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terms list
BOL
Bill of Lading
broker
A company that helps both shipper and carrier achieve lower freight rates and more efficient utilization of carrier equipment. Brokers also help match carriers to loads.
bribes
Money paid before an exchange.
bonded storage
Refers to warehousing situations where goods are not released until applicable fees are paid. As an example, Internal Revenue Service - bonded warehouses hold goods other federal taxes and fees collected.
Bill of Lading
The most important single transportation document that is the operating document in the industry.
benchmarking
Using measures of another organization's performance to judge one's own performance.
batch number
Refers to alphanumeric identification that specifies where a product was processed or manufactured.
barge
Flatboard boat used to transport heavy products.
bar-code scanners
Electronic devices that read bar codes and can be used to keep track inventory, reorder inventory, and analyze inventory patterns.
back order
Materials requested by a customer that are unavailable for shipment at the same time as the reminder of the order. They are usually shipped when available.
backhaul
A return trip or movement in a direction of secondary importance or purpose.
assorting
Building up a variety of different products for resale to a particular customer.
AI
Artificial intelligence
Artificial intelligence
Sophisticated use of the computer in which it is programmed to 'think' as a trained, skilled human in specific situations.
Application-specific software
Refers to software that has been developed for managers to deal with specifics logistics functions or activities (e.g. transportation management systems)
amodal shipper
A transportation manager who purchases a prespecified level of transportation service and is indifferent to the mode(s) or carrier(s) used to provide the actual transportation service.
allocating
aka bulk-breaking
allocating
Breaking larger quantities into smaller quantities.
bulk-breaking
Breaking larger quantities into smaller quantities.
agile supply chain
Focuses on an organization's ability to respond to changes in demand with respect to volume and variety.
accessorial service
Transportation service that is supplemental to line-haul transportation.
ABC
Activity-based costing
activity-based costing
A technique that seeks to better understand the cost of a product by identifying what activities drive particular costs.
accumulating
aka bulk-making
bulk-making
Bringing together inventory from different sources.
ABC analysis
Concept that recognizes that because inventories are not of equal value to a firm, they should not be managed in the same way.
order transmittal
The time from when the customer places or sends the order to when the seller receives it.
order cycle
Elapsed time between a customer places an order and when the goods are received.
CPFR
Collaborative planning, forecasting, and replenishment
collaborative planning, forecasting, and replenishment
Retail industry initiative where trading partners share planning and forecasting data to better match supply and demand.
cause and effect forecasting
Assumes that one or more factors are related to demand, and the relationship between cause and effect can be used to estimate future demand.
associative forecasting
Assumes that one or more factors are related to demand, and the relationship between cause and effect can be used to estimate future demand.
time series forecasting
A group of forecasting techniques that is based on the idea that future demand is solely dependent on past demand.
judgmental forecasting
Refers to forecasting that involves judgment or intuition and is preferred in situations where there is limited, or no, historical data.
make-to-stock
Products are produced prior to receiving a customer order.
make-to-order
Products are produced after receiving a customer order.
customer service
Strives to keep customers happy and creates in the customer's mind the perception of an organization that is easy to do business with.
order management
The management of the various activities associated with the order cycle.
demand management
The creation across the supply chain and its markets of coordinated flow of demand. The three basic types of forecasting models are: 1-judgmental, 2-time series, 3-cause and effect.
materials management
Movement and storage of raw materials, parts, and components within a firm.
inbound logistics
The movement and storage of materials into a firm.
SKU
stock-keeping unit
stock-keeping unit
Each separate type of item that is accounted for in an inventory.
systems approach
A company's objectives can be realized by recognizing the mutual interdependence of the major functional areas of the firm, such as marketing, production, finance, and logistics.
tailored logistics
Groups of customers with similar logistical needs and wants are provided with logistics service appropriate to those needs and wants.
logistics
According to the Council of Supply Chain Management Professionals (CSCMP), that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption to meet customers' requirements.
brownfields
Locations that contain chemicals or other types of industrial wastes.
building-blocks concept
Combining smaller packages into larger unites that can be more efficiently handled at one time.
bulk cargo
Refers o cargo stowed loose, without specific packing, and generally handled with a pump, scoop, or shovel.
bullwhip effect
Characterized by variability in demand orders among supply chain participants.
