to provide control - This type of control is most frequently used in repetitive and process manufacturing

order control

-Control of manufacturing activities by individual manufacturing, job, or shop orders, released by planning personnel and authorizing production personnel to complete a given batch or lot size of a particular manufactured item - Information needed to complete the order (components required, work centers and operations required, tooling required, etc -) may be printed on paper or tickets, often called shop orders orwork orders, which are distributed to production personnel - This use of order control sometimes implies an environmentwhere all the components for a given order are picked and issued from a stocking location, all at one time, and then moved as a kit to manufacturing before any activity begins - It is most frequently seen in job shop manufacturing - See: shop floor control

traffic management

-Control of transportation carriers, modes, and services

supplier footprint

-Describes the supply base for a particular material, component, or service - When stratified properly for leverage, cost impact, risk, and performance, can lead to a supplierfootprint transition plan for consolidated leverage, supplybase reduction, and focused effort -A highlevel process map that shows substantial subprocesses in an organization's process togetherwith the structure ofthe process represented by the suppliers, inputs, outputs, and customers - A SIPOC diagram defines the critical aspects of a process without losing the overall perspective

process sheet

-Detailed manufacturing instructions issued to the plant - The instructions may include specifications on speeds, feed, temperatures, tools, fixtures, and machines and sketches of setups and semifinished dimensions

least changeover cost

-Determining the lowest cost of making machine changeovers between jobs by sequencing the jobs accordingly

process planning

-Determining the technological steps and sequence required to produce a product or service at the required quality level and cost

point of use delivery

-Direct delivery of material to a specified location on a plant floor near the operation in which it is to be used -stock inventory

work cell

-Dissimilar machines grouped together into a production unit to produce a family of parts having similar routings

lot splitting

-Dividing a lot into two or more sublots and simultaneously processing each sublot on identical (orvery similar) facilities as separate lots, usually to compress lead time or to expedite a small quantity - Syn: operation splitting

single level where used

-Documentation for a component that lists each parent in which that component is directly used and in what quantity - Usually made available through the technique known as implosion

production cycle elements

-Elements of manufacturing strategy that define the span of an operation by addressing the following areas: (1) the established boundaries for the firm's activities (2) the construction of relationships outside the firm's boundaries (i -e -, suppliers, distributors, and customers) (3) circumstances underwhich changes in established boundaries or relationships are necessary and (4) the effect of such boundary or relationship changes on the firm's competitive position - The production cycle elements must explicitly address the strategic implications of vertical integration in regard to (a) the direction of such expansion, (b) the extent of the process span desired, and (c) the balance among the resultingvertically linked activities

plan deliver

-Establishing plans for action over time that project appropriation of supply resources to meet delivery requirements -docheckaction

plan source

-Establishing plans for action over time that project the appropriation of material resources to meet supply chain requirements

plan make

-Establishing plans for action over time that project the appropriation of production resources to meet production requirements, planned adjustment factorSee: seasonal index, planned finish dateSyn: scheduled finish date

work measurement

-Estimating how long it takes for an employee to produce one unit of output

pace rating

-Estimating the level of effort of a subject of methods study, where 100 percentwould be the sustainable pace of an average skilled worker

outbound logistics

-Every process that is involved in the shipping and holding of products after they are completed until they are received by the customer

supply chain execution

-Executionoriented software applications for effective procurement and supply of goods and services across a supply chain - Includes manufacturing, warehouse, and transportation execution systems, and systems providingvisibility across the supply chain

process average

-Expected value of the percentage defective of a given manufacturing process

lot tolerance percent defective (ltpd)

-Expressed in percent defective, the poorest quality in an individual lot that should be accepted - Note: The LTPD is used as a basis for some inspection systems and is commonly associated with a value for a small consumer's risk

political environment

-External factors related to the political processincluding laws and regulations and taxation codesat the local, state, federal, and international levels of government

warehouses (distribution centers)

-Facilities used to store inventory - Decisions driving warehouse management include site selection, number of facilities in the system, layout, and methods of receiving, storing, and retrieving goods

personal fatigue and unavoidable delay allowance

-Factor by which the motion study term normal time is increased to allow for personal needs and unavoidable delays

strategic drivers

-Factors that influence business unit and manufacturing strategies

nonevidentfailure

-Failure occurring in either a product or a production process that is not immediately evident - This may be indicative of a faulty design

nonconformity

-Failure to fulfill a specified requirement - See: blemish, defect, imperfection

strategy

-For an enterprise, identifies how the company will function in its environment - Specifies how to satisfy customers, how to grow the business, howto compete in its environment, howto manage the organization and develop capabilities within the business, and how to achieve financial objectives

mix forecast

-Forecast of the proportion of products that will be sold within a given product family, or the proportion of options offered within a product line - Product and option mix as well as aggregate product families must be forecasted - Even though the appropriate level of units is forecasted for a given product line, an inaccurate mix forecast can create material shortages and inventory problems, mix numberSyn: lot number

production and inventory management

-General term referring to the body of knowledge and activities concerned with planning and controlling rates of purchasing, production, distribution, and related capacity resources to achieve target levels of customer service, backlogs, operating costs, inventory investment, manufacturing efficiency, and ultimately, profit and return on investment

trend

-General upward or downward movement of a variable over time (e -g -, demand, process attribute) - trend adjusted exponential smoothing forecasting Aform of exponential smoothingforecastingthat includes a factor for increasing or decreasing trends in the data resultingfrom variables such as population growth or income changes

self directed work team

-Generally, a small, independent, selforganized, and selfcontrolling group in which members flexibly plan, organize, determine, and manage their duties and actions, as well as perform many other supportive functions - It may work without immediate supervision and can often have authority to select, hire, promote, or discharge its members

recency, frequency, monetary (rfm)

-Giving the highest rating to customers who have bought recently, bought many times, and bought in large amounts

tank inventory

-Goods stored in tanks - These goods may be raw materials, intermediates, orfinished goods - The description of inventory as tank inventory indicates the necessity of calculating the quantity on hand from the levels within the tanks

path divergence

-Having parallel network paths exiting from a single node, path floatSy n: float

multicurrency

-Having the capability to handle orders using monies from several countries for billing purposes, multidomestic strategySyn: multicountry strategy

sourcingdecisions

-Highlevel decisions regarding which products or services will be produced within a company and which will be purchased from external supply chain partners - These decisions normally are based on supplier cost and capability by comparison to producing the product in house

mass production

-Highquantity production characterized by specialization of equipment and labor - See: continuous production

nonscheduled hours

-Hours when a machine is not generally available to be scheduled for operation for example, nights, weekends, holidays, lunch breaks, major repair, and rebuilding

less than truckload (ltl)

-I) A small shipment that does not fill the truck - 2) A shipment of insufficient weight to qualify for a truckload quantity rate discount (usually set at about 10,000 lbs -) normally offered to a general commodity trucker

total cost analysis

-In purchasing, a process by which a firm seeks to identify and quantify all of the major costs associated with various sourcing options

top management commitment (quality)

-In the total quality management philosophy, participation of the highest level official in the organization's quality improvement efforts - Participation includes establishing and serving on a quality committee, establishing quality policies and goals, deploying those goals to lower levels of the organization, providing the resources and training that the lower levels need to achieve the goals, participating in quality improvement teams, reviewing organizationwide progress, recognizing those who have performed well, and revising the current reward system to reflect the importance of achieving the quality goals

pipeline stock

-Inventory in the transportation network and the distribution system, including the flow through intermediate stocking points - The flow time through the pipeline has a major effect on the amount of inventory required in the pipeline - Time factors involve ordertransmission, order processing, scheduling, shipping, transportation, receiving, stocking, review time, and so forth - Syn: pipeline inventory - See: distribution system, transportation inventory

point of use inventory

-Inventory placed in the production process near the operation in which it is to be used - See: dockto

lot size inventory

-Inventory that results whenever quantity price discounts, shipping costs, setup costs, or similar considerations make it more economical to purchase or produce in larger lots than are needed for immediate purposes

nonproduction material

-Items (indirect materials and supplies) in the manufacturing process or in the maintenance or operation of a facility that do not generally become part of the final product

primafacie

-Latin for at first sight or on the face of it - Something is presumed to be true

predatory pricing

-Lowering prices below cost to drive out competition and then raising prices again - In the United States, this is aviolation of Article 2 of the Sherman Act -node network, the node at the tail of the arrow

special purpose machinery

-Machines that are designed to perform a small number of activities - They are not as flexible as general purpose machinery but they may be faster and more accurate

scientific management

-Managing a production system using scientific principles - Usually refers to the principles established by Frederick Taylor

production and operations management (pom)

-Managing an organization's production of goods or services managing the process of taking inputs and creating outputs

spend management

-Managing the outflow of funds in order to buy goods and services - The term is intended to encompass such processes as outsourcing, procurement, eprocurement, and supply chain management

process industries

-Manufacturers that produce products by mixing, separating, forming, and/or performing chemical reactions - Paint manufacturers, refineries, and breweries are examples of process industries

return to supplier

-Material that was rejected by the buyer's inspection department and is awaiting shipment back to the supplier for repair or replacement

packaging

-Materials surrounding an item to protect it from damage during transportation - The type of packaging influences the danger of such damage

supplies

-Materials used in manufacturing that are not normally charged to finished production, such as cutting and lubricating oils, machine repair parts, glue,

variables data

-Measurement information - Control charts based on variables data include average (Xbar) charts, range (R) charts, and sample standard deviations charts

performance objectives

-Measurements that enable the firm to monitor whether or not the firm's strategy is being accomplished - Thus, the measurement should be aligned to strategy - Performance objectives may differ based on the hierarchical level of the firm (e -g -, department, business unit, corporation) and should be aligned with the corresponding strategy for that level

overall equipment effectiveness (oee)

-Measuring the effectiveness of all of the equipment of a company based on usage, performance, and production quality

operations sequence analysis

-Method of planning a facility layout by using graphics to determine the placement of departments

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 - See: trend analysis

poka yoke

-Mistakeproofing techniques, such as manufacturing or setup activity, designed in a way to prevent an error from resulting in a product defect - For example, in an assembly operation, if each correct part is not used, a sensing device detects that a part was unused and shuts down the operation, thereby preventing the assemblerfrom moving the incomplete part to the next station or beginning another operation - Sometimes spelled poke

multilinear regression analysis

-Model used for forecasting with more than one independent variable

multicriteria decision models

-Models that enable decision makers to evaluate various alternatives across several decision criteria

stochastic models

-Models where uncertainty is explicitly considered in the analysis

supplier performance evaluation

-Monitoring and evaluating key suppliers on cost, quality, engineering, purchasing, and so on, based on an agreed set of measurements

motor carrier

-Motor vehicles that use the road mode of transportation

materials handling

-Movement and storage of goods inside the distribution center - This represents a capital cost and is balanced against the operating costs of the facility

rollingforecast

-Moving the forecast horizon forward to new periods by adding recent data (and perhaps dropping the oldest data)

return on assets (roa)

