APICS Glossary Part Two

Question 1

Computer services are provided by a third party that keeps all of the software and hardware in its place of business and the company using the services accesses them via the internet. A very common technique used to outsource technological state-of-the-art costs that can be avoided.

Answer 1

Software-as-a-service (SaaS)

Question 2

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

Answer 2

Sole-source supplier

Question 3

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

Answer 3

Sourcing

Question 4

Managing purchases of goods and services in a supply chain including outsourcing and procurement activities.

Answer 4

Spend management

Question 5

The target costs of an operation, process, or product including direct material, direct labor, and overhead charges.

Answer 5

Standard costs

Question 6

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.

Answer 6

Stockkeeping unit (SKU)

Question 7

The costs associated with a stockout. Those costs may include lost sales, backorder costs, expediting, and additional manufacturing and purchasing costs.

Answer 7

Stockout costs

Question 8

A relationship formed by two or more organizations that share information (proprietary), participate in joint investments, and develop linked and common processes to increase the performance of both companies. Many organizations form strategic alliances to increase the performance of their common supply chain.

Answer 8

Strategic alliance

Question 9

The process of developing a strategic plan.

Answer 9

Strategic planning

Question 10

A comprehensive approach for locating and sourcing key material suppliers, which often includes the business process of analyzing total-spend-for-material spend categories. There is a focus on the development of long-term relationships with trading partners who can help the purchaser meet profitability and customer satisfaction goals. From an information technology applications perspective, strategic sourcing includes automation of request for quote (RFQ), request for proposal (RFP), electronic auctioning (e-auction or reverse auction), and contract management processes.

Answer 10

Strategic sourcing

Question 11

Sending production work outside to another manufacturer. See: Outsourcing.

Answer 11

Subcontracting

Question 12

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.

Answer 12

Supplier

Question 13

Certification procedures verifying that a supplier operates, maintains, improves, and documents effective procedures that relate to the customer’s requirements. Such requirements can include cost, quality, delivery, flexibility, maintenance, safety, and ISO quality and environmental standards.

Answer 13

Supplier certification

Question 14

A comprehensive approach to managing an enterprise?s interactions with the organizations that supply the goods and services the enterprise uses. The goal of SRM is to streamline and make more effective the processes between an enterprise and its suppliers. SRM is often associated with automating procure-to-pay business processes, evaluating supplier performance, and exchanging information with suppliers. An e-procurement system often comes under the umbrella of a supplier relationship management family of applications.

Answer 14

Supplier relationship management (SRM)

Question 15

A high-level process map that shows substantial subprocess in an organization’s process together with the structure of the process represented by the suppliers, inputs, outputs, and customers. A SIPOC diagram defines the critical aspects of a process without losing the overall perspective.

Answer 15

Supplier-input-process-output-customer (SIPOC) diagram

Question 16

The global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash.

Answer 16

Supply chain

Question 17

A term associated with supply chain management software applications, where users have the ability to flag the occurrence of certain supply chain events to trigger some form of alert or action within another supply chain application. SCEM can be deployed to monitor supply chain business processes such as planning, transportation, logistics, or procurement. SCEM can also be applied to supply chain business intelligence applications to alert users to any unplanned or unexpected event.

Answer 17

Supply chain event management (SCEM)

Question 18

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

Answer 18

Supply chain management (SCM)

Question 19

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.

Answer 19

Supply Chain Operations Reference-model (SCOR?)

Question 20

Decisions and activities that have outcomes that could negatively affect information or goods within a supply chain.

Answer 20

Supply chain risk

Question 21

The ability of supply chain partners to access demand and production information from trading partners.

Answer 21

Supply chain visibility

Question 22

Activities that provide present benefit without compromising the needs of future generations.

Answer 22

Sustainability

Question 23

A manufacturing management philosophy that includes a consistent set of principles, procedures, and techniques where every action is evaluated in terms of the global goal of the system. Both kanban, which is a part of the JIT philosophy, and drum-buffer-rope, which is a part of the theory of constraints philosophy, represent synchronized production control approaches. (Synonym: Synchronous manufacturing.) See: Kanban.

Answer 23

Synchronized production

Question 24

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.

Answer 24

Tactical buying

Question 25

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

Answer 25

Tactical planning

Question 26

The process of designing a product to meet a specific cost objective. Target costing involves setting the planned selling price, subtracting the desired profit as well as marketing and distribution costs, thus leaving the required manufacturing or target cost.

Answer 26

Target costing

Question 27

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

Answer 27

Tariff

Question 28

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

Answer 28

Third-party logistics (3PL)

Question 29

In supply chain management, the total cost of ownership of the supply delivery system is the sum of all the costs associated with every activity of the supply stream. The main insight that TCO offers to the supply chain manager is the understanding that the acquisition cost is often a very small portion of the total cost of ownership.

Answer 29

Total cost of ownership (TCO)

Question 30

An agreement between countries intended to reduce or remove barriers to trade within member countries. Frequently, but not always, those countries are geographically close. Examples of trade blocs are the European Economic Community and the North American Free Trade Agreement (NAFTA).

Answer 30

Trade bloc

Question 31

See: Trade bloc.

Answer 31

Trading bloc

Question 32

A computerized system to manage the operation of transportation systems including deciding on modes of transportation, planning imports and exports, planning and controlling fleet service activities, and load planning and optimization.

Answer 32

Transportation management system (TMS)

Question 33

General upward or downward movement of a variable over time (e.g., demand, process attribute).

Answer 33

Trend

Question 34

Measuring the economic, social, and environmental consequences of a firm’s activities.

Answer 34

Triple bottom line (TBL)

Question 35

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.

Answer 35

United Nations Global Compact (UNGC)

Question 36

Extending the design of a product currently sold in a single market so that it can be sold in other markets.

Answer 36

Universality

Question 37

The functions within a company that add value to the goods or services that the organization sells to customers and for which it receives payment.

Answer 37

Value chain

Question 38

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

Answer 38

Value stream

Question 39

Drawing the current production process/flow and then attempting to draw the most effective production process/flow.

Answer 39

Value stream mapping

Question 40

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

Answer 40

Value-added

Question 41

A network, often supporting EDI, providing services additional to those provided by common carriers.

Answer 41

Value-added network (VAN)

Question 42

1) The difference between the expected (budgeted or planned) value and the actual. 2) In statistics, a measurement of dispersion of data.

Answer 42

Variance

Question 43

Any seller of an item in the marketplace. See: Supplier.

Answer 43

Vendor

Question 44

A means of optimizing supply chain performance in which the supplier has access to the customer?s inventory data and is responsible for maintaining the inventory level required by the customer. This activity is accomplished by a process in which resupply is done by the vendor through regularly scheduled reviews of the on-site inventory. The on-site inventory is counted, damaged or outdated goods are removed, and the inventory is restocked to predefined levels. The vendor obtains a receipt for the restocked inventory and accordingly invoices the customer. See: Continuous replenishment.

Answer 44

Vendor-managed inventory (VMI)

Question 45

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

Answer 45

Virtual trading exchange

Question 46

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

Answer 46

Warehouse management system (WMS)

Question 47

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

Answer 47

Waste

Question 48

Services that are provided by third parties via the internet.

Answer 48

Web services

Question 49

Abbreviation for extensible markup language. This language facilitates direct communication among computers on the internet. Unlike the older hypertext markup language (HTML), which provides HTML tags giving instructions to a web browser about how to display information, XML tags give instructions to a web browser about the category of information.

Answer 49

XML (extensible markup language)