SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated:February2010BB2B:SeeBusinessto BusinessB2C:SeeBusinesstoConsumerBack-Charged:1)Apaymentcredited to a company'saccountfornotperforming basedoncontractterms,and2)An amount charged to a contractor for materials, equipment, services, or other charges which were paid by theownerandfurnishedtothecontractor.Back Scheduling: A technique used to calculating activities based on a series of known activities, the time requiredtocompletethem,andthedesired enddateforcompletingtheseries.Backflush: A method used to relieve inventory and charge costs based on completed units. Backflushing is analternativetoprocessingactualissueorlabortransactionsrelatedtoproduction.Typicallyabillofmaterialsisusedto determine the quantity required to build a product, and relief is based on quantity required per time unitscomplete.It works well in environmentswhere thetime spent in WiP is short,otherwisethedelay in recording bookon handcan causeproblems withinventorycontrolSee also:Pre-deduct Inventory Transaction ProcessingBackhaul: The portion of a transport trip, typically associated with trucking, that is incurred when returning avehicle to its point of origin. Ideally the carrier with find some sort of freight to carry back, if the trip is empty it iscalled deadhead.Seealso:DeadheadBacklogCustomer:Customerordersreceived but notyet shipped;also includesbackorders andfuture orders.Backorder:1)The act of retaining a quantityto ship against an order when other order lines havealready beenshipped.Backorders are usually caused by stock shortages.2)The quantity remaining to be shipped if an initialshipment(s)has been processed. Note: In some cases backorders are not allowed, this results in a lost sale whensufficientquantitiesarenotavailableto completelyshipand orderororder line.Seealso:BalancetoShipBacksourcing:Theprocess of recapturing and takingresponsibility internallyforprocesses that were previouslyoutsourced to a contract manufacturer,fulfillment or other service provider. Backsourcing typically involves thecancellation or expiration of an outsourcing contract and can be nearly as complex as the original outsourcingprocess.Balance of Trade:The surplus or deficit which results from comparing a country's exports and imports ofmerchandise only.Definitions compiled by:KateVitasekwww.scvisions.comCSCMPdoesnottakeresponsibilityforthefficialdefinitcept as noteddehonPage 16 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Backflush: A method used to relieve inventory and charge costs based on completed units. Backflushing is an alternative to processing actual issue or labor transactions related to production. Typically a bill of materials is used to determine the quantity required to build a product, and relief is based on quantity required per time units complete. It works well in environments where the time spent in WIP is short, otherwise the delay in recording book on hand can cause problems with inventory control Back Scheduling: A technique used to calculating activities based on a series of known activities, the time required to complete them, and the desired end date for completing the series. Back-Charged: 1) A payment credited to a company’s account for not performing based on contract terms, and 2) An amount charged to a contractor for materials, equipment, services, or other charges which were paid by the owner and furnished to the contractor. B2C: See Business to Consumer See also: Pre-deduct Inventory Transaction Processing See also: Deadhead See also: Balance to Ship Backorder: 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 and order or order line. Backlog Customer: Customer orders received but not yet shipped; also includes backorders and future orders. Backhaul: The portion of a transport trip, typically associated with trucking, that is incurred when returning a vehicle to its point of origin. Ideally the carrier with find some sort of freight to carry back, if the trip is empty it is called deadhead. Backsourcing: The process of recapturing and taking responsibility internally for processes that were previously outsourced to a contract manufacturer, fulfillment or other service provider. Backsourcing typically involves the cancellation or expiration of an outsourcing contract and can be nearly as complex as the original outsourcing process. Balance of Trade: The surplus or deficit which results from comparing a country's exports and imports of merchandise only. B B2B: See Business to Business 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 16 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Balanceto Ship (BTS): Balance or remaining quantity of a promotion or orderthat has yet to ship.Seealso:BackorderBalancedOperationalPerformanceGoals:SeeBalancedScorecardBalanced Scorecard:A strategic performance management tool used for measuring whether the smaller-scaleoperational activities ofa