Logistics & Supply Chain Glossary ● A-E


A

ABC Analysis: A classification of items in an inventory according to importance defined in terms of criteria such as sales volume and purchase volume.

ABC Classification: Classification of a group of items in decreasing order of annual dollar volume or other criteria. This array is then split into three classes called A, B, and C. The A group represents 10 to 20% by number of items, and 50 to 70% by projected dollar volume. The next grouping, B, represents about 20% of the items and 20% of the dollare volume. The C-class contains 60 to 70% of the items, and represents about 10 to 30% of the dollar volume.

ABC Costing: See Activity-Based Costing (ABC)

ABC Inventory Control: An inventory control approach based on the ABC volume or sales revenue classification of products (A items are highest volume or revenue, C - or perhaps D - are lowest volume SKUs.)

ABC Model: In cost management, a representation of resource costs during a time period that are consumed through activities and traced to products, services, and customers, or to any other object that creates a demand for the activity to be performed.

ABC System: In cost management, a system that maintains financial and operating data on an organization's resources, activities, drivers, objects and measures. ABC Models are created and maintained within this system.

ABI: *See Automated Broker Interface (ABI)

ABM: See Activity-Based Management (ABM).

ABP: See Activity-Based Planning (ABP).

Abnormal Demand: Demand in any period that is outside the limits established by management policy. This demand may come from a new customer or from existing customers whose own demand is increasing or decreasing. Care must be taken in evaluating the nature of the demand: Is it a volume change, is it a change in product mix, or is it related to the timing of the order?

Absorption Costing: In cost management, an approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit of production. The fixed costs are usually allocated to units of output on the basis of direct labor hours, machine hours, or material costs. Synonym: Allocation Costing.

Accelerated Commercial Release Operations Support System (ACROSS): A Canada Customs system to speed the release of shipments by allowing electronic transmission of data to and from Canada Customs 24 hours a day, 7 days a week.

Acceptable Quality Level (AQL): In quality management, when a continuing series of lots is considered, AQL represents a quality level that, for the purposes of sampling inspection, is the limit of a satisfactory process average.

Acceptable Sampling Plan: In quality management, a specific plan that indicates the sampling sizes and the associated acceptance or non-acceptance criteria to be used. Also see: Acceptance Sampling.

Acceptance Number: In quality management, 1) A number used in acceptance sampling as a cut off at which the lot will be accepted or rejected. For example, if x or more units are bad within the sample, the lot will be rejected. 2) The value of the test statistic that divides all possible values into acceptance and rejection regions. Also see:Acceptance Sampling.

Acceptance Sampling: 1) The process of sampling a portion of goods for inspection rather than examining the entire lot. The entire lot may be accepted or rejected based on the sample even though the specific units in the lot are better or worse than the sample. There are two types: attributes sampling and variables sampling. In attributes sampling, the presence or absence of a characteristic is noted in each of the units inspected. In variables sampling, the numerical magnitude of a characteristic is measured and recorded for each inspected unit; this type of sampling involves reference to a continuous scale of some kind. 2) A method of measuring random samples of lots or batches of products against predetermined standards.

Accessibility: A carrier's ability to provide service between an origin and a destination.

Accessorial Charges: A carrier's charge for accessorial services such as loading, unloading, pickup, and delivery, or any other charge deemed appropriate.

Accountability: Being answerable for, but not necessarily personally charged with, doing specific work. Accountability cannot be delegated, but it can be shared. For example, managers and executives are accountable for business performance even though they may not actually perform the work.

Accounts Payable (A/P): The value of goods and services acquired for which payment has not yet been made.

Accounts Receivable (A/R): The value of goods shipped or services rendered to a customer on whom payment has not been received. Usually includes an allowance for bad debts.

Accreditation: Certification by a recognized body of the facilities, capability, objectivity, competence, and integrity of an agency, service, operational group, or individual to provide the specific service or operation needed. For example, the Registrar Accreditation Board accredits those organizations that register companies to the ISO 9000 Series Standards.

Accredited Standards Committee (ASC): A committee of ANSI chartered in 1979 to develop uniform standards for the electronic interchange of business documents. The committee develops and maintains US generic standards (X12) for Electronic Data Interchange.

Accumulation Bin: A place, usually a physical location, used to accumulate all components that go into an assembly before the assembly is sent out to the assembly floor.Synonym: Assembly Bin.

Accuracy: In quality management, the degree of freedom from error or the degree of conformity to a standard. Accuracy is different from precision. For example, four-significant-digit numbers are less precise than six-significant-digit numbers; however, a properly computed four-significant-digit number might be more accurate than an improperly computed six-significant-digit number.

ACD: See Automated Call Distribution.

Acknowledgement: A communication by a supplier to advise a purchaser that a purchase order has been received. It usually implies acceptance of the order by the supplier.

Acquisition Cost: In cost accounting, the cost required to obtain one or more units of an item. It is order quantity times unit cost.

Action Message: An alert that an MRP or DRP system generates to inform the controller of a situation requiring his or her attention.

Active Stock: Goods in active pick locations and ready for order filling.

Activity: Work performed by people, equipment, technologies, or facilities. Activities are usually described by the action-verb-adjective-noun grammar convention. Activities may occur in a linked sequence and activity-to-activity assignments may exist. (1) In activity-based cost accounting, a task or activity, performed by or at a resource, required in producing the organization's output of goods and services. A resource may be a person, machine, or facility. Activities are grouped into pools by type of activity and allocated to products. (2) In project management, an element of work on a project. It usually has an anticipated duration, anticipated cost, and expected resource requirements. Sometimes major activity is used for larger bodies of work.

Activity Analysis: The process of identifying and cataloging activities for detailed understanding and documentation of their characteristics. An activity analysis is accomplished by means of interviews, group sessions, questionnaires, observations, and reviews of physical records of work.

Activity-Based Budgeting (ABB): An approach to budgeting where a company uses an understanding of its activities and driver relationships to quantitatively estimate workload and resource requirements as part of an ongoing business plan. Budgets show the types, number of, and cost of resources that activities are expected to consume based on forecasted workloads. The budget is part of an organization's activity-based planning process and can be used in evaluating its success in setting and pursuing strategic goals.

Activity-Based Costing (ABC): A methodology that measures the cost and performance of cost objects, activities, and resources. Cost objects consume activities and activities consume resources. Resource costs are assigned to activities based on their use of those resources, and activity costs are reassigned to cost objects (outpputs) based on the cost objects proportional use of those activities. Activity-based costing incorporates causal relationships between cost objects and activities and between activities and resources.

Activity-Based Costing Model: In activity-based cost accounting, a model, by time period, of resource costs created because of activities related to products or services or other items causing the activity to be carried out.

Activity-Based Costing System: A set of activity-based cost accounting models that collectively defines data on an organization's resources, activities, drivers, objects, and measures.

Activity-Based Management (ABM): A discipline focusing on the management of activities within business processes as the route to continuously improve both the value received by customers and the profit earned in providing that value. AMB uses activity-based cost information and performance measurements to influence management action.See Activity-Based Costing.

Activity-Based Planning (ABP): Activity-based planning (ABP) is an ongoing process to determine activity and resource requirements (both financial and operational) based on the ongoing demand of products or services by specific customer needs. Resource requirements are compared to resources available and capacity issues are identified and managed.

Activity-based budgeting (ABB) is based on the outputs of activity-based planning.

Activity Dictionary: A listing and description of activities that provides a common/standard definition of activities across the organization. An activity dictionary can include information about an activity and/or its relationships, such as activity description, business process, function source, whether value added, inputs, outputs, supplier, customer, output measures, cost drivers, attributes, tasks, and other information as desired to describe the activity.

Activity Driver: The best single quantitative measure of the frequency and intensity of the demands placed on an activity by cost objects or other activities. It's used to assign activity costs to cost objects or to other activities.

Activity Level: A description of types of activities dependent on the functional area. Product-related activity levels may include unit, batch, and product levels. Customer-related activity levels may include customer, market, channel, and project levels.

Activity Ratio: A financial ratio used to determine how an organization's resources perform relative to the revenue the resources produce. Activity ratios include inventory turnover, receivables conversion period, fixed-asset turnover, and return on assets.

Actual Cost System: A cost system that collects costs historically as they are applied to production, and allocates indirect costs to products based on the specific costs and achieved volume of the products.

Actual Costs: The labor, material, and associated overhead costs that are charged against a job as it moves through the production process.

Actual Demand: Actual demand is composed of customer orders (and often allocations of items, ingredients, or raw materials to production or distribution). Actual demand nets against or consumes the forecast, depending on the rules chosen over a time horizon. For example, actual demand will totally replace forecast inside the sold-out customer order backlog horizon (often called the demand time fence), but will net against the forecast outside this horizon based on the chosen forecast consumption rule.

Actual to Theoretical Cycle Time: The ratio of the measured time required to produce a given output divided by the sum of the time required to produce a given output based on the rated efficiency of the machinery and labor operations.

Administrative Monetary Penalty System (AMPS ): A Canada Customs system of monetary penalties that will be imposed against violations of Canada Customs regulations.

Ad Valorem Duty: A duty calculated as a percentage of the shipment value. Also see:Duty

Advance Material Request: Ordering materials before the release of the formal product design. This early release is required because of long lead times.

Advanced Planning and Scheduling (APS): Techniques that deal with analysis and planning of logistics and manufacturing over the short, intermediate, and long-term time periods. APS describes any computer program that uses advanced mathmatical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to-promise, and capable-to-promise capabilities. APS often generates and evaluates multiple scenarios. Management then selects one scenario to use as the official plan. The five main components of an APS system are demand planning, production planning, production scheduling, distribution planning, and transportation planning.

Advanced Shipment Notice (ASN): An EDI term referring to a transaction set (ANSI 856) where the supplier sends out a notification to interested parties that a shipment is now outbound in the supply chain. This notification is list transmitted to a customer or consignor designating items shipped. The ASN may also include the expected time of arrival.

Advanced Shipping Notice (ASN): Detailed shipment information transmitted to a customer or consignee in advance of delivery, designating the contents (individual products and quantities of each) and nature of the shipment. May also include carrier and shipment specifics, including time of shipment and expected time of arrival. Also see: Assumed Receipt.

Aerodynamic Drag: Wind resistance

After-Sale Service: Services provided to the customer after products have been delivered. This can include repairs, maintenance, and/or telephone support. Synonym: Field Service

Agency Tariff: A rate bureau publication that contains rates for many carriers.

Agent: An enterprise authorized to transact business for, or in the name of, another enterprise.