-Net income for the previous 12 months divided by total assets - See: return on owner's equity (ROE)

service response logistics

-Obtaining, producing, and distributing material forwholesaling and retailing supply chain management logistics focus on location, service, and capacity issues - Syn: integrated logistics

price erosion

-Occurs when increased competition and efficiencies in production over time cause the price to gradually reduce

master scheduler

-Often the job title of the person charged with the responsibility of managing, establishing, reviewing, and maintaining a master schedule for select items - Ideally, the person should have substantial product, plant, process, and market knowledge because the consequences of this individual's actions often have a great impact on customer service, material, and capacity planning - See: master production schedule

perceived quality

-One of the eight dimensions of quality that refers to a subjective assessment of a product's quality based on criteria defined by the observer

percent recycled waste

-One of the five green SCOR metrics representing the percentage of solid waste that is recycled

place

-One of the four Ps (product, price, place, and promotion) that constitute the set of tools used to direct the business offering to the customer - Place is the distribution tactic used to provide the product to the customer - Distribution answers the questions of where, when, and how the product is made available - See: four Ps

price

-One of the four Ps (product, price, place, and promotion) that constitute the set of tools used to direct the business offering to the customer - Price is the amount charged for the product offering - The price set must take into account competition, substitute products, and internal business costs to return a desirable product margin -

promotion

-One of the four Ps (product, price, place, and promotion) that constitute the set of tools used to direct the business offering to the customer - Promotion is the mechanism whereby information about the product offering is communicated to the customer - It includes public relations, advertising, sales promotions, and other tools used to persuade customers to purchase the product offering - See: four Ps

passenger mile

-One passenger transported one mile - For example, a bus carrying 40 passengers for 100 miles would accrue 4,000 passenger miles

producer

-One who creates a good or service

manufacturer's representative

-One who sells goods for several firms but does not take title to them - Syn: manufacturer's agent, manufacturing representative

normal and proper usage

-Operation of the equipmentwith a program of regular maintenance in accordance with generally accepted practices and within the rated capacity and service classification forwhich itwas specified and designed

work sequence

-Ordered activities performed to accomplish work

resellers

-Organizations intermediate in the manufacturing and distribution process, such as wholesalers and retailers, that purchase goods or

third party transportation services

-Outside firms providing transportation of goods

offshore

-Outsourcing a business function to another company in a different country than the original company's country

replacement parts

-Parts that can be used as substitutes but differ from completely interchangeable service parts in that they require some physical modification (e -g -, boring, cutting, drilling) before they can replace the original part

mystery shoppers

-People who pose as customers but who are really studying an organization's service quality to provide feedback to the organization for improvement purposes

stakeholders

-People with a vested interest in a company, including managers, employees, stockholders, customers, and suppliers

machine downtimes

-Periods during which a machine is unavailable due to tool breakage, worker unavailability, machine breakdown, maintenance, teardown, setup, and other factors

reconsignment

-Permission by a carrier to alter the destination and/or consignee after the shipment has reached its original destination

staging and consolidation

-Physically moving material from the packing area to a staging area, based on a prescribed set of instructions related to a particular outbound vehicle or delivery route, often forshipment consolidation purposes

stickering

-Placing manufacturer or customerrequested stickers on the boxes of the product being sent to them - Typically done so that the customer, usually a retailer, can more effectively track its inventory - Bar coding is commonly a part of the stickering process

scheduled downtime

-Planned shutdown of equipment or plant to perform maintenance or to

operating decision

-Planning operations to meet demand in the short or intermediate term

misguided capacity plans

-Plans for capacity utilization that are based on erroneous data or assumptions

scenarioforecasts

-Plans for how an organization will respond to anticipated future situations

spotstockwarehousing

-Positioning seasonal items in proximity to the market - When the season ends, these items are either disposed of or relocated to a more centralized location

standard containers

-Predetermined, specifically sized containers used for storing and moving components - These containers protect the components from damage and simplify the task of counting components

total productive maintenance (tpm)

-Preventive maintenance plus continuing efforts to adapt, modify, and refine equipment to increase flexibility, reduce material handling, and promote continuous flows - It is operatororiented maintenance with the involvement of all qualified employees in all maintenance activities - Syn: total preventive maintenance

transfer price

-Price that one segment (subunit, department, division, etc -) of an organization charges for a good or service supplied to another segment of the same organization

marginal pricing

-Pricing products at a markup over the marginal cost of producing the next item - Marginal costs generally include the variable cost of producing and selling an additional item

military standards

-Product standards and specifications for military or defense contractors, units, suppliers, and so forth - These standards sometimes become de facto standards within the civilian community

project production

-Production in which each unit or small group of units is managed by a project team created especially for that purpose

u lines

-Production lines shaped like the letterU - The number of workstations in a U line is usually determined by line balancing - Ulines promote communication - The shape allows workers to easily perform several nonsequential tasks without much walk time

process manufacturing

-Production that adds value by mixing, separating, forming, and/or performing chemical reactions - It may be done in either batch or continuous mode - See: project manufacturing

semifinished goods

-Products that have been stored in an uncompleted state and are awaitingfinal operations thatwill adapt them to different uses or customer specifications

stable demand

-Products that keep a similar demand pattern no matter what the season ortime - Staple products fall into this category

nonlinear programming

-Programming similarto linear programming but incorporating a nonlinear objective function and linear constraints, or a linear objective function and nonlinear constraints, or both a nonlinear objective function and nonlinear constraints

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 what occurred during a very short history into the past - Quality control information is also gathered and a laboratory information management system may be part of this configuration to tie process conditions to the quality data that is generated - Causeandeffect relationships can thereby be determined - The quality data at times affects the control parameters that are used to meet product specifications either dynamically or off line

resource limited schedule

-Project schedule with no early or late start or finish dates - The activity and scheduled start and finish dates show the expected availability of resources - Syn: resourceconstrained schedule

projected on hand

-Projected available balance, excluding planned orders

salvage

-Property that, because of its worn, damaged, deteriorated, or incomplete condition or specialized nature, has no reasonable prospect of sale or use as serviceable property without major repairs or alterations, but that has some value in excess of its scrap value

nationalization

-Public ownership and operation of a business enterprise

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

raw material

-Purchased items or extracted materials that are converted via the manufacturing process into components and products

speculative buying

-Purchasing an item not immediately needed in anticipation of future price increase - See: buying down, hedge, hedging

times interest earned

-Ratio of profits before payment of interest and income taxes (EBIT) to interest on debt

process stocks

-Raw ingredients or intermediates available forfurther processing into marketable products

order reporting

-Recording and reporting the start and completion of the manufacturing order (shop order) in its entirety

risk mitigation

-Reducing exposure to risk in terms of either its likelihood or its impact

put away

-Removing the material from the dock (or other location of receipt), transporting the material to a storage area, placing that material in a staging area and then moving it to a specific location, and recordingthe movement and identification of the location where the material has been placed

line manufacturing

-Repetitive manufacturing performed by specialized equipment in a fixed sequence

robotics

-Replacing activities previously performed by humans with mechanical devices or robots that can either be operated by humans or run by computer - Difficulttodo, dangerous, or monotonous tasks are likely candidates for robots to perform

net sales

-Sales dollars the company receives gross sales minus returns and allowances

time tables

-Schedules that are organized by starting location/destination and show the times for departures and arrivals

step function scheduling

-Scheduling logic that recognizes run length to be a multiple ofthe number of batches to be run ratherthan simply a linear relationship of run time to total production quantity

market hedge

-Scheduling or holding an inventory quantity greater than the expected demand because of expected inaccuracy orvolatility in the forecasted demand - See: hedge

synchronous scheduling

-Scheduling processes (kanban in just in time and drumbufferrope in theory of constraints environments) that focus on synchronizing all operations to the constraint of the system - See: synchronized production

limited access

-Securing inventory, usually in a locked environment, to protect it from theft and to help improve inventory count accuracy

order picking

-Selecting or picking the required quantity of specific products for movement to a packaging area (usually in response to one or more shipping orders) and documenting that the material was moved from one location to shipping

price discrimination

-Selling the same products to different buyers at different prices

takt time

-Sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean production system - 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 - Syn: tact time

shingo's seven wastes

-Shigeo Shingo, a pioneer in the Japanese justintime 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

spot demand

-Short leadtime demand that is difficult to estimate - Usually supply for this demand is provided at a premium price

virtual organization

-Shortterm alliances between independent organizations in a potentially longterm relationship to design, produce, and distribute a product - Organizations cooperate based on mutual values and act as a single entity to third parties

multiactivity chart

-Shows how workers interact with each other, or with machines, for different activities

pick on receipt

-Similar to crossdocking, a product is unloaded from an inbound vehicle and loaded directly on an outbound vehicle - Product is received and picked simultaneously, never residing in the warehouse

three bin kanban

-Simple kanban structure that focuses on cycling three bins of material continually and provides a visible method to align replenishment with consumption - One bin is ready to ship from the supplier at all times, while two are back to back in manufacturing/production at or near point of use - As the front bin empties, a signal is sent to the supplier to send a full bin and the back bin is issued forward into production

resource contention

-Simultaneous need for a common resource - Syn: concurrency

translation software

-Software that converts business data into an electronic data interchange standard format, and vice versa

middleware

-Software that interconnects incompatible applications software and databases from various trading partners into decisionsupport tools such as ERP

monopoly

-Sole control of a market by a company - In the United States, a monopoly is a violation of Article 2 ofthe Sherman Act

service

-Sometimes used to describe those activities that support the production or distribution functions in any organization, such as customer service and field service

load leveling

-Spreading orders out in time or rescheduling operations so that the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable - Although both material and labor are ideally level loaded, specific businesses and industries may load to one or the other exclusively (e -g -, service industries) - Syn: capacity smoothing, level loading - See: level schedule

performance appraisal

-Supervisory or peer analysis of work performance - May be made in connection with wage and salary review, promotion, transfer, or employee training

outside shop

-Suppliers - This term is used to convey the idea that suppliers are an extension of the inside shop or the firm's production facilities

pull through distributions

-Supply chain activities that are started by the consumer - Instead of the manufacturer pushing products to stores, in a pullthrough distribution consumers purchase items, which signalsthe manufacturer to produce more of that product - Effectively, the consumer is pulling products to the store

performance benchmarking

-Syn: competitive benchmarking - See: benchmarking, process benchmarking

stacked lead time

-Syn: cumulative lead time, staged materialSyn: kit

sales order configuration

-Syn: customer order servicing system

nominal capacity

-Syn: rated capacity

supply chain network design systems

-Systems created among all members ofthe supply chain in orderto get all members on the same page and with the same goals in orderto promote efficiency

