SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated:February2010Commodities clause: A clause that prohibits railroads from hauling commodities that they produced, mined,owned, or had an interest in.Commodity: Any physical item that is traded in commerce. The term usually implies an undifferentiated productcompetingprimarilyonpriceand availability.Commodity Buying: The practice of grouping like purchased items into common groups which are then managedby a single buyer / agent. This practice assumes that an individual who is more focused on a range of products orservices can perform that function betterthan someone who is novice.Commodity Code:A codedescribing a commodity or a group of commodities pertaining to goods classification.Thiscode can be carrier tariff or regulating in nature.CommodityProcurementStrategy:SeeCommodityBuyingCommodityRate:Aratefora specificcommodityand itsorigin-destination.Common Carrier: Any carrier engaged in the interstate transportation of persons/property on a regular schedule atpublishedrates,whoseservicesareforhiretothegeneralpublic.Common carrier duties:Common carriers are required to serve,deliver,charge reasonable rates, and notdiscriminate.Common cost: A cost that cannot be directly assignable to particular segments of the business but that is incurredfor the business as a whole.Commuter: An exempt for-hire air carrier that publishes a time schedule on specific routes; a special type of airtaxi.CommunicationProtocol:Themethod bywhichtwocomputerscoordinatetheircommunications.BISYNCandMNParetwoexamples.CompanyCulture:A concept which describes thepsychology,attitudes,experiences,beliefs andvalues(personaland cultural values) of an organization. The values and customs shared by people and groups in an organizationwhichgovernhow they interactwith eachother and with outsideorganizations.Comparative Advantage:A principle based on the assumption that an area will specialize in the production ofgoodsforwhichithasthegreatestadvantageorleastcomparativedisadvantage.Competitive Advantage: Value created by a company for its customers that clearly distinguishes it from thecompetition,andprovidesitscustomersareasontoremainloyal.Definitions compiled by:KateVitasekwww.scvisions.comCSCMPdoesnottakeronsibilityforthecialdoneptasnotedPage36of212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Commodity Code: A code describing a commodity or a group of commodities pertaining to goods classification. This code can be carrier tariff or regulating in nature. Competitive Advantage: Value created by a company for its customers that clearly distinguishes it from the competition, and provides its customers a reason to remain loyal. Comparative Advantage: A principle based on the assumption that an area will specialize in the production of goods for which it has the greatest advantage or least comparative disadvantage. Company Culture: A concept which describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. The values and customs shared by people and groups in an organization which govern how they interact with each other and with outside organizations. Communication Protocol: The method by which two computers coordinate their communications. BISYNC and MNP are two examples. Commuter: An exempt for-hire air carrier that publishes a time schedule on specific routes; a special type of air taxi. Common cost: A cost that cannot be directly assignable to particular segments of the business but that is incurred for the business as a whole. Common carrier duties: Common carriers are required to serve, deliver, charge reasonable rates, and not discriminate. Common Carrier: Any carrier engaged in the interstate transportation of persons/property on a regular schedule at published rates, whose services are for hire to the general public. Commodity Rate: A rate for a specific commodity and its origin-destination. Commodity Procurement Strategy: See Commodity Buying Commodity Buying: The practice of grouping like purchased items into common groups which are then managed by a single buyer / agent. This practice assumes that an individual who is more focused on a range of products or services can perform that function better than someone who is novice. Commodity: Any physical item that is traded in commerce. The term usually implies an undifferentiated product competing primarily on price and availability. Commodities clause: A clause that prohibits railroads from hauling commodities that they produced, mined, owned, or had an interest in. 