Agglomeration: A net advantage a company gains by sharing a common location with other companies.

Aggregate Forecast: An estimate of sales, oftentimes phased, for a grouping of products or product families produced by a facility or firm. Stated in terms of units, dollars, or both, the aggregate forecast is used for sales and production planning (or for sales and operations planning) purposes.

Aggregate Planning: A process to develop tactical plans to support the organization's business plan. Aggregate planning usually includes the development, analysis and maintenance of plans for total sales, total production, targeted inventory, and targeted inventory, and targeted customer backlog for families of products. The production plan is the result of the aggregate planning process. Two approaches to aggregate planning exist - production planning and sales and operations planning.

Aggregate Tender Rate: A reduced rate offered to a shipper who tenders two or more class-related shipments at one time and one place.

Agility: The ability to successfully manufacture and market a broad range of low-cost, high-quality products and services with short lead times and varying volumes that provide enhanced value to customers through customization. Agility merges the four distinctive competencies of cost, quality, dependability, and flexibility.

Air Cargo: Freight that is moved by air transportation.

Air Cargo Agent: An agent appointed by an airline to solicit and process international airfreight shipments.

Air Cargo Containers: Containers designed to conform to the inside of an aircraft. There are many shapes and sizes of containers. Air cargo containers fall into three categories: 1) air cargo pallets 2) lower deck containers 3) box type containers.

Air Carrier: An enterprise that offers transportation service via air.

Airport and Airway Trust Fund: A federal fund that collects passenger ticket taxes and disburses those funds for airport facilities.

Air Taxi: An exempt for-hire air carrier that will fly anywhere on demand; air taxis are restricted to a maximum payload and passenger capacity per plane.

Air Transport Association of America: A U.S. airline industry association.

Air Waybill (AWB): A bill of lading for air transport that serves as a receipt for the shipper, indicates that the carrier has accepted the goods listed, obligates the carrier to carry the consignment to the airport of destination according to specified conditions.

Alert: See Action Message.

Algorithm: a clearly specified mathematical process for computation; a set of rules, which, if followed, produce a prescribed result.

All-Cargo Carrier: An air carrier that transports cargo only.

Allocation: 1) A distribution of costs using calculations that may be unrelated to physical observations or direct or repeatable cause-and-effect relationships. Because of the arbitrary nature of allocations, costs based on cost causal assignment are viewed as more relevant for management decision-making. 2) Allocation of available inventory to customer and production orders.

All Water: Term used when the transportation is completely by water.

American National Standards Institute (ANSI): A non-profit organization chartered to develop, maintain, and promulgate voluntary US national standards in a number of areas, especially with regards to setting EDI standards. ANSI is the US representative to the International Standards Organization (ISO).

American Society for Quality (ASQ): Founded in 1946, a not-for-profit educational organization consisting of 144,000 members who are interested in quality improvement.

American Society of Transportation & Logistics: A professional organization in the field of logistics.

American Trucking Associations: A motor carrier industry association composed of sub-conferences representing various motor carrier industry sectors.

American Waterway Operators: A domestic water carrier industry association representing barge operators on inland waterways.

Amtrak: The National Railroad Passenger Corporation, a federally created corporation that operates most of the United States' intercity passenger rail service.

ANSI: *See American National Standards Institute (ANSI)

Anti-Dumping Duty: An additional import duty imposed in instances where imported goods are priced at less than the "normal" price charged in the exporter's domestic market and cause material injury to domestic industry in the importing country

Any-Quantity (AQ) rate: A rate that applies to any size shipment tendered to a carrier; no discount rate is available for large shipments.

API: American Petroleum Institute; also Application Programming Interface

APU: APUs automatically shut down the main locomotive engine idle while maintaining all vital main engine systems at greatly reduced fuel consumption

AQL: See Acceptable Quality Level (AQL).

A/R: See Accounts Receivable.

Arrival Notice: A notice from the delivering carrier to the Notify Party indicating the shipment's arrival date at a specific location (normally the destination).

Artificial Intelligence: A field of research seeking to understand and computerize the human thought process.

AS/RS: See Automated Storage/Retrieval System

ASQ: See American Society for Quality.

Assemble to Order: A production environment where a good or service can be assembled after receipt of a customer's order. The key components (bulk, semifinished, intermediate, sub-assembly, fabricated, purchased, packing, and so on) used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product. This strategy is useful where a large number of end products (based on the selection of options and accessories) can be assembled from common components.

Assembly: A group of subassemblies and/or parts that are put together and constitute a major subdivision for the final product. An assembly may be an end item or a component of a higher-level assembly.

Assignment: A distribution of costs using causal relationships. Because cost causal relationships are viewed as more relevant for management decision making, assignment of costs is generally preferable to allocation techniques. Synonymous with Tracing. Contrast with Allocation

Association of American Railroads: A railroad industry association that represents the larger U.S. railroads.

ATA: Actual time of arrival, or also known as the American Trucking Associations.

ATD: Actual time of departure

ATFI: Automated Tariff Filing Information System

ATP: *See Available to Promise (ATP)

Attributes: A label used to provide additional classification or information about a resource, activity, or cost object. Used for focusing attention and may be subjective. Examples are a characteristic, a score or grade of product or activity, or groupings of these items, and performance measures.

Audit: In reference to freight bills, the term audit is used to determine the accuracy of freight bills.

Auditability: A characteristic of modern information systems gauged by the ease with which data can be substantiated by tracing it to source documents, and the extent to which auditors can rely on pre-verified and monitored control processes.

Auditing: Determining the correct transportation charges due the carrier; auditing involves checking the freight bill for errors, correct rate, and weight.

Audit Trail: Manual or computerized tracing of the transactions affecting the contents or origin or a record.

 

AutoID: Referring to an automated identification system. This includes technology such as bar coding and radio frequency tagging (RFID).

Automated Broker Interface (ABI): The U.S. Customs program to automate the flow of customs-related information among customs brokers, importers, and carriers.

Automated Call Distribution: A feature of large call center or "Customer Interaction Center" telephone switches that routes calls by rules, such as next-available employee, skill set, etc.

Automated Guided Vehicle System (AGVS): A computer-controlled materials handling system consisting of small vehicles (carts) that move along a guideway.

Automated Storage/Retrieval System (AS/RS): A high-density rack inventory storage system with unmanned vehicles automatically loading and unloading products to/from the racks.

Automatic Tire Inflation System: Automatic tire inflation systems monitor and continually adjust the level of pressurized air to tires, maintaining proper tire pressure even when the truck is moving.

Available to Promise (ATP): The uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. The ATP quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled. In the first period, ATP includes on-hand inventory less customer orders that are due and overdue. Three methods of calculation are used: discrete ATP, cumulative ATP with look ahead, and cumulative ATP without look ahead.

Average: See Marine Cargo Insurance

Average Cost: Total cost, fixed plus variable, divided by total output.

AWB: See Air Waybill

B
C
D
E

B2B: See Business-to-Business (B2B).

B2C: See Business-to-Customer (B2C).

Back Order: Product ordered but out of stock and promised to ship when the product becomes available.

Backhaul: The process of a transportation vehicle returning from the original destination point to the point of origin. The 1980 Motor Carrier Act deregulated interstate commercial trucking, thereby allowing carriers to contract for the return trip. The backhaul can be with a full, partial, or empty load. An empty backhaul is called deadheading. Also see:Deadhead

Backorder: (1) The act of retaining a quantity to ship against an order when other order lines have already been shipped. Backorders are usually caused by stock shortages. (2) The quantity remaining to be shipped if an initial shipment(s) has been processed. Note: In some cases, backorders are not allowed. This results in a lost sale when sufficient quantities are not available to completely ship an order or order line.

Backsourcing: Pulling a function back in house as an outsourcing contract expires.

Balanced Scorecard: A structured measurement system based on a mix of financial and non-financial measures of business performance. A list of financial and operational measurements used to evaluate organizational or supply chain performance. The dimensions of the balanced scorecard might include customer perspective, business process perspective, financial perspective, and innovation and learning perspectives. It formally connects overall objectives, strategies, and measurements. Each dimension has goals and measurements. Also see: Scorecard.

Balance of Trade: The surplus or deficit which results from comparing a country's exports and imports of merchandise only.

Bale: A large compressed, bound, and often wrapped bundle of a commodity, such as cotton or hay.

Bar Code: A symbol consisting of a series of printed bars representing values. A system of optical character reading, scanning, tracking of units by reading a series of printed bars for translation into a numeric or alphanumeric identification code. A popular example is the UPC code used on retail packaging.

Bar Code Scanner: A device to read bar codes and communicate data to computer systems.

Bar Coding: A method of encoding data for fast and accurate readability. Bar codes are a series of alternating bars and spaces printed or stamped on products, labels, or other media, representing encoded information which can be read by electronic readers called bar.

Barge: The cargo-carrying vehicle which may or may not have its own propulsion mechanism for the purpose of transporting goods. Primarily used by Inland water carriers, basic barges have open tops, but there are covered barges for both dry and liquid cargoes.

Barrier to Entry: Factors that prevent companies from entering into a particular market, such as high initial investment in equipment.

Barter: The exchange of commodities or services for other commodities or services rather than the purchase of commodities or services with money.

Base Currency: The currency whose value is "one" whenever a quote is made between two currencies.

Basing-Point Pricing: A pricing system that includes a transportation cost from a particular city or town in a zone or region even though the shipment does not originate at the basing point.

Batch Picking: A method of picking orders in which order requirements are aggregated by product across orders to reduce movement to and from product locations. The aggregated quantities of each product are then transported to a common area where the individual orders are constructed. See Zone Picking.

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.

Benefit-Cost Ratio: An analytical tool used in public planning; a ratio of total measurable benefits divided by the initial capital cost. Also see: Cost Benefit Analysis.

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 where-in each party makes a promise to the other party.

Billing: A carrier terminal activity that determines the proper rate and total charges for a shipment and issues a freight bill.

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 Lading Number: The number assigned by the carrier to identify the bill of lading.

Bill of Lading, Through: A bill of lading to cover goods from point of origin to final destination when interchange or transfer from one carrier to another is necessary to complete the journey.

Bill of Material (BOM): A structured list of all the materials or parts and quantities needed to produce a particular finished product, assembly, subassembly, or 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 Center: A drop off facility that is smaller than a public warehouse

Binder: A strip of cardboard, thin wood, burlap, or similar material placed between layers of containers to hold a stack together.

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. Oftentimes, blanket orders cover only one item with predetermined delivery dates. Synonyms: Blanket Order, Standing Order.

