Basic Terminology Flashcards
To help people feel confident about supply chain terminology.
What is MRP?
A computerized system for scheduling production and procurement which requirements from the Master Production Schedule and the Bills-of-Materials to calculate what will be needed when, netting off against all the materials already in the system.
What are Bills-of-Materials (BOM)?
A database which describes all the components that go into a product or a subassembly, together with an estimate of the leadtime needed to produce or procure the product.
What is an SKU?
SKU = Stock Keeping Unit
A category of identical items in a logistics system, typically associated with a part or reference number.
What is “Stock Turnover”?
The average period it takes for all the inventory to pass through a system, normally calculated as [sales per period]/[value of inventory held]
What is an EOQ?
EOQ = Economic Order Quantity
A theoretical approach to calculating the optimum delivery quantity of a good by considering the trade off between ordering costs and inventory costs.
What is a kanban?
The card or signal used in the Toyota Production System which is used to ensure that nothing is made in advance of when it will be really needed, which enables production to be ‘pulled’ through the system.
What is Cross-Docking?
Cross-Docking is a highly choreographed approach to managing a distribution centre which maximizes the speed of unloading, reconsolidation and reloading, meaning stock spends very little time waiting.
What is EDI?
Electronic Data Interchange is the transfer of sales, logistics and other commercial data between the business systems of customers and suppliers. The term is also used to refer to the standards used to facilitate this.
What is an MPS?
A Master Production Schedule is an organisation’s operating plan of what it is going to make or deliver in the short and medium term, often aggregated to product families to make it more manageable.
What is CPFR?
Collaborative Planning, Forecasting, and Replenishment is an approach where firms in the chain jointly plan key production and logistics activities, sharing foreacasts and sales data, and plans for promotions and new product introductions.
What is FIFO?
The idea of First In, First Out has at least two meanings. Physically, it could reflect the idea of stock rotation - you sell (or ship) the items from a location that have been there longest. Alternatively, it could refer to the accounting assumption that this is what is happening (even if it doesn’t in practice).
What is EDI?
Electronic Data Interchange - a method by which orders and invoices are exchanged between buyers and suppliers
What is FBA?
Fulfillment by Amazon (FBA) is Amazon’s fulfillment service.
https://services.amazon.com/fulfillment-by-amazon/benefits.htm
What is EFTPOS?
Electronic Funds Transfer at Point of Sale - use of direct debit (eg switch/maestro) cards at retail checkouts
In logistics, what is a Pallet?
Large flat wooden delivery unit for stacking cases on.
What is a UPC?
Universal Product Code - the number on a retail item’s Barcode
What is VMI?
Vendor Managed Inventory. The supplier is responsible for managing stock levels and inventory at the customer’s site.
What is a WMS?
Warehouse Management System
What is a Backorder?
A backorder occurs when a customer demand cannot be met from stock, leaving the customer to wait for the item to come into stock.
What is co-managed inventory?
This is where where an organization and a third party jointly manage stocks
What is Exponential Smoothing?
Exponential smoothing is a rule of thumb technique for smoothing time series data. Whereas in Single Moving Averages the past observations are weighted equally, Exponential Smoothing assigns exponentially decreasing weights as the observation get older.
In other words, recent observations are given relatively more weight in forecasting than the older observations
Source: http://www.itl.nist.gov/div898/handbook/pmc/section4/pmc43.htm
What is safety stock?
Safety stock is a reserve of inventory not normally needed, but held to allow for unexpected circumstances
What is the ABC Inventory Classification?
The ABC Inventory classification is a way of segmenting inventory management: ‘A’ items are generally considered items that have high value and/or high volume; C items are low value/low volume; B are somewhere in the middle. Sometimes the classification is based on a metric called ‘usage’ or ‘consumption volume’ which is the multiple of item value and volume. NB some people connect this classification with Activity Based Costing, but the fact that both are ‘ABC’ is a historical accident.
What is an AGVS?
An Automated Guided Vehicle System refers to the transportation robots that move items around factories, warehouses and distribution centres.
https://www.youtube.com/watch?v=7xvP645fVnI
