Supply Chain Terms Flashcards
1
Q
ABC Inventory Control
A
An inventory control approach based on the ABC volume or sales revenue classification of products (A items are highest volume or revenue, C - or perhaps D - are lowest volume SKUs.).
2
Q
Accounts Payable (A/P)
A
The value of goods and services acquired for which payment has not yet been made.
3
Q
Accounts Receivable (A/R)
A
The value of goods shipped or services rendered to a customer on whom payment has not been received. Usually includes an allowance for bad debts.
4
Q
Agent
A
An enterprise authorized to transact business for, or in the name of, another enterprise..
5
Q
Assembly
A
A group of subassemblies and/or parts that are put together and constitute a major subdivision for the final product. An assembly may be an end item or a component of a higher-level assembly.
6
Q
Assignment
A
A distribution of costs using causal relationships. Because cost causal relationships are viewed as more relevant for management decision making, assignment of costs is generally preferable to allocation techniques. Synonymous with Tracing. Contrast with Allocation
7
Q
Audit
A
In reference to freight bills, the term audit is used to determine the accuracy of freight bills.
8
Q
Automated Storage/Retrieval System (AS/RS)
A
A high-density rack inventory storage system with unmanned vehicles automatically loading and unloading products to/from the racks.
9
Q
Backorder
A
(1) The act of retaining a quantity to ship against an order when other order lines have already been shipped. Backorders are usually caused by stock shortages. (2) The quantity remaining to be shipped if an initial shipment(s) has been processed. Note: In some cases, backorders are not allowed. This results in a lost sale when sufficient quantities are not available to completely ship an order or order line.
10
Q
Barrier to Entry
A
Factors that prevent companies from entering into a particular market, such as high initial investment in equipment.
11
Q
Barter
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The exchange of commodities or services for other commodities or services rather than the purchase of commodities or services with money.
12
Q
Benchmarking
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The process of comparing performance against the practices of other leading companies for the purpose of improving performance. Companies also benchmark internally by tracking and comparing current performance with past performance.
13
Q
Best in Class
A
An organization, usually within a specific industry, recognized for excellence in a specific process area.
14
Q
Best Practice
A
A specific process or group of processes which have been recognized as the best method for conducting an action. Best practices may vary by industry or geography depending on the environment being used. Best-practices methodology may be applied with respect to resources, activities, cost object, or processes.
15
Q
Bill of Lading (BOL)
A
A transportation document that is the contract of carriage containing the terms and conditions between the shipper and carrier.
16
Q
Bill of Material (BOM)
A
A structured list of all the materials or parts and quantities needed to produce a particular finished product, assembly, subassembly, or manufactured part, whether purchased or not.
17
Q
Blanket Purchase Order:
A
A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Oftentimes, blanket orders cover only one item with predetermined delivery dates. Synonyms: Blanket Order, Standing Order.
18
Q
Broker
A
There are 3 definitions for the term “broker”: 1) an enterprise that owns and leases equipment2) an enterprise that arranges the buying & selling of transportation of, goods, or services 3) a ship agent who acts for the ship owner or charterer in arranging charters.
19
Q
Buffer Stock
A
A quantity of goods or articles kept in storage to safeguard against unforeseen shortages or demands.
20
Q
Bullwhip Effect
A
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 in 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.
21
Q
Business-to-Business (B2B)
A
As opposed to business-to-consumer (B2C). Many companies are now focusing on this strategy, and their web sites are aimed at businesses (think wholesale) and only other businesses can access or buy products on the site. Internet analysts predict this will be the biggest sector on the web.
22
Q
Business-to-Consumer (B2C)
A
The hundreds of e-commerce web sites that sell goods directly to consumers are considered B2C. This distinction is important when comparing web sites that are B2B as the entire business model, strategy, execution, and fulfillment is different.
23
Q
Business Unit
A
A division or segment of an organization generally treated as a separate profit-and-loss center.
