APICS Deck 8 OO Flashcards
Learning - APICS Terms
APICS Deck 8
shipping
The function that performs tasks for the outgoing shipment of parts, components, and products. It includes packaging, marking, weighing, and loading for shipment.S
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non-vessel-operating common carrier (NVOCC)
Carrier that uses ocean liners and works similarly to freight forwarders.N
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tactical buying
The purchasing process focused on transactions and nonstrategic material buying. It is closely aligned with the “ordering” portion of executing the purchasing transaction process. The characteristics for tactical buying include stable, limited fluctuations, defined standard specifications, noncritical to production, no delivery issues, and high reliability concerning quality-standard material with very little concern for rejects. See: strategic sourcing.T
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block scheduling
An operation scheduling technique where each operation is allowed a “block” of time, such as a day or a week.B
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perpetual inventory
An inventory recordkeeping system where each transaction in and out is recorded and a new balance is computed.P
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purchasing performance measurement
Syn: supplier measurement.P
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lean
Syn: lean production.L
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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 to the point of use of the parts. The production card authorizes the production of a given number of parts for use or replenishment. Syn: dualcard kanban system. See: one-card kanban system.T
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automated storage/retrieval system (AS/RS)
A highdensity, rack inventory storage system with vehicles automatically loading and unloading the racks.A
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planning board
Syn: control board.P
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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. Syn: partial productivity factor. See: multiple-factor productivity.S
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correlation
The relationship between two sets of data such that when one changes, the other is likely to make a corresponding change. If the changes are in the same direction, there is positive correlation. When changes tend to occur in opposite directions, there is negative correlation. When there is little correspondence or random changes, there is no correlation.C
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single smoothing
Syn: first-order smoothing.S
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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 design-to-order environments, levlevel L el of service is the percentage of times the customerrequested or acknowledged date was met by shipping complete product quantities. Syn: measure of service, service level. See: cycle service level.L
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process average
Expected value of the percentage defective of a given manufacturing process.P
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average payment period
The average time between receipt of materials and payment for those materials.A
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manufacturing automation protocol (MAP)
An application-specific protocol based on the International Standards Organization’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.M
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cost-based contract
A type of purchasing contract where the price of goods or services is tied to the cost of key inputs or other economic factors, such as interest rates.C
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functional silo syndrome
Suboptimization of an organization’s goals due to members of specific functions developing more loyalty to the function’s group goals than to the organization’s goals.F
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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.S S
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jury of executive opinion
A forecast given by a group of executives who are knowledgeable about the industry, competition, and the firm.J
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law of diminishing marginal returns
A principle that as the quantity of a variable factor applied to a fixed factor is increased, the additional units of the variable factor will result in smaller and smaller increases in output. See: marginal product.L
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TEU
Abbreviation for twenty-foot equivalent unit.T
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time-now date
Syn: data date.T
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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, operational plan, production plantactical T ning, sales and operations planning, strategic plan, tactical planning.T
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time to reliably replenish (TRR)
The time in which a part can reliably be obtained if necessary.T
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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., assemble-to-order companies such as automobile manufacturers). See: pseudo bill of material.M
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quality tree
An analytical tool that visualizes that quality is composed of four layers of achievement: (1) inspection, (2) process measurement and improvement, (3) process control, and (4) design for quality.Q
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demand rate
A statement of requirements in terms of quantity per unit of time (hour, day, week, month, etc.).D
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bin transfer
An inventory transaction to move a quantity from one valid location (bin) to another valid location (bin).B B
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stock
1) Items in inventory. 2) Stored products or service parts ready for sale, as distinguished from stores, which are usually components or raw materials.S
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earned volume
Syn: earned hours.E
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certificate of compliance
A supplier’s certification that the supplies or services in question meet specified requirements. C
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virtual trading exchange
An online trading exchange that enables both information integration and collaboration between multiple trading partners.V
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receivable, and inventory
or a long-term value (such as equipment, land, and buildings). See: balance sheet, liabilities, owner’s equity.A
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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.M
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mission statement
The company statement of purpose.M
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zone picking
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. See: batch picking, discrete order picking, order picking.Z
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GATT
Acronym for general agreement on tariffs and trade.G
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appraisal
1) An evaluation of employee performance. 2) In total quality management, the formal evaluation and audit of quality.A
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online service
The processing of transaction data as soon as the transaction occurs. It is real-time processing as opposed to batch processing. See: real time.O
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SCEM
Abbreviation for supply chain event management.S
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quantity-based order system
Syn: fixed reorder quantity inventory model.Q
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current price
The price currently being paid as opposed to standard cost.C
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process stocks
Raw ingredients or intermediates available for further processing into marketable products.P
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bullwhip effect
An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being excess. This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain. The bullwhip effect can be eliminated by synchronizing the supply chain.B
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lead-time offset
A technique used in MRP where a planned order receipt in one time period will require the release of that order in an earlier time period based on the lead time for the item. Syn: component lead-time offset, offsetting.L
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CAM
Acronym for computer-aided manufacturing.C
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core process
That unique capability that is central to a company’s competitive strategy.C
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short shipment
A situation in which a piece of freight designated by the shipping document is missing from delivery.S
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paperless purchasing
A purchasing operation that does not employ purchase requisitions or hard-copy purchase orders. In actual practice, a small amount of paperwork usually remains, normally in the form of the supplier schedule.P
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product structure
The sequence of operations that components follow during their manufacture into a product. A typical product structure would show raw material converted into fabricated components, components put together to make subassemblies, subassemblies going into assemblies, and so forth.P
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with the correct line items
must arrive on time.C
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ASQ
Abbreviation for American Society for Quality.A
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turnaround
Syn: setup.T
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composite yield
A condition where loss occurs along several operations resulting in a decreased yield for the end item. Syn: cumulative yield.C
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constant
A quantity that has a fixed value. Ant: variable.C
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lap phasing
Syn: overlapped schedule.L
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late finish date (LF)
In the critical path method of project management, the last date upon which a given activity can be completed without delaying the completion date of the project.L
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activity ratio
A financial ratio to determine how an organization’s resources perform relative to the revenue the resources produce. Activity ratios include inventory turnover, receivables conversion period, fixed-asset turnover, and return on assets.A
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factory within a factory
A technique to improve management focus and overall productivity by creating autonomous business units within a larger physical plant. Syn: plant within a plant.F
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calendar unit
The smallest unit of time in a project plan.C
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design for maintainability
Syn: design for service.D
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clock card
Syn: time card.C
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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.P
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intermediately positioned warehouse
A warehouse located between customers and manufacturing plants to provide increased customer service and reduced distribution cost.I
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order losers
Capabilities of an organization in which poor performance can cause loss of business. Failure to meet customer expectations with delivery of the product is an order loser. See: order qualifiers, order winners.O
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venture team
A set of individuals assigned outside normal channels to develop ideas for new products.V
