SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Application Service Provider(Asp):A company that offers access over the Internet to application (examples ofapplicationsinclude wordprocessors,database programs,Webbrowsers,development tools,communicationprograms) and related services that would otherwise have to be located in their own computers. Sometimes referredtoas"apps-on-tap",AsPservicesareexpectedto becomeanimportantalternative,especiallyforsmallercompanieswith low budgetsforinformationtechnology.Thepurpose istotryto reduce acompany'sburden by installing,managing, and maintaining software.Application-to-Application: The direct interchange of data between computers, without re-keying.Approved Vendor List (AvL):List of the suppliers approved for doing business.The AVL is usually created byprocurement or sourcing and engineering personnel using a variety of criteria such as technology,functional fit oftheproduct,financial stability,andpastperformanceof thesupplier.ApS:SeeAdvanced Planningand SchedulingAQ: See Any quantity rateAQL:SeeAcceptableQualityLevelA/R:SeeAccountsReceivableArmy Corps of Engineers: A US federal agency responsible for the construction and maintenance or waterways.Arrival Notice:A notice from the delivering carrier to the Notify Party indicating the shipment's arrival date at aspecific location (normallythedestination).Arrow Diagram: A planning tool to diagram a sequence of events or activities (nodes) and the interconnectivity ofsuch nodes. It is used for scheduling and especially for determining the critical path through nodes.ArtificialIntelligence:UnderstandingandcomputerizingthehumanthoughtprocessAs2:SeeApplicabilityStatement2AsC:SeeAccreditedStandardsCommitteeofANSIAsCX12:AccreditedStandardsCommittee X12.Acommittee of ANSIcharteredin1979to develop uniformstandards for the electronic interchange of business documents.AscII:SeeAmericanStandardCodeforInformationInterchangeASN:SeeAdvanced Shipping NoticeASP:SeeApplication Service ProviderDefinitions compiled byKate Vitasekwww.scvIsions.concSCMPdoesnottakeonsibilityforttaldofept as notedoetoPage 11 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Arrival Notice: A notice from the delivering carrier to the Notify Party indicating the shipment's arrival date at a specific location (normally the destination). ASC: See Accredited Standards Committee of ANSI ASP: See Application Service Provider Approved Vendor List (AVL): List of the suppliers approved for doing business. The AVL is usually created by procurement or sourcing and engineering personnel using a variety of criteria such as technology, functional fit of the product, financial stability, and past performance of the supplier. Artificial Intelligence: Understanding and computerizing the human thought process. Arrow Diagram: A planning tool to diagram a sequence of events or activities (nodes) and the interconnectivity of such nodes. It is used for scheduling and especially for determining the critical path through nodes. Army Corps of Engineers: A US federal agency responsible for the construction and maintenance or waterways. A/R: See Accounts Receivable AS2: See Applicability Statement 2 ASN: See Advanced Shipping Notice ASCII: See American Standard Code for Information Interchange ASC X12: Accredited Standards Committee X12. A committee of ANSI chartered in 1979 to develop uniform standards for the electronic interchange of business documents. Application Service Provider (ASP): A company that offers access over the Internet to application (examples of applications include word processors, database programs, Web browsers, development tools, communication programs) and related services that would otherwise have to be located in their own computers. Sometimes referred to as "apps-on-tap", ASP services are expected to become an important alternative, especially for smaller companies with low budgets for information technology. The purpose is to try to reduce a company's burden by installing, managing, and maintaining software. AQL: See Acceptable Quality Level AQ: See Any quantity rate APS: See Advanced Planning and Scheduling Application-to-Application: The direct interchange of data between computers, without re-keying. 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 11 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010AsQ:SeeAmericanSocietyforQualityAs/RS:SeeAutomatedStorageandRetrievalSystemAssemble-to-order:A strategy employed in production and light manufacturing environments where completesubassembliesandcomponentsareassembled intoafinishedproduct justpriortocustomershipment.Synonym:FinishtoOrderSeealso:MaketoOrderSeealso:MaketoStockAssembly: A collection of components which have been put together into a unit, or the activity involved with puttingcomponentstogethertoformaunit.Assembly Line: A manufacturing process where products are completed from components as a result of a series ofcontinuousactivities.HenryFord iswidelyrecognizedasthefatherof theassembly line.Assignment: A distribution of costs using causal relationships. Because cost causal relationships are viewed asmorerelevantformanagementdecision-making,assignment of costsisgenerallypreferabletoallocationtechniques.Synonym: TracingContrastwith:AllocationAssociationofAmericanRailroads:Arailroad industryassociation that representsthe larger U.S.railroads.AssumedReceipt:Theprincipleofassumingthatthe contentsof a shipment arethe sameas thosepresentedonashipping or delivery note.Shipping and receiving personnel do not check the delivery quantity.This practice is usedin conjunction with