24
Q
Buyer
A
An enterprise that arranges for the acquisition of goods or services and agrees to specific business terms through the issuance of a Purchase Order.
25
Capacity
The physical facilities, personnel, and processes available to meet the product or service needs of customers. Capacity generally refers to the maximum output or producing ability of a machine, a person, a process, a factory, a product, or a service. Also see: Capacity Management
26
Capital
The resources, or money, available for investing in assets that produce output.
27
Cartel
A group of companies that agree to cooperate rather than compete, in producing a product or service. Thus limiting or regulating competition.
28
Category Management
The management of product categories as strategic business units. This practice empowers a category manager with full responsibility for the assortment decisions, inventory levels, shelf-space allocation, promotions, and buying. With this authority and responsibility, the category manager is able to more accurately judge the consumer buying patterns, product sales, and market trends of that category.
29
Change Management
The business process that coordinates and monitors all changes to the business processes and applications operated by the business, as well as to their internal equipment, resources, operating systems, and procedures. The change management discipline is carried out in a way that minimizes the risk of problems that will affect the operating environment and service delivery to the users.
30
Change Order
A formal notification that a purchase order or shop order must be modified in some way. This change can result from a revised quantity, date, or specification by the customer; an engineering change; a change in inventory requirement data; etc.
31
Commodities
Any article exchanged in trade, most commonly used to refer to raw materials and agricultural products.
32
Component
Material that will contribute to a finished product but is not the finished product itself. Examples include tires for an automobile, electronic piece parts for a printed circuit board or a zipper for a ski parka. Also see: Bill of Material (BOM).
33
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. Also see: Consignment Inventory.
34
Consortium
A group of companies that works together to jointly produce a product, service, or project.
35
Contract
An agreement between two or more competent persons or companies to perform or not to perform specific acts or services or to deliver merchandise. A contract may be oral or written. A purchase order, when accepted by a supplier, becomes a contract. Acceptance may be in writing or by performance, unless the purchase order requires acceptance in writing.
36
Cost-of-Goods Sold (COGS)
The amount of direct materials, direct labor, and allocated overhead associated with products sold during a given period of time, determined in accordance with Generally Accepted Accounting Principles (GAAP).
37
Countertrade
A reciprocal trading agreement that includes a variety of transactions involving two or more parties.
38
Credit Terms
The agreement between two or more enterprises concerning the amount and timing of payment for goods or services.
39
Cross Docking
A distribution system in which merchandise received at the warehouse or distribution center is not put away, but instead is readied for shipment to retail stores. Cross docking requires close synchronization of all inbound and outbound shipment movements. By eliminating the put-away, storage, and selection operations, it can significantly reduce distribution costs.
40
Customer Relationship Management (CRM)
This refers to information systems that help sales and marketing functions as opposed to the ERP (Enterprise Resource Planning), which is for back-end integration.
41
Customer Service
The series of activities involved in providing the full range of services to customers.
42
Customs
The authorities designated to collect duties levied by a country on imports and exports.
43
Dashboard
A performance measurement tool used to capture a summary of the key performance indicators/metrics of a company. Metrics dashboards/scorecards should be easy to read and usually have red, yellow, green indicators to flag when the company is not meeting its metrics targets. Ideally, a dashboard/scoreboard should be cross functional in nature and include both financial and non-financial measures. In addition, scorecards should be reviewed regularly - at least on a monthly basis, and weekly in key functions such as manufacturing and distribution where activities are critical to the success of a company. The dashboards/scorecards philosophy can also be applied to external supply chain partners like suppliers to ensure that their objectives and practices align. Synonym: Scorecard.
44
Demand Planning Systems
The systems that assist in the process of identifying, aggregating, and prioritizing all sources of demand for the integrated supply chain of a product of service at the appropriate level, horizon, and interval.