Blanket Rate: A rate that does not increase according to the distance a commodity is shipped.

Blanket Release: The authorization to ship and/or produce against a blanket agreement or contract.

Blanket Wrap: A service pioneered by the moving companies to eliminate packaging material by wrapping product in padded "blankets" to protect it during transit, usually on "air ride" vans.

Bleeding Edge: An unproven process or technology so far ahead of its time that it may create a competitive disadvantage.

Blow Through: An MRP process which uses a "phantom bill of material" and permits MRP logic to drive requirements straight through the phantom item to its components. The MRP system usually retains its ability to net against any occasional inventories of the item.

BOL: See Bill of Lading (BOL).

BOM: See Bill of Material (BOM).

Bonded: See Bond, In.

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.

Bookable Leg: See Leg.

Booking: The act of requesting space and equipment aboard a vessel for cargo which is to be transported.

Booking Number: The number assigned to a certain space reservation by the carrier or the carrier's agent.

Bottleneck: A constraint, obstacle, or planned control that limits throughput or the utilization of capacity.

Boxcar: An enclosed railcar used to transport freight

BPM: See Business Performance Measurement (BPM).

BPO: See Business Process Outsourcing (BPO).

BPR: See Business Process Reengineering (BPR).

Bracing: To secure a shipment inside a carrier's vehicle to prevent damage.

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.

Break-Bulk: The separation of a consolidated bulk load into smaller individual shipments for delivery to the ultimate consignee. The freight may be moved intact inside the trailer, or it may be interchanged and rehandled to connecting carriers.

Break Bulk Cargo: Cargo that is shipped as a unit or package (for example: palletized cargo, boxed cargo, large machinery, trucks) but is not containerized.

Break Bulk Vessel: A vessel designed to handle break bulk cargo.

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.

Broker: There are 3 definitions for the term "broker": 1) an enterprise that owns and leases equipment2) an enterprise that arranges the buying & selling of transportation of, goods, or services 3) a ship agent who acts for the ship owner or charterer in arranging charters.

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.

Buffer: 1) A quantity of materials awaiting further processing. It can refer to raw materials, semi-finished 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.

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: A quantity of goods or articles kept in storage to safeguard against unforeseen shortages or demands.

Build to Inventory: A "push" system of production and inventory management. Product is manufactured or acquired in response to sales forecasts.

Build to Order: A method of reducing inventory by not manufacturing product until there is an actual order from the customer.

Build to Stock: See Build to Inventory.

Bulk Area: A storage area for large items which at a minimum are most efficiently handled by the palletload.

Bulk Cargo: Unpacked dry cargo such as grain, iron ore or coal. Any commodity shipped in this way is said to be in bulk.

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 in 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.

Bundle: A group of products that are shipped together as an unassembled unit.

Bundling: An occurrence where two or more products are combined into one transaction for a single price.

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 labor unrest or natural disaster. CSCMP provides suggestions for helping companies do continuity planning in their Securing the Supply Chain research. A copy of this research is available on CSCMP's web site at www.cscmp.org.

Business Logistics: The process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.

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. (2) A document consisting of the business details (organization, strategy, and financing tactics) prepared by an entrepreneur to plan for a new business.

Business Performance Measurement (BPM): A technique that uses a system of goals and metrics to monitor performance. Analysis of these measurements can help businesses periodically set business goals, then provide feedback to managers on progress towards those goals. A specific measure can be compared to itself over time, compared with a present target, or evaluated along with other measures.

Business Process Outsourcing (BPO): The practice of outsourcing non-core internal functions to third parties. Functions typically outsourced include logistics, accounts payable, accounts receivable, payroll, and human resources. Other areas can include IT development or complete management of the IT functions of the enterprise.

Business Process Reengineering (BPR): The fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements.

Business-to-Business (B2B): As opposed to business-to-consumer (B2C). Many companies are now focusing on this strategy, and their web sites are aimed at businesses (think wholesale) and only other businesses can access or buy products on the site. Internet analysts predict this will be the biggest sector on the web.

Business-to-Consumer (B2C): The hundreds of e-commerce web sites that sell goods directly to consumers are considered B2C. This distinction is important when comparing web sites that are B2B as the entire business model, strategy, execution, and fulfillment is different.

Business Unit: A division or segment of an organization generally treated as a separate profit-and-loss center.

Buyer: An enterprise that arranges for the acquisition of goods or services and agrees to payment terms for such goods or services.

Buyer Behavior: The way individuals or organizations behave in a purchasing situation. The customer-oriented concept finds out the wants, needs, and desires of customers and adapts resources of the organization to deliver need-satisfying goods and services.

C & F: See Cost and Freight

Cab Extenders: Also called gap seals, which help to close the gap between the tractor and the trailer

Cabotage: A federal law that requires coastal and inter-coastal traffic to be carried in U.S.-built and registered ships.

CAE: See Computer-Aided Engineering (CAE).

CAD: See Cash Against Documents.

CADEX: See Customs Automated Data Exchange System

CAF: *See Currency Adjustment Factor (CAF)

Cage: (1) A secure enclosed area for storing highly valuable items (2) A pallet-sized platform with sides that can be secured to the tines of a forklift and in which a person may ride to inventory items stored well above the warehouse floor.

Caged: Referring to the practice of placing high-value or sensitive products in a fenced off area within a warehouse.

Calendar Days: The conversion of working days to calendar days is based on the number of regularly scheduled workdays per week in your manufacturing calendar.Calculation: To convert from working days to calendar days: if work week = 4 days, multiply by 1.75; = 5 days, multiply by 1.4; = 6 days, multiply by 1.17

Call Center: A facility housing personnel who respond to customer phone queries. These personnel may provide customer service or technical support. Call center services may be in house or outsourced. Synonym: Customer Interaction Center.

Can-Order Point: An ordering system used when multiple items are ordered from one vendor. The can-order point is a point higher than the original order point. When any one of the items triggers an order by reaching the must-order point, all items below their can-order point are also ordered. The can-order point is set by considering is set by considering the additional holding cost that would be incurred if the item were ordered early.

Capacity Management: The concept that capacity should be understood, defined, and measured for each level in the organization to include market segments, products, processes, activities, and resources. In each of these applications, capacity is defined in a hierarchy of idle, non-productive, and productive views.

Capacity Planning: Assuring that needed resources (e.g., manufacturing capacity, distribution center capacity, transportation vehicles, etc.) will be available at the right time and place to meet logistics and supply chain needs.

Capacity: The physical facilities, personnel, and processes available to meet the product or service needs of customers. Capacity generally refers to the maximum output or producing ability of a machine, a person, a process, a factory, a product, or a service. Also see: Capacity Management

CAPEX: A term used to describe the monetary requirements (CAPital EXpenditure) of an initial investment in new machines or equipment.

Capital: The resources, or money, available for investing in assets that produce output.

CAPSTAN: Computer-Aided Planned Stowage and Networking system.

CARAT: Cargo Agents Reservation Air Waybill Issuance and Tracking.

Cargo: Merchandise carried by a means of transportation.

Carmack Amendment: An Interstate Commerce Act amendment that delineates the liability of common carriers and the bill of lading provisions.

Carnet: A Customs document permitting the holder to carry or send special categories of goods temporarily into certain foreign countries without paying duties or posting bonds.

Carousel: A rotating system of layers of bins and/or drawers that can store many small items using relatively little floor space.

Carriage: See Transportation.

Carrier: A firm that transports goods or people via land, sea, or air.

Carrier Assets: Items that a carrier owns (technically or outright) to facilitate the services they provide.

Carrier Certificate and Release Order: Used to advise customs of the shipment's details. By means of this document, the carrier certifies that the firm or individual named in the certificate is the owner or consignee of the cargo.

Carrier Liability: A common carrier is liable for all shipment loss, damage, and delay with the exception of that caused by act of God, act of a public enemy, act of a public authority, act of the shipper, and the goods' inherent nature.

Cartel: A group of companies that agree to cooperate rather than compete, in producing a product or service. Thus limiting or regulating competition.

Cartage: There are two definitions for this term: 1) charge for pick-up and delivery of goods 2) movement of goods locally (short distances).

Carton Flow Rack: A storage rack consisting of multiple lines of gravity flow conveyors.

Cash Against Documents (CAD): A method of payment for goods in which documents transferring title are given to the buyer upon payment of cash to an intermediary acting for the seller.

Cash Conversion Cycle: 1) In retailing, the length of time between the sale of products and the cash payments for a company's resources. 2) In manufacturing, the length of time from the purchase of raw materials to the collection of accounts receivable from customers for the sale of products or services. Also see: Cash-to-Cash Cycle Time.

Cash In Advance (CIA): A method of payment for goods whereby the buyer pays the seller in advance of shipment of goods.

Cash-to-Cash Cycle Time: The time it takes for cash to flow back into a company after it has been spent for raw materials. Synonym: Cash Conversion Cycle. Calculation: Total Inventory Days of Supply + Days of Sales Outstanding - Average Payment Period for Material in Days.

Cash with Order (CWO): A method of payment for goods where cash is paid at the time of order, and the transaction becomes binding on both buyer and seller.

Catalog Channel: A call center or order processing facility that receives orders directly from the customer based on defined catalog offerings, and ships directly to the customer.

Category Management: The management of product categories as strategic business units. This practice empowers a category manager with full responsibility for the assortment decisions, inventory levels, shelf-space allocation, promotions, and buying. With this authority and responsibility, the category manager is able to more accurately judge the consumer buying patterns, product sales, and market trends of that category.

Cause-and-Effect Diagram: In quality management, a structured process used to organize ideas into logical groupings. Used in brainstorming and problem-solving exercises. Also known as Ishikawa or fish bone diagram.

CBT: *See Computer-Based Training (CBT)

CELL: A manufacturing or service unit consisting of a number of workstations, and the materials transport mechanisms and storage buffers that interconnect them.

Center-of-Gravity Approach: A supply chain planning methodology for locating distribution centers at approximately the location representing the minimum transportation costs between the plants, the distribution centers, and the markets.

Central Dispatching: The organization of the dispatching function into one central location. This structure often involves the use of data collection devices for communication between the centralized dispatching function which usually reports to the production control department and the shop manufacturing departments.

Centralized Authority: The restriction of authority to make decisions to few managers.

Centralized Inventory Control: Inventory decision-making (for all SKUs) exercised from one office or department for an entire company.

Certificate of Compliance: A supplier's certification that the supplies or services in question meet specified requirements.

Certificate of Insurance: A negotiable document indicating that insurance has been secured under an open policy to cover loss or damage to a shipment while in transit.

