Supply Chain Terms Glossary: Supply Chain Terms in 2024
A
Artificial Intelligence (Ai)
AI refers to the simulation of human intelligence in machines, enabling them to perform tasks that typically require human intelligence.
B
Batch Ordering
Batch ordering involves purchasing a larger quantity of goods at one time, usually to benefit from economies of scale.
Batch Processing
Batch Processing is a method of processing transactions in large groups, rather than individually.
Batch Size
Batch Size refers to the quantity of products produced or processed in one production run.
Batch Tracking
Batch Tracking is the ability to trace and track the movement of goods within a supply chain based on specific batch or lot numbers.
Bill Of Materials (Bom)
A BOM is a comprehensive list of all the materials, components, and assemblies required to manufacture a product.
Blockchain
Blockchain is a distributed ledger technology that allows secure and transparent recording of transactions across multiple entities.
Blockchain In Supply Chain
Blockchain technology can be used in supply chain management to provide increased transparency, traceability, and security.
Bullwhip Effect
The Bullwhip Effect is the phenomenon of demand variability increasing as it moves up the supply chain.
C
Capacity Planning
Capacity planning involves determining the production capacity needed to meet current and future demand.
Capacity Utilization
Capacity utilization is the extent to which available production capacity is being used.
Carbon Footprint
Carbon Footprint is the total amount of greenhouse gases emitted directly or indirectly by an individual, organization, event, product, or service.
Cash-To-Cash Cycle Time (C2C)
Cash-to-Cash Cycle Time (C2C) is the time it takes for a company to convert its investments in inventory and other resources into cash.
Closed-Loop Supply Chain
A closed-loop supply chain incorporates the return of products, components, or materials back into the supply chain.
Collaborative Planning, Forecasting, And Replenishment (Cpfr)
Collaborative Planning, Forecasting, and Replenishment (CPFR) is a business process where trading partners collaborate to optimize the flow of products from supplier to end customer.
Continuous Improvement
Continuous improvement is an ongoing effort to enhance products, services, or processes to increase efficiency and effectiveness.
Cross-Docking
Cross-Docking is a logistics practice where products are transferred directly from inbound to outbound transportation without being stored in a warehouse.
D
Demand Forecasting
Demand forecasting involves estimating future customer demand for a product or service.
Demand Management
Demand Management involves the forecasting and management of customer demand.
Demand Planning
Demand Planning is the process of estimating future customer demand for products or services.
Demand Segmentation
Demand Segmentation is the process of dividing a market or customer base into distinct groups based on similar demand characteristics, preferences, or behaviors.
Demand Variability
Demand Variability refers to the fluctuation in demand for a product or service.
Demand-Side Platform (Dsp)
Demand-Side Platform (DSP) is a technology platform that enables advertisers to manage multiple ad exchange and data exchange accounts through a single interface.
Demand-Side Platforms (Dsp)
DSPs are software platforms used by advertisers and agencies to manage and optimize programmatic advertising campaigns.
Demand-Supply Balancing
Demand-Supply Balancing involves matching supply with demand to ensure optimal inventory levels.
Demand-Supply Matching
Demand-supply matching involves aligning customer demand with the supply of goods or services.
Digital Twin
A digital twin is a virtual replica or simulation of a physical product, process, or system that can be used for analysis and optimization.
Distribution
Distribution involves the movement of finished goods from the manufacturer to the end customer.
Distribution Network
A Distribution Network is the infrastructure that connects suppliers and customers in the supply chain.
Distribution Network Design
Distribution Network Design is the process of determining the optimal configuration and locations of facilities in a supply chain network.
Dynamic Pricing
Dynamic Pricing is a pricing strategy that adjusts prices in real-time based on factors such as demand and competition.
E
E-Commerce
E-commerce refers to the buying and selling of goods or services over the internet.
Economic Order Quantity (Eoq)
Economic Order Quantity (EOQ) is the optimal order quantity that minimizes the total cost of ordering and holding inventory.
Engineer-To-Order (Eto)
Engineer-to-Order (ETO) is a production strategy where products are designed and manufactured to meet specific customer requirements.
F
Forecast Accuracy
Forecast Accuracy is a measure of how well actual demand aligns with forecasted demand.
G
Green Supply Chain
A green supply chain focuses on incorporating environmentally friendly practices and minimizing the environmental impact of logistics and operations.