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safety capacity
In the theory of constraints: The planned amount by which the available capacity exceeds current productive capacity. This capacity provides protection from planned activities, such as resource contention, and preventive maintenance and unplanned activities, such as resource breakdown, poor quality, rework, or lateness. Safety capacity plus productive capacity plus excess capacity is equal to 100 percent of capacity. Syn: capacity cushion. See: protective capacity.S
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ABP
Abbreviation for activity-based planning.A
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balancing operations
In repetitive just-in-time production, matching actual output cycle times of all operations to the demand or use for parts as required by final assembly and, eventually, as required by the market.B
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common-size income statement
In accounting, an income statement having values expressed as a percentage of sales rather than dollar values.C
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billing and collection costs
In transportation, the costs related to issuing invoices or bills. These amounts can be reduced by combining shipments in an order to limit transportation frequency.B
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block diagram
A diagram that shows the operations, interrelationships, and interdependencies of components in a system. Boxes, or blocks (hence the name), represent the components; connecting lines between the blocks represent interfaces. There are two types of block diagrams: (1) functional block diagrams, which show a system’s subsystems and lower level products, their interrelationships, and interfaces with other systems and (2) reliability block diagrams, which are similar to functional block diagrams except they are modified to emphasize those aspects influencing reliability. See: flowchart.B
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heel
In the process industry, an item used in the manufacture of itself. For example, in the manufacture of plastic, the ingredients will include the parent as well as the components.H
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virtual reality
Hardware and software that create an apparently real environment.V
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concurrency
Syn: resource contention.C
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frozen master production schedule
The parts of a master production schedule that should not be changed or should be changed rarely.F
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lighter
A short-haul flat-bottomed barge.L
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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 working-process 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 order for work-in-process inventory and accounting purposes; and (6) providing measurement of efficiency, utilization, and productivity of the workforce and machines. The major subfunctions for flow control are based primarily on production rates and feeding work into production to meet these planned rates, then monitoring and controlling production. See: flow control, order control, production activity control.S
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counterpurchase
When an exporter buys unrelated goods or services from an importer.C
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NAFTA
Acronym for North American Free Trade Agreement.N National Association of Purchasing Management
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producer market
Syn: industrial market.P
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computer-aided process planning (CAPP)
A method of process planning in which a computer system assists in the development of manufacturing process plans (defining operation sequences, machine and tooling requirements, cut parameters, part tolerances, inspection criteria, and other items). Artificial intelligence and classification and coding systems may be used in the generation of the process plan.C
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warranty
A commitment, either expressed or implied, that a certain fact regarding the 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 answer for the performance of a product or person. See: general warranty, guarantee, special warranty.W
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multicriteria decision models
Models that enable decision makers to evaluate various alternatives across several decision criteria.M
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credit period
The time allowed a customer to pay an invoice in full.C
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focused factory
A plant established to focus the entire manufacturing system on a limited, concise, manageable set of products, technologies, volumes, and markets precisely defined by the company’s competitive strategy, technology, and economics. See: cellular manufacturing.F
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core team
A cross-functional team of specialists formed to manage new product introduction. See: crossfunctional team.C
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mixed-model scheduling
The process of developing one or more schedules to enable mixed-model production. The goal is to achieve a day’s production each day. See: mixed-model production.M
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batch
1) A quantity scheduled to be produced or in production. See: process batch, transfer batch. 2) For discrete products, the batch is planned to be the standard batch quantity, but during production, the standard batch quantity may be broken into smaller lots. See: lot. 3) In nondiscrete products, the batch is a quantity that is planned to be produced in a given time period based on a formula or recipe that often is developed to produce a given number of end items. 4) A type of manufacturing process used to produce items with similar designs and that may cover a wide range of order volumes. Typically, items ordered are of a repeat nature, and production may be for a specific customer order or for stock replenishment. See: project manufacturing.B
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spot demand
Demand, having a short lead time, that is difficult to estimate. Usually supply for this demand is provided at a premium price.S
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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 a way that employees always have easy access.S
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supplier partner
A supplier organization with which a company has formed a customer-supplier partnership. See: outpartnering.S
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confirming order
A purchase order issued to a supplier, listing the goods or services and terms of an order placed orally or otherwise before the usual purchase document.C
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fully qualified domain name
The complete, registered address (URL) of an internet site.F
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cartel
A group of companies that agree to cooperate, rather than compete, in producing a product or service, thus limiting or regulating competition.C
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competitive advantage
The advantage a company has over its rivals in attracting customers and defending against competitors. Sources of the advantage include characteristics that a competitor cannot duplicate without substantial cost and risk, such as a manufacturing technique, brand name, or human skill set. Syn: competitive edge.C
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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.T
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product configuration catalog
A listing of all upper level configurations contained in an end-item product family. Its application is most useful when there are multiple end-item configurations in the same product family. It is used to provide a transition linkage between the enditem level and a two-level master production schedule. It also provides a correlation between the various units of upper level product definition.P
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contract carrier
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.C C
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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 during which a product can be produced and marketed profitably.P
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public key
In 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.P
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accounts payable
The value of goods and services acquired for which payment has not yet been made.A
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net assets
Total assets minus total liabilities.N
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movement inventory
A type of in-process inventory that arises because of the time required to move goods from one place to another.M
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kanban
A method of just-in-time production that uses standard containers or lot sizes with a single card attached to each. It is a pull system in which work centers signal with a card that they wish to withdraw parts from feeding operations or suppliers. The Japanese word kanban, loosely translated, means card, billboard, or sign but other signaling devices such as colored golf balls have also been used. The term is often used synonymously for the specific scheduling system developed and used by the Toyota Corporation in Japan. See: move card, production card, synchronized production.K
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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.P
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nationalization
public ownership and operation of a business enterprise.N
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checklist
A tool used to ensure that important steps or actions in an operation have been taken. Checklists contain items that are important or relevant to an issue or situation.C
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forecast
An estimate of future demand. A forecast can be constructed using quantitative methods, qualitative methods, or a combination of methods, and it can be based on extrinsic (external) or intrinsic (internal) factors. Various forecasting techniques attempt to predict one or more of the four components of demand: cyclical, random, seasonal, and trend. Syn: sales forecast. See: Box-Jenkins model, exponential smoothing forecast, extrinsic forecasting method, intrinsic forecasting method, moving average forecast, qualitative forecasting method, quantitative forecasting method.F
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nervousness
The characteristic in an MRP system when minor changes in higher level (e.g., level 0 or 1) records or the master production schedule cause significant timing or quantity changes in lower level (e.g., level 5 or 6) schedules and orders. Syn: system nervousness.N
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gross weight
Vehicle weight including freight or passengers.G
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synchronous manufacturing
Syn: synchronized production.S
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engineering characteristics
The technical features designed into a product.E
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focus forecasting
A system that allows the user to simulate the effectiveness of numerous forecasting techniques, enabling selection of the most effective one.F
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netting
The process of calculating net requirements.N
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capacity planning
The process of determining the amount of capacity required to produce in the future. This process may be performed at an aggregate or product-line level (resource requirements planning), at the master-scheduling level (rough-cut capacity planning), and at the material requirements planning level (capacity requirements planning). See: capacity requirements planning, resource planning, rough-cut capacity planning.C
