SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Adaptive Smoothing: A special type of exponential smoothing that takes the success of previous forecasts intoaccount when setting a value of ALPHAforthe nextperiod.In thismanner,periods that experienced high error willcause ALPHA to be set high and, thus, adjust quickly. When error is low, AS assumes the technique is doing well andsets ALPHAata low level.Thismakes ESmuchmore responsiveto changes in thelevel of thedata and less reactiveto noise.Theadvantage to adaptive smoothing isthatthe decision of what valueof ALPHA to use in exponentialsmoothing is eliminated.Adisadvantage to adaptive smoothing is that trend and seasonality are ignored.ADR:SeeAlternateDispatchResolutionAdvance Material Request: A request for materials which is created in advance of formal need due to long leadtimesfor components,etc.Advanced Planning and Scheduling (ApS):Refers to a manufacturing management process by which rawmaterials and production capacity are optimally allocated to meet demand.ApS is especially well-suited toenvironments where simpler planning methods cannot adequately address complextrade-offs between competingpriorities.Advanced Shipping Notice (AsN):Detailed shipment information transmitted to a customer or consignee inadvance of delivery,designating the contents (individual products and quantities of each) and nature of theshipment. In EDI data standards this is referred to as an 856 transaction. May also include carrier and shipmentspecifics including time of shipment and expected time of arrival.See also:Assumed ReceiptAftermarket:A market for parts and accessories used in the repair or enhancement of a product.A secondarymarket created after the original market sales are finished.After-Sale Service:Services provided to the customer after products have been delivered. This can includerepairs,maintenanceand/ortelephonesupport.Synonym:Field ServiceAgency tariff:Apublication of a rate bureau that contains rates formany carriers.Agent: An enterprise authorized to transact business for, or in the name of, another enterprise.Agglomeration:AnetadvantagegainedbyacommonlocationwithothercompaniesAggregate Forecast: Forecasting of future demand for a family of products or for a single product across multipledimensionsofsource-includingplannedproductionandcustomerorders.Aggregate Inventory:The total inventory available for any given product across multiple locations and/or multiplestock-keeping units.AggregateInventoryManagement:Amethod ofmanaging inventorythroughtheuseof levels set againstoverallinventoryorclassvalueDelfinitions compiled by:KateVitasekwww.scvisions.comcSCMPdoesnottakeresonsibilityforthefficialdefinitcept as notedoensPage 6 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Aftermarket: A market for parts and accessories used in the repair or enhancement of a product. A secondary market created after the original market sales are finished. Agent: An enterprise authorized to transact business for, or in the name of, another enterprise. Advance Material Request: A request for materials which is created in advance of formal need due to long lead times for components, etc. Agency tariff: A publication of a rate bureau that contains rates for many carriers. Agglomeration: A net advantage gained by a common location with other companies. Aggregate Inventory Management: A method of managing inventory through the use of levels set against overall inventory or class value. Aggregate Inventory: The total inventory available for any given product across multiple locations and/or multiple stock-keeping units. Aggregate Forecast: Forecasting of future demand for a family of products or for a single product across multiple dimensions of source - including planned production and customer orders. Advanced Planning and Scheduling (APS): Refers to a manufacturing management process by which raw materials and production capacity are optimally allocated to meet demand. APS is especially well-suited to environments where simpler planning methods cannot adequately address complex trade-offs between competing priorities. After-Sale Service: Services provided to the customer after products have been delivered. This can include repairs, maintenance and/or telephone support. Advanced Shipping Notice (ASN): Detailed shipment information transmitted to a customer or consignee in advance of delivery, designating the contents (individual products and quantities of each) and nature of the shipment. In EDI data standards this is referred to as an 856 transaction. May also include carrier and shipment specifics including time of shipment and expected time of arrival. Synonym: Field Service See also: Assumed Receipt ADR: See Alternate Dispatch Resolution Adaptive Smoothing:Aspecial type of exponential smoothing that takes the success of previous forecasts into account when setting a value of ALPHA for the next period. In this manner, periods that experienced high error will cause ALPHA to be set high and, thus, adjust quickly. When error is low, AS assumes the technique is doing well and sets ALPHA at a low level. This makes ES much more responsive to changes in the level of the data and less reactive to noise. The advantage to adaptive smoothing is that the decision of