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 36 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Competitive Benchmarking:The practice of comparing and rating a company's products or services against thoseofcompetitors.Seealso:BenchmarkingCompetitiveBid:Aprice/serviceofferingbyasupplierthatmustcompetewithofferingsfromothersuppliers.CompetitiveDifferentiator:The abilityto communicatewhatmakes thecompany,product or serviceunique andto stand outfrom other companies,products or services within the marketplace.Complete & On-Time Delivery (coTD): A measure of customer service. All items on any given order must bedelivered on timefor the ordertobe considered as completeand on timeComplete Manufacture to Ship Time: Average time from when a unit is declared shippable by manufacturing untiltheunitactuallyshipstoacustomer.Compliance:Meaningthatproducts,services,processesand/ordocumentscomplywithrequirements.Compliance Checking:The functionof EDI processing software that ensuresthat all transmissions containthemandatory information demanded by the EDI standard.ComparesinformationsentbyanEDIuseragainstEDIstandards and reports exceptions. Does not ensure that documents are complete and fully accurate, but does rejecttransmissionswithmissingdata elementsorsyntaxerrors.Compliance Monitoring: A check done by the VAN/third party network or the translation software to ensure thedata being exchanged is in the correct format forthe standard being used.Compliance Program: A method by which two or more EDI trading partners periodically report conformity toagreed upon standards of control and audit. Management produces statements of compliance, which briefly noteany exceptions,as well as correctiveaction planned ortaken,in accordancewith operatingrules.Auditors produceanindependentandobjectivestatementofopiniononmanagementstatements.Component: Material that will contribute to a finished product but is not the finished product itself. Examples wouldincludetiresforanautomobile,powersupplyforapersonal computer,orazipperforaskiparka.Notethatwhat isa component to themanufacturer may be considered thefinished productof their supplier.Computer-aided design (CAD):Computer-based systemsforproduct design that may incorporate analytical and"what if" capabilities to optimize product designs. Many CAD systems capture geometric and other productcharacteristics for engineering-data-management systems, producibility and cost analysis,and performance analysis.Computer-Aided engineering (CAE): The use of computers to model design options to stimulate theirperformance.Computer-AidedManufacturing(cAM):Computerized systems inwhichmanufacturinginstructions aredownloadedtoautomatedequipmentortooperatorworkstations.Delfinitions compiled by:Kate Vitasekwww.scvisions.comCSCMP does not take responsibility for thesofficial definitikcept as noteddehoPage 37 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Competitive Differentiator: The ability to communicate what makes the company, product or service unique and to stand out from other companies, products or services within the marketplace. Computer-Aided engineering (CAE): The use of computers to model design options to stimulate their performance. Computer-Aided Manufacturing (CAM): Computerized systems in which manufacturing instructions are downloaded to automated equipment or to operator workstations. Computer-aided design (CAD): Computer-based systems for product design that may incorporate analytical and "what if" capabilities to optimize product designs. Many CAD systems capture geometric and other product characteristics for engineering-data-management systems, producibility and cost analysis, and performance analysis. Component: Material that will contribute to a finished product but is not the finished product itself. Examples would include tires for an automobile, power supply for a personal computer, or a zipper for a ski parka. Note that what is a component to the manufacturer may be considered the finished product of their supplier. Compliance Program: A method by which two or more EDI trading partners periodically report conformity to agreed upon standards of control and audit. Management produces statements of compliance, which briefly note any exceptions, as well as corrective action planned or taken, in accordance with operating rules. Auditors produce an independent and objective statement of opinion on management statements. Compliance Monitoring: A check done by the VAN/third party network or the translation software to ensure the data being exchanged is in the correct format for the standard being used. Compliance Checking: The function of EDI processing software that ensures that all transmissions contain the mandatory information demanded by the EDI standard. Compares information sent by an EDI user against EDI standards and reports exceptions. Does not ensure that documents are complete and fully accurate, but does reject transmissions with missing data elements or syntax errors. Compliance: Meaning that products, services, processes and/or documents comply with requirements. Complete Manufacture to Ship Time: Average time from when a unit is declared shippable by manufacturing until the unit actually ships to a customer. Complete & On-Time Delivery (COTD): A measure of customer service. All items on any given order must be delivered on time for the order to be considered as complete and on time Competitive Bid: A price/service offering by a supplier that must compete with offerings from other suppliers. Competitive Benchmarking: The practice of comparing and rating a company’s products or services against those of competitors. See also: Benchmarking 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 37 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Computer-Aided Process Planning (CAPP): Software-based systems that aid manufacturing engineers increating a process