I
Incoterms
Incoterms are a set of international rules that define the responsibilities and liabilities of buyers and sellers in international trade.
Internet Of Things (Iot)
IoT refers to the network of physical devices, vehicles, and other objects embedded with sensors and software that enable them to connect and exchange data.
Inventory
Inventory refers to the stock of goods a company holds to meet customer demand.
Inventory Management
Inventory Management involves maintaining the right quantity and quality of products in stock.
Inventory Turnover
Inventory Turnover is a measure of how quickly inventory is sold or used in a given period.
Inventory Turns
Inventory Turns is a measure of how quickly inventory is sold and replaced over a given period, indicating the efficiency of inventory management.
J
Just-In-Time (Jit)
JIT is a production and inventory system that aims to have the right materials and products delivered at the right time.
K
Kanban
Kanban is a visual system for managing work as it moves through a process, using cards or other signals to indicate the status and progress of tasks.
Key Performance Indicators (Kpis)
KPIs are measurable values that indicate the performance of a company or a specific process.
L
Landed Cost
Landed Cost is the total cost of a product, including the purchase price and all associated costs such as transportation and customs duties.
Last Mile Delivery
Last Mile Delivery is the final step in the delivery process, from a distribution center or transportation hub to the end customer's location.
Last-Mile Delivery
Last-mile delivery is the final stage of the delivery process, from the distribution center to the end customer.
Lead Time
Lead time is the time it takes for an order to be fulfilled from the moment it is placed.
Lean Manufacturing
Lean manufacturing is a systematic approach to minimizing waste and maximizing value in the production process.
Logistics
Logistics involves the planning, implementation, and control of the efficient flow and storage of goods, services, and related information.
M
Machine Learning (Ml)
ML is a subset of AI that focuses on getting machines to learn from data and improve their performance over time.
Make-Or-Buy Decision
The make-or-buy decision involves deciding whether to produce an item internally or purchase it from an external supplier.
Make-To-Order (Mto)
Make-to-Order (MTO) is a manufacturing process where products are only produced after receiving customer orders.
Make-To-Stock (Mts)
Make-to-Stock (MTS) is a manufacturing process where products are produced in anticipation of customer demand.
Manufacturing Resource Planning (Mrp Ii)
MRP II is an integrated information system used for planning and managing manufacturing operations.
Material Requirements Planning (Mrp)
MRP is a production planning and inventory control system that manages the scheduling and ordering of materials.
O
Omni-Channel Retailing
Omni-channel retailing provides customers with a seamless shopping experience across multiple channels, such as physical stores, websites, and mobile apps.
Optimization
Optimization involves finding the best possible solution or decision given a set of constraints and objectives.
Order Cycle Time
Order Cycle Time is the time taken from when a customer places an order to when they receive the goods.
Order Fulfillment
Order Fulfillment is the process of receiving, processing, and delivering customer orders.
Order Management
Order management refers to the process of receiving, processing, and fulfilling customer orders.
Order Management System (Oms)
Order Management System (OMS) is a software solution that helps businesses manage and track customer orders throughout the order lifecycle, from initiation to fulfillment.
Order Picking
Order Picking is the process of selecting and retrieving items from inventory to fulfill customer orders.
Outsourcing
Outsourcing is the practice of utilizing external suppliers or service providers to perform certain business functions.
P
Postponement
Postponement is a strategy of delaying the customization or finalization of a product until a customer order is received.
Predictive Analytics
Predictive analytics involves using historical and real-time data to forecast future events or predict outcomes.
Procurement
Procurement is the process of acquiring goods, services, or works from an external source.
Purchase Order
A purchase order is a legally binding document that confirms the details of a purchase between a buyer and a supplier.
Q
Quality Assurance
Quality Assurance refers to the processes and activities implemented to ensure that products or services meet quality standards.
Quality Control
Quality control involves ensuring that products or services meet specified requirements and satisfy customer expectations.
R
Radio Frequency Identification (Rfid)
Radio Frequency Identification (RFID) is a technology that uses radio waves to identify and track objects.
Reverse Logistics
Reverse logistics refers to the process of managing the return of products from the end customer back to the manufacturer or retailer.
Robotics Process Automation (Rpa)
RPA involves automating repetitive tasks and processes using software robots or bots.
S
Safety Stock
Safety stock is extra inventory held as a buffer to mitigate the risk of stockouts and meet unexpected demand.
