SUPPLY CHAIN VISION LOGISTICS TERMS and GLOSSARY Updated October 2003 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 Best-in-Class: An organization, usually within a specific industry, recognized for excellence in a process area 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 Bilateral Contract: An agreement wherein each party makes a promise to the other party Bill of Activities: A listing of activities required by a product, service, process output or object. Bill of activity attributes could include volume and or cost of each activit in the 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 Material (BOM): A structured list of all the materials or parts and quantities needed to produce a particular finished product, assembly, subassembly, manufactured part, whether purchased or not Bill of Material Accuracy: Conformity of a list of specified items to administrative specifications, with all quantities correct Bill of Resources: A listing of resources required by an activity. Resource attributes could include cost and volumes Bin: 1)A storage device designed to hold small discrete parts. 2)A shelving unit with physical dividers separating the storage locations inary: 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 in individual bit or“ Binary Digit” of data can be“on”or“off(1or0). Multiple bits are combined into a"Byte which represents a character or number Definitions compiled by Kate vitasek Bellevue. Washington Please note: The Council of Logistics Management does not take responsibility for the content of these definitions, nor does the Council endorse these as official definitions except as noted
SUPPLY CHAIN VISIONS LOGISTICS TERMS and GLOSSARY Updated October 2003 Definitions compiled by: Kate Vitasek Supply Chain Visions Bellevue, Washington Please note: The Council of Logistics Management does not take responsibility for the content of these definitions, nor does the Council endorse these as official definitions except as noted. 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. Best-in-Class: An organization, usually within a specific industry, recognized for excellence in a specific process area. 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. Bilateral Contract: An agreement wherein each party makes a promise to the other party. 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. 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 Material (BOM): A structured list of all the materials or parts and quantities needed to produce a particular finished product, assembly, subassembly, manufactured part, whether purchased or not. Bill of Material Accuracy: Conformity of a list of specified items to administrative specifications, with all quantities correct Bill of Resources: A listing of resources required by an activity. Resource attributes could include cost and volumes. Bin: 1) A storage device designed to hold small discrete parts. 2) A shelving unit with physical dividers separating the storage locations. 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
SUPPLY CHAIN VISIONS LOGISTICS TERMS and GLOSSARY Updated October 2003 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 Bitmap Image(BMp): The standard image format on windows-compatible computers. Bitmap ages can be saved for Windows or OS/2 systems and support 24-bit cold Blanket Order: See blanket purchase order Blanket Purchase Order: A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Often blanket orders cover only one item with predetermined delivery dates. Synonym: Blanket Order, Standing Order Blanket Release: The authorization to ship and/or produce against a blanket agreement or contract leeding Edge: An unproven process or technology so far ahead of its time that it may create a competitive disadvantage Blowthrough: 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, but the MRP system usually retains its ability to net against any occasional inventories of the item. Also see Phantom Bill of material BMP: See Bitmap Imagine BOL: See Bill of lading BOM: See Bill of materials Book Inventory: An accounting definition of inventory units or value obtained from perpetual inventory records rather than by actual count Bookings: The sum of the value of all orders received(but not necessarily shipped), net of al discounts, coupons, allowances, and rebates 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 Definitions compiled by Kate vitasek aIn Bellevue. Washington Please note: The Council of Logistics Management does not take responsibility for the content of these definitions, nor does the Council endorse these as official definitions except as noted
SUPPLY CHAIN VISIONS LOGISTICS TERMS and GLOSSARY Updated October 2003 Definitions compiled by: Kate Vitasek Supply Chain Visions Bellevue, Washington Please note: The Council of Logistics Management does not take responsibility for the content of these definitions, nor does the Council endorse these as official definitions except as noted. 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. 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. Blanket Order: See Blanket Purchase Order Blanket Purchase Order: A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Often blanket orders cover only one item with predetermined delivery dates. Synonym: Blanket Order, Standing Order. Blanket Release: The authorization to ship and/or produce against a blanket agreement or contract. Bleeding Edge: An unproven process or technology so far ahead of its time that it may create a competitive disadvantage. Blowthrough: 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, but the MRP system usually retains its ability to net against any occasional inventories of the item. Also see: Phantom Bill of Material BMP: See Bitmap Imagine BOL: See Bill of Lading BOM: See Bill of Materials Book Inventory: An accounting definition of inventory units or value obtained from perpetual inventory records rather than by actual count. Bookings: The sum of the value of all orders received (but not necessarily shipped), net of all discounts, coupons, allowances, and rebates. 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