"C-level" position
Refers to corporate officers such as a chief executive officer (CEO), chief operating officer (COO), or chief financial officer (CFO).
cargo preference
Requires a certain percentage of traffic to move on a nation's flag vessels.
carrier
An individual or firm in the business of carrying cargo or passengers.
center-of-gravity approach
An approach for locating a single facility that minimizes the distance to existing facilities.
centralized logistics organization
An organization maintains a single logistics department that administers the related activities for the entire company from the home office.
certificate of origin
Specifies the country(ies) in which a product is manufactured.
channel intermediaries
Facilitators that make the channel function better.
class rate system
A system that simplifies each of the three primary rate factors - product, weight, and distance.
classification
Numbers assigned to various types of freight, based mainly on the carrier's costs of handling that type of product, and, along with weight and distance, used as a basis for determining the costs of shipment.
closed-loop systems
Refers to systems that consider the return flow of products, their reuse, and the marketing and distribution of recovered products.
co-branding
One location where customers can purchase products from two or more name-brand retailers.
commercial invoice
A document used in cross-border trade that summarizes the entire transaction and contains key information such as a description of the goods, terms of sale and payments, and so on.
commodity rate
A specific rate for every possible combination of product, weight, and distance.
common carrier
Transportation carrier that has agreed to serve the general public and assumes four legal obligations: service, delivery, reasonable rates, and avoidance of discrimination.
communication system
These help various stake-holders to work together by interacting and sharing information in many different forms.
complementary products
Inventories that are used or distributed together (e.g. razor blades and razors).
comprehensive systems analysis
Looks at the entire logistics systems to see how well all of its components function together.
concealed damage
Damage that is not initially apparent but is discovered after a package is opened.
Consignee
The receiver of a shipment.
Consignor
The shipper of goods.
demurrage
A charge assessed by rail carriers to users that fail to unload and return vehicles or containers promptly.
density
A measure of how heavy a product is in relation to its size.
detention
A payment from a shipper or consignee to a truck carrier for having kept the carrier's equipment too long.
DOT
Department of Transportation
Department of Transportation (DOT)
U.S. federal government body with primary responsibility for transportation safety regulation.
dimensional (dim) weight
Considers a shipment's density (the amount of space occupied relative to weight) to determine a shipment's billable weight.
disintermediation
The removal of levels (layers) from a channel of distribution.
distribution center
A warehouse with an emphasis on quick throughput, such as is needed in supporting marketing efforts.
diversion
Occurs when the shipper notifies the carrier, prior to the shipment's arrival in the destination city, of a change in destination.
documentation
The documents associated with transportation shipments.
draft
The depth in the water to which a vessel can be loaded.
dunnage
Material that is used to block and brace products inside carrier equipment to prevent the shipment from shifting in transit and becoming damaged.
EOQ
Economic Order Quanitity
Economic order quantity (EOQ)
An order size that minimizes the sum of carrying and ordering costs.
economic utility
Refers to the value or usefulness of a product in fulfilling customer needs and wants.
electronic commerce
Economic activity that can be conducted via electronic connections such as EDI and the internet.
EDI
Electronic Data Interchange
Electronic Data Interchange (EDI)
Computer-to-computer transmission of business data in a structured format.
electronic procurement (e-procurement)
Uses the internet to make it easier, faster, and less expensive for an organization to purchase goods and services.
embargoes
Prohibition of trade between particular countries.
warehouse
Emphasize the storage of products and their primary purpose is to maximize usage of available storage space.
