SCM Flashcards
https://www.logisticsbureau.com/supply-chain-glossary/#:~:text=Backflushing.,production%20total%20of%20parents%20produced.
supply chain
supply chain is a system of organisations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer
SCM activities are associated with:
the flow and transformation of goods from the raw materials stage to the end user, as well as the associated information and funds flows.
The supply chain, which is also referred to as
the logistics network
The supply chain consists of:
suppliers, manufacturing centres, warehouses, distribution centres, and retail outlets, as well as raw materials, work-in-process inventory, and finished products that flow between the facilities.
A supply chain has three key parts:
Supply
Manufacturing
Distribution
used products re-entry
In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable
Supply Chain Management
It is the oversight of materials, information, and finances distributed from supplier to consumer.
The supply chain also includes all the necessary stops between the supplier and the consumer.
SCM is also called
The art of management of providing the right product, at the right time, right place and at the right cost to the customer.
2PC and T
Supply chain surplus
Supply chain surplus can be defined as the total profit shared by all the stages and intermediaries of a supply chain.
The greater the supply chain surplus the more successful is supply chain.
Supply chain success is measured by its overall surplus not by the profit at each stage.
Back Ordering
A practice of placing a purchase order to a supplier for a product that’s temporarily out of stock in your warehouse and has already been ordered by your customers.
Back ordering is usually adopted during times of high demand and for slow-moving products that suddenly see a spike in demand
Bill of Lading
A shipping document showing the type of goods, their quantity, and the destination address
issued by sea carrier of goods on receipt of cargo
Blanket Purchase Order (BPO)
Blanket Order / call-off order
Blanket Purchase Order (BPO) is the preferred method for placing orders which will require multiple payments over a period of time.
Blanket Order: A method in which the buyer will agree to buy a certain quantity of one or more items over an agreed-upon period of time (which can range from a few days to several months) without specifying their exact shipment dates at the time of purchase.
The vendor can ship the goods in parts and on any convenient dates within this period. This is usually done when the buyer expects an increase in demand for certain products and would like to get a discount for making a larger purchase without locking up all of their capital.
Bonded Warehouse
A location managed by the customs office or a government body, where you may store taxable goods and imports subject to duties for business purposes.
Carnet
A legal document that will allow you to temporarily export items to another country and then reimport them back into the US within a year without paying import duties.
Consignment
Most often it means the act of placing your goods in the care of a third-party warehouse owner (known as the consignee) who maintains them for a fee
Cross docking
A method by which a business owner can ship goods that they have received from vendors to their customers with little to no storage time.
This method is typically used for perishable goods with a short shelf life and goods that are affected by temperature.
Drop shipment
A situation where one of your vendors ships goods directly to your customers, on your behalf.
This is useful for selling slow-moving items with a long product life, without bearing the burden of storage and maintenance yourself.
EDI
Electronic Data Interface/Interchange is a method of transferring transactions from one computer system to another, by converting the data into a standard that can be easily read by all systems.
used where the exchange of information between two or more parties happens on paper.
Groupage
This is a method of grouping multiple shipments from different sellers (each with its own bill of lading) inside a single container.
the freight cost is split between these sellers.
HS
Harmonized Set of Codes is a system of internationally accepted codes that help businesses and government bodies identify items while buying or selling them globally.
Hitchment
refers to the process of combining two or more shipments into a single shipment that is recognized by a single bill of lading, even if they did not originate from the same point.
IMDG codes
The International Maritime Dangerous Goods code was adopted under the 1960 SOLAS (Safety Of Life At Sea) convention
provides guidelines for safe handling of flammable, explosive, corrosive or radioactive materials and helps prevent incidents
Landed Cost
The total cost of ownership of an item. This includes the cost price, shipping charges, custom duties, taxes and any other charges that were borne by the buyer.
Waybill
A document prepared by the seller, on behalf of the carrier, that specifies the shipment’s point of origin, the details of the transacting parties (the buyer and seller), the route, and the destination address.
Anticipation Stock
Inventory held in order to be able to satisfy a demand with seasonal fluctuations with a production level that does not fluctuate at all or that varies to a lesser extent than the demand.
Backflushing
The deduction from inventory, after manufacture, of the component parts used in a parent by exploding the bill of materials by the production total of parents produced.
Backhaul
Vs
Backflush
Generally a back haul is any return load taken after the delivery has been made.
When a truck transports a load from A to B, the trucking company will seek a commercial load for the return journey from B to A. This is known as the backhaul and underpins competitive pricing. The term is also used in IT to describe the transmission of data from point to point, for example from undersea cables to exchanges.