45
Disaster Recovery Planning
Contingency planning specifically related to recovering hardware and software (e.g., data centers, application software, operations, personnel, telecommunications) in information system outages.
46
Distribution Center (DC)
The warehouse facility which holds inventory from manufacturing pending distribution to the appropriate stores.
47
Distributor
A business that does not manufacture its own products, but purchases and resells these products. Such a business usually maintains a finished goods inventory. Synonym: Wholesaler..
48
DUNS Number
A coded, numerical representation assigned to a specific company (USA).
49
Duty
A tax imposed by a government on merchandise imported from another country.
50
Economic Order Quantity (EOQ)
An inventory model that determines how much to order by determining the amount that will meet customer service levels while minimizing total ordering and holding costs.
51
Economy of Scale
A phenomenon whereby larger volumes of production reduce unit cost by distributing fixed costs over a larger quantity.
52
Electronic Data Interchange (EDI)
Intercompany, computer-to-computer transmission of business information in a standard format. For EDI purists, computer to computer means direct transmission from the originating application program to the receiving or processing application program. An EDI transmission consists only of business data, not any accompanying verbiage or free-form messages. Purists might also contend that a standard format is one that is approved by a national or international standards organization, as opposed to formats developed by industry groups or companies.
53
Electronic Funds Transfer (EFT)
A computerized system that processes financial transactions and information about these transactions or performs the exchange of value. Sending payment instructions across a computer network, or the company-to-company, company-to-bank, or bank-to bank electronic exchange of value.
54
End User
The final buyer of the product who purchases the product for immediate use.
55
Engineering Change
A revision to a drawing or design released by engineering to modify or correct a part. The request for the change can be from a customer or from production, quality control, another department, or a supplier. Synonym: Engineering Change Order
56
Engineering Change Order (ECO)
A documented and approved revision to a product or process specification.
57
Enterprise Resource Planning (ERP) System
A class of software for planning and managing enterprise-wide the resources needed to take customer orders, ship them, account for them, and replenish all needed goods according to customer orders and forecasts. Often includes electronic commerce with suppliers. Examples of ERP systems are the application suites from SAP, Oracle, PeopleSoft, and others.
58
FOB Destination
Title passes at destination, and seller has total responsibility until shipment is delivered.
59
FOB Origin
Title passes at origin, and buyer has total responsibility over the goods while in shipment.
60
Free on Board (FOB)
Contractual terms between a buyer and a seller that define where title transfer takes place.
61
Freight Forwarder
An organization which provides logistics services as an intermediary between the shipper and the carrier, typically on international shipments. Freight forwarders provide the ability to respond quickly and efficiently to changing customer and consumer demands and international shipping (import/export) requirements.
62
Global Strategy
A strategy that focuses on improving worldwide performance through the sales and marketing of common goods and services with minimum product variation by country. Its competitive advantage grows through selecting the best locations for operations in other countries.
63
Globalization
The process of making something worldwide in scope or application.
64
Goods
A term associated with more than one definition: 1) Common term indicating movable property, merchandise, or wares. 2) All materials which are used to satisfy demands. 3) Whole or part of the cargo received from the shipper, including any equipment supplied by the shipper.
65
Grandfather Clause
A provision that enabled motor carriers engaged in lawful trucking operations before the passage of the Motor Carrier Act of 1935 to secure common carrier authority w/o proving public convenience and necessity; a similar provision exists for other modes.
66
Handling Costs
The cost involved in moving, transferring, preparing, and otherwise
67
Hazardous Material
A substance or material which the Department of Transportation has determined to be capable of posing a risk to health, safety, and property when stored or transported in commerce.
68
Import
Movement of products from one country into another. The import of automobiles from Germany into the US is an example.
69
INCOTERMS
International terms of sale developed by the International Chamber of Commerce to define sellers' and buyers' responsibilities.
70
Insourcing
The opposite of outsourcing, that is, a service performed in house.