WMS
Warehouse Management Systems
Warehouse Management Systems (WMS)
Software packages that control the movement and storage of materials within a warehousing facility.
warehousing
That part of a firm's logistics system that stores products at and between points of origin and point of consumption.
waste materials
These are material that have been spoiled, broken, or otherwise rendered unfit for further use or reclamation.
weighing out
Cargo reaches a vehicle's or a container's weight capacity without filling its cubic capacity.
weight break
The shipment size that equates transportation charges for different rates and weight groups.
weighted center-of-gravity approach
Similar to the center-of-gravity locational approach, except that shipping volumes are also taken into account.
weight-gaining product characteristics
A product that gains weight in processing; the processing point should be close to the market.
weight-losing product characteristics
A product that loses weight during the production process; the processing point as near to its origin as possible.
wireless communication
Refers to communication without cables and cords, and includes infrared, microwave, and radio transmissions.
suboptimization
Situation where a process, procedure, or system yields less than the best possible outcome or output, caused by a lack of best possible coordination between different components, elements, parts, etc.
consolidate
Assemble small shipments into a single, larger shipment.
containers
A uniform sealed reusable metal "box" in which goods are shipped.
Container Security Initiative (CSI)
An agreement in which the world's ports agree to allow U.S. customs agents to identify and inspect high-risk containers bound for the United States before they are loaded onto ships.
contract carrier
Provides specialized service to each customer based on a contractual arrangement.
contract logistics
A long-term arrangement between a shipper and another party to provide logistics services.
contract (third-party) warehousing
A type of contract logistics that focuses on providing unique and specially tailored warehousing services to particular clients.
control
Measurement that ensures conformity with an organization's policies, procedures, or standards.
cost trade-offs
Changes to one logistics activity cause some costs to increase and others to decrease.
cross-docking
A process where product is received in a facility, occasionally married with product going to the same destination, then shipped at the earliest opportunity, without going into long-term storage.
cube out
Occurs when a cargo takes up a vehicle's or a container's cubic capacity before reaching its weight capacity.
The major functions of the different planning time horizons
Strategic, Tactical, Operational
Strategic (planning time horizon)
Medium- to long-term horizon
One- to five-year (plus) time span
Overall 'structural' decisions
Trade-offs between company functions
Trade-offs with other organizations
Corporate financial plans and policies
Policy decisions developed into a strategic plan
Tactical (planning time horizon)
Short- to medium-term horizon
Six-month to one-year (plus) time-span
Subsystem decisions are made
-should not impose on other logistics components
Annual budgets provide finance/cost basis
The strategic plan detail is made into an operational plan
Operational (planning time horizon)
Day-to-day decision making
Operations controlled against standards and rules
Control via weekly/monthly reports
The implementation of the operational plan
CPA
Customer profitability analysis
Customer Profitability Analysis (CPA)
Refers to the allocation of revenues and costs to customer segments or individual customers to calculate the profitability of the segments or customers.
customer satisfaction
Compares actual experience to the expected experience and if the actual experience equals or exceeds the expected experience, then the customer is satisfied.
customs broker
An intermediary that oversees the efficient movement of importers' goods (and accompanying paperwork) through customs and other inspection points.
C-TPAT
Customs Trade Partnership Against Terrorism
Customs Trade Partnership Against Terrorism
A program in which public and private organizations work together to prevent terrorism against the United States through imports and transportation.
cycle (base) stock
Inventory needed to satisfy demand during an order cycle.
data
Facts or recorded measures of certain phenomena.
data mining
Utilizes sophisticated quantitative techniques to find hidden patterns in large volumes of data.
dead inventory (stock)
Product for which there is no demand.
decentralized logistics organization
Logistics-related decisions are made separately at the divisional or product group level and often in different geographic regions.
DSS
Decision support system
Decision support system (DSS)
Helps managers make decisions by providing information, models, or analysis tools.
delivery window
The time span within which a scheduled delivery must be made.
empowerment zone
Created by the U.S. Department of Housing and Urban Development to encourage business development-through various tax credits-in economically depressed portions of cities.