what value of ALPHA to use in exponential smoothing is eliminated. A disadvantage to adaptive smoothing is that trend and seasonality are ignored. Definitions compiled by: Kate Vitasek www.scvisions.com CSCMP does not take responsibility for these definitions nor endorses these as official definitions except as noted. Page 6 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Aggregate Plan: A plan for the production process, 2 to 18 months in advance to give management an idea to ofwhat quantity of materials andother resources are tobeprocured and when,so that thetotal costof operations ofthe organization is kept to the minimum over that period.AggregatePlanning:Anoperationalactivitywhichcompilesanaggregateplanfortheproductionprocess.Aggregate Tender Rate:A reduced rate offered toa shipper whotenders two or more class-rated shipments atonetimeandoneplace.AgileManufacturing:Tools,techniques,and initiatives that enable a plant or company to thrive under conditionsof unpredictablechange.Agilemanufacturingnotonly enablesaplanttoachieverapid responsetocustomerneeds,but also includes the ability toquickly reconfigure operations-and strategic alliances-to respond rapidlyto unforeseenshifts in the marketplace.In some instances,it also incorporates"mass customization" concepts to satisfy uniquecustomer requirements. In broad terms, it includes the ability to react quickly to technical or environmentalsurprises.Agility: The ability to rapidly and cost effectively adapt to market changes with no significant negative impact onquality or dependability.AGvS:SeeAutomatedGuidedVehicleSystemAir Cargo: Freight that is moved by air transportation.Air Cargo Containers: Containers designed to conform to the inside of an aircraft. There are many shapes andsizes of containers. Air cargo containers fall into three categories: 1)air cargo pallets 2) lower deck containers 3)box type containers.AirForceMaterialCommand:SeeAMFCAirMobilityCommand:SeeAMCAir Taxi: An exempt for-hire air carrier that will fly anywhere on demand: air taxis are restricted to a maximumpayloadandpassengercapacityperplane.AirTransportAssociationofAmerica:AU.S.airlineindustryassociation.Air Waybill (AwB): A bill of lading for air transport that serves as a receipt for the shipper, indicates that thecarrier has accepted the goods listed, obligates the carrier to carry the consignment to the airport of destinationaccording to specified conditions.Airportand AirwayTrustFund:Afederal fund that collects passenger ticket taxes and disburses thosefundsforairportfacilitiesDefinitions compiled by:KateVitasekwww.scvisions.comcSCMPdoesnottakeronsibilityforthefficialdefinitcept as notedoePage 7 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Air Mobility Command: See AMC Air Force Material Command: See AMFC Agile Manufacturing: Tools, techniques, and initiatives that enable a plant or company to thrive under conditions of unpredictable change. Agile manufacturing not only enables a plant to achieve rapid response to customer needs, but also includes the ability to quickly reconfigure operations-and strategic alliances-to respond rapidly to unforeseen shifts in the marketplace. In some instances, it also incorporates "mass customization" concepts to satisfy unique customer requirements. In broad terms, it includes the ability to react quickly to technical or environmental surprises. Agility: The ability to rapidly and cost effectively adapt to market changes with no significant negative impact on quality or dependability. Aggregate Tender Rate: A reduced rate offered to a shipper who tenders two or more class-rated shipments at one time and one place. Aggregate Planning: An operational activity which compiles an aggregate plan for the production process. Air Transport Association of America: A U.S. airline industry association. Air Taxi: An exempt for-hire air carrier that will fly anywhere on demand: air taxis are restricted to a maximum payload and passenger capacity per plane. Airport and Airway Trust Fund: A federal fund that collects passenger ticket taxes and disburses those funds for airport facilities. Air Cargo: Freight that is moved by air transportation. AGVS: See Automated Guided Vehicle System Air Cargo Containers: Containers designed to conform to the inside of an aircraft. There are many shapes and sizes of containers. Air cargo containers fall into three categories: 1) air cargo pallets 2) lower deck containers 3) box type containers. Air Waybill (AWB): A bill of lading for air transport that serves as a receipt for the shipper, indicates that the carrier has accepted the goods listed, obligates the carrier to carry the consignment to the airport of destination according to specified conditions. Aggregate Plan: A plan for the production process, 2 to 18 months in advance to give management an idea to of what quantity of materials and other resources are to be procured and when, so that the total cost of operations of the organization is kept to the minimum over that period. Definitions compiled by: Kate Vitasek www.scvisions.com CSCMP does not take responsibility for these definitions nor endorses these as official definitions except as noted. Page 7 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Alaskan Carrier:Afor-hire air carrier