71
Intermodal Transportation
Transporting freight by using two or more transportation modes, such as by truck and rail or truck and oceangoing vessel.
72
Internal Customer
The recipient (person or department) of another person's or department's output (good, service, or information) within an organization. Also see: Customer.
73
International Standards Organization (ISO):
An organization within the United Nations to which all national and other standard-setting bodies (should) defer. Develops and monitors international standards, including OSI, EDIFACT, and X.400.
74
In-Transit Inventory
Material moving between two or more locations, usually separated geographically; for example, finished goods being shipped from a plant to a distribution center. In-transit inventory is an easily overlooked component of total supply chain availability.
75
Inventory
Raw materials, work in process, finished goods, and supplies required for creation of a company's goods and services. The number of units and/or value of the stock of goods held by a company.
76
Inventory Cost
The cost of holding goods, usually expressed as a percentage of the inventory value; includes the cost of capital, warehousing, taxes, insurance, depreciation, and obsolescence.
77
Inventory Management
The process of ensuring the availability of products through inventory administration.
78
Invoice
A detailed statement showing goods sold or shipped and amounts for each. The invoice is prepared by the seller and acts as the document that the buyer will use to make payment.
79
Just In Time (JIT)
An inventory control system that controls material flow into assembly and manufacturing plants by coordinating demand and supply to the point where desired materials arrive just in time for use. An inventory reduction strategy that feeds production lines with products delivered just in time. Developed by the auto industry, it refers to shipping goods in smaller, more frequent lots.
80
Just in Time II (JIT II)
Vendor-managed operations taking place within a customer's facility. JIT II was popularized by the Bose Corporation. The supplier reps, called "inplants," place orders to their own companies, relieving the customer's buyers from this task. Many also become involved at a deeper level such as participating in new product development projects and manufacturing planning (concurrent planning).
81
Kaizen
A Japanese term for improvement - continuing improvement involving everyone - managers and workers. In manufacturing, kaizen relates to finding and eliminating waste in machinery, labor, or production methods. Also see: Continuous Process Improvement.
82
Kanban
Japanese word for visible record, loosely translated means card, billboard, or sign. Popularized by Toyota Corporation, it uses standard containers or lot sizes to deliver needed parts to the assembly line just in time for use.
83
Key Performance Indicator (KPI)
A measure which is of strategic importance to a company or department. For example, a supply chain flexibility metric is Supplier On-Time Delivery Performance which indicates the percentage of orders that fulfilled on or before the original requested date. Also see: Scorecard.
84
Kitting
Light assembly of components or parts into defined units, Kitting reduces the need to maintain an inventory of pre-build, completed products, but increases the time and labor consumed at shipment.
85
Lading
The cargo carried in a transportation vehicle.
86
Landed Cost
Cost of product plus relevant logistics costs, such as transportation, warehousing, handling, etc. Also called Total Landed Cost of Net Landed Costs.
87
Lead Time
The total time that elapses between an order's placement and its receipt. It includes the time required for order transmittal, order processing, order preparation, and transit.
88
Less-Than-Truckload (LTL)
Trucking companies that consolidate and transport smaller (less than truckload) shipments of freight by utilizing a network of terminals and relay points. This means that the shipment will not take up an entire truck and will typically weigh between 100 and 10,000 pounds.
89
Life Cycle Cost
In cost accounting, a product's life cycle is the period that starts with the initial product conceptualization and ends with the withdrawal of the product from the marketplace and final disposition. A product life cycle is characterized by certain defined stages, including research, development, introduction, maturity, decline, and abandonment. Life cycle cost is the accumulated costs incurred by a product during these stages.
90
Make-or-Buy Decision
The act of deciding whether to produce an item internally or buy it from an outside supplier. Factors to consider in the decision include costs, capacity availability, proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing.
91
Manufacturer's Representative
One who sells goods for several firms but does not take title to them.