ERP
Enterprise Resource Planning system
Enterprise resource planning (ERP) system
System that attempts enterprisewide coordination of relevant business processes by allowing (conceptually, at least) all functional areas within a firm to access and analyze a common database.
ergonomics
The science that seeks to adapt work or working conditions to suit the abilities of the worker.
excess capacity
Unused available space.
excess (surplus) materials
Stock that exceeds the reasonable requirements of an organization.
expatriate workers
Employees who are sent to other countries for extended periods of time.
exempt carrier
For-hire carriers that have been exempted from economic regulation through provisions in various pieces of legislation.
expediting
The need to rapidly move a shipment to its final destination.
export management company
Firm the helps a domestic company become involved in foreign sales. They often locate foreign firms that can be licensed to manufacture the product in the foreign country.
export packers
An international logistics specialist that custom packs shipments when the exporter lacks the equipment or expertise to do so itself.
facility closing
A company discontinues operations at a current site because the operations are no longer needed or can be absorbed by other facilities.
facility location
Refers to choosing the locations for distribution centers, warehouses, and production facilities to facilitate logistical effectiveness and efficiency.
facility relocation
A firm must move operations to another facility to better serve suppliers or customers.
fast supply chain
Emphasizes a speed or time component.
field warehousing
A facility temporarily established at the site of inventory; the warehouser assumes custody of the inventory and issues a receipt for it, which can then be used as collateral for a loan.
freight claims
A document that notifies a transportation carrier of wrong or defective deliveries, delay, or other delivery shortcoming.
freight forwarder
Consolidates freight shipments and buys transportation services in volume rates.
GPS
Global positioning systems
Global positioning systems (GPS)
Use satellites that allow companies to compute vehicle positions, velocity, and time.
global procurement (sourcing)
Refers to buying components and inputs anywhere in the world.
fixed order interval system
Inventory is replenished on a constant, set schedule and is always ordered at a specific time; the quantity ordered varies depending on forecasted sales before the next order date.
fixed order quantity system
Inventory is replenished with a set quantity every time it is ordered; the time interval between orders may vary.
goods in transit
Goods moving between two points, often accompanied by a live bill of lading.
GIS
Graphical Information Systems
Graphical Information Systems (GIS)
Allow companies to produce digital maps that can drill down to site-specific qualities such as bridge heights.
grid system
A location technique utilizing a map or grid, with specific locations marked on the north-south and east-west axes. Its purpose is to find a location that minimizes transportation costs.
GSCF
Global Supply Chain Forum
GSCF model
A framework that identifies eight relevant processes, such as customer relationship management, demand management, and order fulfillment, associated with supply chain management.
hazardous materials
A substance or material in a quantity and form that may pose an unreasonable risk to health and safety or property when transported in commerce.
import quotas
Absolute limits to the quantity of a product that can be imported into a country during a particular time period.
fixed slot location
Each product is assigned a specific location in a warehouse and is always stored there.
GDP
gross domestic product
flags of convenience
Refers to ships that register in nations that have lax maritime registration rules, particularly with respect to safety requirements.
flexibility
An organization's ability to address unexpected operational situations.
FOB destination (delivered) pricing
Pricing that includes both the price of the product and the transportation cost of the product to the purchaser's receiving dock.
FOB origin pricing
Price of the product at seller's place of business. Buyer must arrange for transportation of the product from the seller's place of business.
form utility
Refers to a product's being in a form that (1) can be used by the customer and (2) is of value to the customer.
fourth-party logistics (lead logistics provider)
General contractor that ensures that third-party logistics companies are working toward relevant supply chain goals and objectives.
fragmented logistics structure
Logistics activities are managed in multiple departments throughout an organizations.
free (foreign) trade zone
An area, usually near a port or an airport, where goods can be stored or processed before entering through the importing nation's customs inspections.
freight absorption
Buyer pays a lower freight charge than the shipper incurs in shipping the product.
freight bill
An invoice submitted by a transportation carrier requesting to be paid.
in bond
Cargo on which taxes or duties have yet to be paid. The owner must post a bond or use a bonded carrier or warehouse to guarantee that the materials will not be sold until the taxes or duties are paid.