plan to manufacture a product who's geometric,electronic, and other characteristics have beencaptured inaCADdatabase.Computer-Based Training (CBT): Training that is delivered via computer workstation and includes all training andtesting materials.Computer-Integrated Manufacturing (CIM): A variety of approaches in which computer systems communicate orinteroperate over a local-area network.Typically,CIM systems link management functions with engineering,manufacturing,and support operations.In the factory,CiM systems may control the sequencing of productionoperations,controloperationofautomatedequipmentandconveyorsystems,transmitmanufacturinginstructionscapture data at various stages of the manufacturing or assembly process,facilitate tracking and analysis of testresultsandoperatingparameters,oracombinationofthese.Computerized Maintenance Management Systems (CMMs): Software-based systems that analyze operatingconditions of production equipment -- vibration, oil analysis, heat, etc. --and equipment-failure data, and apply thatdata to the scheduling of maintenance and repair inventory orders and routine maintenance functions.A CMMSprevents unscheduled machine downtime and optimizes a plant's ability to process product at optimum volumes andquality levels.Computerized Process Simulation: Use of computer simulation to facilitate sequencing of production operations,analysisofproductionflows,andlayoutofmanufacturingfacilities.ComputerizedSpC:SeeStatisticalprocesscontrolConcept of Operations (CoNops): There are various uses and users for CONOPS. The primary purpose of theCONOPSistoprovidea vision foran initiativeordesired capability:Ingeneral,theCONOPSprovidesguidancetothose users requiring directionand/or information on developingtheir own documents,schedules,milestones,andplans.Concurrent Engineering:A cross-functional, team-based approach in which the product and the manufacturingprocess are designed and configured within the same time frame, rather than sequentially. Ease and cost ofmanufacturability,as well as customer needs,quality issues, and product-life-cycle costs are taken into accountearlier in the development cycle.Fully configured concurrent engineeringteamsinclude representation frommarketing,designengineering,manufacturingengineering,andpurchasing,aswellassupplier--andevencustomer-companies.Configuration:The selection and grouping of components and assemblies intoafinished product.Configuration Excellence: Focuses on establishing and maintaining consistency of a product or service'sperformance. It also looks at the functional and physical attributes of a product with its requirements, design, andoperational informationthroughouttheproduct's life.Definitions compiled by:Kate Vitasekwww.scvisions.comCSCMPdoesnottakeresponsibilityforthesedefinitionsnoras official definitionexceptasnotedndosesthePage 38 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Concept of Operations (CONOPS): There are various uses and users for CONOPS. The primary purpose of the CONOPS is to provide a vision for an initiative or desired capability. In general, the CONOPS provides guidance to those users requiring direction and/or information on developing their own documents, schedules, milestones, and plans. Configuration: The selection and grouping of components and assemblies into a finished product. Concurrent Engineering: A cross-functional, team-based approach in which the product and the manufacturing process are designed and configured within the same time frame, rather than sequentially. Ease and cost of manufacturability, as well as customer needs, quality issues, and product-life-cycle costs are taken into account earlier in the development cycle. Fully configured concurrent engineering teams include representation from marketing, design engineering, manufacturing engineering, and purchasing, as well as supplier-and even customer- companies. Configuration Excellence: Focuses on establishing and maintaining consistency of a product or service’s performance. It also looks at the functional and physical attributes of a product with its requirements, design, and operational information throughout the product’s life. Computer-Based Training (CBT): Training that is delivered via computer workstation and includes all training and testing materials. Computer-Aided Process Planning (CAPP): Software-based systems that aid manufacturing engineers in creating a process plan to manufacture a product who's geometric, electronic, and other characteristics have been captured in a CAD database. Computerized SPC: See Statistical process control Computerized Process Simulation: Use of computer simulation to facilitate sequencing of production operations, analysis of production flows, and layout of manufacturing facilities. Computerized Maintenance Management Systems (CMMS): Software-based systems that analyze operating conditions of production equipment - vibration, oil analysis, heat, etc. - and equipment-failure data, and apply that data to the scheduling of maintenance and repair inventory orders and routine maintenance functions. A CMMS prevents unscheduled machine downtime and optimizes a plant's ability to process product at optimum volumes and quality levels. Computer-Integrated Manufacturing (CIM): A variety of approaches in which computer systems communicate or interoperate over a local-area network. Typically, CIM systems link management functions with engineering, manufacturing, and support operations. In the factory, CIM systems may control the sequencing of production operations, control operation of automated equipment and conveyor systems, transmit manufacturing instructions, capture data at various stages of the manufacturing or assembly process, facilitate tracking and analysis of test results and operating parameters, or a combination of these. 