performance and event management systems

-Systems that record and measure the performance of key supply chain processes - With this data, employees can determine when the key processes have changed and why they have changed - This data then is utilized to adjust the existent data

queue management

-Tactics to deal with an excess number of items, such as products or customers, waiting in line for service

work teams

-Teams of employees formed to shepherd a particularwork area orfunction - workticketSyn: work order

tiger teams

-Teams that attempt to achieve a specific goal within a short time period

supplier development

-Technical and financial assistance given to existing and potential suppliers to improve quality and/or due date/performance

process improvement

-The activities designed to identify and eliminate causes of poor quality, process variation, and nonvalueadded activities

methodsanalysis

-That part of methods engineering normally involving an examination and analysis of an operation or a work cycle broken down into its constituent parts to improve the operation, eliminate unnecessary steps, and/or establish and record in detail a proposed method of performance

startup

-That period starting with the date of initial operation during which the unit is brought up to acceptable production capacity and quality within estimated production costs - The activity that commences on the date of initial activity and has significant duration on most projects, but is often confused (used interchangeably) with date of initial operation

therbligs

-The 17 basic movements identified by Frank and Lillian Gilbreth - (The name of the term is essentially Gilbreth spelled backwards -) Examples of movements include grasp, move, release, select, and position - See: predetermined time standards, thirdorder smoothingSyn: triple smoothing

upside flexibility

-The ability of a facility to increase its output and capacity to deliver for the foreseeable future in order to meet a nonforecasted increase in demand - The main drivers of this flexibility are the availability of direct labor and/or direct materials and the actual production capacity ofthe facility

supply chain resilience

-The ability of a supply chain to anticipate, create plans to avoid or mitigate, and/or to recover from disruptions to supply chain functionality

process capability

-The ability of the process to produce parts that conform to (engineering) specifications - Process capability relates to the inherent variability of a process that is in a state of statistical control - See: Cp, Cpk, process capability analysis

material flexibility

-The ability of the transformation process to handle unexpected variations in material inputs

volume flexibility

-The ability of the transformation process to quickly accommodate large variations in production levels

product mix fiexibility

-The ability to change over quickly to other products produced in a facility, as required by demand shifts in mix

statistical thinking

-The ability to draw conclusions based on data

mix flexibility

-The ability to handle a wide range of products or variants by using equipment that has short setup times

surge capacity

-The ability to meet sudden, unexpected increases in demand by expanding production with existing personnel and equipment

quick changeover

-The ability to shorten machine setups between different machine operation requirements to increase process flexibility - Highest concentration is on first reducing external setup time, then on internal setup issues - This reduces economic order quantity, queue and manufacturing lead times, and workinprocess inventory it improves quality, process, and material flows, quick ratioSyn: quick asset ratio -level planning, it often uses a replenishment technique called pairedcell overlapping loops of cards, which combines the best of push and pull strategies - See: pairedcell overlapping loops of cards

visibility

-The ability to view important information throughout a facility or supply chain no matter where in the facility or supply chain the information is located

machine loading

-The accumulation by workstation, machine, or machine group of the hours generated from the scheduling of operations for released orders by time period - Machine loading differs from capacity requirements planning in that it does not use the planned orders from MRP but operates solely from released orders - It may be of limited value because of its limited visibility of resources

purchasing capacity

-The act of buying capacity or machine time from a supplier - A company can then schedule and use the capacity of the machine or a part of the capacity of the machine as if it were in its own plant

nesting

-The act of combining several small processes to form one larger process - netassetsTotal assets minus total liabilities

scheduling

-The act of creating a schedule, such as a shipping schedule, master production schedule, maintenance schedule, or supplier schedule, schedulingalgorithmSyn: scheduling rules

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

rejection

-The act of identifying an item as not meeting quality specifications

supplier measurement

-The act of measuring the supplier's performance to a contract - Measurements usually cover delivery reliability, lead time, and price - Syn: purchasing performance measurement - See: vendor measurement

vendor measurement

-The act of measuring the vendor's performance to a contract - Measurements usually cover delivery reliability, lead time, quality, and price - See: supplier measurement

partnering

-The act of one organization committing to a longterm relationship with another organization based on trust and a shared concept of how to satisfy the customer

pledging of accounts receivable

-The act of securing a loan by pledging a company's accounts receivable - PLMAbbreviation for product life cycle management

procure to pay cycle

-The activities and processes that take place from the time a purchase order is placed until payment is made

order to cash cycle

-The activities and processes that take place from the time an order is placed by a customer until payment is received and credited - The goal is to translate sales into financial benefit as rapidly as possible - See: cash conversion cycle

return

-The activities associated with the reverse flow of goods - Detail activities encompass identification of the need to return, disposition decision making, scheduling of the return, and shipment and receipt of the returned goods

program management

-The activities involved in the realization of a product or service offered to customers - Responsibilities include planning, directing, and controlling one or more projects of a new or continuing nature initiating any acquisition processes necessary to get the project work underway and monitoring performance - See: program manager

packing and marking

-The activities of packing for safe shipping and unitizing one or more items of an order, placing them into an appropriate container, and marking and labeling the container with customer shipping destination data as well as other information that may be required

warehousing

-The activities related to receiving, storing, and shipping materials to and from production or distribution locations

preventive maintenance

-The activities, including adjustments, replacements, and basic cleanliness, that forestall machine breakdowns - The purpose is to ensure that production quality is maintained and that delivery schedules are met - In addition, a machine thatiswell cared forwill last longerand cause fewer problems - Syn: periodic maintenance

order release

-The activity of releasing materials to a production process to support a manufacturing order - See: planned order release

order processing

-The activity required to administratively process a customer's order and make it ready for shipment or production

operations scheduling

-The actual assignment of starting or completion dates to operations or groups of operations to show when these operations must be done if the manufacturing order is to be completed on time - These dates are used in the dispatching function - Syn: detailed scheduling, order scheduling, shop scheduling

market share

-The actual portion of current market demand that a company or product achieves

marginal utility

-The additional usefulness and enjoyment received from consuming one more unit of a good or service

production plan

-The agreed upon plan that comes from the production planning (sales and operations planning) processspecifically, the overall level of manufacturing output planned to be produced, usually stated as a monthly rate for each product family (group of products, items, options, features, and so on) - Various units of measurement (e -g -, units, tonnage, standard hours, number of workers) can be used to express the plan - Represents management's authorization for the master scheduler to convert it into a more detailed plan that is, the master production schedule

rationing

-The allocation of product among consumers - When price is used to allocate product, it is allocated to those willing to pay the most

total annual material receipts

-The amount (in dollars) of all direct materials that were received in a calendaryear - This number should fall very close to the direct material dollars that were used in a calendaryear in a lean environment

lot size

-The amount of a particular item that is ordered from the plant or a supplier or issued as a standard quantity to the production process - Syn: order quantity

piece rate

-The amount of money paid for a unit of production - It serves as the basis for determining the total pay for an employee working in a piecework system

queue time

-The amount of time a job waits at a work center before setup orwork is performed on the job - Queue time is one element of total manufacturing lead time - Increases in queue time result in direct increases to manufacturing lead time and workinprocess inventories

planning horizon

-The amount of time a plan extends into the future - For a master schedule, this is normally set to cover a minimum of cumulative lead time plus time for lot sizing lowlevel components and time for capacity changes of primary work centers or of key suppliers - For longerterm plans, the planning horizon must be long enough to permit any needed additions to capacity - See: cumulative lead time, planning time fence

shelf life

-The amount of time an item may be held in inventory before it becomes unusable

supplier lead time

-The amount of time that normally elapses between the time an order is received by a supplier and the time the order is shipped - Syn: vendor lead time - See: purchasing lead time

theoretical cycle time

-The amount of time, eliminating all stops, waiting, and additional time due to error, that is needed for one item to go through an entire process

machine hours

-The amount of time, in hours, that a machine is actually running - Machine hours, rather than labor hours, may be used for planning capacity for scheduling and for allocating costs

value oftransfers

-The amount transferred, in a fiscal year, from one stage of the manufacturing process to another - For example, the amount of raw materials that are transformed into work in process

microeconomics

-The analysis of the behavior of individual economic decision makers (individuals and firms)

statistical quality control (sqc)

-The application of statistical techniques to control quality - Includes acceptance sampling as well as statistical process control, but is often used interchangeably with statistical process control

statistical process control (spc)

-The application of statistical techniques to monitor and adjust an operation - Often used interchangeably with statistical quality control, although statistical quality control includes acceptance sampling as well as statistical process control

production planning methods

-The approach taken in setting the overall manufacturing output to meet customer demand by setting production levels

running sum of forecast errors

-The arithmetic sum ofthe differences between actual and forecasted demand for the periods being evaluated, run orderSyn: manufacturing order

materials

-The components that are processed by an operation

value adding/nonvalueadding

-The assessment of each of the company's activities to determine if that activity adds value to the organization or its customers - If an activity is considered non valueadding, it should be eliminated to increase an organization's efficiency

master route sheet

-The authoritative route process sheetfrom which all other format variations and copies are derived

moveorder

-The authorization to move a particular item from one location to another, move signalSyn: move card

release

-The authorization to produce or ship material that has already been ordered, released orderSyn: open order

pushtechnology

-The automatic updates in selected services, such as news orweather, that occur periodically as information is sent via the internet - The source of the information pushes it onto the customer - Syn: webcasting

single factor productivity

-The average amount of a given product (output) attributed to a unit of a given resource (input) - Factors include labor and capital

order fulfillment lead time

-The average amount of time between the customer's order and the customer's receipt of delivery this includes every manufacturing or processing step in between

mean absolute deviation (mad)

-The average of the absolute values of the deviations of observed values from some expected value - MAD can be calculated based on observations and the arithmetic mean of those observations - An alternative is to calculate absolute deviations of actual sales data minus forecast data - This data can be averaged in the usual arithmetic way or with exponential smoothing - See: forecast error, tracking signal

operating cycle

-The average period of time required to perform the three primary activities of a company's operating cyclepurchasing, producing, and selling a product - The operating cycle is calculated by adding the inventory conversion period to the receivables conversion period

order entry complete to start manufacture

-The average time from when an order is placed by a customerto when the manufacturing of that order is completed

order complete manufacture to customer receipt of order

-The average time from when an order is ready for delivery to a customer to when the customer actually receives the delivery

mean time between failures (mtbf)

-The average time interval between failures for repairable product for a defined unit of measure (e -g -, operating hours, cycles, miles) - See: reliability

mean time to repair (mttr)