Incoterms 2000
Terms of sale for international transactions that represent, from the seller's viewpoint, the different locations, or stages, for quoting a price to an overseas buyer.
industry systems analysis
Analysis that is performed by a trade association, professional organization, or other entity, on a industry wide basis.
information
A body of facts in a format suitable for decision making.
information (channel) strategy
A strategic orientation where a diverse group of logistics activities, together with other activities, are managed as a channel system.
order processing
The time from when the seller receives an order until an appropriate location is authorized to fill the order.
order triage
Classifying orders according to pre-established guidelines so that a company can prioritize how orders should be filled.
package testing
Simulation of the types of problems that the package will be exposed to in warehouses and in transit.
packaging
Materials used for the containment, protection, handling, delivery, and presentation of goods.
pallet (skid)
A small platform (made of plastic, steel, or wood) on which goods are placed for handling by mechanical means.
paperless warehousing
Generates and uses few or no paper documents and relies on technology to accomplish the relevant tasks.
parcel
In transportation, a small quantity or small package.
parcel carriers
Companies that specialize in transporting parcels or small packages.
part-to-picker system
The pick location is brought to the picker (e.g., carousels).
partial systems analysis
Looks at a single aspect of logistics, such as a time-and-motion study of individuals who handle incoming freight at a receiving dock.
partnerships
Positive, long-term relationships between supply chain participants.
perfect order
An order that simultaneously achieves relevant customer metrics.
phantom freight
Occurs in delivered pricing when a buyer pays an excessive freight charge calculated into the price of the goods.
physical distribution
Storage of finished product and movement to the customers.
picker-to-part system
An order picker goes to where the product is located (e.g., a forklift).
pick-to-light technology
The orders to be picked are identified by lights placed on shelves or racks.
piggyback transportation
Truck trailers on flatcars, also referred to as TOFC.
TOFC
Truck trailers of flatcars.
pilferage
Employee theft.
pipeline (in-transit) stock
Inventory that is in route between various nodes in a logistics system.
place utility
Having products available where they are needed by customers.
maverick spending
Refers to employees who do not follow company guidelines about which suppliers to use in particular situations.
multiclient warehousing
Mixes attributes of public and contract warehousing; services are more differentiated than a public facility but less customized than in a contract facility.
nesting
Packaging tapered articles inside each other to reduce the cubic volume of the entire shipment.
nodes
Fixed facilities, such as a plant, warehouse, or store, in a logistics system.
nontariff barriers
Restrictions other than tariffs that are placed on imported products.
Nonvessel-operating common carrier (NVOCC)
In international trade, a firm that provides carrier services to shippers but owns no vessels itself.
obsolete materials
Refer to materials that are not likely to ever be used by the organization that purchased it.
OSHA
Occupational Safety and Health Administration
Occupational Safety and Health Administration (OSHA)
A U.S. federal agency that regulates workplaces to ensure the safety of workers.
ocean carrier alliances
Refers to an alliance in the container trades in which ocean carriers retain their individual identities but cooperate in the area of operations.
office automation systems
Provide effective ways to process personal and organizational business data, to perform calculations, and to create documents.
on-demand software
Refers to software that users access on a per-use basis instead of software they own or license for installation.
opportunity costs
The cost of giving up an alternative opportunity.
order delivery
The time from when a transportation carrier picks up the shipment until it is received by the customer.
order fill rate
The percentage of orders that can be completely and immediately filled from existing stock.
order picking and assembly
Includes all activities from when an appropriate location is authorized to fill an order until goods are loaded aboard an outbound carrier.
shipper's export declaration (SED)
Contains relevant export transaction data such as the transportation mode(s), transaction participants, and description of what is being exported.
shipper's letter of instruction (SLI)
Often accompanies an SED and provides explicit shipment instructions.
shipping conferences
Cartels of all ocean vessel operators operating between certain trade areas.
short-interval scheduling
An analysis of workers' productivity over short periods of time. Each worker is assigned specific duties that he or she should be able to complete during the time period provided.
short sea shipping
Refers to waterborne transportation that utilizes inland and coastal waterways to move shipments from domestic ports to their destination.
shrink-wrap
Plastic wrapping that when heated shrinks in size to form a cover over the product.
simulation
A technique used to model the systems under study, typically using mathematical equations to represent relationships among components of a logistics system.
