SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Block Stacking:A storagemethod whichusesno formal racking or shelves to contain the products.Items to bestored(pallets,casesorcartons)arestackedupwardsfromthefloorsurfacetowhateverheightispractical.Blocking bug: A defect that prevents further or more detailed analysis or verification of a functional area or feature,oranyissuethat wouldpreventtheproductfrom shipping.Blow Through: An MRP process which uses a "phantom bill of material" and permits MRP logic to driverequirements straight through the phantom item to its components.The MRP system usuallyretains its ability to netagainstany occasional inventories ofthe item.Seealso:PhantomBillofMaterialBMP:SeeBitmapImageBodyofknowledge(Bok):Theprescribedaggregationofknowledgeinaparticularareaanindividualisexpectedto have mastered to be considered or certified as a practitioner.BoK:SeeBodyofKnowledgeBOL:See Bill of LadingBoM:SeeBill ofMaterialsBona Fide Need Rule:Requires funds to be used only for needs or services in the year of the appropriationsobligation period.Bonded Warehouse: Warehouse approved by the Treasury Department and under bond/guarantee for observanceof revenuelaws.Used for storinggoods until duty is paid orgoods are released in some other propermanner.Book Inventory:An accounting term used to refer to the value or quantity of inventory shown in the company'saccounting"books"such as an inventory controldatabase orthe general ledger.Book inventory is compared tophysical inventoryduring auditprocessesforvalidation and todetermineany variances.Bookings: The sum of the value of all orders received (but not necessarily shipped), net of all discounts, coupons,allowances,and rebates.Bottleneck:Aconstraint,obstacleorplannedcontrolthat limitsthroughputortheutilizationofcapacityBottom-upReplanning:A manual technique of resource planning that allows the user to interact withthe systematmuchlow levelsofdetail usingdisaggregateddemand andsupplyordersand tracingthedemandof a lowerlevelcomponenttohigherlevelassembliesandproducts.Definitions compiled byKateVitasekwww.scvIsions.concSCMPdoesnottakeonsibilityforthcialdonept as notedoet山Page 21 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT BOK: See Body of Knowledge BOL: See Bill of Lading Bona Fide Need Rule: Requires funds to be used only for needs or services in the year of the appropriations obligation period. Bookings: The sum of the value of all orders received (but not necessarily shipped), net of all discounts, coupons, allowances, and rebates. Book Inventory: An accounting term used to refer to the value or quantity of inventory shown in the company’s accounting ‘books” such as an inventory control database or the general ledger. Book inventory is compared to physical inventory during audit processes for validation and to determine any variances. BOM: See Bill of Materials BMP: See Bitmap Image Bottom-up Replanning: A manual technique of resource planning that allows the user to interact with the system at much low levels of detail using disaggregated demand and supply orders and tracing the demand of a lower level component to higher level assemblies and products. Bottleneck: A constraint, obstacle or planned control that limits throughput or the utilization of capacity. Bonded Warehouse: Warehouse approved by the Treasury Department and under bond/guarantee for observance of revenue laws. Used for storing goods until duty is paid or goods are released in some other proper manner. Body of knowledge (BOK): The prescribed aggregation of knowledge in a particular area an individual is expected to have mastered to be considered or certified as a practitioner. Blow Through: An MRP process which uses a "phantom bill of material" and permits MRP logic to drive requirements straight through the phantom item to its components. The MRP system usually retains its ability to net against any occasional inventories of the item. Blocking bug: A defect that prevents further or more detailed analysis or verification of a functional area or feature, or any issue that would prevent the product from shipping. See also: Phantom Bill of Material Block Stacking: A storage method which uses no formal racking or shelves to contain the products. Items to be stored (pallets, cases or cartons) are stacked upwards from the floor surface to whatever height is practical. 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 21 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated:February 2010Bounce Back:The practice of sending another identical (or similar)catalog back to someone whohas just orderedsomething from oneof your catalogs.Box-Jenkins Model: In time series analysis, the Box-Jenkins methodology applies autoregressive moving averagemodels to find thebest fitof a time series to past values of this time series, in order to make forecastsSee also:ForecastBoxcar:Anenclosedrailcartypically40to5ofeetlong;usedforpackagedfreightandsomebulkcommodities.BPA: See Blanket Purchasing AgreementBPM:SeeBusinessPerformanceMeasurementBpo:SeeBusinessProcessOutsourcingBPR:SeeBusinessProcessReengineeringBPS:SeeBasisPointBracing: Securing a shipment inside