SUPPLY CHAIN VISION LOGISTICS TERMS and GLOSSARY Updated October 2 Bottleneck: A constraint, obstacle or planned control that limits throughput or the utilization of Bottom-up Replanning: In MRP, the process of using pegging data to solve material availability or other problems. This process is accomplished by the planner (not the computer system), who evaluates the effects of possible solutions. Potential solutions include compressing lead time, cutting order quantity, substituting material, and changing the master schedule. sing Box-Jenkins Model: A forecasting method based on regression and moving average models The model is based not on regression of independent variables, but on past observations of the item to be forecast at varying time lags and on previous error values from forecasting. See Forecast BPM: See Business Performance Measurement BPO: See Business Process Outsourcing BPR: See Business Process Reengineering Bracketed Recall: Recall from customers of suspect lot numbers plus a specified number of lots produced before and after the suspect ones Branding: The use of a name, term, symbol, or design, or a combination of these, to identify a pr 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 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 with the total revenue curve. The point of intersection is defined as the break-even point, i. e, the point at which total revenues exactly equal total costs. Also see: Total Cost Curve Definitions compiled by Kate vitasek Bellevue. Washington Please note: The Council of Logistics Management does not take responsibility for the content of these definitions, nor does the Council endorse these as official definitions except as noted
SUPPLY CHAIN VISIONS LOGISTICS TERMS and GLOSSARY Updated October 2003 Definitions compiled by: Kate Vitasek Supply Chain Visions Bellevue, Washington Please note: The Council of Logistics Management does not take responsibility for the content of these definitions, nor does the Council endorse these as official definitions except as noted. Bottleneck: A constraint, obstacle or planned control that limits throughput or the utilization of capacity. Bottom-up Replanning: In MRP, the process of using pegging data to solve material availability or other problems. This process is accomplished by the planner (not the computer system), who evaluates the effects of possible solutions. Potential solutions include compressing lead time, cutting order quantity, substituting material, and changing the master schedule. Box-Jenkins Model: A forecasting method based on regression and moving average models. The model is based not on regression of independent variables, but on past observations of the item to be forecast at varying time lags and on previous error values from forecasting. See: Forecast. BPM: See Business Performance Measurement BPO: See Business Process Outsourcing BPR: See Business Process Reengineering Bracketed Recall: Recall from customers of suspect lot numbers plus a specified number of lots produced before and after the suspect ones. Branding: The use of a name, term, symbol, or design, or a combination of these, to identify a product. 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. 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. Break-Even Chart: A graphical tool showing the total variable cost and fixed cost curve along with the total revenue curve. The point of intersection is defined as the break-even point, i.e., the point at which total revenues exactly equal total costs. Also see: Total Cost Curve
SUPPLY CHAIN VISION LOGISTICS TERMS and GLOSSARY Updated October 2 Break-Even Point: The level of production or the volume of sales at which operations are neither profitable nor unprofitable. The break-even point is the intersection of the total revenue and total cost curves. Also see. Total Cost Curve 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 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 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 suppliers computer Browser: A utility that allows an internet user to look through collections of things. For ample, Netscape Navigator and Microsoft Explorer allow you to view contents on the World Wide Web BTS: See Balance to Ship Bulletin Board: An electronic forum that hosts posted messages and articles related to a common subject Bucketed System: An MRP, DRP, or other time-phased system in which all time-phased are accumulated into time periods, or buckets. If the period of accumulation is one week the system is said to have weekly buckets Bucketless system: An MRP, DRP, or other time-phased system in which all time-phased data are processed, stored, and usually displayed using dated records rather than defined time periods or buckets Buffer: 1)A quantity of materials awaiting further processing. It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center. 2) In the theory of constraints, buffers can be time or material and support throughput and/or due date performance. Buffers can be maintained at the constraint, convergent points (with a constraint part), divergent points, and shipping points Definitions compiled by Kate vitasek Bellevue. Washington Please note: The Council of Logistics Management does not take responsibility for the content of these definitions, nor does the Council endorse these as official definitions except as noted