company arealigned with itslarger-scale objectives in terms of vision and strategy Byfocusing not only on financial outcomes but also on the operational, marketing and developmental inputs to these,the Balanced Scorecard helps provide a more comprehensive view of a business,which in turn helps organizationsact in their best long-term interestsSeealso:ScorecardBAM: See Business Activity MonitoringBar Code:A symbol consisting of a series of printed bars representing values.A system of optical characterreading,scanning,and tracking of units by reading a series of printed bars for translation into a numeric oralphanumeric identification code.A popular example is the UpC code used on retail packaging.Bar codescanner:Adeviceto read bar codes and communicatedata to computer systemsBarge: The cargo-carrying vehicle used primarily by inland water carriers.: The basic barges have open tops, buttherearecovered barges for bothdryand liquid cargoes.Barrier to Entry: Reasons that companies perceive will stop them from participating in a particular market.Theseincludecostofentry,significantcompetition,limitedknowledge,etc.Base Demand:The level of demand for a product which is based on actual history and /orknown customercontracts.Synonym:BaseloadDemandBaseStockSystem:An inventorysysteminwhicha replenishmentorder is issued eachtimea withdrawalismade,and the order quantity s equal to the amount of the withdrawal..This type of system is also referred to as a par-stock system (bringing stock back to par level).BaseloadDemand:SeeBaseDemandBaseline: A basis for comparison set by monitoring the initial performance of a process. The baseline is used as areferencepointtoevaluateperformanceimprovementefforts.Basing Point Pricing: A pricing system that includes a transportation cost from a particular city or town in a zoneorregioneventhoughtheshipmentdoesnotoriginateatthebasingpoint.Definitions compiled byKateVitasekwww.scvIsIons.comcSCMPdoesnottakereonsibilityforthefficialdefiniept as notedoet山Page17of212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Baseload Demand: See Base Demand Baseline: A basis for comparison set by monitoring the initial performance of a process. The baseline is used as a reference point to evaluate performance improvement efforts. Basing Point Pricing: A pricing system that includes a transportation cost from a particular city or town in a zone or region even though the shipment does not originate at the basing point. BAM: See Business Activity Monitoring Base Demand: The level of demand for a product which is based on actual history and / or known customer contracts. Barrier to Entry: Reasons that companies perceive will stop them from participating in a particular market. These include cost of entry, significant competition, limited knowledge, etc. Base Stock System: An inventory system in which a replenishment order is issued each time a withdrawal is made, and the order quantity s equal to the amount of the withdrawal. . This type of system is also referred to as a parstock system (bringing stock back to par level). See also: Scorecard Synonym: Baseload Demand Balanced Scorecard: A strategic performance management tool used for measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy By focusing not only on financial outcomes but also on the operational, marketing and developmental inputs to these, the Balanced Scorecard helps provide a more comprehensive view of a business, which in turn helps organizations act in their best long-term interests. Balance to Ship (BTS): Balance or remaining quantity of a promotion or order that has yet to ship. See also: Backorder Barge: The cargo-carrying vehicle used primarily by inland water carriers. The basic barges have open tops, but there are covered barges for both dry and liquid cargoes. Bar code scanner: A device to read bar codes and communicate data to computer systems. Bar Code: A symbol consisting of a series of printed bars representing values. A system of optical character reading, scanning, and tracking of units by reading a series of printed bars for translation into a numeric or alphanumeric identification code. A popular example is the UPC code used on retail packaging. Balanced Operational Performance Goals: See Balanced Scorecard 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 17 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Basis Point (Bps): A basis point is a unit that is equal to 1/100th of 1%, and is often used instead of percentageswhen discussing interest rates,rates of return,and other percentage-based performance metrics that can occur asfractionsof a percent.1%change=100 basispoints,and 0.01%=1basispoint.Batch Control Totals: The result of grouping transactions at the input stage and establishing control totals overthemtoensureproper processing.These control totals can bebased on document counts,record counts,quantitytotals, dollartotals, orhash (mixed