that operates within the state of Alaska.Alert:SeeActionMessageAlgorithm: A clearly specified mathematical process for computation; a set of rules, which, if followed, give aprescribed result.All-cargo carrier: An air carrier that transports cargo onlyAllocated Item: A feature of an inventory control and order management system which allows for quantitiesavailable in inventory to be associated with a customer or production order so that the quantity cannot otherwise beused.Allocation: 1) In cost accounting, a distribution of costs using calculations that may be unrelated to physicalobservations or direct or repeatable cause-and-effect relationships. Because of the arbitrary nature of allocations,costs based on cost causal assignment are viewed as more relevant for management decision-making.2) In ordermanagement,allocation ofavailable inventoryto customerandproductionorders.Allocation Costing: A method of allocating indirect / overhead costs to inventory items and costs of sales.Seealso:AbsorptionCostingAlpha Release: A very early release of a product to get preliminary feedback about the feature set and usability.Alternate Dispute Resolution (ADR): Any of a number of methods (such as mediation, arbitration, mock trials,etc)usedtoresolvedisputes outside of litigation.Alternate Routing:In a production environment this is an optional process for manufacturing or assembly of aproduct, which may be employed due to unavailability of a primary work center, or choice of non-standardcomponents.May also refer to a transportation route which is different than what would normally betaken,perhapsdue to weather.American Customer Satisfaction Index (AcsI): Released for the first time in October 1994, an economicindicator and cross industry measure of the satisfaction of U.S. household customers with the quality of the goodsand services available to them-both those goods and services produced within the United States and those providedasimportsfromforeignfirmsthathavesubstantialmarketsharesordollarsales.TheAcSIisco-sponsoredbytheUniversity of Michigan Business School, ASQand the CFI Group.American National StandardsInstitute(ANsI):A non-profit organization chartered to develop,maintain,andpromulgate voluntary U.S.national standards in a number of areas,especially with regards to setting EDI standards.ANSIistheU.S.representativetotheInternational Standards Organization (ISO)Definitions compiled byKateVitasekwww.scvisions.comCSCMPdoesnottakeresponsibilityforthetfficialdefiniticept as notededehinitionsnorPage 8 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Alaskan Carrier: A for-hire air carrier that operates within the state of Alaska. See also: Absorption Costing American National Standards Institute (ANSI): A non-profit organization chartered to develop, maintain, and promulgate voluntary U.S. national standards in a number of areas, especially with regards to setting EDI standards. ANSI is the U.S. representative to the International Standards Organization (ISO). American Customer Satisfaction Index (ACSI): Released for the first time in October 1994, an economic indicator and cross industry measure of the satisfaction of U.S. household customers with the quality of the goods and services available to them-both those goods and services produced within the United States and those provided as imports from foreign firms that have substantial market shares or dollar sales. The ACSI is co-sponsored by the University of Michigan Business School, ASQ and the CFI Group. Alternate Routing: In a production environment this is an optional process for manufacturing or assembly of a product, which may be employed due to unavailability of a primary work center, or choice of non-standard components. May also refer to a transportation route which is different than what would normally be taken, perhaps due to weather. Alpha Release: A very early release of a product to get preliminary feedback about the feature set and usability. Alternate Dispute Resolution (ADR): Any of a number of methods (such as mediation, arbitration, mock trials, etc) used to resolve disputes outside of litigation. Allocation Costing: A method of allocating indirect / overhead costs to inventory items and costs of sales. Allocation: 1) In cost accounting, a distribution of costs using calculations that may be unrelated to physical observations or direct or repeatable cause-and-effect relationships. Because of the arbitrary nature of allocations, costs based on cost causal assignment are viewed as more relevant for management decision-making. 