a carrier's vehicle to prevent damage.Bracketed Recall:RA method of performing product recalls where a range of known lot numbers is expanded onthe front and back end in order to capture any risk.Branding:Theact of assigning a nameor imageto aproduct insucha waythat consumers will associateonewiththe other.Branding typically includes doing background research to ensure that the name can be trademarked and isnotcurrentlyinusebyanothercompanyforasimilarproduct.Breadman:A specificapplication of Kanban,used in coordinating vendorreplenishment activities.In making breador other route type deliveries, the deliveryman typically arrives at the customer's location and fills a designatedcontainer or storage location with product. The size of the order is not specified on an ongoing basis, nor does thecustomer even specify requirements for each individual delivery.Instead, the supplier assumes the responsibility forquantifying the need against a prearranged set of rules and delivers the requisite quantity.Break-Bulk: The separation of a single consolidated bulk load into smaller individual shipments for delivery to theultimate consignees.This is preceded by a consolidation of orders at the time of shipment, where many individualorders which are destined for a specific geographic area are grouped into one shipment in order to reduce cost.Break-Even Chart: A graphical tool used to chart the "break-even point"-the point where the total sales revenueaxis line intersects with total cost axis line.Sales revenue,variable and fixed costs areplotted on thevertical axiswhilevolumeisplotted onthehorizontal axis.See also:Total Cost CurveDefinitions compiled by:KateVitasekwww.scvIsions.comcSCMPdoesnottakereonsibilityforthfficialdefinitcept as notedde山Page22of212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT BPA: See Blanket Purchasing Agreement Break-Even Chart: A graphical tool used to chart the “break-even point” – the point where the total sales revenue axis line intersects with total cost axis line. Sales revenue, variable and fixed costs are plotted on the vertical axis while volume is plotted on the horizontal axis. Break-Bulk: The separation of a single consolidated bulk load into smaller individual shipments for delivery to the ultimate consignees. This is preceded by a consolidation of orders at the time of shipment, where many individual orders which are destined for a specific geographic area are grouped into one shipment in order to reduce cost. Breadman: A specific application of Kanban, used in coordinating vendor replenishment activities. In making bread or other route type deliveries, the deliveryman typically arrives at the customer's location and fills a designated container or storage location with product. The size of the order is not specified on an ongoing basis, nor does the customer even specify requirements for each individual delivery. Instead, the supplier assumes the responsibility for quantifying the need against a prearranged set of rules and delivers the requisite quantity. Branding: The act of assigning a name or image to a product in such a way that consumers will associate one with the other. Branding typically includes doing background research to ensure that the name can be trademarked and is not currently in use by another company for a similar product. Bracketed Recall: RA method of performing product recalls where a range of known lot numbers is expanded on the front and back end in order to capture any risk. Bracing: Securing a shipment inside a carrier's vehicle to prevent damage. BPR: See Business Process Reengineering BPO: See Business Process Outsourcing BPM: See Business Performance Measurement Boxcar: An enclosed rail car typically 40 to 50 feet long; used for packaged freight and some bulk commodities. Box-Jenkins Model: In time series analysis, the Box–Jenkins methodology applies autoregressive moving average models to find the best fit of a time series to past values of this time series, in order to make forecasts. Bounce Back: The practice of sending another identical (or similar) catalog back to someone who has just ordered something from one of your catalogs. See also: Forecast See also: Total Cost Curve BPS: See 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 22 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Break-Even Point: A chart which graphically represents the point at which cost or expenses and revenue are equal:there is no net loss orgain, and one has"broken even".Seealso:TotalCostCurveBricks and Mortar: The act of selling through a physical location. The flip side of clicks and mortar, where selling isconducted via the Internet.An informal term for representingthe old economy versus new economy or theIndustrial economy versus information economy.Broadband:A high-speed, high-capacity transmission channel. Broadband channels are carried on radio wave,coaxial or fiber-optic cables that have a widerbandwidth than conventional telephone lines,giving them theability tocarry video, voice, and data simultaneously.Broken case:An open case.Theterm is often used interchangeablywith"repack"or"less-than-full-case"to namethe area