92
Manufacturing Lead Time
The total time required to manufacture an item, exclusive of lower-level purchasing lead time. For make-to-order products, it's the length of time between the release of an order to the production process and shipment to the final customer. For make-to-stock products, it's the length of time between the release of an order to the production process and receipt into finished goods inventory. Included are order preparation time, queue time, set-up time, run time, move time, inspection time, and put-away time. Synonym: Manufacturing Cycle Time.
93
Market-Positioned Warehouse
Warehouse positioned to replenish customer inventory assortments and afford maximum inbound transport consolidation economies from inventory origin points with relatively short-haul local delivery.
94
Material Requirements Planning (MRP)
A decision-making methodology used to determine the timing and quantities of materials to purchase.
95
MRO items
Maintenance, repair, and operating items--office supplies, for example.
96
North American Free Trade Agreement (NAFTA)
A free trade agreement, implemented January 1, 1994, between Canada, the United States and Mexico..
97
Offshore
Utilizing an outsourcing service provider located in a country other than where the client is located.
98
Origin
The place where a shipment begins its movement.
99
Original Equipment Manufacturer (OEM)
A manufacturer that buys and incorporates another supplier's products into its own products. Also, products supplied to the original equipment manufacturer or sold as part of an assembly. For example, an engine may be sold to an OEM for use as that company's power source for its generator units.
100
Outsource
To utilize a third party provider to perform services previously performed in house. Examples include manufacturing of products and call center/customer support.
101
Packing List
A document containing information about the location of each Product ID in each package. It allows the recipient to quickly find the item he or she is looking for without a broad search of all packages. It also confirms the actual shipment of goods on a line item basis.
102
Point of Sale Information (POS)
Price and quantity data from the retail location as sales transactions occur.
103
Procurement
The business functions of procurement planning, purchasing, inventory control, traffic, receiving, incoming inspection, and salvage operations. Synonym: Purchasing
104
Product
Something that has been or is being produced
105
Production Capacity
Measure of how much production volume may be experienced over a set period of time.
106
Purchase Order (PO)
The purchaser's authorization used to formalize a purchase transaction with a supplier. The physical form or electronic transaction a buyer uses when placing an order for merchandise.
107
Quality
Conformance to requirements or fitness for use. Quality can be defined through five principal approaches:
1) Transcendent quality is an ideal, a condition of excellence.
2) Product-based quality is based on a product attribute.
3) User-based quality is fitness for use.
4) Manufacturing-based quality is conformance to requirements.
5) Value-based quality is the degree of excellence to an acceptable price.
Also, quality has two major components:
a) quality of conformance - quality is defined by the absence of defects.
b) quality of design - quality is measured by the degree of customer satisfaction with a product's characteristics and features.
108
Quality Control
The management function that attempts to ensure that the goods or services in a firm manufacturers or purchases meet the product or service specifications.
109
Raw Materials (RM)
Crude or processed material that can be converted by manufacturing, processing, or a combination thereof into a new and useful product.
110
Receiving
The function encompassing the physical receipt of material, the inspection of the shipment for conformance with the purchase order (quantity and damage), the identification and delivery to destination, and the preparation of receiving reports.
111
Request for Information (RFI)
A document used to solicit information about vendors, products, and services prior to a formal RFQ/RFP process.
112
Request for Proposal (RFP)
A document which provides information concerning needs and requirements for a manufacturer. This document is created in order to solicit proposals from potential suppliers. For example, a computer manufacturer may use an RFP to solicit proposals from suppliers of third party logistics services.
113
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.
114
Return Material Authorization or Return Merchandise Authorization (RMA)
A number usually produced to recognize and give authority for a faulty (perhaps) good to be returned to a distribution center or manufacturer. A form generally required with a warranty/return which helps the company identify the original product and the reason for the return. The RMA number often acts as an order form for the work required in repair situations, or as a reference for credit approval.
115
Reverse Engineering
A process whereby competitors' products are disassembled and analyzed for evidence of the use of better processes, components, and techniques.