Certificate of Origin: A document containing an affidavit to prove the origin of imported goods. Used for customs and foreign exchange purposes.

Certificate of Public Convenience and Necessity: The grant of operating authority that common carriers receive. A carrier must prove that a public need exists and that the carrier is fit, willing, and able to provide the needed service. The certificate may specify the commodities the carrier may haul, and the routes it may use.

Certificated Carrier: A for-hire air carrier that is subject to economic regulation and requires an operating certification to provide service.

Certified Supplier: A status awarded to a supplier who consistently meets predetermined quality, cost, delivery, financial, and count objectives. Incoming inspection may not be required.

CFS: See Container Freight Station (CFS).

CFS/CFS: See Container Freight Station to Container Freight Station (CFS/CFS).

Chain of Customers: The sequence of customers who, in turn, consume the output of each other, forming a chain. For example, individuals are customers of a department store which in turn is the customer of a producer who is the customer of a material supplier.

Change Management: The business process that coordinates and monitors all changes to the business processes and applications operated by the business, as well as to their internal equipment, resources, operating systems, and procedures. The change management discipline is carried out in a way that minimizes the risk of problems that will affect the operating environment and service delivery to the users.

Change Order: A formal notification that a purchase order or shop order must be modified in some way. This change can result from a revised quantity, date, or specification by the customer; an engineering change; a change in inventory requirement data; etc.

Changeover: Process of making necessary adjustments to change or switchover the type of products produced on a manufacturing line. Changeovers usually lead to downtime and for the most part, companies try to minimize changeover time to help reduce costs.

Channel: 1. A method whereby a business dispenses its product, such as a retail or distribution channel, call center, or a web-based electronic storefront. 2. A push technology that allows users to subscribe to a web site to browse offline, automatically display updated pages on their screen savers, and download or receive notifications when pages in the web site are modified. Channels are available only in browsers that support channel definitions such as Microsoft Internet Explorer version 4.0.

Channel Conflict: This occurs when various sales channels within a company's supply chain compete with each other for the same business. An example is where a retail channel is in competition with a web-based channel set up by the company.

Channel Partners: Members of a supply chain (i.e., suppliers, manufacturers, distributors, retailers, etc.) who work in conjunction with one another to manufacture, distribute, and sell a specific product.

Channels of Distribution: Any series of firms or individuals that participates in the flow of goods and services from the raw material supplier and producer to the final user or consumer. Also see: Distribution Channel.

Chargeable Weight: The shipment weight used in determining freight charges. The chargeable weight may be the dimensional weight or, for container shipments, the gross weight of the shipment less the tare weight of the container.

Charging Area: A warehouse area where a company maintains battery chargers and extra batteries to support a fleet of electrically powered materials handling equipment. The company must maintain this area in accordance with government safety regulations.

Chassis: A specialized framework that carries a rail or marine container

Chock: A wedge, usually made of hard rubber or steel, that is firmly placed under the wheel of a trailer, truck, or boxcar to stop it from rolling.

CI: See Continuous Improvement (CI).

CIA: *See Cash In Advance (CIA)

CIF: *See Cost, Insurance, Freight (CIF)

City Driver: A motor carrier driver who drives a local route as opposed to a long-distance, intercity route.

Civil Aeronautics Board: A federal regulatory agency that implemented economic regulatory controls over air carriers.

CL: Carload rail service requiring shipper to meet minimum weight.

Claim: A charge made against a carrier for loss, damage, delay, or overcharge.

Class I Carrier: A classification of regulated carriers based upon annual operating revenues -- motor carriers of property; $5 million; railroads; $50 million; motor carriers of passengers; $3 million.

Class II Carrier: A classification of regulated carriers based upon annual operating revenues -- motor carriers of property: $1-$5 million; railroads: $10-$50 million; motor carriers of passengers: $3 million.

Class III Carrier: A classification of regulated carriers based upon annual operating revenues -- motor carriers of property: $1 million; railroads $10 million.

Class 1 Railroad: A line haul freight railroad of US ownership with operating revenue in excess of $272.0 million. There are seven (7) Class 1 Railroads in the United States. Two Mexican and two Canadian railroads would also qualify, if they were US companies.

Class Rates: A grouping of goods or commodities under one general heading. All the items in the group make up a class. The freight rates that apply to all items in the class are called "class rates."

Classification: An alphabetical listing of commodities, the class or rating into which the commodity is placed, and the minimum weight necessary for the rate discount; used in the class rate structure.

Classification yard: A railroad terminal area where railcars are grouped together to form train units.

Clearance: A document stating that a shipment is free to be imported into the country after all legal requirements have been met.

Clearinghouse: A conventional or limited-purpose entity generally restricted to providing specialized services, such as clearing funds or settling accounts.

CLM: Council of Logistics Management, now known as The Council of Supply Chain Management Professionals.

Closed Loop MRP: A system build around material requirements planning that includes the additional planning processes of production planning (sales and operations planning), master production scheduling, and capacity requirements planning. Once this planning phase is complete and the plans have been accepted as realistic and attainable, the execution processes come into play. These processes include the manufacturing control process of input-output (capacity) measurement, detailed scheduling and dispatching, as well as anticipated delay reports from both the plant and suppliers, supplier scheduling, and so on. The term "closed loop implies not only that each of these processes is included in the overall system, but also that feedback is provided by the execution processes so that the planning can be kept valid at all times..

CMI: See Co-Managed Inventory

CO: Carbon monoxide

CO2: Carbon dioxide

Co-Destiny: The evolution of a supply chain from intra-organizational management to inter-organizational management.

Co-Packer: A contract co-packer produces goods and/or services for other companies, usually under the other company's label or name. Co-packers are more frequently seen in consumer packaged goods and foods.

Co-Managed Inventory (CMI): A form of continuous replenishment in which the manufacturer is responsible for replenishment of standard merchandise, while the retailer manages the replenishment of promotional merchandise.

Coastal Carriers: Water carriers that provide service along coasts serving ports on the Atlantic or Pacific Oceans or on the Gulf of Mexico.

Code: A numeric, or alphanumeric representation of text for exchanging commonly-used information. For example: commodity codes, carrier codes.

Codifying: The process of detailing a new standard.

COFC: See Container on Flat Car

COGS: See Cost-of-Goods Sold (COGS).

Collaborative Planning, Forecasting, and Replenishment (CPFR): (1) A collaboration process whereby supply chain trading partners can jointly plan key supply chain activities from production and delivery of raw materials, to production and delivery of final products to end customers. Collaboration encompasses business planning, sales forecasting, and all operations required to replenish raw materials and finished goods. (2) A process philosophy for facilitating collaborative communications. CPFR is considered a standard, endorsed by the Voluntary Inter-Industry Commerce Standards.

Collect Freight: Freight payable to the carrier at the port of discharge or ultimate destination. The consignee does not pay the freight charge if the cargo does not arrive at the destination.

Collective Paper: All documents (commercial invoices, bills of lading, etc.) submitted to a buyer for the purpose of receiving payment for a shipment.

Combi Aircraft: An aircraft specially designed to carry unitized cargo loads on the upper deck of the craft, forward of the passenger area.

Combined Lead Time: See Cumulative Lead Time

Commercial Invoice: A document created by the seller. It is an official document which is used to indicate, among other things, the name and address of the buyer and seller, the product(s) being shipped, and their value for customs, insurance, or other purposes.

Commercial zone: The area surrounding a city or town to which rate carriers quote for the city or town also apply; the ICC defines the area.

Committed Capability: The portion of the production capability that is currently in use, or is scheduled for use.

Committee of American Steamship Lines: An industry association representing subsidized U.S. flag steamship firms.

Commodities: Any article exchanged in trade, most commonly used to refer to raw materials and agricultural products.

Commodities Clause: A clause that prohibits railroads from hauling commodities that they produced, mined, owned, or had an interest in.

Commodity Buying: Grouping like parts or materials under one buyer's control for the procurement of all requirements to support production.

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.

Commodity Procurement Strategy: The purchasing plan for a family of items. This would include the plan to manage the supplier base and solve problems.

Commodity Rate: A rate for a specific commodity and its origin-destination.

Common Carrier: Transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided. A common carrier must obtain a certificate of public convenience and necessity from the Federal Trade Commission for interstate traffic.Antonym: Private Carrier.

Common Carrier Duties: Common carriers must serve, deliver, charge reasonable rates, and not discriminate.

Common Cost: A cost that a company cannot directly assign to particular segments of the business; a cost that the company incurs for the business as a whole.

Commuter: An exempt for-hire air carrier that publishes a time schedule on specific routes; a special type of air taxi.

Company Culture: A system of values, beliefs, and behaviors inherent in a company. To optimize business performance, top management must define and create the necessary culture.

Comparative Advantage: A principle based on the assumption that an area will specialize in producing goods for which it has the greatest advantage or the least comparative disadvantage.

Competitive Advantage: Value created by a company for its customers that clearly distinguishes it from the competition, provides its customers a reason to remain loyal.

Competitive Benchmarking: Benchmarking a product or service against competitors.Also see: Benchmarking.

Competitive Bid: A price/service offering by a supplier that must compete with offerings from other suppliers.

Complete and 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.

Complete Manufacture to Ship Time: Average time from when a unit is declared shippable by manufacturing until the unit actually ships to a customer.

Compliance: Meaning that products, services, processes, and/or documents comply with requirements.

Component: Material that will contribute to a finished product but is not the finished product itself. Examples include tires for an automobile, power supply for a personal computer, or a zipper for a ski parka.

Computer-Aided Engineering (CAE): The use of computers to model design options to stimulate their performance.

Computer-Based Training: Training that is delivered via computer workstation and includes all training and testing materials.

Conference: A group of vessel operators joined for the purpose of establishing freight rates.

Conference Carrier: An ocean carrier who is a member of an association known as a "conference." The purpose of the conference is to standardize shipping practices, eliminate freight rate competition, and provide regularly scheduled service between specific ports.

Configuration: The arrangement of components as specified to produce an assembly.

Configure/Package to Order: A process where the trigger to begin to 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 configure-to-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.

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 has been retrieved by the addressee.

Confirming Order: A purchase order issued to a supplier listing the goods or services and terms of an order placed orally or otherwise before the usual purchase document.

Conformance: An affirmative indication or judgment that a product or service has met the requirements of a relevant specification, contract, or regulation. Synonym: Compliance.

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; the 4-R Act of 1976 provided funding.

Consignee: The party to whom goods are shipped and delivered. The receiver of a freight shipment.