-The average time that it takes to repair a product

marketing strategy

-The basic plan the marketing function expects to use to achieve its business and marketing objectives in a particular market - Includes marketing expenditures, marketing mix, and marketing allocation

market boundary

-The boundary where the laiddown costfortwo companies isequal - Laiddown cost is product cost plus unit transportation cost

modal split

-The breakdown of use of transportation modes - Statistics used forthe calculation include passengermiles, tonmiles, and revenue

procurement

-The business functions of procurement planning, purchasing, inventory control, traffic, receiving, incoming inspection, and salvage operations

remote diagnostics

-The capability of determining the cause of a problem from an offsite location

requirements traceability

-The capability to determine the source of demand requirements through record linkages - It is used in analyzing requirements to make adjustments to plans for material or capacity - See: pegging

rate basis point

-The center of shipping in a specific area used to determine shipping rates

maintainability

-The characteristic of equipment design and installation that enables the equipment to be repaired easily and efficiently - See: serviceability

performance criterion

-The characteristic to be measured (e -g -, parts per million defective, business profit) - See: performance measure, performance measurement system, performance standard

producibility

-The characteristics of a design that enable the item to be produced and inspected in the quantity required at least cost and minimum time

queuingtheory

-The collection of models dealing with waiting line problems for example, problems for which customers or units arrive at some service facility at which waiting lines or queues may build

overhead pool

-The collection of overhead costs that are to be allocated over a specified group of products - overissueSyn: excess issue

order placement

-The commitment of a customer to buy a product and the subsequent administrative and data processing steps followed by the supplier

shop committee

-The committee that represents the union in its relations and negotiations with a company or plant - This is the first stage forthe unionized employees to vet complaints

mission statement

-The company statement of purpose

lost time factor

-The complement of utilization that is, one minus the utilization factor - It is the percentage of time lost to machine, tool, and worker unavailability - It can be calculated as the planned hours minus actual hours used, divided by the planned hours - See: balance delay, utilization

production network

-The complete set of all work centers, processes, and inventory points, from raw materials sequentially to finished products and product families - Represents the logical system that provides the framework to attain the strategic objectives of the firm based on its resources and the products'volumes and processes - Provides the general sequential flow and capacity requirement relationships among raw materials, parts, resources, and product families

robustness

-The condition of a product or process design that remains relatively stable with a minimum of variation even though factors that influence operations or usage, such as environment and wear, are constantly changing

variable yield

-The condition that occurs when the output of a process is not consistently repeatable in quantity, quality, or combinations of these

visual control

-The control of authorized levels of activities and inventories in away that is instantly and visibly obvious - A type of activity and inventory control used in a workplace organization where everything has an assigned place and is in its place

mix control

-The control of the individual items going through the plant

production

-The conversion of inputs into finished products

marginal cost of capital

-The cost of the next dollar, after taxes, that a firm expects to raise for investment

stockout costs

-The costs associated with a stockout - Those costs may include lost sales, backorder costs, expediting, and additional manufacturing and purchasing costs

prevention costs

-The costs caused by improvement activities that focus on the reduction of failure and appraisal costs - Typical costs include education, quality training, and supplier certification - Prevention costs are one of four categories of quality costs

overhead

-The costs incurred in the operation of a business that cannot be directly related to the individual goods or services produced - These costs, such as light, heat, supervision, and maintenance, are grouped in several pools (e -g -, department overhead, factory overhead, general overhead) and distributed to units of goods or services by some standard allocation method such as direct labor hours, direct labor dollars, or direct materials dollars - Syn: burden - See: expense

ordering cost

-The costs that increase as the number of orders placed increases - Used in calculating order quantities - Includes costs related to the clerical work of preparing, releasing, monitoring, and receiving orders the physical handling of goods inspections and setup costs, as applicable - See: acquisition cost, inventory costs

return disposal costs

-The costs that occur from discarding or recycling products that are returned because they have reached the end of their useful life or are obsolete - Commonplace in the consumer goods industry

mass customization

-The creation of a highvolume product with large variety whose manufacturing cost is low due to the large volume, allowing customers to specify an exact model out of a large volume of possible end items - An example is a personal computer order in which the customer specifies 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 low cost

organizational design

-The creation of an organizational structure to support the strategic business plans and goals of an enterprise (e -g -, forprofit versus notforprofit companies) - Given the mission and business strategy, the organizational structure design provides the framework within which the business operational and management activities will be performed

net working capital

-The current assets of a firm minus its current liabilities - Syn: working capital

projected finish date

-The current estimate of the date when an activity will be completed

projected start date

-The current estimate of the date when an activity will begin - projectionSyn: extrapolation

price to earnings (pe) ratio

-The current price of a stock relative to its earnings per share

shipage limit

-The date after which a product cannot be shipped to a customer

need date

-The date when an item is required for its intended use - In an MRP system, this date is calculated by a billofmaterial explosion of a schedule and the netting of available inventory against that requirement

operation start date

-The date when an operation should be started so that its order due date can be met - Can be calculated based on scheduled quantities and lead times or on the work remaining and the time remaining to complete the job

push pull boundary

-The decoupling point at which a system changes from being driven by forecast to being driven by customer demand

manufacturing process development

-The definition and implementation of an execution system for making a part, good, or service that is consistent with the objectives of the firm

price elasticity

-The degree of change in buyer demand in response to changes in product price - Calculated by dividing the percentage of change in quantity bought by the percentage of change in price - Prices are considered elastic if demand varies with changes in price - If demand changes only slightly when the price changes, demand is said to be inelastic - For example, demand for most medical services is relatively inelastic, but demand for automobiles is generally elastic

vertical integration

-The degree to which a firm has decided to directly produce multiple valueadding stages from raw material to the sale of the product to the ultimate consumer - The more steps in the sequence, the greater the vertical integration - A manufacturerthat decides to begin producing parts, components, and materials that it normally purchases is said to be backward integrated - Likewise, a manufacturerthat decides to take over distribution and perhaps sale to the ultimate consumer is said to be forward integrated - See: backward integration, forward integration

primary demand

-The demand for a category of products rather than for a specific brand

overhead base

-The denominator used to calculate the predetermined overhead rate used in applying overhead (e -g -, estimated direct labor hours, estimated direct labor dollars)

pack out department

-The department that performs the final steps (often including packaging and labeling) before shipment to the customer - See: final assembly department

operation description

-The details or description of an activity or operation to be performed - The operation description is normally contained in the routing document and could include setup instructions, operating instructions (feeds, speeds, heats, pressure, etc -), and required product specifications or tolerances

supply chain planning

-The determination of a set of policies and procedures that govern the operation of a supply chain - Planning includes the determination of marketing channels, promotions, respective quantities and timing, inventory and replenishment policies, and production policies - Planning establishes the parameters within which the supply chain will operate

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

new product introduction

-The development and release of an item that is new to a company's set of offerings

performance variance

-The difference between a performance standard and actual performance

rate variance

-The difference between the actual output rate of product and the planned or standard output rate

material usage variance

-The difference between the planned or standard requirements for materials to produce a given item and the actual quantity used for a particular instance of manufacture, material yieldSyn: yield

purchase price variance

-The difference in price between the amount paid to the supplier and the planned or standard cost of that item

product engineering

-The discipline of designing a product or product line to take advantage of process technology and improve quality, reliability, and so forth

process engineering

-The discipline of designing and improving the manufacturing equipment and production process to support the manufacture of a product line - See: manufacturing engineering

total quality engineering (tqe)

-The discipline of designing quality into the product and manufacturing processes by understanding the needs of the customer and performance capabilities of the equipment - See: design for quality

sampling distribution

-The distribution of values of a statistic calculated from samples of a given size

master budget

-The document that consolidates all other budgets of an organization into an overall plan, including the projection of a cash flow statement, an operating statement for the budget period, and a balance sheet forthe end of the budget period - Syn: static budget

shipping order debit memo

-The document used to authorize the shipment of rejected material back to the supplier and create a debit entry in accounts payable

order delivery

-The duration of time between when the transportation carrier picks up a shipment and when it is received by the customer

stowability

-The ease or difficulty of loading, handling, and storage of shipping items - Used as a factor for determining shipment costs and classifying freight, it considers regulations, liability, and item characteristics (e -g -, hazardous materials, excessive weight, irregular shape)

product flexibility

-The ease with which current designs can be modified in response to changing market demands

shitsuke

-The effort and discipline required to continually enforce changes made in an organization - See: five Ss -Syn: manufacturing calendar

response time

-The elapse of time or average delay between the initiation of a transaction and the results of the transaction

project duration

-The elapsed duration from project start date through project finish date

manufacturing engineering

-The engineering discipline concerned with designing and improving production processes - See: process engineering

supplier partnership

-The establishment of a working relationship with a supplier organization whereby two organizations act as one - Syn: collaborative supply relationship

rated capacity

-The expected output capability of a resource or system - Capacity is traditionally calculated from such data as planned hours, efficiency, and utilization - The rated capacity is equal to hours available * efficiency * utilization - Syn: calculated capacity, effective capacity, nominal capacity, standing capacity

perishability

-The fact that an item has a limited shelf life and may be fragile and require special handling, permission marketingSyn: relationship marketing

net income (loss)

-The final figure in the income statement

manufacturing rampup

-The final phase of new product and process development in which the new product moves from pilot production to fullscale manufacturing

motive

-The first deliverable in a SCOR implementation plan - Acts as the foundation for the implementation improvement program and will guide SCOR team members in the selection of SCOR framework elements

selling, general, and administrative (sg&a) expenses

-The fixed costs associated with a company - Examples are salaries, marketing costs, customer service, occupancy expenses, and other overhead - In retail, called the cost of selling -

organizational change management

-The fostering and support of people who champion new technologies, new operating practices, and new products and services that will transform the organization, maintaining its viability and improving its competitive position in step with changes in the business environment in which it functions

receiving

-The function encompassing the physical receipt of material, the inspection of the shipment for conformance with the purchase order (quantity and damage), the identification and delivery to destination, and the preparation of receiving reports

shop planning

-The function of coordinating the availability of material handling, material, resources, setup, and tooling so that an operation or job can be done on a particular machine - Shop planning is often part of the dispatching function - The term shop planning is sometimes used interchangeably with dispatching, although dispatching does not necessarily include shop planning - For example, the selection of jobs might be handled by the centralized dispatching function, while the actual shop planning might be done by the foreman or a representative, shop schedulingSyn: operations scheduling, shop travelerSyn: traveler

priority planning

-The function of determining what material is needed and when - Master production scheduling and material requirements planning are the elements used for the planning and replanning process to maintain proper due dates on required materials

production control

-The function of directing or regulating the movement of goods through the entire manufacturing cycle from the requisitioning of raw material to the delivery of the finished products, production cycleSyn: manufacturing lead time

pre expediting

-The function of following up on open orders before the scheduled delivery date to ensure the timely delivery of materials in the specified quantity

sorting

-The function of physically separating a homogeneous subgroup from a heterogeneous population of items

transportation

-The function of planning, scheduling, and controlling activities related to mode, vendor, and movement of inventories into and out of an organization

production activity control (pac)