116
Reverse Logistics
A specialized segment of logistics focusing on the movement and management of products and resources after the sale and after delivery to the customer. Includes product returns for repair and/or credit.
117
Root Cause Analysis
Analytical methods to determine the core problem(s) of an organization, process, products, market, etc.
118
Safety Stock
The inventory a company holds above normal needs as a buffer against delays in receipt of supply or changes in customer demand..
119
Scorecard
A performance measurement tool used to capture a summary of the key performance indicators (KPIs)/metrics of a company. Metrics dashboards/scorecards should be easy to read and usually have red, yellow, green indicators to flag when the company is not meeting its metrics targets. Ideally, a dashboard/scorecard should be cross functional in nature and include both financial and non-financial measures. In addition, scorecards should be reviewed regularly - at least on a monthly basis and weekly in key functions, such as manufacturing and distribution where activities are critical to the success of a company. The dashboard/scorecards philosophy can also be applied to external supply chain partners like suppliers to ensure that their objectives and practices align. Synonym: Dashboard
120
Seasonality
A repetitive pattern of demand from year to year (or other repeating time interval), with some periods considerably higher than others. Seasonality explains the fluctuation in demand for various recreational products which are used during different seasons.
121
Service Level
A measure (usually expressed as a percentage) of satisfying demand through inventory or by the current production schedule in time to satisfy the customer's requested delivery dates and quantities.
122
Shelf Life
The amount of time an item may be held in inventory before it becomes unusable. Shelf life is a consideration for food and drugs which deteriorate over time, and for high-tech products which become obsolete quickly.
123
Shipping
The function that performs the tasks for the outgoing shipment of parts, components, and products. It includes packaging, marking, weighing, and loading for shipment.
124
Shrinkage
Reductions of actual quantities of items in stock, in process, or in transit. The loss may be caused by scrap, theft, deterioration, evaporation, etc.
125
SMART
See Specific, Measurable, Achievable, Realistic, Time Based.
Specific, Measurable, Achievable, Realistic, Time Based (SMART): A shorthand description of a way of setting goals and targets for individuals and teams.
126
Stakeholders
People with a vested interest in a company, including manager, employees, stockholders, customers, suppliers, and others.
127
Statistical Process Control (SPC)
A visual means of measuring and plotting process and product variation. Results are used to adjust variables and maintain product quality.
128
Stock-Keeping Unit (SKU)
A category of unit with a unique combination of form, fit, and function (i.e., unique components held in stock).
129
Strategic Alliance
Business relationship in which two or more independent organizations cooperate and willingly modify their business objectives and practices to help achieve long-term goals and objectives.
130
Supplier
1) A provider of goods or services. Also see: Vendor.
2) A seller with whom the buyer does business, as opposed to vendor, which is a generic term referring to all sellers in the marketplace.
131
Supply Chain
(1) Starting with unprocessed raw materials and ending with the final customer using the finished go`ods, the supply chain links many companies together. (2) The material and informational interchanges in the logistical process, stretching from acquisition of raw materials to delivery of finished products to the end user. All vendors, service providers, and customers are links in the supply chain.
132
SWOT Analysis
An analysis of the strengths, weaknesses, opportunities, and threats of and to an organization. SWOT analysis is useful in developing strategy
133
Taguchi Method
A concept of offline quality control methods conducted at the product and process design states in the product development cycle. This concept, expressed by Genichi Taguchi, encompasses three phases of product design, parameter design, and tolerance design. The goal is to reduce quality loss by reducing the variability of a product's characteristics during the parameter phase of product development.
134
Terms and Conditions (T's & C's):
All the provisions and agreements of a contract.
135
Third Party Logistics
Outsourcing all or much of a company's logistics operations to a specialized company.