Consignment: (1) A shipment that is handled by a common carrier. (2) The process of a supplier placing goods at a customer location without receiving payment until after the goods are used or sold. Also see: Consignment Inventory.

Consignment Inventory: (1) Goods or products 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.

Consignor: The party who originates a shipment of goods (shipper). The sender of a freight shipment, usually the seller.

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 break-bulk consolidation.

Consolidation Point: The location where consolidation takes place.

Consolidator: An enterprise that provides services to group shipments, orders, and/or goods to facilitate movement.

Consolidator's Bill of Lading: A bill of lading issued by a consolidator as a receipt for merchandise that will be grouped with cargo obtained from other shippers. See also House Air Waybill.

Consortium: A group of companies that works together to jointly produce a product, service, or project.

Constraint: A bottleneck, obstacle, or planned control that limits throughput or the utilization of capacity.

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.

Consumer-Centric Database: Database with information about a retailer's individual consumers used primarily for marketing and promotion.

Consumption Entry: An official Customs form used for declaration of reported goods, also showing the total duty due on such transaction.

Container: (1) A box, typically 10 to 40 feet long, which is primarily used for ocean freight shipments. For travel to and from ports, containers are loaded onto truck chassis or on railroad flatcars. (2) The packaging, such as a carton, case, box, bucket, drum, bin, bottle, bundle, or bag, that an item is packed and shipped in.

Container Chassis: A vehicle built for the purpose of transporting a container so that, when a container and chassis are assembled, the produced unit serves as a road trailer.

Container Depot: The storage area for empty containers.

Container Freight Station (CFS): The location designated by carriers for receipt of cargo to be packed into containers/equipment by the carrier. At destination, CFS is the location designated by the carrier for unpacking of cargo from equipment/containers.

Container Freight Station Charge: The charge assessed for services performed at the loading or discharge location.

Container Freight Station to Container Freight Station (CFS/CFS): A type of steamship-line service in which cargo is transported between container freight stations, where containers may be stuffed, stripped, or consolidated. Usually used for less-than-container load shipments.

Container I.D.: An identifier assigned to a container by a carrier. See also: Equipment ID.

Containerization: A shipment method in which commodities are placed in containers, and after initial loading, the commodities, per se, are not rehandled in shipment until they are unloaded at the destination.

Container on Flat Car (COFC): A container that is transported on a rail flatcar. It can be shipped via tractor/trailer using a chassis as the wheel section.

Container Terminal: An area designated to be used for the stowage of cargo in containers that may be accessed by truck, rail, or ocean transportation.

Container Vessel: A vessel specifically designed for the carriage of containers.

Container Yard: The location designated by the carrier for receiving, assembling, holding, storing, and delivering containers, and where containers may be picked up by shippers or redelivered by consignees.

Container Yard to Container Yard (CY/CY): A type of steamship-line service in which freight is transported from origin container yard to destination container yard.

Contingency Planning: Preparing to deal with calamities (e.g., floods) and noncalamitous situations (e.g., strikes) before they occur.

Continuous Flow Distribution (CFD): The streamlined pull of products in response to customer requirements while minimizing the total costs of distribution.

Continuous-Flow, Fixed-Path Equipment: Materials handling devices that include conveyors and drag lines.

Continuous Improvement (CI): A structured, measurement-driven process that continually reviews and improves performance.

Continuous Process Improvement (CPI): A never-ending effort to expose and eliminate root causes of problems; small-step improvement as opposed to big-step improvement. Synonym: Continuous Improvement. Also see: Kaizen.

Continuous Replenishment: Continuous replenishment is the practice of partnering between distribution channel members that changes the traditional replenishment process from distributor-generated purchase orders based on economic order quantities to the replenishment of products based on actual and forecasted product demand.

Continuous Replenishment Planning (CRP): A program that triggers the manufacturing and movement of product through the supply chain when the identical product is purchased by an end user.

Contract: An agreement between two or more competent persons or companies to perform or not to perform specific acts or services or to deliver merchandise. A contract may be oral or written. A purchase order, when accepted by a supplier, becomes a contract. Acceptance may be in writing or by performance, unless the purchase order requires acceptance in writing.

Contract Administration: Managing all aspects of a contract to guarantee that the contractor fulfills his obligations.

Contract Carrier: A for-hire carrier that does not serve the general public but serves shippers with whom the carrier has a continuing contract. The contract carrier must secure a permit to operate.

Contract of Affreightment: A contract between a cargo shipper and carrier for the transport of multiple cargoes over a period of time. Contracts are individually negotiated and usually include cargo description, quantities per shipment and in total, load and discharge ports, freight rates and duration of the contract.

Contribution: The difference between sales price and various costs. Contribution is used to cover fixed costs and profits.

Contribution Margin: An amount equal to the difference between sales revenue and variable costs.

Controlled Access: Referring to an area within a warehouse or yard that is fenced and gated. These areas are typically used to store high-value items and may be monitored by security cameras.

Conveyance: The application used to describe the function of a vehicle of transfer.

Conveyor: A materials handling device that moves freight from one warehouse area to another. Roller conveyors utilize gravity, whereas belt conveyors use motors.

Cooperative Associations: Groups of firms or individuals having common interests; agricultural cooperative associations may haul up to 25 percent of their total interstate non-farm, nonmember goods tonnage in movements incidental and necessary to their primary business.

Coordinated Transportation: Two or more carriers of different modes transporting a shipment.

CORBA: Common Object Request Broker Architecture.

Core Competency: Bundles of skills or knowledge sets that enable a firm to provide the greatest level of value to its customers in a way that's difficult for competitors to emulate and that provides for future growth. Core competencies are embodied in the skills of the workers and in the organization. They are developed through collective learning, communication, and commitment to work across levels and functions in the organization and with the customers and suppliers. A core competency could be the capability of a firm to coordinate and harmonize diverse production skills and multiple technologies. To illustrate: advanced casting processes for making steel require the integration of machine design with sophisticated sensors to track temperature and speed, and the sensors require mathematical modeling of heat transfer. For rapid and effective development of such a process, materials scientists must work closely with machine designers, software engineers, process specialists, and operating personnel. Core competencies are not directly related to the product or market.

Core Process: That unique capability that is central to a company's competitive strategy.

Cost Accounting: The branch of accounting that is concerned with recording and reporting business operating costs. It includes the reporting of costs by departments, activities, and products.

Cost and Freight (C & F): The seller quotes a price that includes the cost of transportation to a specific point. The buyer assumes responsibility for loss and damage and pays for the insurance of the shipment.

Cost Allocation: In accounting, the assignment of costs that cannot be directly related to production activities via more measurable means, e.g., assigning corporate expenses to different products via direct labor costs or hours.

Cost Center: In accounting, a sub-unit in an organization that is responsible for costs.

Cost Driver: In accounting, any situation or event that causes a change in the consumption of a resource, or influences quality or cycle time. An activity may have multiple cost drivers. Cost drivers do not necessarily need to be quantified; however, they strongly influence the selection and magnitude of resource drivers and activity drivers.

Cost Driver Analysis: In cost accounting, the examination, quantification, and explanation of the effects of cost drivers. The results are often used for continuous improvement programs to reduce throughput times, improve quality, and reduce cost.

Cost Element: In cost accounting, the lowest level component of a resource activity, or cost object.

Cost, Insurance, Freight: A freight term indicating that the seller is responsible for cost, the marine insurance, and the freight charges on an ocean shipment of goods.

Cost Management: The management and control of activities and drivers to calculate accurate product and service costs, improve business processes, eliminate waste, influence cost drivers, and plan operations. The resulting information can be very useful in setting and evaluating an organization's strategies.

Cost of Capital: The cost to borrow or invest capital.

Cost-of-Goods Sold (COGS): The amount of direct materials, direct labor, and allocated overhead associated with products sold during a given period of time, determined in accordance with Generally Accepted Accounting Principles (GAAP).

Cost of Lost Sales: The forgone profit companies associate with a stockout.

Cost Trade-Off: The interrelationship among system variables in which a change in one variable affects other variables' costs. A cost reduction in one variable may increase costs for other variables, and vice versa.

Cost Variance: In cost accounting the difference between what has been budgeted for an activity and what it actually costs.

COTD: See Complete and On-Time Delivery (COTD).

Council of Supply Chain Management Professionals (CSCMP): The CSCMP is a not-for-profit professional business organization consisting of individuals throughout the world who have interests and/or responsibilities in logistics and supply chain management, and the related functions that make up these professions. Its purpose is to enhance the development of the logistics and supply chain management professions by providing these individuals with educational opportunities and relevant information through a variety of programs, services, and activities.

Countertrade: A reciprocal trading agreement that includes a variety of transactions involving two or more parties.

Countervailing Duties: An additional import duty imposed to offset Government subsidies in the exporting country, when the subsidized imports cause material injury to domestic industry in the importing country.

Country of Destination: The country that will be the ultimate or final destination for goods.

Country of Origin: The country where the goods were manufactured.

Courier Service: A fast, door-to-door service for high-valued goods and documents; firms usually limit service to shipments weighing fifty pounds or less.

CPFR: See Collaborative Planning, Forecasting and Replenishment (CPFR).

CPI: See Continuous Process Improvement (CPI).

Crane: A materials handling device that lifts heavy items. There are two types: bridge and stacker.

Credit Level: The amount of purchasing credit a customer has available. Usually defined by the internal credit department and reduced by any existing unpaid bills or open orders.

Credit Terms: The agreement between two or more enterprises concerning the amount and timing of payment for goods or services.

Critical Differentiators: This is what makes an idea, product, service, or business model unique.

Critical Success Factor (CSF): Those activities and/or processes that must be completed and/or controlled to enable a company to reach its goals.

Critical Value Analysis: A modified ABC analysis in which a company assigns a subjective critical value to each item in an inventory.

CRM: See Customer Relationship Management (CRM).

Crossdock: Crossdock operations in a warehouse involve moving goods between different trucks to consolidate loads without intermediate storage.

Cross Docking: A distribution system in which merchandise received at the warehouse or distribution center is not put away, but instead is readied for shipment to retail stores. Cross docking requires close synchronization of all inbound and outbound shipment movements. By eliminating the put-away, storage, and selection operations, it can significantly reduce distribution costs.

Cross Sell: The practice of attempting to sell additional products to a customer during a sales call. For example, when the CSR presents a camera case and accessories to a customer that is ordering a camera.

Cross Shipment: Material flow activity where materials are shipped to customers from a secondary shipping point rather than from a preferred shipping point.

CRP: See Continuous Replenishment Planning (CRP).