Six Sigma
A practice that emphasizes the virtual elimination of business errors that strives to achieve 3.4 defects, deficiencies, or errors per one million opportunities.
slip sheet
A flat sheet of either fiberboard material or plastic that is placed under the unit load.
slurry systems
Transport products that are ground into a powder, mixed with water, and then shipped in slurry form through a pipeline.
socially responsible procurement
Procurement activities that meet the ethical and discretionary responsibilities expected by society.
sorting
Separating products into grades and qualities desired by different target markets.
speculative stock
Inventory that is held for several reasons such as seasonal demand, projected price increases, and potential product shortages.
stockout
Being out of an item at the same time there is a willing buyer for it.
stockout cost
Costs to seller when it is unable to supply an item to a customer ready to buy.
stowability
Refers to how easy a commodity is to pack into a load.
substitute products
Products that customers view as being able to fill the same need or want as another product.
supplier development (reverse marketing)
A degree of aggressive procurement involvement not normally encountered in supplier selection.
supplier parks
Key suppliers locate on, or adjacent to, automobile plants, which helps reduce shipping costs and inventory carrying costs.
supply chain
All activities associated with the flow and transformation of goods from the raw material stage, through to the end user, as well as the associated information flows.
supply chain collaboration
Cooperative, formal or informal supply chain relationships between manufacturing companies and their suppliers, business partners, or customers, developed to enhance the overall business performance of both sides.
SCM
Supply Chain Management
Supply Chain Management
According to the Council of Supply Chain Management Professionals, SCM encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.
supply management
A relational exchange approach involving a limited number of suppliers.
STB
Surface Transportation Board
Surface Transportation Board
A U.S. government agency with primary responsibility for regulating railroad pricing and service.
sweatshops
Organizations that exploit workers and that do not comply with fiscal and legal obligations toward employees.
systems analysis
The orderly and planned observation of one or more segments in the logistics network or supply chain.
system constraints
Factors in the system that cannot be changed for various reasons.
system security
Refers to security throughout the entire supply chain.
tariffs
Taxes that governments place on the importation of certain items.
intermodal competition
Refers to the number of transportation modes available to prospective users.
intermodal transportation
Using a container that can be transferred from the vehicle of one mode to a vehicle of another, and with the movement covered under a single bill of lading.
International Air Transport Association (IATA)
A cartel consisting of nearly all the world's scheduled international airlines.
international freight forwarders
An international trade specialist that can handle either vessel shipments or air shipments and that offers a number of different functions such as booking space on carriers, obtaining consular documents, and arranging for insurance, among others.
international logistics
Refers to logistical activities associated with goods that move across national boundaries.
intramodal competition
Refers to the number of carriers within each mode.
kickbacks
Money paid after an exchange.
land bridge
Refers to a combination of water transportation and surface transportation between an origin and destination port.
landed costs
Price of the product at its source plus transportation costs to its destination.
letter of credit
An international payment option that is issued by a bank and guarantees payment to a seller provided that the seller has complied with the applicable terms and conditions of the particular transaction.
line-haul
Terminal-to-terminal movement of freight or passengers.
load center
A major port where thousands of containers arrive and depart per week. These ports specialize in the efficient handling of containers.
logistics information system
People, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to logistics decision makers.
LIS
Logistics Information System
LSP
Logistics Service Provider
Logistics Service Provider
Companies that specialize in providing various types of logistics services.
materials handling
The short-distance movement of material between two or more points.
mass logistics
A one-size-fits-all approach in which every customer gets the same type and levels of logistics service.