-The function of routing and dispatching the work to be accomplished through the production facility and of performing supplier control - PAC encompasses the principles, approaches, and techniques needed to schedule, control, measure, and evaluate the effectiveness of production operations - See: shop floor control

reliability engineering

-The function responsible for the determination and application of appropriate reliability tasks and criteria duringthe design, development, manufacture, test, and support of a product thatwill result in achievement of the specified product reliability

order service

-The function that encompasses receiving, entering, and promising orders from customers, distribution centers, and interplant operations - Order service is also typically responsible for responding to customer inquiries and interacting with the master scheduler on availability of products - In some companies, distribution and interplant requirements are handled separately - See: order entry, order promising

shipping

-The function that performs tasks for the outgoing shipment of parts, components, and products - It includes packaging, marking, weighing, and loading for shipment

management

-The functions of planning, organizing, and controlling the transformation process and its utility in providing a good or service to customers

value chain

-The functions within a company that add value to the goods or services that the organization sells to customers and forwhich it receives payment

mathematical programming

-The general problem of optimizing a function of several variables subject to a number of constraints - If the function and constraints are linear in the variables and a subset of the constraints restricts the variables to be nonnegative, a linear programming problem exists

supply chain

-The global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash

operating environment

-The global, domestic, environmental, and stakeholder influences that affect the key competitive factors, customer needs, culture, and philosophy of each individual company - This environment becomes the framework in which business strategy is developed and implemented - Syn: business environment

objective function

-The goal or function that is to be optimized in a model - Most often it is a cost function that should be minimized subject to some restrictions or a profit function that should be maximized subject to some restrictions

repetitive industries

-The group of manufacturers that produce highvolume, lowvariety products such as spark plugs, lawn mowers, and paper clips - See: repetitive manufacturing

supplier base

-The group of suppliers from which a firm acquires goods and services - Syn: supply base

tier one

-The group of suppliers that is directly responsible for not only product supply but product development

operations

-The group that produces the goods and/ or services that a company sells

psychographics

-The grouping of consumers according to their behavior patterns and lifestyles

materials management

-The grouping of management functions supporting the complete cycle of material flow, from the purchase and internal control of production materials to the planning and control of work in process to the warehousing, shipping, and distribution of the finished product

maximum demonstrated capacity

-The highest amount of actual output produced in the past when all efforts have been made to optimize the resource for instance, overtime, additional personnel, extra hours, extra shifts, reassignment of personnel, or use of any related equipment - Maximum demonstrated capacity is the most one could ever expect to produce in a short period of time but represents a rate that cannot be maintained over a long period of time - See: demonstrated capacity

tool number

-The identification number assigned to reference and control a specific tool

risk management

-The identification, assessment, and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities

net operating income

-The income before interest and taxes are subtracted - Syn: earnings before interest and taxes (EBIT)

revenue

-The income received by a company from sales of products or services - Revenues can come from other sources including stock owned in other companies, income from selling property, or other company assets that are not a typical part of the core business

marginal cost

-The incremental costs incurred when the level of output of some operation or process is increased by one unit

marginal revenue

-The incremental sales dollars received when the level of output of some operation is increased by one unit

minor setup

-The incremental setup activities required when changingfrom one item to another within a group of items

national stock number (nsn)

-The individual identification number assigned to an item to permit inventory management in the US supply system

scope creep

-The informal addition of unfunded features and services to a project - Scope creep is closely monitored and controlled to ensure that agreedupon output of a project can be achieved within the budgeted timeline and costs

server address

-The internet address of a server

mediation

-The introduction of a neutral third party who attempts to provide alternatives to issues causing conflict that have not been put forth by either party or to change the way the parties perceive the situation - It is often used in collective bargaining to reach an agreement

material release

-The introduction of parts into a production process

order point system

-The inventory method that places an order for a lot when ever the quantity on hand is reduced to a predetermined level known as the order point

manufacturing release

-The issuance of a manufacturing order into the factory

order penetration point

-The key variable in a logistics configuration the point (in time) at which a product becomes earmarked for a particular customer - Downstream from this point, the system is driven by customer orders upstream processes are driven by forecasts and plans

sample range

-The largest value in a sample minus the smallestvalue in the sample

put away time

-The lead time between when a raw material or component arrives and when the items are available in the store - Syn: docktostock time

lot operation cycle time

-The length of time required from the start of setup to the end of cleanup for a production lot at a given operation, including setup, production, and cleanup

receivables conversion period

-The length of time required to collect sales receipts - Syn: average collection period

standard time

-The length of time that should be required to (1) set up a given machine or operation and (2) run one batch or one or more parts, assemblies, or end products through that operation - Used in determining machine requirements and labor requirements - Assumes an average worker who follows prescribed methods, and allows time for personal rest to overcome fatigue and unavoidable delays - Also frequently used as a basis for incentive pay systems and as a basis of allocating overhead in cost accounting systems - Syn: standard hours - See: standard, standing capacitySyn: rated capacity, standing orderSyn: blanket purchase order -share matrix

sales quota

-The level of sales that an individual or group is expected to meet

price schedule

-The list of prices applying to varying quantities or kinds of goods

virtual corporation

-The logical extension of outpartnering - With the virtual corporation, the capabilities and systems of the firm are merged with those of the suppliers, resulting in a new type of corporation where the boundaries between the suppliers' systems and those of the firm seem to disappear - The virtual corporation is dynamic in that the relationships and structures formed change according to the changing needs of the customer

sales operations management

-The management of activities and processes to ensure that the sales function runs efficiently, is well integrated with other functional areas, and supports the overall business strategy

servicefunction

-The mathematical relationship of the safety factor to the service level (e -g -, the fraction of demand routinely met from stock)

theoretical capacity

-The maximum output capability, allowing no adjustments for preventive maintenance, unplanned downtime, shutdown, and so forth

standard practice

-The means by which a wide range of organizations and supply chains have historically conducted operations - These well established practices provide good performance but do not provide a significant cost or competitive advantage over emerging and best practices - Implementation of this type of practice involves low risk and results in acceptable performance

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

tipping point

-The moment when something unique becomes common - The term often refers to the popular acceptance of new technologies - The concept has been applied to any process in which, beyond a certain point, the rate at which the process (chemical, sociological, environmental, etc -) proceeds increases dramatically

strategic variables

-The most important variables that affect the business environment and business strategy - Typically include the economic situation, population demographics, changes in technology, and government policies

physical supply

-The movement and storage of goods from suppliers to manufacturing - The cost of physical supply is ultimately passed on to the customer

send ahead

-The movement of a portion of a lot of material to a subsequent operation before completion of the current operation for all units of the lot - The purpose of sending material ahead is to reduce the manufacturing lead time - See: overlapped schedule

service parts demand

-The need or requirement for a component to be sold by itself, as opposed to being used in production to make a higherlevel product - Syn: repair parts demand, spare parts demand

residual income

-The net operating income that an investment center earns above the minimum required return on its operating assets

service capacity

-The number of daily customers a firm is designed to serve actual throughput may be larger or smaller

overlap quantity

-The number of items that need to be run and sent ahead to the following overlap operation before the following operation can begin - Syn: offset quantity - See: process batch, transfer batch

service phases

-The number of phases necessary to service a new arrival in the system

on order

-The number or value of goods or services that have been ordered but not received at a location

resource driver

-The objects that are linked to an activity that consumes resources at a specified rate - For example, a resource driver is a purchase order (the object) that when placed (the activity) consumes hours (the rate) of purchasing (the resource)

product or service liabiiity

-The obligation of a company bears for loss related to personal injury, property damage, or other harm caused by its goods or services

limiting operation

-The operation with the least capacity in a series of operations with no alternative routings - The capacity of the total system can be no greater than the limiting operation, and as long as this limiting condition exists, the total system can be effectively scheduled by scheduling the limiting operation and providing this operation with proper buffers - See: protective capacity, protective inventory

process steps

-The operations or stages within the manufacturing cycle required to transform components into intermediates orfinished goods - From a larger perspective, the operations or stages within any business required to turn inputs into outputs

market plan

-The output of the market planning process - The market plan includes the current market position, opportunity and issue analysis, marketing objectives and strategies, action plans, programs, projects, budgets, and pro forma profit and loss statement and management controls - Syn: brand plan, product plan

third party warehousing

-The outsourcing of the warehousingfunction by the seller of the goods

quality costs

-The overall costs associated with prevention activities and the improvement of quality throughout the firm before, during, and after production of a product - These costs fall into four recognized categories: internal failure costs, external failure costs, appraisal costs, and prevention costs - Internal failure costs relate to problems before the product reaches the customer - These usually include rework - External failure costs relate to problems found after the product reaches the customer - These usually include such costs as warranty and returns - Appraisal costs are associated with the formal evaluation and audit of quality in the firm - Typical costs include inspection, quality audits, testing, calibration, and checking time - Prevention costs are those caused by improvement activities that focus on reducing failure and appraisal costs - Typical costs include education, quality training, and supplier certification

logistics management

-The part of supply chain management that oversees the planning and execution of forward and reverse flows of goods and related information between points in the supply chain to meet customer requirements

open master production schedule

-The part of the master production schedule that still has available capacity for assigning new orders

principal

-The party authorizing an agent to act on his or her behalf

plan stability

-The percent difference between the production thatwas planned and the production that was actually completed - The numerator is the difference between actual and planned production, divided by the planned production - This information then is used to adjust production standards

strict performance

-The performance of a contract good enough forthe contractor to be paid full price less the other party's losses

post release

-The period after the product design has been released to manufacturing, during which the product has ongoing support and product enhancement

prerelease

-The period of product specification, design, and design review

payback period

-The period of time required for the stream of cash flows resulting from a project to equal the project's initial investment

order to delivery cycle

-The period of time that starts when the customer places an order and ends when the customer receives the order

material analyst

-The person assigned responsibility for and identification of the planning requirements for specific items and responsibility for each order

move

-The physical transportation of inventory from one location to another within a facility - Movements are usually made underthe direction and control of the inventory system

strategic plan

-The plan for how to marshal and determine actions to support the mission, goals, and objectives of an organization - Generally includes an organization's explicit mission, goals, and objectives and the specific actions needed to achieve those goals and objectives - See: business plan, operational plan, strategic planning, strategy, tactical plan

minimum inventory

-The planned lowest amount or level of inventory for an item - minimum order quantityAn order quantity modifier, applied after the lot size has been calculated, that increases the order quantity to a preestablished minimum

maximum inventory

-The planned maximum allowable inventory for an item based on its planned lot size and target safety stock

reverse supply chain

-The planning and controlling of the processes of moving goods from the point of consumption back to the point of origin for repair, reclamation, recycling, or disposal - See: reverse logistics

logistics system

-The planning and coordination of the physical movement aspects of a firm's operations such that a flow of raw materials, parts, and finished goods is achieved in a manner that minimizes total costs for the levels of service desired

operations planning

-The planning of activities that transform inputs into finished goods and services,