CSCMP: See Council of Supply Chain Management Professionals (CSCMP).

CSF: See Critical Success Factor (CSF).

CSG: Communications Support Group.

CSR: See Customer Service Representative (CSR).

Cubage: Cubic volume of space being used or available for shipping or storage.

Cube Out: The situation when a piece of equipment has reached its volumetric capacity before reaching the permitted weight limit.

Cube Utilization: In warehousing, a measurement of the utilization of the total storage capacity of a vehicle or warehouse.

Cubic Capacity: The carrying capacity of a piece of equipment according to measurement in cubic feet.

Cubic Space: In warehousing, a measurement of space available, or required, in transportation and warehousing.

Cumulative Lead Time: The total time required to source components, build, and ship a product.

Cumulative Source/Make Cycle Time: The cumulative internal and external lead time to manufacture shippable product, assuming that there is no inventory on hand, no materials or parts on order, and no prior forecasts existing with suppliers. (An element of Total Supply Chain Response Time) Calculation: The critical path along the following elements: Total Sourcing Lead Time, Manufacturing Order Release to Start Manufacturing, total Manufacture Cycle Time (Make to Order, Engineer to Order, Configure/Package to Order) or Manufacture Cycle Time (Make to Stock), Complete Manufacture to Ship Time. Note: Determined separately for Make-to-Order, Configure/Package-to-Order, Engineer-to-Order, and Make-to-Stock products.

Currency Adjustment Factor (CAF): A surcharge imposed by a carrier on ocean freight charges to offset foreign currency fluctuations.

Customer: 1) In VMI, the trading partner or reseller, i.e., Wal-Mart, Safeway, or CVS. 2) In direct consumer, the end customer or user.

Customer Acquisition or Retention: The rate at which new customers are acquired, or existing customers are retained. A key selling point to potential marquis partners.

Customer Driven: The end user, or customer, motivates what is produced or how it is delivered.

Customer Facing: Those personnel whose jobs entail actual contact with the customer.

Customer Interaction Center: See Call Center

Customer Order: An order from a customer for a particular product or a number of products. It is often referred to as an actual demand to distinguish it from a forecasted demand.

Customer/Order Fulfillment Process: A series of customers' interactions with an organization through the order-filling process, including product/service design, production and delivery, and order stats reporting.

Customer Profitability: The practice of placing a value on the profit generated by business done with a particular customer.

Customer Relationship Management (CRM): This refers to information systems that help sales and marketing functions as opposed to the ERP (Enterprise Resource Planning), which is for back-end integration.

Customer Segmentation: Dividing customers into groups based on specific criteria, such as products purchased, customer geographic location, etc.

Customer Service: The series of activities involved in providing the full range of services to customers.

Customer Service Representative (CSR): An individual who provides customer support via telephone in a call-center environment.

Customer-Supplier Partnership: A long-term relationship between a buyer and a supplier characterized by teamwork and mutual confidence. The supplier is considered an extension of the buyer's organization. The partnership is based on several commitments. The buyer provides long-term contracts and uses fewer suppliers. The supplier implements quality assurance processes so that incoming inspection can be minimized. The supplier also helps the buyer reduce costs and improve product and process designs.

Customization: Creating a product from existing components into an individual order.Synonym: Build to Order.

Customs: The authorities designated to collect duties levied by a country on imports and exports.

Customs Automated Data Exchange System (CADEX): A Canada Customs system that allows for the electronic transmission of import data for goods that have already been released. Additional information such as accounting data and release notifications are also accessible.

Customs Broker: A firm that represents importers/exporters in dealings with customs. Normally responsible for obtaining and submitting all documents for clearing merchandise through customs, arranging inland transport, and paying all charges related to these functions.

Customs Clearance: The act of obtaining permission to import merchandise from another country into the importing nation.

Customs House Broker: A business firm that oversees the movement of international shipments through Customs, and ensures that the documentation accompanying a shipment is complete and accurate.

Customs Invoice: A document that contains a declaration by the seller, the shipper, or the agent as to the value of the shipment.

Customs Value: The value of the imported goods on which duties will be assessed.

CWO: See Cash with Order (CWO).

CWT: The abbreviation for hundredweight, which is the equivalent of 100 pounds. See Hundredweight.

CY/CY: See Container Yard to Container Yard (CY/CY).

Cycle Inventory: An inventory system where counts are performed continuously, often eliminating the need for an annual overall inventory. It is usually set up so that A items are counted regularly (i.e., every month), B items are counted semi-regularly (every quarter or six months), and C Items are counted perhaps only once a year.

Cycle Time: The amount of time it takes to complete a business process.

Cycle Time to Process Obsolete and End-of-Life Product Returns for Disposal:The total time to process goods returned as obsolete and end of life to actual disposal. This cycle time includes the time a Return Product Authorization (RPA) is created to the time the RPA is approved, from Product Available for Pickup to Product Received and from Product Receipt to Product Disposal/Recycle.

Cycle Time to Repair or Refurbish Returns for Use: The total time to process goods returned for repair or refurbishing. This cycle time includes the time a Return Product Authorization (RPA) is created to the time the RPA is approved, from Product Available for Pickup to Product Received, from Product Receipt to Product Repair/Refurbish Begin, and from Product Repair/Refurbish Begin to Product Available for Use.

Dangerous Goods: Articles or substances capable of posing a significant risk to health, safety, or property, and that ordinarily require special attention when transported. See also Hazardous Goods.

Dashboard: A performance measurement tool used to capture a summary of the key performance indicators/metrics of a company. Metrics dashboards/scorecards should be easy to read and usually have red, yellow, green indicators to flag when the company is not meeting its metrics targets. Ideally, a dashboard/scoreboard should be cross functional in nature and include both financial and non-financial measures. In addition, scorecards should be reviewed regularly - at least on a monthly basis, and weekly in key functions such as manufacturing and distribution where activities are critical to the success of a company. The dashboards/scorecards philosophy can also be applied to external supply chain partners like suppliers to ensure that their objectives and practices align. Synonym: Scorecard.

Data Dictionary: Lists the data elements for which standards exist. The Joint Electronic Document Interchange (JEDI) committee developed a data dictionary that is employed by many EDI users.

Data Interchange Standards Association (DISA): The secretariat which provides clerical and administrative support to the ASC X12 Committee.

Data Mining: The process of studying data to search for previously unknown relationships. This knowledge is then applied to achieving specific business goals.

Data Warehouse: A repository of data that has been specially prepared to support decision-making applications. Synonym: Decision-Support Data.

Database: Data stored in computer-readable form, usually indexed or sorted in a logical order by which users can find a particular item of data they need.

Date Code: A label on products with the date of production. In food industries, it's often an integral part of the lot number.

Days of Supply: Measure of quantity of inventory on hand in relation to number of days for which usage will be covered. For example, if a component is consumed in manufacturing at the rate of 100 per day and there are 1,585 units available on hand, this represents 15.85 days' supply.

DC: *See Distribution Center (DC)

Deadhead: The return of an empty transportation container to its point of origin. SeeBackhaul.

Dead on Arrival (DOA): A term used to describe products which are not functional when delivered. Synonym: Defective.

Deadweight Tons (DWT): The cargo carrying capacity of a vesel, including fuel oil, stores and provisions.

Decentralized Authority: A situation in which a company management gives decision-making authority to managers at many organizational levels.

Decision Support System (DSS): Software that speeds access and simplifies data analysis, queries, etc.

Declaration of Dangerous Goods: To comply with the U.S. regulations, exporters are required to provide special notices to inland and ocean transport companies when goods are hazardous.

Declared Value for Carriage: The value of the goods, declared by the shipper on a bill of lading, for the purpose of determining a freight rate or the limit of the carrier's liability.

Deconsolidator: An enterprise that provides services to un-group shipments, orders, goods, etc., to facilitate distribution.

Dedicated Contract Carriage: A third party service that dedicates equipment (vehicles) and drivers to a single customer for its exclusive use on a contractual basis.

Defective goods inventory (DGI): Those items that have been returned, have been delivered damaged and have a freight claim outstanding, or have been damaged in some way during warehouse handling.

Delivery Appointment: The time agreed upon between two enterprises for goods or transportation equipment to arrive at a selected location.

Delivery-Duty-Paid: Supplier/manufacturer arrangement in which suppliers are responsible for the transport of the goods they've produced, which are being sent to a manufacturer. This responsibility includes tasks such as ensuring that products get through Customs.

Delivery Instructions: A document issued to a carrier to pick up goods at a location anddeliver them to another location. See also Delivery Order

Delivery Order: A document issued by the customs broker to the ocean carrier as authority to release the cargo to the appropriate party.

Delivery Performance to Commit Date: The percentage of orders that are fulfilled on o before the internal commit date, used as a measure of internal scheduling systems effectiveness. Delivery measurements are based on the date a complete order is shipped or the ship-to date of a complete order. A complete order has all items on the order delivered in the quantities requested. An order must be complete to be considered fulfilled. Multiple-line items on a single order with different planned delivery dates constitute multiple orders, and multiple-planned delivery dates on a single line item also constitute multiple orders.Calculation: [Total number of orders delivered in full and on time to the scheduled commit date]/[Total number of orders delivered]

Delivery Performance to Request Date: The percentage of orders that are fulfilled on or before the customer's requested date used as a measure of responsiveness to market demand. Delivery measurements are based on the date a complete order is shipped or the ship-to date of a complete order. A complete order must be complete to be considered fulfilled. Multiple line items on a single order with different planned delivery dates constitute multiple orders, and multiple planned delivery dates on a single line item also constitute multiple orders. Calculation: [Total number of orders delivered in full and on time to the customer's request date]/[Total number of orders delivered]

Delta Nu Alpha: A professional association of transportation and traffic practitioners.

Demand Chain Management: The same as supply chain management, but with an emphasis on consumer pull versus supplier push.

Demand Planning Systems: The systems that assist in the process of identifying, aggregating, and prioritizing all sources of demand for the integrated supply chain of a product of service at the appropriate level, horizon, and interval.

Demand Pull: The triggering of material movement to a work center only when that work center is ready to begin the next job. In effect, it eliminates the queue from in from of a work center, but it can cause a queue at the end of a previous work center.

Demand Side Analysis: Techniques such as market research, surveys, focus groups, and performance/cost modeling used to identify emerging technologies.

Demand Signal: A signal from a consumer, customer or using operation that triggers the issue of product or raw material.

Demand Supply Balancing: The process of identifying and measuring the gaps and imbalances between demand and resources in order to determine how to best resolve the variances through marketing, pricing, packaging, warehousing, outsource plans, or some other action that will optimize service, flexibility, costs, assets, (or other supply chain inconsistencies) in an iterative and collaborative environment.