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TCO
Abbreviation for total cost of ownership.T
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multilinear regression analysis
Model used for forecasting with more than one independent variable.M
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startup costs
The extra operating costs to bring the plant or product on-stream 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, post-startup monitoring, and associated overhead. Additional capital required to correct plant problems may be included. Startup costs are sometimes capitalized.S
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liquidity ratio
Financial ratios that are indicators of a firm’s ability to retire short-term financial obligations.L
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rejected inventory
Inventory that does not meet quality requirements but has not yet been sent to rework, scrapped, or returned to a supplier.R
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negotiation
The process by which a buyer and a supplier agree upon the conditions surrounding the purchase of an item or a service.N
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fixed-interval review system
A hybrid inventory system in which the inventory analyst reviews the inventory position at fixed time periods. If the inventory level is found to be above a preset reorder point, no action is taken. If the inventory level is at or below the reorder point, the analyst orders a variable quantity equal to M – x where M is a maximum stock level and x is the current quantity on hand and on order (if any). This hybrid system does not reorder every review interval. It therefore differs from the fixed-interval order system, which F automatically places an order whenever inventory is reviewed.F
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production process
The activities involved in converting inputs into finished goods. See: manufacturing process, transformation process.P
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CLIN
Abbreviation for contract line items number.C
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advance material request
Ordering materials before the release of the formal product design. This early release is required because of long lead times.A
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aggregate demand
Demand that is grouped (e.g., all sedans) for making forecasts or plans. See: aggregate forecast.A
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cumulative sum
The accumulated total of all forecast errors, both positive and negative. This sum will approach zero if the forecast is unbiased. Syn: sum of deviations.C
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priority
In 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.P
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supply chain network design systems
Systems created among all members of the supply chain in order to get all members on the same page and with the same goals in order to promote efficiency.S
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calibration
The comparison of a measurement instrument or system of unverified accuracy with a measurement instrument or system of a known accuracy to detect any variation from the required performance specification.C
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consumable tooling, supplies
Syn: consumables.C
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forensic procurement
Analyzing root cause-and-effect troubleshooting.F
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aggregate inventory
The inventory for any grouping of items or products involving multiple stockkeeping units. See: base inventory level.A
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reliability engineering
The function responsible for the determination and application of appropriate reliability tasks and criteria during the design, development, manufacture, test, and support of a product that will result in achieving of the specified product reliability.R
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viral marketing
An advertisement that is embedded into web-based technology, e.g., email or pop-up ads, that can easily move through the internet and get in front of the target audience who may never have seen it otherwise.V
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cross-subsidy
In activity-based cost accounting, the situation of assigning too much or too little cost to a cost object. This may lead to poor decision making relative to the economic goals of the organization.C
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available time
The number of hours a work center can be used, based on management decisions regarding shift structure, extra shifts, regular overtime, observance of weekends and public holidays, shutdowns, and the like. See: capacity available, utilization.A
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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.S
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usage
The number of units or dollars of an inventory item consumed over a period of time.U
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alpha factor
Syn: smoothing constant.A
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processing (DDP)
A data processing organizational concept under which computer resources of a company are installed at more than one location with appropriate communication links. Processing is performed at the user’s location generally on a smaller computer and under the user’s control and scheduling, as opposed to processing for all users being done on a large, centralized computer system.D
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dedicated line
A production line permanently configured to run well-defined parts, one piece at a time, from station to station.D
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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.S
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LBO
Abbreviation for leveraged buyout.L
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running sum of forecast errors
The arithmetic sum of the differences between actual and forecasted demand for the periods being evaluated.R
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frequency distribution
A table that indicates the frequency with which data fall into each of any number of subdivisions of the variable. The subdivisions are usually called classes.F
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Products are divided as follows: (1) Cash cows
high
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time buffer
Protection against uncertainty that takes the form of time.T
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equipment class
A means to describe a group of equipment with similar characteristics for purposes of planning and scheduling.E
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flow time efficiency
The ratio of theoretical flow time to the actual flow time through a process.F
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material requirements plan
The result from the process of material requirements planning.M
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imports
Products bought in one country and produced in another.I
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material definition
A definition of the properties and characteristics of a substance. material-dominated
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market value-added
In financial management, the surplus of a firm’s equity over the capital that has been invested in the firm.M
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dunnage
The packing material used to protect a product from damage during transport.D
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advanced production system (APS)
Syn: advanced planning and scheduling.A
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random cause
Syn: common causes.R
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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.P
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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.M
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Equal Employment Opportunity Commission (EEOC)
An administrative agency in the United States that oversees Title VII of the Civil Rights Act, which prohibits employment discrimination based on race, color, religion, sex, or national origin.E
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activity duration
The planned difference between the start and finish dates of a project activity.A
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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.L
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dispute resolution
The process of arbitration or mediation to settle arguments without going to court.D
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intangible costs
Those costs that are difficult to quantify such as the cost of poor quality or of high employee turnover.I
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excess capacity
Capacity that is not used to either produce or protect the creation of throughput.E
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reach
The percentage of target customers who receive an advertising message.R
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LTT
Abbreviation for longest-task-time.L
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in-control process
A process in which the statistical measure being evaluated is 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: out-of-control process.I
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risk breakdown structure
A tool that helps identify potential project risks, organized by risk categories and subcategories.R
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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.O
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par level
In service operations, the maximum supply volume based on established quotas from previous use for a particular supply item, in a particular department, for a specified time period.P
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fixed-location storage
A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. Although more space is needed to store parts than in a randomlocation storage system, fixed locations become familiar, and therefore a locator file may not be needed. See: random-location storage.F
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capital budgeting
Actions relating to the planning and financing of capital outlays for such purposes as the purchase of new equipment, the introduction of new product lines, and the modernization of plant facilities.C
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dispatching
The selecting and sequencing of available jobs to be run at individual workstations and the assignment of those jobs to workers.D
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planner
Syn: material planner.P
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capital-intensive
A situation in which the largest expenditure in an operation is capital as opposed to labor. See: labor-intensive.C
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job status
A periodic report showing the plan for completing a job (usually the requirements and completion date) and the progress of the job against that plan.J
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enterprise resources management
The planning, execution, control, and measurement functions required to effectively operate an enterprise.E
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distributed inventory
Maintaining inventory in a variety of locations to provide better customer service.D
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absorption costing
An approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit of production. The fixed costs are usually allocated to units of output on the basis of direct labor hours, machine hours, or material costs. Syn: allocation costing. See: activity-based costing.A
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capital recovery