bar codes and an EDI-delivered ASN to eliminate invoices and facilitate rapid receiving.AssuredSourceofSupply:Aguaranteedsupplysourceusuallydesignatedbyacontractualagreement.Synonym:CertifiedSupplierASTM:SeeAmericanSocietyforTestingandMaterialsAsTD:SeeAmericanSocietyforTrainingandDevelopmentAsynchronous Process: A situation where two related processes are started and run concurrently without waitingfortheotherto complete.ATA:SeeAmericanTruckingAssociationDefinitions compiled byKateVitasekwww.scvisions.comcSCMPdoesnottakereonsibilityfortheofficialdefinitcept as notededehonPage12of212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Assured Source of Supply: A guaranteed supply source usually designated by a contractual agreement. See also: Make to Stock Synonym: Certified Supplier Association of American Railroads: A railroad industry association that represents the larger U.S. railroads. AS/RS: See Automated Storage and Retrieval System ASQ: See American Society for Quality Assignment: 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. Assembly Line: A manufacturing process where products are completed from components as a result of a series of continuous activities. Henry Ford is widely recognized as the father of the assembly line. Assembly: A collection of components which have been put together into a unit, or the activity involved with putting components together to form a unit. Assemble-to-order: A strategy employed in production and light manufacturing environments where complete subassemblies and components are assembled into a finished product just prior to customer shipment. See also: Make to Order Synonym: Finish to Order Assumed Receipt: The principle of assuming that the contents of a shipment are the same as those presented on a shipping or delivery note. Shipping and receiving personnel do not check the delivery quantity. This practice is used in conjunction with bar codes and an EDI-delivered ASN to eliminate invoices and facilitate rapid receiving. ASTD: See American Society for Training and Development ASTM: See American Society for Testing and Materials ATA: See American Trucking Association Asynchronous Process: A situation where two related processes are started and run concurrently without waiting for the other to complete. Contrast with: Allocation Synonym: Tracing 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 12 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Atomic: Refers to the lowest level of division for a process, product structure, network, etc.Atomic elementscannot typically be sub-divided. In a process this refers to a unique activity,in a product structure this would be asinglepart component, in a network this could representa single warehouse or location.ATP:SeeAvailabletoPromiseATS:SeeAvailabletoSellAttachment: A piece of equipment which is typically sold as a optional separate unit and may be combined with themainproductatthefactoryorinthefield.Attributes: A label used to provide additional classification or information about a resource, activity, or cost object.Used for focusing attention and may be subjective.Examples are a characteristic,a score or grade of product oractivity,orgroupingsoftheseitems,andperformancemeasures.Audit: The inspection and examination of a process or quality system to ensure compliance to requirements. Anaudit canapplytoanentireorganization ormay be specifictoafunction,process orproduction step.Audit Trail: Manual or computerized tracing of the transactions affecting the contents or origin of a record.Auditability:A characteristic of modern information systems, gauged by the ease with which data can besubstantiated by trading it to source documents and the extent to which auditors can rely on pre-verified andmonitored control processes.Auditing: Determining the correct transportation charges due the carrier: auditing involves checking the accuracyof the freight billfor errors, correct rate, and weight.Authentication: 1) The process of verifying the eligibility of a device, originator, or individual to access specificcategories of information orto enter specific areas of afacility.This process involves matching machine-readablecode with a predetermined list of authorized end users.2)A practice of establishing the validity of a transmission,message,device,or originator,whichwasdesigned toprovideprotection againstfraudulenttransmissions.Authentication Key:A short string of characters used to authenticate transactions between trading partners.Autodiscrimination: The functionality of a bar code reader to recognize the bar code symbology being scannedthusallowingareadertoreadseveral differentsymbologiesconsecutivelyAutoID:Referring to an automated identification system. This includes technology such as bar coding and radiofrequency tagging (RFID).Automated Broker Interface (ABI):The U.S. Customs program to automate the flow of customs-relatedinformationamongcustomsbrokers,importers,andcarriersDelfinitions compiled by:KateVitasekwww.scvisions.comcSCMPdoesnottakenialdoept as notedonsibilityforthdehonorPage 13 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Auditing: Determining the correct transportation charges due the carrier: auditing involves checking the accuracy of the freight bill for errors, correct rate, and weight. Authentication Key: A short string of characters used to authenticate transactions between trading partners. Authentication: 1) The process of verifying the eligibility of a device, originator, or individual to access specific categories of information or to enter specific areas of a facility. This process involves matching machine-readable code with a predetermined list of authorized end users. 