2) In order management, allocation of available inventory to customer and production orders. Allocated Item: A feature of an inventory control and order management system which allows for quantities available in inventory to be associated with a customer or production order so that the quantity cannot otherwise be used. All-cargo carrier: An air carrier that transports cargo only. Algorithm: A clearly specified mathematical process for computation; a set of rules, which, if followed, give a prescribed result. Alert: See Action Message Definitions compiled by: Kate Vitasek www.scvisions.com CSCMP does not take responsibility for these definitions nor endorses these as official definitions except as noted. Page 8 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010American Society for Quality (AsQ):A professional organization with more than 100,o00 members whichadvances learning,quality improvement,and knowledge exchangeto improvebusinessresuits,and to create betterworkplacesandcommunitiesworldwide.AmericanSocietyforTestingandMaterials(AsTM):Not-for-profit organizationthatprovides aforum forthedevelopmentand publication ofvoluntary consensus standardsfor materials,products,systems and services.American SocietyforTraining and Development (ASTD):Amembership organization providing materials,educationandsupportrelatedtoworkplacelearningandperformance.AmericanSocietyof Transportation&Logistics:Aprofessionalorganization in thefield of logisticsAmerican Standard Code for Information Interchange (AScII): ASCII format -simple text based data with noformatting. The standard code for information exchange among data processing systems. Uses a coded character setconsisting of 7-bit coded characters (8bits including parity check).AmericanTruckingAssociation,Inc.(ATA):A motorcarrier industry associationthatis madeup of subconferences representing various sectors ofthemotorcarrier industry.American WaterwayOperators:A domesticwatercarrier industryassociation representing bargeoperators ontheinland waterways.AMC:The US Air Force Air Mobility Command's mission is to provide global air mobility.The command also plays acrucial role in providing humanitarian support at home and around the world.AMC Airmen--active duty, Air NationalGuard,AirForceReserveand Civil ReserveAirFleet.AMFc:Air Force Material Command conducts research, development, testing and evaluation, and provides theacquisition management services and logistics support necessaryto keep Air Force weapon systems readyfor war.The command develops,acquiresand sustains the aerospace power neededto defendtheUnited States and itsinterestsfortodayandtomorrow.AMS: See Automated Manifest SystemAmtrak:The National Railroad Passenger Corporation, a federally created corporation that operates most of theUnited States'intercity passenger rail service.Analysis of Variance (ANovA):A statistical term that refers to a collection of statistical models whichtest themeansof severalgroupstodetermine ifthemeansareequal.Andon:A manufacturing term referring to a signboard incorporating signal lights,audio alarms,and text or otherdisplaysinstalledataworkstationtonotifymanagementandotherworkersofaqualityorprocessproblemDelfinitions compiled by:KateVitasekwww.scvisions.comCSCMPdoesnottakeresponsibilityforthefficialdefiniticept as notedoet山Page 9 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT AMC: The US Air Force Air Mobility Command's mission is to provide global air mobility. The command also plays a crucial role in providing humanitarian support at home and around the world. AMC Airmen-active duty, Air National Guard, Air Force Reserve and Civil Reserve Air Fleet. AMFC: Air Force Material Command conducts research, development, testing and evaluation, and provides the acquisition management services and logistics support necessary to keep Air Force weapon systems ready for war. The command develops, acquires and sustains the aerospace power needed to defend the United States and its interests for today and tomorrow. AMS: See Automated Manifest System Analysis of Variance (ANOVA): A statistical term that refers to a collection of statistical models which test the means of several groups to determine if the means are equal. Amtrak: The National Railroad Passenger Corporation, a federally created corporation that operates most of the United States' intercity passenger rail service. Andon: A manufacturing term referring to a signboard incorporating signal lights, audio alarms, and text or other displays installed at a workstation to notify management and other workers of a quality or process problem. American Waterway Operators: A domestic water carrier industry association representing barge operators on the inland waterways. American Trucking Association, Inc. (ATA): A motor carrier industry association that is made up of sub conferences representing various sectors of the motor carrier industry. American Standard Code for Information Interchange (ASCII): ASCII format - simple text based data with no formatting. The standard code for information exchange among data processing systems. Uses a coded character set consisting of 7-bit coded characters (8 bits including parity check). American Society of Transportation & Logistics: A professional organization in the field of logistics. American Society for Training and Development (ASTD): A membership organization providing materials, education and support related to workplace learning and performance. American Society for Testing and Materials (ASTM): Not-for-profit organization that provides a forum for the development and publication of voluntary consensus standards for materials, products, systems and services. American Society for Quality (ASQ): A professional organization with more than 100,000 members which advances learning, quality improvement, and knowledge exchange to improve business results, and to create better workplaces and communities worldwide. Definitions compiled by: Kate Vitasek www.scvisions.com