1) Charging periodically to operations amounts that will ultimately equal the amount of capital expenditure. See: amortization, depletion, depreciation. 2) The replacement of the original cost of an asset plus interest. 3) The process of regaining the net investment in a project by means of revenue in excess of the cost from the project. (Usually implies amortization of principal plus interest on the diminishing unrecovered balance.)C
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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.P
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annualized contract
A negotiated agreement with a supplier for one year that sets pricing, helps ensure a continuous supply of material, and provides the supplier with estimated future requirements.A
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semiworks
Syn: pilot plant.S
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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.P
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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.M
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semiprocess flow
A manufacturing configuration in which most jobs go through the same sequence of operations even though production is in job lots.S
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projection
Syn: extrapolation.P
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churn
The process of customers changing their buying preferences because they find better and/or cheaper products and services elsewhere. The internet makes it easy for customers to shop electronically in search of a better deal.C
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and response
quality without sacrificing quantity objectives. The types of metrics are financial, behavioral, and core-process performance.L
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experimental design
A formal plan that details the specifics for conducting an experiment, such as which statistical techniques and responses, factors, levels, blocks, and treatments, are to be used.E
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environmentally responsible purchasing
Syn: responsible procurement.E
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functional organization
A hierarchical organization in which each individual has one clear superior and staff areas are well defined.F G
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define phase
A step in the six sigma DMAIC process in which project goals and customer deliverables are identified. See: design-measure-analyze-improve-control process.D
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general warehouse
A location where goods usually are stored for long periods of time. The primary purpose is to protect goods until they are needed. The general warehouse is used because the producer or owner either does not have the necessary warehouse space or the cost of storage is better off-site. Usually use of a general warehouse involves minimal handling, movement, and transportation.G
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substitutability
When a buyer can purchase similar products from different suppliers. This increases the buyer’s power as the buyer doesn’t have to rely on just one supplier.S
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empowerment
A condition whereby employees have the authority to make decisions and take action in their work areas without prior approval. For example, an operator can stop a production process if a problem is detected, or a customer service representative can send out a replacement product if a customer calls with a problem.E
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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.T
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BOM
Abbreviation for bill of material.B
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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.O
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distribution center
A location 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.D
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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.L
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muri
A Japanese word meaning strain or overburden.M
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bottom-up estimating
A method of estimation that involves disaggregating a piece of work into components, estimating each component requirement, and adding the resulting times and/or costs to arrive at the estimate for the whole.B
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productive inventory
In the theory of constraints: The inventory required to meet production requirements without allowance for unplanned delays. See: idle inventory, protective inventory.P
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tracking signal
The ratio of the 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.T
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knowledge worker
A worker whose job is the accumulation, transfer, validation, analysis, and creation of information. K
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cash conversion cycle
1) In retailing, the length of time between the sale of products and the cash payments for a company’s resources. 2) In manufacturing, the length of time from the purchase of raw materials to the collection of accounts receivable from customers for the sale of products or services.C
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seasonal index
A number used to adjust data to seasonal demand. Syn: seasonal adjustment. See: base series.S
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partial order
Any shipment received or shipped that is less than the amount ordered.P
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MTM
Abbreviation for methods-time measurement.M
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customer service level
Syn: customer service ratio.C
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physical supply
The movement and storage of goods from suppliers to manufacturing. The cost of physical supply is ultimately passed on to the customer.P
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institutional market
A market in which most or all customers are one of the following: schools, hospitals, prisinstruction I ons, and other institutions that provide products and services to individuals who are under their care. See: consumer market, government market, industrial market.I
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many-to-many communication
Communication that enables many people to exchange information with many other people.M
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gap
When the actual performance level is not equal to the expected performance level.G
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intellectual property
Various legal entitlements that attach to certain names, written and recorded media, and inventions.I
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aggregate planning
A process to develop tactical plans to support the organization’s business plan. Aggregate planning usually includes the development, analysis, and maintenance of plans for total sales, total production, targeted inventory, and targeted customer backlog for families of products. The production plan is the result of the aggregate planning process. Two approaches to aggregate planning exist: (1) production planning and (2) sales and operations planning. See: production planning, sales and operations planning, sales plan.A
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heijunka
In just-in-time philosophy, an approach to level production throughout the supply chain to match the planned rate of end product sales.H
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group decision support system (GDSS)
The software designed to support groups in unstructured decision making by supporting brainstorming, conflict resolution, voting, and other techniques.G
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misguided capacity plans
Plans for capacity utilization that are based on erroneous data or assumptions.M
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single-card kanban system
Syn: one-card kanban system.S
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CAD/CAM
The integration of computer-aided design and computer-aided manufacturing to achieve automation from design through manufacturing.C
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nonconformity
Failure to fulfill a specified requirement. See: blemish, defect, imperfection.N
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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.P
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simultaneous engineering
Syn: participative design/ engineering.S
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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.L
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fixed overhead
Traditionally, all manufacturing costs
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basic producer
A manufacturer that uses natural resources to produce materials for other manufacturing. A typical example is a steel company that processes iron ore and produces steel ingots; other examples are companies that make wood pulp, glass, and rubber.B
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materials
The components that are processed by an operation.M
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CSR
Abbreviation for customer service representative.C
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divergent point
An operation in a production process in which a single material/component enters and, after processing, can then be routed to a number of different downstream operations.D
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degrees of freedom
A statistical term indicating the number of variables or data points used for testing a relationship. The greater the degrees of freedom, the greater the confidence that can be placed on the statistical significance of the results.D
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European Union (EU)
An economic and political union of European countries, created to strengthen economies and lower trade barriers.E
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CMI
Abbreviation for co-managed inventory.C
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influence filter
In e-commerce, a device to make stakeholders better satisfied with a website.I
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coefficient of determination
Used to measure the expected accuracy of a forecast; measures the variation in one variable due to a different variable.C
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buying capacity
Syn: capacity buying.B
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stop sequence
A loading procedure in which the first stop is loaded last.S
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routing sheet
Syn: routing.R
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service level
Syn: level of service.S
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part record
Syn: item record.P
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EF
Abbreviation for early finish date.E
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4PL
Abbreviation for fourth-party logistics.F
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risk analysis
A review of the uncertainty associated with the research, development, and production of a product, service, or project.R
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involuntary services
Services that are not sought by customers. These include hospitals and prisons.I
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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.R
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capability study
Syn: process capability analysis.C
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kaizen event
A time-boxed set of activities carried out by the cell team during the week of cell implementation. The kaizen event is an implementation arm of a lean manufacturing program. See: kaizen blitz.K
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stockout
A lack of materials, components, or finished goods that are needed. See: backorder.S
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receiving point
The location to which material is being shipped. Ant: shipping point.R