2) A practice of establishing the validity of a transmission, message, device, or originator, which was designed to provide protection against fraudulent transmissions. Auditability: A characteristic of modern information systems, gauged by the ease with which data can be substantiated by trading it to source documents and the extent to which auditors can rely on pre-verified and monitored control processes. Automated Broker Interface (ABI): The U.S. Customs program to automate the flow of customs-related information among customs brokers, importers, and carriers. ATP: See Available to Promise Atomic: Refers to the lowest level of division for a process, product structure, network, etc. Atomic elements cannot typically be sub-divided. In a process this refers to a unique activity, in a product structure this would be a single part component, in a network this could represent a single warehouse or location. Attachment: A piece of equipment which is typically sold as a optional separate unit and may be combined with the main product at the factory or in the field. ATS: See Available to Sell Audit Trail: Manual or computerized tracing of the transactions affecting the contents or origin of a record. Audit: The inspection and examination of a process or quality system to ensure compliance to requirements. An audit can apply to an entire organization or may be specific to a function, process or production step. Attributes: A label used to provide additional classification or information about a resource, activity, or cost object. Used for focusing attention and may be subjective. Examples are a characteristic, a score or grade of product or activity, or groupings of these items, and performance measures. AutoID: Referring to an automated identification system. This includes technology such as bar coding and radio frequency tagging (RFID). Autodiscrimination: The functionality of a bar code reader to recognize the bar code symbology being scanned thus allowing a reader to read several different symbologies consecutively 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 13 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Automated Call Distribution (AcD):A feature of large call center or"Customer Interaction Center"telephoneswitches that routescalls by rulessuch as next available employee, skill-set etc.AutomatedClearinghouse(AcH):Anationwide electronic payments system,whichmorethan15,ooo financialinstitutions use,onbehalf of 1oo,ooo corporationsand millions of consumer intheU.S.Thefunds transfer systemofchoice among businesses that make electronic payments to vendors, it is economical and can carry remittanceinformationinstandardized,computerprocessabledataformats.Automated Commercial Environment (AcE):Update of outmoded Automated Commercial System (ACS).It isintended to provide automated information system to enable the collection, processing and analysis of commercialimport and export data, allowing for moving goods through the ports faster and at lower cost, as well as detection ofterrorist threats.Automated Guided Vehicle System (AGvS):A systemfor material handling equipment which uses wired orwirelessguidancetomovematerialsaroundfacilitiesbasedonsystemcommandsAutomated Manifest System (AMs): A multi-modular cargo inventory control and release notification systemthrough which carriers submit their electronic cargo declaration24 hours before loading.Seealso:24HourRuleAutomated Storage/Retrieval System (As/Rs): An inventory storage system which uses un-manned vehicles toautomaticallyperformstockput-awayandpickingactions.Automatic Relief: An accounting method where bookkeeping is performed either as a result of completed orpending activities.See also: BackflushingAvailable Inventory: Also called net inventory, this is the quantity of stock which is available to use afterconsidering allocations,reservations,backorders,andquantities set asideto compensateforquality problems.Synonym:NetInventorySynonym:Available-to-PromiseAvailabletoPromise(ATP):Thequantityof aproduct which is or will beavailabletopromisetoa customerbasedon their required shipment date.ATPistypically'timephased'to allow forpromisingdeliveryat a future datebasedonanticipatedpurchaseorproductionreceipts.Available to Sell (ATs): Total quantity of goods committed to the pipeline for a ship to or selling location. Thisincludes the current inventory at a location and any open purchase orders.Definitions compiled byKateVitasekwww.scvisions.comcSCMPdoesnottakeponsibility for thefficialdefinept as notededehonsnorPage 14 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Available to Promise (ATP): The quantity of a product which is or will be available to promise to a customer based on their required shipment date. ATP is typically ‘time phased’ to allow for promising delivery at a future date based on anticipated purchase or production receipts. Available Inventory: Also called net inventory, this is the quantity of stock which is available to use after considering allocations, reservations, backorders, and quantities set aside to compensate for quality problems. Automatic Relief: An accounting method where bookkeeping is performed either as a result of completed or pending activities. Automated Storage/Retrieval System (AS/RS): An inventory storage system which uses un-manned vehicles to automatically perform stock put-away and picking actions. Automated Guided Vehicle System (AGVS): A system for material handling equipment which uses