JIT
just-in-time
Just-in-time approach
Seeks to minimize inventory by reducing (if not eliminating) safety stock, as well as having the required amount of materials arrive at the production location at the exact time they are needed.
ISO 9000
A set of generic standards used to document, implement, and demonstrate quality management and assurance systems.
investment recovery
Identifies opportunities to recover revenues or reduce costs associated with scrap, surplus, obsolete, and waste materials.
inventory
Stocks of goods and materials that are maintained for many purposes.
inventory carrying (holding) costs
The costs of holding an inventory, such as interest on investment, insurance, deterioration, and so on.
inventory flow diagram
Depicts the demand for, and replenishment of, inventory.
inventory shrinkage
Refers to the fact that more items are recorded entering than leaving warehouse facilities.
inventory tax
Analogous to personal property taxes paid by individuals, and inventory tax is based on the value of inventory that is held by an organization on the assessment date.
inventory turnover
The number of times an inventory is used or replaced each year.
Malcolm Baldrige National Quality Award
Established in the late 1980s to recognize U.S. organizations for their achievements in quality and performance.
Maquiladora
Manufacturing plants that exist just south of the U.S.-Mexican border.
marginal analysis
Analyzing the impacts of small changes, such as adding or subtracting one unit of input.
market strategy
A strategic orientation in which a limited number of traditional logistics activities are managed across business units.
SCOR
Supply-Chain Operations Reference Model
Supply-Chain Operations Reference Model
A framework that identifies five key processes - plan, source, make, deliver, return - associated with supply chain management.
possession utility
Refers to the value or usefulness that comes from a customer being able to take possession of a product.
postponement
The delay of value-added activities such as assembly, production, and packaging to the latest possible time.
power retailer
Retailers that are characterized by large market share and low prices.
private carrier
Companies whose primary business is other than transportation provide their own transportation service by operating truck, railcars, barges, ships, or airplanes.
rail gauge
The distance between the inner sides of two parallel rail tracks.
reconsignment
Similar to diversion, but it occurs after the shipment has arrived in the destination city.
regrouping function
Involves rearranging the quantities and assortment of products as they move through the supply chain.
relationship management
Creating, maintaining, and enhancing strong relationships with customers and other stakeholders.
relevancy
Satisfying current and emerging customer needs.
ROP
reorder point
reorder point
The level of inventory at which a replenishment order is placed.
responsiveness
The degree to which an organization can accommodate unique or unplanned customer requests.
reverse auctions
A buyer invites bids from multiple sellers, and the seller with the lowest bid is often awarded the business.
reverse logistics
Goods that flow from the consumer to the manufacturer (e.g., product recalls and product recycling).
right-to-work laws
State laws that specify that a worker does not have to join the union to work permanently at a facility.
private warehousing
A warehousing facility that is owned or occupied on a long-term lease by the firm using it.
process strategy
A strategic orientation in which traditional logistics activities are managed as a value-added system.
procurement (purchasing)
Raw materials, component parts, and supplies brought from outside organizations to support a company's operations.
p-cards
procurement cards
procurement cards
Are similar to credit cards for personal use, only p-cards are used for organizational purchases.
product recall
Refers to a situation in which a hazard or defect is discovered in a manufactured or processed item, and its return is mandated by a government agency.
productivity
The amount of output divided by the amount of input.
public warehousing
Similar to common carriers in that public warehousing serves all legitimate users and has certain responsibilities to this users.
pull inventory system
An inventory system that responds to actual (rather than forecasted) customer demand.
pure materials
Materials that lose no weight in processing.
push inventory system
An inventory system that responds to forecasted (rather than actual) customer demand.
quality
Conformance to mutually agreed upon requirements.
quality-of-life considerations
Their intent is to incorporate nonbusiness factors (e.g., cost of living, crime rate, educational opportunities) into the decision of where to locate a plant or distribution facility.