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reprocessed material
Goods that have gone through selective rework or recycle.R
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bottom-up replanning
In MRP, the process of using pegging data to solve material availability or other problems. This process is accomplished by the planner (not the computer system), who evaluates the effects of possible solutions. Potential solutions include compressing lead time, cutting order quantity, substituting material, and changing the master schedule.B
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processor-dominated scheduling
A technique that schedules equipment (processor) before materials. This technique facilitates scheduling equipment in economic run lengths and the use of low-cost production sequences. This scheduling method is used in some process industries. See: material-dominated scheduling.P
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supply chain community
The set of trading partners and nominal trading partners that define a complete supply chain.S
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finished good
Syn: end item.F
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employee involvement (EI)
The concept of using the experience, creative energy, and intelligence of all employees by treating them with respect, keeping them informed, and including them and their ideas in decision-making processes appropriate to their areas of expertise. Employee involvement focuses on quality and productivity improvements. Syn: people involvement.E
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stabilization stock
An inventory that is carried on hand above the base inventory level to provide protection against incurring overtime or downtime.S
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material yield
Syn: yield.M
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bid pricing
Offering a specific price for each job rather than setting a standard price that applies for all customers.B
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rope
One of the three devices required for proper management of operations. (The other two are drum and buffer.) The rope is the information flow from the drum to the front of the line (material release), which chokes the release of materials to match the flow through the constraint.R
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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. This time is used in determining machine requirements and labor requirements. Standard time assumes an average worker following prescribed methods and allows time for personal rest to overcome fatigue and unavoidable delays. It is 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.S
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blanket rate
A rate that does not depend on the distance cargo is transported.B
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nonrecurring material
Tooling, gauges, and facilities necessary in the manufacturing of the final product and not consumed during manufacturing or shipped with the final product.N
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stockout percentage
A measure of the effectiveness with which a company responds to actual demand or requirements. The stockout percentage can be a measurement 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.S
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fault tolerance
The ability of a system to avoid or minimize the disruptive effects of defects by using some form of redundancy or extra design margins.F
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consignee
The receiver of a shipment of freight.C
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issue cycle time
The time required to generate a requisition for material, pull the material from an inventory location, and move it to its destination.I
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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.S
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direct delivery
The consignment of goods directly from the supplier to the buyer, frequently used where a third party acts as intermediary between supplier and buyer.D
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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, and (5) evaluation of the pros and cons of each option within the organization’s objectives and feasibility, (6) implementation of the solution selected.S
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adjudicate
To hear and decide an issue under legal dispute.A
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LCL
1) Abbreviation for less than carload (lot shipment). 2) Abbreviation for lower control limit.L
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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, what would be the effect on net income if variable costs of production increased 20 percent?S
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book inventory
An accounting definition of inventory units or value obtained from perpetual inventory records rather than by actual count.B
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lead-time inventory
Inventory that is carried to cover demand during the lead time.L
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SRM
Abbreviation for supplier relationship management.S
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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.P
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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. Syn: principle of postponement. See: booked orders.O
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market targeting
The process of developing measurements of the desirability of given market segments and deciding in which market segments to compete.M
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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 recording the movement and identification of the location where the material has been placed.P
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ABC classification
The classification of a group of items in decreasing order of annual dollar volume (price multiplied by projected volume) or other criteria. This array is then split into three classes, called A, B, and C. The A group usually represents 10 percent to 20 percent by number of items and 50 percent to 70 percent by projected dollar volume. The next grouping, B, usually represents about 20 percent of the items and about 20 percent of the dollar volume. The C class contains 60 percent to 70 percent of the items and represents about 10 percent to 30 percent of the dollar volume. The ABC principle states that effort and money can be saved through applying looser controls to the low-dollarvolume class items than will be applied to high-dollarvolume class items. The ABC principle is applicable to inventories, purchasing, sales, and so on. Syn: ABC analysis, distribution by value. See: 80-20, Pareto analysis, Pareto’s law.A
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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. This is in contrast to a functional organization in which the activities that make up the process are performed by people in multiple functionally oriented departments.P
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fixed budget
A budget of expected costs based on a specific level of production or other activity.F
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queue ratio
The ratio of the hours of slack within the job to the queue originally scheduled.Q
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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.M
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metrics
Syn: performance measurement system.M
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hypertext markup language (HTML)
A language used to create web pages that permits the user to create text, hypertext links, and multimedia elements within the page. HTML is not a programming language, but a way to format text.H
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finish-to-finish
In project management, a network requirement that activity A must be finished before subsequent activity B can finish. See: logical relationship.F
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electronic signature
An authentication that validates a transaction by means of an authorization code to identify an individual or group.E
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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, in-process inventory and lead times continue to grow.R
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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 for the product, sometimes expressed as a percentage of selling price.P
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everyday low prices (EDLP)
A retail strategy of keeping prices low across all products or services as opposed to having sales at certain times.E
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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.O P
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flowchart
The output of a flowcharting process, a chart that shows the operations, transportation, storages, delays, inspections, and so on related to a process. Flowcharts are drawn to better understand processes. The flowchart is one of the seven tools of quality. Syn: flow diagram. See: block diagram, flow process chart.F
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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 sum to 100 percent for all categories. See: categorical plan.W W
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certified fixtures
The inspection models that conform to known specifications.C Certified in Integrated Resource Management (CIRM) The APICS designation that is a recognition of a high level of professional knowledge in enterprise-wide processes and activities.C Certified in Production and Inventory Management
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withdrawal kanban
An indicator that a container can be transported between work areas.W
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fixed property
Property attached to, and not easily removed from, the location.F
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EOQ
Abbreviation for economic order quantity.E
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over, short, and damaged (OS&D) report
A report submitted by a freight agent showing discrepancies in billing received and actual merchandise received.O
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vital few, useful many
A term used by J.M. Juran to describe his use of the 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.”V
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lot-size system
Syn: fixed reorder quantity inventory model.L
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request for quote (RFQ)
A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors.R
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dumping
Selling goods below costs in selected markets.D E
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first-order smoothing
A single exponential smoothing; a weighted moving average approach that is applied to forecasting problems where the data do not exhibit significant trend or seasonal patterns. Syn: single exponential smoothing, single smoothing.F
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knowledge management tool
Provides an assortment of information quickly to stakeholders for faster and better decisions.K
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cost analysis
A review and an evaluation of actual or anticipated cost data.C
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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.S
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exports
Products produced in one country and sold in another.E
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order policy
A set of procedures for determining the lot size and other parameters related to an order. See: lot sizing.O O
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changeover flexibility
Syn: setup flexibility.C
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private trading exchange (PTX)