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 purchasing orders, order management includes order placement, monitoring, receiving, acceptance, and payment of supplier

purchase consolidation

-The pooling of purchasing requirements by multiple areas in a company, or even across companies

universe

-The population, or large set of data, from which samples are drawn - Usually assumed to be infinitely large or at least very large relative to the sample

user interface

-The portion of a computer system through which the end user interacts with the system - May include the keyboard, mouse, touchscreen, and other devices

terms of trade

-The portion of a contract of sale that specifies the responsibilities of the seller or exporter and the responsibilities of the buyer or importer, especially the point at which one party's responsibilities end and the other party's responsibilities begin (including the point at which title to the goods is transferred) - Commonly specified using International Commercial Terms (Incoterms®)

unattainable capability

-The portion of the production capability that cannot be attained - Typically caused by factors such as equipment unavailability, suboptimal scheduling, or resource limitations

time standard

-The predetermined times allowed for the performance of a specific job - Often consist of two parts, one for machine setup and one for actual running - Can be developed through observation of the actual work (time study), summation of standard micromotion times (predetermined or synthetic time standards), or approximation (historical job times)

transfer pricing

-The pricing of goods or services transferred from one segment of a business to another - See: interplant transfer

negotiation

-The process by which a buyer and a supplier agree upon the conditions surrounding the purchase of an item or a service

order entry

-The process of accepting and translating what a customerwants into terms used by the manufacturer or distributor - The commitment should be based on the availabletopromise (ATP) line in the master schedule - This can be as simple as creating shipping documents forfinished goods in a make to stock environment, or it might be a more complicated series of activities, including design efforts for make to order products - See: master schedule, order service

smoothing

-The process of averaging data by a mathematical process or by curve fitting, such as the leastsquares method or exponential smoothing

organizational development (od)

-The process of building and strengthening core competencies and organizational capabilities that enable the execution of the business strategy and provide a sustainable competitive advantage overtime - Includes staffing the organization, building core competencies and organizational capabilities, and continuous improvement initiatives in response to the changing business environment

rescheduling

-The process of changing order or operation due dates, usually as a result of their being out of phase with production or customer commitments

priority control

-The process of communicating start and completion dates to manufacturing departments in order to execute a plan - The dispatch list is the tool normally used to provide these dates and priorities based on the current plan and status of all open orders

monitoring

-The process of comparing actual to planned progress

weight confirmation

-The process of confirming a shipment arrival only by confirming that the correct weight has been delivered

transformation process

-The process of converting inputs into finished goods or services - In a service firm, the input may be a customer - Syn: transformation system - See: manufacturing process, production process

total quality control (tqc)

-The process of creating and producing the total composite good and service characteristics (by marketing, engineering, manufacturing, purchasing, etc -) through which the good and service will meet the expectations of customers

risk management planning

-The process of defining how to identify and minimize risk factors for a project

reservation

-The process of designating stock for a specific order or schedule - See: allocation

target costing

-The process of designing a product to meet a specific cost objective - Target costing involves settingthe planned selling price and subtracting the desired profit as well as marketing and distribution costs, thus leaving the required manufacturing or target cost -upto level

tracking

-The process of determining and reporting the location of a shipment throughout the supply chain channel

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 - See: production planning, sales and operations planning

strategic inventory positioning

-The process of determining, for inventory in the supply chain or production process, the location thatwill best protect the system against variability

risk response planning

-The process of developing a plan to avoid risks and to mitigate the effect of those that cannot be avoided

strategic planning

-The process of developing a strategic plan - See: operational planning, strategic plan, tactical planning

market planning

-The process of developing market plans for products and services - This process is composed of the following phasesidentification research and analysis of market opportunities selection of target markets development of marketing strategies development of the marketing plans, programs, and projects and management, execution, and control of the market plans, programs, and projects

production scheduling

-The process of developing the production schedule

reverse engineering

-The process of disassembling, evaluating, and redesigning a competitor's product for the purpose of manufacturing a product with similar characteristics without violating any of the competitor's proprietary manufacturingtechnologies

product life cycle management (plm)

-The process of facilitating the development, use, and support of products that customers want and need - Helps professionals envision the creation and preservation of product information, both to the customer and along the reverselogistics portion of the supply chain

resource leveling

-The process of scheduling (and rescheduling) the start and finish dates of operations (or activities) to achieve a consistent rate of resource usage so that resource requirements do not exceed re

planning

-The process of setting goals for the organization and choosing various ways to use the organization's resources to achieve the goals

picking

-The process of withdrawing from stock the components to make assemblies orfinished goods - In distribution, the process of withdrawing goods from stock to ship to a distribution warehouse or to a customer

lot sizing

-The process of, or techniques used in, determining lot size - See: order policy

make

-The process that describes the activities associated with the conversion of materials or creation of content for services - The process is characterized by adding value to products through assembly, mixing, separating, forming, machining, and chemical processes - The SCOR make process is generic so as to cover all types of material conversion and can be applied to make to stock, make to order, and engineertoorder environments

master scheduling

-The process where the master schedule is generated and reviewed and adjustments are made to the master production schedule to ensure consistency with the production plan - The master production schedule (the line on the grid) is the primary input to the material requirements plan - The sum of the master production schedules for the items within the product family must equal the production plan for that family

online service

-The processing of transaction data as soon as the transaction occurs (realtime processing as opposed to batch processing) - See: real time

output

-The product being completed by a process or facility

order cycle

-The progression used by a company starting with receipt of a customer's order and ending with delivery to that customer

product mix

-The proportion of individual products that make up the total production or sales volume - Changes in the product mix can mean drastic changes in the manufacturing requirements for certain types of labor and material

sales mix

-The proportion of individual producttype salesvolumes that make up the total sales volume

purchase order

-The purchaser's authorization used to formalize a purchase transaction with a supplier - A purchase order, when given to a supplier, should contain statements of the name, part number, quantity, description, and price of the goods or services ordered agreed to terms as to payment, discounts, date of performance, and transportation and all other agreements pertinent to the purchase and its execution by the supplier

tactical buying

-The purchasing process focused on transactions and nonstrategic material buying - Closely aligned with the ordering portion of executing the purchasing transaction process - Its characteristics include stable, limited fluctuations defined standard specifications noncritical to production no delivery issues and high reliability concerning qualitystandard material with very little concern for rejects - See: strategic sourcing

quantity per

-The quantity of a component to be used in the production of its parent - This value is stored in the bill of material and is used to calculate the gross requirements for components during the explosion process of MRP

standard batch quantity (sbq)

-The quantity of a parent that is used as the basis for specifying the material requirements for production - The quantity per is expressed as the quantity to make the SBQ, not to make only one of the parent - Often used by manufacturers that use some components in standard quantities or by processrelated manufacturers - Syn: run size

transfer batch

-The quantity of an item moved between sequential work centers during production - See: batch, overlap quantity

process batch

-The quantity or volume of output that is to be completed at a workstation before switching to a different type of work or changing an equipment setup

planned order receipt

-The quantity planned to be received at a future date as a result of a planned order release - Planned order receipts differ from scheduled receipts in that they have not been released - Syn: planned receipt

production rate

-The rate of production usually expressed in units, cases, or some other broad measure, expressed by a period of time (e -g -, per hour, shift, day, or week) - Syn: production level

point reporting

-The recording and reporting of milestone manufacturing order occurrences, typically done at checkpoint locations ratherthan operations and easily controlled from a reporting standpoint

price point

-The relative price position at which the product will enterthe market compared to direct and indirect competitors' prices - It is considered within the context of the pricerange options available: high, medium, or low

protective capacity

-The resource capacity needed to protect system throughputensuring that some capacity above the capacity required to exploit the constraint is available to catch up when disruptions inevitably occur - Nonconstraint resources need protective capacity to rebuild the bank in front of the constraint or capacityconstrained resource (CCR) and/or on the shipping dock before throughput is lost and to empty the space bufferwhen it fills

value delivery network

-The resources and processes used to deliver a product to customers

material requirements plan

-The result from the process of material requirements planning

storage

-The retention of parts or products for future use or shipment

return on supply chain fixed assets

-The return an organization receives on its invested capital in supply chain fixed assets - Includes the fixed assets used to plan, source, make, deliver, and return - Calculated as (supply chain revenue COGS supply chain management costs) * supply chain fixed assets

supply uncertainty

-The risk of interruptions in the flow of components from upstream suppliers

processflow

-The sequence of activities that, when followed, results in a product or service deliverable - See: flow process chart, process chart

tactical plan(s)

-The set of functional plans (e -g -, production plan, sales plan, marketing plan) synchronizing activities across functions that specify production levels, capacity levels, staffing levels, funding levels, and so on, for achieving the intermediate goals and objectives to support the organization's strategic plan - See: aggregate planning, ODerational clan, oroduction olannine - sales and

manufacturing philosophy

-The set of guiding principles, driving forces, and ingrained attitudes that helps communicate goals, plans, and policies to all employees and that is reinforced through conscious and subconscious behavior within the manufacturing organization

seven zeros

-The seven zeros are an essential part of the Toyota Production System - They are zero defects,

product segments

-The shared information between a planofresources and a production rule for a specific product - A logical grouping of personnel resources, equipment resources, and material specifications required to carry out the production step

sole source

-The situation where the supply of a product is available from only one organization - Usually technical barriers such as patents preclude other suppliers from offering the product - See: single sourcing

ratification

-The situation wherein a principal that has failed to denounce an agent's unauthorized conduct is consequently bound by the conduct

six sigma quality

-The six sigma approach is a set of concepts and practices that focus on reducingvariability in processes and reducing deficiencies in the product - Important elements are (1) producing only 3 -4 defects for every one million opportunities or operations, and (2) process improvement initiatives striving for six sigmalevel performance - Six sigma is a business process that permits organizations to improve bottomline performance, creating and monitoring business activities to reduce waste and resource requirements while increasing customer satisfaction

rail gauge

-The spacing of the width of the rails on a railway track, measured between the inner sides ofthe rails - In rail transport, this is a key parameter in determining interoperability, since all vehicles must have running gear that is compatible with the spacing - This can vary between countries and cause compatibility issues

planned load

-The standard hours ofwork required by planned production orders

unit of issue

-The standard issue quantity of an item from stores (e -g -, pounds, each, box of 12, package of 20, case of 144)

pick date

-The start date of picking components for a production order - On or before this date, the system produces a list of orders due to be picked, pick lists, tags, and turnaround cards

universality

-The strategy of designing a product initially intended for one market in such away that it can also be sold in other markets - A form of standardization