routing
The process of determining how a shipment will be moved between consignor and consignee or between place of acceptance by the carrier and place of delivery to the consignee.
routing guide
Provides guidance in terms of a preferred list of carriers for shipments moving between two points.
safety (buffer) stock
Inventory that is held in addition to cycle stock to guard against uncertainties in supply and/or lead time.
scrap materials
These are materials that are no longer serviceable, have been discarded, or are a by-product of the production process.
seamless distribution
Refers to removing impediments to the flow of information and goods.
service recovery
A process for returning a customer to a state of satisfaction after a service or product has failed to live up to expectations.
shippers' associations
Nonprofit membership cooperatives that perform basically the same function as freight forwarders.
RFID
radio-frequency identification
radio-frequency identification
The use of radio frequency to identify objects that have been implanted with an RFID tag.
TEU
Twenty-foot equivalent unit; a measure of the number of 20-foot containers that are used or handled.
terminal
A carrier or public facility where freight (or passengers) is shifted between vehicles or modes.
terms of payment
Refer to the manner by which a seller will be paid by a buyer for an international transaction.
terms of sale
For international transactions, refers to determining when and where to transfer between buyer and seller, the physical goods, the payment for goods, legal title, required documentation as well as responsibility for controlling and caring for goods while in transit.
theft
Taking and removing personal property with the intent to deprive the rightful owner of it.
third-party logistics (logistics outsourcing)
A long-term arrangement between a shipper and another party to provide logistics services that is characterized by relational focus, a focus on mutual benefits, and the availability of customized offerings.
throughput
Refers to the amount of product entering and leaving a facility in a given time period.
time series forecasting
A group of forecasting techniques that is based on the idea that future demand is solely dependent on past demand.
time utility
Having products available when they are needed by customers.
TOFC
trailer on flatcar
trailer on flatcar
Piggyback traffic, or loading truck trailers onto rail flatcars.
tom miles
The number of tons times the number of miles.
total cost approach
Concept that suggests that all relevant activities in moving and storing products should be considered as a whole (i.e., their total cost), not individually.
tracing
A carrier's attempt to determine a shipment's location during the course of its move.
transaction processing system
Collects and stores information about transactions and may also control some aspects of transactions.
transit time
The elapsed time from when an order is picked up by a transportation carrier until it is received by the customer.
transponders
A small device that responds to radio signals from an outside source.
transportation
Actual physical movement of goods and people between two points.
transportation management
The buying and controlling of transportation services by either a shipper or consignee.
TWIC
Transportation Worker Identification Credential
Transportation Worker Identification Credential
A common credential that will be used to identify workers across all modes of transportation.
unified logistics structure
Multiple logistics activities are combined into, and managed as, a single department.
unitization
The term associated with the handling of unit loads.
unit load
Boxes or other containers secured to a pallet or slip sheet.
unit load devices
An alternative name for airfreight containers.
variable slot location
A system in which products are stored wherever there is empty space available in a warehouse.
VMI
vendor-managed inventory
vendor-managed inventory
A system in which the size and timing of replenishment orders into a retailer's system are the manufacturer's responsibility.
voice-based order picking
The use of speech to guide order-picking activities.
FOB origin, freight collect
The buyer pays freight charges and owns the goods in transit. This is the most common FOB origin term.
FOB origin, freight prepaid
The seller pays the freight charges, but the buyer owns the goods in transit.
FOB origin, freight prepaid and charged back
The seller pays the freight charges in advance but bills the buyer for them. The buyer owns the goods in transit.
FOB destination, freight prepaid
The seller pays the freight charges and also owns the goods in transit. The is what is generally referred to as FOB destination pricing.
FOB destination, freight collect
The buyer pays the freight charges when the goods arrive, and the seller owns the goods while they are in transit.
FOB destination, freight prepaid and charged back
The seller owns the goods in transit, prepays the freight charges, and bills the buyer for the freight charges.

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