136
Third Party Logistics Provider (3PL)
A firm which provides multiple logistics services for use by customers. Preferably, these services are integrated or bundled together, by the provider. These firms facilitate the movement of parts and materials from suppliers to manufacturers, and finished products from manufacturers, and finished products from manufacturers to distributors and retailers. Among the services they provide are transportation, warehousing, cross docking, inventory management, packaging, and freight forwarding.
137
Third Party Warehousing
The outsourcing of the warehousing function by the seller of the goods.
138
Throughput
A measure of warehousing output volume (weight, number of units). Also, the total amount of units received, plus the total amount of units shipped divided by two.
139
Total Cost of Ownership (TCO)
Total cost of a computer asset throughout its life cycle, from acquisition to disposal. TCO is the combined hard and soft costs of owning networked information assets. "Hard" costs include items such as the purchase price of the asset, implementation fees, upgrades, maintenance, contracts, support contracts, disposal costs, and license fees that may or may not be up-front or charged annually. These costs are considered "hard costs" because they are tangible and easily accounted for.
140
Trading Partner
Companies that do business with each other via EDI (e.g., send and receive business documents such as purchase orders).
141
Uniform Product Code (UPC)
A standard product numbering and bar coding system used by the retail industry. UPC codes are administered by the Uniform Code Council. They identify the manufacturer as well as the item, and are included on virtually all retail packaging. Also see: Uniform Code Council.
142
Unit Cost
The cost associated with a single unit of product. The total cost of producing a product or service divided by the total number of units. The cost associated with a single unit of measure underlying a resource, activity, product, or service. It's calculated by dividing the total cost by the measured volume. Unit cost measurement must be used with caution as it may not always be practical or relevant in all aspects of cost management.
143
Unit of Measure (UOM)
The unit in which the quantity of an item is managed, e.g., pounds, each, box of 12, package of 20, or case of 144. Various UOMs may exist for a single item. For example, a product may be purchased in cases, stocked in boxes, and issued in single units.
144
Upstream
Principal direction of movement for customer orders which originate at point of demand or use, as well as other flows, such as return product movements, payments for purchases, etc. Opposite of downstream.
145
Value Added
Increased or improved value, worth, functionality, or usefulness.
146
Value Adding/Non-Value Adding
Assessing the relative value of activities according to how they contribute to customer value or to meeting an organization's needs. The degree of contribution reflects the influence of an activity's cost driver(s).
147
Value Chain
A series of activities, when combined, define a business process; the series of activities from manufacturers to the retail stores that define the industry supply chain.
148
Variable Cost
A cost that fluctuates with the volume or activity level of business
149
Vendor
The manufacturer or distributor of an item or product line. Also see: Supplier.
150
Vendor-Managed Inventory (VMI)
The practice of retailers making suppliers responsible for determining order size and timing, usually based on receipt of retail POS and inventory data. Its goal is to increase retail inventory turns and reduce stock outs..
151
Warehouse
Storage place for products. Principal warehouse activities include receipt of product, storage, shipment, and order picking.
152
Warehouse Management System (WMS)
The systems used in effectively managing warehouse business processes and direct warehouse activities, including receiving, putaway, picking, shipping, and inventory cycle counts. Also includes support of radio frequency communications, allowing real-time data transfer between the system and warehouse personnel. they also maximize space and minimize material handling by automating put-away processes.
153
Waybill
Document containing description of goods that are part of common carrier freight shipment. Shows origin, destination, consignee/consignor, and amount charged. Copies travel with goods and are retained by originating/delivering agents. Used by carrier for internal record and control, especially during transit. Not a transportation contract.
154
Work in Process (WIP)
Parts and subassemblies in the process of becoming completed finished goods. Work in process generally includes all of the material, labor, and overhead charged against a production order which has not been absorbed back into inventory through receipt of completed products.
155
World Trade Organization (WTO)
An organization established on January 1, 1995 replacing the previous General Agreement on Tariffs and Trade GATT that forms the cornerstone of the world trading system.