A trade exchange hosted by a single company to facilitate collaborative ecommerce with its trading partners. As opposed to public e-marketplaces, 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. P
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market share
The actual portion of current market demand that a company or product achieves.M
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master planning of resources
A grouping of business processes that includes the following activities: demand management, which includes the forecasting of sales, the planning of distribution, and the servicing of customer orders; sales and operations planning, which includes sales planning, production planning, inventory planning, backlog planning, and resource planning; master scheduling, which includes the preparation of the master production schedule and the rough-cut capacity plan.M
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assurance
One of the dimensions of service quality. The ability of employees to inspire trust and confidence.A
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inspection
Measuring, examining, testing, or gauging one or more characteristics of a good or service and comparing the results with specified requirements to determine whether conformity is achieved for each characteristic. I
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assured source of supply
A guaranteed supply source generally created by a contract.A
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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.S
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DRP II
Abbreviation for distribution resource planning.D
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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.V
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product and market focus
Developing products based on dimensions like service to similar customers, volume, or customization.P
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distribution resource planning (DRP II)
The extension of distribution requirements planning into the planning of the key resources contained in a distribution system (warehouse space, workforce, money, trucks, freight cars, etc).D
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finishing lead time
1) The time that is necessary to finish manufacturing a good after receipt of a customer order. 2) The time allowed for completing the good based on the final assembly schedule.F
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linear trend forecasting
Using simple linear regression to estimate future trends.L
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critical chain
The longest sequence of dependent events through a project network, considering both technical and resource dependencies in completing the project. The critical chain is the constraint of a project.C
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visits
In e-commerce, 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.V
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vendor lead time
Syn: supplier lead time.V
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brand name
A word or combination of words used to identify a product and differentiate it from other prodbrand B ucts; the verbal part of a trademark, in contrast to the pictorial mark; a trademark word.B
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flatcar
A railroad car without sides used for hauling machinery.F
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failsafe techniques
Syn: failsafe work methods, pokayoke. F
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global supply chains
Supply chains that include international partners or markets.G
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Monte Carlo simulation
A subset of digital simulation models based on random or stochastic processes.M
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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 are enabling companies to identify and focus on more likely candidates.T
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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.S
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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.R
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virtual cell
A logical rather than 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.V
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management
The functions of planning, organizing, and controlling the transformation process and its utility in providing a good or service to customers.M
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strategy
The strategy of an enterprise identifies how a company will function in its environment. The strategy specifies how to satisfy customers, how to grow the business, how to compete in its environment, how to manage the organization and develop capabilities within the business, and how to achieve financial objectives. See: strategic plan.S
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flexibility responsiveness
The ability of the firm and its management to change rapidly in response to changes taking place in the marketplace.F
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formulation
Syn: formula.F
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generally accepted manufacturing practices (GAMP)
A group of practices and principles, independent of any one set of techniques, that define how a manufacturing company should be managed. Included are such elements as the need for data accuracy, frequent communication between marketing and manufacturing, top management control of the production planning process (sales and operations planning process), systems capable of validly translating high-level plans into detailed schedules, and so on. Today GAMP includes such paradigms as just-in-time, theory of constraints, total quality management, business process reengineering, and supply chain management.G
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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 supplier footprint transition plan for consolidated leverage, supply-base reduction, and focused effort.S supplier-input-process-output-customer (SIPOC)
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upper control limit (UCL)
Control limit for points above the central line in a control chart.U
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market reach
Syn: market penetration.M
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pilot order
Syn: experimental order.P
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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. This definition of service industry 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.S
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tolerance stack up
When two or more components, all within tolerance limits but some distance from the specification itself, are assembled together the assembly may be subject to early failure because of the interaction between the components.T
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invoice
A list of goods shipped by the supplier to the buyer stating prices, quantities, and other costs.I
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newsvendor problem
A problem inventory management dealing with determining the single period (e.g., day or week) order quantity which will minimize the cost of sometimes having too much inventory and sometimes having too little.N
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job rotation
The practice of an employee periodically changing job responsibilities to provide a broader perspective and a view of the organization as a total system, to enhance motivation, and to provide cross-training.J
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C.P.M.
Abbreviation for Certified Purchasing Manager.C
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live load
Syn: available work.L
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authentication
In information systems, the act of identifying a person or confirming the source of a message.A
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CASE
Acronym for computer-assisted software engineering.C
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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.M
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major components: (1) quality of conformance
quality is defined by the absence of defects, and (2) quality of
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accessorial charges
A bill for services, such as inside deliveries, which are made in addition to transportation charges.A
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distribution network structure
The planned channels of inventory disbursement from one or more sources to field warehouses and ultimately to the customer. There may be one or more levels in the disbursement system. Syn: bill of distribution.D
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server address
The internet address of a server.S
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interrogate
Retrieve information from computer files by use of predefined inquiries or unstructured queries handled by a high-level retrieval language.I
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product grade
The categorization of goods based upon the range of specifications met during the manufacturing process.P
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quantity discount
A price reduction allowance determined by the quantity or value of a purchase.Q
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classification
The designation of the job function that
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double-sampling plan
A way to control quality by taking one sample and making an accept or reject decision, and, if the decision cannot be made, taking a second sample and making the accept or reject decision by combining the results of both samples.D
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common cost
A cost that is incurred by the business as a whole.C
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negligence
The causing of injury to another by failure to use reasonable care.N
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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.P
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cost-type contract
Syn: cost-plus contract.C
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EI
Abbreviation for employee involvement.E
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EOQ tables
Tables listing several ranges of monthly usages in dollars and the appropriate order size in dollars or monthly usage for each usage range.E
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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 that is well cared for will last longer and cause fewer problems. Syn: periodic maintenance.P
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equal protection clause
A part of the Fourteenth Amendment to the U.S. Constitution requiring similar treatment of citizens in similar circumstances.E
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consignment
1) A shipment that is handled by a common carrier. 2) The process of a supplier placing goods at a customer location without receiving payment until after the goods are used or sold. See: consigned stocks.C
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NC
Abbreviation for numerical control.N
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hybrid inventory system
An inventory system combining features of the fixed reorder quantity inventory model and the fixed reorder cycle inventory model. Features of the fixed reorder cycle inventory model and the fixed reorder quantity inventory model can be combined in many different ways. For example, in the order pointperiodic review combination system, an order is placed if the inventory level drops below a specified level before the review date; if not, the order quantity is determined at the next review date. Another hybrid inventory system is the optional replenishment model. See: fixed reorder cycle inventory model, fixed reorder quantity inventory model, optional replenishment model, order point system.H
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truckload lot
A truck shipment that qualifies for a lower freight rate because it meets a minimum weight and/or volume.T