Beyond Economic Repair (BER)
Where the projected cost of repair, normally for a repairable or rotable item, exceeds a management set percentage of the replacement value of the item concerned.
De-Coupling Stock
Inventory accumulated between dependent activities in the goods flow to reduce the need for completely synchronized operations.
Inventory accumulated between two inter-dependent operations as a buffer against breakdowns or unevenness in machine production rates, thus reducing the need for output synchronization
DRP
Distribution Requirement Planning
Distribution requirements planning (DRP) is a systematic process to make the delivery of goods more efficient by determining which goods, in what quantities, and at what location are required to meet anticipated demand. The goal is to minimize shortages and reduce the costs of ordering, transporting, and holding goods.
A time-phased finished good inventory replenishment plan in a distribution network. The function of determining the need to replenish inventory at branch warehouses over a forward time period.
A time-phased order point approach used where planned orders at branch warehouse level are exploded via MRP logic to become gross requirements on the supplying source enabling the translation of inventory plans into material flows.
DRPII
Distribution Resource Planning
The extension of MRP into the planning of the key resources contained in a distribution system.
Economic Order Interval (EOI)
In fixed order interval systems, the interval between orders that will minimise the total inventory cost, under a given set of circumstances, obtained by trade off analysis between the cost of placing an order and the cost of holding stock
Enterprise Requirement Planning (ERP)
A further extension of MRP II whereby a single system embraces and integrates all aspects of business operations into a single database application.
MRP I
Material Requirements Planning
A system to support manufacturing and fabrication organisations by the timely release of production and purchase orders using the production plan for finished goods to determine the materials required to make the product.
The 3 key inputs are:
Master production schedule,
Inventory status records
and Product structure records.
MRP II
Manufacturing Resource Planning
A method for the effective planning of all the resources of a manufacturing company.
Ideally it addresses operational planning in units, financial planning in money, and has a simulation capability to answer what if questions.
Manufacturing resource planning is a direct out-growth and extension of material requirements planning (MRP-1).
Perpetual Inventory System
An inventory control system where a running record is kept of the amount of stock held for each item.
Periodic Inventory
An inventory control system classification for independent demand items where the number of items held is reviewed at a fixed time interval and the size of any resultant order depends on the stock on hand at the time of the review.
Pareto Principle
heuristic rule which states that where there is a large number of contributors to a result, the majority of the result is due to a minority of the contributors.
Sometimes known as the 80/20 rule
Pipeline Stocks
The products which are currently being moved from one location to another.
Probabilistic (or Stochastic) Inventory Control
Models An inventory control system where all the variables and parameters used are treated as random variables.
It is assumed that the average demand for items is approximately constant over time and that it is possible to state the probability distribution of the demand, particularly during the lead time for replenishment.
Production Lead Time
The time taken to manufacture or produce an item after an external order has been received until the item is available for packing.
Pull System
A system where orders for an end item are pulled through the facility to satisfy demand for the end item. An examples of pull system is the JIT Kanban process
Purchasing Lead Time (PLT)
The length of time between the decision to purchase an item and its actual addition to stock.
Push System
A system where orders are issued for completion by specified due dates, based on estimated lead-times, or where the flow of material in a product structure is controlled and determined by the lower levels.
Quarantine Stock
Quarantine stock refers to materials that belong to the user but is not yet ready for use.
An inventory of specific items that are kept for an emergency situation or items that are set aside for a specific use.
On-hand stock which has been segregated and is not available to meet customer requirements.
Random Sample Cycle Counting
A method in which the particular parts to be counted are selected from the population of part numbers in a manner that has no inherent bias.
In this selection process, each part number has an equal chance of being selected.
Re-Order Level (ROL) (or Re-Order Point – ROP)
The calculated level of stock within an inventory control system to which the quantity of a specific item is allowed to fall before replenishment order action is generated.
Re-Order Quantity, Replenishment Order Quantity
The calculated order quantity necessary to replenish stocks at a given point in time
Quantity based systems are checked continually to determine if an order should be placed;
time based systems only have a count of stock at predetermined intervals and orders placed as required;
a distribution system plans orders to meet distribution needs; and
production based systems only order stock to meet
Reverse Logistics
The requirement to plan the flow of surplus or unwanted material or equipment back through the supply chain after meeting customer demand.
Rounding Order Quantity
That element of an order that has been added to the basic order quantity to meet a constraint imposed by the manufacturer or to optimise overall supply chain costs.
Routing.
A process of optimising transport delivery routes to make better use of time and capacity to reduce overall costs. This type of fleet optimisation is generally supported with specialist software tools. Early tools used what was called the ‘travelling salesman’ algorithm.