in whichmaterials are picked in that form.Broker: An intermediary between the shipper and the carrier. The broker arranges transportation for shippers andrepresents carriers.Brokered Systems:Independent computersystems,owned byindependent organizations or entities,linked in amanner toallow one system to retrieve information from another.For example,a customer's computer system isableto retrieveorderstatusfroma supplier'scomputer.Browser:A utility that allows an internet user to look through collections of things.For example,NetscapeNavigator and Microsoft Explorer allowyou to viewcontents on theWorld WideWeb.BRs:SeeBusinessReviewsBTS: See Balance to ShipBucket-brigade Picking: A way of organizing workers on a pick line so that the line balances itself. Each workerstartsdown apick line,atthe speed they can accomplishgiven theirskill and thedifficulty of the next pick.Whenthe last worker finishes his pick at the end of the pick line, he or she walks back upstream to take over the work oftheirpredecessor,whowalksbackandtakesovertheworkofhisorherpredecessorandsoon.BucketedSystem:Atechnique used in requirementsplanning whereavailableresources are represented inbuckets- typically weekly or monthly periods - showing a beginning balance, anticipated supply and demand for the periodand thecalculated forecast availability.Bucketless system:A technique used in requirements planning where available resources are calculated ondemand using a beginning balance and known or planned supply and demand for the period.Definitions compiled byKateVitasekwww.scvisions.comCSCMPdoesnottakeresponsibilityforthefficialdefiniticept as notededehinitionsnoreon0Page 23 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Bucket-brigade Picking: A way of organizing workers on a pick line so that the line balances itself. Each worker starts down a pick line, at the speed they can accomplish given their skill and the difficulty of the next pick. When the last worker finishes his pick at the end of the pick line, he or she walks back upstream to take over the work of their predecessor, who walks back and takes over the work of his or her predecessor and so on. Bucketless system: A technique used in requirements planning where available resources are calculated on demand using a beginning balance and known or planned supply and demand for the period. Bucketed System: A technique used in requirements planning where available resources are represented in buckets – typically weekly or monthly periods – showing a beginning balance, anticipated supply and demand for the period and the calculated forecast availability. BTS: See Balance to Ship Browser: A utility that allows an internet user to look through collections of things. For example, Netscape Navigator and Microsoft Explorer allow you to view contents on the World Wide Web. Brokered Systems: Independent computer systems, owned by independent organizations or entities, linked in a manner to allow one system to retrieve information from another. For example, a customer's computer system is able to retrieve order status from a supplier's computer. Broker: An intermediary between the shipper and the carrier. The broker arranges transportation for shippers and represents carriers. Broken case: An open case. The term is often used interchangeably with "repack" or "less-than-full-case" to name the area in which materials are picked in that form. Broadband: A high-speed, high-capacity transmission channel. Broadband channels are carried on radio wave, coaxial or fiber-optic cables that have a wider bandwidth than conventional telephone lines, giving them the ability to carry video, voice, and data simultaneously. Bricks and Mortar: The act of selling through a physical location. The flip side of clicks and mortar, where selling is conducted via the Internet. An informal term for representing the old economy versus new economy or the Industrial economy versus information economy. Break-Even Point: A chart which graphically represents the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even". See also: Total Cost Curve BRs: See Business Reviews 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 23 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Buffer:Thelevel of merchandise/goods to bestocked as neededto accommodate regular sales orders,taking intoconsiderationlowandpeakperiods.Buffer Management: A technique used in theory of constraints (ToC) based management systems to overcomeshortages and idle constraints.BufferStock:SeeSafetyStockBulk area: Astorage area forlarge items which at aminimumaremost efficientlyhandled by thepallet load.Bulk storage:The process of housing or storing materials and packages in larger quantities,generally using theoriginal packaging or shipping containers orboxes.Bulkpacking:Theprocessoractofplacingnumbersof small cartonsorboxes intoalargersingleboxtoaidinthemovementofproductandtopreventdamageorpilferagetothesmallercartonsorboxes.BulletinBoard:An electronicforumthathostsposted messages andarticlesrelatedtoa commonsubject.Bullwhip Effect: Also known as "Whiplash Effect"it is an observed phenomenon in forecast-driven