CLT Book Glossary

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.

Stock keeping unit (SKU)

1) An inventory item. For example, a shirt in six colors and five sizes would represent 30 different SKUs.

Intermodal transport:

1) Shipments moved by different types of equipment combining the best features of each mode. 2) The use or two or more different carrier modes in the through movement of a shipment.

Inventory

1) Those stocks or items used to support production (raw materials and work-in-process items), supporting activities (maintenance, repair, and operating supplies), and customer service (finished goods and spare parts). Demand for inventory may be dependent or independent. Inventory functions are anticipation, hedge, cycle (lot size), fluctuation (safety, buffer or reserve),transportation (pipeline), and service parts. 2) All the money currently tied up in the system. As used in theory of constraints, inventory refers to the equipment, fixtures, buildings, and so forth that the system owns - as well as inventory in the forms of raw materials, work-in-process, and finished goods.

Airway bill

A bill of lading for air transport that serves as a receipt for the shipper, indicates that the carrier has accepted the goods listed, obligates the carrier to carry the consignment to the airport of destination according to specified conditions.

Contract carriers

A carrier that does not serve the general public, but provides transportation for hire for one or a limited number of shippers under a specific contract.

Bill of lading

A carrier's contract and receipt for goods the carrier agrees to transport from one place to another and to deliver to a designated person. In case of loss, damage, or delay, the bill of lading is the basis for filing freight claims.

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.

Certificate of origin

A document attesting to a shipment's country of origin.

Material Safety Data Sheet (MSDS)

A document intended to provide workers and emergency personnel with procedures for handling or working with that substance in a safe manner, and includes information such as physical data (melting point, boiling point, flash point, etc.), toxicity, health effects, first aid, reactivity, storage, disposal, protective equipment, and spill-handling procedures.

Delivery receipt

A document issued by the carrier that the consignee signs as proof of receipt.

Shipping manifest

A document that lists the pieces in a shipment. A manifest usually covers an entire load regardless of whether the load is to be delivered to a single destination or too many destinations. Manifest usually list the items, piece count, total weight, and the destination name and address for each destination in the load.

Shipping order

A document which specifies the products to be shipped, customer information and the mode of transport

Exempt carriers

A for-hire carrier that is free from economic regulation.

Order

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

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 awaiting final inspection and acceptance as finished goods inventory. Many accounting systems also include the value of semi-finished stock and components in this category.

Private carriers

A group that provides transportation exclusively within an organization.

Automated storage/retrieval system (AS/RS)

A high-density, rack inventory storage system with vehicles automatically loading and unloading the racks.

Import quota

A limit on the quantity of a good that can be produced abroad and sold domestically.

First-in-First Out (FIFO)

A method of inventory valuation for accounting purposes. The accounting assumption is that the oldest inventory (first in) is the first to be used (first out), but there is no necessary relationship with the actual physical movement of specific items.

Batch pick

A method of picking orders in which order requirements are aggregrated by product across orders to reduce movement to and from product locations. The aggregrated quantities of eachproduct are then transported to a common area where the individual orders are constructed.

Zone pick

A method of subdividing a picking list by areas within a storeroom for more efficient and rapid order picking. A zone-picked order must be grouped to a single location before delivery or must be delivered to different locations, such as work centers.

Just-in-time (JIT)

A philosophy of manufacturing based on planned elimination of all waste and on continuous improve- ment of productivity. It encompasses the successful execution of all manufacturing activities required to produce a final product, from design engineering to delivery, and includes all stages of conversion from raw material onward. The primary elements of JIT are to have only the required inventory when needed; to improve quality to zero defects; to reduce lead times by reducing setup times, queue lengths, and lot sizes; to incrementally revise the operations themselves; and to accomplish these activities at minimum cost. In the broad sense, it applies to all forms of manufacturing-job shop, process, and repetitive and to many service industries as well.

Placard

A poster or sign that measures 10 3⁄4 x 10 3⁄4 inches placed on the outside of a container or vehicle to warn that a hazmat is inside the vehicle or container.

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 time-phased, it makes recommendations to reschedule open orders when due dates and need dates are not in phase. Time-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. Time-phased MRP is accomplished by exploding the bill of material, adjusting for inventory quantities on hand or on order, and offsetting the net requirements by the appropriate lead times.

Containerization

A shipment method in which commodities are placed in containers, and after initial loading, the commodities per se are not re-handled in shipment until they are unloaded at the destination.

Grounding

A special form of bonding in which conductive equipment is connected to an earthing electrode or to the building grounding system in order to prevent sparking between conductive equipment and grounded structures.

Cantilever rack

A specialized form of rack used for storing long items such as lumber or pipes.

Oxidizer

A substance that oxidizes another substance, especially one that supports the combustion of fuel; an oxidizing agent.

Bonding

A system that connects various pieces of conductive equipment together to keep them at the same potential. Static sparking cannot take place between objects that are the same potential.

Warehouse management system (WMS)

A system that manages all processes that a warehouse carries out. These processes include receiving, picking, and shipping.

Duty (trade)

A tax levied by government on the importation, exportation, or use and consumption of goods.

Tariff

A tax on imports or exports. An official schedule of taxes and fees imposed by a country on imports or exports.

Hazard Communication (HAZCOM)

Also known as the Right-to-Know law. HAZCOM is based on the idea that every worker has the right to know the dangers of the materials they are exposed to at work. The law requires employers to tell employees about the dangers of hazmats and what they can do to protect themselves—before they begin working.