modular design strategy

-The strategy of planning and designing products so that components or subassemblies can be used in current and future products or assembled to produce multiple configurations of a product - Automobiles and personal computers are examples of modular designs

mass marketing

-The strategy of sending the same message to all potential customers

marketing cost analysis

-The study and evaluation of the relative profitability or costs of different marketing operations in terms of customers, marketing units, commodities, territories, or marketing activities - Cost accounting is typically used

logistics social responsibility

-The subset of corporate social responsibility that relates to logistics, including minimizing negative impacts, monitoring and controlling, reporting, and continuously improving in social responsibility areas that include the environment, health and safety, and labor issues related to warehousing, transportation, and other logistics areas

total cost to serve

-The sum of the supply chain cost to deliver products and services to customers - Includes the cost to plan the supply chain source materials, products, goods, merchandize and services produce, manufacture, remanufacture, refurbish, repair and maintain goods and services manage orders, customer inquiries and returns and deliver products and services at the agreed location (point of revenue) - Comprises both direct cost and indirect cost

value analysis

-The systematic use of techniques that identify a required function, establish a value forthat function, and finally provide that function at the lowest overall cost - Focuses on the functions of an item rather than the methods of producing the present product design

standard costs

-The target costs of an operation, process, or product including direct material, direct labor, and overhead charges

real time

-The technique of coordinating data processing with external related physical events as they occur, thereby permitting prompt reporting of conditions - See: online service

valuation

-The technique of determining worth, typically of inventory - Valuation of inventories may be expressed in standard dollars, replacement dollars, current average dollars, or lastpurchaseprice dollars - valueThe worth of an item, good, or service

time phasing

-The technique of expressing future demand, supply, and inventories by time period

startup audit

-The technique of having an implementation team tour or visit the implementation site on a frequent basis and use the management by walking

replan cycle

-The time it takes to implement a new production plan into the plant's actual production plan - Occurs after completion ofthe last cycle and takes the form of a rolling document

supply chain cycle time

-The time it would take to fill a customer order if inventory levels were zero - Sum ofthe longest lead times for each stage in the supply chain - See: cycle time, cycle service level

materials handling time

-The time necessary to move materials from one work center to the next work center - Includes waiting for the materials handling equipment and actual movement time

order preparation lead time

-The time needed to analyze requirements and open order status and to create the paperwork necessary to release a purchase order or a production order

teardown time

-The time needed to remove a setup from a machine orfacility - Teardown is an element of manufacturing lead time, but it is often allowed for in setup or run time rather than separately - See: teardown

rework lead time

-The time required to rework material inhouse or at a supplier's location

service time

-The time taken to serve a customer (e -g -, the time required to fill a sales order or the time required to fill a request at a tool crib)

move time

-The time that a job spends in transit from one operation to another in the plant

purchasing lead time

-The total lead time required to obtain a purchased item - Included here are order preparation and release time supplier lead time transportation time and receiving, inspection, and putaway time - See: lead time, supplier lead time, timetoproduct

on order stock

-The total of all outstanding replenishment orders - The onorder balance increases when a new order is released and decreases when material is received against an order or when an order is canceled

operation time

-The total of setup and run time for a specific task - Syn: operation duration

operations strategy

-The total pattern of decisions that shape the longterm capabilities of an operation and their contribution to overall strategy - Operations strategy should be consistent with overall strategy - See: strategic plan

replenishment lead time

-The total period of time that elapses from the moment it is determined that a product should be reordered until the product is back on the shelf available for use - Syn: reorder cycle, replenishment order quantitySyn: reorder quantity

time to market

-The total time required to design, build, and deliver a product (timed from concept to delivery) - See: procurement lead time - Time to places the order until the customer receives the product

manufacturing lead time

-The total time required to manufacture an item, exclusive of lowerlevel purchasing lead time - For make to order products, it is 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 is the length of time between the release of an order to the production process and receipt into inventory - Included are order preparation time, queue time, setup time, run time, move time, inspection time, and putaway time - Syn: manufacturing cycle, production cycle, production lead time - See: lead time

operation duration

-The total time that elapses between the start of the setup of an operation and the completion of the operation - Syn: operation time, operation listSyn: routing

technology transfer

-The transmission of technology (e -g -, knowledge, skills, software, hardware) from one country, organization, business, or entity to another country, organization, business, or entity - TEIAbbreviation for total employee involvement

unit of measure

-The unit in which the quantity of an item is managed (e -g -, pounds, each, box of 12, package of 20, case of 144)

project management

-The use of skills and knowledge in coordinatingthe organizing, planning, scheduling, directing, controlling, monitoring, and evaluating of prescribed activities to ensure that the stated objectives of a project, manufactured good, or service are achieved - See: project

parametric estimating

-The use of statistical and historical data to estimate activity parameters such as time or budget

statistical inventory control

-The use of statistical methods to model the demands and lead times experienced by an inventory item or group of items - Demand during lead time and between reviews can be modeled, and reorder points, safety stocks, and maximum inventory levels can be defined to strive for desired customer service levels, inventory investments, manufacturing and distribution efficiency, and targeted returns on investments

order winners

-Those competitive characteristics that cause a firm's customers to choose that firm's goods and services over those of its competitors - Order winners can be considered to be competitive advantages for the firm - Order winners usually focus on one (rarely more than two) of the following strategic initiatives: price/cost, quality, delivery speed, delivery reliability, product design, flexibility, aftermarket service, and image

relevant costs

-Those costs incurred because of a decision - The costs would not have resulted unless the decision was made and implemented - They are relevant to the decision

selling and administrative cost

-Those costs that are associated with the marketing, sales, and administrative functions of a plant or company - Is a function of overhead costing and an important number in the COGS (costs of goods sold) calculation

significantvariances

-Those differences between planned and actual performance that exceed established thresholds and that require further review, analysis, and action

slow moving items

-Those inventory items with a low turnover items in inventory that have a relatively low rate of usage compared to the normal amount of inventory carried

service parts

-Those modules, components, and elements that are planned to be used without modification to replace an original part - Syn: repair parts, spare parts

sales cycle time

-Time from a product entering a floor until it is completely sold out - sales forecastSyn: forecast

performance measurement units

-Time, error rates, accuracy rates, cost, and other measures of system performance

time study

-Timing employees as they accomplish jobs for the purpose of setting time standards

unit size

-To combine a number of packages into one unit by attaching them together

offload

-To reschedule or use alternate routings to reduce the workload on a machine, work center, or facility

nonrecurring material

-Tooling, gauges, and facilities necessary in the manufacturing of the final product that are not consumed during manufacturing or shipped with the final product

molds

-Tools for plastic or chemical production - Term used for the tools that shape plastic or other soft material parts

orthogonal arrays

-Tools that help maintain independence between different iterations of a product design experiment introduced to quality analysis by Genichi Taguchi

repurpose

-Totake something and use it for something else not originally intended - The materials may be repaired, reconditioned, and repackaged for resale or used in a different manner through remanufacturing, recycling, or salvage

unitcost

-Total labor, material, and overhead cost for one unit of production (e -g -, one part, one gallon, one pound)

lot number traceability

-Tracking parts by lot numbers to a group of items - This tracking can assist in tracing quality problems to their source - A lot number identifies a designated group of related items manufactured in a single run or received from a vendor in a single shipment

time stamping

-Tracking with each transaction the time of occurrence - Used in period closings and to tie end items to samples for certification of item properties

operator flexibility

-Training machine workers to perform tasks outside their immediate jobs and in problemsolving techniques to improve process flexibility - This is a necessary process in developing a fully crosstrained workforce

telecommunications

-Transmission of voice and image data at a distance by electronic means - telescopingSyn: overlapped schedule

multimodal solutions

-Transportation plans that involve multiple means of transportation and coordinate the physical and information requirements

quality assurance/control

-Two terms that have many interpretations because ofthe multiple definitions for the words assurance and control - For example, as state of being certain, or the act of making certain control can mean an evaluation to indicate needed corrective responses, the act of guiding, or the state of a process in which the variability is attributable to a constant system of chance causes - One definition of quality assurance is all the planned and systematic activities implemented within the quality system that can be demonstrated to provide confidence that a good or service will fulfill requirements for quality - One definition for quality control is the operational techniques and activities used to fulfill requirements for quality - Often, however, quality assurance and quality control are used interchangeably, referring to the actions performed to ensure the quality of a good, service, or process

robust design

-Type of design for a product or service that plans for intended performance even in the face of a harsh environment

option overplanning

-Typically, scheduling extra quantities of a master schedule option greaterthan the expected sales for that option to protect against unanticipated demand - This schedule quantity may be planned only in the period where new customer orders are currently being accepted, typically just after the demand time fence - This technique is usually used on the second level of a twolevel master scheduling approach to create a situation where more of the individual options than of the overall family are available - The historical average of demand for an item is quantified in a planning bill of material, and option overplanning is accomplished by increasing this percentage to allow for demands greater than forecast - See: demand time fence, hedge, planning bill of material

life cycle assessment (lca)

-Understanding the human and environmental impacts during the life of a product, process, or service, including energy, material, and environmental inputs and outputs - Sometimes called cradletograve analysis, LCA includes raw material extraction through materials processing, manufacture, distribution, use, repair and maintenance, and disposal or recycling

warehouse storage

-Using a building or other structure as a planned space for storing goods and materials

parity

-When performance of a company is basically equivalent to that of competitors in the same market space - This criterion would be deemed sufficient for products and processes for which the company does not seek to gain and hold marketplace leadership - The goal is not to perform below this base benchmark

shortage gaming

-When suppliers ration or apportion supplies and buyers, in response, inflate their orders in an attempt to receive what they actually need, shortcycle manufacturingSyn: just in time

transient state

-When the variables in a system or process have changed, but not reached steady state yet - Data is usually not collected from the model until less erratic behavior emerges - See: steady state

tolerance stack up

-When two or more components all within tolerance limits but at some distance from the specification itselfare assembled together, causing the assembly potentially to be subject to early failure because ofthe interaction between the components

optimal order period

-Within a fixed order period inventory system, the time between a status check on the material that balances ordering costs with carrying costs

sampling plan

-Within acceptance sampling, the determination of the sample size and the number of defectives that will trigger rejection of a lot

object oriented programming (oop)

-Within computer programming, the use of coding techniques and tools that reflect the concept of viewing the business environment as a set of elements (or objects) with associated properties (e -g -, data, data manipulation/actions, inheritance) - The objects encapsulate, through data and functions, the properties of the business that are of interest

positioning strategy

-Within manufacturing, a plan for inventory, product design, and production process

occurrence factor

-Within the repair/remanufacturing environment, the occurrence factor is associatedwith how often a repairis required to bringthe average part to a serviceable condition (some repair operations do not occur 100 percent of the time) -The factor is expressed at the operation level in the routing - See: repair factor, replacement factor

overtime

-Work beyond normal established working hours that usually requires that a premium be paid to the workers

on demand

-Work is completed only when demand occurs - More specifically, a process in which a product or service is made only after an order is placed for that product or service

protective packaging

-Wrapping or covering of material that provides containment, protection, and identification of inventory in a warehouse - The material must be contained in such away thatwill support movement and storage and will fit into the dimension of storage space and transportation vehicles