CSCMP does not take responsibility for these definitions nor endorses these as official definitions except as noted. Page 9 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated:February2010Animated GIF:A file containing a series of GIF(Graphics InterchangeFormat) images that are displayed in rapidsequencebysomeWebbrowsers,givingananimatedeffect.See also:GIFANovA:SeeAnalysisofVarianceANsI:SeeAmericanNationalStandardsInstituteANsIAscx12:AmericanNationalStandardsInstituteAccreditedStandardsCommitteeX12.ThecommitteeofANSI that is charted with setting EDI standards.ANSI Standard:A published transaction set approved by ANSI.The standards are reviewed every six months.Anticipated DelayReport:A report,normallyhandwritten,which is created by the procurement and productionareastoadvisemanagementregardingorderswhicharenotexpectedtobecompletedontime.AnticipationInventories:Extra stocks of inventory which are being held above known requirement is order toaccommodatetrendsorpromotions.Mayalsobeusedtohedgeagainstriskof supplyproblems.Anticipation Order: An order placed in advance of the availability of a product for delivery at a future date.Anticipation orders are frequently used in the retail environment where suppliers are previewing new products attrade shows and want togeta commitmentfrom their retailcustomerspriortoproduction of seasonal items.Anti-Deficiency Act [Title 31, U.S. Code, Sec1341 & 1517]: Prohibits making or authorizing an obligation inexcess of the amount available; forbids obligation to pay money from the Us Treasury in advance of theappropriation;requiresagencytofixresponsibilityforviolationsoftheAct.Anti-Dumping Duty: An additional import duty imposed in instances where imported goods are priced at less thanthe normal price charged in the exporter's domestic market and cause material injury to domestic industry in theimporting country.Any-quantity Rate (AQ): The same rate applies to any size shipment tendered to a carrier; no discount rate isavailableforlargeshipments.A/P:SeeAccountsPayableApplicability Statement 2 (As2):A specification for Electronic Data Interchange between businesses using theInternet's Web pageprotocol,theHypertext TransferProtocol (HTTP).Thespecification isanextension of the earlierversion, Applicability Statement 1 (AS1). Both specifications were created by EDI over the Internet (EDINT), aworking group of the Internet Engineering Task Force (IETF) that develops secure and reliable businesscommunicationsstandards.Definitions compiled by:KateVitasekwww.scvisions.comCSCMPdoesnottakeresponsibilityforthefficialdefinitcept as notedoet山Page 10.of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT ANOVA: See Analysis of Variance Anti-Dumping Duty: An additional import duty imposed in instances where imported goods are priced at less than the normal price charged in the exporter's domestic market and cause material injury to domestic industry in the importing country. Anti-Deficiency Act [Title 31, U.S. Code, Sec1341 & 1517]: Prohibits making or authorizing an obligation in excess of the amount available; forbids obligation to pay money from the US Treasury in advance of the appropriation; requires agency to fix responsibility for violations of the Act. Anticipation Order: An order placed in advance of the availability of a product for delivery at a future date. Anticipation orders are frequently used in the retail environment where suppliers are previewing new products at trade shows and want to get a commitment from their retail customers prior to production of seasonal items. ANSI Standard: A published transaction set approved by ANSI. The standards are reviewed every six months. ANSI ASC X12: American National Standards Institute Accredited Standards Committee X12. The committee of ANSI that is charted with setting EDI standards. ANSI: See American National Standards Institute Animated GIF: A file containing a series of GIF (Graphics Interchange Format) images that are displayed in rapid sequence by some Web browsers, giving an animated effect. See also: GIF Any-quantity Rate (AQ): The same rate applies to any size shipment tendered to a carrier; no discount rate is available for large shipments. Applicability Statement 2 (AS2): Aspecification for Electronic Data Interchange between businesses using the Internet's Web page protocol, the Hypertext Transfer Protocol (HTTP). The specification is an extension of the earlier version, Applicability Statement 1 (AS1). Both specifications were created by EDI over the Internet (EDIINT), a working group of the Internet Engineering Task Force (IETF) that develops secure and reliable business communications standards. A/P: See Accounts Payable Anticipation Inventories: Extra stocks of inventory which are being held above known requirement is order to accommodate trends or promotions. May also be used to hedge against risk of supply problems. Anticipated Delay Report: A report, normally handwritten, which is created by the procurement and production areas to advise management regarding orders which are not expected to be completed on time. Definitions compiled by: Kate Vitasek www.scvisions.com CSCMP does not take responsibility for these definitions nor endorses these as official definitions except as noted. Page 10 of 212