SUPPLY CHAIN VISIONS LOGISTICS TERMS and GLOSSARY Updated October 2003 Definitions compiled by: Kate Vitasek Supply Chain Visions Bellevue, Washington Please note: The Council of Logistics Management does not take responsibility for the content of these definitions, nor does the Council endorse these as official definitions except as noted. Break-Even Point: The level of production or the volume of sales at which operations are neither profitable nor unprofitable. The break-even point is the intersection of the total revenue and total cost curves. Also see: Total Cost Curve 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. 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. 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. 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. BTS: See Balance to Ship Bulletin Board: An electronic forum that hosts posted messages and articles related to a common subject. Bucketed System: An MRP, DRP, or other time-phased system in which all time-phased data are accumulated into time periods, or buckets. If the period of accumulation is one week, then the system is said to have weekly buckets. Bucketless system: An MRP, DRP, or other time-phased system in which all time-phased data are processed, stored, and usually displayed using dated records rather than defined time periods, or buckets. Buffer: 1) A quantity of materials awaiting further processing. It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center. 2) In the theory of constraints, buffers can be time or material and support throughput and/or due date performance. Buffers can be maintained at the constraint, convergent points (with a constraint part), divergent points, and shipping points
SUPPLY CHAIN VISION LOGISTICS TERMS and GLOSSARY Updated October 2003 Buffer Management: In the theory of constraints, a process in which all expediting in a shop is driven by what is scheduled to be in the buffers(constraint, shipping, and assembly buffers). By expediting this material into the buffers, the system helps avoid idleness at the constraint and missed customer due dates. In addition. the causes of items missing from the buffer are identified, and the frequency of occurrence is used to prioritize improvement activities Buffer Stock: See Safery Stock Bullwhip Effect: An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being excess. This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain. The bullwhip effect can be eliminated by synchronizing the supply chain Burn Rate: The rate of consumption of cash in a business. 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 Business Application: Any computer program, set of programs, or package of programs created to solve a particular business problem or function Business Continuity Plan(BCP): A contingency plan for sustained operations during periods of high risk, such as during labor unrest or natural disaster. CLM provides suggestions for helping companies do continuity planning in their Securing the Supply Chain Research. A copy of the research is available on the clm website Business Plan: 1)A statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow(source and application of funds)statement. a business plan is usually stated in terms of dollars and grouped y product family. The business plan is then translated into synchronized tactical functional plans through the production planning process(or the sales and operations planning process Although frequently stated in different terms( dollars versus units), these tactical plans should agree with each other and with the business plan See: long-term planning, strategic plan. 2)A document consisting of the business details (organization, strategy, and financing tactics) prepared by an entrepreneur to plan for a new business Definitions compiled by Kate vitasek Bellevue. Washington Please note: The Council of Logistics Management does not take responsibility for the content of these definitions, nor does the Council endorse these as official definitions except as noted
SUPPLY CHAIN VISIONS LOGISTICS TERMS and GLOSSARY Updated October 2003 Definitions compiled by: Kate Vitasek Supply Chain Visions Bellevue, Washington Please note: The Council of Logistics Management does not take responsibility for the content of these definitions, nor does the Council endorse these as official definitions except as noted. Buffer Management: In the theory of constraints, a process in which all expediting in a shop is driven by what is scheduled to be in the buffers (constraint, shipping, and assembly buffers). By expediting this material into the buffers, the system helps avoid idleness at the constraint and missed customer due dates. In addition, the causes of items missing from the buffer are identified, and the frequency of occurrence is used to prioritize improvement activities. Buffer Stock: See Safety Stock. Bullwhip Effect: An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being excess. This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain. The bullwhip effect can be eliminated by synchronizing the supply chain. Burn Rate: The rate of consumption of cash in a business. 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. Business Application: Any computer program, set of programs, or package of programs created to solve a particular business problem or function. Business Continuity Plan (BCP): A contingency plan for sustained operations during periods of high risk, such as during labor unrest or natural disaster. CLM provides suggestions for helping companies do continuity planning in their Securing the Supply Chain Research. A copy of the research is available on the CLM website. Business Plan: 1) A statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow (source and application of funds) statement. A business plan is usually stated in terms of dollars and grouped by product family. The business plan is then translated into synchronized tactical functional plans through the production planning process (or the sales and operations planning process). Although frequently stated in different terms (dollars versus units), these tactical plans should agree with each other and with the business plan. See: long-term planning, strategic plan. 2) A document consisting of the business details (organization, strategy, and financing tactics) prepared by an entrepreneur to plan for a new business