Deming Circle: The concept of a continuously rotating wheel of plan-to-do-check-action (PDCA) used to show the need for interaction among market research, design, production, and sales to improve quality. Also see: Plan-Do-Check-Action.

Demographic Segmentation: In marketing, dividing potential markets by characteristics of potential customers, such as age, sex, income, and education.

Demurrage: The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. Also see: Detention, Express.

Denied Party Listing (DPL): A list of organizations that is unauthorized to submit a bid for an activity or to receive a specific product. For example, some countries have bans on certain products like weapons or sensitive technology.

Density: A physical characteristic measuring a commodity's mass per unit volume or pounds per cubic foot; an important factor in ratemaking, since density affects the utilization of a carrier's vehicle.

Density rate: A rate based upon the density and shipment weight.

Deregulation: Revisions or complete elimination of economic regulations controlling transportation. The Motor Carrier Act of 1980 and the Staggers Act of 1980 revised the economic controls over motor carriers and railroads, and the Airline Deregulation Act of 1978 eliminated economic controls over air carriers.

Derived demand: The demand for a product's transportation is derived from the product's demand at some location.

Design for Manufacture/Assembly (DFMA): A product design methodology that provides a quantitative evaluation of product designs.

Design of Experiments (DOE): A branch of applied statistics dealing with planning, conducting, analyzing, and interpreting controlled tests to evaluate the factors that control the value of a parameter or group of parameters.

Destination: The location designated as a receipt point for goods/shipment.

Detention: The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. Also see: Demurrage, Express.

Devanning: The unloading of cargo from a container or other piece of equipment. See Stripping.

DFMA: See Design for Manufacture/Assembly (DFMA).

DFZ: See Duty Free Zone

Differential: A discount offered by a carrier that faces a service time disadvantage over a route.

Direct Channel: This is when your own sales force sells to the customer. Your company may ship to the customer, or a third party may handle shipment, but in either case, your company owns the sales contract and retains rights to the receivable from the customer. Your end customer may be a retail outlet. The movement to the customer may be direct from the factory, or the product may move through a distribution network owned by your company. Order information in this channel may be transmitted by electronic means.

Direct Cost: A cost that can be directly traced to a cost object since a direct or repeatable cause-and-effect relationship exists. A direct cost uses a direct assignment or cost causal relationship to transfer costs. Also see: Indirect Cost, Tracing

Direct Product Profitability (DPP): Calculation of the net profit contribution attributable to a specific product or product line.

Direct Production Material: Material that is used in the manufacturing/content of a product. (Example: purchased parts, solder, SMT glues, adhesives, mechanical parts, bill-of-materials parts, etc.)

Direct Retail Locations: A retail location that purchases products directly from your organization or responding entity.

Direct Store Delivery (DSD): Process of shipping direct from a manufacturer's plant or distribution center to the customer's retail store, thus bypassing the customer's distribution center. Also called Direct-to-Store Delivery.

Direct-to-Store (DTS) Delivery: Same as Direct Store Delivery.

DISA: *See Data Interchange Standards Association (DISA)

Disaster Recovery Planning: Contingency planning specifically related to recovering hardware and software (e.g., data centers, application software, operations, personnel, telecommunications) in information system outages.

Discharge Port: The name of the port where the cargo is unloaded from the export vessel. This is the port reported to the U.S. Census on the Shipper's Export Declaration, Schedule K, which is used by U.S. companies when exporting. This can also be considered the first discharge port.

Discrete Manufacturing: Discrete manufacturing processes create products by assembling unconnected distinct parts as in the production of distinct items such as automobiles, appliances, or computers.

Disintermediation: When the traditional sales channels are disassembled and the middleman gets cut out of the deal. Such as where the manufacturer ships direct to a retailer, bypassing the distributor.

Dispatching: The carrier activities involved with controlling equipment; involves arranging for fuel, drivers, crews, equipment, and terminal space.

Distributed Inventory: Inventory that is geographically dispersed. For example, where a company maintains inventory in multiple distribution centers to provide a higher level of customer service.

Distribution: Outbound logistics, from the end of the production line to the end user. The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. These activities encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management. It includes all activities related to physical distribution, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of fieldwarehouses. Synonym: Physical Distribution. The systematic division of a whole into discrete parts having distinctive characteristics.

Distribution Center (DC): The warehouse facility which holds inventory from manufacturing pending distribution to the appropriate stores.

Distribution Channel: One or more companies or individuals who participate in the flow of goods and services from the manufacturer to the final user or consumer.

Distribution Channel Management: The organizational and pipeline strategy for getting products to customers. Direct channels involve company sales forces, facilities, and/or direct shipments to customers; indirect channels involve the use of wholesalers, distributors, and/or other parties to supply the products to customers. Many companies use both strategies, depending on markets and effectiveness.

Distribution Planning: The planning activities associated with transportation, warehousing, inventory levels, materials handling, order administration, site and location planning, industrial packaging, data processing, and communications networks to support distribution.

Distribution Requirements Planning (DRP): A system of determining demands for inventory at distribution centers and consolidating demand information in reverse as input to the production and materials system.

Distribution Resource Planning (DRP II): The extension of distribution requirements planning into the planning of the key resources contained in a distribution system: warehouse space, workforce, money, trucks, freight cars, etc.

Distribution Warehouse: A finished goods warehouse from which a company assembles customer orders.

Distributor: A business that does not manufacture its own products, but purchases and resells these products. Such a business usually maintains a finished goods inventory.Synonym: Wholesaler.

Diversion: The process of changing the destination and/or the consignee while the shipment is enroute.

DOA: See Dead on Arrival.

Dock Receipt: A document used to accept materials or equipment at an ocean pier or accepted location. Provides the ocean carrier with verification of receipt and the delivering carrier with proof of delivery.

Document: In EDI, a form, such as an invoice or purchase order, that trading partners have agreed to exchange and that the EDI software handles within its compliance-checking logic.

Documentation: The papers attached or pertaining to goods requiring transportation and/or transfer of ownership.

DOE: See Design of Experiments.

Domestic Trunk Line Carrier: A classification for air carriers that operate between major population centers. These carriers are now classified as major carriers.

Door to Door: The through-transport of goods from consignor to consignee.

Door to Port: The through transport service from consignor to port of importation.

Double Bottoms: A motor carrier operation that involves one tractor pulling two trailers.

Double-Pallet Jack: A mechanized device for transporting two standard pallets simultaneously.

Doubles: Double trucks are two 28-foot trailers that are pulled by one tractor. Doubles also are known as "double bottoms."

Download: To merge temporary files containing a day's or week's worth of information with the main data base in order to update it.

Downstream: One or more companies or individuals who participate in the flow of goods and services moving from the manufacturer to the final user or consumer.

DPL: See Denied Party List (DPL).

Drawback: See Duty Drawback

Drayage: The service offered by a motor carrier for pick-up and delivery of ocean containers or rail containers. Drayage agents usually handle full-load containers for ocean and rail carriers.

Drayage Firms: Motor carriers that provide local pickup and delivery of trailers and containers (on chassis)

Driving Time Regulations: U.S. Department of Transportation rules that limit the maximum time a driver may drive in interstate commerce; the rules prescribe both daily and weekly maximums.

Drop: A situation in which an equipment operator deposits a trailer or boxcar at a facility at which it is to be loaded or unloaded.

Drop Ship: To take the title of the products but not actually handle, stock, or deliver it, e.g., to have one supplier ship directly to another or to have a supplier ship directly to the buyer's customer.

DRP: See Distribution Requirements Planning (DRP).

DRP II: *See Distribution Resource Planning (DRP II)

Drum-Buffer-Rope (DBR): In the theory of constraints, the generalized process used to manage resources to maximize throughput. The drum is the rate or pace of production set by the system's constraint. The buffers establish the protection against uncertainty so that the system can maximize throughput. The rope is a communication process from the constraint to the gating operation that checks or limits material released into the system to support the constraint.

DSD: See Direct Store Delivery (DSD).

DSS: See Decision Support System (DSS).

DTS: See Direct-to-Store Delivery (DTS).

Dual Operation: A motor carrier that has both common and contract carrier operating authority.

Dual rate system: An international water carrier pricing system in which a shipper signing an exclusive use agreement with the conference pays a rate 10 to 15 percent lower than non-signing shippers do for an identical shipment.

Dumping: When a product is sold below cost in a foreign market and/or when a product is sold at a lower price in the foreign market than in a domestic market, with the intention of driving out competition in the foreign market.

Dunnage: The packing material used to protect a product from damage during transport.

DUNS Number: A coded, numerical representation assigned to a specific company (USA).

Duty: A tax imposed by a government on merchandise imported from another country.

Duty Drawback: A refund of duty paid on imported merchandise when it is exported later, whether in the same or a different form.

Duty Free Zone (DFZ): An area where goods or cargo can be stored without paying import customs duties while awaiting manufacturing or future transport.

Dynamic Process Control (DPC): Continuous monitoring of process performance and adjustment of control parameters to optimize process output.

80/20 Rule: A term referring to the Pareto principle. This principle suggests that most effects come from relatively few causes; that is, 80% of the effects (or sales or costs) come from 20% of the possible causes (or items). Also see: ABC Classification, Pareto

EAI: See Enterprise Application Integration (EAI).

EAN.UCC: European Article Numbering/Uniform Code Council. The EAN.UCC System provides identification standards to uniquely identify trade items, logistics units, locations, assets, and service relations worldwide. The identification standards define the construction of globally-unique and unambiguous numbers. For additional reference, please see http://www.uc-council.org/ean_ucc_systems/stnds_and_tech/bus_apps.html

Early Supplier Involvement (ESI): The process of involving suppliers early in the product design activity and drawing on their expertise, insights, and knowledge to generate better designs in less time and ones that are easier to manufacture with high quality.

Earnings Before Interest and Taxes (EBIT): A measure of a company's earning power from ongoing operations, equal to earnings (revenues minus cost of sales, operating expenses, and taxes) before deduction of interest payments and income taxes. Also called operating profit.

EBIT: See Earnings Before Interest and Taxes (EBIT).

EC: *See Electronic Commerce (EC)

ECO: See Engineering Change Order (ECO)

E-Commerce: See Electronic Commerce.

Economic Order Quantity (EOQ): An inventory model that determines how much to order by determining the amount that will meet customer service levels while minimizing total ordering and holding costs.