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

reconciling inventory

-comparing the physical inventory figures with the perpetual inventory record and making any necessary corrections

source inspection

-inspection at the source of supply or production (e -g -, the supplier or the work center) as opposed to inspection following receipt from the supplier orfollowing transfer of the items from one work center to another

systems rollup

-integrating computer systems enables faster data retrieval and better information system responsiveness

price skimming

-introducing a product above its longrun price to maximize product margin before others can enterthe market

seasonal inventory

-inventory built up to smooth production in anticipation of a peak seasonal demand - Syn: seasonal stock

residual inventory

-inventory created by the canceling or rescheduling of an order or left over because of lot sizing

transit inventory

-inventory in transit between manufacturing and stocking locations - See: transportation inventory

raw materials inventory

-inventory of material that has not undergone processing at a facility - RCCPAbbreviation for roughcut capacity planning

rejected inventory

-inventory that does not meet quality requirements but has not yet been sent to rework, scrapped, or returned to a supplier

transportation inventory

-inventory that is in transit between locations - See: pipeline stock, transit inventory

trade secret

-knowledge of a manufacturing process that gives the owner an advantage over competitors who do not have it - Trade secrets are legally protectable

marks and numbers

-ldentifying agents placed on products or containers used to identify a shipment or its parts

netrequirements

-ln MRP, the net requirements for a part or an assembly are derived as a result of applying gross requirements and allocations against inventory on hand, scheduled receipts, and safety stock - After being lotsized and offset for lead time, net requirements become planned orders

scorteam leader

-ln SCOR implementation, the primary coordinator and manager of the planning and execution phases ofthe SCOR improvement program

scor metrics

-ln SCOR, metrics measure the ability of processes to achieve the strategic objectives associated with performance attributes - SCOR recognizes three levels of predefined metrics: Level 1 metrics are diagnostics forthe overall health ofthe supply chain - Level 2 metrics serve as diagnostics forthe level 1 metrics - Level 3 metrics serve as diagnostics for level 2 metrics

post deduct

-ln a JIT system, when workinprocess materials used to build finished goods are relieved from inventory by multiplying the number of units completed by the number of parts in the bill of material - Effective only if the bill of material is accurate and manufacturing lead times are short - See: backflushing

priority

-ln a general sense, the relative importance of jobs (i -e -, the sequence in which jobs should be worked on) - It is a separate concept from capacity

valve inventory

-ln a just in time context, inventory at a stockpoint that is too large to be located next to the point of use ofthe material, and from which material is drawn by a pull system - Often located at a stockpoint in the plant's receiving area

production card

-ln a justintime context, a card or other signal for indicating that items should be made for use or that some items removed from pipeline stock should be replaced - See: kanban

move card

-ln a justintime context, a card or other signal indicating that a specific number of units of a particular item are to be taken from a source (usually an outbound stockpoint) and taken to a point of use (usually an inbound stockpoint) - It authorizes the movement of one part number between a single pair of work centers - The card circulates between the outbound stockpoint ofthe supplyingwork center and the inbound stockpoint ofthe usingwork center - Syn: move signal, conveyance card - See: kanban

performance standard

-ln a performance measurement system, the accepted, targeted, or expected value for the criterion - See: performance criterion, performance measure, performance measurement system

profitability analysis

-ln activity based cost accounting, the examination of profit received from cost objects to attempt to optimize profitability - A variety of views may be examined, including customer, distribution channel, product, and regions

support costs

-ln activitybased cost accounting, activity costs not directly related to producing a product, such as the cost ofthe information system

tracing

-ln activitybased cost accounting, connecting resources to activities to cost objects using underlying causal drivers to understand how costs occur during normal business activities

mutually exclusive project

-ln capital budgeting, a project thatwill not be accepted if a competing project is accepted - See: contingent project, independent project

protocol

-ln information systems, a set of rules for defining the format and relationships for sharing information between devices - These rules govern the transmission of data across a network and serve as the grammar of data communication languages

public key

-ln information systems, a system where one person holds a private key (an encryption code defining access rights) but shares another key with a set of people with whom that person will communicate - See: private key

private key

-ln information systems, an encryption key that is known only by the sender and receiver of the message - See: public key

terms of sale

-ln international trade, the element of a contract that states the delivery and payment terms between a buyer and a seller - It includes when and where the transfer of goodswill occur, documentation that is required, and liabilities for both parties while the goods are in transit

muda(waste)

-ln lean manufacturing, costs are reduced by reducing waste within a system - There are seven categories of waste: (1) overproduction excess or too early (2) waitingqueuing delays (3) transportationunneeded movements (4) processingpoor process design (5) motionactivities that do not add value (6) inventorystock that is sitting and is accumulating cost without necessarily providing value (7) defective unitsscrap or rework

pacemaker

-ln lean, the resource that is scheduled based on the customer demand rate for that specific value stream this resource performs an operation or process that governs the flow of materials along the value stream - Its purpose is to maintain a smooth flow through the manufacturing plant - A larger buffer is provided for the pacemaker than other resources so that it can maintain continuous operation - See: constraint

question mark

-ln marketing, a slang term for a low market share but high growth rate product - See: growthshare matrix

market demand

-ln 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

modularization

-ln product development, the use of standardized parts for flexibility and variety - Permits product development cost reductions by using the same item(s) to build a variety of finished goods - This is the first step in developing a planning bill of material process

scope change

-ln project management, a change to a project's scope, usually requiring an adjustment to the project's budget and schedule

program

-ln project management, a coordinated set of related projects, usually including ongoing work

work package

-ln project management, a deliverable at the bottom of a work breakdown structure - This may be treated as a subproject to be assigned to a project manager to plan and execute, in which case this managerwill define new activities

project schedule

-ln project management, a list of activities and their planned completion dates that collectively achieve project milestones

program evaluation and review technique (pert)

-ln project management, a network analysis technique in which each activity is assigned a pessimistic, most likely, and optimistic estimate of its duration - The critical path method is then applied using a weighted average of these times for each node - PERT computes a standard deviation of the estimate of project duration

start to finish

-ln project management, a network requirement that activity A must start before subsequent activity B can finish - See: logical relationship

start to start

-ln project management, a network requirement that activity A must start before subsequent activity B can start - See: logical relationship

path

-ln project management, a set of serially related activities in a network diagram

project risk management

-ln project management, a systematic process of controlling project risk - Includes maximizing the likelihood and effect of positive events and minimizing the likelihood and effect of negative events

scheduled finish date

-ln project management, an activity's planned finish time, normally between the early finish time and the late finish time - It may reflect resource limitations - Syn: planned finish date

scheduled start date

-ln project management, an activity's planned start time, normally between the early start time and the late start time - It may reflect resource limitations - Syn: planned start date

s curve

-ln project management, graphic display of cumulative project attributes such as costs, labor hours, or percentage of work - The name derives from the typical shape ofthe curve

scope definition

-ln project management, subdividing a project into smaller components to facilitate management

slacktime

-ln project management, the amount of time that an activity may be delayed from its early start without delaying the project finish date - Syn: slack

negative float

-ln project management, the amount of time that must be made up on an activity to get the project back on schedule - See: float

networkanalysis

-ln project management, the calculation of early and late start and finish times for those activities not yet completed - See: critical path method, graphical evaluation and review technique, program evaluation and review technique (PERT)

total float

-ln project management, the length of time an activity can be late without delaying succeeding activities - See: float, free float, independent float, total lead timeSyn: lead time

project management team

-ln project management, the personnel assigned to a projectwho are directly involved in management activities

path convergence

-ln project management, the point in a network diagram where one or more parallel paths come together - A delay on any ofthe parallel paths can conceivably delay network completion

par level

-ln service operations, the maximum supply volume based on established quotas from previous use for a particular supply item, in a particular department and for a specified time period

master black belt

-ln six sigma, a quality expert capable of implementing strategic quality efforts as well as teaching other facilitators (black belts) the quality applications within all levels of the organization

lower specification limit (lsl)

-ln statistical process control, charting the line that defines the minimum acceptable level of random output - See: tolerance limits

upper specification limit (usl)

-ln statistical process control, the line that defines the maximum acceptable level of random output - See: tolerance limits

range

-ln statistics, the spread in a series of observations - For example, the anticipated demand for a particular product might vary from a low of 10 to a high of 500 per week - The range would therefore be 50010, or 490

system constraint

-ln supply chain management, the supply chain is viewed as the complete system - The system constraint is the resource at any one of the trading partners that is most limiting the endtoend throughput ofthe supply chain

total cost of ownership (tco)

-ln supply chain management, the total cost of ownership of the supply delivery system is the sum of all the costs associated with every activity of the supply stream - The main insight that TCO offers to the supply chain manager is the understanding that the acquisition cost is often a very small portion of the total cost of ownership

precedence relationship

-ln the critical path method of project management, a logical relationship that one node has to the succeeding node - The terms precedence relationship, logical relationship, and dependency are used somewhat interchangeably

uncontrollable factors

-ln the environment of a production system, those factors that cannot be changed (e -g -, temperature, natural causes, weather, vibration)

resiliency

-ln the supply chain, the ability to return to a position of equilibrium after experiencing an event that causes operational results to deviate from expectations - Resiliency is increased by strategically increasing the number of response options and/ or decreasing the time to execute those options - Resiliency is improved by risk monitoring and control

transition tree (trt)

-ln the theory of constraints, a logicbased tool for identifying and sequencing actions in accomplishing an objective - The transitions represent the states or stages in moving from the present situation to the desired objective

protective inventory

-ln the theory of constraints, the amount of inventory required relative to the protective capacity in the system to achieve a specific throughput rate at the constraint - See: limiting operation

productive inventory

-ln the theory of constraints, the inventory required to meet production requirements without allowance for unplanned delays - See: idle inventory, protective inventory

personal discrimination

-ln transportation, charging different companies with similar deliveries different rates for shipping - This is a policy decision, possibly based on importance of the customer

terminals

-ln transportation, locations where carriers load and unload goods to and from vehicles - Also used to make connections between local pickup and delivery service and linehaul service - Functions performed in terminals include weighing connections with other routes and carriers, vehicle routing, dispatching, maintenance, paperwork, and administration - Terminals may be owned and operated by the carrier or the public

piece parts

-lndividual items in inventory at the simplest level in manufacturing (e -g -, bolts and washers)

multiskilled

-lndividualswho are capable of carrying out a variety of tasks

locational determinants

-lnformation or factors considered in determining where to put a facility

management information system (mls)