data, such as customerAR numbers)totals.Batch Number: A sequence number associated with a specific batch or production run of products and used fortracking purposes.Synonym:LotNumberBatchPicking:An order picking method whereorders aregrouped into small batches,an order pickerwill pick allorders within the batch in one pass.Batch picking is usually associated with pickers with multi-tiered picking cartsmoving up and down aisles picking batches of usually 4 to 12 orders, however, batch picking is also very commonwhen working with automated material handling equipment such as carousels.See also:Discrete Order PickingSee also: Order PickingSee also: Zone PickingBatch Processing: A computer term which refers to the processing of computer information after it has beenaccumulated in onegroup,or batch.This isthe oppositeof"real-time"processing wheretransactions areprocessedin their entirety as they occur.Batch Release: Orders are released to be fulflled or picked at specific times during the course of a day.Accumulationoftheordersbeforereleaseresultsinabatch.See also: Batch PickingBaud: A computer term describing the rate of transmission over a channel or circuit. The baud rate is equal to thenumber of pulses that can be transmitted in one second, often the same as the number of bits per second. Commonrates are now 1200, 2400, 4800, 9600 bits and 19.2 and 56 kilobytes (Kbs) for"dial-up" circuits, and may be muchhigherforbroadbandcircuits.BcP:See Business Continuity PlanBeginning AvailableBalance:See Available InventoryBelly Cargo: Air freight carried in the belly of passenger aircraft.Benchmark:Ameasured,"best in class"achievement;areferenceormeasurement standard for comparison;thisperformance level is recognized as the standard of excellence for a specific business process. Any metric which isbeingusedtocompareactualperformanceagainst.Delfinitions compiled by:KateVitasekwww.scvisions.comcSCMPdoesnottakeresponsibilityforthetofficial definitiokcept as notededehonsnorPage 18 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Belly Cargo: Air freight carried in the belly of passenger aircraft. Benchmark: A measured, "best in class" achievement; a reference or measurement standard for comparison; this performance level is recognized as the standard of excellence for a specific business process. Any metric which is being used to compare actual performance against. Beginning Available Balance: See Available Inventory BCP: See Business Continuity Plan Baud: A computer term describing the rate of transmission over a channel or circuit. The baud rate is equal to the number of pulses that can be transmitted in one second, often the same as the number of bits per second. Common rates are now 1200, 2400, 4800, 9600 bits and 19.2 and 56 kilobytes (Kbs) for "dial-up" circuits, and may be much higher for broadband circuits. Batch Processing: A computer term which refers to the processing of computer information after it has been accumulated in one group, or batch. This is the opposite of “real-time” processing where transactions are processed in their entirety as they occur. Batch Release: Orders are released to be fulfilled or picked at specific times during the course of a day. Accumulation of the orders before release results in a batch. See also: Batch Picking See also: Discrete Order Picking See also: Order Picking See also: Zone Picking Batch Picking: An order picking method where orders are grouped into small batches, an order picker will pick all orders within the batch in one pass. Batch picking is usually associated with pickers with multi-tiered picking carts moving up and down aisles picking batches of usually 4 to 12 orders, however, batch picking is also very common when working with automated material handling equipment such as carousels. Batch Number: A sequence number associated with a specific batch or production run of products and used for tracking purposes. Batch Control Totals: The result of grouping transactions at the input stage and establishing control totals over them to ensure proper processing. These control totals can be based on document counts, record counts, quantity totals, dollar totals, or hash (mixed data, such as customer AR numbers) totals. Synonym: Lot Number Basis Point (BPS): A basis point is a unit that is equal to 1/100th of 1%, and is often used instead of percentages when discussing interest rates, rates of return, and other percentage-based performance metrics that can occur as fractions of a percent. 1% change = 100 basis points, and 0.01% = 1 basis point. 