Economic Value Added (EVA): A measurement of shareholder value as a company's operating profits after tax, less an appropriate charge for the capital used in creating the profits.

Economy of Scale: A phenomenon whereby larger volumes of production reduce unit cost by distributing fixed costs over a larger quantity.

ECR: See Efficient Consumer Response (ECR).

EDI: See Electronic Data Interchange (EDI).

EDI Interchange: Communication between partners in the form of a structured set of messages and service segments starting with an interchange control header and ending with an interchange control trailer. In the context of X.400 EDI messaging, the contents of the primary body of an EDI message.

EDIA: See Electronic Data Interchange Association (EDIA).

EDIFACT: Electronic Data Interchange for Administration, commerce, and Transport. The United Nations' EDI standard.

EDI Standards: Criteria that define the data content and format requirements for specific business transactions (e.g., purchase orders). Using standard formats allows companies to exchange transactions with multiple trading partners more easily. Also see:American National Standards Institute.

EDI Transmission: A functional group of one or more EDI transactions that are sent to the same location in the same transmission, and are identified by a functional group header and trailer.

Efficient Consumer Response (ECR): A demand-driven replenishment system designed to link all parties in the logistics channel to create a massive flow-through distribution network. Replenishment is based on consumer demand and point-of-sale information.

EFT: See Electronic Funds Transfer (EFT).

Electronic Commerce (EC): Also written as e-commerce. Conducting business electronically via traditional EDI technologies, or online via the Internet. In the traditional sense of selling goods, it's possible to do this electronically because of certain software programs that run the main functions of e-commerce support, such as product display, ordering, shipment, billing, and inventory management. The definition of e-commerce includes business activity that is business-to-business (B2B) and/or business-to-consumer (B2C)

Electronic Data Interchange (EDI): Intercompany, computer-to-computer transmission of business information in a standard format. For EDI purists, computer to computer means direct transmission from the originating application program to the receiving or processing application program. An EDI transmission consists only of business data, not any accompanying verbiage or free-form messages. Purists might also contend that a standard format is one that is approved by a national or international standards organization, as opposed to formats developed by industry groups or companies.

Electronic Data Interchange Association: A national body that propagates and controls the use of EDI in a given country. All EDIAs are nonprofit organizations dedicated to encouraging EDI growth. The EDI in the United States was formerly TDCC and administered the development of standards in transportation and other industries.

Electronic Funds Transfer (EFT): A computerized system that processes financial transactions and information about these transactions or performs the exchange of value. Sending payment instructions across a computer network, or the company-to-company, company-to-bank, or bank-to bank electronic exchange of value.

Electronic Mail (E-Mail): The computer-to-computer exchange of messages. E-mail is usually unstructured (free-form) rather than in a structured format. X.400 has become the standard for e-mail exchange.

E-Mail: See Electronic Mail

Embargo: A prohibition upon exports or imports, either with specific products or specific countries.

Empirical: Pertaining to a statement or formula based on experience or observation rather than on deduction or theory.

End Item: A product sold as a completed item or repair part; any item subject to a customer order or sales forecast. Synonym: Finished Goods Inventory.

End-of-Life Inventory: Inventory on hand that will satisfy future demand for products that are no longer in production at your company.

End User: The final buyer of the product who purchases the product for immediate use.

Engineering Change: A revision to a drawing or design released by engineering to modify or correct a part. The request for the change can be from a customer or from production, quality control, another department, or a supplier. Synonym: Engineering Change Order

Engineering Change Order (ECO): A documented and approved revision to a product or process specification.

Engineer to Order: A process in which the manufacturing organization must first prepare (engineer) significant product or process documentation before manufacture may begin.

Enroute: A term used for goods in transit or on the way to a destination.

Enterprise Application Integration (EAI): A computer term for the tools and techniques used in linking ERP and other enterprise systems together. Linking systems is key for e-business. Gartner says "firms implementing enterprise applications spend at least 30% on point-to-point interfaces."

Enterprise Resource Planning (ERP) System: A class of software for planning and managing enterprise-wide the resources needed to take customer orders, ship them, account for them, and replenish all needed goods according to customer orders and forecasts. Often includes electronic commerce with suppliers. Examples of ERP systems are the application suites from SAP, Oracle, PeopleSoft, and others.

Entry Form: The document that must be filed with Customs to obtain the release of imported goods and to allow collection of duties and statistics. Also called a Customs Entry Form or Entry.

Enveloping: an EDI management software function that groups all documents of the same type, or functioal group, and bound for the same destination into an electronic envelope. Enveloping is useful where there are multiple documents such as orders or invoices issued to a single trading partner that need to be sent as a packet.

Environmentally Sensitive Engineering: Designing features in a product and its packaging that improve recycling, etc. It can include elimination of compounds that are hazardous to the environment.

EOQ: See Economic Order Quantity (EOQ).

EPC or ePC: Electronic Product Code. An electronically coded tag that is intended as an improvement to the UPC bar code system. The EPC is a 96-bit tag which contains a number called the global Trade Identification Number (GTIN). Unlike a UPC number, which only provides information specific to a group of products, the GTIN gives each product its own specific identifying number, giving greater accuracy in tracking.

Equipment: The rolling stock carriers use to facilitate the transportation services that they provide, including containers, trucks, chassis, vessels, and airplanes, among others.

Equipment I.D.: An identifier assigned by the carrier to a piece of equipment. See also Container ID.

Equipment Positioning: The process of placing equipment at a selected location.

Ergonomic: The science of creating workspaces and products which are human friendly to use.

ERP: See Enterprise Resource Planning System (ERP).

ERS: See Evaluated Receipts Settlement (ERS).

ESI: See Early Supplier Involvement (ESI).

ETA: The Estimated Time of Arrival.

 

ETD: The Estimated Time of Departure.

Ethical Standards: A set of guidelines for proper conduct by business professionals.

EVA: See Economic Value Added (EVA).

Evaluated Receipts Settlement (ERS): A process for authorizing payment for goods based on actual receipts with purchase order data when price has already been negotiated. The basic premise behind ERS is that all of the information in an invoice has already been transmitted in the shipping documentation. Therefore, the invoice is eliminated and the shipping documentation is used to pay the vendor.

Exception Rate: A deviation from the class rate; changes (exceptions) made to the classification.

Exclusive Patronage Agreements: A shipper agrees to use only a conference's member liner firms in return for a 10 to 15 percent rate reduction.

Exclusive Use: Vehicles that a carrier assigns to a specific shipper for its exclusive use.

Exempt Carrier: A for-hire carrier that is free from economic regulation. Trucks hauling certain commodities are exempt from Interstate Commerce Commission economic regulation. By far, the largest portion of exempt carriers transports agricultural commodities or seafood.

Expediting: (1) Moving shipments through regular channels at an accelerated rate. (2) To take extraordinary action because of an increase in relative priority. Synonym: Stock chase

Expert System: A computer program that mimics a human expert.

Export: To send goods and services to another country.

Export Compliance: Complying with rules for exporting products, including packaging, labeling, and documentation.

Export Broker: An enterprise that brings together buyer and seller for a fee, then eventually withdraws from the transaction.

Export Declaration: A document required by the U.S. Treasury department and completed by the exporter to show the value, weight, consignee, destination, etc., pertinent to the export shipment. The document serves two purposes: to gather trade statistics and to provide a control document if the goods require a valid export license.

Export License: A document secured from a government authorizing an exporter to export a specific quantity of a controlled commodity to a certain country. An export license is often required if a government has placed embargoes or other restrictions upon exports.

Export Management Company: A private firm that serves as the export department for several manufacturers, soliciting and transacting export business on behalf of its clients in return for a commission, salary, or a retainer plus commission.

Export Sales Contract: The initial document in any international transaction; it details the specifics of the sales agreement between the buyer and seller.

Export Trading Company: A firm that buys domestic products for sale overseas. A trading company takes title to the goods; an export-management company usually does not.

Exporter Identification Number (EIN): A number required for the exporter on the Shipper's Export Declaration. A corporation may use their Federal Employer Identification Number as issued by the IRS; individuals can use their Social Security Numbers.

Express: (1) Carrier payment to its customers when ships, rail cars, or trailers are unloaded or loaded in less than the time allowed by contract and returned to the carrier for use. See Demurrage, Detention. (2) The use of priority package delivery to achieve overnight or second-day delivery.

Extended Enterprise: The notion that supply chain partners form a larger entity which works together as though it were a single unit.

Extensible Markup Language (XML): A computer term for a language that facilitates direct communication of data among computers on the Internet. Unlike the older hypertext markup language (HTML) which provides data tags that give instructions to a web browser on how to display information, XML tags give instructions to a browser or to application software which help to define specifics about the category of information.

External Factory: A situation where suppliers are viewed as an extension of the firm's manufacturing capabilities and capacities. The same practices and concerns that are commonly applied to the management of the firm's manufacturing system should also be applied to the management of the external factory.

Extranet: A computer term describing a private network (or a secured link on the public Internet) that links separate organizations and uses the same software and protocols as the Internet. Used for improving supply chain management. For example, extranets are used to provide access to a supply chain partner's internal inventory data which is not available to unrelated parties. Antonym: Intranet.

Ex Works: The price that the seller quotes applies only at the point of origin. The buyer takes possession of the shipment at the point of origin and bears all costs and risks associated with transporting the goods to the destination.

4PL: *See Fourth Party Logistics (4PL)

5-Point Annual Average: Method frequently used in PMG studies to establish a representative average for a one-year period. Calculation: [12/31/03 + 3/31/04 + 6/30/05 + 9/30/06 + 12/31/07]/5

5-S Program: A program for organizing work areas. Sometimes referred to as elements, each of the five components of the program begins with the letter "S." They include sort, systemize, shine or sweep, standardize, and sustain. In the UK, the concept is converted to the 5-C program comprising five comparable components: clear out, configure, clean and check, conformity, and custom and practice.
* Sort - get rid of clutter; separate out what is needed for the operations. * Systemize/Set in Order - organize the work area; make it easy to find what is needed. 
* Shine - clean the work area; make it shine. 
* Standardize - establish schedules and methods of performing the cleaning and sorting.
* Sustain - implement mechanisms to sustain the gains through involvement of people, integration into the performance measurement system, discipline, and recognition. 
The 5-S program is frequently combines with precepts of the Lean Manufacturing Initiative. Even when used separately, however, the 5-S (or 5-C) program is said to yield excellent results. Implementation of the program involves introducing each of the five elements in order, which reportedly generates multiple benefits, including product diversification, higher quality, lower costs, reliable deliveries, improved safety, and higher availability rate.

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