Service Level Agreement (Sla)
A Service Level Agreement (SLA) is a contract between a service provider and a customer that defines the level of service expected.
Six Sigma
Six Sigma is a disciplined approach to process improvement that aims to reduce defects and variation in manufacturing and service processes.
Sourcing
Sourcing involves identifying and selecting suppliers to meet the needs of a company.
Sourcing Strategy
A Sourcing Strategy is a plan for identifying and selecting suppliers to meet an organization's needs.
Supplier
A supplier is an individual or organization that provides goods or services to a company.
Supplier Auditing
Supplier Auditing involves evaluating and verifying suppliers' compliance with quality, social, environmental, and ethical standards through various assessment methods.
Supplier Collaboration
Supplier Collaboration involves working closely with suppliers to improve performance and achieve mutual goals.
Supplier Development
Supplier Development involves working with suppliers to improve their capabilities and performance.
Supplier Diversity
Supplier diversity refers to the intentional inclusion of diverse suppliers in a company's supply chain.
Supplier Evaluation
Supplier Evaluation involves assessing and selecting suppliers based on predetermined criteria.
Supplier Negotiation
Supplier Negotiation involves bargaining with suppliers to agree on favorable terms and conditions.
Supplier Onboarding
Supplier Onboarding is the process of bringing new suppliers into a supply chain and establishing their capabilities.
Supplier Performance Management
Supplier Performance Management focuses on measuring and improving supplier performance.
Supplier Performance Metrics
Supplier Performance Metrics are measures used to assess a supplier's performance in terms of quality, delivery, and cost.
Supplier Relationship Management
Supplier Relationship Management focuses on managing interactions and relationships with suppliers.
Supplier Relationship Management (Srm)
SRM involves building and maintaining positive relationships with suppliers to optimize value and minimize risks.
Supply Chain
Supply chain refers to the entire process involved in getting a product or service from the supplier to the end customer.
Supply Chain Analytics
Supply chain analytics involves the use of data analysis and modeling techniques to gain insights and make data-driven decisions in supply chain management.
Supply Chain Collaboration
Supply chain collaboration involves working closely with partners, suppliers, and customers to achieve mutual benefits.
Supply Chain Integration
Supply Chain Integration is the coordination and collaboration of various entities in the supply chain to achieve common goals.
Supply Chain Network
A supply chain network is the interconnected system of suppliers, manufacturers, warehouses, distribution centers, and retailers.
Supply Chain Resilience
Supply Chain Resilience is the ability of a supply chain to quickly recover from disruptions, adapt to changes, and maintain or restore normal operations.
Supply Chain Risk Management
Supply chain risk management involves identifying, assessing, and mitigating risks that may disrupt the supply chain.
Supply Chain Sustainability
Supply chain sustainability involves integrating environmental, social, and economic considerations into supply chain practices.
Supply Chain Visibility
Supply chain visibility refers to the ability to track and monitor products, shipments, and inventory throughout the supply chain.
Sustainable Packaging
Sustainable Packaging refers to the use of environmentally friendly materials and design concepts to minimize environmental impact throughout the packaging lifecycle.
T
Third-Party Logistics (3Pl)
Third-Party Logistics (3PL) refers to the outsourcing of logistics activities to a third-party provider.
Third-Party Logistics Provider (3Pl)
A 3PL is a company that provides logistics services to other companies, including transportation, warehousing, and distribution.
Total Cost Of Ownership (Tco)
TCO is a financial estimate that considers the direct and indirect costs associated with owning and using a product or service over its entire life cycle.
Total Quality Management (Tqm)
TQM is a management framework focused on continuous improvement and customer satisfaction through process excellence.
Transportation
Transportation refers to the movement of goods or people from one place to another.
Transportation Management
Transportation Management involves the planning and optimization of transportation activities.
Transportation Optimization
Transportation Optimization involves finding the most efficient routes and modes of transportation to minimize costs, reduce lead times, and improve service levels.
V
Value Stream Mapping
Value Stream Mapping is a visual tool used to analyze and improve the flow of materials and information in a process.
Vendor-Managed Inventory (Vmi)
VMI is a inventory management approach where the supplier is responsible for monitoring and replenishing the customer's inventory.
W
Warehouse Management
Warehouse management includes the control and optimization of warehouse operations, such as receiving, storing, and picking.
Warehousing
Warehousing refers to the storage of goods in a centralized location before distribution.