distributionchannels. The oscillating demand magnification upstream a supply chain is reminiscent of a cracking whip.Theconcepthas itsrootsinJForrester'sIndustrialDynamics(1961)andthus itisalsoknownastheForresterEffect.Bundle: A group of products that are shipped together as an unassembled unit.Bundling:An occurrence where two or more products are combined into one transaction for a singleprice.Burn Rate: The rate of consumption of cash in a business. Burn rate is used to determine cash requirements on anon-going basis.Aburn-rateof $5o,ooo would meanthecompanyspends$5o,oooa monthaboveany incomingcash flow to sustain its business.Entrepreneurial companies will calculate their burn-rate in order to understand howmuchtimetheyhavebeforethey need to raisemore money,or showapositivecashflow.Business Activity Monitoring (BAM): A term which refers to capturing operational data in real-time or close to it,making it possible for an enterprise to react more quickly to events.This is typically done through software andincludesfeaturestoprovidealerts/notificationswhenspecificevents occur.Seealso:SupplyChainEventManagementBusiness Application: Any computer program, set of programs, or package of programs created to solve aparticularbusinessproblemorfunction.Business Continuity Plan (BcP): A defined operational plan which is designed to be implemented in the event ofdisruption of normal operations. Disruptions may be the result of natural disasters, civil or labor unrest, etc. CsCMPprovides suggestions for helping companies do continuity planning in their Securing the Supply Chain Research. AcopyoftheresearchisavailableontheCSCMP websiteDelfinitions compiled by:KateVitasekwww.scvisions.comcSCMPdoesnottakereonsibilityforcialdonceptas notedPage24of212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Bullwhip Effect: Also known as “Whiplash Effect” it is an observed phenomenon in forecast-driven distribution channels. The oscillating demand magnification upstream a supply chain is reminiscent of a cracking whip. The concept has its roots in J Forrester's Industrial Dynamics (1961) and thus it is also known as the Forrester Effect. Buffer Management: A technique used in theory of constraints (TOC) based management systems to overcome shortages and idle constraints. Bulletin Board: An electronic forum that hosts posted messages and articles related to a common subject. Bulk packing: The process or act of placing numbers of small cartons or boxes into a larger single box to aid in the movement of product and to prevent damage or pilferage to the smaller cartons or boxes. Bulk storage: The process of housing or storing materials and packages in larger quantities, generally using the original packaging or shipping containers or boxes. Bulk area: A storage area for large items which at a minimum are most efficiently handled by the pallet load. Buffer Stock: See Safety Stock Buffer: The level of merchandise / goods to be stocked as needed to accommodate regular sales orders, taking into consideration low and peak periods. Bundle: A group of products that are shipped together as an unassembled unit. Bundling: An occurrence where two or more products are combined into one transaction for a single price. Business Continuity Plan (BCP): A defined operational plan which is designed to be implemented in the event of disruption of normal operations. Disruptions may be the result of natural disasters, civil or labor unrest, etc. CSCMP provides suggestions for helping companies do continuity planning in their Securing the Supply Chain Research. A copy of the research is available on the CSCMP website. Business Application: Any computer program, set of programs, or package of programs created to solve a particular business problem or function. See also: Supply Chain Event Management Business Activity Monitoring (BAM): A term which refers to capturing operational data in real-time or close to it, making it possible for an enterprise to react more quickly to events. This is typically done through software and includes features to provide alerts / notifications when specific events occur. Burn Rate: The rate of consumption of cash in a business. Burn rate is used to determine cash requirements on an on-going basis. A burn-rate of $50,000 would mean the company spends $50,000 a month above any incoming cash flow to sustain its business. Entrepreneurial companies will calculate their burn-rate in order to understand how much time they have before they need to raise more money, or show a positive cash flow. 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 24 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Business Intelligence:The set of skills,technologies,applications and practices used to help a business acquireabetterunderstandingofitscommercialcontexttomakebetterbusinessdecisions.Business Logistics: The systematic and coordinated set of activities required to provide the physical movementand storageofgoods(rawmaterials,parts,finishedgoods)from vendor/supply servicesthrough companyfacilitiesto the customer (market) and the associated activities-packaging, order processing, etc.