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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.O
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stockkeeping unit (SKU)
1) An inventory item. For example, a shirt in six colors and five sizes would represent 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.S
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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 vis-à-vis similar business units made and marketed by competitors. The units are evaluated in terms of their competitive strengths, their relative advantages, life cycles, and cash flow patterns.S
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manufacturing order
A document, group of documents, or schedule conveying authority for the manufacture of specified parts or products in specified quantities. Syn: M job order, manufacturing authorization, production order, production release, run order, shop order, work order. See: assembly parts list, batch card, blend order, fabrication order, mix ticket, work order.M
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machine attachments
Additional machine parts that decrease the time needed to complete a task and the level of human involvement.M
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concept phase
In project management, the first phase in which a project is defined and the scope is planned.C
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implied warranty
A warranty imposed on sellers beyond any express agreement in the contract.I
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lean production
A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. It involves identifying and eliminating non-value-adding activities in design, production, supply L 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. It 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.L
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Supply Chain Operations Reference (SCOR®) model
A process reference model developed and endorsed by the Supply Chain Council as the cross-industry, standard 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 of the 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 Supply Chain Council members have formed industry groups to collect best practices information that companies can use to evaluate their supply chain performance.S
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carrier
A company that provides air, sea, or land transportation services.C
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e-cash
An electronic system that provides for deposits and withdrawals of digital money. It permits a payer using it to remain anonymous.E
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aggregate forecast
An estimate of sales, often timephased, for a grouping of products or product families produced by a facility or firm. Stated in terms of units, dollars, or both, the aggregate forecast is used for sales and production planning (or for sales and operations planning) purposes. See: product group forecast.A
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distinctive competency
A sustainable advantage that a company has over its competitors. distributed data
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capacity smoothing
Syn: load leveling.C
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flowcharting
A systems analysis tool that graphically presents a procedure. Symbols are used to represent operations, transportations, inspections, storages, delays, and equipment.F
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project phase
In project management, a set of related project activities that usually go together to define a project deliverable.P
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push-back rack
Palletized materials are stored on a wheeled rack structure and pushed up a slightly sloping ramp from which they can eventually slide down to an aisle.P
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bar graph
A graphical method of displaying data by grouping observations into specific clusters.B
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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.M
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downgrade
The substitution of a product of lower quality, value, or status for another either in planning or in fact.D
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flatbed
A type of truck trailer that has a floor but no enclosure. Sideboards or tie-downs are used to prevent cargo from falling off.F
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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 in which customer complaints and questions are answered, following up with customers after the sale to ensure satisfaction, and offering on-site service for product repairs. 4) Measure of repairs and maintenance based on cost, speed, and convenience.S
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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.M
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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.P
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repair parts demand
Syn: service parts demand.R
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product tree
A graphical (or tree) representation of the bill of material such as is shown below: A Parent | ______________________ | | | B C(2) D(5) Components (Quantities per parent)P
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plan stability
The percent difference between the production that was 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.P
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design for manufacturability
Simplification of parts, products, and processes to improve quality and reduce manufacturing costs.D
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I/O
Abbreviation for input/output control.I
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APICS
Founded in 1957 as the American Production Operations Management builds operations management excellence in individuals and enterprises through superior education and training, internationally recognized certifications, comprehensive resources, and a worldwide network of accomplished industry professionals.A
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sales mix
The proportion of individual product-type sales volumes that make up the total sales volume.S
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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).U
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technologies
The terms, concepts, philosophies, hardware, software, and other attributes used in a field, industrial sector, or business function.T
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genchi genbutsu
A Japanese phrase meaning visit the shop floor to observe what is occurring.G
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Boolean algebra
A form of algebra that, like ordinary algebra, represents relationships and properties with symbols. However, Boolean algebra also has classes, propositions, on-off circuit elements, and operators (and, or, not, except, if, then). Boolean algebra is useful in defining the logic of a complex system.B
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process time
The time during which the material is being changed, whether it is a machining operation or an assembly. Syn: residence time.P
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duty-free zone
An area where merchandise is brought into the country for further work to be done. Duty is paid only on the items brought in, normally at a lower rate than finished goods, and paid only at the time of sale.D
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program directive
A report by the program manager to inform supporting departments concerning an active or planned program or project.P
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appraisal costs
Those costs associated with the formal evaluation and audit of quality in the firm. Typical costs include inspection, quality audits, testing, calibration, and checking time.A
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COTD
Abbreviation for complete and on-time delivery.C
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business process
A set of logically related tasks or activities performed to achieve a defined business outcome.B
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cycle inventory
Syn: cycle stock.C
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allocative efficiency
The use of resources to produce those goods and services most wanted by consumers.A
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capacity management
The function of establishing, measuring, monitoring, and adjusting limits or levels of capacity in order to execute all manufacturing schedules (i.e., the production plan, master production schedule, material requirements plan, and dispatch list). Capacity management is executed at four levels: resource requirements planning, rough-cut capacity planning, capacity requirements planning, and input/output control.C
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process list
A list of operations and procedures in the manufacture of a product. It may also include a statement of material requirements.P
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silo effect
A departmental organization with poor communication between departments.S
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customer service
1) The ability of a company to address the needs, inquiries, and requests from customers. 2) A measure of the delivery of a product to the customer at the time the customer specified.C
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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.S
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functionality
The degree to which a product achieves its designed purpose.F
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manufacturing capital asset value
The depreciated value of manufacturing fixed assets.M
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FOB
Abbreviation for free on board.F
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prerequisite tree (PRT)
A necessity-based logic diagram that facilitates answering the third question in the change sequence: How do we effect the change? A PRT shows the relationship between the injections, desirable effects or ambitious target, and the obstacles that block the implementation of the injections. A PRT includes the intermediate objectives required to overcome the obstacles and shows the sequence in which they must be achieved for successful implementation.P
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big data
A collection of data and technology that accesses, integrates, and reports all available data by filbig B tering, correlating, and reporting insights not attainable with past data technologies. It describes data processing beyond the human scale. In the past, databases
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product specification
A statement of acceptable physical, electrical, and/or chemical properties or an acceptable range of properties that distinguish one product or grade from another.P
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no-touch exchange of dies (NTED)
The exchange of dies without human intervention.N
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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.S
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search models
Operations research models that attempt to find optimal solutions with adaptive searching approaches.S
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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.S
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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. Syn: workload.L
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scheduled start date
In 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
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pay for knowledge
A pay restructuring scheme by which competent employees are rewarded for the knowledge they acquire before or while working for an organization, regardless of whether such knowledge is actually being used at any given time.P
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administrative contracting officer