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 18 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February2010Benchmarking:The process of comparing performance against the practices of other leading companies for thepurpose of improving performance.Companies also benchmark internally by tracking and comparing currentperformance with past performance.Benchmarking seeks to improveany given businessprocess by exploiting"bestpractices" rather than merely measuring the best performance.Best practices are the cause of best performance.Studying best practices provides the greatest opportunity for gaining a strategic, operational, and financialadvantage.Benefit-cost ratio:An analytical tool used in public planning;a ratio of total measurable benefits divided by theinitial capital cost.Bespoke: An individual or custom-made product or service. Traditionally applied to custom-tailored clothing, theterm has been extended to information technology, especially for custom-designed software as an alternative tocommercial (COTS)software.Best-in-Class: An organization, usually within a specific industry, recognized for excellence in a specific processarea.Best Practice: A specific process or group of processes which have been recognized as the best method forconducting an action. Best Practices may vary by industry or geography depending on the environment being used.Bestpracticesmethodologymaybeappliedwithrespecttoresources,activities,costobject,orprocesses.Beta release: A pre-released version of a product that is sent to customers for evaluation and feedback.BI: See Business IntelligenceBilateral Contract: An agreement in which each of the parties to the contract makes a promise or promises to theotherparty.Bill of Activities: A listing of activities required by a product, service, process output or other cost object. Bill ofactivity attributes could include volume and or cost of each activity in the listing.Bill of Lading (BoL):A transportation document that is the contract of carriage containing the terms andconditions between the shipper and carrier.Bill of Lading, Through: A bill of lading that covers goods from point of origin to final destination, wheninterchangeortransferfromone carrierto anotheris necessaryto completethe journeyBill of Material (BoM):A structured list of all the materials or parts and quantities needed to produce a particularfinishedproduct,assembly,subassembly,ormanufacturedpart,whetherpurchasedornot.Bill of Material Accuracy: Conformity of a list of specified items to administrative specifications, with all quantitiescorrect.Delfinitions compiled by:KateVitasekwww.scVIsIons.coTcSCMPdoesnottakeresponsibilityforthefficialdefiniticept as noteddehoPage 19 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Bill of Lading (BOL): A transportation document that is the contract of carriage containing the terms and conditions between the shipper and carrier. Bill of Activities: A listing of activities required by a product, service, process output or other cost object. Bill of activity attributes could include volume and or cost of each activity in the listing. Bilateral Contract: An agreement in which each of the parties to the contract makes a promise or promises to the other party. Beta release: A pre-released version of a product that is sent to customers for evaluation and feedback. BI: See Business Intelligence Best Practice: 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. Best-in-Class: An organization, usually within a specific industry, recognized for excellence in a specific process area. Benefit-cost ratio: An analytical tool used in public planning; a ratio of total measurable benefits divided by the initial capital cost. Benchmarking: 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. Benchmarking seeks to improve any given business process by exploiting "best practices" rather than merely measuring the best performance. Best practices are the cause of best performance. Studying best practices provides the greatest opportunity for gaining a strategic, operational, and financial advantage. Bespoke: An individual or custom-made product or service. Traditionally applied to custom-tailored clothing, the term has been extended to information technology, especially for custom-designed software as an alternative to commercial (COTS) software. Bill of Lading, Through: A bill of lading that covers goods from point of origin to final destination, when interchange or transfer from one carrier to another is necessary to complete the journey. Bill of Material Accuracy: Conformity of a list of specified items to administrative specifications, with all quantities correct. Bill of Material (BOM): 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. 