Free trade agreements

An agreement between one or more countries which eliminates tariffs, import quotas, and preferences on most (if not all) goods and services traded between them.

Advanced ship notice (ASN)

An electronic data interchange (EDI) notification of shipment of product.

Fixed costs

An expenditure that does not vary with the production volume; for example, rent, property tax, and salaries of certain personnel.

Cycle count

An inventory accuracy audit technique where inventory is counted on a cyclic schedule rather than once a year. A cycle inventory count is usually taken on a regular, defined basis (often more frequently for high-value or fast-moving items and less frequently for low-value or slow-moving items). Most effective cycle counting systems require the counting of a certain number of items every workday with each item counted at a prescribed frequency. The key purpose of cycle counting is to identify items in error, thus triggering research, identification, and elimination of the cause of errors.

Fixed order quantity ordering

An inventory system, such as economic order quantity, in which the same order quantity is used from order to order. The time between orders (order period) then varies from order to order.

Carrier freight bill

An invoice presented by the carrier to the shipper, the consignee or a referenced third-party as a demand for payment for services rendered.

Variable costs

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

Item

Any unique manufactured or purchased part, material, intermediate, subassembly, or product.

Hazmat employee

Any worker who directly affects the safe transportation of hazardous materials.

Vertical lift module (VLM)

Automated storage and retrieval system that moves units or items between levels in a facility.

Decoupling

Creating independence between supply and use of material. Commonly denotes providing inventory between operations so that fluctuations in the production rate of the supplying operation do not constrain production or use rates of the next operation.

Less than truckload (LTL)

Either a small shipment that does not fill the truck or a shipment of not enough weight to qualify for a truckload quantity (usually set at about 10,000 lbs) rate discount, offered to a general commodity trucker.

Aggregate inventory management

Establishing the overall level (dollar value) of inventory desired and implementing controls to achieve this goal.

Materials

For the purpose of this training, "materials" include other terms such as goods, cargo, freight, loads, products, merchandise, etc.

Hazardous material (hazmat)

Hazardous material defined by environmental laws and legal precedents. A product has been defined as hazardous by regulations that impose stiff fines if the regulations are ignored.

Drive-in/drive-through rack

High-density storage system that allows units to be stored several deep. Fork-trucks can drive between and into racks to retrieve items. It is also known as a proof of delivery.

Push-back rack

High-density storage system which can hold several units deep on slightly inclined rails. As a unit is removed from the front, the incline causes units behind it to move forward into the front location.

Unitization

In warehousing, the consolidation of several units into larger units for fewer handlings.

Material Handler

Individuals who move and stage materials within the supply chain.

Dunnage

Inexpensive or waste material used to protect and load securing cargo during transport.

Staging Area

Location in a facility where materials are organized. Newly received items can be staged before being placed in a final storage destination or into another container for transport. Inventory items may also be staged before being organized into orders for container loading.

Corrosives

Materials that can attack and chemically destroy exposed body tissues. Corrosives can also damage or even destroy metal. They begin to cause damage as soon as they touch the skin, eyes, respiratory tract, digestive tract, or the metal.

Import

Products bought in one country and produced in another.

Export

Products produced in one country and sold in another.

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 stock

Purchased items or extracted materials that are converted via the manufacturing process into components and products.

Single-deep storage

Rack that holds only one unit deep.

Double-deep storage(also called Deep-reach)

Rack that holds two units deep, one behind the other.

Basic Description

Required description on documentation when shipping or handling hazmats. It must include: the Identification Number; Proper Shipping Name; Hazard Class or Division; and Packing Group (if applicable).

Mobile sliding rack

Storage racks that sit on tracks so they can be moved to retrieve items. An aisle can be opened between any two rows to allow access.

High density storage

Storage system which allows pallets to be stored more than one unit deep or high.

Freight forwarders

The 'middle man' between the carrier and the organization shipping the product. Often combines smaller shipments to take advantage of lower bulk costs.

Order processing

The activity required to administratively process a customer's order and make it ready for shipment or production.

Cross-docking

The concept of packing products on the incoming shipments so they can be easily sorted at intermediate warehouses or for outgoing shipments based on final destination. The items are carried from the in-coming vehicle docking point to the outgoing vehicle docking point without being stored in inventory at the warehouse. Cross-docking reduces inventory investment and storage space requirements.

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.

Reportable Quantity (RQ)

The minimum quantity of a hazardous substance which, if released, is required to be reported.

Inventory turnover

The number of times that an inventory cycles, or "turns over," during the year. A frequently used method to compute inventory turnover is to divide the average inventory level into the annual cost of sales. For example, an average inventory of $3 million divided into an annual cost of sales of $21 million means that inventory turned over 7 times.

Yard

The outdoor area around a dock; can refer to a shipping yard; rail yard or truck yard.

Packaging

The process of using materials to contain and protect a product during handling, storage and shipping

Kitting

The process through which individual items are grouped or packaged to create a single shipment.

Consignee

The receiver of shipment of freight; the customer.

Common carriers

Transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided. Acommon carrier must obtain a certificate of public convenience and necessity from the Federal Trade Commission for interstate traffic.

Placarding

Use of a poster or sign that measures 10 3⁄4 x 10 3⁄4 inches placed on the outside of a container or vehicle to warn that a hazmat is inside the vehicle or container.

Full truckload (FTL)

When the load from one customer fills up the whole truck.

POD

proof of delivery