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 38 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated:February2010Configure/Package-to-Order: A process where the trigger to begin manufacture, final assembly or packaging of aproduct is an actual customer order or release,rather than a market forecast.In order to be considered a Configureto-Order environment, less than 20% of the value-added takes place after the receipt of the order or release, andvirtually all necessary design and process documentation is available at time of order receipt.Confirmation: With regards to EDI, a formal notice (by message or code) from a electronic mailbox system or EDIserver indicating that a message sent to a trading partner has reached its intended mailbox or been retrieved by theaddressee.Confirming Order:A document similar to, or same as a purchase order,which is provided to a supplier asconfirmationofapreviousverbalpurchaserequest.Conformance:A term used inqualitymanagement to confirm the adherenceto specification of a productor serviceSynonym:CompliancecoNopS:SeeConceptofOperationsConrail:The Consolidated Rail Corporation established by the Regional ReorganizationAct of 1973to operate thebankrupt Penn Central Railroad and other bankrupt railroads in the Northeast;funding was provided by the 4-R Actof1976.Consensus: A state in which all the members of a group support an action or decision, even if some of them don'tfully agree with it.Consignee:Thepartyto whom goodsare shipped and delivered.Thereceiver ofafreight shipment.Consignment: The act of consigning-placing a person or thing in the possession of another, but retainingownership until the goods are sold.This may apply to shipping or sale in a store (i.e.,a consignment shop).Seealso:ConsignmentInventoryConsignment Inventory: 1) Goods or product that are paid for when they are sold by the reseller, not at the timethey are shipped to the reseller.2) Goods or products which are owned by the vendor until they are sold to theconsumer.Consignor:The partywho originatesa shipment of goods (shipper).The sender of a freight shipment, usually theseller.Consolidation:Combining two or more shipments in order to realize lower transportation rates.Inboundconsolidation from vendors is called make-bulkconsolidation;outbound consolidationto customers is called break-bulkconsolidation.Definitions compiled byKateVitasekwww.scvisions.comcSCMPdoesnottakereponsibilityfor thesedefinitionsnorofficialdefinitcept as notedendoPage 39 of 212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT CONOPS: See Concept of Operations Consolidation: Combining two or more shipments in order to realize lower transportation rates. Inbound consolidation from vendors is called make-bulk consolidation; outbound consolidation to customers is called breakbulk consolidation. Consignor: The party who originates a shipment of goods (shipper). The sender of a freight shipment, usually the seller. Consignment Inventory: 1) Goods or product that are paid for when they are sold by the reseller, not at the time they are shipped to the reseller. 2) Goods or products which are owned by the vendor until they are sold to the consumer. Consignment: The act of consigning—placing a person or thing in the possession of another, but retaining ownership until the goods are sold. This may apply to shipping or sale in a store (i.e., a consignment shop). Consignee: The party to whom goods are shipped and delivered. The receiver of a freight shipment. See also: Consignment Inventory Consensus: A state in which all the members of a group support an action or decision, even if some of them don't fully agree with it. Conrail: The Consolidated Rail Corporation established by the Regional Reorganization Act of 1973 to operate the bankrupt Penn Central Railroad and other bankrupt railroads in the Northeast; funding was provided by the 4-R Act of 1976. Conformance: A term used in quality management to confirm the adherence to specification of a product or service. Confirming Order: A document similar to, or same as a purchase order, which is provided to a supplier as confirmation of a previous verbal purchase request. Synonym: Compliance Confirmation: With regards to EDI, a formal notice (by message or code) from a electronic mailbox system or EDI server indicating that a message sent to a trading partner has reached its intended mailbox or been retrieved by the addressee. Configure/Package-to-Order: A process where the trigger to begin manufacture, final assembly or packaging of a product is an actual customer order or release, rather than a market forecast. In order to be considered a Configureto-Order environment, less than 20% of the value-added takes place after the receipt of the order or release, and virtually all necessary design and process documentation is available at time of order receipt. 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 39 of 212