wired or wireless guidance to move materials around facilities based on system commands. Automated Commercial Environment (ACE): Update of outmoded Automated Commercial System (ACS). It is intended to provide automated information system to enable the collection, processing and analysis of commercial import and export data, allowing for moving goods through the ports faster and at lower cost, as well as detection of terrorist threats. Available to Sell (ATS): Total quantity of goods committed to the pipeline for a ship to or selling location. This includes the current inventory at a location and any open purchase orders. Automated Manifest System (AMS): A multi-modular cargo inventory control and release notification system through which carriers submit their electronic cargo declaration 24 hours before loading. Automated Clearinghouse (ACH): A nationwide electronic payments system, which more than 15,000 financial institutions use, on behalf of 100,000 corporations and millions of consumer in the U.S. The funds transfer system of choice among businesses that make electronic payments to vendors, it is economical and can carry remittance information in standardized, computer processable data formats. Synonym: Available-to-Promise Synonym: Net Inventory Automated Call Distribution (ACD): A feature of large call center or "Customer Interaction Center" telephone switches that routes calls by rules such as next available employee, skill-set etc. See also: 24 Hour Rule See also: Backflushing 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 14 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Average Annual Production Materials Related A/P (Accounts Payable): The value of direct materials acquiredin that year for which payment has not yet been made. Production-related materials are those items classified asmaterial purchases and included intheCostof GoodsSold (COGS)as rawmaterial purchases.Calculate:Calculate:Usethe 5-pointAnnual AverageAverageCostperUnit:Theaveragecostof stockof anygiven item based onhaving incurred differentcostsforeach time a receipt was processed. Usually calculated at the time of a new receipt by multiplying old inventoryquantity by old avg.cost, then adding the received count and total cost, then dividing the new total cost by the newinventoryquantity.Average Inventory:The average inventory level over a period of time. Implicit in this definition is a "samplingperiod" which is the amount of time between inventory measurements.For example, daily inventory levels over atwo-week period of time,hourly inventory levels over one day,etc.Theaverage inventoryfor the sametotal periodoftime canfluctuatewidelydepending uponthesamplingperiod used.Average Payment Period (for materials):The average time from receipt of production-related materials andpayment for those materials.Production-related materials are those items classified as material purchases andincluded in the Cost of Goods Sold (CoGS) as raw material purchases. (An element of Cash-to-Cash Cycle Time)[Five point annual average production-related material accounts payable] /Calculation::[Annualproduction-relatedmaterialreceipts/365]AVL: See Approved VendorListAvoidable Cost: part of the cost of any activity associated with an output, that could be saved by not performingthat activity.Award Fee:Based on subjective assessment by Government on howwell contractor meets/exceeds performancestandards.AwB: See Air WaybillDefinitions compiled byKateVitasekwww.scvisions.comcSCMPdoesnottakereonsibilityforthefficialdefinitcept as notededefinitionsnortPage 15 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT AWB: See Air Waybill Average Annual Production Materials Related A/P (Accounts Payable): The value of direct materials acquired in that year for which payment has not yet been made. Production-related materials are those items classified as material purchases and included in the Cost of Goods Sold (COGS) as raw material purchases. [Five point annual average production-related material accounts payable] / [Annual production-related material receipts/365] Avoidable Cost: part of the cost of any activity associated with an output, that could be saved by not performing that activity. AVL: See Approved Vendor List Award Fee: Based on subjective assessment by Government on how well contractor meets/exceeds performance standards. Calculation: Calculate: Calculate: Use the 5-point Annual Average Average Payment Period (for materials): The average time from receipt of production-related materials and payment for those materials. Production-related materials are those items classified as material purchases and included in the Cost of Goods Sold (COGS) as raw material purchases. (An element of Cash-to-Cash Cycle Time) Average Inventory: The average inventory level over a period of time. Implicit in this definition is a "sampling period" which is the amount of time between inventory measurements. For example, daily inventory levels over a two-week period of time, hourly inventory levels over one day, etc. The average inventory for the same total period of time can fluctuate widely depending upon the sampling period used. Average Cost per Unit: The average cost of stock of any given item based on having incurred different costs for each time a receipt was processed. Usually calculated at the time of a new receipt by multiplying old inventory quantity by old avg. cost, then adding the received count and total cost, then dividing the new total cost by the new inventory quantity. 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 15 of 212