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 19 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated:February2010Bill of Resources:A listing of resources required by an activity. Resource attributes could include cost andvolumes.Bin: An inventory location which is typically a box or tray used to hold quantities of smaller partsBinary: A computer term referring to a system of numerical notation that assumes only two possible states orvalues, zero (O) and one (1). Computer systems use a binary technique where an individual bit or "Binary Digit" ofdata can be"on"or"off"(1 or O). Multiple bits are combined into a"Byte"which represents a character or number.Bisynchronous:A computer termreferring toa communicationprotocol wherebymessages aresent as blocksofcharacters.Theblocksof data arecheckedforcompleteness andaccuracybythereceiving computer.BitmapImage(BMP):The standard imageformat on Windows-compatiblecomputers.Bitmap images canbesavedforWindowsorOS/2systemsandsupport24-bitcolor.BlanketOrder:SeeBlanketPurchaseOrderBlanket Purchase Order: A blanket order is defined as an order the customer makes with its supplier whichcontains multiple delivery dates scheduled over a period of time, sometimes at predetermined prices. It is normallyused when there is a recurring need for expendable goods. Hence, items are purchased under a single purchaseorder (P.O)rather than processing a separate P.O.each time supplies are needed.Synonym:BlanketOrderSynonym:StandingOrderBlanket Purchasing Agreement (BPA):A US Government Service Administration buying schedulefor buyers andsellers which denotesnot onlythatpriceshave already been determined to befair and reasonable but goes a stepfurther by determining the terms under which goods and services will be provided and possibly establishing a singlesource to deliver them over a period of time.Blanket Release:An authorization,similar to a purchase request,which is used to confirm a customer's agreementto produce or deliver products identified in an earlier blanket P.O. agreement or contract.Blanket Rate: A rate that does not increase according to the distance the commodity is shipped.Bleeding Edge: An unproven process or technology so far ahead of its time that it may create a competitivedisadvantage.Block diagram:A diagram of a system, in which the principal parts or functions are represented by blocksconnected by lines that show the relationships of the blocks. The block diagram is typically used for a higher level,less detailed description aimed more at understanding the overall concepts and less at understanding thedetails ofimplementation.Definitions compiled byKateVitasekwww.scvisions.comCSCMP does not take responsibility for thesfficialdefiniticept as notededehosnortPage 20.of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Blanket Purchasing Agreement (BPA): A US Government Service Administration buying schedule for buyers and sellers which denotes not only that prices have already been determined to be fair and reasonable but goes a step further by determining the terms under which goods and services will be provided and possibly establishing a single source to deliver them over a period of time. Bisynchronous: A computer term referring to a communication protocol whereby messages are sent as blocks of characters. The blocks of data are checked for completeness and accuracy by the receiving computer. Binary: A computer term referring to a system of numerical notation that assumes only two possible states or values, zero (0) and one (1). Computer systems use a binary technique where an individual bit or "Binary Digit" of data can be "on" or "off" (1 or 0). Multiple bits are combined into a "Byte" which represents a character or number. Block diagram: A diagram of a system, in which the principal parts or functions are represented by blocks connected by lines that show the relationships of the blocks. The block diagram is typically used for a higher level, less detailed description aimed more at understanding the overall concepts and less at understanding the details of implementation. Bleeding Edge: An unproven process or technology so far ahead of its time that it may create a competitive disadvantage. Blanket Rate: A rate that does not increase according to the distance the commodity is shipped. Blanket Purchase Order: A blanket order is defined as an order the customer makes with its supplier which contains multiple delivery dates scheduled over a period of time, sometimes at predetermined prices. It is normally used when there is a recurring need for expendable goods. Hence, items are purchased under a single purchase order (P.O) rather than processing a separate P.O. each time supplies are needed. Blanket Release: An authorization, similar to a purchase request, which is used to confirm a customer’s agreement to produce or deliver products identified in an earlier blanket P.O. agreement or contract. Synonym: Standing Order Synonym: Blanket Order Bin: An inventory location which is typically a box or tray used to hold quantities of smaller parts. Bill of Resources: A listing of resources required by an activity. Resource attributes could include cost and volumes. Blanket Order: See Blanket Purchase Order Bitmap Image (BMP): The standard image format on Windows-compatible computers. Bitmap images can be saved for Windows or OS/2 systems and support 24-bit color. 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 20 of 212