SUPPLYCHAINMANAGEMENTTERMSandGLOSSARYUpdated: February 2010Consolidator:An enterprise that provides services to group shipments, orders, and/or goods to facilitatemovement.Consortium:An association of two or more individuals,companies,organizations orgovernments（oranycombination of these entities)with theobjectiveof participating ina common activityorpoolingtheirresourcesforachievinga common goal.Constraint: A bottleneck, obstacle or planned control that limits throughput or the utilization of capacityConsul: A government official residing in a foreign country, charged with representing the interests of his or hercountry and its nationals.Consular Declaration:A formal statement made to the consul of a country describing merchandise to be shippedtothatconsul'scountry.Approval mustbeobtainedpriorto shipment.ConsularDocuments:Specialformssignedbytheconsulofacountrytowhichcargoisdestined.ConsularInvoice:A document, required by someforeign countries,describing a shipment of goods and showinginformation such as the consignor, consignee, and value of the shipment. Certified by a consular official of theforeign country,it is used by the country's custom.ConsultativeSales:Amethod of sellingthat emphasizes customerneeds and meetingthose needs with solutionscombiningproductsand/orservicesdependingoncustomerprofile.Consumer-Centric Database: Database with information about a retailer's individual consumers, used primarily formarketingandpromotion.Consumer Packaged Goods (cpG): Consumable goods such as food and beverages, footwear and apparel,tobacco, and cleaning products. In general, CPGs are things that get used up and have to be replaced frequently,incontrastto itemsthatpeopleusuallykeepfora longtime,suchas carsand furniture.Consuming the Forecast:The practice of allowing forecast requirementsto be reduced by actual orders receivedThisallowsaplanningsystem toavoid duplication ofdemand when actual customer ordersforaperiod arereceived.Consumption Entry:An official Customs form usedfor declaration of reported goods,also showingthetotal dutydueonsuchtransaction.Contactless: Refers to the practice of using RFID, Smart Card or other forms of Near Field Communicationstechnology to gather data electronically without the need to actuallymake contact physically with the item.Definitions compiled by:KateVitasewww.scvisions.comcScMpdoesnottakeonsibilityforcialdoeptas.notedPage40of212
Updated: February 2010 TERMS and GLOSSARY SUPPLY CHAIN MANAGEMENT Consuming the Forecast: The practice of allowing forecast requirements to be reduced by actual orders received. This allows a planning system to avoid duplication of demand when actual customer orders for a period are received. Consumer Packaged Goods (CPG): Consumable goods such as food and beverages, footwear and apparel, tobacco, and cleaning products. In general, CPGs are things that get used up and have to be replaced frequently, in contrast to items that people usually keep for a long time, such as cars and furniture. Consumption Entry: An official Customs form used for declaration of reported goods, also showing the total duty due on such transaction. Contactless: Refers to the practice of using RFID, Smart Card or other forms of Near Field Communications technology to gather data electronically without the need to actually make contact physically with the item. Consumer-Centric Database: Database with information about a retailer's individual consumers, used primarily for marketing and promotion. Constraint: A bottleneck, obstacle or planned control that limits throughput or the utilization of capacity. Consortium: An association of two or more individuals, companies, organizations or governments (or any combination of these entities) with the objective of participating in a common activity or pooling their resources for achieving a common goal. Consolidator: An enterprise that provides services to group shipments, orders, and/or goods to facilitate movement. Consul: A government official residing in a foreign country, charged with representing the interests of his or her country and its nationals. Consular Declaration: A formal statement made to the consul of a country describing merchandise to be shipped to that consul's country. Approval must be obtained prior to shipment. Consular Documents: Special forms signed by the consul of a country to which cargo is destined. Consular Invoice: A document, required by some foreign countries, describing a shipment of goods and showing information such as the consignor, consignee, and value of the shipment. Certified by a consular official of the foreign country, it is used by the country's custom. Consultative Sales: A method of selling that emphasizes customer needs and meeting those needs with solutions combining products and/or services depending on customer profile. 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 40 of 212