A government employee who ensures compliance with the terms and conditions of contracts.A
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manufacturing ramp-up
The final phase of new product and process development, whereby the new product moves from pilot production to full-scale manufacturing.M
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labor
The people who produce value in a product stream.L
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OEM
Abbreviation for original equipment manufacturer.O
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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.N
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GERT
Acronym for graphical evaluation and review technique.G
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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.P
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vertical marketing system
A marketing system that focuses on the means to reduce the traditional independence of indirect channels. The system strategically seeks to increase the integration and interdependence of channels by uniting them with common objectives and team management (e.g., franchising, cooperatives, vertical integration).V
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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.S
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engineer-to-order
Products whose customer specifications require unique engineering design, significant customization, or new purchased materials. Each customer order results in a unique set of part numbers, bills of material, and routings. Syn: design-to-order.E
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horizontal marketplace
An online marketplace used by buyers and sellers from multiple industries. This marketplace lowers prices by lowering transaction costs.H
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dimensions of quality
An aspect of quality that is specified to enhance the ability to define quality. The most commonly used list for products was created by David Garvin. His dimensions are aesthetics, conformance, durability, features, perceived quality, performance, reliability, and serviceability. The most commonly used list for service quality was created by Parasuraman, Zeithamel, and Berry. This list is assurance, availability, completeness, empathy, pleasantness, professionalism, responsiveness, service reliability, tangibles, and timeliness.D
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plant layout
Configuration of the plant site with lines, buildings, major facilities, work areas, aisles, and other pertinent data, such as department boundaries.P
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automated flow line
A production line that has machines linked by automated parts transfer and handling machines.A
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Baldrige Award
Syn: Malcolm Baldrige National Quality Award.B
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economy of scope
Using one versatile plant to produce many different products at a lower cost than making each product in different plants at a higher cost. See: economy of scale.E
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intrinsic forecast method
A forecast based on internal factors, such as an average of past sales. Ant: extrinsic forecast.I
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electronic product codes (EPCs)
Codes that are used with RFID tags to carry information on the product that will support warranty programs.E
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early manufacturing involvement
The process of involving manufacturing personnel early in the product design activity and drawing on their expertise, insights, and knowledge to generate better designs in less time and to generate designs that are easier to manufacture. Early involvement of manufacturing, field service, suppliers, customers, and so on means drawing on their expertise, knowledge, and insight to improve the design. Benefits include increased functionality, increased quality, ease of manufacture and assembly, ease of testing, better testing procedures, ease of service, decreased cost, and improved aesthetics. See: design for manufacture and assembly, participative design/engineering.E
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operational plan(s)
The set of short-range plans and schedules detailing specific actions. Operational plans are more detailed than strategic and tactical plans and cover a shorter time horizon. See: operational planning, strategic plan, tactical plan.O
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skills matrix
A visual tool to show the skills/skill levels of employees. This is mostly used when forming a team so the leader knows what skills are necessary to accomplish the team’s goals. This also is used when using a full-cross training process to ensure that all workers are cross trained to the same levels.S
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fishbone chart
Syn: cause-and-effect diagram.F
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expressed for a given time period
such as, per month, week, day, or even minute. If the goal units are money, throughput will be an amount of money per time period. In that case, throughput is calculated as revenues received minus totally variable costs divided for the chosen time period.T
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cumulative MRP
The planning of parts and subassemblies by exploding a master schedule, as in MRP, except that the master-scheduled items and therefore the exploded requirements are time phased in cumulative form. Usually these cumulative figures cover a planning year.C
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truckload carriers
Carriers that deliver/charge only for full truckload shipments.T
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job order costing
Syn: job costing.J
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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.P
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durability
1) A measurement of time or amount of use before a product needs repair or replacement. 2) One of the eight dimensions of quality that refers to the length of a product’s economic life.D
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reconsignment
Permission by a carrier to alter the destination and/or consignee after the shipment has reached its original destination.R
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product positioning
The marketing effort involved in placing a product in a market to serve a particular niche or function. Syn: service positioning.P
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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, process-focused organization.P
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Bayesian analysis
Statistical analysis where uncertainty is incorporated, using all available information to choose among a number of alternative decisions.B
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constraint theory
Syn: theory of constraints.C
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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.P
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cascading yield loss
The condition where yield loss happens in multiple operations or tasks, resulting in a compounded yield loss. Syn: cumulative yield. See: composite yield.C
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SG&A
Abbreviation for selling, general and administrative.S
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co-managed inventory (CMI)
Continuous replenishment where the manufacture is responsible for managing the inventory of standard merchandise and the retailer manages promotional items.C
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pay point
Syn: count point.P
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bill of distribution
Syn: distribution network structure.B
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source document
An original written or printed record of some type that is to be converted into machinereadable form.S
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accountability
Being answerable for, but not necessarily personally charged with, doing the work. Accountability cannot be delegated, but it can be shared.A
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standard ratio
A relationship based on a sample distribution by value for a 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).S
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MPS
Abbreviation for master production schedule.M
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indented where-used
A listing of every parent item, and the respective quantities required, as well as each of their respective parent items, continuing until the ultimate end item or level-0 item is referenced. Each of these parent items calls for a given component item in a bill-of-material file. The component item is shown closest to the left margin of the listing, with each parent indented to the right, and each of their respective parents indented even further to the right.I
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superflush
A technique to relieve all components down to the lowest level using the complete bill of material, based on the count of finished units produced or transferred to finished goods inventory.S
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rate of return on investment
The efficiency ratio relating profit or cash flow incomes to investments. Several different measures of this ratio are in common use.R
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industrial facilities management
The installation and maintenance of the physical plant, its surroundings, and the physical assets of an organization.I
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planned finish date
Syn: scheduled finish date.P
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milestone schedule
In project management, a highlevel schedule displaying important deliverables.M
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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.U
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out of stock
A situation in which there is no inventory at a location available for sale to the customer. See: stockout.O
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enterprise performance management (EPM)
The process of monitoring performance across the enterprise with the goal of improving business performance. An EPM system integrates and analyzes data from many sources, including e-commerce systems, front- and E back-office applications, data warehouses, and external data sources. Advanced EPM systems can support many performance methodologies, such as the balanced scorecard.E
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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.U
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final assembly schedule (FAS)
A schedule of end items to finish the product for specific customers’ orders in a make-to-order or assemble-to-order environment. It is also referred to as the finishing schedule because it may involve operations other than the final assembly; also, it may not involve assembly (e.g., final mixing, cutting, packaging). The FAS is prepared after receipt of a customer order as constrained by the availability of material and capacity, and it schedules the operations required to complete the product from the level where it is stocked (or master scheduled) to the end-item level.F
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product or service liability
The obligation of a company to make restitution for loss related to personal injury, property damage, or other harm caused by its goods or services.P
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internal supply chain
A structure for sharing information within a firm and creating an atmosphere for cooperation between functions to strengthen the firm.I
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demand-based order quantity
An order system using forecast or derived demand for one or more future periods (rather than a fixed quantity as in economic order quantity).D
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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.P