-in an efficient mannernecessarytoenabletheorganizationtocontributetotheexplicitgoalsof thecompany.BusinessPlan:Aformalstatement of a set of businessgoals,the reasons whytheyarebelieved attainable,and theplanforreachingthosegoals.Itmayalsocontainbackground informationabouttheorganizationorteamattemptingto reachthosegoals.BusinessPerformanceMeasurement(BPM):A technique which usesa systemofgoals and metrics to monitorperformance.Analysisofthesemeasurementscanhelpbusinessesinperiodicallysettingbusinessgoals,andthenprovidingfeedbacktomanagersonprogresstowardsthosegoals.Aspecificmeasurecanbecomparedto itselfovertime,compared with a preset target or evaluated along with othermeasures.Business Process Outsourcing (Bpo): The practice of outsourcing non-core internal functions to third parties.Functions typically outsourced include logistics, accounts payable,accounts receivable,payroll and human resources.OtherareascanincludeITdevelopmentorcompletemanagementoftheITfunctionsoftheenterprise.BusinessProcessReengineering(BPR):Thefundamentalrethinking andoftentimes,radical redesignofbusinessprocessestoachievedramaticorganizationalimprovements.BusinessReviews(BRs):Aperiodicassessmentofthecommercialcontext ofabusiness,itsmission statement,goalsand strategic plan.Reviews are typicallyheld eachquarter of thecalendar yearand are attended byseniormanagersoffunctional areasfromboth supplierand customer organizations.Business-to-Business(B2B):As opposed to business-to-consumer (B2C).Many companies are nowfocusing onthis strategy, and their sites are aimed at businesses (think wholesale) and only other businesses can access or buyproducts on the site.Internet analysts predict this will be thebiggest sector on the Web.Business-to-Consumer(B2C):The hundreds of e-commerce Web sites that sell goods directlyto consumers areconsidered B2C.This distinction is important when comparing Websites that are B2B as the entire business model,strategy,execution, and fulfillment is different.Business Unit: A part of an organization which is managed like a separate business with its own profit and lossfinancial reporting.For example, in the General Motors group Chevrolet is a business unit.BuyerBehavior:Themannerisms inherent inhowabusinessorindividualactsduringthepurchasingprocessDefinitions compiled byKate Vitasekwww.scvisions.comCSCMPdoesnottakeresponsibilityforthenrofficialdefinitixceptasnotedse.dePage 25 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Buyer Behavior: The mannerisms inherent in how a business or individual acts during the purchasing process. Business Unit: A part of an organization which is managed like a separate business with its own profit and loss financial reporting. For example, in the General Motors group Chevrolet is a business unit. Business-to-Consumer (B2C): The hundreds of e-commerce Web sites that sell goods directly to consumers are considered B2C. This distinction is important when comparing Websites that are B2B as the entire business model, strategy, execution, and fulfillment is different. Business-to-Business (B2B): As opposed to business-to-consumer (B2C). Many companies are now focusing on this strategy, and their 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. Business Process Reengineering (BPR): The fundamental rethinking and oftentimes, radical redesign of business processes to achieve dramatic organizational improvements. Business Performance Measurement (BPM): A technique which uses a system of goals and metrics to monitor performance. Analysis of these measurements can help businesses in periodically setting business goals, and then providing feedback to managers on progress towards those goals. A specific measure can be compared to itself over time, compared with a preset target or evaluated along with other measures. Business Plan: A formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Business Logistics: The systematic and coordinated set of activities required to provide the physical movement and storage of goods (raw materials, parts, finished goods) from vendor/supply services through company facilities to the customer (market) and the associated activities-packaging, order processing, etc.-in an efficient manner necessary to enable the organization to contribute to the explicit goals of the company. Business Intelligence: The set of skills, technologies, applications and practices used to help a business acquire a better understanding of its commercial context to make better business decisions. Business Reviews (BRs): A periodic assessment of the commercial context of a business, its mission statement, goals and strategic plan. Reviews are typically held each quarter of the calendar year and are attended by senior managers of functional areas from both supplier and customer organizations. Business Process Outsourcing (BPO): The practice of outsourcing non-core internal functions to third parties. Functions typically outsourced include logistics, accounts payable, accounts receivable, payroll and human resources. Other areas can include IT development or complete management of the IT functions of the enterprise. 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 25 of 212